<PAGE> 1
As filed with the Securities and Exchange Commission on July 15, 1994
Registration No. 33-______________
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
DELL COMPUTER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 74-2487834
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9505 ARBORETUM BOULEVARD
AUSTIN, TEXAS 78759-7299
(Address, including ZIP code, of registrant's
principal executive offices)
DELL COMPUTER CORPORATION INCENTIVE PLAN
(Full title of the plan)
MICHAEL S. DELL
DELL COMPUTER CORPORATION
9505 ARBORETUM BOULEVARD
AUSTIN, TEXAS 78759-7299
(512) 338-4400
(Name, address, including ZIP code, and telephone number,
including area code, of agent for service)
Copies to:
ROBERT L. KIMBALL RICHARD E. SALWEN
JOHNSON & WORTLEY, P.C. DELL COMPUTER CORPORATION
900 JACKSON STREET 9505 ARBORETUM BOULEVARD
DALLAS, TEXAS 75202 AUSTIN, TEXAS 78759-7299
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of maximum maximum
securities Amount to be offering price aggregate Amount of
to be registered registered per share (1) offering price (1) registration fee
---------------- ------------ -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 4,500,255 $ 27.31 $ 122,901,964.05 $ 42,380.28
Shares (2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
in accordance with Rule 457(h) promulgated under the Securities Act of
1933, as amended, based on the average of the high and low prices for
registrant's common stock reported in the NASDAQ National Market
System on July 14, 1994, pursuant to Rule 457(c).
(2) Pursuant to Rule 416, there are also being registered such additional
shares of common stock as may become issuable pursuant to the
antidilution provisions of the Dell Computer Corporation Incentive
Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (c) below are hereby incorporated
by reference into this registration statement on Form S-8 (this "Registration
Statement").
(a) The registrant's Annual Report on Form 10-K for the fiscal
year ended January 30, 1994.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 since the end of the
fiscal year covered by the Annual Report on Form 10-K referred
to in (a) above.
(c) The description of the registrant's common stock in Item 1 of
the registrant's Registration Statement on Form 8-A dated June
20, 1988, including any amendment or report filed for the
purpose of updating such description.
All documents subsequently filed by Dell Computer Corporation (the
"Company" or "Registrant") pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), after the
date of this Registration Statement and before the filing of a post-effective
amendment to the Registration Statement which indicates that all shares of
Common Stock, par value $.01 per share, offered hereunder have been sold or
that deregister all such shares then remaining unsold shall be deemed to be
incorporated herein by reference and to be a part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not Required.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation provides that no
director of the Registrant will be personally liable to the Registrant or any
of its stockholders for monetary damages arising from the director's breach of
fiduciary duty as a director. However, this does not apply with respect to any
action in which the director would be liable under Section 174 of Title 8 of
the General Corporation Law of Delaware nor does it apply with respect to any
liability in which the director (i) breached his duty of loyalty to the
Registrant; (ii) did not act in good faith or, in failing to act, did not act
in good faith; (iii) acted in a manner involving intentional misconduct or a
knowing violation of law or, in failing to act, shall have acted in a manner
involving intentional misconduct or a knowing violation of law; or (iv) derived
an improper personal benefit.
The Registrant's Certificate of Incorporation and Bylaws provide that
it will indemnify its officers and directors and former officers and directors
against any expenses, judgments or settlement payments sustained or paid by
such persons as a result of having acted as an officer or director of the
Registrant, or, at the request of the
2
<PAGE> 3
Registrant, as an officer, director, agent or employee of another business
entity. The Bylaws further provide that the Registrant may, by action of its
Board of Directors, provide indemnification to employees and agents of the
Registrant, individually or as a group, with the same scope and effect as the
indemnification of directors and officers.
The Registrant has entered into indemnity contracts with some of its
executive officers and directors. Each such Indemnity Agreement provides for
indemnification of officers and directors of the Registrant to the greatest
extent permitted by the General Corporation Law of Delaware and additionally
provides (i) that such persons shall be indemnified for amounts paid in
settlement of derivative actions; (ii) for advances of investigation and
litigation expenses subject to repayment if indemnification is disallowed;
(iii) that indemnification is available unless the Board of Directors or
independent legal counsel determines that the relevant standards were not
satisfied, with the Registrant bearing the burden of proving same in any suit
for indemnification; (iv) for partial indemnification where the officer or
director is not entitled to full indemnification; (v) that no claim or cause of
action may be asserted by or on behalf of the Registrant after the expiration
of two years from the date such persons cease to be directors and/or officers
with respect to claims against them in such capacities; and (vi) for payment to
such persons of expenses incurred in connection with the successful
prosecution, in whole or in part, of any amount not timely paid (generally
within 30 days of demand) by the Registrant. In addition, the Registrant
currently maintains directors and officers liability insurance.
Pursuant to the provisions of Section 145 of the General Corporation
Law of Delaware, every Delaware corporation has the power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (other than an
action by or in the right of the corporation) by reason of the fact that he is
or was a director, officer, employee or agent of any corporation, partnership,
joint venture, trust or other enterprise, against any and all expenses,
judgments, fines and amounts paid in settlement and reasonably incurred in
connection with such action, suit or proceeding. The power to indemnify
applies only if such person acted in good faith and in a manner he reasonably
believed to be in the best interest, or not opposed to the best interest, of
the corporation and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
The power to indemnify applies to actions brought by or in the right
of the corporation as well, but only to the extent of defense and settlement
expenses and not to any satisfaction of a judgment or settlement of the claim
itself, and with the further limitation that in such actions no indemnification
shall be made in the event of any adjudication of negligence or misconduct
unless the court, in its discretion, believes that in light of all the
circumstances indemnification should apply.
To the extent any of the persons referred to in the two immediately
preceding paragraphs is successful in the defense of the actions referred to
therein, such person is entitled pursuant to Section 145 to indemnification as
described above.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable
3
<PAGE> 4
ITEM 8. EXHIBITS
4.1 Certificate of Incorporation of Dell Computer Corporation, as
amended (incorporated by reference to Exhibit 3.1 of the
Company's Annual Report on Form 10-K for the year ended
February 2, 1992, Commission File No. 0-17017).
4.2 Certificate of Amendment to the Certificate of Incorporation
of the Company (incorporated by reference to Exhibit 3.2 of
the Company's Annual Report on Form 10-K for the year ended
January 31, 1993, Commission File No. 0-17017).
4.3 Certificate of Stock Designation of the Company (incorporated
by reference to Exhibit 3.3 of the Company's Registration
Statement on Form S-4 as filed with the Securities and
Exchange Commission on October 1, 1993, Registration No.
33-69680).
4.4 Certificate of Corrections dated April 27, 1994 (incorporated
by reference to Exhibit 3.1 of the Company's Report on Form
10-Q for the Quarterly Period ended May 1, 1994, Commission
file No. 0-17017).
4.5 Bylaws of the Company, as amended (incorporated by reference
to Exhibit 3.2 of the Company's Annual Report on Form 10-K for
the year ended February 2, 1992, Commission File No. 0-17017).
4.6 Dell Computer Corporation Incentive Plan.
5 Opinion of Johnson & Wortley, P.C.
23.1 Consent of Price Waterhouse.
23.2 Consent of Johnson & Wortley, P.C. (included in Exhibit 5).
24 Power of Attorney of officers and directors of the Company
(included on signature page).
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3 and the information
required to be included in a post-effective amendment by those
4
<PAGE> 5
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
2. That, for any purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Austin, State of Texas, on July 8, 1994.
DELL COMPUTER CORPORATION
(Registrant)
By: /s/ Michael S. Dell
Michael S. Dell
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated. Each person whose signature appears
below hereby authorizes and appoints Michael S. Dell and Thomas J. Meredith as
his or her attorney-in-fact to sign on his or her behalf individually and in
the capacity stated below all amendments and post-effective amendments to this
registration statement as that attorney-in-fact may deem necessary or
appropriate.
/s/ Michael S. Dell July 8, 1994
- ---------------------------------
Michael S. Dell
Chairman of the Board, Chief Executive Officer and Director
/s/ Thomas J. Meredith July 8, 1994
- ---------------------------------
Thomas J. Meredith
Chief Financial Officer
(principal financial officer)
/s/ Donald J. Carty July 8, 1994
- ---------------------------------
Donald J. Carty
Director
/s/ Paul O. Hirschbiel, Jr. July 8, 1994
- ---------------------------------
Paul O. Hirschbiel, Jr.
Director
<PAGE> 7
/s/ Michael H. Jordan July 8, 1994
- ---------------------------------
Michael H. Jordan
Director
/s/ George Kozmetsky July 8, 1994
- ---------------------------------
George Kozmetsky
Director
/s/ Thomas W. Luce III July 8, 1994
- ---------------------------------
Thomas W. Luce III
Director
/s/ Claudine B. Malone July 8, 1994
- ---------------------------------
Claudine B. Malone
Director
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
No. Description of Exhibits Page
------- ----------------------- ------------
<S> <C>
4.1 Certificate of Incorporation of Dell Computer Corporation, as amended (incorporated by reference to Exhibit 3.1 of
the Company's Annual Report on Form 10-K for the year ended February 2, 1992, Commission File No. 0-17017).
4.2 Certificate of Amendment to the Certificate of Incorporation of the Company (incorporated by reference to Exhibit
3.2 of the Company's Annual Report on Form 10-K for the year ended January 31, 1993, Commission File No. 0-17017).
4.3 Certificate of Stock Designation of the Company (incorporated by reference to Exhibit 3.3 of the Company's
Registration Statement on Form S-4 as filed with the Securities and Exchange Commission on October 1, 1993,
Registration No. 33-69680).
4.4 Certificate of Corrections dated April 27, 1994 (incorporated by reference to Exhibit 3.1 of the Company's Report
on Form 10-Q for the Quarterly Period ended May 1, 1994, Commission file No. 0-17017).
4.5 Bylaws of the Company, as amended (incorporated by reference to Exhibit 3.2 of the Company's Annual Report on Form
10-K for the year ended February 2, 1992, Commission File No. 0-17017).
4.6* Dell Computer Corporation Incentive Plan.
5* Opinion of Johnson & Wortley, P.C.
23.1* Consent of Price Waterhouse.
23.2 Consent of Johnson & Wortley, P.C. (included in Exhibit 5).
24 Power of Attorney of officers and directors of the Company (included on signature page).
</TABLE>
- ----------------------
* Filed herewith.
8
<PAGE> 1
EXHIBIT 4.6
DELL COMPUTER CORPORATION
INCENTIVE PLAN
June 22, 1994
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 Maximum Amount of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Reduction in Available Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Restoration of Unused Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Description of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Registration and Listing of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 Reduction in Outstanding Shares of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.7 Limitation on Certain Stock Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.1 Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Duration, Removal, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.3 Meetings and Actions of Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.4 Committee's Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4. ELIGIBILITY AND PARTICIPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.1 Eligible Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Grant of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Date of Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.4 Award Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Limitation for Incentive Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.6 No Right to Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.7 Limitation on Individual Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.8 Family Trusts of Eligible Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5. AWARDS TO NON-EMPLOYEE DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Ineligibility for Other Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Automatic Grant of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Available Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Terms and Conditions of Automatic Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5 Non-Employee Director Retainer Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.6 Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 6. TERMS AND CONDITIONS OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Vesting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.3 Expiration of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4 Exercise Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.5 Method of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.6 Incentive Option Exercises and Disqualifying Dispositions . . . . . . . . . . . . . . . . . . . . 15
6.7 Medium and Time of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.8 Payment with Sale Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.9 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
6.10 Reload Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.11 Limitation on Aggregate Value of Shares That May Become First Exercisable During
Any Calendar Year Under an Incentive Option . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.12 No Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.13 Modification, Extension and Renewal of Options . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.14 Other Agreement Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 7. STOCK APPRECIATION RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.1 Form of Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Rights Related to Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.3 Right Without Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 Limitations on Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5 Payment of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.6 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.7 Other Agreement Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. STOCK AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.2 Expiration of Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.3 Rights as Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
8.4 Bonus Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.6 Other Agreement Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9. PERFORMANCE UNITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.1 Multiple Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.2 Performance Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.3 Modification of Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.4 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.5 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Other Agreement Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10. CHANGE-IN-CONTROL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 Changes in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.2 Restructure and No Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.3 Notice of Change in Control or Restructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11. ADDITIONAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.1 Adjustment of Awards and Authorized Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.2 Termination of Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
11.3 Other Loss of Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.4 Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
11.5 Retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.6 Disability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
11.7 Leave of Absence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.8 Transferability of Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.9 Forfeiture and Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
11.10 Delivery of Certificates of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.11 Conditions to Delivery of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.12 Certain Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.13 Securities Act Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.14 Legend for Restrictions on Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.15 Rights as a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.16 Furnish Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.17 Obligation to Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.18 Adjustments to Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.19 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.20 Information Confidential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.21 Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.22 Deferral of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.23 Restructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12. DURATION AND AMENDMENT OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.1 Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 13. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.1 Application of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.2 Right of the Corporation and Subsidiaries to Terminate Employment . . . . . . . . . . . . . . . . . . 35
13.3 No Liability for Good Faith Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.4 Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
13.5 Exclusion From Pension and Profit-Sharing Compensation . . . . . . . . . . . . . . . . . . . . . . . . 35
13.6 Execution of Receipts and Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.7 Unfunded Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.8 No Guarantee of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.9 Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.10 Corporation Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.11 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.12 No Liability of Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.13 Corporation Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.15 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.16 Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.17 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.18 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.19 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
13.20 Word Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ANNEX A NONSTATUTORY STOCK OPTION AGREEMENT
(ANNUAL) (INITIAL) AWARD FOR NON-EMPLOYEE DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . A-1
ANNEX B NONSTATUTORY STOCK OPTION AGREEMENT
RETAINER AWARD FOR NON-EMPLOYEE DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
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<PAGE> 5
DELL COMPUTER CORPORATION
INCENTIVE PLAN
SCOPE AND PURPOSE OF PLAN
Dell Computer Corporation, a Delaware corporation (the "Corporation"),
has adopted this Dell Computer Corporation Incentive Plan (the "Plan") to
provide for the granting of:
(a) Incentive Options (hereafter defined) to certain Key
Employees (hereafter defined);
(b) Nonstatutory Options (hereafter defined) to certain Key
Employees, Non-employee Directors (hereafter defined), and
other persons;
(c) Performance Units (hereafter defined) to certain Key
Employees and other persons;
(d) Stock Awards (hereafter defined) to certain Key Employees and
other persons; and
(e) Stock Appreciation Rights (hereafter defined) to certain Key
Employees and other persons.
The purpose of the Plan is to provide an incentive for Key Employees,
directors, and certain consultants and advisors of the Corporation or its
Subsidiaries (hereafter defined) to remain in the service of the Corporation or
its Subsidiaries, to extend to them the opportunity to acquire a proprietary
interest in the Corporation so that they will apply their best efforts for the
benefit of the Corporation, and to aid the Corporation in attracting able
persons to enter the service of the Corporation and its Subsidiaries.
SECTION 1. DEFINITIONS
1.1 "Acquiring Person" means any Person other than Michael S.
Dell, any trust created by Michael S. Dell for family or estate-planning
purposes (or any trustee or other fiduciary of such a trust acting as such),
the Corporation, any of the Corporation's Subsidiaries, any employee benefit
plan of the Corporation or of a Subsidiary of the Corporation or of a
corporation owned directly or indirectly by the stockholders of the Corporation
in substantially the same proportions as their ownership of stock of the
Corporation, any trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or of a Subsidiary of the Corporation
or of a corporation owned directly or indirectly by the stockholders of the
Corporation in substantially the same proportions as their ownership of stock
of the Corporation.
1.2 "Award" means the grant of any form of Option, Performance
Unit, Reload Option, Stock Appreciation Right or Stock Award under the Plan,
whether granted singly, in combination, or in tandem, to a Holder pursuant to
the terms, conditions, and limitations that the Committee may establish in
order to fulfill the objectives of the Plan.
1.3 "Award Agreement" means the written document or agreement
evidencing the terms, conditions, and limitations of the Award granted by the
Corporation to that Holder.
<PAGE> 6
1.4 "Board of Directors" means the board of directors of the
Corporation.
1.5 "Business Day" means any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
1.6 "Change in Control" means the event that is deemed to have
occurred if:
(a) any Acquiring Person is or becomes the "beneficial
owner" (as defined in Rule l3d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation representing thirty
percent or more of the combined voting power of the then outstanding
Voting Securities of the Corporation; or
(b) members of the Incumbent Board cease for any reason
to constitute at least a majority of the Board of Directors; or
(c) a public announcement is made of a tender or exchange
offer by any Acquiring Person for fifty percent or more of the
outstanding Voting Securities of the Corporation, and the Board of
Directors approves or fails to oppose that tender or exchange offer in
its statements in Schedule 14D-9 under the Exchange Act; or
(d) the stockholders of the Corporation approve a merger
or consolidation of the Corporation with any other corporation or
partnership (or, if no such approval is required, the completion of
such a merger or consolidation of the Corporation), other than a
merger or consolidation that would result in the Voting Securities of
the Corporation outstanding immediately before the completion thereof
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity or of a
parent of the surviving entity) a majority of the combined voting
power of the Voting Securities of the surviving entity (or its parent)
outstanding immediately after that merger or consolidation; or
(e) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale
or disposition by the Corporation of all or substantially all the
Corporation's assets (or, if no such approval is required, the
completion of such a liquidation, sale, or disposition in one
transaction or series of related transactions) other than a
liquidation, sale or disposition of all or substantially all the
Corporation's assets in one transaction or a series of related
transactions to a corporation owned directly or indirectly by the
stockholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation.
1.7 "Code" means the Internal Revenue Code of 1986, as amended.
1.8 "Committee" means the committee appointed pursuant to Section
3 by the Board of Directors to administer this Plan.
1.9 "Corporation" means Dell Computer Corporation, a Delaware
corporation.
1.10 "Date of Grant" has the meaning given it in Paragraph 4.3.
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<PAGE> 7
1.11 "Disability" has the meaning given it in Paragraph 11.6.
1.12 "Disinterested Person" means a person who is both a
"disinterested person" under Rule 16b-3 and an "outside director" as defined in
section 162(m) (hereafter defined), unless the Board of Directors has
determined that the Plan should not comply with Rule 16b-3 or section 162(m),
or both.
1.13 "Effective Date" means the date on which the Plan is approved
by the stockholders of the Corporation.
1.14 "Eligible Individuals" means (a) Key Employees, (b)
Non-employee Directors only for purposes of Awards pursuant to Section 5, and
(c) any other Person that the Committee designates as eligible for an Award
(other than for Incentive Options) because the Person performs bona fide
consulting or advisory services for the Corporation or any of its Subsidiaries
(other than services in connection with the offer or sale of securities in a
capital-raising transaction) and the Committee determines that the Person has a
direct and significant effect on the financial development of the Corporation
or any of its Subsidiaries. Notwithstanding the foregoing provisions of this
Paragraph 1.14, to ensure that the requirements of the fourth sentence of
Paragraph 3.1 are satisfied, the Board of Directors may from time to time
specify individuals who shall not be eligible for the grant of Awards or
options or stock appreciation rights or allocations of stock under any plan of
the Corporation or its affiliates (as those terms are used in subsection (c)(2)
of Rule 16b-3). Nevertheless, the Board of Directors may at any time determine
that an individual who has been so excluded from eligibility shall become
eligible for grants of Awards and grants of such other options or stock
appreciation rights or allocations of stock under any plans of the Corporation
or its affiliates so long as that eligibility will not impair the Plan's
satisfaction of the conditions of Rule 16b-3, unless the Board of Directors has
determined that the Plan should not comply with Rule 16b-3.
1.15 "Employee" means any employee of the Corporation or of any of
its Subsidiaries, including officers and directors of the Corporation who are
also employees of the Corporation or of any of its Subsidiaries.
1.16 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
1.17 "Executive Officer" means an Eligible Individual who, as of
the earlier of the date an Award is vested, the date restrictions with respect
to an Award lapse, or a payment is made pursuant to the terms of the Award
Agreement, is one of the "covered employees" defined in regulations promulgated
under section 162(m) or any successor provision of law.
1.18 "Exercise Notice" has the meaning given it in Paragraph 6.5.
1.19 "Exercise Price" has the meaning given it in Paragraph 6.4.
1.20 "Fair Market Value" means, for a particular day:
(a) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges on any national or regional
securities exchange at the date of determining the Fair Market Value,
then the average of the high and low reported sales prices, regular
way, on the composite tape of that exchange on the date in question
or, if such day is not a Business Day or no such sales are reported
that day, on the last Business Day for which such sales are reported
3
<PAGE> 8
before the date in question, in any case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to unlisted trading privileges on that securities
exchange; or
(b) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in subparagraph
1.20(a) and if sales prices for shares of Stock of the same class in
the over-the-counter market are reported by the National Association
of Securities Dealers, Inc. Automated Quotations, Inc. ("NASDAQ")
National Market System (or such other system then in use) at the date
of determining the Fair Market Value, then the average of the high and
low reported sales prices on the date in question or, if such day is
not a Business Day or no such sales are reported that day, on the last
Business Day for which such sales are reported before the date in
question; or
(c) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in subparagraph
1.20(a) and sales prices for shares of Stock of the same class are not
reported by the NASDAQ National Market System (or a similar system
then in use) as provided in subparagraph 1.20(b), and if bid and asked
prices for shares of Stock of the same class in the over-the-counter
market are reported by NASDAQ (or, if not so reported, by the National
Quotation Bureau Incorporated) at the date of determining the Fair
Market Value, then the average of the high bid and low asked prices on
the date in question or, if such day is not a Business Day or no such
prices are reported that day, on the last Business Day for which such
prices are reported before the date in question; or
(d) If shares of Stock of the same class are not listed
or admitted to unlisted trading privileges as provided in subparagraph
1.20(a) and sales prices or bid and asked prices therefor are not
reported by NASDAQ (or the National Quotation Bureau Incorporated) as
provided in subparagraph 1.20(b) or subparagraph 1.20(c) at the date
of determining the Fair Market Value, then the value determined in
good faith by the Committee, which determination shall be conclusive
for all purposes; or
(e) If shares of Stock of the same class are listed or
admitted to unlisted trading privileges as provided in subparagraph
1.20(a) or sales prices or bid and asked prices therefor are reported
by the NASDAQ National Market System or by NASDAQ (or the National
Quotation Bureau Incorporated) as provided in subparagraph 1.20(b) or
subparagraph 1.20(c) at the date of determining the Fair Market Value,
but the volume of trading is so low that the Board of Directors
determines in good faith that such prices are not indicative of the
fair value of the Stock, then the value determined in good faith by
the Committee, which determination shall be conclusive for all
purposes notwithstanding the provisions of subparagraphs 1.20(a), (b),
or (c).
For purposes of valuing Incentive Options, the Fair Market Value of Stock shall
be determined without regard to any restriction other than one that, by its
terms, will never lapse. For purposes of the redemption provided for in clause
10.2(d)(v) and Paragraph 11.23, Fair Market Value shall have the meaning and
shall be determined as provided above; provided, however, that the Committee,
with respect to any such redemption, shall have the right to determine that the
Fair Market Value for purposes of the redemption should be an amount measured
by the value of the shares of stock, other securities, cash or property
otherwise being received by holders of shares of Stock in connection with the
Restructure, and upon that determination the Committee shall have the power and
authority to determine Fair Market
4
<PAGE> 9
Value for purposes of the redemption based upon the value of such shares of
stock, other securities, cash or property. Any such determination by the
Committee shall be conclusive for all purposes.
1.21 "Holder" means an Eligible Individual to whom an Award has
been granted.
1.22 "Incentive Option" means an incentive stock option as defined
under Section 422 of the Code and regulations thereunder.
1.23 "Incumbent Board" means the individuals who, as of the
Effective Date, constitute the Board of Directors and any other individual who
becomes a director of the Corporation after that date and whose election or
appointment by the Board of Directors or nomination for election by the
Corporation's stockholders was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board.
1.24 "Key Employee" means any Employee whom the Committee
identifies as having a direct and significant effect on the performance of the
Corporation or any of its Subsidiaries.
1.25 "Non-employee Director" means a director of the Corporation
who while a director is not (and who in the year before becoming a director has
not been) an Employee.
1.26 "Nonstatutory Option" means a stock option that does not
satisfy the requirements of Section 422 of the Code or that is designated at
the Date of Grant or in the applicable Option Agreement to be an option other
than an Incentive Option.
1.27 "Non-Surviving Event" means an event of Restructure as
described in either subparagraph (b) or (c) of Paragraph 1.37
1.28 "Normal Retirement" means the separation of the Holder from
employment with the Corporation and its Subsidiaries on account of retirement
at any time on or after the date on which the Holder reaches age sixty-five if
the Holder is employed in the United States of America or such other age as
provided for by the Committee as the normal retirement age in the country where
the Holder is employed.
1.29 "Option Agreement" means an Award Agreement for an Incentive
Option or a Nonstatutory Option.
1.30 "Option" means either an Incentive Option or a Nonstatutory
Option, or both.
1.31 "Performance Period" means a period of not fewer than six
months over which performance is measured for the purpose of determining the
payment value of Performance Units. A Performance Period shall not exceed ten
years.
1.32 "Performance Unit" means a unit representing a contingent
right to receive a specified amount of cash or shares of Stock at the end of a
Performance Period.
1.33 "Person" means any person or entity of any nature whatsoever,
specifically including (but not limited to) an individual, a firm, a company, a
corporation, a partnership, a trust or other entity. A Person, together with
that Person's affiliates and associates (as those terms are defined in Rule
12b-2
5
<PAGE> 10
under the Exchange Act for purposes of this definition only), and any Persons
acting as a partnership, limited partnership, joint venture, association,
syndicate or other group (whether or not formally organized), or otherwise
acting jointly or in concert or in a coordinated or consciously parallel manner
(whether or not pursuant to any express agreement), for the purpose of
acquiring, holding, voting or disposing of securities of the Corporation with
that Person, shall be deemed a single "Person."
1.34 "Plan" means this Dell Computer Corporation Incentive Plan,
as it may be amended from time to time.
1.35 "Reload Option" has the meaning given it in Paragraph 6.10.
1.36 "Restricted Stock Award" means the grant or purchase, on the
terms and conditions that the Committee determines or on the terms and
conditions of Section 8, of Stock that is nontransferable and subject to
substantial risk of forfeiture until specific conditions are met.
1.37 "Restructure" means the occurrence of any one or more of the
following:
(a) The merger or consolidation of the Corporation with
any Person, whether effected as a single transaction or a series of
related transactions, with the Corporation remaining the continuing or
surviving entity of that merger or consolidation and the Stock
remaining outstanding and not changed into or exchanged for stock or
other securities of any other Person or of the Corporation, cash, or
other property;
(b) The merger or consolidation of the Corporation with
any Person, whether effected as a single transaction or a series of
related transactions, with (i) the Corporation not being the
continuing or surviving entity of that merger or consolidation or (ii)
the Corporation remaining the continuing or surviving entity of that
merger or consolidation but all or a part of the outstanding shares of
Stock are changed into or exchanged for stock or other securities of
any other Person or the Corporation, cash, or other property; or
(c) The transfer, directly or indirectly, of all or
substantially all of the assets of the Corporation (whether by sale,
merger, consolidation, liquidation or otherwise) to any Person whether
effected as a single transaction or a series of related transactions.
1.38 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act, or any successor rule, as it may be amended from time to time,
and references to paragraphs or clauses of Rule 16b-3 shall refer to the
corresponding paragraphs or clauses or Rule 16b-3 as it exists at the Effective
Date or the comparable paragraph or clause of Rule 16b-3 as it may thereafter
be amended.
1.39 "SAR Exercise Price" has the meaning given it in Paragraph
1.43.
1.40 "section 162(m)" means section 162(m) of the Code and the
rules and regulations adopted from time to time thereunder, or any successor
law or rule as it may be amended from time to time.
1.41 "Securities Act" means the Securities Act of 1933, as amended.
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<PAGE> 11
1.42 "Stock" means the Corporation's authorized common stock, par
value $.01 per share, as described in the Corporation's Certificate of
Incorporation, or any other securities that are substituted for the Stock as
provided in Paragraph 11.1.
1.43 "Stock Appreciation Right" means the right to receive an
amount equal to the excess of the Fair Market Value of a share of Stock (as
determined on the date of exercise) over, as appropriate, the Exercise Price of
a related Option or over a price specified in the related Award Agreement (the
"SAR Exercise Price") that is not less than fifty percent of the Fair Market
Value of the Stock on the Date of Grant of the Stock Appreciation Right.
1.44 "Stock Award" means the grant or purchase, on the terms and
conditions that the Committee determines or on the terms and conditions of
Section 8, of a Restricted Stock Award or a Stock Bonus Award.
1.45 "Stock Bonus Award" means the grant or purchase, on the terms
and conditions that the Committee determines or on the terms and conditions of
Paragraph 8.4, of Stock that is not subject to a substantial risk of forfeiture
if conditions imposed by the Committee are not satisfied.
1.46 "Stockholder Approved Standard" means initially (a) total
stockholder return (Stock price appreciation plus dividends), (b) net income,
(c) earnings per share, (d) return on sales, (e) return on equity, (f) return
on assets, (g) increase in the market price of Stock or other securities, (h)
the performance of the Corporation in any of the items mentioned in clause (a)
through (g) in comparison to the average performance of the companies included
in the S&P Computer Systems Index or successor index, or (i) the performance of
the Corporation in any of the items mentioned in clause (a) through (g) in
comparison to the average performance of the companies used in a
self-constructed peer group established before the beginning of the Performance
Period; and any other performance objective approved by the stockholders of the
Corporation in accordance with section 162(m).
1.47 "Subsidiary" means, with respect to any Person, any
corporation, limited partnership or other entity of which a majority of the
voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by that Person.
1.48 "Total Shares" has the meaning given it in Paragraph 10.1.
1.49 "Voting Securities" means any securities that are entitled to
vote generally in the election of directors, in the admission of general
partners, or in the selection of any other similar governing body.
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN
2.1 Maximum Amount of Shares. Subject to the provisions of
Paragraph 2.6 and Paragraph 11.1 of the Plan, the aggregate number of shares of
Stock that may be issued or transferred pursuant to Awards under the Plan shall
be 4,500,255 shares of Stock.
2.2 Reduction in Available Shares. In computing the total number
of shares available at a particular time for Awards under the Plan, there shall
be counted against the limitations stated in Paragraph 2.1 the number of shares
of Stock subject to issuance upon exercise or settlement of outstanding Awards,
the number of shares of Stock that equal the value of outstanding Performance
Units determined in each case as of the Date of Grant of each Award (other than
Awards designated to be paid
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<PAGE> 12
only in cash), and the number of shares of Stock that have been issued upon
exercise or settlement of outstanding Awards (except as otherwise provided in
Paragraph 2.3).
2.3 Restoration of Unused Shares. If Stock subject to any Award
is not issued or transferred, or ceases to be issuable or transferable for any
reason, including (but not exclusively) because an Award is forfeited,
terminated, expires unexercised, is settled in cash in lieu of Stock, or is
exchanged for other Awards, the shares of Stock that were subject to that Award
shall no longer be charged against the number of available shares provided for
in Paragraph 2.2 and shall again be available for issue, transfer, or exercise
pursuant to Awards under the Plan to the extent of such forfeiture,
termination, expiration, or other cessation of their subjection to an Award.
2.4 Description of Shares. The shares to be delivered under the
Plan shall be made available from (a) authorized but unissued shares of Stock,
(b) Stock held in the treasury of the Corporation, or (c) previously issued
shares of Stock reacquired by the Corporation, including shares purchased on
the open market, in each situation as the Board of Directors or the Committee
may determine from time to time at its sole option.
2.5 Registration and Listing of Shares. From time to time, the
Board of Directors and appropriate officers of the Corporation shall and are
authorized to take whatever actions are necessary to file required documents
with governmental authorities, stock exchanges, and other appropriate Persons
to make shares of Stock available for issuance pursuant to Awards.
2.6 Reduction in Outstanding Shares of Stock. Nothing in this
Section 2 shall impair the right of the Corporation to reduce the number of
outstanding shares of Stock pursuant to repurchases, redemptions, or otherwise;
provided, however, that no reduction in the number of outstanding shares of
Stock shall (a) impair the validity of any outstanding Award, whether or not
that Award is fully exercisable or fully vested or (b) impair the status of any
shares of Stock previously issued pursuant to an Award or thereafter issued
pursuant to a then-outstanding Award as duly authorized, validly issued, fully
paid, and nonassessable shares.
2.7 Limitation on Certain Stock Awards. No more than twenty-five
percent of the aggregate shares of Stock which may be issued under the Plan may
be issued pursuant to Stock Awards; provided, however, that the limitation
expressed in this Section 2.7 shall not apply with respect to shares of Stock
issued in connection with the exercise or settlement of an Option, Stock
Appreciation Right, or Performance Unit, whether or not such shares of Stock
are subject to a substantial risk of forfeiture when issued.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee. The Committee shall administer the Plan with
respect to all Eligible Individuals who are subject to Section 16(b) of the
Exchange Act, but shall not have the power to appoint members of the Committee
or to terminate, modify, or amend the Plan. The Board of Directors may
administer the Plan with respect to all other Eligible Individuals or may
delegate all or part of that duty to the Committee or to any other person or
persons. Except for references in Paragraphs 3.1, 3.2, and 3.3 and unless the
context otherwise requires, references herein to the Committee shall also refer
to the Board of Directors or its delegee as administrator of the Plan for
Eligible Individuals who are not subject to Section 16(b) of the Exchange Act.
Unless the Board of Directors determines not to have Awards under the Plan
comply with the requirements of Rule 16b-3 and section 162(m), the Committee
shall be
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constituted so that, as long as Stock is registered under Section 12 of the
Exchange Act, then (a) each member of the Committee shall be a Disinterested
Person who is a member of the Board of Directors and so that the Plan in all
other applicable respects will qualify transactions related to the Plan for the
exemptions from Section 16(b) of the Exchange Act provided by Rule 16b-3, to
the extent exemptions thereunder may be available, and (b) no discretion
regarding Awards to Eligible Individuals who are subject to Section 16(b) of
the Exchange Act shall be afforded to a person who is not a Disinterested
Person. The number of persons that shall constitute the Committee shall be
determined from time to time by a majority of all the members of the Board of
Directors, and, unless that majority of the Board of Directors determines
otherwise, shall be no fewer than two persons. Persons elected to serve on the
Committee as Disinterested Persons shall not be eligible to receive Awards or
equity securities under any plan of the Corporation or its affiliates (as those
terms are used in Rule 16b-3) while they are serving as members of the
Committee and shall not have been granted or awarded equity securities under
the Plan or any other plan of the Corporation or any of its affiliates within
one year before their appointment to the Committee becomes effective, in each
case except for Awards or equity securities pursuant to paragraphs
(c)(2)(i)(A), (B), (C) or (D) of Rule 16b-3.
3.2 Duration, Removal, Etc. The members of the Committee shall
serve at the pleasure of the Board of Directors, which shall have the power, at
any time and from time to time, to remove members from or add members to the
Committee. Removal from the Committee may be with or without cause. Any
individual serving as a member of the Committee shall have the right to resign
from membership in the Committee by at least three day's written notice to the
Board of Directors. The Board of Directors, and not the remaining members of
the Committee, shall have the power and authority to fill vacancies on the
Committee, however caused. The Board of Directors shall promptly fill any
vacancy that causes the number of members of the Committee to be below two or
any other number that Rule 16b-3 may require from time to time (unless the
Board of Directors expressly determines not to have Awards under the Plan
comply with Rule 16b-3).
3.3 Meetings and Actions of Committee. The Board of Directors
shall designate which of the Committee members shall be the chairman of the
Committee. If the Board of Directors fails to designate a Committee chairman,
the members of the Committee shall elect one of the Committee members as
chairman, who shall act as chairman until the director ceases to be a member of
the Committee or until the Board of Directors elects a new chairman. The
Committee shall hold its meetings at those times and places as the chairman of
the Committee may determine. At all meetings of the Committee, a quorum for
the transaction of business shall be required, and a quorum shall be deemed
present if at least a majority of the members of the Committee are present. At
any meeting of the Committee, each member shall have one vote. All decisions
and determinations of the Committee shall be made by the majority vote or
majority decision of all of its members present at a meeting at which a quorum
is present; provided, however, that any decision or determination reduced to
writing and signed by all of the members of the Committee shall be as fully
effective as if it had been made at a meeting that was duly called and held.
The Committee may make any rules and regulations for the conduct of its
business that are not inconsistent with the provisions of the Plan, the
Certificate of Incorporation, the by-laws of the Corporation, and Rule 16b-3 so
long as it is applicable, as the Committee may deem advisable.
3.4 Committee's Powers. Subject to the express provisions of the
Plan and Rule 16b-3 so long as it is applicable, the Committee shall have the
authority, in its sole and absolute discretion, (a) to adopt, amend, and
rescind administrative and interpretive rules and regulations relating to the
Plan; (b) to determine the Eligible Individuals to whom, and the time or times
at which, Awards shall be granted; (c)
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to determine the number of shares of Stock that shall be the subject of each
Award; (d) to determine the terms and provisions of each Award Agreement (which
need not be identical) and any amendments thereto, including provisions
defining or otherwise relating to (i) the term and the period or periods and
extent of exercisability of the Options, (ii) the extent to which the
transferability of shares of Stock issued or transferred pursuant to any Award
is restricted, (iii) the effect of termination of employment on the Award, and
(iv) the effect of approved leaves of absence (consistent with any applicable
regulations of the Internal Revenue Service); (e) to accelerate, pursuant to
Section 6, the time of exercisability of any Option that has been granted; (f)
to construe the respective Award Agreements and the Plan; (g) to make
determinations of the Fair Market Value of the Stock pursuant to the Plan; (h)
to amend any Award Agreement or waive any provision, condition or limitation
thereof; (i) to delegate its duties under the Plan to such agents as it may
appoint from time to time, provided that the Committee of Disinterested Persons
may not delegate its duties with respect to making Awards to Eligible
Individuals who are subject to Section 16(b) of the Exchange Act (unless the
Board of Directors expressly determines not to have Awards under the Plan
comply with Rule 16b-3); and (j) to make all other determinations, perform all
other acts, and exercise all other powers and authority necessary or advisable
for administering the Plan, including the delegation of those ministerial acts
and responsibilities as the Committee deems appropriate. Subject to Rule 16b-3
so long as it is applicable, the Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan, in any Award, or in any
Award Agreement in the manner and to the extent it deems necessary or desirable
to carry the Plan into effect, and the Committee shall be the sole and final
judge of that necessity or desirability. The determinations of the Committee
on the matters referred to in this Paragraph 3.4 shall be final and conclusive.
SECTION 4. ELIGIBILITY AND PARTICIPATION
4.1 Eligible Individuals. Awards may be granted pursuant to the
Plan only to persons who are Eligible Individuals at the time of the grant
thereof.
4.2 Grant of Awards. Subject to the express provisions of the
Plan, the Committee shall determine which Eligible Individuals shall be granted
Awards from time to time. In making grants, the Committee shall take into
consideration the contribution the potential Holder has made or may make to the
success of the Corporation or its Subsidiaries and such other considerations as
the Committee may from time to time specify. The Committee shall also
determine the number (or the manner of determining the number) of shares or
cash amounts subject to each of the Awards and shall authorize and cause the
Corporation to grant Awards in accordance with those determinations.
4.3 Date of Grant. The date on which the Award covered by an
Award Agreement is granted (the "Date of Grant") shall be the date specified by
the Committee as the effective date or date of grant of an Award or, if the
Committee does not so specify, shall be the date the Committee adopts the
resolution approving the offer of an Award to an individual, including the
specification of the number (or method of determining the number) of shares of
Stock and the amount (or method of determining the amount) of cash to be
subject to the Award, even though certain terms of the Award Agreement may not
be determined at that time and even though the Award Agreement may not be
executed until a later time. In no event shall a Holder gain any rights in
addition to those specified by the Committee in its grant, regardless of the
time that may pass between the grant of the Award and the actual execution or
delivery of the Award Agreement by the Corporation and the Holder. The
Committee may invalidate an Award at any time before the Award Agreement is
signed by the Holder (if signature is required) or is delivered to the Holder
(if signature is not required), and such Award shall be treated as never having
been granted.
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4.4 Award Agreements. Each Award granted under the Plan shall be
evidenced by an Award Agreement that is executed by the Corporation and the
Eligible Individual to whom the Award is granted and incorporating those terms
that the Committee shall deem necessary or desirable. More than one Award may
be granted under the Plan to the same Eligible Individual and be outstanding
concurrently. If an Eligible Individual is granted both one or more Incentive
Options and one or more Nonstatutory Options, those grants shall be evidenced
by separate Award Agreements, one for each of the Incentive Option grants and
one for each of the Nonstatutory Option grants.
4.5 Limitation for Incentive Options. Notwithstanding any
provision contained herein to the contrary, (a) a person shall not be eligible
to receive an Incentive Option unless the person is an Employee of the
Corporation or a corporate Subsidiary (but not a partnership or other
non-corporate Subsidiary), and (b) a person shall not be eligible to receive an
Incentive Option if, immediately before the time the Option is granted, that
person owns (within the meaning of Sections 422 and 425 of the Code) stock
possessing more than ten percent of the total combined voting power or value of
all classes of stock of the Corporation or a Subsidiary. Nevertheless, this
subparagraph 4.5(b) shall not apply if, at the time the Incentive Option is
granted, the Exercise Price of the Incentive Option is at least one hundred and
ten percent of Fair Market Value and the Incentive Option is not, by its terms,
exercisable after the expiration of five years from the Date of Grant.
4.6 No Right to Award. The adoption of the Plan shall not be
deemed to give any person a right to be granted an Award except pursuant to
Section 5.
4.7 Limitation on Individual Awards. No Eligible Individual
shall, in one calendar year, receive Awards to which more than 200,000 shares
of Stock are subject.
4.8 Family Trusts of Eligible Persons. Notwithstanding any other
limitation on the transferability of Awards, the Committee may (in its sole
discretion) permit a Holder to transfer an Award, or may cause the Corporation
to grant an Award that otherwise would be granted to an Eligible Individual, to
a trust established for the benefit of one or more of the children,
grandchildren or spouse of the Holder or Eligible Individual or pursuant to a
qualified domestic relations order. Any Holder or Eligible Individual desiring
such transfers or issuances shall make application therefor in the manner and
time specified by the Committee and shall comply with such other requirements
as the Committee may require to assure compliance will all applicable
securities laws. The Committee shall not give permission for such an issuance
or transfer if it would give rise to short-swing liability under Section 16(b)
of the Exchange Act or if it may not be made in compliance with all applicable
federal, state and foreign securities laws. The granting of permission for
such an issuance or transfer shall not obligate the Corporation to register the
shares of Stock to be issued under the applicable Award.
SECTION 5. AWARDS TO NON-EMPLOYEE DIRECTORS
5.1 Ineligibility for Other Awards. Non-employee Directors shall
not be eligible to receive any Awards under the Plan other than the automatic
and retainer Awards specified in this Section 5.
5.2 Automatic Grant of Awards. Awards of Nonstatutory Options
shall be made automatically to Non-employee Directors as follows:
(a) Beginning in 1994, each Non-employee Director who is
a director of the Corporation as of both the day immediately preceding
the annual meeting of the Corporation's
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stockholders and the day immediately following the annual meeting
shall automatically be granted a Nonstatutory Option for the purchase
of 6,000 shares of Stock effective on the date of the first meeting of
the Board of Directors following the annual meeting, whether or not
that director is in attendance at that meeting.
(b) Each non-Employee individual who becomes a
Non-employee Director on or following the Effective Date shall, on the
day after the first meeting of the Board of Directors that the
Non-employee Director attends in person or by telephone as a
Non-employee Director, automatically be granted a Nonstatutory Option
for the purchase of 15,000 shares of Stock.
5.3 Available Stock. The automatic Awards specified in Paragraph
5.2 shall be made in the amounts specified in Paragraph 5.2 only if the number
of shares of Stock available to be issued, transferred or exercised pursuant to
Awards under the Plan (as calculated in Section 2) is sufficient to make all
automatic grants required to be made by Paragraph 5.2 on the Date of Grant of
those automatic Awards. If a lesser number of shares of Stock are available to
be issued or transferred pursuant to Awards under the Plan on the Date of Grant
of the automatic Awards described Paragraph 5.2, but their number is
insufficient to permit the grant of the entire number of shares specified in
the automatic Awards, then the number of available shares shall be apportioned
equally among the automatic Awards made on that date, and the number of shares
apportioned to each automatic Award shall be the amount of shares automatically
subject to that automatic Award.
5.4 Terms and Conditions of Automatic Award. Award Agreements
for Nonstatutory Option Awards to Non-employee Directors shall be in the form
attached as Annex A and, except as expressly provided in those Award
Agreements, the automatic Awards to Non-employee Directors shall not be subject
to the provisions of Section 10 or 11. In addition, the following terms and
conditions shall apply to automatic Awards pursuant to Paragraph 5.2:
(a) With respect to Nonstatutory Option Awards granted
pursuant to Paragraph 5.2(a): (i) the exercise price for each share
of Stock subject to the Option shall be the Fair Market Value of a
share of Stock on the Date of Grant of such Option; (ii) the Option
shall become vested and exercisable with respect to 1,200 shares of
Stock (or, if less, one- fifth of the number determined pursuant to
Paragraph 5.3) on each of the first five anniversaries of that Date of
Grant so long as the Non-employee Director remains a director of the
Corporation after the Date of Grant through those dates; and (iii) the
Option shall terminate on the earliest of (A) 11:59 p.m., central
time, on the date ten years from the Date of Grant, (B) immediately
when the Holder ceases to be a director, if the Board demands or
requests the Holder's resignation from the Board, (C) 11:59 p.m.,
central time, on the date 90 days after the Holder ceases to be a
director for any reason other than the reasons specified in the
preceding clause (B) or the following clause (D), or (D) 11:59 p.m.,
central time, on the date one year after the Holder ceases to be a
director because of death or permanent disability.
(b) With respect to Nonstatutory Option Awards granted
pursuant to Paragraph 5.2(b): (i) the exercise price for each share
of Stock subject to the Option shall be the Fair Market value of a
share of Stock on the Date of Grant of such Option; (ii) the Option
shall become vested and exercisable with respect to 3,000 shares of
Stock (or, if less, one- fifth of the number determined pursuant to
Paragraph 5.3) on each of the first five anniversaries of that Date of
Grant so long as the Non-employee Director remains a director of the
Corporation after the Date of Grant through those dates; and (iii) the
Option shall terminate on the earliest of (A) 11:59
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p.m., central time, on the date ten years from the Date of Grant, (B)
immediately when the Holder ceases to be a director, if the Board
demands or requests the Holder's resignation from the Board, (C) 11:59
p.m., central time, on the date 90 days after the Holder ceases to be
a director for any reason other than the reasons specified in the
preceding clause (B) or the following clause (D), or (D) 11:59 p.m.,
central time, on the date one year after the Holder ceases to be a
director because of death or permanent disability.
5.5 Non-Employee Director Retainer Awards. A Non-employee
Director may elect to receive Nonstatutory Options in lieu of all or a portion
of the director's annual cash retainer fee for services as a Non-employee
Director of the Corporation.
(a) Method of Election. Except as otherwise specified by
the Committee, the election shall be made in accordance with the
following provisions. The election may be made only by written notice
delivered to the Committee at least six months and one day before the
date the cash payment would otherwise be made, but in no event later
than the day before the annual meeting of stockholders of the
Corporation. The election shall be irrevocable except for payments
otherwise payable at least six months and one day after the date of a
written notice of revocation.
(b) Terms of Nonstatutory Options. Award Agreements for
Nonstatutory Option Awards to Non-employee Directors shall be in the
form attached as Annex B and, except as expressly provided in those
Award Agreements, the automatic Awards to Non-employee Directors shall
not be subject to the provisions of Section 10 or 11. In addition,
the following terms and conditions shall apply to Awards pursuant to
this Paragraph 5.5. The Date of Grant of a Nonstatutory Option
granted pursuant to this Paragraph 5.5 shall be the date on which the
portion of the annual cash retainer fee that the Non-employee Director
has elected not to receive would otherwise have been paid. The number
of shares subject to that Nonstatutory Option shall be determined by
dividing the foregone amount of the annual cash retainer fee otherwise
due and payable on the Date of Grant by the value of an option for one
share of Common Stock on the Date of Grant having the terms set forth
herein, which value shall be calculated pursuant to the Black-Scholes
Model based on the applicable assumptions used in calculating option
values in the most recent annual meeting proxy statement of the
Corporation. The exercise price with respect to a share of Stock
subject to that Nonstatutory Option shall be the Fair Market Value of
a share of Stock on the Nonstatutory Option's Date of Grant. The
right to exercise the Nonstatutory Option shall vest with respect to
20 percent of the shares subject to the Nonstatutory Option on each of
the first five anniversaries of the Date of Grant, and any unexercised
portion of the Nonstatutory Option shall terminate at 11:59 p.m.,
central time, on the tenth anniversary of the Date of Grant.
5.6 Tax Withholding. The Corporation shall have the right to
require a Non-employee Director to pay to the Corporation the amount necessary
to satisfy the Corporation's current or future obligation to withhold federal,
state or local income or other taxes that the Non-employee Director incurs by
granting, vesting or exercising of an Option. Tax withholding obligations in
respect of Options to Non-employee Directors may not be satisfied by the
Corporation's withholding of Stock subject to the Option or by the Non-employee
Director's transfer of Stock to the Corporation.
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SECTION 6. TERMS AND CONDITIONS OF OPTIONS
All Options granted under the Plan (other than Options granted to
Non-employee directors pursuant to Section 5) shall comply with, and the
related Option Agreements shall be deemed to include and be subject to, the
terms and conditions set forth in this Section 6 (to the extent each term or
condition applies to the form of Option) and also to the terms and conditions
set forth in Section 11; provided, however, that the Committee may authorize an
Option Agreement that expressly contains terms and provisions that differ from
any of the terms and provisions of Section 11. The Committee may also
authorize an Option Agreement that contains any or all of the terms and
provisions of Section 10 or similar terms and provisions; nevertheless, no term
or provision of Section 10 (or any similar term or provision) shall apply to an
Option Agreement unless the Option Agreement expressly states that such term or
provision applies.
6.1 Number of Shares. Each Option Agreement shall state the
total number of shares of Stock to which it relates.
6.2 Vesting. Each Option Agreement shall state the time,
periods or other conditions on which the right to exercise the Option or a
portion thereof shall vest and the number (or method of determining the number)
of shares of Stock for which the right to exercise the Option shall vest at
each such time, period or satisfaction of a condition.
6.3 Expiration of Options. Nonstatutory Options and Incentive
Options may be exercised during the term determined by the Committee and set
forth in the Option Agreement; provided that no Option shall be exercised after
the expiration of a period of ten years commencing on the Date of Grant of the
Incentive Option.
6.4 Exercise Price. Each Option Agreement shall state the
exercise price per share of Stock (the "Exercise Price"). The exercise price
per share of Stock subject to an Incentive Option shall not be less than the
greater of (a) the par value per share of the Stock or (b) 100% of the Fair
Market Value per share of the Stock on the Date of Grant of the Option. The
exercise price per share of Stock subject to a Nonstatutory Option shall not be
less than the greater of (a) the par value per share of the Stock or (b) fifty
percent of the Fair Market Value per share of the Stock on the Date of Grant of
the Option.
6.5 Method of Exercise. The Option shall be exercisable only by
written or recorded electronic notice of exercise in the manner specified by
the Committee from time to time (the "Exercise Notice") delivered to the
Corporation or its designated agent during the term of the Option, which notice
shall (a) state the number of shares of Stock with respect to which the Option
is being exercised, (b) be signed or otherwise given by the Holder of the
Option or by the person authorized to exercise the Option pursuant to Paragraph
11.4 if the Holder is dead or pursuant to Paragraph 11.6 if the Holder is
disabled, (c) be accompanied by the Exercise Price for all shares of Stock for
which the Option is exercised, unless provision for the payment of such
Exercise Price has been made pursuant to Paragraph 6.7 (if payment is to made
with Stock) or Paragraph 6.8, and (d) include such other information,
instruments, and documents as may be required to satisfy any other condition to
exercise contained in the Option Agreement. The Option shall not be deemed to
have been exercised unless all of the requirements of the preceding provisions
of this Paragraph 6.5 have been satisfied.
6.6 Incentive Option Exercises and Disqualifying Dispositions.
During the Holder's lifetime, only the Holder may exercise an Incentive Option.
The Holder of an Incentive Option shall immediately
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notify the Corporation in writing of any disposition of the Stock acquired
pursuant to the Incentive Option that would disqualify the Incentive Option
from the incentive option tax treatment afforded by Section 422 of the Code.
The notice shall state the number of shares disposed of, the dates of
acquisition and disposition of the shares, and the consideration received upon
that disposition.
6.7 Medium and Time of Payment. The Exercise Price of an Option
shall be payable in full upon the exercise of the Option (a) in cash or by an
equivalent means (such as that specified in Paragraph 6.8) acceptable to the
Committee, (b) on the Committee's prior consent, with shares of Stock owned by
the Holder (including shares to be received upon that exercise of the Option or
restricted shares already held by the Holder) and having a Fair Market Value at
least equal to the aggregate Exercise Price payable in connection with such
exercise, or (c) by any combination of clauses (a) and (b). If the Committee
elects to accept shares of Stock in payment of all or any portion of the
Exercise Price, then (for purposes of payment of the Exercise Price) those
shares of Stock shall be deemed to have a cash value equal to their aggregate
Fair Market Value determined as of the date of the delivery of the Exercise
Notice. If the Committee elects to accept shares of restricted Stock in
payment of all or any portion of the Exercise Price, then an equal number of
shares issued pursuant to the exercise shall be restricted on the same terms
and for the restriction period remaining on the shares used for payment.
6.8 Payment with Sale Proceeds. In addition, at the request of
the Holder and to the extent permitted by applicable law, the Committee may
(but shall not be required to) approve arrangements with a brokerage firm under
which that brokerage firm, on behalf of the Holder, shall pay to the
Corporation the Exercise Price of the Option being exercised (either as a loan
to the Holder or from the proceeds of the sale of Stock issued pursuant to that
exercise of the Option), and the Corporation shall promptly cause the exercised
shares to be delivered to the brokerage firm. Such transactions shall be
effected in accordance with the procedures that the Committee may establish
from time to time.
6.9 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation), at the time of
the exercise of an Option, the amount that the Committee deems necessary to
satisfy the Corporation's or its Subsidiary's current or future obligation to
withhold federal, state or local income or other taxes that the Holder incurs
by exercising an Option. Upon the exercise of an Option requiring tax
withholding, a Holder may (a) direct the Corporation to withhold from the
shares of Stock to be issued to the Holder the number of shares necessary to
satisfy the Corporation's obligation to withhold taxes, that determination to
be based on the shares' Fair Market Value as of the date on which tax
withholding is to be made; (b) deliver to the Corporation sufficient shares of
Stock (based upon the Fair Market Value at date of withholding) to satisfy the
Corporation's tax withholding obligations, based on the shares' Fair Market
Value as of the date of exercise; or (c) deliver sufficient cash to the
Corporation to satisfy its tax withholding obligations. Holders who elect to
use such a stock withholding feature must make the election at the time and in
the manner that the Committee prescribes. The Committee may, at its sole
option, deny any Holder's request to satisfy withholding obligations through
Stock instead of cash or may impose any conditions it deems appropriate on such
action, including the escrow of shares of Stock. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined
above) of any shares of Stock withheld as payment of any tax withholding
obligation is insufficient to discharge that tax withholding obligation, then
the Holder shall pay to the Corporation, immediately upon the Committee's
request, the amount of that deficiency.
6.10 Reload Provisions. Options may contain a provision pursuant
to which a Holder who pays all or a portion of the Exercise Price of an Option
or the tax required to be withheld pursuant to the
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exercise of an Option by surrendering shares of Stock shall automatically be
granted an Option for the purchase of the number of shares of Stock equal to
the number of shares surrendered (a "Reload Option"). The Date of Grant of the
Reload Option shall be the date on which the Holder surrenders the shares of
Stock in respect of which the Reload Option is granted. The Reload Option
shall have an Exercise Price equal to the Fair Market Value of a share of Stock
on the Date of Grant of the Reload Option and shall have a term that is no
longer than the original term of the underlying Option.
6.11 Limitation on Aggregate Value of Shares That May Become First
Exercisable During Any Calendar Year Under an Incentive Option. Except as is
otherwise provided in subparagraph 10.1(b), with respect to any Incentive
Option granted under this Plan, the aggregate Fair Market Value of shares of
Stock subject to an Incentive Option and the aggregate Fair Market Value of
shares of Stock or stock of any Subsidiary (or a predecessor of the Corporation
or a Subsidiary) subject to any other incentive stock option (within the
meaning of Section 422 of the Code) of the Corporation or its Subsidiaries (or
a predecessor corporation of any such corporation) that first become
purchasable by a Holder in any calendar year may not (with respect to that
Holder) exceed $100,000, or such other amount as may be prescribed under
Section 422 of the Code or applicable regulations or rulings from time to time.
As used in the previous sentence, Fair Market Value shall be determined as of
the date the Incentive Option is granted. For purposes of this Paragraph 6.11
"predecessor corporation" means (a) a corporation that was a party to a
transaction described in Section 424(a) of the Code (or which would be so
described if a substitution or assumption under that Section had been effected)
with the Corporation, (b) a corporation which, at the time the new incentive
stock option (within the meaning of Section 422 of the Code) is granted, is a
Subsidiary of the Corporation or a predecessor corporation of any such
corporations, or (c) a predecessor corporation of any such corporations.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code.
6.12 No Fractional Shares. The Corporation shall not in any case
be required to sell, issue, or deliver a fractional share with respect to any
Option. In lieu of the issuance of any fractional share of Stock, the
Corporation shall pay to the Holder an amount in cash equal to the same
fraction (as the fractional Stock) of the Fair Market Value of a share of Stock
determined as of the date of the applicable Exercise Notice.
6.13 Modification, Extension and Renewal of Options. Subject to
the terms and conditions of and within the limitations of the Plan, Rule 16b-3
if it is applicable, and any consent required by the last two sentences of this
Paragraph 6.13, the Committee may (a) modify, extend or renew outstanding
Options granted under the Plan, (b) accept the surrender of Options outstanding
hereunder (to the extent not previously exercised) and authorize the granting
of new Options in substitution for outstanding Options (to the extent not
previously exercised), and (c) amend the terms of an Incentive Option at any
time to include provisions that have the effect of changing the Incentive
Option to a Nonstatutory Option. Nevertheless, without the consent of the
Holder, the Committee may not modify any outstanding Options so as to specify a
higher or lower Exercise Price or accept the surrender of outstanding Incentive
Options and authorize the granting of new Options in substitution therefor
specifying a higher or lower Exercise Price. In addition, no modification of an
Option granted hereunder shall, without the consent of the Holder, materially
alter or impair any rights of the Holder or materially increase the obligations
of a Holder under any Option theretofore granted hereunder to such Holder under
the Plan except, with respect to Incentive Options, as may be necessary to
satisfy the requirements of Section 422 of the Code or as permitted in clause
(c) of this Paragraph 6.13.
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6.14 Other Agreement Provisions. The Option Agreements authorized
under the Plan shall contain such provisions in addition to those required by
the Plan (including, without limitation, restrictions or the removal of
restrictions upon the exercise of the Option and the retention or transfer of
shares thereby acquired) as the Committee may deem advisable. Each Option
Agreement shall identify the Option evidenced thereby as an Incentive Option or
Nonstatutory Option, as the case may be, and no Option Agreement shall cover
both an Incentive Option and a Nonstatutory Option. Each Award Agreement
relating to an Incentive Option granted hereunder shall contain such
limitations and restrictions upon the exercise of the Incentive Option to which
it relates as shall be necessary for the Incentive Option to which such Award
Agreement relates to constitute an incentive stock option, as defined in
Section 422 of the Code.
SECTION 7. STOCK APPRECIATION RIGHTS
All Stock Appreciation Rights granted under the Plan shall comply
with, and the related Award Agreements shall be deemed to include and be
subject to, the terms and conditions set forth in this Section 7 (to the extent
each term or condition applies to the form of Stock Appreciation Right) and
also the terms and conditions set forth in Section 11; provided, however, that
the Committee may authorize an Award Agreement related to a Stock Appreciation
Right that expressly contains terms and provisions that differ from the terms
and provisions set forth in Section 11. The Committee may also authorize an
Award Agreement related to a Stock Appreciation Right that contains any or all
of the terms and provisions of Section 10 or similar terms and provisions;
nevertheless, no term or provision of Section 10 (or any similar term or
provision) shall apply to an Award Agreement related to a Stock Appreciation
Right unless the Award Agreement expressly states that such term or provision
applies.
7.1 Form of Right. A Stock Appreciation Right may be granted to
an Eligible Individual (a) in connection with an Option, either at the time of
grant or at any time during the term of the Option, or (b) without relation to
an Option.
7.2 Rights Related to Options. A Stock Appreciation Right
granted pursuant to an Option shall entitle the Holder, upon exercise, to
surrender that Option or any portion thereof, to the extent unexercised, and to
receive payment of an amount computed pursuant to subparagraph 7.2(b). That
Option shall then cease to be exercisable to the extent surrendered. Stock
Appreciation Rights granted in connection with an Option shall be subject to
the terms of the Award Agreement governing the Option, which shall comply with
the following provisions in addition to those applicable to Options:
(a) Exercise and Transfer. Subject to Paragraph 11.12, a
Stock Appreciation Right granted in connection with an Option shall be
exercisable only at such time or times and only to the extent that the
related Option is exercised and shall not be transferable except to
the extent that the related Option is transferable. To the extent
that an Option has been exercised the Stock Appreciation Rights
granted in connection with such Option shall terminate.
(b) Value of Right. Upon the exercise of a Stock
Appreciation Right related to an Option, the Holder shall be entitled
to receive payment from the Corporation of an amount determined by
multiplying:
(i) The difference obtained by subtracting the
Exercise Price of a share of Stock specified in the related
Option from the Fair Market Value of a share of Stock on the
date of exercise of the Stock Appreciation Right, by
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(ii) The number of shares as to which that Stock
Appreciation Right has been exercised.
7.3 Right Without Option. A Stock Appreciation Right granted
without relationship to an Option shall be exercisable as determined by the
Committee and set forth in the Award Agreement governing the Stock Appreciation
Right, which Award Agreement shall comply with the following provisions:
(a) Number of Shares. Each Award Agreement shall state
the total number of shares of Stock to which the Stock Appreciation
Right relates.
(b) Vesting. Each Award Agreement shall state the time
or periods in which the right to exercise the Stock Appreciation Right
or a portion thereof shall vest and the number of shares of Stock for
which the right to exercise the Stock Appreciation Right shall vest at
each such time or period.
(c) Expiration of Rights. Each Award Agreement shall
state the date at which the Stock Appreciation Rights shall expire if
not previously exercised.
(d) Value of Right. A Stock Appreciation Right granted
without relationship to an Option shall entitle the Holder, upon
exercise of the Stock Appreciation Right, to receive payment of an
amount determined by multiplying:
(i) The difference obtained by subtracting the
SAR Exercise Price from the Fair Market Value of a share of
Stock on the date of exercise of that Stock Appreciation
Right, by
(ii) The number of rights as to which the Stock
Appreciation Right has been exercised.
7.4 Limitations on Rights. Notwithstanding subparagraph 7.2(b)
and subparagraph 7.3(d), the Committee may limit the amount payable upon
exercise of a Stock Appreciation Right. Any such limitation must be determined
as of the Date of Grant and be noted on the instrument evidencing the Holder's
Stock Appreciation Right.
7.5 Payment of Rights. Payment of the amount determined under
subparagraph 7.2(b) or subparagraph 7.3(d) and Paragraph 7.4 may be made solely
in whole shares of Stock valued at Fair Market Value on the date of exercise of
the Stock Appreciation Right or, in the sole discretion of the Committee,
solely in cash or a combination of cash and Stock. If the Committee decides to
make full payment in shares of Stock and the amount payable results in a
fractional share, payment for the fractional share shall be made in cash.
7.6 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation), at the time of
the exercise of a Stock Appreciation Right, the amount that the Committee deems
necessary to satisfy the Corporation's or its Subsidiary's current or future
obligation to withhold federal, state or local income or other taxes that the
Holder incurs by exercising a Stock Appreciation Right. Upon the exercise of a
Stock Appreciation Right requiring tax withholding, a Holder may (a)
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direct the Corporation to withhold from the shares of Stock to be issued to the
Holder the number of shares necessary to satisfy the Corporation's obligation
to withhold taxes, that determination to be based on the shares' Fair Market
Value as of the date on which tax withholding is to be made; (b) deliver to the
Corporation sufficient shares of Stock (based upon the Fair Market Value at
date of withholding) to satisfy the Corporation's tax withholding obligations,
based on the shares' Fair Market Value as of the date of exercise; or (c)
deliver sufficient cash to the Corporation to satisfy its tax withholding
obligations. Holders who elect to use such a stock withholding feature must
make the election at the time and in the manner that the Committee prescribes.
The Committee may, in its sole discretion, deny any Holder's request to satisfy
withholding obligations through Stock instead of cash or may impose any
conditions it deems appropriate on such action, including the escrow of shares
of Stock. In the event the Committee subsequently determines that the
aggregate Fair Market Value (as determined above) of any shares of Stock
withheld as payment of any tax withholding obligation is insufficient to
discharge that tax withholding obligation, then the Holder shall pay to the
Corporation, immediately upon the Committee's request, the amount of that
deficiency.
7.7 Other Agreement Provisions. The Award Agreements authorized
relating to Stock Appreciation Rights shall contain such provisions in addition
to those required by the Plan (including, without limitation, restrictions or
the removal of restrictions upon the exercise of the Stock Appreciation Right
and the retention or transfer of shares thereby acquired) as the Committee may
deem advisable.
SECTION 8. STOCK AWARDS
All Stock Awards granted under the Plan shall comply with, and the
related Award Agreements shall be deemed to include and be subject to, the
terms and conditions set forth in this Section 8 (to the extent each term or
condition applies to the form of Stock Award) and also to the terms and
conditions set forth in Section 11; provided, however, that the Committee may
authorize an Award Agreement related to a Stock Award that expressly contains
terms and provisions that differ from the terms and provisions set forth in
Section 11. The Committee may also authorize an Award Agreement related to a
Stock Award that contains any or all of the terms and provisions of Section 10
or similar terms and provisions; nevertheless, no term or provision of Section
10 (or any similar term or provision) shall apply to an Award Agreement related
to a Stock Award unless the Award Agreement expressly states that such term or
provision applies.
8.1 Restrictions. All shares of Restricted Stock Awards granted
or sold pursuant to the Plan shall be subject to the following conditions:
(a) Transferability. The shares may not be sold,
transferred or otherwise alienated or hypothecated until the
restrictions are removed or expire.
(b) Conditions to Removal of Restrictions. Conditions to
removal or expiration of the restrictions may include, but are not
required to be limited to, continuing employment or service as a
director, officer, consultant, or advisor or achievement of
performance objectives described in the Award Agreement.
(c) Legend. Each certificate representing Restricted
Stock Awards granted pursuant to the Plan shall bear a legend making
appropriate reference to the restrictions imposed.
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(d) Possession. At its sole discretion, the Committee
may (i) authorize issuance of a certificate for shares in the Holder's
name only upon lapse of the applicable restrictions, (ii) require the
Corporation to retain physical custody of certificates representing
Restricted Stock Awards during the restriction period and may require
the Holder of the Award to execute stock powers in blank for those
certificates and deliver those stock powers to the Corporation, or
(iii) may require the Holder to enter into an escrow agreement
providing that the certificates representing Restricted Stock Awards
granted or sold pursuant to the Plan shall remain in the physical
custody of an escrow holder until all restrictions are removed or
expire. The Corporation may issue shares subject to stop-transfer
restrictions or may issue such shares subject only to the restrictive
legend described in subparagraph 8.1(c).
(e) Other Conditions. The Committee may impose other
conditions on any shares granted or sold as Restricted Stock Awards
pursuant to the Plan as it may deem advisable, including, without
limitation, (i) restrictions under the Securities Act or Exchange Act,
(ii) the requirements of any securities exchange upon which the shares
or shares of the same class are then listed, and (iii) any state
securities law applicable to the shares.
8.2 Expiration of Restrictions. The restrictions imposed
pursuant to Paragraph 8.1 on Restricted Stock Awards shall lapse as determined
by the Committee and set forth in the applicable Award Agreement, and the
Corporation shall promptly deliver to the Holder of the Restricted Stock Award
a certificate representing the number of shares for which restrictions have
lapsed, free of any restrictive legend relating to the lapsed restrictions.
Each Restricted Stock Award may have a different restriction period, in the
discretion of the Committee. The Committee may, in its discretion,
prospectively reduce the restriction period applicable to a particular
Restricted Stock Award. The foregoing notwithstanding, no restriction shall
remain in effect for more than ten years after the date of the Awards.
8.3 Rights as Stockholder. Subject to the provisions of
Paragraphs 8.1 and 11.12, the Committee may, in its discretion, determine what
rights, if any, the Holder shall have with respect to the Restricted Stock
Awards granted or sold, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto.
8.4 Bonus Stock. The Committee, in its sole discretion, may
award an Eligible Individual shares of stock. Unless the Committee
specifically provides otherwise, shares of Stock awarded pursuant to this
Paragraph 8.4 shall not be subject to vesting or other restrictions hereunder.
8.5 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation) the amount that
the Committee deems necessary to satisfy the Corporation's or its Subsidiary's
current or future obligation to withhold federal, state or local income or
other taxes that the Holder incurs by reason of the Stock Award. The Holder
may (a) direct the Corporation to withhold from the shares of Stock to be
issued to the Holder the number of shares necessary to satisfy the
Corporation's obligation to withhold taxes, that determination to be based on
the shares' Fair Market Value as of the date on which tax withholding is to be
made; (b) deliver to the Corporation sufficient shares of Stock (based upon the
Fair Market Value at date of withholding) to satisfy the Corporation's tax
withholding obligations, based on the shares' Fair Market Value as of the date
of exercise; or (c) deliver sufficient cash to the Corporation to satisfy its
tax withholding obligations. Holders who elect to use such a stock withholding
feature must make the election at the time and in the manner that the
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Committee prescribes. The Committee may, in its sole discretion, deny any
Holder's request to satisfy withholding obligations through Stock instead of
cash or may impose any conditions it deems appropriate on such action,
including the escrow of shares of Stock. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined
above) of any shares of Stock withheld as payment of any tax withholding
obligation is insufficient to discharge that tax withholding obligation, then
the Holder shall pay to the Corporation, immediately upon the Committee's
request, the amount of that deficiency.
8.6 Other Agreement Provisions. The Award Agreements relating to
Stock Awards shall contain such provisions in addition to those required by the
Plan as the Committee may deem advisable.
SECTION 9. PERFORMANCE UNITS
All Performance Units granted under the Plan shall comply with, and
the related Award Agreements shall be deemed to include and be subject to, the
terms and conditions set forth in this Section 9 (to the extent each term or
condition applies to the form of Performance Unit) and also to the terms and
conditions set forth in Section 11; provided, however, that the Committee may
authorize an Award Agreement related to a Performance Unit that expressly
contains terms and provisions that differ from the terms and provisions set
forth in Section 11. The Committee may also authorize an Award Agreement
related to a Performance Unit that contains any or all of the terms and
provisions of Section 10 or similar terms and provisions; nevertheless, no term
or provision of Section 10 (or any similar term or provision) shall apply to an
Award Agreement related to a Stock Award unless the Award Agreement expressly
states that such term or provision applies.
9.1 Multiple Grants. The Committee may make grants of
Performance Units in such a manner that more than one Performance Period is in
progress simultaneously. At or before the beginning of each Performance
Period, the Committee will establish the contingent value of each Performance
Unit for that Performance Period, which may vary depending on the degree to
which performance objectives established by the Committee are met.
9.2 Performance Standards. At or before the beginning of each
Performance Period, the Committee will (i) establish the beginning and ending
dates of the Performance Period, (ii) establish for that Performance Period
such specific performance objectives as the Committee (in its sole discretion)
believes are relevant to the Corporation's overall business objectives, (iii)
determine the minimum and maximum value of a Performance Unit and the value of
a Performance Unit based on the degree to which performance objectives are
achieved, exceeded or not achieved, (iv) determine a minimum performance level
below which Performance Units will be assigned a value of zero, and a maximum
performance level above which the value of Performance Units will not increase,
and (v) notify each Holder of a Performance Unit for that Performance Period in
writing of the established performance objectives and minimum, target, and
maximum Performance Unit value for that Performance Period.
9.3 Modification of Standards. If the Committee determines in
its sole discretion that the established performance measures or objectives are
no longer suitable to Corporation objectives because of a change in the
Corporation's business, operations, corporate structure, capital structure, or
other conditions the Committee deems to be material, the Committee may modify
the performance measures and objectives as it considers appropriate and
equitable.
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9.4 Payment. The basis for payment of Performance Units for a
given Performance Period will be the achievement of those financial performance
objectives determined by the Committee at the beginning of the Performance
Period. If minimum performance is not achieved or exceeded for a Performance
Period, no payment will be made and all contingent rights will cease. If
minimum performance is achieved or exceeded, the value of a Performance Unit
will be based on the degree to which actual performance exceeded the
pre-established minimum performance standards. The amount of payment will be
determined by multiplying the number of Performance Units granted at the
beginning of the Performance Period by the final Performance Unit value.
Payments will be made in cash or Stock as soon as administratively possible
following the close of the applicable Performance Period.
9.5 Payment of Taxes. The Committee may, in its discretion,
require a Holder to pay to the Corporation (or the Corporation's Subsidiary if
the Holder is an employee of a Subsidiary of the Corporation), at the time of
the payment of cash or stock in connection with a Performance Unit, the amount
that the Committee deems necessary to satisfy the Corporation's or its
Subsidiary's current or future obligation to withhold federal, state or local
income or other taxes that the Holder incurs with respect to such payment.
Upon receiving notice that the Holder is required to satisfy tax withholding, a
Holder may (a) if the payment is to be made in Stock, direct the Corporation to
withhold from the shares of Stock to be issued to the Holder the number of
shares necessary to satisfy the Corporation's obligation to withhold taxes,
that determination to be based on the shares' Fair Market Value as of the date
on which tax withholding is to be made; (b) deliver to the Corporation
sufficient shares of Stock (based upon the Fair Market Value at date of
withholding) to satisfy the Corporation's tax withholding obligations, based on
the shares' Fair Market Value as of the date of exercise or settlement; (c) if
the payment is to be made in cash, direct the Corporation to withhold from such
payment the amount of cash required to satisfy the Corporation's obligation to
withhold taxes; or (d) deliver sufficient cash to the Corporation to satisfy
its tax withholding obligations. Holders who elect to use such a stock
withholding feature must make the election at the time and in the manner that
the Committee prescribes. The Committee may, at its sole option, deny any
Holder's request to satisfy withholding obligations through Stock instead of
cash or may impose any conditions it deems appropriate on such action,
including the escrow of shares of Stock. In the event the Committee
subsequently determines that the aggregate Fair Market Value (as determined
above) of any shares of Stock withheld as payment of any tax withholding
obligation is insufficient to discharge that tax withholding obligation, then
the Holder shall pay to the Corporation, immediately upon the Committee's
request, the amount of that deficiency.
9.6 Other Agreement Provisions. The Award Agreements, if any,
authorized relating to Performance Units shall contain such provisions in
addition to those required by the Plan (including, without limitation,
restrictions or the removal of restrictions upon the transfer of shares thereby
acquired) as the Committee may deem advisable.
SECTION 10. CHANGE-IN-CONTROL PROVISIONS
The Committee may authorize an Award that contains any or all of the terms and
provisions of this Section 10 or similar terms and provisions; nevertheless, no
term or provision of this Section 10 (or any similar term or provision) shall
apply to an Award unless the related Award Agreement expressly states that such
term or provision applies.
10.1 Changes in Control. Upon the occurrence of a Change in
Control, (a) each Holder of an Option shall immediately be granted
corresponding Stock Appreciation Rights; (b) all outstanding Stock Appreciation
Rights and Options shall immediately become fully vested and exercisable in
full,
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including that portion of any Stock Appreciation Award or Option that pursuant
to the terms and provisions of the applicable Award Agreement had not yet
become exercisable (the total number of shares of Stock as to which a Stock
Appreciation Right or Option is exercisable upon the occurrence of a Change in
Control is referred to herein as the "Total Shares"); (c) the restriction
period of any Restricted Stock Award shall immediately be accelerated and the
restrictions shall expire; and (d) the maximum value of any Performance Unit
which has been outstanding for at least six months as of the effective date of
the Change in Control will be deemed to be earned for all Performance Periods
ending on or before such date, and a pro rata cash or Stock distribution shall
be made promptly following such date. If a Change in Control involves a
Restructure or occurs in connection with a series of related transactions
involving a Restructure and if such Restructure is in the form of a
Non-Surviving Event and as a part of such Restructure shares of stock, other
securities, cash or property shall be issuable or deliverable in exchange for
Stock, then the Holder of an Award shall be entitled to purchase or receive (in
lieu of the Total Shares that the Holder would otherwise be entitled to
purchase or receive), as appropriate for the form of Award, the number of
shares of stock, other securities, cash or property to which that number of
Total Shares would have been entitled in connection with such Restructure (and,
for Options, at an aggregate exercise price equal to the Exercise Price that
would have been payable if that number of Total Shares had been purchased on
the exercise of the Option immediately before the completion of the
Restructure). Nothing in this Paragraph 10.1 shall impose on a Holder the
obligation to exercise any Award immediately before or upon the Change of
Control, nor shall the Holder forfeit the right to exercise the Award during
the remainder of the original term of the Award because of a Change in Control
or because the Holder's employment is terminated for any reason following a
Change in Control.
10.2 Restructure and No Change in Control. In the event a
Restructure should occur at any time while there is any outstanding Award
hereunder and that Restructure does not occur in connection with a Change in
Control or in connection with a series of related transactions involving a
Change in Control, then:
(a) no Holder of an Option shall automatically be granted
corresponding Stock Appreciation Rights;
(b) neither any outstanding Stock Appreciation Rights nor
any outstanding Options shall immediately become fully vested and
exercisable in full merely because of the occurrence of the
Restructure;
(c) the restriction period of any Restricted Stock Award
shall not immediately be accelerated and the restrictions expire
merely because of the occurrence of the Restructure; and
(d) at the option of the Committee, the Corporation may
(but shall not be required to) take any one or more of the following
actions:
(i) grant each Holder of an Option corresponding
Stock Appreciation Rights;
(ii) accelerate in whole or in part the time of
the vesting and exercisability of any one or more of the
outstanding Stock Appreciation Rights and Options so as to
provide that those Stock Appreciation Rights and Options
shall be exercisable before, upon, or after the completion of
the Restructure;
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(iii) accelerate in whole or in part the
expiration of some or all of the restrictions on any
Restricted Stock Award so that the Stock subject to that
Awards shall be owned by the Holder without restriction or
risk of forfeiture;
(iv) if the Restructure is in the form of a
Non-Surviving Event, cause the surviving entity to assume in
whole or in part any one or more of the outstanding Awards
upon such terms and provisions as the Committee deems
desirable; or
(v) redeem in whole or in part any one or more
of the outstanding Awards (whether or not then exercisable)
in consideration of a cash payment, as such payment may be
reduced for tax withholding obligations as contemplated in
the Section governing the particular form of Award, in an
amount equal to:
(A) for Options and Stock Appreciation
Rights granted in connection with Options, the excess
of (1) the Fair Market Value, determined as of a date
immediately preceding the completion of the
Restructure, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed over (2) the Exercise Price for
that number of shares of Stock;
(B) for Stock Appreciation Rights not
granted in connection with an Option, the excess of
(1) the Fair Market Value, determined as of a date
immediately preceding the completion of the
Restructure, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed over (2) the SAR Exercise Price of
the number of shares of Stock;
(C) for Restricted Stock Awards, the
Fair Market Value, determined as of a date
immediately preceding the completion of the
Restructure, of the aggregate number of shares of
Stock subject to the Award and as to which the Award
is being redeemed; and
(D) for Performance Units, the amount
per Performance Unit as the Committee in its sole
discretion may determine (which may be zero dollars).
The Corporation shall promptly notify each Holder of any election or action
taken by the Corporation under this Paragraph 10.2. In the event of any
election or action taken by the Corporation pursuant to this Paragraph 10.2
that requires the amendment or cancellation of any Award Agreement as may be
specified in any notice to the Holder thereof, that Holder shall promptly
deliver that Award Agreement to the Corporation in order for that amendment or
cancellation to be implemented by the Corporation and the Committee. The
failure of the Holder to deliver any such Award Agreement to the Corporation as
provided in the preceding sentence shall not in any manner effect the validity
or enforceability of any action taken by the Corporation and the Committee
under this Paragraph 10.2, including, without limitation, any redemption of an
Award as of the completion of a Restructure. Any cash payment to be made by
the Corporation pursuant to this Paragraph 10.2 in connection with the
redemption of any outstanding Awards shall be paid to the Holder thereof
currently with the delivery to the Corporation of the Award Agreement
evidencing that Award; provided, however, that any such redemption shall be
effective upon the completion of the Restructure notwithstanding that the
payment of the redemption price may occur subsequent to the completion. If all
or any portion of an outstanding Award is to be exercised
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or accelerated to upon or after the completion of a Restructure that is in the
form of a Non-Surviving Event and as a part of that Restructure shares of
stock, other securities, cash or property shall be issuable or deliverable in
exchange for Stock, then the Holder of the Award shall thereafter be entitled
to purchase or receive (in lieu of the number of shares of Stock that the
Holder would otherwise be entitled to purchase or receive) the number of shares
of stock, other securities, cash or property to which such number of shares of
Stock would have been entitled in connection with the Restructure (and, for
Options, at an aggregate exercise price equal to the Exercise Price that would
have been payable if that number of Total Shares had been purchased on the
exercise of the Option immediately before the completion of the Restructure).
10.3 Notice of Change in Control or Restructure. The Corporation
shall attempt to keep all Holders of Awards subject to Paragraph 10.1 or
Paragraph 10.2 informed with respect to any Change in Control or Restructure or
of any potential Change in Control or Restructure to the same extent that the
Corporation's stockholders are informed by the Corporation of any such event or
potential event.
SECTION 11. ADDITIONAL PROVISIONS
The terms and provisions of this Section 11 shall apply to each Award (unless,
by its terms, such term or provision is inapplicable or is altered); provided,
however, that the Committee may authorize an Award Agreement that expressly
contains terms and provisions that differ from the terms and provisions set
forth in this Section 11.
11.1 Adjustment of Awards and Authorized Stock. The terms of an
Award, the number of shares of Stock authorized pursuant to Paragraph 2.1 for
issuance under the Plan, and the number of shares authorized pursuant to
Paragraph 5.2 for issuance under Awards to Non-employee Directors, shall be
subject to adjustment from time to time in accordance with the following
provisions:
(a) If at any time or from time to time, the Corporation
shall subdivide as a whole (by reclassification, by a Stock split, by
the issuance of a distribution on Stock payable in Stock or otherwise)
the number of shares of Stock then outstanding into a greater number
of shares of Stock, then (i) the maximum number of shares of Stock
available for the Plan as provided in Paragraph 2.1 shall be increased
proportionately, and the kind of shares or other securities available
for the Plan shall be appropriately adjusted, (ii) the number of
shares of Stock (or other kind of shares or securities) that may be
acquired under any Award (including the number of shares to be granted
pursuant to Paragraph 5.2) shall be increased proportionately, and
(iii) the price (including Exercise Price) for each share of Stock (or
other kind of shares or unit of other securities) subject to then
outstanding Awards shall be reduced proportionately, without changing
the aggregate purchase price or value as to which outstanding Awards
remain exercisable or subject to restrictions.
(b) If at any time or from time to time, the Corporation
shall consolidate as a whole (by reclassification, reverse Stock
split, or otherwise) the number of shares of Stock then outstanding
into a lesser number of shares of Stock, (i) the maximum number of
shares of Stock available for the Plan as provided in Paragraph 2.1
shall be decreased proportionately, and the kind of shares or other
securities available for the Plan shall be appropriately adjusted,
(ii) the number of shares of Stock (or other kind of shares or
securities) that may be acquired under any Award (including the number
of shares to be granted pursuant to Paragraph 5.2) shall be decreased
proportionately, and (iii) the price (including Exercise Price) for
each share of Stock
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(or other kind of shares or unit of other securities) subject to then
outstanding Awards shall be increased proportionately, without
changing the aggregate purchase price or value as to which outstanding
Awards remain exercisable or subject to restrictions.
(c) Whenever the number of shares of Stock subject to
outstanding Awards and the price for each share of Stock subject to
outstanding Awards are required to be adjusted as provided in this
Paragraph 11.1, the Committee shall promptly prepare and provide to
each Holder a notice setting forth, in reasonable detail, the event
requiring adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the change in price and the
number of shares of Stock, other securities, cash or property
purchasable subject to each Award after giving effect to the
adjustments.
(d) Adjustments under subparagraph 11.1(a) and (b) and
Paragraph 11.23 shall be made by the Committee, and its determination
as to what adjustments shall be made and the extent thereof shall be
final, binding and conclusive. No fractional interest shall be issued
under the Plan on account of any such adjustments.
11.2 Termination of Employment. Subject to the last sentence of
Paragraph 10.1 (if applicable), if a Holder is an Eligible Individual because
the Holder is an Employee and if that employment relationship is terminated for
any reason other than Normal Retirement or that Holder's death or Disability
(hereafter defined), then the following provisions shall apply to all Awards
held by that Holder that were granted because that Holder was an Employee:
(a) If the termination is by the Holder's employer, then
Performance Units held by that Holder that have not become payable at
the time of termination shall be null and void and that portion, if
any, of any and all other Awards held by that Holder that are not yet
exercisable (or for which restrictions have not lapsed) and the
portion of any Award that is exercisable but has not been exercised as
of the time of the termination shall become null and void as of the
time of the termination.
(b) If such termination is by the Holder, then
Performance Units held by that Holder that have not become payable at
the time of termination shall be null and void and that portion, if
any, of any and all other Awards held by that Holder that are not yet
exercisable (or for which restrictions have not lapsed) as of the time
of the termination shall become null and void as of the time of the
termination. With respect to any Option or Stock Appreciation Right
that survives the termination of employment, the Award shall terminate
on the earlier of:
(i) the termination of the term of the Award or
(ii) (A) one month after the date of termination
of the Holder's employment in the case of a Nonstatutory
Option or a Stock Appreciation Right that is granted in
tandem with a Nonstatutory Option or was not granted in
tandem with an Option; and (B) three months after the date of
termination of the Holder's employment in the case of an
Incentive Option or a Stock Appreciation Right granted in
tandem with an Incentive Option.
11.3 Other Loss of Eligibility. If a Holder is an Eligible
Individual because the Holder is serving in a capacity other than as an
Employee and if that capacity is terminated for any reason other
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than the Holder's death, then Performance Units held by that Holder that have
not become payable at the time of termination shall be null and void and that
portion, if any, of any and all Awards held by the Holder that were granted
because of that capacity which are not yet exercisable (or for which
restrictions have not lapsed) as of the date of the termination shall become
null and void as of the date of the termination; provided, however, that the
portion, if any, of any and all of the Awards held by the Holder that are
exercisable as of the date of the termination shall survive the termination for
one month.
11.4 Death. Upon the death of a Holder, then any and all
restrictions on Restricted Stock Awards held by the Holder shall lapse, and
that portion, if any, of any and all Options and Stock Appreciation Rights held
by that Holder that are not yet exercisable shall become null and void as of
the time of death; provided, however, that the portion, if any, of Options or
Stock Appreciation Rights held by the Holder that are exercisable as of the
date of death shall be exercisable by that Holder's legal representatives,
legatees or distributees for a period of the lesser of (a) the remainder of the
term of the Award or (b) 12 months following the date of the Holder's death.
Any portion of an Award not exercised upon the expiration of the periods
specified in (a) or (b) shall be null and void. With respect to any
Performance Unit held by the Holder for which the Performance Period has not
expired at the time of the Holder's death, if the performance objectives are
achieved at the end of the Performance Period the Corporation shall pay to the
estate of the Holder a pro rata portion of the Stock or cash payable upon
achievement of the performance objectives based on the portion of time expired
in the Performance Period before the Holder's death, the degree of completion
of the performance objectives before the Holder's death, or any other basis
that the Committee deems appropriate, in its sole discretion. Such payment
will be made in the time and manner as would have occurred if the Holder had
not died before expiration of the Performance Period. Except as expressly
provided in this Section 11.4, all Awards held by a Holder shall be null and
void upon and after the death of the Holder.
11.5 Retirement. If a Holder is an Eligible Individual because
the Holder is an Employee and if that employment relationship is terminated by
reason of the Holder's Normal Retirement, then that portion, if any, of any and
all Awards other than Performance Units held by that Holder that are not yet
exercisable (or for which restrictions have not lapsed) as of the time of
termination shall become null and void as of the time of the termination. With
respect to any Option or Stock Appreciation Right that survives the termination
because of Normal Retirement, the Award shall terminate on the earlier of:
(a) the termination of the term of the Award or
(b) (i) 36 months after the date of the Holder's
termination for Normal Retirement in the case of a Nonstatutory Option
or a Stock Appreciation Right that is granted in tandem with a
Nonstatutory Option or was not granted in tandem with an Option; and
(ii) three months after the date of termination of the Holder's
employment for Normal Retirement in the case of an Incentive Option or
a Stock Appreciation Right granted in tandem with an Incentive Option.
With respect to any Performance Unit held by the Holder for which the
Performance Period has not expired at the time of the Holder's termination for
Normal Retirement, if the performance objectives are achieved at the end of the
Performance Period the Corporation shall pay to the Holder a pro rata portion
of the Stock or cash payable upon achievement of the performance objectives
based on the portion of time expired in the Performance Period before the
Holder's termination, the degree of completion of the performance objectives
before the Holder's termination, or any other basis that the Committee deems
appropriate, in its sole discretion. Such payment will be made in the time and
manner as would have
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occurred if the Holder had not terminated employment for Normal Retirement
before expiration of the Performance Period.
11.6 Disability. If a Holder is an Eligible Individual because
the Holder is an Employee and if that employment relationship is terminated by
reason of the Holder's Disability, then any and all restrictions on Restricted
Stock Awards held by the Holder shall lapse and that portion, if any, of any
and all Options and Stock Appreciation Rights held by that Holder that are not
yet exercisable shall become null and void as of the time of termination for
Disability. With respect to any portion of an Option or Stock Appreciation
Right that survives the termination because of Disability, that portion of the
Award shall be exercisable by the Holder, the Holder's guardian or legal
representative and shall terminate on the earlier of:
(a) the termination of the term of the Award or
(b) (i) 36 months after the date of the Holder's
termination for Disability in the case of a Nonstatutory Option or a
Stock Appreciation Right that is granted in tandem with a Nonstatutory
Option or was not granted in tandem with an Option; and (ii) 12 months
after the date of termination of the Holder's employment for
Disability in the case of an Incentive Option or a Stock Appreciation
Right granted in tandem with an Incentive Option.
With respect to any Performance Unit held by the Holder for which the
Performance Period has not expired at the time of the Holder's termination for
Disability, if the performance objectives are achieved at the end of the
Performance Period the Corporation shall pay to the Holder a pro rata portion
of the Stock or cash payable upon achievement of the performance objectives
based on the portion of time expired in the Performance Period before the
Holder's termination, the degree of completion of the performance objectives
before the Holder's termination, or any other basis that the Committee deems
appropriate, in its sole discretion. Such payment will be made in the time and
manner as would have occurred if the Holder's employment had not been
terminated for Disability before expiration of the Performance Period.
"Disability" shall have the meaning given it in the employment agreement of the
Holder; provided, however, that if that Holder has no employment agreement or
such term is not defined in the employment agreement, "Disability" shall mean a
physical or mental impairment of sufficient severity that, in the opinion of
the Corporation, the Holder is unable to continue performing the duties the
Holder performed before such impairment and that impairment or condition is
cited by the Corporation as the reason for termination of the Holder's
employment.
11.7 Leave of Absence. With respect to an Award, the Committee
may, in its sole discretion, determine that any Holder who is on leave of
absence for any reason will be considered to still be in the employ of the
Corporation.
11.8 Transferability of Awards. An Award requiring exercise shall
be exercisable during a Holder's lifetime only by that Holder or by that
Holder's guardian or legal representative. An Award shall not be transferrable
other than by will or the laws of descent and distribution.
11.9 Forfeiture and Restrictions on Transfer. Each Award
Agreement may contain or otherwise provide for conditions giving rise to the
forfeiture of the Stock acquired pursuant to an Award or otherwise and may also
provide for those restrictions on the transferability of shares of the Stock
acquired pursuant to an Award or otherwise that the Committee in its sole and
absolute discretion may deem proper or advisable. The conditions giving rise
to forfeiture may include, but need not be limited
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to, the requirement that the Holder render substantial services to the
Corporation or its Subsidiaries for a specified period of time. The
restrictions on transferability may include, but need not be limited to,
options and rights of first refusal in favor of the Corporation and
stockholders of the Corporation other than the Holder of such shares of Stock
who is a party to the particular Award Agreement or a subsequent holder of the
shares of Stock who is bound by that Award Agreement.
11.10 Delivery of Certificates of Stock. Subject to Paragraph
11.11, the Corporation shall promptly issue and deliver a certificate
representing the number of shares of Stock as to which (a) an Option has been
exercised after the Corporation receives an Exercise Notice and upon receipt by
the Corporation of the Exercise Price and any tax withholding as may be
requested; (b) a Stock Appreciation Right has been exercised and upon receipt
by the Corporation of any tax withholding as may be requested; (c) restrictions
have lapsed with respect to a Restricted Stock Award and upon receipt by the
Corporation of any tax withholding as may be requested; and (d) performance
objectives have been achieved during a Performance Period relating to a
Performance Unit for Stock. The value of the shares of Stock, cash or notes
transferable because of an Award under the Plan shall not bear any interest
owing to the passage of time, except as may be otherwise provided in an
Agreement. If a Holder is entitled to receive certificates representing Stock
received for more than one form of Award under the plan separate Stock
certificates shall be issued with respect to each such Award and for Incentive
Options and Nonstatutory Stock Options separately.
11.11 Conditions to Delivery of Stock. Nothing herein or in any
Award granted hereunder or any Award Agreement shall require the Corporation to
issue any shares with respect to any Award if that issuance would, in the
opinion of counsel for the Corporation, constitute a violation of the
Securities Act or any similar or superseding statute or statutes, any other
applicable statute or regulation, or the rules of any applicable securities
exchange or securities association, as then in effect. At the time of any
exercise of an Option or Stock Appreciation Right, at the time of any grant or
vesting of a Stock Award, or grant or settlement of a Performance Unit, the
Corporation may, as a condition precedent to the exercise of that Option or
Stock Appreciation Right, grant or vesting of the Stock Award, or grant or
settlement of the Performance Unit, require from the Holder of the Award (or in
the event of the Holder's death, the Holder's legal representatives, heirs,
legatees, or distributees) such written representations, if any, concerning the
Holder's intentions with regard to the retention or disposition of the shares
of Stock being acquired pursuant to the Award and such written covenants and
agreements, if any, as to the manner of disposal of such shares as, in the
opinion of counsel to the Corporation, may be necessary to ensure that any
disposition by that Holder (or in the event of the Holder's death, the Holder's
legal representatives, heirs, legatees, or distributees), will not involve a
violation of the Securities Act or any similar or superseding statute or
statutes, any other applicable state or federal statute or regulation, or any
rule of any applicable securities exchange or securities association, as then
in effect.
11.12 Certain Directors and Officers. All Awards Agreements for
Holders who are directors or officers of the Corporation or any Subsidiary and
who are subject to Section 16(b) of the Exchange Act shall be deemed to include
such additional limitations, terms, and provisions as Rule 16b-3 then requires
unless the Committee determines that any such Award should not comply with the
requirements of Rule 16b-3. Unless the Committee determines that an Award to
an Executive Officer is not intended to qualify for the exemption for
performance-based compensation under section 162(m) or unless the requirements
of section 162(m) change, (i) the maximum payment to the Executive Officer for
Awards granted in one fiscal year shall be 300 percent of the Executive
Officer's base salary on the first day of the fiscal year of the Corporation in
which the Awards are granted, (ii) an Award that will be settled in Stock shall
have a base value equal to the Fair Market Value of a share of Stock on the
Date of Grant
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of the Award, (iii) the period over which the performance objectives of the
Award must be satisfied shall not be shorter than six months, (iv) the
performance objectives applicable to an Award for an Executive Officer shall be
based on one or more of the Stockholder Approved Standards; and (v) the Award
shall be subject to any additional requirement of section 162(m).
11.13 Securities Act Legend. Certificates for shares of Stock,
when issued, may have the following legend, or statements of other applicable
restrictions, endorsed thereon, and may not be immediately transferable:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD,
PLEDGED, TRANSFERRED, OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF
PROVIDES EVIDENCE SATISFACTORY TO THE ISSUER (WHICH, IN THE DISCRETION
OF THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER, OR OTHER DISPOSITION
WILL NOT VIOLATE APPLICABLE FEDERAL OR STATE LAWS.
This legend shall not be required for shares of Stock issued pursuant to an
effective registration statement under the Securities Act.
11.14 Legend for Restrictions on Transfer. Each certificate
representing shares issued to a Holder pursuant to an Award granted under the
Plan shall, if such shares are subject to any transfer restriction, including a
right of first refusal, provided for under this Plan or an Agreement, bear a
legend that complies with applicable law with respect to the restrictions on
transferability contained in this Paragraph 11.14, such as:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY IMPOSED BY THAT CERTAIN INSTRUMENT
ENTITLED "DELL COMPUTER CORPORATION INCENTIVE PLAN" AS ADOPTED BY DELL
COMPUTER CORPORATION (THE "CORPORATION") ON JUNE 22, 1994, AND AN
AGREEMENT THEREUNDER BETWEEN THE CORPORATION AND (HOLDER) DATED
______________________, _____, AND MAY NOT BE TRANSFERRED, SOLD, OR
OTHERWISE DISPOSED OF EXCEPT AS THEREIN PROVIDED. THE CORPORATION
WILL FURNISH A COPY OF SUCH INSTRUMENT AND AGREEMENT TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE ON REQUEST TO THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS OR REGISTERED OFFICE.
11.15 Rights as a Stockholder. A Holder shall have no right as a
stockholder with respect to any shares covered by the Holder's Award until a
certificate representing those shares is issued in the Holder's name. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash or other property) or distributions or other rights for which the record
date is before the date that certificate is issued, except as contemplated by
the Award Agreement, Section 10, Paragraph 11.1 or Paragraph 11.23.
Nevertheless, dividends and dividend equivalent rights may be extended to and
made part of any Award denominated in Stock or units of Stock, subject to such
terms, conditions, and
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restrictions as the Committee may establish. The Committee may also establish
rules and procedures for the crediting of interest on deferred cash payments
and dividend equivalents for deferred payment denominated in Stock or units of
Stock.
11.16 Furnish Information. Each Holder shall furnish to the
Corporation all information requested by the Corporation to enable it to comply
with any reporting or other requirement imposed upon the Corporation by or
under any applicable statute or regulation.
11.17 Obligation to Exercise. The granting of an Award hereunder
shall impose no obligation upon the Holder to exercise the same or any part
thereof.
11.18 Adjustments to Awards. Subject to the general limitations
set forth in Sections 6, 7, and 10 and Paragraphs 11.1 and 11.23, the Committee
may make any adjustment in the exercise price of, the number of shares subject
to or the terms of a Nonstatutory Option or Stock Appreciation Right by
cancelling an outstanding Nonstatutory Option or Stock Appreciation Right and
regranting a Nonstatutory Option or Stock Appreciation Right. Such adjustment
shall be made by amending, substituting or regranting an outstanding
Nonstatutory Option or Stock Appreciation Right. Such amendment, substitution
or regrant may result in terms and conditions that differ from the terms and
conditions of the original Nonstatutory Option or Stock Appreciation Right.
Except as provided in this Plan or the applicable Award Agreement, the
Committee may not, however, impair the rights of any Holder to previously
granted Nonstatutory Options or Stock Appreciation Rights without that Holder's
consent. If such action is effected by amendment, the effective date of such
amendment shall be the date of the original grant.
11.19 Remedies. The Corporation shall be entitled to recover from
a Holder reasonable attorneys' fees incurred in connection with the enforcement
of the terms and provisions of the Plan and any Award Agreement whether by an
action to enforce specific performance or for damages for its breach or
otherwise.
11.20 Information Confidential. As partial consideration for the
granting of each Award hereunder, the Holder shall agree with the Corporation
that the Holder will keep confidential all information and knowledge that the
Holder has relating to the manner and amount of the Holder's participation in
the Plan; provided, however, that such information may be disclosed as required
by law and may be given in confidence to the Holder's spouse, tax and financial
advisors, or to a financial institution to the extent that such information is
necessary to secure a loan. In the event any breach of this promise comes to
the attention of the Committee, it shall take into consideration that breach in
determining whether to recommend the grant of any future Award to that Holder,
as a factor militating against the advisability of granting any such future
Award to that individual.
11.21 Consideration. No Option or Stock Appreciation Right shall
be exercisable, no restriction on any Restricted Stock Award shall lapse, and
no Performance Unit shall be settled in Stock with respect to a Holder unless
and until the Holder shall have paid cash or property to, or performed services
for, the Corporation or any of its Subsidiaries that the Committee believes is
equal to or greater in value that the par value of the Stock subject to such
Award.
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11.22 Deferral of Payment.
(a) Deferral Opportunity. The Committee, in its sole
discretion, may permit a Holder to defer receipt of all or part of a
payment of a cash or Stock in connection with an Award. Such Deferral
must satisfy all conditions prescribed by the Committee, including but
not limited to the period during which the Holder must request such
deferral.
(b) Measurement of Deferred Payments. Payments deferred
shall be recorded in a bookkeeping account maintained by the
Corporation. The value of such payments shall be adjusted to reflect
the performance of any measurement standard (including the price of
Stock) prescribed by the Committee or, in the discretion of the
Committee, elected by the Participant.
(c) Payment of Deferred Payments. The value of payments
deferred under this Paragraph 11.22 shall be paid to the Holder or the
Holder's beneficiary in one or more payments made or commencing on the
date specified by the Holder with the consent of the Committee;
provided, however, that all such payments shall be subject to the
following conditions:
(i) All payments unpaid at the time of a
Holder's Death or Disability shall be paid in a single sum as
soon as practicable after the Committee's receipt of notice
of such death or Disability, subject to offset for any
obligations of the Holder to the Corporation;
(ii) Payments must commence no later than 90 days
after the termination of the Holders' services for the
Corporation; and
(iii) Installment payments shall be made no less
frequently than annually and over a period which does not
exceed 10 years.
(d) Plan Remains Unfunded. Notwithstanding any deferral
under this Paragraph 11.22, the Plan shall remain unfunded, as
described in Paragraph 13.7.
11.23 Restructure. Unless the provisions of Section 10 apply to
the Award, if a Restructure should occur at the option of the Committee, the
Corporation may (but shall not be required to) take any one or more of the
following actions:
(a) grant each Holder of an Option corresponding Stock
Appreciation Rights;
(b) accelerate in whole or in part the time of the
vesting and exercisability of any one or more of the outstanding Stock
Appreciation Rights and Options so as to provide that those Stock
Appreciation Rights and Options shall be exercisable before, upon, or
after the completion of the Restructure;
(c) accelerate in whole or in part the expiration of some
or all of the restrictions on any Restricted Stock Award so that the
Stock subject to that Awards shall be owned by the Holder without
restriction or risk of forfeiture;
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(d) if the Restructure is in the form of a Non-Surviving
Event, cause the surviving entity to assume in whole or in part any
one or more of the outstanding Awards upon such terms and provisions
as the Committee deems desirable; or
(e) redeem in whole or in part any one or more of the
outstanding Awards (whether or not then exercisable) in consideration
of a cash payment, as such payment may be reduced for tax withholding
obligations as contemplated in the Section governing the particular
form of Award, in an amount equal to:
(i) for Options and Stock Appreciation Rights
granted in connection with Options, the excess of (A) the
Fair Market Value, determined as of a date immediately
preceding the completion of the Restructure, of the aggregate
number of shares of Stock subject to the Award and as to
which the Award is being redeemed over (B) the Exercise Price
for that number of shares of Stock;
(ii) for Stock Appreciation Rights not granted in
connection with an Option, the excess of (A) the Fair Market
Value, determined as of a date immediately preceding the
completion of the Restructure, of the aggregate number of
shares of Stock subject to the Award and as to which the
Award is being redeemed over (B) the SAR Exercise Price of
the number of shares of Stock;
(iii) for Restricted Stock Awards, the Fair Market
Value, determined as of a date immediately preceding the
completion of the Restructure, of the aggregate number of
shares of Stock subject to the Award and as to which the
Award is being redeemed; and
(iv) for Performance Units, the amount per
Performance Unit as the Committee in its sole discretion may
determine (which may be zero dollars).
The Corporation shall promptly notify each affected Holder of any election or
action taken by the Corporation under this Paragraph 11.23. In the event of
any election or action taken by the Corporation pursuant to this Paragraph
11.23 that requires the amendment or cancellation of any Award Agreement as may
be specified in any notice to the Holder thereof, that Holder shall promptly
deliver that Award Agreement to the Corporation in order for that amendment or
cancellation to be implemented by the Corporation and the Committee. The
failure of the Holder to deliver any such Award Agreement to the Corporation as
provided in the preceding sentence shall not in any manner effect the validity
or enforceability of any action taken by the Corporation and the Committee
under this Paragraph 11.23, including, without limitation, any redemption of an
Award as of the completion of a Restructure. Any cash payment to be made by
the Corporation pursuant to this Paragraph 11.23 in connection with the
redemption of any outstanding Awards shall be paid to the Holder thereof
currently with the delivery to the Corporation of the Award Agreement
evidencing that Award; provided, however, that any such redemption shall be
effective upon the completion of the Restructure notwithstanding that the
payment of the redemption price may occur subsequent to the completion. If all
or any portion of an outstanding Award is to be exercised or accelerated to
upon or after the completion of a Restructure that is in the form of a
Non-Surviving Event and as a part of that Restructure shares of stock, other
securities, cash or property shall be issuable or deliverable in exchange for
Stock, then the Holder of the Award shall thereafter be entitled to purchase or
receive (in lieu of the number of shares of Stock that the Holder would
otherwise be entitled to purchase or receive) the number of shares of stock,
other securities, cash
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or property to which such number of shares of Stock would have been entitled in
connection with the Restructure (and, for Options, at an aggregate exercise
price equal to the Exercise Price that would have been payable if that number
of Total Shares had been purchased on the exercise of the Option immediately
before the completion of the Restructure).
SECTION 12. DURATION AND AMENDMENT OF PLAN
12.1 Duration. No Awards may be granted hereunder after the date
that is ten years from the Effective Date.
12.2 Amendment. The Board of Directors may, insofar as permitted
by law, suspend or discontinue the Plan or revise or amend it in any respect
whatsoever, and may amend any provision of the Plan or any Award Agreement to
make the Plan or the Award Agreement, or both, comply with Section 16(b) of the
Exchange Act and the exemptions from that Section in the regulations
thereunder, the Code, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or the regulations promulgated under the Code or ERISA. The
Board of Directors may also amend, modify, suspend or terminate the Plan for
the purpose of meeting or addressing any changes in other legal requirements
applicable to the Corporation or the Plan or for any other purpose permitted by
law. The Plan may not be amended without the consent of the holders of a
majority of the shares of Stock then outstanding to (a) increase materially the
aggregate number of shares of Stock that may be issued under the Plan (except
for adjustments pursuant to Section 10 and Paragraphs 11.1 and 11.23 of the
Plan), (b) increase materially the benefits accruing to Eligible Individuals
under the Plan, or (c) modify materially the requirements about eligibility for
participation in the Plan; provided, however, that such amendments may be made
without the consent of stockholders of the Corporation if changes occur in law
or other legal requirements (including Rule 16b-3) that would permit otherwise.
The provisions in Section 5 shall not be amended more than once every six
months other than to comport with changes in the Code, ERISA or the rules under
the Code or ERISA.
SECTION 13. GENERAL
13.1 Application of Funds. The proceeds received by the
Corporation from the sale of shares pursuant to Awards shall be used for
general corporate purposes.
13.2 Right of the Corporation and Subsidiaries to Terminate
Employment. Nothing contained in the Plan, or in any Award Agreement, shall
confer upon any Holder the right 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 Holder's employment any time.
13.3 No Liability for Good Faith Determinations. Neither the
members of the Board of Directors nor any member of the Committee shall be
liable for any act, omission, or determination taken or made in good faith with
respect to the Plan or any Award granted under it, and members of the Board of
Directors and the Committee shall be entitled to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage, or
expense (including attorneys' fees, the costs of settling any suit, provided
such settlement is approved by independent legal counsel selected by the
Corporation, and amounts paid in satisfaction of a judgment, except a judgment
based on a finding of bad faith) arising therefrom to the full extent permitted
by law and under any directors and officers liability or similar insurance
coverage that may from time to time be in effect. This right to
indemnification shall be in
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addition to, and not a limitation on, any other indemnification rights any
member of the Board of Directors or the Committee may have.
13.4 Other Benefits. Participation in the Plan shall not preclude
the Holder from eligibility in any other stock or stock option plan of the
Corporation or any Subsidiary or any old age benefit, insurance, pension,
profit sharing retirement, bonus, or other extra compensation plans that the
Corporation or any Subsidiary has adopted, or may, at any time, adopt for the
benefit of its Employees. Neither the adoption of the Plan by the Board of
Directors nor the submission of the Plan to the stockholders of the Corporation
for approval shall be construed as creating any limitations on the power of the
Board of Directors to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan, and such arrangements
may be either generally applicable or applicable only in specific cases.
13.5 Exclusion From Pension and Profit-Sharing Compensation. By
acceptance of an Award (whether in Stock or cash), as applicable, each Holder
shall be deemed to have agreed that the Award is special incentive compensation
that will not be taken into account in any manner as salary, compensation or
bonus in determining the amount of any payment under any pension, retirement or
other employee benefit plan of the Corporation or any Subsidiary. In addition,
each beneficiary of a deceased Holder shall be deemed to have agreed that the
Award will not affect the amount of any life insurance coverage, if any,
provided by the Corporation or a Subsidiary on the life of the Holder that is
payable to the beneficiary under any life insurance plan covering employees of
the Corporation or any Subsidiary.
13.6 Execution of Receipts and Releases. Any payment of cash or
any issuance or transfer of shares of Stock to the Holder, or to the Holder's
legal representative, heir, legatee, or distributee, in accordance with the
provisions hereof, shall, to the extent thereof, be in full satisfaction of all
claims of such persons hereunder. The Committee may require any Holder, legal
representative, heir, legatee, or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
13.7 Unfunded Plan. Insofar as it provides for Awards of cash and
Stock, the Plan shall be unfunded. Although bookkeeping accounts may be
established with respect to Holders who are entitled to cash, Stock or rights
thereto under the Plan, any such accounts shall be used merely as a bookkeeping
convenience. The Corporation shall not be required to segregate any assets
that may at any time be represented by cash, Stock or rights thereto, nor shall
the Plan be construed as providing for such segregation, nor shall the
Corporation nor the Board of Directors nor the Committee be deemed to be a
trustee of any cash, Stock or rights thereto to be granted under the Plan. Any
liability of the Corporation to any Holder with respect to a grant of cash,
Stock or rights thereto under the Plan shall be based solely upon any
contractual obligations that may be created by the Plan and any Award
Agreement; no such obligation of the Corporation shall be deemed to be secured
by any pledge or other encumbrance on any property of the Corporation. Neither
the Corporation nor the Board of Directors nor the Committee shall be required
to give any security or bond for the performance of any obligation that may be
created by the Plan.
13.8 No Guarantee of Interests. Neither the Committee nor the
Corporation guarantees the Stock of the Corporation from loss or depreciation.
13.9 Payment of Expenses. All expenses incident to the
administration, termination, or protection of the Plan, including, but not
limited to, legal and accounting fees, shall be paid by the
35
<PAGE> 40
Corporation or its Subsidiaries; provided, however, the Corporation or a
Subsidiary may recover any and all damages, fees, expenses, and costs arising
out of any actions taken by the Corporation to enforce its rights under this
Plan.
13.10 Corporation Records. Records of the Corporation or its
Subsidiaries regarding the Holder's period of employment, termination of
employment and the reason therefor, leaves of absence, re-employment, and other
matters shall be conclusive for all purposes hereunder, unless determined by
the Committee to be incorrect.
13.11 Information. The Corporation and its Subsidiaries shall,
upon request or as may be specifically required hereunder, furnish or cause to
be furnished, all of the information or documentation which is necessary or
required by the Committee to perform its duties and functions under the Plan.
13.12 No Liability of Corporation. The Corporation assumes no
obligation or responsibility to the Holder or the Holder's legal
representatives, heirs, legatees, or distributees for any act of, or failure to
act on the part of, the Committee.
13.13 Corporation Action. Any action required of the Corporation
shall be by resolution of its Board of Directors or by a person authorized to
act by resolution of the Board of Directors.
13.14 Severability. If any provision of this Plan is held to be
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining provisions hereof, but such provision shall be fully
severable and the Plan shall be construed and enforced as if the illegal or
invalid provision had never been included herein. If any of the terms or
provisions of this Plan or any Award Agreement conflict with the requirements
of Rule 16b-3 (as those terms or provisions are applied to Eligible Individuals
who are subject to Section 16(b) of the Exchange Act) or Section 422 of the
Code (with respect to Incentive Options), then those conflicting terms or
provisions shall be deemed inoperative to the extent they so conflict with the
requirements of Rule 16b-3 (unless the Board of Directors or the Committee, as
appropriate, has expressly determined that the Plan or such Award should not
comply with Rule 16b-3) or Section 422 of the Code. With respect to Incentive
Options, if this Plan does not contain any provision required to be included
herein under Section 422 of the Code, that provision shall be deemed to be
incorporated herein with the same force and effect as if that provision had
been set out at length herein; provided, further, that, to the extent any
Option that is intended to qualify as an Incentive Option cannot so qualify,
that Option (to that extent) shall be deemed a Nonstatutory Option for all
purposes of the Plan.
13.15 Notices. Whenever any notice is required or permitted
hereunder, such notice must be in writing and personally delivered or sent by
mail. Any notice required or permitted to be delivered hereunder shall be
deemed to be delivered on the of the date on which it is personally delivered
or, if earlier (only for notices to Holders), on the third Business Day after
it is deposited in the United States mail, postage prepaid, addressed to the
person who is to receive it at the address which such person has theretofore
specified by written notice delivered in accordance herewith, whether such
notice is actually received or not. The Corporation or a Holder may change, at
any time and from time to time, by written notice to the other, the address
which it or the Holder had previously specified for receiving notices. Until
changed in accordance herewith, the Corporation and each Holder shall specify
as its and the Holder's address for receiving notices the address set forth in
the Agreement pertaining to the shares to which such notice relates.
36
<PAGE> 41
13.16 Waiver of Notice. Any person entitled to notice hereunder
may waive such notice.
13.17 Successors. The Plan shall be binding upon the Holder, the
Holder's legal representatives, heirs, legatees, and distributees, upon the
Corporation, its successors, and assigns, and upon the Committee, and its
successors.
13.18 Headings. The titles and headings of Sections and Paragraphs
are included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
13.19 Governing Law. All questions arising with respect to the
provisions of the Plan shall be determined by application of the laws of the
State of Delaware except to the extent Delaware law is preempted by federal
law. Questions arising with respect to the provisions of an Agreement that are
matters of contract law shall be governed by the laws of the state specified in
the Agreement, except to the extent Delaware corporate law conflicts with the
contract law of such state, in which event Delaware corporate law shall govern.
The obligation of the Corporation to sell and deliver Stock hereunder is
subject to applicable laws and to the approval of any governmental authority
required in connection with the authorization, issuance, sale, or delivery of
such Stock.
13.20 Word Usage. Words used in the masculine shall apply to the
feminine where applicable, and wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
IN WITNESS WHEREOF, Dell Computer Corporation, acting by and through
its officer hereunto duly authorized, has executed this instrument and
certifies that its Effective Date is the 22nd day of June, 1994.
DELL COMPUTER CORPORATION
By: /s/ Michael S. Dell
Name: Michael S. Dell
Title: Chief Executive Officer
37
<PAGE> 42
ANNEX A
DELL COMPUTER CORPORATION
INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
(ANNUAL) (INITIAL) AWARD FOR NON-EMPLOYEE DIRECTORS
To: __________________________ Date of Grant: _____________________
Number of Shares: Exercise Price Per Share: __________
DELL COMPUTER CORPORATION, a Delaware corporation (the "Corporation"), is
pleased to grant you a Nonstatutory Option (the "Option") to purchase shares of
the Corporation's common stock, par value $.01 per share. The number of shares
subject to this Option and the exercise price per share are stated above. This
Option is granted under Paragraph 5.2 of the Dell Computer Corporation
Incentive Plan dated June 22, 1994 (the "Plan") and is governed by the terms of
the Plan. All terms having their initial letters capitalized have the meaning
given them in the Plan unless otherwise defined in this Agreement or unless the
context requires otherwise.
THIS OPTION IS NOT BINDING ON THE CORPORATION UNTIL YOU COMPLETE YOUR ADDRESS
FOR NOTICE IN PARAGRAPH 7, SIGN THIS DOCUMENT, AND RETURN IT TO THE
CORPORATION'S HUMAN RESOURCES DEPARTMENT.
1. Vesting and Exercisability. This Option will vest and will
be exercisable at the times and with respect to the number of shares of Stock
indicated as follows:
<TABLE>
<CAPTION>
Option Exercisable On and After: Number of shares of Stock as to
------------------------------- which the Option may be exercised
---------------------------------
<S> <C>
____________, ____ _____ shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
</TABLE>
In accordance with the preceding schedule, the Option may be exercised, from
time to time, in whole or in part.
2. Method of Exercise. The Option shall be exercisable only by
written or recorded electronic notice of exercise delivered to the
Corporation's Human Resources Department or designee, in accordance with
instructions generally applicable to all optionholders, during the term of the
Option. The notice must (a) state the number of shares of Stock with respect
to which the Option is being exercised, (b) be signed or otherwise given by you
(or by your legal representative, legatee, or distributee in the case of your
death or by your guardian or legal representative in case of your disability),
(c) be accompanied by the Exercise Price for all shares of Stock for which the
Option is exercised (unless you
A-1
<PAGE> 43
have provided for the payment of such Exercise Price pursuant to Paragraph 6.8
of the Plan (regarding cashless exercises)), and (d) be accompanied by the
amount that the Corporation is required to withhold for federal income or other
tax purposes (unless you have provided for the payment of such taxes to the
Corporation pursuant to Paragraph 6.8 of the Plan (regarding cashless
exercises)). The Option shall not be deemed to have been exercised unless all
of these requirements are satisfied.
3. Duration. The Option will terminate on the earliest of (a)
11:59 p.m., central time, on the date ten years from the Date of Grant; (b)
immediately when you cease to be a director of the Corporation, if the Board of
Directors of the Corporation demands or requests your resignation from the
Board of Directors; (c) 11:59 p.m., central time, on the date 90 days after you
cease to be a director of the Corporation for any reason other than the reasons
specified in the preceding clause (b) or the following clause (d); or (d) 11:59
p.m., central time, on the date one year after you cease to be a director
because of your death or Disability. In this Option, "Disability" means a
physical or mental impairment of sufficient severity such that, in the opinion
of a physician selected by the Corporation (which may be your physician or any
other physician), you are unable to continue to serve as a director of the
Corporation and that in fact results in the cessation of your service.
4. Transferability. This Option is not transferrable other than
by will or the laws of descent and distribution.
5. Rights as a Stockholder. You will have no right as a
stockholder with respect to any shares subject to this Option until a
certificate representing those shares is issued in your name. No adjustment
will be made for dividends (ordinary or extraordinary, whether in cash or other
property) or distributions or other rights for which the record date is before
the date that certificate is issued, except as contemplated by Paragraph 11.1
or Paragraph 11.23 of the Plan.
6. Incorporation of Plan. The following terms and provisions of
the Plan are hereby expressly incorporated herein and made a part of this
Agreement and shall be applicable for all purposes under this Agreement with
any necessary changes in points of detail.
a. The terms and provisions contained in Paragraph 11.1
of the Plan (concerning adjustment of the Exercise Price and the
number of shares of Stock subject to the Option upon certain events).
b. The terms and provisions contained in Paragraph 11.10
of the Plan (concerning delivery of certificates of Stock to you upon
exercise of the Option).
c. The terms and provisions contained in Paragraph 11.11
of the Plan (concerning conditions to the delivery of the certificates
of Stock upon compliance with applicable securities laws).
d. The terms and provisions contained in Paragraph 11.12
of the Plan (concerning terms of the Option by persons subject to
Section 16(b) of the Exchange Act).
e. The terms and provisions contained in Paragraph 11.16
of the Plan (concerning certain information to be furnished by you to
the Corporation).
f. The terms and provisions contained in Paragraph 11.17
of the Plan (concerning that you are under no obligation to exercise
the Option).
A-2
<PAGE> 44
g. The terms and provisions contained in Paragraph 11.19
of the Plan (concerning remedies available to the Corporation in
connection with the enforcement of the terms and provisions of this
Agreement).
h. The terms and provisions contained in the last
sentence of Paragraph 11.23 of the Plan (concerning a Restructure of
the Corporation).
i. The terms and provisions contained in Section 12 of
the Plan (concerning duration and amendment of the Plan and the
Agreement).
j. The terms and provisions contained in Section 13 of
the Plan (concerning general matters relating to the Plan).
7. Notice. For purposes of notice hereunder, which shall be
given in accordance with Paragraph 13.15 of the Plan, the Corporation, the
Committee, and you agree that any notices shall be given to the Corporation or
you at the following addresses:
Corporation or Dell Computer Corporation
Committee:
Att'n: Human Resources Department
Option Notice
You:
The Corporation or you may change the address previously specified for
receiving notices at any time and from time to time by written notice to the
other in accordance with Paragraph 13.15 of the Plan.
DELL COMPUTER CORPORATION DIRECTOR
By:_________________________________ _________________________________
Name:
A-3
<PAGE> 45
ANNEX B
DELL COMPUTER CORPORATION
INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT
RETAINER AWARD FOR NON-EMPLOYEE DIRECTORS
To: ____________________ Date of Grant: ___________________
Number of Shares: ______________ Exercise Price Per Share: ________
DELL COMPUTER CORPORATION, a Delaware corporation (the "Corporation"), is
pleased to grant you a Nonstatutory Option (the "Option") to purchase shares of
the Corporation's common stock, par value $.01 per share. The number of shares
subject to this Option and the exercise price per share are stated above. This
Option is granted under Paragraph 5.5 of the Dell Computer Corporation
Incentive Plan dated June 22, 1994 (the "Plan") and is governed by the terms of
the Plan. All terms having their initial letters capitalized have the meaning
given them in the Plan unless otherwise defined in this Agreement or unless the
context requires otherwise.
THIS OPTION IS NOT BINDING ON THE CORPORATION UNTIL YOU COMPLETE YOUR ADDRESS
FOR NOTICE IN PARAGRAPH 7, SIGN THIS DOCUMENT, AND RETURN IT TO THE
CORPORATION'S HUMAN RESOURCES DEPARTMENT.
1. Vesting and Exercisability. This Option will vest and will
be exercisable at the times and with respect to the number of shares of Stock
indicated as follows:
<TABLE>
<CAPTION>
Option Exercisable On and After: Number of shares of Stock as to
------------------------------- which the Option may be exercised
---------------------------------
<S> <C>
____________, ____ _____ shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
____________, ____ _____ additional shares of Stock
</TABLE>
In accordance with the preceding schedule, the Option may be exercised, from
time to time, in whole or in part.
2. Method of Exercise. The Option shall be exercisable only by
written or recorded electronic notice of exercise delivered to the
Corporation's Human Resources Department or designee, in accordance with
instructions generally applicable to all optionholders, during the term of the
Option. The notice must (a) state the number of shares of Stock with respect
to which the Option is being exercised, (b) be signed or otherwise given by you
(or by your legal representative, legatee, or distributee in the case of your
death or by your guardian or legal representative in case of your disability),
(c) be accompanied by the Exercise Price for all shares of Stock for which the
Option is exercised (unless you
B-1
<PAGE> 46
have provided for the payment of such Exercise Price pursuant to Paragraph 6.8
of the Plan (regarding cashless exercises)), and (d) be accompanied by the
amount that the Corporation is required to withhold for federal income or other
tax purposes (unless you have provided for the payment of such taxes to the
Corporation pursuant to Paragraph 6.8 of the Plan (regarding cashless
exercises)). The Option shall not be deemed to have been exercised unless all
of these requirements are satisfied.
3. Duration. The Option will terminate on 11:59 p.m., central
time, on the date ten years from the Date of Grant.
4. Transferability. This Option is not transferrable other than
by will or the laws of descent and distribution.
5. Rights as a Stockholder. You will have no right as a
stockholder with respect to any shares subject to this Option until a
certificate representing those shares is issued in your name. No adjustment
will be made for dividends (ordinary or extraordinary, whether in cash or other
property) or distributions or other rights for which the record date is before
the date that certificate is issued, except as contemplated by Paragraph 11.1
or Paragraph 11.23 of the Plan.
6. Incorporation of Plan. The following terms and provisions of
the Plan are hereby expressly incorporated herein and made a part of this
Agreement and shall be applicable for all purposes under this Agreement with
any necessary changes in points of detail.
a. The terms and provisions contained in Paragraph 11.1
of the Plan (concerning adjustment of the Exercise Price and the
number of shares of Stock subject to the Option upon certain events).
b. The terms and provisions contained in Paragraph 11.10
of the Plan (concerning delivery of certificates of Stock to you upon
exercise of the Option).
c. The terms and provisions contained in Paragraph 11.11
of the Plan (concerning conditions to the delivery of the certificates
of Stock upon compliance with applicable securities laws).
d. The terms and provisions contained in Paragraph 11.12
of the Plan (concerning terms of the Option by persons subject to
Section 16(b) of the Exchange Act).
e. The terms and provisions contained in Paragraph 11.16
of the Plan (concerning certain information to be furnished by you to
the Corporation).
f. The terms and provisions contained in Paragraph 11.17
of the Plan (concerning that you are under no obligation to exercise
the Option).
g. The terms and provisions contained in Paragraph 11.19
of the Plan (concerning remedies available to the Corporation in
connection with the enforcement of the terms and provisions of this
Agreement).
h. The terms and provisions contained in the last
sentence of Paragraph 11.23 of the Plan (concerning a Restructure of
the Corporation).
B-2
<PAGE> 47
i. The terms and provisions contained in Section 12 of
the Plan (concerning duration and amendment of the Plan and the
Agreement).
j. The terms and provisions contained in Section 13 of
the Plan (concerning general matters relating to the Plan).
7. Notice. For purposes of notice hereunder, which shall be
given in accordance with Paragraph 13.15 of the Plan, the Corporation, the
Committee, and you agree that any notices shall be given to the Corporation or
you at the following addresses:
Corporation or Dell Computer Corporation
Committee:
Att'n: Human Resources Department
Option Notice
You:
The Corporation or you may change the address previously specified for
receiving notices at any time and from time to time by written notice to the
other in accordance with Paragraph 13.15 of the Plan.
DELL COMPUTER CORPORATION DIRECTOR
By:_________________________________ __________________________________
Name:
B-3
<PAGE> 1
EXHIBIT 5
JOHNSON & WORTLEY
A Professional Corporation
Fax: 214/977-9004 ATTORNEYS AND COUNSELORS Other Locations:
Metro: 214/263-6764 900 Jackson Street, Suite 100 Austin, Texas
Dallas, Texas 75202-4499 Houston, Texas
214/977-9000 Washington, D.C.
Writer's Direct Dial Number
(214) 977-9611
July 14, 1994
Dell Computer Corporation
9505 Arboretum Boulevard
Austin, Texas 78759-7299
Dear Sirs:
This firm has acted as counsel to Dell Computer Corporation, a
Delaware corporation ("the Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of the offer and
sale of an aggregate of 4,500,255 shares of common stock, par value $.01 per
share, of the Company (the "Common Stock"), as that number may be adjusted from
time to time pursuant to the provisions of the Company's Incentive Plan (the
"Plan"), that may be issued pursuant to awards granted under the Plan. Unless
otherwise defined herein, terms having their initial letters capitalized have
the meanings ascribed to them in the Plan.
In reaching the opinion set forth herein, this firm has reviewed such
agreements, certificates of public officials and officers of the Company,
records, documents, and matters of law that this firm deemed relevant.
Based upon and subject to the foregoing and subject further to the
assumptions, exceptions, and qualifications hereinafter stated, this firm
expresses the opinion that each share of Common Stock, when issued in
accordance with the terms of the Plan and the relevant award Agreement, will be
legally issued, fully paid and non-assessable.
The opinion expressed above is subject to the following assumptions,
exceptions, and qualifications:
1. This firm has assumed that (i) all information contained in
all documents reviewed by this firm is true and correct, (ii) all signatures on
all documents reviewed by this firm are genuine, (iii) all documents submitted
to this firm as originals are true and complete, (iv) all documents submitted
to us as copies are true and complete copies of the originals thereof, (v) each
natural person signing any document reviewed by this firm had the legal
capacity to do so, and (vi) each person signing in a representative capacity
any document reviewed by this firm had authority to sign in such capacity.
<PAGE> 2
2. This firm has also assumed that the Company will receive the
full amount and type of consideration (as specified in the Plan and each
applicable award agreement) for each of the shares of Common Stock or will have
received that consideration upon the issuance of Common Stock pursuant to the
applicable award agreement, that such consideration will be in cash, personal
property, or services already performed, that such consideration will equal or
exceed the par value per share of Common Stock, that appropriate certificates
evidencing such shares will be properly executed upon such issuance, and that
each grant of an award pursuant to the Plan will be duly authorized.
The opinion expressed above is limited to the laws of the State of
Texas, the Delaware General Corporation Law, and the federal laws of the United
States of America. You should be aware that this firm is not admitted to the
practice of law in the State of Delaware and the opinion herein with respect to
the Delaware General Corporation law is based solely upon the unofficial
compilation thereof contained in the Prentice-Hall Information Services
Corporation Statutes as of the date hereof.
This opinion may be filed as an exhibit to the Registration Statement.
In giving this consent, we do not thereby admit that we come into the category
of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
JOHNSON & WORTLEY
A Professional Corporation
By: /s/ Jim A. Watson
For the Corporation
2
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Dell Computer Corporation Incentive
Plan of our report dated March 2, 1994, with respect to the consolidated
financial statements and schedules of Dell Computer Corporation included in its
Annual Report on Form 10-K for the year ended January 30, 1994, filed with the
Securities and Exchange Commission.
/s/ Price Waterhouse
PRICE WATERHOUSE
Austin, Texas
July 8, 1994
