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EXHIBIT 99
DELL COMPUTER CORPORATION
AMENDED AND RESTATED
INCENTIVE PLAN
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS......................................................................................1
SECTION 2. SHARES OF STOCK SUBJECT TO THE PLAN..............................................................8
2.1 Maximum Amount of Shares..................................................................8
2.2 Calculation of Available Shares...........................................................9
2.3 Restoration of Unused Shares..............................................................9
2.4 Description of Shares.....................................................................9
2.5 Registration and Listing of Shares........................................................9
2.6 Reduction in Outstanding Shares of Stock..................................................9
2.7 Limitation on Certain Stock Awards........................................................9
SECTION 3. ADMINISTRATION OF THE PLAN......................................................................10
3.1 Committee................................................................................10
3.2 Duration, Removal, Etc...................................................................10
3.3 Meetings and Actions of Committee........................................................11
3.4 Committee's Powers.......................................................................11
SECTION 4. ELIGIBILITY AND PARTICIPATION...................................................................12
4.1 Eligible Individuals.....................................................................12
4.2 Grant of Awards..........................................................................12
4.3 Date of Grant............................................................................12
4.4 Award Agreements.........................................................................12
4.5 Limitation for Incentive Options.........................................................12
4.6 No Right to Award........................................................................13
4.7 Limitation on Individual Awards..........................................................13
4.8 Family Trusts of Eligible Persons........................................................13
SECTION 5 AWARDS TO NON-EMPLOYEE DIRECTORS.................................................................13
5.1 Ineligibility for Other Awards...........................................................13
5.2 Grant of Awards..........................................................................13
5.3 Available Stock..........................................................................15
5.4 Intentionally Deleted....................................................................16
5.5 Intentionally Deleted....................................................................16
5.6 Tax Withholding..........................................................................16
SECTION 6. TERMS AND CONDITIONS OF OPTIONS.................................................................16
6.1 Number of Shares.........................................................................16
6.2 Vesting..................................................................................16
6.3 Expiration of Options....................................................................16
6.4 Exercise Price...........................................................................16
6.5 Method of Exercise.......................................................................16
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6.6 Incentive Option Exercises and Disqualifying Dispositions................................17
6.7 Medium and Time of Payment...............................................................17
6.8 Payment with Sale Proceeds...............................................................17
6.9 Payment of Taxes.........................................................................17
6.10 Reload Provisions........................................................................18
6.11 Limitation on Aggregate Value of Shares That May Become First Exercisable
During Any Calendar Year Under an Incentive Option.......................................18
6.12 No Fractional Shares.....................................................................18
6.13 Modification, Extension and Renewal of Options...........................................18
6.14 Other Agreement Provisions...............................................................19
SECTION 7. STOCK APPRECIATION RIGHTS.......................................................................19
7.1 Form of Right............................................................................19
7.2 Rights Related to Options................................................................19
7.3 Right Without Option.....................................................................20
7.4 Limitations on Rights....................................................................20
7.5 Payment of Rights........................................................................20
7.6 Payment of Taxes.........................................................................21
7.7 Other Agreement Provisions...............................................................21
SECTION 8. STOCK AWARDS....................................................................................21
8.1 Restrictions.............................................................................21
8.2 Expiration of Restrictions...............................................................22
8.3 Rights as Stockholder....................................................................22
8.4 Bonus Stock..............................................................................22
8.5 Payment of Taxes.........................................................................22
8.6 Other Agreement Provisions...............................................................23
SECTION 9. PERFORMANCE UNITS...............................................................................23
9.1 Multiple Grants..........................................................................23
9.2 Performance Standards....................................................................23
9.3 Modification of Standards................................................................24
9.4 Payment..................................................................................24
9.5 Payment of Taxes.........................................................................24
9.6 Other Agreement Provisions...............................................................24
SECTION 10. CHANGE-IN-CONTROL PROVISIONS...................................................................25
10.1 Changes in Control.......................................................................25
10.2 Restructure and No Change in Control.....................................................25
10.3 Notice of Change in Control or Restructure...............................................27
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SECTION 11. ADDITIONAL PROVISIONS..........................................................................27
11.1 Adjustment of Awards and Authorized Stock................................................27
11.2 Termination of Employment................................................................28
11.3 Other Loss of Eligibility................................................................29
11.4 Death....................................................................................29
11.5 Retirement...............................................................................29
11.6 Disability...............................................................................30
11.7 Leave of Absence.........................................................................31
11.8 Transferability of Awards................................................................31
11.9 Forfeiture and Restrictions on Transfer..................................................31
11.10 Delivery of Certificates of Stock........................................................31
11.11 Conditions to Delivery of Stock..........................................................31
11.12 Certain Directors and Officers...........................................................32
11.13 Securities Act Legend....................................................................32
11.14 Legend for Restrictions on Transfer......................................................32
11.15 Rights as a Stockholder..................................................................33
11.16 Furnish Information......................................................................33
11.17 Obligation to Exercise...................................................................33
11.18 Adjustments to Awards....................................................................33
11.19 Remedies.................................................................................33
11.20 Information Confidential.................................................................33
11.21 Consideration............................................................................34
11.22 Deferral of Payment......................................................................34
11.23 Restructure..............................................................................34
SECTION 12. DURATION AND AMENDMENT OF PLAN.................................................................36
12.1 Duration.................................................................................36
12.2 Amendment................................................................................36
SECTION 13. GENERAL........................................................................................36
13.1 Application of Funds.....................................................................36
13.2 Right of the Corporation and Subsidiaries to Terminate Employment........................36
13.3 No Liability for Good Faith Determinations...............................................37
13.4 Other Benefits...........................................................................37
13.5 Exclusion From Pension and Profit-Sharing Compensation...................................37
13.6 Execution of Receipts and Releases.......................................................37
13.7 Unfunded Plan............................................................................37
13.8 No Guarantee of Interests................................................................38
13.9 Payment of Expenses......................................................................38
13.10 Corporation Records......................................................................38
13.11 Information..............................................................................38
13.12 No Liability of Corporation..............................................................38
13.13 Corporation Action.......................................................................38
13.14 Severability.............................................................................38
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13.15 Notices. ................................................................................38
13.16 Waiver of Notice.........................................................................39
13.17 Successors...............................................................................39
13.18 Headings.................................................................................39
13.19 Governing Law............................................................................39
13.20 Word Usage...............................................................................39
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DELL COMPUTER CORPORATION
AMENDED AND RESTATED
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.
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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:
(a) The acquisition by an Person of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 20% or more of either (1) the then outstanding shares of Stock or
(2) the combined voting power of the then outstanding Voting Securities
of the Corporation; provided, however, that for purposes of this
subparagraph (a), the following acquisitions shall not constitute a
Change in Control: (i) any acquisition directly from the Corporation,
(ii) any acquisition by the Corporation, (iii) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any corporation controlled by the Corporation, (iv) any
acquisition by Mr. Michael S. Dell, his Affiliates (as defined in Rule
12b-2 promulgated under the Exchange Act) or Associates (as defined in
Rule 12b-2 promulgated under the Exchange Act), his heirs or any trust
or foundation to which he has transferred or may transfer Stock
(collectively, "Michael Dell") or (v) any acquisition by any
corporation pursuant to a transaction which complies with clauses (1),
(2) and (3) of subparagraph (c) of this Paragraph; or
(b) Individuals who constitute the Incumbent Board cease for
any reason to constitute at least a majority of the Board; or
(c) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Corporation or the
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (1) all or substantially all of the Persons who were the
beneficial owners, respectively, of the outstanding Stock and
outstanding Voting Securities of the Corporation immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Corporation or all or substantially
all of the Corporation's assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding
Stock and outstanding Voting Securities, as the case may be, (2) no
Person (excluding any employee benefit Plan (or related trust) of the
Corporation, such corporation resulting from such Business Combination
and Michael Dell) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (3) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board of
Directors, providing for such Business Combination; or
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(d) Approval by the stockholders of the Corporation of a
complete liquidation or dissolution 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.
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
Rule16b-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.
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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 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
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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 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; provided, however, that any individual
becoming a director subsequent to such date whose election, or nomination for
election by the Corporation's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
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
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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 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
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(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.
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 seventy-five 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.
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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 (the "Authorized
Shares") shall be calculated as follows (with all references to "fiscal years"
referring to fiscal years of the Corporation):
(a) At any time from (and including) July 18, 1997 until (and
including) the end of fiscal 1998, the number of Authorized Shares
shall be 31,761,880.
(b) At any time during any fiscal year (commencing with fiscal
1999 and ending with fiscal 2003), the number of Authorized Shares
shall be equal to the sum of (1) the number of Authorized Shares as of
the end of the immediately preceding fiscal year, plus (2) 4% of the
total number of issued and outstanding shares of Stock as of the end of
the immediately preceding fiscal year, plus (3) 4% of the total number
of shares of Stock repurchased by the Corporation during the
immediately preceding fiscal year, plus (4) the Performance Amount (as
defined in subparagraph (d) of this Paragraph) for the immediately
preceding fiscal year.
(c) The number of Authorized Shares shall not be increased
after fiscal 2003 unless such increase is approved by the Corporation's
stockholders.
(d) The "Performance Amount" for any fiscal year shall be
calculated as follows:
(1) If the Total Shareholder Return (as defined
below) achieved by the Corporation during such fiscal year
exceeds the average Total Shareholder Return achieved by the
companies included in the S&P Computer Systems Index during
such fiscal year, the Performance Amount for such fiscal year
shall be equal to the sum of (A) 1% of the total number of
issued and outstanding shares of Stock as of the end of such
fiscal year, plus (B) 1% of the total number of shares of
Stock repurchased by the Corporation during such fiscal year.
(2) If the Total Shareholder Return achieved by the
Corporation during such fiscal year does not exceed the
average Total Shareholder Return achieved by the companies
included in the S&P Computer Systems Index during such fiscal
year, the Performance Amount for such fiscal year shall be
equal to zero.
The term "Total Shareholder Return" for any period and for any company
shall mean the number (expressed as a percentage) obtained by dividing
(X) the sum of the amount of dividends for such period, assuming
dividend reinvestment, and the difference between the price per share
of such company's common stock at the end of the period and the price
per share of such company's common stock at the beginning of the
period, by (Y) the price per share of such company's common stock at
the beginning of such period.
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2.2 Calculation of Available Shares. At any time, the number of shares
that may then be issued or transferred pursuant to Awards under the Plan (the
"Available Shares") shall be equal to the difference between (a) the number of
Authorized Shares at such time and (b) the sum of (1) the number of shares of
Stock subject to issuance upon exercise or settlement of then outstanding
Awards, (2) the number of shares of Stock that equal the value of then
outstanding Performance Units determined in each case as of the Date of Grant of
each Award (other than Awards designated to be paid only in cash) and (3) 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 Authorized Shares in calculating the
number of Available Shares under Paragraph 2.2 and shall again be included in
Available Shares.
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.
(a) No more than twenty 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.
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(b) Except for the Unrestricted Pool (as defined below), all
Restricted Awards (as defined below) shall either be subject to a
vesting period of three years or more or be subject to vesting that is
contingent upon specified performance standards. A Restricted Award
that is within the Unrestricted Pool may be subject to whatever vesting
restriction the Committee specifies, if any. For purposes of this
subsection (b), the term "Unrestricted Pool" shall mean, for each
fiscal year of the Corporation, a number of Restricted Awards that is
equal to 5% of the total number of Awards made hereunder during such
fiscal year; and the term "Restricted Award" shall mean either of the
following: (1) a Stock Award or (2) an Option with an associated
Exercise Price that is less than 100% of the Fair Market Value per
share of the Stock on the Date of Grant of the Option (provided,
however, that an Option not shall be included in this clause (2) if the
recipient pays, or otherwise foregoes value to, the Corporation in an
amount at least equal to the difference between the Fair Market Value
per share of Stock on the Date of Grant and the Exercise Price). The
provisions of this subsection (b) shall apply in addition to any other
limitations or restrictions on the award of Restricted Awards provided
for herein, including the aggregate limit on the number of Stock Awards
that may be issued hereunder (as described in subsection (a) of this
Section 2.7) and the limit on the permissible discount available for
Options (as described in in Section 6.4).
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
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 Rule16b-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
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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) 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,
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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.
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.
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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 12,800,000 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 with 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 Awards specified in
this Section 5.
5.2 Grant of Awards.
(a) Discretionary Awards. The Committee may, in its
discretion, grant a Nonstatutory Option or Restricted Stock Award to
any Non-employee Director; provided, however, that (1) no Non-employee
Director may receive Awards (not including Awards granted in lieu of
Annual Cash Retainer pursuant to subsection (b) of this Section)
covering more than 40,000 shares of Stock in any Service Year (or, in
the case of a newly-elected Non-employee Director, covering more than
three times the annual limit in the Service Year in which such
Non-employee Director is first elected or appointed to the Board of
Directors) and (2) the aggregate number of shares of Stock subject to
Restricted Stock Awards granted to a Non-employee Director during any
Service Year (not including Awards granted in lieu of Annual Cash
Retainer pursuant to subsection (b) of this Section) may not exceed 20%
of the total number of shares of Stock subject to all Awards granted to
such Non-employee Director during such Service Year. Awards under this
Section are discretionary, and until the Committee grants an Award to a
Non-employee Director pursuant to this Section, such Non-employee
Director shall not have any right or claim to any Award. The receipt of
an Award under the Plan shall not give any Non-employee Director any
right or claim to receive any other Award under the Plan, and the
Committee or the Board of Directors may determine that any or all
Non-employee Directors are not eligible to receive Awards under the
Plan for an indefinite period or for specified Service Years.
(b) Awards in Lieu of Annual Cash Retainer. In addition to any
Awards granted pursuant to subsection (a) of this Section, the
Committee, in its discretion, may permit a Non-employee Director to
elect to receive a Nonstatutory Option or Restricted Stock Award in
lieu of all or a portion of his or her Annual Cash Retainer for any
Service Year. If the Committee
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permits any such election, it, in its discretion pursuant to subsection
(c) of this Section, shall determine the appropriate terms of such
Award (including the appropriate number of shares of Stock subject to
the Award and, in the case of a Nonstatutory Option, the appropriate
exercise price per share). Any such election, if permitted by the
Committee, shall be made in accordance with such procedures as are
adopted from time to time by the Committee.
(c) Terms of Awards.
(1) In connection with the grant of an Award under
this Section, the Committee, in its discretion, shall
establish the terms of such Award. Such terms shall include
the following:
(A) In the case of an Option:
(i) The number of shares of Stock
subject to the Option (subject to the
provisions of subsection (a) of this
Section);
(ii) The exercise price per share;
(iii) The vesting and
exercisability schedule (including
provisions regarding acceleration of vesting
and exercisability); provided, however, that
no Option (or any portion thereof) may be
exercisable earlier than six months from the
Date of Grant;
(iv) Whether the Option is
transferable and, if so, the circumstances
under which such Option may be transferred;
and
(v) The termination and expiration
of the Option (provided, however, that in no
event may an Option expire more than ten
years after its date of grant).
(B) In the case of a Restricted Stock Award:
(i) The number of shares of Stock
subject to the Award (subject to the
provisions of subsection (a) of this
Section); and
(ii) The vesting schedule
(including provisions regarding acceleration
of vesting) and transfer and forfeiture
restrictions; provided, however, that no
Restricted Stock Award (or any portion
thereof) may be transferable earlier than
six months from the Date of Grant.
In addition, it shall be expressly within the discretion of
the Committee to include in any Award Agreement terms that
provide for the acceleration of vesting and lapse of
restrictions, as applicable, upon the occurrence of a Change
in Control, liquidation or dissolution of the Company.
(2) Notwithstanding the provisions of paragraph (1) in this
subsection, the following limitations shall apply to the Committee's
exercise of discretion:
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(a) The exercise price per share of any Option issued
under this Section shall not be less than 100% of the Fair
Market Value of a share of Stock on the Date of Grant.
(b) The Committee shall not "reprice" any Option
issued under this Section if the effect of such repricing
would be to decrease the exercise price per share applicable
to such Option. For this purpose, a "repricing" would include
a tandem cancellation and regrant or any other amendment or
action that would have substantially the same effect as
decreasing the exercise price of outstanding Options.
(d) Award Agreements. Each Award granted under this
Section shall be evidenced by an Award Agreement, which shall
comply with and be subject to the terms and conditions of this
Section. In addition to the terms of the Award as described in
subsection (c) of this Section, an Award Agreement may contain
such other terms, provisions and conditions not inconsistent
with the terms and provisions of this Section as may be
determined by the Committee.
(e) Exercise of Options. Options shall be exercisable
in accordance with such rules and procedures as are specified
in the applicable Award Agreement, as are applicable to
optionholders of the Company generally or as may be adopted
from time to time by the Committee.
(f) Certain Definitions. As used in this Section, the
following terms shall have the respective meanings ascribed to
them below:
(1) "Annual Cash Retainer" shall mean the
annual cash retainer fee, in such amount as is
established from time to time by resolution of the
Board of Directors, payable to a Non-employee
Director for his or her services as a director of the
Company.
(2) "Service Year" shall mean the
approximately annual period commencing at an annual
meeting of the Company's stockholders and ending at
the next annual meeting of the Company's
stockholders.
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.
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5.4 Intentionally Deleted.
5.5 Intentionally Deleted.
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.
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) seventy-five 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,
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(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 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
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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 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.
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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.
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.
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(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
(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
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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) 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.
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(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.
(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
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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 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.
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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.
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.
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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, 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:
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(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;
(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
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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 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.
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(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 (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:
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(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 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.
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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 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 the Holder has no
employment agreement or such term is not defined in the employment
agreement, "Disability" shall mean that the Committee (1) has
determined that the Holder has a permanent physical or mental
impairment of sufficient severity as to prevent the Holder from
performing duties for the Corporation and (2) has provided written
notice to the Holder that the Holder's employment is terminated due to
a permanent "Disability" pursuant to this section. The Committee, or
its designee, may establish any process or procedure it deems
appropriate for determining whether a Holder has a "Disability."
Whether a Holder's employment is terminated due to "Disability" for
purposes of this section shall be determined by the Committee in the
Committee's complete discretion. If a Holder's employment is terminated
due to a physical or mental impairment or condition of any degree of
severity or permanence, but the Committee does not inform the Holder in
writing that the Holder's employment is terminated due to "Disability"
for the purposes of this section, such Holder's employment is not
terminated due to "Disability" for the purposes of this section.
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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 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
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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 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
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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 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
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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.
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;
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(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;
(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
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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 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.
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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 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
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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 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
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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.
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.
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