SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 6, 1999
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-10428 77-0148208
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(State of or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
3400 West Warren Avenue, Fremont, California 94538
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 623-9001
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(Former name or address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
Sunrise Technologies International, Inc. (the "Company") has
determined to amend and restate its 1999 Long-Term Equity Compensation Plan
(the "Plan"), established as of March 20, 1999, in order to decrease the
number of shares available under the Plan from 2,600,000 to 2,100,000.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of April 6, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
10.1 Amended and Restated 1999 Long-Term Equity Compensation Plan.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
(Registrant)
DATE: April 7, 1999 By: /s/ C. Russell Trenary, III
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Name: C. Russell Trenary, III
Title: President and Chief Executive
Officer
EXHIBIT 10.1
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SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
1999 LONG-TERM
EQUITY COMPENSATION PLAN
AMENDED AND RESTATED
AS OF APRIL 6, 1999
<PAGE>
SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
1999 LONG-TERM EQUITY COMPENSATION PLAN
AMENDED AND RESTATED AS OF APRIL 6, 1999
Page
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Article 1. Establishment, Objectives and Duration . . . . . . . . . . .1
Article 2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . .1
Article 3. Administration . . . . . . . . . . . . . . . . . . . . . . .4
Article 4. Shares Subject to the Plan and Maximum Awards. . . . . . . .4
Article 5. Eligibility and Participation. . . . . . . . . . . . . . . .5
Article 6. Stock Options. . . . . . . . . . . . . . . . . . . . . . . .6
Article 7. Stock Appreciation Rights. . . . . . . . . . . . . . . . . .7
Article 8. Restricted Stock . . . . . . . . . . . . . . . . . . . . . .9
Article 9. Performance Units and Performance Shares . . . . . . . . . 10
Article 10. Performance Measures . . . . . . . . . . . . . . . . . . . 12
Article 11. Beneficiary Designation. . . . . . . . . . . . . . . . . . 12
Article 12. Deferrals. . . . . . . . . . . . . . . . . . . . . . . . . 12
Article 13. Retention Rights . . . . . . . . . . . . . . . . . . . . . 13
Article 14. Amendment, Modification, Termination
and Adjustments. . . . . . . . . . . . . . . . . . . . . 13
Article 15. Payment of Plan Awards and Conditions Thereon. . . . . . . 13
Article 16. Change in Control. . . . . . . . . . . . . . . . . . . . . 14
Article 17. Withholding. . . . . . . . . . . . . . . . . . . . . . . . 16
Article 18. Indemnification. . . . . . . . . . . . . . . . . . . . . . 16
Article 19. Successors . . . . . . . . . . . . . . . . . . . . . . . . 16
Article 20. Legal Construction . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
ARTICLE 1. ESTABLISHMENT, OBJECTIVES AND DURATION
1.1. ESTABLISHMENT OF THE PLAN. Sunrise Technologies International,
Inc., a Delaware corporation (hereinafter referred to as the "Company"),
hereby amends and restates its incentive compensation plan to be known as
the "Sunrise Technologies International, Inc. 1999 Long-Term Equity
Compensation Plan" (hereinafter referred to as the "Plan"), as set forth in
this document. The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Stock,
Performance Shares and Performance Units.
Subject to approval by the Company's stockholders, the Plan shall
become effective as of April 6, 1999 (the "Effective Date") and shall
remain in effect as provided in Section 1.3 hereof.
1.2. OBJECTIVES OF THE PLAN. The objectives of the Plan are to
optimize the profitability and growth of the Company through incentives
which are consistent with the Company's goals and which link the personal
interests of Participants to those of the Company's stockholders; to
provide Participants with an incentive for excellence in individual
performance; and to promote teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in
its ability to motivate, attract and retain the services of Participants
who make significant contributions to the Company's success and to allow
Participants to share in the success of the Company.
1.3. DURATION OF THE PLAN. The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect,
subject to the right of the Board of Directors to amend or terminate the
Plan at any time pursuant to Article 14 hereof, until all Shares subject to
it shall have been purchased or acquired according to the Plan's
provisions. However, in no event may an Award be granted under the Plan on
or after March 19, 2009.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the
meanings set forth below, and when the meaning is intended, the initial
letter of the word shall be capitalized:
2.1. "AFFILIATE" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations of the Exchange Act.
2.2. "AWARD" means, individually or collectively, a grant under this
Plan of Nonqualified Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or Performance
Units.
2.3. "AWARD AGREEMENT" means an agreement entered into by the
Company and each Participant setting forth the terms and provisions
applicable to Awards granted under this Plan.
2.4. "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the
meaning ascribed to such terms in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
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2.5. "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of
the Company.
2.6. "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
2.7. "COMMITTEE" means any committee appointed by the Board to
administer the Plan, as specified in Article 3 herein.
2.8. "COMPANY" means Sunrise Technologies International, Inc., a
Delaware corporation, including any and all Subsidiaries and Affiliates,
and any successor thereto as provided in Article 19 herein.
2.9. "CONSULTANT" means a consultant or advisor who provides bona
fide services to the Company as an independent contractor. Service as a
Consultant shall be considered employment for all purposes of the Plan,
except for purposes of an ISO grant under Article 6.
2.10. "COVERED EMPLOYEE" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of the group of
"covered employees," as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
2.11. "DIRECTOR" means any individual who is a member of the Board of
Directors of the Company or any Subsidiary or Affiliate.
2.12. "DISABILITY" shall have the meaning ascribed to such term in
the Participant's governing long-term disability plan, or if no such plan
exists, at the discretion of the Committee.
2.13. "EFFECTIVE DATE" shall have the meaning ascribed to such term
in Section 1.1 hereof.
2.14. "EMPLOYEE" means any full-time, active employee of the Company
or its Subsidiaries or Affiliates. Directors or Consultants who are not
employed by the Company shall not be considered Employees under this Plan.
2.15. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.16. "FAIR MARKET VALUE" shall be determined on the basis of the
closing sale price at which Shares have been sold the regular way on the
principal securities exchange on which the Shares are traded or, if there
is no such sale on the relevant date, then on the last previous day on
which there was such a sale.
2.17. "FREESTANDING SAR" means an SAR that is granted independently
of any Options, as described in Article 7 herein.
2.18. "INCENTIVE STOCK OPTION" OR "ISO" means an option to purchase
Shares granted under Article 6 herein and which is designated as an
Incentive Stock Option and which is intended to meet the requirements of
Code Section 422.
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2.19. "INSIDER" shall mean an individual who is, on the relevant
date, an officer, director or ten percent (10%) beneficial owner of any
class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act.
2.20. "NON-EMPLOYEE DIRECTOR" shall mean a Director who is not also
an Employee. Service as a Non-Employee Director shall be considered
employment for all purposes of the Plan, except for purposes of an ISO
grant under Article 6.
2.21. "NON-QUALIFIED STOCK OPTION" OR "NQSO" means an option to
purchase Shares granted under Article 6 herein and which is not intended to
meet the requirements of Code Section 422.
2.22. "OPTION" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.
2.23. "OPTION PRICE" means the price at which a Share may be
purchased by a Participant pursuant to an Option.
2.24. "PARTICIPANT" means an Employee, Non-Employee Director or
Consultant who has been selected to receive an Award or who has outstanding
an Award granted under the Plan.
2.25. "PERFORMANCE-BASED EXCEPTION" means the performance-based
exception from the tax deductibility limitations of Code Section 162(m).
2.26. "PERFORMANCE SHARE" means an Award granted to a Participant, as
described in Article 9 herein.
2.27. "PERFORMANCE UNIT" means an Award granted to a Participant, as
described in Article 9 herein.
2.28. "PERIOD OF RESTRICTION" means the period during which the
transfer of Shares of Restricted Stock is limited in some way (based on
the passage of time, the achievement of performance goals or upon the
occurrence of other events as determined by the Committee, at its
discretion), and the Shares are subject to a substantial risk of
forfeiture, as provided in Article 8 herein.
2.29. "PERSON" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a "group" as defined in Section 13(d) thereof.
2.30. "RESTRICTED STOCK" means an Award granted to a Participant
pursuant to Article 8 herein.
2.31. "RETIREMENT" shall have the meaning ascribed to such term in
the Company's tax-qualified retirement plan.
<PAGE>
2.32. "SHARES" means the shares of common stock of the Company.
2.33. "STOCK APPRECIATION RIGHT" OR "SAR" means an Award, granted
alone or, in connection with a related Option, designated as an SAR,
pursuant to the terms of Article 7 herein.
2.34. "SUBSIDIARY" means any corporation, partnership, joint venture
or other entity in which the Company has a majority voting interest
(including all divisions, affiliates and related entities).
2.35. "TANDEM SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related
Option (and when a Share is purchased under the Option, the Tandem SAR
shall similarly be canceled).
ARTICLE 3. ADMINISTRATION
3.1. THE COMMITTEE. The Plan shall be administered by the
Compensation Committee of the Board consisting of not less than two (2)
Directors who meet the "outside director" requirements of Rule 16b-3
promulgated by the Securities and Exchange Commission under the Exchange
Act and the requirements of Code Section 162(m), or by any other committee
appointed by the Board, provided the members of such committee meet such
requirements.
3.2. AUTHORITY OF THE COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select
individuals who shall participate in the Plan; determine the sizes and
types of Awards; determine the terms and conditions of Awards in a manner
consistent with the Plan; construe and interpret the Plan and any
agreement or instrument entered into under the Plan; establish, amend or
waive rules and regulations for the Plan's administration; and (subject to
the provisions of Article 14 herein) amend the terms and conditions of any
outstanding Award to the extent such terms and conditions are within the
discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the
Committee may delegate its authority as identified herein.
3.3. DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all
persons, including the Company, its stockholders, Employees, Participants
and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1. NUMBER OF SHARES AVAILABLE FOR GRANTS. Subject to Sections 4.2
and 4.3 herein, the maximum number of Shares with respect to which Awards
may be granted to Participants under the Plan shall be two million one
hundred thousand (2,100,000). Shares issued under the Plan may be either
authorized but unissued Shares, treasury Shares or any combination thereof.
<PAGE>
Unless and until the Committee determines that an Award to a Covered
Employee shall not be designed to comply with the Performance-Based
Exception, the following rules shall apply to grants of such Awards under
the Plan, subject to Sections 4.2 and 4.3.
(a) STOCK OPTIONS AND SARS: The maximum aggregate number of
Shares that may be subject to Stock Options, with or without Tandem SARs,
or Freestanding SARs, granted in any one fiscal year to any one Participant
shall be one million (1,000,000).
(b) RESTRICTED STOCK: The maximum aggregate grant with
respect to Awards of Restricted Stock which are intended to qualify for the
Performance-Based Exception, and which are granted in any one fiscal year
to any one Participant shall be two hundred thousand (200,000) Shares.
(c) PERFORMANCE SHARES/PERFORMANCE UNITS: The maximum
aggregate payout (determined as of the end of the applicable performance
period) with respect to Awards of Performance Shares or Performance Units
which are intended to comply with the Performance-Based Exception, and
which are granted in any one fiscal year to any one Participant shall be
equal to the Fair Market Value of two hundred thousand (200,000) Shares.
4.2. LAPSED AWARDS. If any Award granted under this Plan is
canceled, terminates, expires or lapses for any reason (with the exception
of the termination of a Tandem SAR upon exercise of the related Option, or
the termination of a related Option upon exercise of the corresponding
Tandem SAR), any Shares subject to such Award again shall be available for
the grant of an Award under the Plan. The foregoing notwithstanding, the
aggregate number of Shares that may be issued under the Plan upon the
exercise of ISOs shall not be increased when Restricted Stock or other
Shares are forfeited.
4.3. ADJUSTMENTS. In the event of any change in corporate
capitalization such as a stock split, or a corporate transaction such as
any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization
(whether or not such reorganization comes within the definition of such
term in Code Section 368) or any partial or complete liquidation of the
Company, such adjustment shall be made in the number and class of Shares
which may be delivered under Section 4.1, in the number and class of and/or
price of Shares subject to outstanding Awards granted under the Plan, and
in the Award limits set forth in subsections 4.1(a), 4.l(b) and 4.l(c), as
may be determined to be appropriate and equitable by the Committee, in its
sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number of Shares subject to any Award shall always be a
whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1. ELIGIBILITY. Persons eligible to participate in this Plan
include Consultants, Non-Employee Directors and officers and certain key
salaried Employees of the Company with potential to contribute to the
success of the Company or its Subsidiaries, including Employees who are
members of the Board.
<PAGE>
5.2. ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from all eligible Participants
those to whom Awards shall be granted, and shall determine the nature and
amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1. GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee.
6.2. AWARD AGREEMENT. Each Option grant shall be evidenced by an
Award Agreement that shall specify the Option Price, the duration of the
Option, the number of Shares to which the Option pertains, and such other
provisions as the Committee shall determine. The Award Agreement also
shall specify whether the Option is intended to be an ISO within the
meaning of Code Section 422, or an NQSO, whose grant is intended not to
fall under the provisions of Code Section 422.
6.3. OPTION PRICE. The Option Price for each grant of an Option
under this Plan shall be at least equal to one hundred percent (100%) of
the Fair Market Value of a Share on the date the Option is granted.
6.4. DURATION OF OPTIONS. Each Option granted to a Participant
shall expire at such time as the Committee shall determine at the time of
grant; provided, however, that no Option shall be exercisable later than
the tenth anniversary date of its grant and provided further that no Option
shall be exercisable later than the fifth anniversary date of its grant for
an ISO granted to a Participant, who at the time of such grant, owns stock
possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company.
6.5. EXERCISE OF OPTIONS. Options granted under this Article 6
shall be exercisable at such times and be subject to such restrictions and
conditions as the Committee shall in each instance approve, which need not
be the same for each grant or for each Participant.
6.6. PAYMENT. Options granted under this Article 6 shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of Shares with respect to which the Option is to
be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
Company in full in a form as determined by the Committee either: (a) in
cash or its equivalent; (b) by tendering previously acquired Shares having
an aggregate Fair Market Value at the time of exercise equal to the total
Option Price (provided that the Shares which are tendered must have been
held by the Participant for at least six (6) months prior to their tender
to satisfy the Option Price); (c) by withholding Shares which otherwise
would be acquired on exercise having an aggregate Fair Market Value at the
time of exercise equal to the total Option Price; (d) by promissory note of
the Participant; or (e) by any combination of the foregoing methods of
payment.
<PAGE>
The Committee may also allow cashless exercise as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of Shares
purchased under the Option(s).
6.7. RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of
an Option granted under this Article 6 as it may deem advisable including,
without limitation, restrictions under applicable federal securities laws,
under the requirements of any stock exchange or market upon which such
Shares are then listed and/or traded, and under any blue sky or state
securities laws applicable to such Shares.
6.8. TERMINATION OF EMPLOYMENT OR CONSULTING ARRANGEMENT. Each
Option Award Agreement shall set forth the extent to which the Participant
shall have the right to exercise the Option following termination of the
Participant's employment or consulting arrangement with the Company. Such
provisions shall be determined in the sole discretion of the Committee,
shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Options issued pursuant to this
Article 6, and may reflect distinctions based on the reasons for
termination of employment.
6.9. NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan
may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under the Plan
shall be exercisable during his or her lifetime only by such Participant or
the Participant's legal representative (to the extent permitted under Code
Section 422).
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided
in a Participant's Award Agreement, no NQSO granted under this Article 6
may be sold, transferred, pledged, assigned or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a Participant's
Award Agreement, all NQSOs granted to a Participant under this Article 6
shall be exercisable during his or her lifetime only by such Participant or
the Participant's legal representative.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1. GRANT OF SARS. Subject to the terms and conditions of the
Plan, SARs may be granted to Participants at any time and from time to time
as shall be determined by the Committee. The Committee may grant
Freestanding SARs, Tandem SARs or any combination of these forms of SAR.
<PAGE>
The Committee shall have complete discretion in determining the
number of SARs granted to each Participant (subject to Article 4 herein)
and, consistent with the provisions of the Plan, in determining the terms
and conditions pertaining to such SARs.
The grant price of a Freestanding SAR shall equal the Fair Market
Value of a Share on the date of grant of the SAR. The grant price of
Tandem SARs shall equal the Option Price of the related Option.
7.2. EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of
the right to exercise the equivalent portion of the related Option. A
Tandem SAR may be exercised only with respect to the Shares for which its
related Option is then exercisable.
Notwithstanding any other provision of this Plan to the contrary,
with respect to a Tandem SAR granted in connection with an ISO: (i) the
Tandem SAR will expire no later than the expiration of the underlying ISO;
(ii) the value of the payout with respect to the Tandem SAR may be for no
more than one hundred percent (100%) of the difference between the Option
Price of the underlying ISO and the Fair Market Value of the Shares subject
to the underlying ISO at the time the Tandem SAR is exercised; and (iii)
the Tandem SAR may be exercised only when the Fair Market Value of the
Shares subject to the ISO exceeds the Option Price of the ISO.
7.3. EXERCISE OF FREESTANDING SARS. Freestanding SARs may be
exercised upon whatever terms and conditions the Committee, in its sole
discretion, imposes upon them.
7.4. SAR AGREEMENT. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.5. TERM OF SARS. The term of an SAR granted under the Plan shall
be determined by the Committee, in its sole discretion; provided, however,
that such term shall not exceed ten years.
7.6. PAYMENT OF SAR AMOUNT. Upon exercise of an SAR, a Participant
shall be entitled to receive payment from the Company in an amount
determined by multiplying:
(a) the difference between the Fair Market Value of a Share
on the date of exercise over the grant price; by
(b) the number of Shares with respect to which the SAR is
exercised.
At the discretion of the Committee, the payment upon SAR exercise may
be in cash, in Shares of equivalent value or in some combination thereof.
The Committee's determination regarding the form of SAR payout shall be set
forth in the Award Agreement pertaining to the grant of the SAR.
<PAGE>
7.7. TERMINATION OF EMPLOYMENT OR CONSULTING ARRANGEMENT. Each SAR
Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the SAR following termination of the
Participant's employment or consulting arrangement with the Company and/or
its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement
entered into with Participants, need not be uniform among all SARs issued
pursuant to the Plan and may reflect distinctions based on the reasons for
termination of employment.
7.8. NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
except as otherwise provided in a Participant's Award Agreement, all SARs
granted to a Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant or the Participant's legal
representative.
ARTICLE 8. RESTRICTED STOCK
8.1. GRANT OF RESTRICTED STOCK. Subject to the terms and provisions
of the Plan, the Committee, at any time and from time to time, may grant
Shares of Restricted Stock to Participants in such amounts as the Committee
shall determine.
8.2. RESTRICTED STOCK AGREEMENT. Each Restricted Stock grant shall
be evidenced by a Restricted Stock Award Agreement that shall specify the
Period(s) of Restriction, the number of Shares of Restricted Stock granted
and such other provisions as the Committee shall determine.
8.3. TRANSFERABILITY. Except as provided in this Article 8, the
Shares of Restricted Stock granted under the Plan may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated until
the end of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Award Agreement, or upon
earlier satisfaction of any other conditions, as specified by the Committee
in its sole discretion and set forth in the Restricted Stock Award
Agreement. All rights with respect to the Restricted Stock granted to a
Participant under the Plan shall be available during his or her lifetime
only to such Participant or the Participant's legal representative.
8.4. OTHER RESTRICTIONS. Subject to Article 10 herein, the
Committee shall impose such other conditions and/or restrictions on any
Shares of Restricted Stock granted pursuant to the Plan as it may deem
advisable including, without limitation, a requirement that Participants
pay a stipulated purchase price for each Share of Restricted Stock,
restrictions based upon the achievement of specific performance goals
(Company-wide, divisional and/or individual), time-based restrictions on
vesting following the attainment of the performance goals and/or
restrictions under applicable federal or state securities laws.
The Company may retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all
conditions and/or restrictions applicable to such Shares have been
satisfied.
<PAGE>
Except as otherwise provided in this Article 8, Shares of Restricted
Stock covered by each Restricted Stock grant made under the Plan shall
become freely transferable by the Participant after the last day of the
applicable Period of Restriction.
8.5. VOTING RIGHTS. Participants holding Shares of Restricted Stock
granted hereunder may be granted the right to exercise full voting rights
with respect to those Shares during the Period of Restriction.
8.6. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of
Restriction, Participants holding Shares of Restricted Stock granted
hereunder may be credited with regular cash dividends paid with respect to
the underlying Shares while they are so held. The Committee may apply any
restrictions to the dividends that the Committee deems appropriate.
Without limiting the generality of the preceding sentence, if the grant or
vesting of Restricted Shares granted to a Covered Employee is designed to
comply with the requirements of the Performance-Based Exception, the
Committee may apply any restrictions it deems appropriate to the payment of
dividends declared with respect to such Restricted Shares, such that the
dividends and/or the Restricted Shares maintain eligibility for the
Performance-Based Exception.
8.7. TERMINATION OF EMPLOYMENT OR CONSULTING ARRANGEMENT. Each
Restricted Stock Award Agreement shall set forth the extent to which the
Participant shall have the right to receive unvested Restricted Shares
following termination of the Participant's employment or consulting
arrangement with the Company. Such provisions shall be determined in the
sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Shares of
Restricted Stock issued pursuant to the Plan and may reflect distinctions
based on the reasons for termination of employment; provided, however, that
except in the cases of terminations by reason of death or Disability, the
vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Covered Employees shall
occur at the time they otherwise would have, but for the employment
termination.
ARTICLE 9. PERFORMANCE UNITS AND PERFORMANCE SHARES
9.1. GRANT OF PERFORMANCE UNITS/SHARES. Subject to the terms of the
Plan, Performance Units and/or Performance Shares may be granted to
Participants in such amounts and upon such terms, and at any time and from
time to time, as shall be determined by the Committee.
9.2. VALUE OF PERFORMANCE UNITS/SHARES. Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant. Each Performance Share shall have an initial value equal to the
Fair Market Value of a Share on the date of grant. The Committee shall set
performance goals in its discretion which, depending on the extent to which
they are met, will determine the number and/or value of Performance
Units/Shares that will be paid out to the Participant. For purposes of
this Article 9, the time period during which the performance goals must be
met shall be called a "Performance Period."
<PAGE>
9.3. EARNING OF PERFORMANCE UNITS/SHARES. Subject to the terms of
this Plan, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number
and value of Performance Units/Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.
9.4. FORM AND TIMING OF PAYMENT OF PERFORMANCE UNITS/SHARES.
Payment of earned Performance Units/Shares shall be made in a single lump
sum following the close of the applicable Performance Period. Subject to
the terms of this Plan, the Committee, in its sole discretion, may pay
earned Performance Units/Shares in the form of cash or in Shares (or in a
combination thereof) which have an aggregate Fair Market Value equal to the
value of the earned Performance Units/Shares at the close of the applicable
Performance Period. Such Shares may be granted subject to any restrictions
deemed appropriate by the Committee. The determination of the Committee
with respect to the form of payout of such Awards shall be set forth in the
Award Agreement pertaining to the grant of the Award.
At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Shares which have been
earned in connection with grants of Performance Units and/or Performance
Shares, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth
in Section 8.6 herein). In addition, Participants may, at the discretion
of the Committee, be entitled to exercise their voting rights with respect
to such Shares.
9.5. TERMINATION OF EMPLOYMENT OR CONSULTING ARRANGEMENT DUE TO
DEATH, DISABILITY OR RETIREMENT. Unless determined otherwise by the
Committee and set forth in the Participant's Award Agreement, in the event
the employment or consulting arrangement of the Participant is terminated
by reason of death, Disability or Retirement during a Performance Period,
the Participant shall receive a payout of the Performance Units/Shares
which is prorated, as specified by the Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time
specified by the Committee in its sole discretion and set forth in the
Participant's Award Agreement. Notwithstanding the foregoing, with respect
to Covered Employees who retire during a Performance Period, payments shall
be made at the same time as payments are made to Participants who did not
terminate employment during the applicable Performance Period.
9.6. TERMINATION OF EMPLOYMENT OR CONSULTING ARRANGEMENT FOR OTHER
REASONS. In the event the Participant's employment or consulting
arrangement terminates for any reason other than those reasons set forth in
Section 9.5 herein, all Performance Units/Shares shall be forfeited by the
Participant to the Company unless determined otherwise by the Committee, as
set forth in the Participant's Award Agreement.
9.7. NONTRANSFERABILITY. Except as otherwise provided in a
Participant's Award Agreement, Performance Units/Shares may not be sold,
transferred, pledged, assigned or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further,
<PAGE>
except as otherwise provided in a Participant's Award Agreement, a
Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant or the Participant's legal
representative.
ARTICLE 10. PERFORMANCE MEASURES
Unless and until the Committee proposes for stockholder vote and
stockholders approve a change in the general performance measures set forth
in this Article 10, the attainment of which may determine the degree of
payout and/or vesting with respect to Awards to Covered Employees which are
designed to qualify for the Performance-Based Exception, the performance
measure(s) to be used for purposes of such grants shall be chosen from
among net income either before or after taxes, market share, customer
satisfaction, profits, share price, earnings per share, total stockholder
return, return on assets, return on equity, operating income, return on
capital or investments, or economic value added (including, but not limited
to, any or all of such measures in comparison to the Company's competitors,
the industry or some other comparator group).
The Committee shall have the discretion to adjust the determinations
of the degree of attainment of the preestablished performance goals;
provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Covered Employees, may
not be adjusted upward (the Committee shall retain the discretion to adjust
such Awards downward).
In the event that applicable tax and/or securities laws change to
permit Committee discretion to alter the governing performance measures
without obtaining stockholder approval of such changes, the Committee shall
have sole discretion to make such changes without obtaining stockholder
approval. In addition, in the event that the Committee determines that it
is advisable to grant Awards which shall not qualify for the
Performance-Based Exception, the Committee may make such grants without
satisfying the requirements of Code Section 162(m).
ARTICLE 11. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or
successively) to whom any benefit under the Plan is to be paid in case of
his or her death before he or she receives any or all of such benefit.
Each such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and will be
effective only when filed by the Participant in writing with the Company
during the Participant's lifetime. In the absence of any such designation,
the Participant's beneficiary shall be paid to the Participant's estate.
ARTICLE 12. DEFERRALS
The Committee may permit or require a Participant to defer such
Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise of an
Option or SAR, the lapse or waiver of restrictions with respect to
Restricted Stock, or the satisfaction of any requirements or goals with
respect to Performance Units/Shares. If any such deferral election is
required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
<PAGE>
ARTICLE 13. RETENTION RIGHTS
13.1. EMPLOYMENT. Nothing in the Plan shall interfere with or limit
in any way the right of the Company to terminate the services of any
Participant at any time, nor confer upon any Participant any right to
continue as an Employee, Non-Employee Director or Consultant.
13.2. PARTICIPATION. No Participant shall have the right to be
selected to receive an Award under this Plan or, having been so selected,
to be selected to receive a future Award.
ARTICLE 14. AMENDMENT, MODIFICATION, TERMINATION AND ADJUSTMENTS
14.1. AMENDMENT, MODIFICATION, AND TERMINATION. Subject to the terms
of the Plan, the Board, upon recommendation of the Committee, may at any
time and from time to time, alter, amend, suspend or terminate the Plan in
whole or in part.
14.2. ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in Section 4.3 hereof) affecting the Company or the financial
statements of the Company or of changes in applicable laws, regulations or
accounting principles, whenever the Committee determines that such
adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the
Plan; provided that unless the Committee determines otherwise, no such
adjustment shall be authorized to the extent that such authority would be
inconsistent with the Plan or Awards meeting the requirements of Code
Section 162(m), as from time to time amended.
14.3. AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision
of the Plan to the contrary (but subject to Section 14.2 hereof), no
termination, amendment or modification of the Plan shall adversely affect
in any material way any Award previously granted under the Plan without the
written consent of the Participant holding such Award.
14.4. COMPLIANCE WITH CODE SECTION 162(m). At all times when Code
Section 162(m) is applicable, all Awards granted under this Plan shall
comply with the requirements of Code Section 162(m); provided, however,
that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the
Plan, then compliance with Code Section 162(m) will not be required. In
addition, in the event that changes are made to Code Section 162(m) to
permit greater flexibility with respect to any Award or Awards available
under the Plan, the Committee may, subject to this Article 14, make any
adjustments it deems appropriate.
ARTICLE 15. PAYMENT OF PLAN AWARDS AND CONDITIONS THEREON
15.1. EFFECT OF COMPETITIVE ACTIVITY. Anything contained in the Plan
to the contrary notwithstanding, if the employment of any Participant who
is an Employee shall terminate, for any reason other than death, while any
Award to such Participant is outstanding hereunder, and such Participant
has not yet received the Shares covered by such Award or otherwise received
<PAGE>
the full benefit of such Award, such Participant, if otherwise entitled
thereto, shall receive such Shares or benefit only if, during the entire
period from the date of such Participant's termination to the date of such
receipt, such Participant shall have earned out such Award by: (i) making
himself or herself available, upon request, at reasonable times and upon a
reasonable basis, to consult with, supply information to, and otherwise
cooperate with the Company or any Subsidiary or Affiliate thereof with
respect to any matter that shall have been handled by him or her or under
his or her supervision while he or she was in the employ of the Company or
of any Subsidiary or Affiliate thereof; and (ii) refraining from engaging
in any activity that is directly or indirectly in competition with any
activity of the Company or any Subsidiary or Affiliate thereof.
15.2. NONFULFILLMENT OF COMPETITIVE ACTIVITY CONDITIONS; WAIVERS
UNDER THE PLAN. In the event of a Participant's nonfulfillment of any
condition set forth in Section 15.1 hereof, such Participant's rights under
any Award shall be forfeited and canceled forthwith; provided, however,
that the nonfulfillment of such condition may at any time (whether before,
at the time of, or subsequent to termination of employment) be waived by
the Committee upon its determination that in its sole judgment there shall
not have been and will not be any substantial adverse effect upon the
Company or any Subsidiary or Affiliate thereof by reason of the
nonfulfillment of such condition.
15.3. EFFECT OF INIMICAL CONDUCT. Anything contained in the Plan to
the contrary notwithstanding, all rights of a Participant under any Award
shall cease on and as of the date on which it has been determined by the
Committee that such Participant at any time (whether before or subsequent
to termination of such Participant's employment in the case of a
Participant who is an Employee) acted in manner inimical to the best
interests of the Company or any Subsidiary or Affiliate thereof.
ARTICLE 16. CHANGE IN CONTROL
16.1. DEFINITION. For purposes of this Plan, a "Change in Control"
of the Company is deemed to have occurred as of the first day that any one
or more of the following conditions shall have been satisfied:
(a) the "Beneficial Ownership" of securities representing more than
thirty-three percent (33%) of the combined voting power of the Company is
acquired by any "person" as defined in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company, or any
corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock
of the Company); or
(b) the stockholders of the Company approve a definitive agreement
to merge or consolidate the Company with or into another corporation or to
sell or otherwise dispose of all or substantially all of its assets, or
adopt a plan of liquidation; or
<PAGE>
(c) during any period of three (3) consecutive years, individuals
who at the beginning of such period were members of the Board cease for any
reason to constitute at least a majority thereof (unless the election, or
the nomination for election by the Company's stockholders, of each new
director was approved by a vote of at least a majority of the directors
then still in office who were directors at the beginning of such period or
whose election or nomination was previously so approved).
16.2. TREATMENT OF OUTSTANDING AWARDS. Subject to Section 16.3
herein, upon the occurrence of a Change in Control:
(a) any and all Options and SARs granted hereunder shall become
immediately exercisable and shall remain exercisable throughout their
entire term;
(b) any restriction periods and restrictions imposed on Restricted
Stock which are not performance-based shall lapse; and
(c) the target payout opportunities attainable under all
outstanding Awards of performance-based Restricted Stock, Performance Units
and Performance Shares shall be deemed to have been fully earned for the
entire Performance Period(s) as of the effective date of the Change in
Control. The vesting of all Awards denominated in Shares shall be
accelerated as of the effective date of the Change in Control, and there
shall be paid out to Participants within thirty (30) days following the
effective date of the Change in Control a pro rata number of Shares (or
their cash equivalents) based upon an assumed achievement of all relevant
targeted performance goals and upon the length of time within the
Performance Period which has elapsed prior to the Change in Control.
Awards denominated in cash shall be paid pro rata to Participants in cash
within thirty (30) days following the effective date of the Change in
Control, with the proration determined as a function of the length of time
within the Performance Period which has elapsed prior to the Change in
Control, and based on an assumed achievement of all relevant targeted
performance goals.
16.3. TERMINATION, AMENDMENT AND MODIFICATIONS OF CHANGE-IN-CONTROL
PROVISIONS. Notwithstanding any other provision of the Plan or any Award
Agreement provision, the provisions of this Article 16 may not be
terminated, amended or modified on or after the date of an event which is
likely to give rise to a Change in Control to affect adversely any Award
theretofore granted under the Plan without the prior written consent of the
Participant with respect to said Participant's outstanding Awards.
16.4. POOLING OF INTEREST ACCOUNTING. Notwithstanding anything
contained in the Plan to the contrary, in the event that the consummation
of a Change in Control is contingent on using pooling of interests
accounting methodology, the Board may, in its discretion, take any action
necessary to preserve the use of pooling of interests accounting.
<PAGE>
ARTICLE 17. WITHHOLDING
17.1. TAX WITHHOLDING. The Company shall have the power and the
right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state and local taxes,
domestic or foreign, required by law or regulation to be withheld with
respect to any taxable event arising as a result of this Plan.
17.2. SHARE WITHHOLDING. With respect to withholding required upon
the exercise of Options or SARs, upon the lapse of restrictions on
Restricted Stock, or upon any other taxable event arising as a result of
Awards granted hereunder, Participants may elect, subject to the approval
of the Committee, to satisfy the withholding requirement, in whole or in
part, by having the Company withhold Shares having a Fair Market Value on
the date the tax is to be determined equal to the minimum statutory total
tax which could be imposed on the transaction. All such elections shall be
irrevocable, made in writing, and signed by the Participant, and shall be
subject to any restrictions or limitations that the Committee, in its sole
discretion, deems appropriate.
ARTICLE 18. INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or
of the Board, shall be indemnified and held harmless by the Company against
and from any loss, cost, liability or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by him or
her in settlement thereof, with the Company's approval, or paid by him or
her in satisfaction of any judgment in any such action, suit or proceeding
against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or
she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which such persons may be entitled under the
Company's Certificate of Incorporation or Bylaws, as a matter of law or
otherwise, or any power that the Company may have to indemnify them or hold
them harmless.
ARTICLE 19. SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether
the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation or otherwise, of all or substantially all
of the business or assets of the Company.
ARTICLE 20. LEGAL CONSTRUCTION
20.1. GENDER AND NUMBER. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine,
the plural shall include the singular, and the singular shall include the
plural.
20.2. SEVERABILITY. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed
and enforced as if the illegal or invalid provision had not been included.
<PAGE>
20.3. REQUIREMENTS OF LAW. The granting of Awards and the issuance
of Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4. SECURITIES LAW COMPLIANCE. With respect to Insiders,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
20.5. GOVERNING LAW. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with
and governed by the laws of the State of California.
