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EXHIBIT 99.1
MIGRATEC, INC.
LONG-TERM INCENTIVE PLAN
(AS AMENDED AND RESTATED)
MIGRATEC, INC., a Delaware corporation, (together with its
predecessors, successors and assigns, the "Company"), hereby establishes and
adopts the following Long-Term Incentive Plan (the "Plan").
RECITALS:
WHEREAS, the Company desires to encourage high levels of performance by
those individuals who are key to the success of the Company, to attract new
individuals who are highly motivated and who will contribute to the success of
the Company and to encourage such individuals to remain as directors,
consultants, officers and/or employees of the Company by increasing their
proprietary interest in the Company's growth and success; and
WHEREAS, to further these goals, the Company has formulated the Plan to
authorize the granting of incentive awards through grants of stock options
("Options"), Restricted Share Awards and Dividend Equivalent Rights (as such
terms are hereinafter defined) to those individuals whose judgment, initiative
and efforts are responsible for the success of the Company;
NOW, THEREFORE, the Company hereby constitutes, establishes and adopts
the following Plan and agrees to the following provisions:
ARTICLE 1
PURPOSE OF THE PLAN
1.1 PURPOSE. The purpose of the Plan is to assist the Company in
attracting and retaining selected individuals to serve as directors,
consultants, officers and employees of the Company who will contribute to the
Company's success and to achieve long-term objectives which will inure to the
benefit of all shareholders of the Company through the additional incentive
inherent in the ownership of the Company's shares of common stock, no par value
per share (the "Shares"). Options granted under the Plan will be either
"incentive stock options" intended to qualify as such under the provisions of
section 422 of the Internal Revenue Code of 1986, as from time to time amended
(the "Code"), or "nonqualified stock options." For purposes of the Plan, the
term "subsidiary" shall mean "subsidiary corporation," as such term is defined
in section 424(f) of the Code, and "affiliate" shall have the meaning set forth
in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). For purposes of the Plan, the term "Award" shall mean a grant of an
Option, a Restricted Share Award, a Dividend Equivalent Right or any other award
made under the terms of the Plan.
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ARTICLE 2
SHARES SUBJECT TO AWARDS
2.1 NUMBER OF SHARES. Subject to the adjustment provisions of Section
7.10 hereof, the aggregate number of Shares which may be issued under Awards
under the Plan, whether pursuant to Options, Restricted Share Awards or Dividend
Equivalent Rights, shall not exceed Seven Million (7,000,000). No Awards to
purchase fractional Shares shall be granted or issued under the Plan.
2.2 SHARES SUBJECT TO TERMINATED AWARDS. The Shares covered by any
unexercised portions of terminated Options granted under Article 4, any Shares
forfeited as provided in Article 5 and any Shares subject to Awards which are
otherwise surrendered by the Participant (as hereinafter defined) without
receiving any payment or other benefit with respect thereto may again be subject
to new Awards under the Plan. In the event the purchase price of an Option is
paid in whole or in part through the delivery of Shares, the number of Shares
issuable in connection with the exercise of the Option shall not again be
available for the grant of Awards under the Plan.
2.3 CHARACTER OF SHARES. Shares delivered under the Plan may be
authorized and unissued Shares or Shares acquired by the Company, or both.
ARTICLE 3
ELIGIBILITY AND ADMINISTRATION
3.1 AWARDS TO EMPLOYEES, OFFICERS, DIRECTORS AND CONSULTANTS.
(a) Participants who receive Options under Article 4 hereof
("Optionees"), Restricted Share Awards under Article 5 hereof or
Dividend Equivalent Rights under Article 6 hereof (in each case, a
"Participant") shall consist of such employees, officers, directors and
consultants of the Company or any of its subsidiaries or affiliates as
the Committee (as defined in Section 3.2(a) hereinafter) shall select
from time to time. The Committee's designation of an Optionee or
Participant in any year shall not require the Committee to designate
such person to receive Awards or grants in any other year. The
designation of an Optionee or Participant to receive Awards or grants
under one portion of the Plan shall not require the Committee to
include such Optionee or Participant under other portions of the Plan.
(b) No Option which is intended to qualify as an "incentive
stock option" may be granted to any employee, officer, director or
consultant who, at the time of such grant, owns, directly or indirectly
(within the meaning of sections 422(b)(6) and 424(d) of the Code),
shares possessing more than ten percent (10%) of the total combined
voting power of all classes of shares of the Company or any of its
subsidiaries or affiliates, unless at the time of such grant, (i) the
option price is fixed at not less than 110% of the Fair Market Value
(as hereinafter defined) of the Shares subject to such Option,
determined on the date of the grant, and (ii) the exercise of such
Option is prohibited by its terms after the expiration of five (5)
years from the date such Option is granted.
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3.2 ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors
of the Company or, upon the designation of the Board, by the
Compensation Committee (the "Committee") of the Board of Directors.
References herein to the Committee shall mean the Compensation
Committee of the Board or such similar committee of the Board as
designated by the Board of Directors or, in the absence of a
Compensation Committee or any such designation of a similar committee,
the Board of Directors of the Company. Any committee charged with
administering the Plan shall have only such authority with respect to
the making of Awards and the performing of other duties and
responsibilities under the Plan as shall be delegated to such committee
by the Board.
(b) The Committee is authorized, subject to the provisions of
the Plan, to establish such rules and regulations as it may deem
appropriate for the conduct of meetings and proper administration of
the Plan. All actions of the Committee shall be taken by majority vote
of its members.
(c) Subject to the provisions of the Plan, the Committee shall
have authority to, in its sole discretion, interpret the provisions of
the Plan and, subject to the requirements of applicable law, to
prescribe, amend, and rescind rules and regulations relating to it as
it may deem necessary or advisable. The Committee shall have the
authority to, in its sole discretion, amend, rescind and alter the
terms of any grant of Options or other Award under this Plan, provided
that such amendment, rescission or alteration shall not adversely
affect the rights of the Optionee or Award recipient as set forth in
the applicable Option or Award agreement between the Company and the
Optionee or Award recipient. All decisions made by the Committee
pursuant to the provisions of the Plan shall be final, conclusive and
binding on all persons, including the Company, its shareholders,
directors, consultants, officers, employees, Optionees and
Participants.
ARTICLE 4
OPTIONS
4.1 GRANT OF OPTIONS. The Committee shall determine, within the
limitations of the Plan, the directors, consultants, officers and employees of
the Company and its subsidiaries and affiliates to whom Options are to be
granted under the Plan, the number of Shares that may be purchased under each
such Option and the option price, and shall designate such Options at the time
of the grant as either "incentive stock options" or "nonqualified stock
options;" provided, however, that Options granted to employees of an affiliate
(that is not also a subsidiary) or to non-employees of the Company may only be
"nonqualified stock options."
All Options granted pursuant to this Article 4 herein shall be
authorized by the Committee and shall be evidenced in writing by stock option
agreements ("Option Agreements") in such form and containing such terms and
conditions as the Committee shall determine which are not inconsistent with the
provisions of the Plan, and, with respect to any Option Agreement granting
Options which are intended to qualify as "incentive stock options," are not
inconsistent with Section 422 of the
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Code. Granting an Option pursuant to the Plan shall impose no obligation on the
recipient to exercise such option. Any individual who is granted an Option
pursuant to this Article 4 may hold more than one Option granted pursuant to
this Article 4 at the same time and may hold both "incentive stock options" and
"nonqualified stock options" at the same time. To the extent that any Option
does not qualify as an "incentive stock option" (whether because of its
provisions, the time or manner of its exercise or otherwise) such Option or the
portion thereof which does not so qualify shall constitute a separate
"nonqualified stock option."
4.2 OPTION PRICE. Subject to Section 3.1(b) herein, the option price
per each Share purchasable under any "incentive stock option" granted pursuant
to this Article 4 shall not be less than 100% of the Fair Market Value (as
hereinafter defined) of such Share on the date of the grant of such Option. The
option price per share of each Share purchasable under any "nonqualified stock
option" granted pursuant to this Article 4 shall be such amount as the Committee
shall determine at the time of the grant of such Option or the then current Fair
Market Value (as defined in Section 7.2 hereinafter).
4.3 OTHER PROVISIONS. Options granted pursuant to this Article 4 shall
be made in accordance with the terms and provisions of Article 7 hereof and any
other applicable terms and provisions of the Plan.
ARTICLE 5
RESTRICTED AWARDS
5.1 RESTRICTED SHARE AWARDS.
(a) Grants of Restricted Shares. A grant of Shares made
pursuant to this Article 5 is referred to as a "Restricted Share
Award." The Committee may grant to any Participant an amount of Shares
in such manner, and subject to such terms, restrictions and conditions
relating to vesting, forfeiture, delivery and transfer (whether based
on performance standards, periods of service or otherwise) as the
Committee shall establish (such Shares being referred to herein as the
"Restricted Shares"). The terms of any Restricted Share Award granted
under this Plan shall be set forth in a written agreement (a
"Restricted Share Agreement") which shall contain provisions determined
by the Committee and not inconsistent with this Plan. The provisions of
Restricted Share Awards need not be the same for each Participant
receiving such Awards.
(b) Issuance of Restricted Shares. As soon as practicable on
or after the date of grant of a Restricted Share Award by the
Committee, the Company shall cause to be transferred on the books of
the Company Shares, registered in the name of the Participant,
evidencing the Restricted Shares covered by the Award, but subject to
forfeiture to the Company retroactive to the date of grant, if a
Restricted Share Agreement delivered to the Participant by the Company
with respect to the Restricted Shares covered by the Award is not duly
executed by the Participant and timely returned to the Company. All
Restricted Shares covered by Awards under this Article 5 shall be
subject to the restrictions, terms and conditions contained in the Plan
and the Restricted Share Agreement entered into by and
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between the Company and the Participant. Until the lapse or release of
all restrictions applicable to an Award of Restricted Shares, the share
certificates representing such Restricted Shares may, in the discretion
of the Committee, be held in custody by the Company or its designee and
shall bear a restrictive legend describing the applicable restrictions,
terms and conditions.
(c) Shareholder Rights. Beginning on the date of grant of the
Restricted Share Award and subject to execution of the Restricted Share
Agreement as provided in Sections 5.1(a) and (b), the Participant shall
become a shareholder of the Company with respect to all Shares subject
to the Restricted Share Agreement and shall have all of the rights of a
shareholder, including, but not limited to, the right to vote such
Shares and the right to receive distributions made with respect to such
Shares; provided, however, that any Shares distributed as a dividend or
otherwise with respect to any Restricted Shares as to which the
restrictions have not yet lapsed shall be subject to the same
restrictions as such Restricted Shares.
(d) Restriction on Transferability. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws
of descent and distribution), pledged or sold prior to lapse or release
of the restrictions applicable thereto.
(e) Delivery of Shares Upon Release of Restrictions. Upon
expiration or earlier termination of any forfeiture period without a
forfeiture and the satisfaction of or release from any other conditions
prescribed by the Committee, the restrictions applicable to the
Restricted Shares shall lapse. As promptly as administratively feasible
thereafter, subject to the requirements of Section 8.1 herein, the
Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's beneficiary, one or more
stock certificates for the appropriate number of Shares, free of all
such restrictions, except for any restrictions that may be imposed by
law.
5.2 TERMS AND CONDITIONS OF RESTRICTED SHARES.
(a) Restrictions Affecting Restricted Shares. Subject to
Section 5.2(b) herein, Restricted Shares shall be subject to such
restrictions, terms and conditions as shall be established by the
Committee, including, but not limited to, restrictions relating to
vesting, forfeiture, delivery and transfer (whether based on
performance standards, periods of service or otherwise). Such
restrictions, terms and conditions may be set forth in the Plan or in
the Restricted Share Agreement entered into by and between the Company
and the Participant.
(b) Waiver of Conditions or Restrictions. Notwithstanding
anything contained in this Article 5 to the contrary, the Committee
may, in its sole discretion, waive any restrictions, terms or
conditions set forth in the Plan or in any Restricted Share Agreement
under appropriate circumstances (which may include the death,
disability or retirement of the Participant, or a material change in
circumstances arising after the date of an Award) and subject to such
terms and conditions as the Committee shall deem appropriate.
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ARTICLE 6
DIVIDEND EQUIVALENT RIGHTS
6.1 GRANT OF DIVIDEND EQUIVALENT RIGHTS. The Committee shall determine,
within the limitations of the Plan, the directors, consultants, officers and
employees of the Company and its subsidiaries and affiliates to whom Dividend
Equivalent Rights are to be granted under the Plan. For purposes of the Plan, a
"Dividend Equivalent Right" shall mean the right of the holder thereof to
receive credits based on the cash dividends that would have been paid on the
Shares specified in the Award if the Shares were held by the holder to whom the
Award is made. The Committee may grant a Dividend Equivalent Right, either as a
component of another Award or as a separate Award, and, in general, each such
holder of a Dividend Equivalent Right that is outstanding on a dividend record
date for the Company's common stock shall be credited with an amount equal to
the cash or stock dividends or other distributions that would have been received
had the Shares covered by the Award been issued and outstanding on the dividend
record date. The terms of any Dividend Equivalent Right awarded under this Plan
shall be set forth in a written agreement (a "Dividend Equivalent Rights
Agreement") which shall contain provisions determined by the Committee and not
inconsistent with this Plan. The provisions of any such Award need not be the
same for each Participant receiving such Awards. Dividend equivalents credited
to the holder of a Dividend Equivalent Right may be paid currently or may be
deemed to be reinvested in additional Shares (which may thereafter accrue
additional Dividend Equivalent Rights). Any such reinvestment shall be at the
Fair Market Value (as hereinafter defined) at the time thereof. Dividend
Equivalent Rights may be settled in cash or Shares, or a combination thereof, in
a single payment or in installments. The Committee may provide that a Dividend
Equivalent Right granted as a component of another Award shall be settled upon
exercise, settlement or payment for or lapse of restrictions on such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain restrictions,
terms and conditions different from such other Award.
ARTICLE 7
GENERALLY APPLICABLE PROVISIONS
7.1 OPTION PERIOD. Subject to Section 3.1(b) herein, the period for
which an Option is exercisable shall not exceed ten (10) years from the date
such Option is granted. After the Option is granted, the option period may not
be reduced.
7.2 FAIR MARKET VALUE. Unless otherwise provided in Section 422 of the
Internal Revenue Code of 1986, as amended, for the grant of an "incentive stock
option," if the Shares are listed or admitted to trading on a securities
exchange registered under the Exchange Act, the "Fair Market Value" of a Share
as of a specified date shall mean the average of the high and low price of the
shares for the day immediately preceding the date as of which Fair Market Value
is being determined (or if there was no reported sale on such date, on the last
preceding date on which any reported sale occurred) as reported on the principal
securities exchange on which the Shares are listed or admitted to trading. If
the Shares are not listed or admitted to trading on any such exchange but are
listed as a national market security on the National Association of Securities
Dealers, Inc.
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Automated Quotation System ("The Nasdaq Stock Market"), traded in the
over-the-counter market or listed or traded on any similar system then in use,
the Fair Market Value of a Share shall be either, in the sole discretion of the
Committee, the average of the high and low sales price or the closing sales
price, for the day immediately preceding the date as of which the Fair Market
Value is being determined (or if there was no reported sale on such date, on the
last preceding date on which any reported sale occurred) as reported on such
system. If the Shares are not listed or admitted to trading on any such
exchange, are not listed as a national market security on The Nasdaq Stock
Market and are not traded in the over-the-counter market or listed or traded on
any similar system then in use, but are quoted on The Nasdaq Stock Market or any
similar system then in use, the Fair Market Value of a Share shall be the
average of the closing high bid and low asked quotations on such system for the
Shares on the date in question. If the Shares are not publicly traded, Fair
Market Value shall be determined by the Committee in its sole discretion using
appropriate criteria. An Option shall be considered granted on the date the
Committee acts to grant the Option or such later date as the Committee shall
specify.
7.3 EXERCISE OF OPTIONS. Options granted under the Plan shall be
exercised by the Optionee thereof (or by his or her executors, administrators,
guardian or legal representative, as provided in Sections 7.7 and 7.8 hereof) as
to all or part of the Shares covered thereby, by the giving of written notice of
exercise to the Company, specifying the number of Shares to be purchased,
accompanied by payment of the full purchase price for the Shares being
purchased. Full payment of such purchase price shall be made within five (5)
business days following the date of exercise and shall be made (i) in cash or by
certified check or bank check, (ii) with the consent of the Committee, by
delivery of a promissory note in favor of the Company upon such terms and
conditions as determined by the Committee, (iii) with the consent of the
Committee, by tendering previously acquired Shares (valued at their Fair Market
Value, as determined by the Committee as of the date of tender), including
pursuant to a Cashless Exercise as defined in Section 7.4 herein, or (iv) with
the consent of the Committee, any combination of (i), (ii) and (iii). Such
notice of exercise, accompanied by such payment, shall be delivered to the
Company at its principal business office or such other office as the Committee
may from time to time direct, and shall be in such form, containing such further
provisions consistent with the provisions of the Plan, as the Committee may from
time to time prescribe. In no event may any Option granted hereunder be
exercised for a fraction of a Share. The Company shall effect the transfer of
Shares purchased pursuant to an Option as soon as practicable, and, within a
reasonable time thereafter, such transfer shall be evidenced on the books of the
Company. No person exercising an Option shall have any of the rights of a holder
of Shares subject to an Option until certificates for such Shares shall have
been issued following the exercise of such Option. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the
date of such issuance.
7.4 CASHLESS EXERCISE. A "Cashless Exercise" means the assignment in a
form acceptable to the Company of the proceeds of a sale or loan with respect to
some or all of the Shares acquired upon the exercise of an Option pursuant to a
program or procedure approved by the Company (including, without limitation,
through an exercise complying with the provisions of Regulation T as promulgated
from time to time by the Board of Governors of the Federal Reserve System). The
Company reserves the right, in its absolute and sole discretion, to decline to
approve or to terminate any such program or procedure. Generally, and without
limiting the Company's absolute discretion, a Cashless Exercise will be
permitted only at such times as the underlying Shares are publicly traded.
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7.5 NON-TRANSFERABILITY OF OPTIONS. Without the prior written consent
of the Company, no Option shall be assignable or transferable by the Optionee,
other than by will or the laws of descent and distribution, and may be exercised
during the life of the Optionee only by the Optionee or his duly appointed
guardian or legal representative. Notwithstanding the foregoing or any other
provisions contained in this Plan, a nonqualified stock option agreement may
provide that the Optionee may transfer the option and all rights and privileges
evidenced by the Option Agreement to (i) members of Optionee's immediate family
(i.e., Optionee's spouse, or the children, grandchildren or parents of Optionee
or Optionee's spouse) (any such person referred to herein as a "Family Member"),
(ii) one or more trusts for the benefit of any Family Member, and (iii) any
partnership whose only partners are Family Members (any person or entity
referred to in clauses (i), (ii) or (iii) above being a "Permitted Transferee"),
provided that (a) no consideration may be paid for the transfer of the option or
other rights or privileges evidenced by the Option Agreement and (b) any
Permitted Transferee who is the transferee of any option will remain subject to
all conditions (including the transfer restrictions) which were applicable to
the Option and the rights and privileges evidenced by the Plan and the Option
Agreement prior to the transfer to such Permitted Transferee.
7.6 TERMINATION OF SERVICE. If the service of the Optionee is
terminated for any reason other than (1) Disability (as hereinafter defined) of
the Optionee, (2) death of the Optionee, or (3) for cause, in accordance with
any applicable employment or engagement agreement in effect between the Optionee
and the Company on the date of grant of the Option; or if no such agreement is
in effect, as determined by the Committee in its sole and absolute discretion,
an Option (to the extent exercisable on the date of such termination) shall be
exercisable by the Optionee at any time within (i) ninety (90) days after such
termination if the Optionee is a non-director employee or a consultant, or (ii)
one year after such termination if the Optionee is a director, unless such
Option terminates prior to such time; provided, however, that the Committee may,
in its sole discretion, on a case by case basis, extend the period during which
any such Option must be exercised. Unless the Option Agreement between such
Optionee and the Company provides otherwise, if such Optionee's service with the
Company is terminated for cause, any Option(s) granted to him will automatically
terminate as of the time of such cessation of service.
7.7 DEATH. If the Optionee dies while employed by the Company or any of
its subsidiaries or affiliates or during his term as a Director of the Company
or any of its subsidiaries or affiliates, as the case may be, any Option(s)
granted to him not previously expired or exercised shall, to the extent
exercisable on the date of death, be exercisable by the estate of such Optionee
or by any person who acquired such Option by bequest or inheritance, at any time
within one (1) year after the death of the Optionee, unless earlier terminated
pursuant to its terms; provided, however, that if the term of such Option would
expire by its terms within six (6) months after the Optionee's death, the term
of such Option shall be extended until six (6) months after the Optionee's
death; provided further, that in no instance may the term of the Option, as so
extended, exceed the maximum term set forth in Section 3.1(b)(ii) or Section 7.1
herein.
7.8 DISABILITY. If the Optionee's service is terminated by reason of
the Optionee's Disability, an Option (to the extent exercisable on the date of
the Optionee's termination of service by reason of Disability) shall be
exercisable by the Optionee at any time prior to the expiration of the Option or
within one (1) year after the date of such termination of service, whichever is
the shorter
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period. As used herein, the term "Disability" shall mean the inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
six (6) months. The determination of whether or not an Optionee's service is
terminated by reason of Disability shall be in the sole and absolute discretion
of the Committee. An individual shall not be considered Disabled unless he
furnishes proof of the existence thereof in such form and manner, and at such
times, as the Committee may require.
7.9 AMENDMENT AND MODIFICATION OF THE PLAN. The Compensation Committee
of the Board of Directors of the Company or, in the absence of a Compensation
Committee, the Board of Directors of the Company, may, from time to time, alter,
amend, suspend or terminate the Plan as it shall deem advisable, subject to any
requirement for shareholder approval imposed by applicable law or any rule of
any stock exchange or quotation system on which Shares are listed or quoted;
provided that no amendments to, or termination of, the Plan shall in any way
impair the rights of an Optionee or a Participant under any Award previously
granted without such Optionee's or Participant's consent.
7.10 ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that a
dividend payable in Shares or a share split shall be hereinafter declared upon
the Shares, the number of Shares then subject to any Option hereunder and the
number of Shares reserved for issuance pursuant to the Plan but not yet covered
by an Option shall be adjusted by adding to each such Share the number of shares
which would be distributable thereon if such Share had been outstanding on the
date fixed for determining the shareholders entitled to receive such share
dividend or share split. In the event that the outstanding Shares shall be
changed into or exchanged for a different number or kind of shares of common
stock or other securities of the Company or of another corporation, whether
through reorganization, recapitalization, share split, combination of shares,
merger, consolidation, combination, spin-off, repurchase or exchange of Shares,
then there shall be substituted for each Share subject to any such Option and
for each Share reserved for issuance pursuant to the Plan but not yet covered by
an Option, the number and kind of shares of common stock or other securities
into which each outstanding Share shall be so changed or for which each such
Share shall be exchanged. In the event there shall be any change, other than as
specified above in this Section 7.10, in the number or kind of outstanding
Shares or of any shares of common stock or other securities into which Shares
shall have been changed or for which they shall have been exchanged, then if the
Committee shall in its sole discretion determine that such change equitably
requires an adjustment in the number or kind of Shares theretofore reserved for
issuance pursuant to the Plan but not yet covered by an Option and of the Shares
then subject to an Option or Options, such adjustment shall be made by the
Committee and shall be effective and binding for all purposes of the Plan and of
each Option Agreement. In the case of any such substitution or adjustment as
provided for in this Section 7.10, the option price in each Option Agreement for
each Share covered thereby prior to such substitution or adjustment will be the
option price for all shares of common stock or other securities which shall have
been substituted for such Share or to which such adjustment provided for in this
Section 7.10 shall be made, in accordance with Section 424(a) of the Code. No
adjustment or substitution provided for in this Section 7.10 shall require the
Company pursuant to any Option Agreement to sell a fractional Share, and the
total substitution or adjustment with respect to each Option Agreement shall be
limited accordingly.
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7.11 LAPSE OF RESTRICTIONS IN THE EVENT OF A CHANGE IN CONTROL. A
"Change in Control" for purposes of this Plan shall mean (i) the dissolution or
liquidation of the Company, (ii) any sale or other disposition of all or
substantially all of the assets of the Company or (iii) the consummation of any
merger or consolidation of the Company if the shareholders of the Company
immediately before such transaction own, immediately after consummation of such
transaction, equity securities (other than Options and other rights to acquire
equity securities) possessing less than fifty and one-tenth percent (50.1%) of
the voting power of the surviving or acquiring corporation.
(a) Change in Control With Provision Being Made Therefor. If
provision be made in writing in connection with a Change in Control for
the assumption and continuance of any Option granted under the Plan, or
the substitution for such Option of a new option covering the shares of
the successor employer corporation, with appropriate adjustment as to
number and kind of shares and prices, the Option granted under the
Plan, or the new Option substituted therefor, as the case may be, shall
continue in the manner and under the terms provided.
(b) Change in Control Without Provision Being Made Therefor.
In the event provision is not made in connection with a Change in
Control for the continuance and assumption of any Option granted under
the Plan or for the substitution of any Option covering the shares of
the successor employer corporation, then, subject to the $100,000
annual limitation with respect to incentive stock options, the holder
of any such Option shall be entitled, prior to the effective date of
any such Change in Control and for six months thereafter, to purchase
the full number of shares not previously exercised under such Option,
without regard to the periods of exercisability of such Option
established by the Committee and set forth in the Option Agreement
evidencing such Option if (and only if) such Option has not at that
time expired or been terminated.
(c) Adjustments. All adjustments under this Section 7.11 shall
be made by the Committee, whose determination as to what adjustments
shall be made and the extent thereof, shall be final, binding and
conclusive for all purposes of the Plan and of each Option Agreement,
Restricted Share Agreement and Dividend Equivalent Rights Agreement.
7.12 QUALIFICATION OF THE PLAN. This Plan is not intended to be, and
shall not be, qualified under Section 401(a) of the Code.
ARTICLE 8
MISCELLANEOUS
8.1 TAX WITHHOLDING. The Company shall notify an Optionee or
Participant of any income tax withholding requirements arising as a result of
the grant of any Award, exercise of an Option or any other event occurring
pursuant to this Plan. The Company shall have the right to withhold from such
Optionee or Participant such withholding taxes as may be required by law, or to
otherwise require the Optionee or Participant to pay such withholding taxes. If
the Optionee or Participant shall fail to make such tax payments as are
required, the Company or its subsidiaries or affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any
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payment of any kind otherwise due to such Optionee or Participant or to take
such other action as may be necessary to satisfy such withholding obligations.
8.2 RIGHT OF DISCHARGE RESERVED. Nothing in the Plan nor the grant of
an Award hereunder shall confer upon any officer, employee, director, consultant
or other individual the right to continue in the employment or service of the
Company or any subsidiary or affiliate of the Company or affect any right that
the Company or any subsidiary or affiliate of the Company may have to terminate
the employment or service of (or to demote or to exclude from future Options
under the Plan) any such officer, employee, director, consultant or other
individual at any time for any reason. Except as specifically provided by the
Committee, the Company shall not be liable for the loss of existing or potential
profit from an Award granted in the event of termination of an employment or
other relationship even if the termination is in violation of an obligation of
the Company or any subsidiary or affiliate of the Company to the officer,
employee, director or consultant.
8.3 NATURE OF PAYMENTS. All Awards made pursuant to the Plan are in
consideration of services performed for the Company or any subsidiary or
affiliate of the Company. Any income or gain realized pursuant to Awards under
the Plan constitutes a special incentive payment to the Optionee or Participant
and shall not be taken into account, to the extent permissible under applicable
law, as compensation for purposes of any of the employee benefit plans of the
Company or any subsidiary or affiliate of the Company except as may be
determined by the Committee or by the directors of the applicable subsidiary or
affiliate of the Company.
8.4 COMPLIANCE WITH SECURITIES LAW.
(a) The grant of Options and the issuance of Shares upon
exercise of Options shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such
securities. Options may not be exercised if the issuance of Shares upon
exercise would constitute a violation of any applicable federal, state
or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the
Shares may then be listed. In addition, no Option may be exercised
unless (a) a registration statement under the Securities Act shall at
the time of exercise of the Option be in effect with respect to the
Shares issuable upon exercise of the Option or (b) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the
Option may be issued in accordance with the terms of an applicable
exemption from the registration requirements of the Securities Act. THE
OPTIONEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE
FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE OPTIONEE MAY NOT
BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS
VESTED. The inability of the Company to obtain from any regulatory body
having jurisdiction the authority, if any, deemed by the Company's
legal counsel to be necessary to the lawful issuance and sale of any
Shares hereunder shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise
of any Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate to evidence
compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by
the Company.
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(b) This Plan is intended to comply in all respects with Rule
16b-3 promulgated under the Securities Act of 1934, as amended (the
"Exchange Act"), with respect to Participants who are subject to
Section 16 of the Exchange Act, and any provision herein that is
contrary to Rule 16b-3 shall be deemed null and void to the extent
appropriate by either the Committee or the Company's Board of
Directors.
8.5 INDEMNIFICATION OF COMMITTEE. The Company shall indemnify each
present and future member of the Committee against, and each member of the
Committee shall be entitled, without further act on his part, to indemnity from
the Company for all expenses (including the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by him in connection with or arising out of any action, suit, or proceeding in
which he may be involved by reason of his being or having been a member of the
Committee, whether or not he continues to be a member of the Committee at the
time of incurring such expenses; provided, however, that such indemnity shall
not include any expenses incurred by any such member of the Committee (a) in
respect of matters as to which he shall be finally adjudged in any such action,
suit, or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as a member of the Committee or (b) in
respect of any matter in which any settlement is effected in an amount in excess
of the amount approved by the Company on the advice of its legal counsel; and
provided further, that no right of indemnification under the provisions set
forth herein shall be available to or enforceable by any such member of the
Committee unless, within sixty (60) days after institution of any such action,
suit, or proceeding, such Committee member shall have offered the Company, in
writing, the opportunity to handle and defend the same at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors, or administrators of each such member of the Committee and shall be
in addition to all other rights to which such member of the Committee shall be
entitled as a matter of law, contract, or otherwise.
8.6 SEVERABILITY. If any provision of the Plan shall be held unlawful
or otherwise invalid or unenforceable in whole or in part, such unlawfulness,
invalidity or unenforceability shall not affect any other provision of the Plan
or part thereof, each of which remain in full force and effect. If the making of
any payment or the provision of any other benefit required under the Plan shall
be held unlawful or otherwise invalid or unenforceable, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the Plan.
8.7 GENDER AND NUMBER. In construing the Plan, any masculine
terminology herein shall also include the feminine, and the definition of any
term herein in the singular shall also include the plural, except when otherwise
indicated by the context.
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8.8 GOVERNING LAW. The Plan and all determinations made and actions
taken thereunder, to the extent not otherwise governed by the Code or the laws
of the United States, shall be governed by the laws of the State of Delaware and
construed accordingly.
8.9 TERMINATION OF PLAN. Awards may be granted under the Plan at any
time and from time to time on or prior to January 31, 2010, on which date the
Plan will expire except as to Awards then outstanding under the Plan. Such
outstanding Awards shall remain in effect until they have been exercised or
terminated, or have expired.
8.10 CAPTIONS. The captions in this Plan are for convenience of
reference only, and are not intended to narrow, limit or affect the substance or
interpretation of the provisions contained herein.
8.11 DATE. The Plan shall be dated as of January 31, 2000.
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