SURGICAL LASER TECHNOLOGIES, INC. 2000 EQUITY INCENTIVE PLAN
1. Purpose. The purpose of the Surgical Laser Technologies, Inc. 2000 Equity
Incentive Plan (the "Plan") is to further the growth, development and
financial success of Surgical Laser Technologies, Inc. (the "Company") and
any subsidiary by providing additional incentives to those officers,
directors, employees and consultants who are responsible for the management
of the business affairs of the Company and any subsidiary, and which will
enable them to participate directly in the growth of the capital stock of
the Company. The Company intends that the Plan will facilitate securing,
retaining and motivating directors, officers, employees and consultants of
high caliber and potential.
2. Administration. The Plan shall be administered by the Company's Board of
Directors (the "Board"). The Board shall have full and final authority, in
its sole discretion, to interpret the provisions of the Plan and to decide
all questions of fact arising in its application; to determine the
employees and consultants to whom awards shall be made under the Plan; to
determine the type of awards to be made and the amount, size and terms of
each such award; to determine the time when awards shall be granted; and to
make all other determinations necessary or advisable for the administration
of the Plan. Notwithstanding the foregoing, the Board may delegate to the
Company's Compensation Committee the administration of the Plan, but only
the Board may amend or terminate the Plan. The Board may delegate
administration of the Plan to the Compensation Committee only if the
Compensation Committee is comprised of at least two directors, all of whom
are Non-Employee Directors (within the meaning of Rule 16b-3(b)(3)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or any successor provision thereto, and only if each member
of the Compensation Committee is an "outside director" within the meaning
of Treas. Reg.ss.1.162-27(e)(3).
3. Stock Subject to the Plan. The shares that may be issued under the Plan
shall not exceed in the aggregate 250,000 shares of common stock, par value
$.01, of the Company (the "Common Stock"); provided, however, that no Key
Employee shall in any one-year period receive awards for more than the
number of shares of the Company's Common Stock that, in the aggregate as of
the date of grant, represents more than 3% of the Company's outstanding
Common Stock as of the end of the fiscal quarter ended prior to such grant,
with such annual limitation being 59,338 shares as of May 25, 2000. Such
shares may be authorized and unissued shares or shares issued and
subsequently reacquired by the Company. Except as otherwise provided
herein, any shares subject to an option or right which for any reason
expires or is terminated unexercised as to such shares shall again be
available under the Plan; provided, however, that (a) if an Option (as
hereinafter defined) is canceled, the canceled Option is counted against
the maximum number of shares for which Options may be granted to
<PAGE>
an employee, and (b) if the Option price is reduced after the date of
grant, the transaction is treated as a cancellation of an Option and the
grant of a new Option for purposes of counting the maximum number of shares
for which Options may be granted to a Key Employee. Key Employee shall mean
employee directors, officers and other employees of the Company or any
subsidiary who are in positions in which their decisions, actions and
counsel significantly impact upon the profitability and success of the
Company and any subsidiary.
4. Eligibility to Receive Awards. Persons eligible to receive awards under the
Plan shall be limited to those consultants, directors, officers and other
employees of the Company and any subsidiary (as defined in Section 424(f)
of the Internal Revenue Code of 1986 (the "Code"), or any amendment or
substitute thereto), who are in positions in which their decisions, actions
and counsel significantly impact upon the profitability and success of the
Company and any subsidiary. Consultants and directors who are not also
employees of the Company or any subsidiary shall not be eligible to be
awarded stock options which are intended to qualify as incentive stock
options within the meaning of Section 422 of the Code or any amendment or
substitute thereto ("Incentive Stock Options").
5. Form of Awards. Awards may be made at any time and from time to time by the
Board in the form of stock options to purchase shares of Common Stock of
the Company, restricted stock or any combination thereof. Stock options may
be options which are intended to qualify as Incentive Stock Options or
options which are not intended to so qualify ("Nonqualified Stock
Options").
6. Stock Options. Stock options for the purchase of Common Stock ("Options")
shall be evidenced by written agreements in such form not inconsistent with
the Plan as the Board shall approve from time to time and which shall
contain in substance the following terms and conditions:
(a) Type of Option. Each option agreement shall identify the Options
represented thereby as Incentive Stock Options or Nonqualified Stock
Options, as the case may be.
(b) Option Price. Subject to the limitation set forth in Section 6(h)(B),
the purchase price of Common Stock subject to an Incentive Stock
Option shall not be less than 100% of the fair market value of such
stock on the date the Option is granted, as determined by the Board,
but in no event less than the par value of such stock. The purchase
price of the Common Stock subject to a Nonqualified Stock Option shall
not be less than 85% of the fair market value of such stock on the
date the Option is granted, as determined by the Board.
Notwithstanding the foregoing, if the date on which the Option is
granted is not a business day, the purchase price for an Option shall
be not less than the applicable percentage for
-2-
<PAGE>
the fair market value on the most recent business day preceding the
grant date. For this purpose, fair market value on any date shall mean
the closing price of the Common Stock on the Nasdaq Stock Market, as
reported in the Wall Street Journal (or if not so reported, as
otherwise reported by Nasdaq), or if the Common Stock is not reported
by Nasdaq, the fair market value shall be as determined by the Board
pursuant to a method authorized by the Code or the rules and
regulations promulgated thereunder.
(c) Exercise Term. Each option agreement shall state the period or periods
of time within which the Option may be exercised, in whole or in part,
which shall be such period or periods of time as may be determined by
the Board, provided that no Option shall be exercisable after ten
years from the date of grant thereof. The Board shall have the power
to permit an acceleration of previously established exercise terms,
subject to the requirements set forth herein, upon such circumstances
and subject to such terms and conditions as the Board deems
appropriate.
(d) Exercise and Payment for Shares. Options may be exercised in whole or
in part, from time to time, by giving written notice of exercise to
the Secretary or his office, specifying the number of shares to be
purchased. The purchase price of the shares with respect to which an
Option is exercised shall be payable in full with the notice of
exercise in cash, Common Stock, including Common Stock issuable upon
the exercise of the Option (it being understood that the use of Common
Stock issuable upon the exercise of an Incentive Stock Option shall
constitute a disqualifying disposition thereof), at fair market value,
or a combination thereof, as the Board may determine from time to time
and subject to such terms and conditions as may be prescribed by the
Board for such purpose.
(e) Conditions Upon Issuance of Shares. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder and the requirements
of any stock exchange upon which the Common Stock may then be listed,
and shall be further subject to the approval of counsel for the
Company with respect to such compliance. As a condition to the
exercise of an Option, the Company may require the person exercising
such Option to represent and warrant at the time of any such exercise
that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required
by any of the aforementioned relevant provisions of law.
-3-
<PAGE>
(f) Rights Upon Termination of Employment. In the event that an optionee
ceases to be an employee of the Company or any subsidiary for any
reason, including retirement (as hereinafter defined), other than
death or disability (within the meaning of Section 22(e)(3) of the
Code or any substitute therefor), the optionee shall have the right to
exercise an Option during its term within a period of three months
after such termination to the extent that the Option was exercisable
at the time of termination, or within such other period, and subject
to such terms and conditions, as may be specified by the Board. In the
event that an optionee dies or becomes disabled prior to the
expiration of his Option and without having fully exercised his
Option, the optionee or his successor shall have the right to exercise
the Option during its term within a period of one (1) year after
termination of employment due to death or disability to the extent
that the Option was exercisable at the time of termination, or within
such other period, and subject to such terms and conditions, as may be
specified by the Board. As used in this Section 6(f), "retirement"
means a termination of employment by reason of an optionee's
retirement at or after his earliest permissible retirement date
pursuant to and in accordance with his employer's regular retirement
plan or personnel practices.
(g) Nontransferability. Each Incentive Stock Option and, unless otherwise
determined by the Board, each other Option granted under the Plan
shall not be transferable other than by will or by the laws of descent
and distribution. During the lifetime of the optionee, each Option
will be exercisable only by him or any permitted transferee.
(h) Incentive Stock Options. In the case of an Incentive Stock Option,
each option agreement shall contain such other terms, conditions and
provisions as the Board determines necessary or desirable in order to
qualify such Option as a tax-favored option (within the meaning of
Section 422 of the Code or any amendment or substitute thereto or
regulation thereunder) including without limitation, each of the
following, except that any of these provisions may be omitted or
modified if it is no longer required in order to have an option
qualify as a tax-favored option within the meaning of Section 422 of
the Code or any substitute therefor:
(A) The aggregate fair market value (determined as of the date the
Option is granted) of the Common Stock with respect to which
Incentive Stock Options are first exercisable under the terms of
the option agreement by any employee during any calendar year
(under all plans of the Company) shall not exceed $100,000; and
(B) No Incentive Stock Option shall be granted to any employee if at
the time the Option is granted the individual owns stock
possessing more than ten
-4-
<PAGE>
percent of the total combined voting power of all classes of
stock of the Company or its parent or its subsidiaries unless at
the time such Option is granted the option price is at least 110
percent of the fair market value of the stock subject to the
Option and such Option by its terms is not exercisable after the
expiration of five years from the date of grant.
(i) Options may be granted under the Plan from time to time in
substitution for stock options held by employees of other corporations
who are about to become and who do concurrently with the grant of such
options become employees of the Company or a subsidiary as a result of
a merger or consolidation of the employing corporation with the
Company or a subsidiary, or the acquisition by the Corporation or a
subsidiary of the assets of the employing corporation, or the
acquisition by the Company, or a subsidiary of stock of the
subsidiary. The terms and conditions of the substitute options so
granted may vary from the terms and conditions set forth in this
Section 6 of the Plan to such extent as the Board at the time of grant
may deem appropriate to conform, in whole or in part, to the
provisions of the stock options in substitution for which they are
granted.
7. Option Grants to Non-Employee Directors. Each person who is or becomes a
director of the Company and is not an officer of or otherwise employed by
the Company or any subsidiary thereof (as defined in Section 424(f) of the
Code) (a "Non-Employee Director") shall be entitled to receive Nonqualified
Stock Options under the following terms and conditions:
(a)(i) Each individual who becomes a Non-Employee Director after May 25,
2000 shall on the first trading day coinciding with or immediately
following the fifteenth (15th) day after his or her initial election
to the Board automatically be granted an Option for 10,000 shares,
provided that if such Non-Employee Director is elected to serve as
Chairman, the Option granted shall be for 15,000 shares.
(ii) After May 25, 2000, each time a Non-Employee Director completes three
(3) years of continuous service on the Board (a "Grant Period") since
his most recent grant of an Option under this Section 7 or under the
Company's Second Amended and Restated Stock Option Plan for Outside
Directors, that Non-Employee Director shall on the first trading day
coinciding with or immediately following the completion of the Grant
Period automatically be granted an additional Option for 10,000
shares, provided that if the Non-Employee Director has served as
Chairman throughout the Grant Period, the Option granted shall be for
15,000 shares.
-5-
<PAGE>
(b) The price of the shares subject to each Option granted under this
Section 7 (a "Director Option") shall be 100% of the fair market value
for such shares on the date the Option is granted, as determined in
accordance with Section 6(b) hereof.
(c) Each Director Option shall be exercisable in three equal consecutive
annual installments commencing one year from the date of grant;
provided, however, that all shares covered by the Director Option
which have not otherwise become exercisable shall become immediately
exercisable as to all such shares upon the consummation of any
business combination transaction involving the sale of all or
substantially all of the assets of the Company to, or the acquisition
of shares of the Company's Common Stock representing more than 50% of
the votes which all stockholders of the Company are entitled to cast
by, any person not presently an affiliate of the Company, directly or
indirectly, through one or more affiliates or any other transaction or
series of transactions having a similar effect.
(d) Except as hereinafter otherwise provided, each Director Option shall
terminate on the expiration of ten years from the date the Director
Option was granted. Each Director Option, or portion thereof, which
has become exercisable may be exercised until the first to occur of
the following events:
(A) except as provided in (C), below, the expiration of three months
from the date of the Non-Employee Director's "Termination of
Service" (as hereinafter defined) unless such Termination of
Service results from the Non-Employee Director's death or "Total
Disability" (as hereinafter defined); or
(B) except as provided in (C), below, the expiration of three years
from the date of the Non-Employee Director's Termination of
Service by reason of Total Disability; or
(C) the expiration of one year from the date of the Non-Employee
Director's death, if such death occurs while the optionee is a
Non-Employee Director or within the three-month period referred
to in (A), above, or the three-year period referred to in (B),
above, whichever is applicable.
For purposes of this Section 7(d), "Termination of Service" shall
mean a cessation of a Non-Employee Director's service as a member
of the Board whether as a result of resignation, failure to be
reelected or any other reason and "Total Disability" shall mean a
permanent and total disability as determined in accordance with
Section 22(e)(3) of the Code.
8. Restricted Stock Awards. Restricted stock awards under the Plan shall
consist of shares of Common Stock free of any purchase price or for such
purchase price as may be
-6-
<PAGE>
established by the Board, restricted against transfer, subject to
forfeiture, and subject to such other terms, conditions and restrictions as
are intended to further the purpose of the Plan, and shall be evidenced by
a written restricted stock agreement in such form not inconsistent with
this Plan as the Board shall approve from time to time, which agreement
shall contain in substance the following terms and conditions:
(a) Restriction Period. Shares awarded pursuant to this Plan shall be
subject to such terms, conditions and restrictions, including without
limitation, prohibitions against transfer, substantial risks of
forfeiture and attainment of performance objectives for such period or
periods, as shall be determined by the Board. The Board shall have the
power to permit, in its sole discretion, an acceleration of the
expiration of the applicable restriction period with respect to any
part or all of the shares awarded to the participant.
(b) Restriction Upon Transfer. Restricted stock and the right to vote such
shares and to receive dividends thereon may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise
encumbered, except as herein provided, during the restriction period
applicable to such shares. Notwithstanding the foregoing and except as
otherwise provided in the Plan, the participant shall have all other
rights of a stockholder including, but not limited to, the right to
receive dividends and the right to vote such shares.
(c) Certificates. Each certificate issued in respect of shares of
restricted stock awarded to a participant shall be deposited with the
Company or its designee and shall bear the following legend:
This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in the
Surgical Laser Technologies, Inc. 2000 Equity Incentive Plan and
an Agreement entered into between the registered owner and
Surgical Laser Technologies, Inc. Release from such terms and
conditions shall be obtained only in accordance with the
provisions of the Plan and Agreement, a copy of each is on file
in the office of the Secretary of Surgical Laser Technologies,
Inc.
(d) Lapse of Restrictions. Each restricted stock agreement shall also
specify the terms and conditions upon which any restrictions upon
shares awarded under the Plan shall lapse, as determined by the Board.
Upon the lapse of such restrictions, a certificate for shares of
Common Stock free of the restrictive legend shall be issued to the
participant or his legal representative.
(e) Termination Prior to Lapse of Restrictions. In the event of a
participant's termination of employment prior to the lapse of
restrictions as determined
-7-
<PAGE>
pursuant to the provisions of subparagraph (d), above, all shares as
to which there still remains unlapsed restrictions shall be forfeited
by such participant to the Company without payment of any
consideration by the Company, and neither the participant nor any
successors, heirs, assigns, or personal representatives of such
participant shall thereafter have any further rights or interest in
such shares or certificates.
9. Date of Grant. The date on which an award shall be deemed to have been
granted under this Plan shall be the date of the Board's authorization of
the award or such later date as may be determined by the Board at the time
the award is authorized. Notice of the determination shall be given to each
individual to whom an award is so granted within a reasonable time after
the date of such grant.
10. General Restrictions. Each award under the Plan shall be subject to the
requirement that if at any time the Board shall determine that (a) the
listing, registration or qualification of the shares of Common Stock
subject or related thereto upon any securities exchange, including the
Nasdaq Stock Market, or under any state or federal law, or (b) the consent
or approval of any government regulatory body, or (c) an agreement by the
recipient of an award with respect to the disposition of shares of Common
Stock is necessary or desirable as a condition of or in connection with the
granting of such award or the issuance or purchase of shares of Common
Stock thereunder, such award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval, or
agreement shall have been effected or obtained free of any conditions not
acceptable to the Board.
11. Single or Multiple Agreements. Multiple forms of awards or combinations
thereof may be evidenced by a single agreement or multiple agreements, as
determined by the Board in its sole discretion.
12. Rights of a Stockholder. The recipient of any award under the Plan, unless
otherwise provided by the Plan, shall have no rights as a stockholder with
respect thereto unless and until certificates for shares of Common Stock
are issued and delivered to him.
13. Right to Terminate Service. Nothing in the Plan nor in any agreement
entered into pursuant to the Plan shall confer upon any participant the
right to continue in the service of the Company or any subsidiary as an
employee or consultant or affect any right which the Company or any
subsidiary may have to terminate the employment or consulting relationship
with such participant.
14. Withholding. Whenever the Company proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient
to satisfy any federal, state or local withholding tax requirements prior
to the delivery of any certificate or certificates
-8-
<PAGE>
for such shares. Whenever under the Plan payments are to be made in cash,
such payments shall be net of an amount sufficient to satisfy any federal,
state or local withholding tax requirements. If and to the extent
authorized by the Board, in its sole discretion, an optionee may make an
election, by means of a form of election to be prescribed by the Board, to
have shares of Common Stock which are acquired upon exercise of an Option
withheld by the Company or to tender other shares of Common Stock or other
securities of the Company owned by the optionee to the Company at the time
of exercise of an Option to pay the amount of tax that would otherwise be
required by law to be withheld by the Company as a result of any exercise
of an Option from amounts payable to such optionee, subject to the
following limitations:
(a) such election shall be irrevocable;
(b) such election shall be subject to the disapproval of the Board at any
time;
(c) if the optionee is a director, officer, or 10% stockholder (an
"Insider"), such election may not be made within six months of the
grant date of the Option the exercise of which resulted in the tax
withholding obligation (except that this limitation shall not apply in
the event of death or disability of such person occurring prior to the
expiration of the six-month period); and
(d) if the optionee is an Insider, such election must be made either (i)
six months prior to the date that the amount of tax to be withheld
upon such exercise is determined or (ii) in any ten-day period
beginning on the fourth business day following the date of release by
the Company for publication of quarterly or annual summary statements
of sales or earnings of the Company.
Any securities so withheld or tendered will be valued by the Board as of
the date of exercise.
15. Non-Assignability. No award under the Plan shall be assignable or
transferable by the recipient thereof except by will or by the laws of
descent and distribution or by such other means as and to the extent the
Board may approve. During the life of the recipient such award shall be
exercisable only by such person or by such person's guardian or legal
representative.
16. Non-Uniform Determinations. The Board's determinations under the Plan
(including without limitation determinations of the persons to receive
awards, the form, amount and timing of such awards, the terms and
provisions of such awards, and the agreements evidencing same) need not be
uniform and may be made selectively among persons who receive, or are
eligible to receive, awards under the Plan whether or not such persons are
similarly situated.
-9-
<PAGE>
17. Adjustments Upon Changes in Capitalization or Merger. Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, as well as the price
per share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
outstanding shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to
an Option.
In the event of the proposed dissolution or liquidation of the Company,
each outstanding Option will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Board. The Board may, in the exercise of its sole discretion in such
instances, declare that each outstanding Option shall terminate as of a
date fixed by the Board and give each optionee the right to exercise his
Option as to all or any part of the optioned Common Stock, including shares
as to which the Option would not otherwise be exercisable. In the event of
a proposed sale of all or substantially all of the assets of the Company or
any subsidiary, or the merger of the Company or any subsidiary with or into
another corporation, the affected Options shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, provided that the successor
corporation consents to such assumption or substitution. Moreover, the
Board may determine, in the exercise of its sole discretion and in lieu of
such assumption or substitution, that the affected optionees shall have the
right to exercise their Options as to all of the optioned Common Stock,
including shares as to which the Option would not otherwise be exercisable.
If the Board makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Board shall
notify the optionee that the Option shall be fully exercisable for a period
of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
Notwithstanding the foregoing, any adjustments made pursuant to this
Section 17, to reflect any stock dividend, stock split, share combination,
or similar change in the
-10-
<PAGE>
capitalization of the Company shall be subject to and administered in
accordance with the provisions of Section 424(a) of the Code and the Treas.
Regulations thereunder.
18. Amendment. The Board may terminate or amend the Plan at any time, except
that without stockholder approval the Board may not increase the maximum
number of shares which may be issued under the Plan (other than increases
pursuant to Section 17 hereof), extend the maximum period during which any
Option may be exercised pursuant to Section 6(c) hereof, extend the term of
the Plan, amend the employees or classes of employees eligible to receive
awards hereunder, change the minimum option price or approve any other
amendment which would require stockholder approval pursuant to Treasury
Regulations Section 1.162-27(e)(4)(vi). The termination or any modification
or amendment of the Plan shall not, without the consent of a participant,
affect his rights under an award previously granted.
19. Effect on Other Plans. Participation in this Plan shall not affect an
employee's eligibility to participate in any other benefit or incentive
plan of the Company or any subsidiary. Any awards made pursuant to this
Plan shall not be used in determining the benefits provided under any other
plan of the Company or any subsidiary unless specifically provided.
20. Duration of the Plan. The Plan shall remain in effect until all awards
under the Plan have been satisfied by the issuance of shares or the payment
of cash, but no award shall be granted more than ten years after the
earlier of the date the Plan is adopted by the Board or is approved by the
Company's stockholders.
21. Forfeiture for Dishonesty. Notwithstanding anything to the contrary in this
Plan, if the Board finds, by a majority vote, after full consideration of
the facts presented on behalf of both the Company and any participant, that
the participant has been engaged in fraud, embezzlement, theft, commission
of a felony or other dishonest conduct in the course of his employment by
the Company or any subsidiary which damaged the Company or any subsidiary
or that the participant has disclosed trade secrets of the Company or any
subsidiary, the participant shall forfeit all unexercised Options and
rights, all restricted stock and all exercised Options or rights under
which the Company has not yet delivered the certificates or cash. The
decision of the Board as to the cause of a participant's discharge and the
damage done to the Company or any subsidiary shall be final. No decision of
the Board, however, shall affect the finality of the discharge of such
participant by the Company or any subsidiary in any manner.
22. No Prohibition on Corporate Action. No provision of this Plan shall be
construed to prevent the Company or any officer or director thereof from
taking any corporate action deemed by the Company or such officer or
director to be appropriate or in the Company's best interest, whether or
not such action could have an adverse effect on the Plan or any options,
rights or stock awards granted hereunder, and no participant or
-11-
<PAGE>
participant's estate, personal representative or beneficiary shall have any
claim against the Company or any officer or director thereof as a result of
the taking of such action.
23. Use of Proceeds. The proceeds received by the Company from the exercise of
any stock option issued pursuant to the Plan or from the grant of any stock
award under the Plan shall be used for general corporate purposes.
24. Indemnification. With respect to the administration of the Plan, the
Company shall indemnify each present and future member of the Board
against, and each member of the Board 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 Board (or the
Compensation Committee if it administers the Plan), whether or not he
continues to be such member of the Committee or the Board 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 or the
Board (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 such member of the
Committee or the Board; or (b) in respect of any matter in which any
settlement is effected for 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 or the
Board unless within 60 days after institution of any such action, suit or
proceeding, he shall have offered the Company in writing the opportunity to
handle and defend 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 the Board and shall
be in addition to all other rights to which such member of the Committee
and the Board may be entitled as a matter of law, contract or otherwise.
25. Miscellaneous Provisions.
(a) No participant or other person shall have any right with respect to
the Plan, the Common Stock reserved for issuance under the Plan or in
any award, contingent or otherwise, until written evidence of the
award shall have been delivered to the recipient and all the terms,
conditions and provisions of the Plan and the award applicable to such
recipient (and each person claiming under or through him) have been
met.
-12-
<PAGE>
(b) No shares of Common Stock, other securities or property of the
Company, or other forms of payment shall be issued hereunder with
respect to any award unless counsel for the Company shall be satisfied
that such issuance will be in compliance with applicable federal,
state, local and foreign legal, securities exchange and other
applicable requirements.
(c) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give
effect to such intention and that if any provision of the Plan is
found not to be in compliance with Rule 16b-3, such provision shall be
deemed null and void to the extent required to permit the Plan to
comply with Rule 16b-3.
(d) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other
segregation of assets to assure the payment of any award under the
Plan, and rights to the payment of awards shall be no greater than the
rights of the Company's general creditors.
(e) By accepting any award or other benefit under the Plan, each
participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification
of, and consent to, any action taken under the Plan by the Company,
the Board or the Committee or its delegates.
(f) The masculine pronoun shall include the feminine and neuter, and the
singular shall include the plural, where the context so indicates.
-13-
