<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 19, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SANTA FE SNYDER CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 36-2722169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
840 GESSNER, SUITE 1400
HOUSTON, TEXAS 77024
(Address, including zip code, of Principal Executive Offices)
SANTA FE SNYDER CORPORATION
INCENTIVE STOCK COMPENSATION PLAN 2000
(Full title of the plan)
DAVID L. HICKS
VICE PRESIDENT - LAW AND GENERAL COUNSEL
SANTA FE SNYDER CORPORATION
840 GESSNER, SUITE 1400
HOUSTON, TEXAS 77024
(713) 507-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
copy to:
G. MICHAEL O'LEARY
ANDREWS & KURTH L.L.P.
4200 CHASE TOWER
600 TRAVIS
HOUSTON, TEXAS 77002
(713) 220-4200
CALCULATION OF REGISTRATION FEE
------------------------
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====================================================================================================================
PROPOSED
MAXIMUM
AMOUNT PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED TO BE REGISTERED OFFERING PRICE OFFERING REGISTRATION
(1) PER SHARE PRICE(2) FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, Par Value $.01 Per Share 5,000,000 (2) $52,392,750 $13,831.69
====================================================================================================================
</TABLE>
(1) The number of shares of Common Stock registered hereby is subject to
adjustment to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
(2) Of the 5,000,000 shares of Common Stock registered hereby, 150,000 are
subject to options previously granted under the Plan at an exercise price
of $6.875 per share. The proposed maximum offering price per share of the
remaining 4,850,000 shares is $10.59, estimated solely for the purpose of
calculating the registration fee pursuant to Rule 457(h), based upon the
average of the high and low prices of a share of the Registrant's Common
Stock for May 17, 2000 on the New York Stock Exchange as reported in The
Wall Street Journal on May 18, 2000.
<PAGE> 2
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participants as specified by Rule 428(b)(1) under
the Securities Act of 1933, as amended. These documents and the documents
incorporated herein by reference pursuant to Item 3 of Part II of this
registration statement, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Santa Fe Snyder Corporation (the "Company") incorporates herein by
reference in this registration statement the following documents filed with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"):
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1999, and
(b) The description of the Company's Common Stock contained in its Registration
Statement on Form 8-A/A (No. 001-07667) filed with the Commission on May 11,
1999 pursuant to Section 12 of the Exchange Act.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of the Registration Statement
and this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
The information required by Item 4 is not applicable to this
Registration Statement since the class of securities to be offered is registered
under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (a) of Section 145 of the General Corporation Law of the
State of Delaware empowers a corporation to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
2
<PAGE> 3
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
made to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Seventh of the Company's Amended and Restated Certificate of
Incorporation states that:
The Corporation shall, to the maximum extent permitted from time to
time under the General Corporation Law of the State of Delaware, indemnify and
upon request shall advance expenses to any person who is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit, proceeding or claim, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was or has agreed to be a
director or officer of the Corporation, or while a director or officer is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, against
expenses (including attorneys' fees and expenses), judgments, fines, penalties
and amounts paid in settlement or incurred in connection with the investigation,
preparation to defend or defense of such action, suit, proceeding or claim,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was or has agreed to be a director or officer of the Corporation,
or while a director or officer is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against expenses (including attorneys' fees
and expenses), judgments, fines, penalties and amounts paid in settlement or
incurred in connection with the investigation, preparation to defend or defense
of such action, suit, proceeding, claim or counterclaim initiated by or on
behalf of such person.
Such indemnification shall not be exclusive of other indemnification
rights arising under any bylaw, agreement, vote of directors or stockholders or
otherwise and shall inure to the benefit of the heirs and legal representatives
of such person. Any repeal or modification of the foregoing provisions of this
Section 7(c) shall be prospective only, and shall not adversely affect any right
or protection of a director or officer of the Corporation existing at the time
of such repeal or modification. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any transaction from which
the director derived an improper personal benefit. If the General
3
<PAGE> 4
Corporation Law of the State of Delaware is amended to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended. Any repeal or modification of this Section by the
stockholders of the Corporation shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
In addition, Article IX of the Company's Bylaws further provides that
the Company shall indemnify its officers, directors and employees to the fullest
extent permitted by law.
The Company enters into indemnification agreements with certain of its
executive officers and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The information required by Item 7 is not applicable to this
Registration Statement.
ITEM 8. EXHIBITS.
Exhibit
Number Description
------ -----------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.2 Consent of Independent Accountants.
23.3 Consent of Ryder Scott Company Petroleum Engineers.
24.1 Power of Attorney (included on signature page).
99.1 Santa Fe Snyder Corporation Incentive Stock Compensation Plan
2000.
4
<PAGE> 5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on the 15th day of May,
2000.
SANTA FE SNYDER CORPORATION
(Registrant)
By: /s/ James L. Payne
--------------------------------------
James L. Payne
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of Santa Fe Snyder Corporation (the "Company") hereby constitutes
and appoints James L. Payne and David L. Hicks (with full power to each of them
to act alone) his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and on his behalf and in his name, place and stead, in any
and all capacities, to sign, execute and file this Registration Statement under
the Securities Act of 1933, as amended, and any or all amendments (including,
without limitation, post-effective amendments), with all exhibits and any and
all documents required to be filed with respect thereto, with the Securities and
Exchange Commission or any regulatory authority, granting unto such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same, as fully to all intents
and purposes as he himself might or could do, if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ John C. Snyder Chairman of the Board and Director May 15, 2000
- ---------------------------------------
John C. Snyder
/s/ James L. Payne Chief Executive Officer and Director May 15, 2000
- --------------------------------------- (Principal Executive Officer)
James L. Payne
/s/ Mark A. Jackson Executive Vice President and Chief May 15, 2000
- --------------------------------------- Financial Officer (Principal Financial
Mark A. Jackson Officer)
/s/ William E. Greehey Director May 15, 2000
- ---------------------------------------
William E. Greehey
/s/ John A. Hill Director May 15, 2000
- ---------------------------------------
John A. Hill
</TABLE>
5
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<TABLE>
<S> <C> <C>
/s/ Melvyn N. Klein Director May 15, 2000
- ---------------------------------------
Melvyn N. Klein
/s/ Harold R. Logan, Jr. Director May 15, 2000
- ---------------------------------------
Harold R. Logan, Jr.
/s/ Allan V. Martini Director May 15, 2000
- ---------------------------------------
Allan V. Martini
/s/ James E. McCormick Director May 15, 2000
- ---------------------------------------
James E. McCormick
/s/ Reuben F. Richards Director May 15, 2000
- ---------------------------------------
Reuben F. Richards
/s/ Edward T. Story Director May 15, 2000
- ---------------------------------------
Edward T. Story
/s/ Kathryn D. Wriston Director May 15, 2000
- ---------------------------------------
Kathryn D. Wriston
/s/ Michael S. Wilkes Vice President and Controller May 15, 2000
- --------------------------------------- (Principal Accounting Officer)
Michael S. Wilkes
</TABLE>
<PAGE> 7
EXHIBIT INDEX
Exhibit
Number
-------
5.1 Opinion of Andrews & Kurth L.L.P.
23.1 Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.2 Consent of Independent Accountants.
23.3 Consent of Ryder Scott Company Petroleum Engineers.
24.1 Power of Attorney (included on signature page).
99.1 Santa Fe Snyder Corporation Incentive Stock Compensation Plan 2000
<PAGE> 1
Exhibit 5.1
May 18, 2000
Board of Directors
Santa Fe Snyder Corporation
840 Gessner, Suite 1400
Houston, Texas 77024
Ladies and Gentlemen:
We have acted as counsel to Santa Fe Santa Fe Snyder Corporation (the
"Company") in connection with the Company's Registration Statement on Form S-8
(the "Registration Statement") relating to the registration under the Securities
Act of 1933, as amended, of 5,000,000 shares (the "Shares") of the Company's
common stock, $0.01 par value, to be issued pursuant to the Santa Fe Santa Fe
Snyder Corporation Incentive Stock Compensation Plan 2000 (the "Plan").
In connection herewith, we have examined copies of such statutes,
regulations, corporate records and documents, certificates of public and
corporate officials and other agreements, contracts, documents and instruments
as we have deemed necessary as a basis for the opinion hereafter expressed. In
such examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of all documents submitted to us as copies. We have
also relied, to the extent we deem such reliance proper, upon information
supplied by officers and employees of the Company with respect to various
factual matters material to our opinion.
Based upon the foregoing and having due regard for such legal
considerations as we deem relevant, we are of the opinion that the Shares have
been duly authorized, and that such Shares will, when issued in accordance with
the terms of the Plan, be legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
1198/2698
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated January 28, 2000 relating
to the consolidated financial statement which appears in Santa Fe Snyder
Corporation's Annual Report on Form 10-K for the year ended December 31, 1999.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
May 18, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF EXPERTS
As petroleum engineers, we hereby consent to the incorporation
by reference in this Registration Statement on Form S-8 of our oil and gas
reserve reports as of December 31, 1995, December 31, 1996, December 31, 1997,
December 31, 1998 and December 31, 1999, included in the Santa Fe Snyder
Corporation Annual Report on Form 10-K for the year ended December 31, 1999.
RYDER SCOTT COMPANY
PETROLEUM ENGINEERS
Houston, Texas
May 18, 2000
<PAGE> 1
EXHIBIT 99.1
SANTA FE SNYDER CORPORATION
INCENTIVE STOCK COMPENSATION PLAN 2000
SECTION 1. Purpose of the Plan.
The Santa Fe Snyder Corporation Incentive Stock Compensation Plan 2000 (the
"Plan") is intended to promote the interests of Santa Fe Snyder Corporation, a
Delaware corporation (the "Company"), by encouraging officers, employees,
directors and consultants of the Company and its Affiliates to acquire or
increase their equity interest in the Company and to provide a means whereby
they may develop a sense of proprietorship and personal involvement in the
development and financial success of the Company, and to encourage them to
remain with and devote their best efforts to the business of the Company thereby
advancing the interests of the Company and its stockholders. The Plan is also
contemplated to enhance the ability of the Company and its Affiliates to attract
and retain the services of individuals who are essential for the growth and
profitability of the Company.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth
below:
"Affiliate" shall mean (i) any "parent corporation" of the Company (as
defined in Section 424(e) of the Code) and any "subsidiary corporation" of any
such corporation (as defined in Section 424(f) of the Code), (ii) any entity
that, directly or through one or more intermediaries, is controlled by the
Company, and (iii) any entity in which the Company has a significant equity
interest, as determined by the Committee.
"Award" shall mean any Option, Restricted Stock, Performance Award, Phantom
Shares, Bonus Shares, Other Stock-Based Award or Cash Award.
"Award Agreement" shall mean any agreement, contract, or other instrument
or document (written or electronic) evidencing any Award, which may, but need
not, be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Bonus Shares" shall mean an award of Shares granted pursuant to Section
6(d) of the Plan.
"Cash Award" shall mean an award payable in cash granted pursuant to
Section 6(f) of the Plan.
"Change in Control" shall mean the occurrence of any one of the following
events:
(a) any "person" (as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any affiliate, 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, is or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly of securities of the
Company representing 25% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of two consecutive years (not including any
period prior to the effective date of the Plan), individuals who at the
beginning of such period constitute the Board, and any new director (other
than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (a), (c) or
(d) of this Change in Control definition and excluding any individual whose
initial assumption of office occurs as a result of either (i) an actual or
threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act), or an actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of the period or whose election or nomination for election
was previously
<PAGE> 2
so approved (hereinafter referred to as "Continuing Directors"), cease for
any reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 60% of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after such merger or consolidation; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets. For
purposes of this clause (d), the term "the sale or disposition by the
Company of all or substantially all of the Company's assets" shall mean a
sale or other disposition transaction or series of related transactions
involving assets of the Company or of any direct or indirect subsidiary of
the Company (including the stock of any direct or indirect subsidiary of
the Company) in which the value of the assets or stock being sold or
otherwise disposed of (as measured by the purchase price being paid
therefor or by such other method as the Board determines is appropriate in
a case where there is no readily ascertainable purchase price) constitutes
more than two-thirds of the "fair market value of the Company" (as
hereinafter defined). For purposes of the preceding sentence, the "fair
market value of the Company" shall be the aggregate market value of the
Company's outstanding common stock (on a fully diluted basis) plus the
aggregate market value of the Company's other outstanding equity
securities. The aggregate market value of the Company's common stock shall
be determined by multiplying the number of shares of the Company's common
stock (on a fully diluted basis) outstanding on the date of the execution
and delivery of a definitive agreement with respect to the transaction or
series of related transactions (the "Transaction Date") by the average
closing price for the Company's common stock for the ten trading days
immediately preceding the Transaction Date. The aggregate market value of
any other equity securities of the Company shall be determined in a manner
similar to that prescribed in the immediately preceding sentence for
determining the aggregate market value of the Company's common stock or by
such other method as the Board shall determine is appropriate. However,
notwithstanding anything in this clause (d) to the contrary, a spinoff or
distribution of the stock of a subsidiary of the Company to those persons
who were stockholders of the Company immediately prior to such spinoff or
distribution in substantially the same proportion as their ownership of
Company stock immediately prior to such spinoff or distribution shall not
constitute a "sale or disposition by the Company of all or substantially
all of the Company's assets".
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations thereunder.
"Committee" shall mean the Compensation and Benefits Committee of the
Board.
"Consultant" shall mean any individual, other than a Director or an
Employee, who renders consulting services to the Company or an Affiliate for a
fee.
"Director" shall mean a "non-employee director" of the Company, as defined
in Rule 16b-3.
"Employee" shall mean any employee of the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, with respect to Shares, the average of the
high and low sales price of a Share on the applicable date (or if there is no
trading in the Shares on such date, on the next preceding date on which there
was trading) as reported in The Wall Street Journal (or other reporting service
approved by the Committee). In the event the Shares are not publicly traded at
the time a determination of its fair market value is required to be made
hereunder, the determination of fair market value shall be made in good faith by
the Committee.
A-2
<PAGE> 3
"Option" shall mean an option granted under Section 6(a) of the Plan.
Options granted under the Plan may constitute "incentive stock options" for
purposes of Section 422 of the Code or nonqualified stock options.
"Other Stock-Based Award" shall mean an award granted pursuant to Section
6(g) of the Plan that is not otherwise specifically provided for, the value of
which is based in whole or in part upon the value of a Share.
"Participant" shall mean any Director, Employee or Consultant granted an
Award under the Plan.
"Performance Award" shall mean any right granted under Section 6(c) of the
Plan.
"Performance Objectives" means the objectives, if any, established by the
Committee that are to be achieved with respect to an Award granted under this
Plan, which may be described in terms of Company-wide objectives, in terms of
objectives that are related to performance of a division, subsidiary, department
or function within the Company or an Affiliate in which the Participant
receiving the Award is employed or in individual or other terms, and which will
relate to the period of time determined by the Committee. The Performance
Objectives intended to qualify under Section 162(m) of the Code shall be with
respect to one or more of the following: earnings per share; earnings before
interest, taxes, depreciation and amortization expenses ("EBITDA"); earnings
before interest and taxes ("EBIT"); EBITDA, EBIT or earnings before taxes and
unusual or nonrecurring items as measured either against the annual budget or as
a ratio to revenue; market share; sales; costs; return on equity; operating cash
flow; production volumes compared to plan or prior years; reserves added;
discretionary cash flow; return on net capital employed; and stock price
performance. Which objectives to use with respect to an Award, the weighting of
the objectives if more than one is used, and whether the objective is to be
measured against a Company-established budget or target, an index or a peer
group of companies, shall be determined by the Committee in its discretion at
the time of grant of the Award. A Performance Objective need not be based on an
increase or a positive result and may include, for example, maintaining the
status quo or limiting economic losses.
"Person" shall mean individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, government or political
subdivision thereof or other entity.
"Phantom Shares" shall mean an Award of the right to receive Shares issued
at the end of a Restricted Period which is granted pursuant to Section 6(e) of
the Plan.
"Restricted Period" shall mean the period established by the Committee with
respect to an Award during which the Award either remains subject to forfeiture
or is not exercisable by the Participant.
"Restricted Stock" shall mean any Share, prior to the lapse of restrictions
thereon, granted under Sections 6(b) of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the SEC under the
Exchange Act, or any successor rule or regulation thereto as in effect from time
to time.
"SEC" shall mean the Securities and Exchange Commission, or any successor
thereto.
"Shares" or "Common Shares" or "Common Stock" shall mean the common stock
of the Company, $0.01 par value, and such other securities or property as may
become the subject of Awards under the Plan.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum, and the acts of the members of the
Committee who are present at any meeting thereof at which a quorum is present,
or acts unanimously approved by the members of the Committee in writing, shall
be the acts of the Committee. Subject to the following, the Committee, in its
sole discretion, may delegate any or all of its powers and duties under the
Plan, including the power to grant Awards under the Plan, to the Chief Executive
Officer of the Company, subject to such limitations on such delegated powers and
duties as the Committee may impose. Upon any such delegation all references in
the Plan to the "Committee", other than in Section 8, shall be deemed to include
the Chief Executive Officer; provided, however, that such delegation shall not
limit the Chief Executive Officer's right to receive Awards under the Plan.
Notwithstanding the
A-3
<PAGE> 4
foregoing, the Chief Executive Officer may not grant Awards to, or take any
action with respect to any Award previously granted to, a person who is an
officer or a member of the Board. Subject to the terms of the Plan and
applicable law, and in addition to other express powers and authorizations
conferred on the Committee by the Plan, the Committee shall have full power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to a Participant; (iii) determine the number of Shares to
be covered by, or with respect to which payments, rights, or other matters are
to be calculated in connection with, Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited, or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(vii) interpret and administer the Plan and any instrument or agreement relating
to an Award made under the Plan; (viii) establish, amend, suspend, or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any stockholder and any Employee.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(c),
the number of Shares with respect to which Awards may be granted under the Plan
shall be five million; provided, however, not more than two million of such five
million Shares may be issued with respect to Restricted Stock, Performance
Awards, Phantom Shares and Other Stock-Based Awards. If any Award is exercised,
paid, forfeited, terminated or canceled without the delivery of Shares, then the
Shares covered by such Award, to the extent of such payment, exercise,
forfeiture, termination or cancellation, shall again be Shares with respect to
which Awards may be granted.
(b) Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
(c) Adjustments. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number and type of Shares
(or other securities or property) with respect to which Awards may be granted,
(ii) the number and type of Shares (or other securities or property) subject to
outstanding Awards, and (iii) the grant or exercise price with respect to any
Award or, if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Award.
SECTION 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a
Participant and receive an Award under the Plan. In addition, each Director
shall receive Awards automatically as provided in Section 7.
SECTION 6. Awards.
(a) Options. Subject to the provisions of the Plan, the Committee shall
have the authority to determine the Participants to whom Options shall be
granted, the number of Shares to be covered by each Option, the
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purchase price therefor and the conditions and limitations applicable to the
exercise of the Option, including the following terms and conditions and such
additional terms and conditions, as the Committee shall determine, that are not
inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Share purchasable under an
Option shall be determined by the Committee at the time the Option is
granted, but shall not be less than the Fair Market Value per Share on such
grant date.
(ii) Time and Method of Exercise. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part
(which may include the achievement of one or more Performance Objectives),
and the method or methods by which, and the form or forms (which may
include, without limitation, cash, check acceptable to the Company, Shares
already-owned for more than six months, outstanding Awards, Shares that
would otherwise be acquired upon exercise of the Option, a
"cashless-broker" exercise through procedures approved by the Company,
other securities or other property, loans, notes approved by the Committee,
or any combination thereof, having a Fair Market Value on the exercise date
equal to the relevant exercise price) in which payment of the exercise
price with respect thereto may be made or deemed to have been made.
(iii) Incentive Stock Options. The terms of any Option granted under
the Plan intended to be an incentive stock option shall comply in all
respects with the provisions of Section 422 of the Code, or any successor
provision, and any regulations promulgated thereunder. Incentive stock
options may be granted only to employees of the Company and its parent
corporation and subsidiary corporations, within the meaning of Section 424
of the Code. To the extent the aggregate Fair Market Value of the Shares
(determined as of the date of grant) of an Option to the extent exercisable
for the first time during any calendar year (under all plans of the Company
and its parent and subsidiary corporations) exceeds $100,000, such Option
Shares in excess of $100,000 shall be nonqualified stock options.
(iv) Limits. The maximum number of Options that may be granted to any
Participant during any calendar year shall not exceed 1.0 million Shares.
(b) Restricted Stock. Subject to the provisions of the Plan, the Committee
shall have the authority to determine the Participants to whom Restricted Stock
shall be granted, the number of Shares of Restricted Stock to be granted to each
such Participant, the duration of the Restricted Period during which, and the
conditions, including Performance Objectives, if any, under which if not
achieved, the Restricted Stock may be forfeited to the Company, and the other
terms and conditions of such Awards. Unless subject to the achievement of
Performance Objectives or a special determination is made by the Committee as to
a shorter Restricted Period, the Restricted Period shall not be less than three
years.
(i) Dividends. Dividends paid on Restricted Stock may be paid directly
to the Participant, may be subject to risk of forfeiture and/or transfer
restrictions during any period established by the Committee or sequestered
and held in a bookkeeping cash account (with or without interest) or
reinvested on an immediate or deferred basis in additional shares of Common
Stock, which credit or shares may be subject to the same restrictions as
the underlying Award or such other restrictions, all as determined by the
Committee in its discretion.
(ii) Registration. Any Restricted Stock may be evidenced in such
manner as the Committee shall deem appropriate, including, without
limitation, book-entry registration or issuance of a stock certificate or
certificates. In the event any stock certificate is issued in respect of
Restricted Stock granted under the Plan, such certificate shall be
registered in the name of the Participant and may bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to
such Restricted Stock or such legend may be noted in the records of the
transfer agent.
(iii) Forfeiture and Restrictions Lapse. Except as otherwise
determined by the Committee or the terms of the Award that granted the
Restricted Stock, upon termination of a Participant's employment (as
determined under criteria established by the Committee) for any reason
during the applicable Restricted Period, all Restricted Stock shall be
forfeited by the Participant and reacquired by the Company. Unrestricted
Shares, evidenced in such manner as the Committee shall deem appropriate,
shall be issued to the holder of Restricted Stock promptly after the
applicable restrictions have lapsed or otherwise been satisfied.
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(iv) Transfer Restrictions. During the Restricted Period, Restricted
Stock will be subject to the limitations on transfer as provided in Section
6(i)(iii).
(v) Limits. The maximum number of Shares of Restricted Stock that may
be granted to any Participant during any calendar year shall not exceed
500,000 shares.
(c) Performance Awards. The Committee shall have the authority to determine
the Participants who shall receive a Performance Award, which shall be
denominated as a cash amount (e.g., $100 per award unit) at the time of grant
and confer on the Participant the right to receive payment of such Award, in
whole or in part, upon the achievement of such Performance Objectives during
such performance periods as the Committee shall establish with respect to the
Award.
(i) Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the Performance
Objectives to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount of
any payment or transfer to be made pursuant to any Performance Award.
(ii) Payment of Performance Awards. Performance Awards, to the extent
earned, shall be paid (in cash and/or in Shares, in the sole discretion of
the Committee) in a lump sum following the close of the performance period.
(iii) Limits. The maximum value of Performance Awards that may be
granted to any Participant during any calendar year shall not exceed $1.0
million.
(d) Bonus Shares. The Committee shall have the authority, in its
discretion, to grant Bonus Shares to Participants. Each Bonus Share shall
constitute a transfer of an unrestricted Share to the Participant, without other
payment therefor, as additional compensation for the Participant's services to
the Company. Bonus Shares shall be in lieu of a cash bonus that otherwise would
be granted to the Participant.
(e) Phantom Shares. The Committee shall have the authority to grant Awards
of Phantom Shares to Participants upon such terms and conditions as the
Committee may determine.
(i) Terms and Conditions. Each Phantom Share Award shall constitute an
agreement by the Company to issue or transfer a specified number of Shares
or pay an amount of cash equal to a specified number of Shares, or a
combination thereof to the Participant in the future, subject to the
fulfillment during the Restricted Period of such conditions, including
Performance Objectives, if any, as the Committee may specify at the date of
grant. During the Restricted Period, the Participant shall not have any
right to transfer any rights under the subject Award, shall not have any
rights of ownership in the Phantom Shares and shall not have any right to
vote such shares.
(ii) Dividends. Any Phantom Share award may provide that amount equal
to any or all dividends or other distributions paid on Shares during the
Restricted Period be credited in a cash bookkeeping account (without
interest) or that equivalent additional Phantom Shares be awarded, which
account or shares may be subject to the same restrictions as the underlying
Award or such other restrictions as the Committee may determine.
(iii) Limits. The maximum number of Phantom Shares that may be granted
to any Participant during any calendar year shall not exceed 500,000.
(f) Cash Awards. The Committee shall have the authority to determine the
Participants to whom Cash Awards shall be granted, the amount, and the terms or
conditions, if any, as additional compensation for the Participant's services to
the Company or its Affiliates. A Cash Award may be granted (simultaneously or
subsequently) separately or in tandem with another Award and may entitle a
Participant to receive a specified amount of cash from the Company upon such
other Award becoming taxable to the Participant, which cash amount may be based
on a formula relating to the anticipated taxable income associated with such
other Award and the payment of the Cash Award.
(g) Other Stock-Based Awards. The Committee may grant to Participants an
Other Stock-Based Award, which shall consist of a right which is an Award
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on or related to, Shares as is deemed by the Committee to be
consistent
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with the purposes of the Plan. Subject to the terms of the Plan, including the
Performance Objectives, if any, applicable to such Award, the Committee shall
determine the terms and conditions of any such Other Stock-Based Award. The
maximum number of Shares or the value for which Other Stock-Based Awards may be
granted to any Participant during any calendar year shall not exceed 500,000
shares, if the Award is in Shares, or $1.0 million, if the Award is denominated
in dollars.
(h) Replacement Awards. The Committee shall have the authority to grant an
Award to any Participant conditioned upon such Participant canceling his or her
rights with respect to a similar award granted to the Participant under another
plan of the Company, including, without limitation, the Company's 1999 Retention
Stock Compensation Plan.
(i) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the
discretion of the Committee, be granted either alone or in addition to, in
tandem with, or in substitution for any other Award granted under the Plan
or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards or awards
granted under any other plan of the Company or any Affiliate may be granted
either at the same time as or at a different time from the grant of such
other Awards or awards.
(ii) Forms of Payment by Company Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, or any combination thereof, and may be made
in a single payment or transfer, in installments, or on a deferred basis,
in each case in accordance with rules and procedures established by the
Committee. Such rules and procedures may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments.
(iii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Award, and each right
under any Award, shall be exercisable only by the Participant during the
Participant's lifetime, or by the person to whom the Participant's
rights shall pass by will or the laws of descent and distribution.
(B) Except as provided in (C) below, no Award and no right under
any such Award may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution (or, in the case of
Restricted Stock, to the Company) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be
void and unenforceable against the Company or any Affiliate.
(C) Notwithstanding anything in the Plan to the contrary, to the
extent specifically provided by the Committee with respect to a grant, a
nonqualified stock option may be transferred to immediate family members
or related family trusts, or similar entities on such terms and
conditions as the Committee may establish.
(iv) Term of Awards. The term of each Award shall be for such period
as may be determined by the Committee; provided, that in no event shall the
term of any Award exceed a period of 10 years from the date of its grant.
(v) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan
pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable
under the Plan or the rules, regulations, and other requirements of the
SEC, any stock exchange upon which such Shares or other securities are then
listed, and any applicable federal or state laws, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(vi) Consideration for Grants. Awards may be granted for no cash
consideration or for such consideration as the Committee determines
including, without limitation, such minimal cash consideration as may be
required by applicable law.
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(vii) Delivery of Shares or other Securities and Payment by
Participant of Consideration. No Shares or other securities shall be
delivered pursuant to any Award until payment in full of any amount
required to be paid pursuant to the Plan or the applicable Award Agreement
(including, without limitation, any exercise price, tax payment or tax
withholding) is received by the Company. Such payment may be made by such
method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Shares, other securities,
other Awards or other property, withholding of Shares, cashless exercise
with simultaneous sale, or any combination thereof; provided that the
combined value, as determined by the Committee, of all cash and cash
equivalents and the Fair Market Value of any such Shares or other property
so tendered to the Company, as of the date of such tender, is at least
equal to the full amount required to be paid pursuant to the Plan or the
applicable Award Agreement to the Company.
SECTION 7. Automatic Director Awards.
Each Director who is elected or appointed to the Board for the first time
after the effective date of this Plan shall automatically receive, on the date
of his or her election or appointment, a nonqualified Option for 10,000 shares
of Common Stock.
On the date of the regular Annual Meeting of Stockholders of the Company in
each year that this Plan is in effect (commencing with the Annual Meeting of
Stockholders in 2000), each Director who is serving on that day, including a
Director who was elected for the first time at such annual meeting, shall
automatically receive the following:
(a) Director Options. A nonqualified Option grant for 5,000 shares of
Common Stock. Each such Option will be subject to all of the limitations
contained in the following provisions:
(i) Each such Director Option shall become exercisable (vested) six
months and one day after its grant date.
(ii) The purchase price of each Director Option shall be the Fair
Market Value of the Common Stock on its grant date.
(iii) Each such Director Option may be exercised in full at one time
or in part from time to time by giving written notice to the Company,
stating the number of shares of Common Stock with respect to which the
Director Option is being exercised, accompanied by payment in full of the
option purchase price for such shares, which payment may be (i) in cash by
check acceptable to the Company, (ii) by the transfer to the Company of
shares of Common Stock already owned by the optionee having an aggregate
Fair Market Value at the date of exercise equal to the aggregate option
purchase price, (iii) from the proceeds of a sale through a broker of some
or all of the shares to which such exercise relates, or (iv) by a
combination of such methods of payment.
(iv) Each Director Option shall expire 10 years from the grant date
thereof, but shall be subject to earlier termination as follows: (1) to the
extent exercisable as of the date a Director ceases to serve as a director
of the Company (the "Resignation Date"), the Director Option may be
exercised only within three years of such Resignation Date by the Director
or the Director's legal representative or the person to whom the Director's
rights shall pass by will or the laws of descent and distribution, as the
case may be, and to the extent not so exercised shall terminate on the
third anniversary of the Resignation Date and (2) to the extent not
exercisable as of the Resignation Date, the Director Option shall terminate
on such Resignation Date.
(b) Restricted Stock. A Restricted Stock Award for 4,000 shares of Common
Stock.
(i) The Restricted Period shall lapse on an Award of Restricted Stock
granted to a Director pursuant to this Section upon the earlier of the date
that is six months and one day after the grant date, the Director's death,
termination from the Board either after reaching age 65 or due to a
disability. If a Director ceases to be a member of the Board during a
Restricted Period for any other reason, the Restricted Stock subject to
such Restricted Period shall be forfeited.
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(ii) Each certificate representing Restricted Stock awarded hereunder
shall be registered in the name of the Director and, during the Restricted
Period, shall be left on deposit with the Company with a stock power
endorsed in blank. Directors shall have the right to receive dividends paid
on their Restricted Stock and to vote such shares. Restricted Stock may not
be sold, pledged, assigned, transferred or encumbered during the Restricted
Period other than by will or the laws of descent and distribution.
In addition, each Director who is serving on the date of the Annual Meeting
of Stockholders in 2000 shall receive a grant of 2,000 Bonus Shares on that
date.
In the event that the number of shares of Common Stock available for
automatic Director Awards under this Plan is insufficient to make all such
automatic Awards provided for in this Section on the applicable date, then all
Directors who are entitled to a grant on such date shall share ratably in the
number of shares then available for grant under this Plan (Restricted Stock
Awards shall be made first, then the Director Options), and shall have no right
to receive a grant with respect to the deficiencies in the number of available
shares and all future grants under this Section.
SECTION 8. Amendment and Termination.
Except to the extent prohibited by applicable law and unless otherwise
expressly provided in an Award Agreement or in the Plan:
(a) Amendments to the Plan. Except as required by applicable law or the
rules of the principal securities market on which the shares are traded and
subject to paragraph (b) below, the Board or the Committee may amend, alter,
suspend, discontinue, or terminate the Plan without the consent of any
stockholder, Participant, other holder or beneficiary of an Award, or other
Person; provided, however, no such amendment may be made without stockholder
approval, if such amendment would (i) materially increase the number of Shares
authorized under the Plan, but excluding any adjustment made pursuant to Section
4(c), or (ii) materially increase the Persons eligible to receive Awards under
the Plan.
(b) Amendments to Awards. The Committee may waive any conditions or rights
under, amend any terms of, or alter any Award theretofore granted, provided no
change, other than pursuant to paragraph (c) or (d), in any Award shall reduce
the benefit to Participant without the consent of such Participant. In addition,
the Committee may not reduce the exercise price of an Option, except as provided
in Section 4(c), without the approval of the stockholders of the Company.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. Subject to paragraph (d) below, the Committee is hereby
authorized to 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(c) of the Plan) affecting
the Company, any Affiliate, or the financial statements of the Company or any
Affiliate, 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.
(d) Section 162(m). The Committee, in its sole discretion and without the
consent of the Participant, may amend (i) any stock-based Award to reflect (1) a
change in corporate capitalization, such as a stock split or dividend, (2) a
corporate transaction, such as a corporate merger, a corporate consolidation,
any corporate separation (including a spinoff or other distribution of stock or
property by a corporation), any corporate reorganization (whether or not such
reorganization comes within the definition of such term in Section 368 of the
Code), (3) any partial or complete corporate liquidation, or (4) a change in
accounting rules required by the Financial Accounting Standards Board and (ii)
any Award that is not intended to meet the requirements of Section 162(m) of the
Code, to reflect any significant event that the Committee, in its sole
discretion, believes to be appropriate to reflect the original intent in the
grant of the Award. With respect to an Award that is subject to Section 162(m)
of the Code, the Committee (i) shall not take any action that would disqualify
such Award and (ii) must first certify that the Performance Objectives, if
applicable, have been achieved before the Award may be paid.
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SECTION 9. Change in Control.
(a) Subject to paragraph (b) below, and except to the extent an Award
Agreement expressly provides to the contrary, in the event of a Change in
Control of the Company all outstanding Awards automatically shall become fully
vested immediately prior to such Change in Control (or such earlier time as set
by the Committee), all restrictions, if any, with respect to such Awards shall
lapse, all performance criteria, if any, with respect to such Awards shall be
deemed to have been met at the target level, and unless the Company survives as
an independent publicly traded company, all Options outstanding at the time of
the event or transaction shall terminate, except to the extent provision is made
in writing in connection with such event or transaction for the continuation of
the Plan and/or the assumption of the Options theretofore granted, or for the
substitution for such Options of new options covering the stock of a successor
entity, or the parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares and exercise prices, in which event the Plan and
Options theretofore granted shall continue in the manner and under the terms so
provided.
(b) If a Participant is a "disqualified individual" (as defined in Section
280G of the Code) and the accelerated vesting of an Award and/or the termination
of the Restricted Period occurs with respect to a Change in Control, together
with any other payments which the Participant has the right to receive from the
Company and its Affiliates, whether or not under this Plan, would constitute a
"parachute payment" (as defined in Section 280G of the Code), then, except to
the extent such Participant has entered into an Award Agreement or a written
severance or employment agreement with the Company that expressly provides for a
"parachute tax gross-up", such accelerated vesting and/or termination of the
Restricted Period provided under the paragraph above shall be reduced to the
extent necessary (beginning with Options) so that the present value thereof (as
determined for parachute purposes) to the Participant will be $1.00 less than
three times the Participant's "base amount" (as defined in Section 280G of the
Code), but only if such reduction produces a better net after-tax position to
the Participant. Such determinations shall be made by the Company in good faith.
SECTION 10. General Provisions.
(a) No Rights to Awards. No Director, Employee, Consultant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Consultants, or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold
from any Award, from any payment due or transfer made under any Award or under
the Plan or from any compensation or other amount owing to a Participant the
amount (in cash, Shares, other securities, Shares that would otherwise be issued
pursuant to such Award, other Awards or other property) of any applicable taxes
payable in respect of an Award, its exercise, the lapse of restrictions thereon,
or any payment or transfer under an Award or under the Plan and to take such
other action as may be necessary in the opinion of the Company to satisfy all
obligations for the payment of such taxes. Notwithstanding the above, a
Participant who is subject to Rule 16b-3 may direct the Company to satisfy such
Participant's tax withholding obligation through the "constructive" tender of
already-owned Shares or the withholding of Shares otherwise to be acquired upon
the exercise or payment of such Award.
(c) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or an Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.
(d) Governing Law. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.
(e) Severability. If any provision of the Plan or any Award is or becomes
or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as
to any Person or Award, or would disqualify the Plan or any Award under any law
deemed applicable by the Committee, such provision shall be construed or deemed
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amended to conform to the applicable laws, or if it cannot be construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Shares or
other consideration under an Award if, acting in its sole discretion, it
determines that the issuance of transfer or such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor the Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Affiliate and a Participant or any other
Person. To the extent that any Person acquires a right to receive payments from
the Company or any Affiliate pursuant to an Award, such right shall be no
greater than the right of any general unsecured creditor of the Company or any
Affiliate.
(h) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award, and the Committee shall determine whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or whether such fractional Shares or any rights thereto
shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the
Plan solely as a convenience to facilitate reference, Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 11. Designation of Beneficiary.
Each Participant to whom an Award has been made under this Plan may
designate a beneficiary or beneficiaries (which beneficiary may be an entity
other than a natural person) to exercise any rights or receive any payment that
under the terms of such Award may become exercisable or payable on or after the
Participant's death. At any time, and from time to time, any such designation
may be changed or cancelled by the Participant without the consent of any such
beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Company and shall not be effective until
received by the Company. If no beneficiary has been named by a deceased
Participant, or the designated beneficiaries have predeceased the Participant,
the beneficiary shall be the Participant's estate, If a Participant designates
more than one beneficiary, any such exercise or payment under this Plan shall be
made in equal shares unless the Participant has designated otherwise, in which
case the exercise or payment shall be made in the shares designated by the
Participant.
SECTION 12. Effective Date of the Plan.
The Plan shall become effective upon its adoption by the Board; however, no
Award may become exercisable or payable unless and until the Plan is approved by
the stockholders of the Company at (1) the first annual meeting of the
stockholders following the date the Plan is adopted by the Board or (2) if
earlier, a special meeting of the stockholders at which the Plan is presented
for approval by the stockholders. In the event such stockholder approval is not
obtained, all Awards outstanding on such date, whichever is applicable, shall be
automatically cancelled without payment.
SECTION 13. Term of the Plan.
No Award shall be granted under the Plan after the 10th anniversary of the
date the Plan is adopted by the Board. However, unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
prior to such termination, and the authority of the Board or the Committee to
amend, alter, adjust, suspend, discontinue, or terminate any such Award or to
waive any conditions or rights under such Award, shall extend beyond such
termination date.
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