Approved by Board of Directors on March 28, 2000
Approved by Stockholders on June 28, 2000
Winstar Communications, Inc.
(Name of Company)
2000 Performance Equity Plan
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of the Winstar Communications, Inc. 2000
Performance Equity Plan is to enable the Company to offer to its employees,
officers, directors and consultants whose past, present and/or potential
contributions to the Company and its Subsidiaries have been, are or will be
important to the success of the Company, an opportunity to acquire a proprietary
interest in the Company. The various types of long-term incentive awards that
may be provided under the Plan will enable the Company to respond to changes in
compensation practices, tax laws, accounting regulations and the size and
diversity of its businesses.
1.2 Definitions. For purposes of the Plan, the following terms
shall be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder, or such other document as may be determined by the Committee,
setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(d) "Committee" means the Compensation Committee of the Board
or any other committee of the Board that the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company,
$.01 par value per share.
(f) "Company" means Winstar Communications, Inc., a
corporation organized under the laws of the State of Delaware.
(g) "Deferred Stock" means Common Stock to be received under
an award made pursuant to Section 8 below at the end of a specified deferral
period.
(h) "Disability" means physical or mental impairment as
determined under procedures established by the Committee for purposes of the
Plan.
(i) "Effective Date" means the date set forth in Section
12.1, below.
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(j) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on the last trading day prior to such date, as reported by the
exchange or Nasdaq, as the case may be; (ii) if the Common Stock is not listed
on a national securities exchange or quoted on the Nasdaq National Market or
Nasdaq SmallCap Market, but is traded in the over-the-counter market, the
closing bid price for the Common Stock on the last trading day prior to such
date, as reported by the OTC Bulletin Board or the National Quotation Bureau,
Incorporated or similar publisher of such quotations; and (iii) if the fair
market value of the Common Stock cannot be determined pursuant to clause (i) or
(ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award
under the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after such age which may be
designated by the Committee as "retirement age" for any particular Holder. If no
age is designated, it shall be 62.
(o) "Other Stock-Based Award" means an award under Section 9
below that is valued in whole or in part by reference to, or is otherwise based
upon, Common Stock.
(p) "Parent" means any present or future "parent
corporation" of the Company, as such term is defined in Section 424(e) of the
Code.
(q) "Plan" means the Winstar Communications, Inc. 2000
Performance Equity Plan, as hereinafter amended from time to time.
(r) "Repurchase Value" shall mean the Fair Market Value in
the event the award to be settled under section 2.2(h) is comprised of shares of
Common Stock and the difference between Fair Market Value and the Exercise Price
(if lower than Fair Market Value) in the event the award is a Stock Option or
Stock Appreciation Right; in each case, multiplied by the number of shares
subject to the award.
(s) "Restricted Stock" means Common Stock received under an
award made pursuant to Section 7 below that is subject to restrictions under
said Section 7.
(t) "SAR Value" means the excess of the Fair Market Value
(on the exercise date) over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option, multiplied by the
number of shares for which the Stock Appreciation Right is exercised.
(u) "Stock Appreciation Right" means the right to receive
from the Company, on surrender of all or part of the related Stock Option,
without a cash payment to the Company, a number of shares of Common Stock equal
to the SAR Value divided by the Fair Market Value (on the exercise date).
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(v) "Stock Option" or "Option" means any option to purchase
shares of Common Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 5.3 of the Plan.
(x) "Subsidiary" means any present or future "subsidiary
corporation" of the Company, as such term is defined in Section 424(f) of the
Code.
(y) "Vest" means to become exercisable or to otherwise
obtain ownership rights in an award.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the Board
or a Committee. Committee members shall serve for such term as the Board may in
each case determine, and shall be subject to removal at any time by the Board.
The Committee members, to the extent possible and deemed to be appropriate by
the Board, shall be "non-employee directors" as defined in Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and "outside directors" within the meaning of Section 162(m) of the Code.
2.2 Powers of Committee. The Committee shall have full authority to
award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):
(a) to select the officers, employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock Options
and/or Other Stock-Based Awards may from time to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share exercise price or types of consideration
paid upon exercise of such options, such as other securities of the Company or
other property, any restrictions or limitations, and any vesting, exchange,
surrender, cancellation, acceleration, termination, exercise or forfeiture
provisions, as the Committee shall determine);
(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash and non-cash awards
made by the Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the payment or crediting of interest on deferred amounts denominated in cash and
of dividend equivalents on deferred amounts denominated in Common Stock;
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(f) to determine the extent and circumstances under which
Common Stock and other amounts payable with respect to an award hereunder shall
be deferred that may be either automatic or at the election of the Holder;
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms; and
(h) to make payments and distributions with respect to awards
(i.e., to "settle" awards) hrough cash payments in an amount equal to the
Repurchase Value.
Notwithstanding anything contained herein to the contrary, the
Committee shall not grant to any one Holder in any one calendar year awards for
more than 1,000,000 shares in the aggregate.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 11 below, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all Agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 11 below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but not limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of shares of Common Stock
reserved and available for issuance under the Plan shall be 10,000,000 shares.
Shares of Common Stock under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. If any shares of Common Stock
that have been granted pursuant to a Stock Option cease to be subject to a Stock
Option, or if any shares of Common Stock that are subject to any Stock
Appreciation Right, Restricted Stock award, Deferred Stock award, Reload Stock
Option or Other Stock-Based Award granted hereunder are forfeited or any such
award otherwise terminates without a payment being made to the Holder in the
form of Common Stock, such shares shall again be available for distribution in
connection with future grants and awards under the Plan. If a Holder pays the
exercise price of a Stock Option by surrendering any previously owned shares
and/or arranges to have the appropriate number of shares otherwise issuable upon
exercise withheld to cover the withholding tax liability associated with the
Stock Option exercise, then the number of shares available under the Plan shall
be increased by the lesser of (i) the number of such surrendered shares and
shares used to pay taxes; and (ii) the number of shares purchased under such
Stock Option.
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3.2 Adjustments. In the event of any dividend of shares of Common Stock
payable on shares of Common Stock, Common Stock split, reverse Common Stock
split or other extraordinary or unusual event which results in a change in the
shares of Common Stock of the Company as a whole, the Committee shall make such
equitable adjustments as it deems appropriate in the terms of any award
(including number of shares subject to the award and the exercise price) and the
aggregate number of shares reserved for issuance under the Plan. Any such
adjustments made by the Committee will be final, binding and conclusive.
Section 4. Eligibility.
Awards may be made or granted to employees, officers,
directors and consultants who are deemed to have rendered or to be able to
render significant services to the Company or its Subsidiaries and who are
deemed to have contributed or to have the potential to contribute to the success
of the Company. No Incentive Stock Option shall be granted to any person who is
not an employee of the Company or a Subsidiary at the time of grant.
Notwithstanding the foregoing, an award may be made or granted to a person in
connection with his hiring or retention, or at any time on or after the date he
reaches an agreement (oral or written) with the Company with respect to such
hiring or retention, even though it may be prior to the date the person first
performs services for the Company or its Subsidiaries; provided, however, that
no portion of any such award shall become vested prior to the date the person
first performs such services.
Section 5. Stock Options.
5.1 Grant and Exercise. Stock Options granted under the Plan may be of
two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. Any
Stock Option granted under the Plan shall contain such terms, not inconsistent
with this Plan, or with respect to Incentive Stock Options, not inconsistent
with the Plan and the Code, as the Committee may from time to time approve. The
Committee shall have the authority to grant Incentive Stock Options or
Non-Qualified Stock Options, or both types of Stock Options which may be granted
alone or in addition to other awards granted under the Plan. To the extent that
any Stock Option intended to qualify as an Incentive Stock Option does not so
qualify, it shall constitute a separate Nonqualified Stock Option.
5.2 Terms and Conditions. Stock Options granted under the Plan
shall be subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall be fixed
by the Committee; provided, however, that an Incentive Stock Option may be
granted only within the ten-year period commencing from the Effective Date and
may only be exercised within ten years of the date of grant (or five years in
the case of an Incentive Stock Option granted to an optionee who, at the time of
grant, owns Common Stock possessing more than 10% of the total combined voting
power of all classes of voting stock of the Company ("10% Stockholder").
(b) Exercise Price. The exercise price per share of Common
Stock purchasable under a Stock Option shall be determined by the Committee at
the time of grant and may not be less than 100% of the Fair Market Value on the
trading day immediately preceding the date of grant (or, if greater, the par
value of a share of Common Stock); provided, however, that (i) the exercise
price of an Incentive Stock Option granted to a 10% Stockholder shall not be
less than 110% of the Fair Market Value on the date of grant; and (ii) if the
Stock Option is granted in connection with the recipient's hiring, retention,
reaching an agreement (oral or written) with the Company with respect to such
hiring or retention, promotion or similar event, the option exercise price may
be not less than the Fair Market Value of the Common Stock on the trading day
immediately preceding the date on which the recipient is hired or retained,
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reached such agreement with respect to such hiring or retention, or is promoted
(or similar event), if the grant of the Stock Option occurs not more than 120
days after the date of such hiring, retention, agreement, promotion or other
event.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 10 below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option by giving written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, which shall be in cash or,
if provided in the Agreement, either in shares of Common Stock (including
Restricted Stock and other contingent awards under this Plan) or partly in cash
and partly in such Common Stock, or such other means which the Committee
determines are consistent with the Plan's purpose and applicable law. Cash
payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that
the Company shall not be required to deliver certificates for shares of Common
Stock with respect to which an Option is exercised until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof (except that, in the case of an exercise arrangement approved by
the Committee and described in the last sentence of this paragraph, payment may
be made as soon as practicable after the exercise). Payments in the form of
Common Stock shall be valued at the Fair Market Value on the date prior to the
date of exercise. Such payments shall be made by delivery of stock certificates
in negotiable form that are effective to transfer good and valid title thereto
to the Company, free of any liens or encumbrances. Subject to the terms of the
Agreement, the Committee may, in its sole discretion, at the request of the
Holder, deliver upon the exercise of a Nonqualified Stock Option a combination
of shares of Deferred Stock and Common Stock; provided, however, that,
notwithstanding the provisions of Section 8 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a Stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option. The Committee may permit a Holder to elect to pay the Exercise Price
upon the exercise of a Stock Option by irrevocably authorizing a third party to
sell shares of Common Stock (or a sufficient portion of the shares) acquired
upon exercise of the Stock Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.
(e) Transferability. Except as may be set forth in the next
sentence of this section or in the Agreement, no Stock Option shall be
transferable by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the Holder's
lifetime, only by the Holder (or, to the extent of legal incapacity or
incompetency, the Holder's guardian or legal representative). Notwithstanding
the foregoing, a Holder, with the approval of the Committee, may transfer a
Nonqualified Stock Option (i) (A) by gift, for no consideration, or (B) pursuant
to a domestic relations order, in either case, to or for the benefit of the
Holder's "Immediate Family" (as defined below), or (ii) to an entity in which
the Holder and/or members of Holder's Immediate Family own more than fifty
percent of the voting interest, in exchange for an interest in that entity,
subject to such limits as the Committee may establish, and the transferee shall
remain subject to all the terms and conditions applicable to the Stock Option
prior to such transfer. The term "Immediate Family" shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, any person sharing the Holder's household (other than a tenant or
employee), a trust in which these persons have more than fifty percent
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beneficial interest, and a foundation in which these persons (or the Holder)
control the management of the assets.
(f) Termination by Reason of Death. If a Holder's employment
by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee at the time of
grant and set forth in the Agreement, shall become fully vested and may
thereafter be exercised by the legal representative of the estate or by the
legatee of the Holder under the will of the Holder, for a period of eighteen
months (or such other greater or lesser period as the Committee may specify in
the Agreement at the time of grant) from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is shorter.
(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall become
fully vested and may thereafter be exercised by the Holder for a period of
twenty-four months (or such other greater or lesser period as the Committee may
specify in the Agreement at the time of grant) from the date of such termination
of employment or until the expiration of the stated term of such Stock Option,
whichever period is shorter.
(h) Termination by Normal Retirement. If a Holder's employment
by the Company or any Subsidiary terminates by reason of Normal Retirement, any
Stock Option held by such Holder, unless otherwise determined by the Committee
at the time of grant and set forth in the Agreement, shall thereupon
automatically terminate, except that the portion of such Stock Option that has
vested on the date of termination may thereafter be exercised by the Holder for
a period of eighteen months (or such other greater or lesser period as the
Committee may specify in the Agreement at the time of grant) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is shorter.
(i) Other Termination. Subject to the provisions of Section
13.3 below and unless otherwise determined by the Committee at the time of grant
and set forth in the Agreement, if a Holder's employment or retention by, or
association with, the Company or any Subsidiary terminates for any reason other
than death, Disability or Normal Retirement, the Stock Option shall thereupon
automatically terminate, except that if the Holder's employment is terminated by
the Company or a Subsidiary without cause, or if the Holder voluntarily
terminates his employment without breaching any employment agreement between the
Company or any Subsidiary and the Holder, then the portion of such Stock Option
that has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.
(j) Additional Incentive Stock Option Limitation. In the case
of an Incentive Stock Option, the aggregate Fair Market Value (on the date of
grant of the Option) with respect to which Incentive Stock Options become
exercisable for the first time by a Holder during any calendar year (under all
such plans of the Company and its Parent and Subsidiaries) shall not exceed
$100,000.
(k) Buyout and Settlement Provisions. The Committee may at any
time, in its sole discretion, offer to repurchase a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
5.3 Stock Reload Option. If a Holder tenders shares of Common
Stock to pay the exercise price of a Stock Option ("Underlying Option") and/or
arranges to have a portion of the shares otherwise issuable upon exercise
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withheld to pay the applicable withholding taxes, then the Holder may receive,
at the discretion of the Committee, a new Stock Reload Option to purchase that
number of shares of Common Stock equal to the number of shares tendered to pay
the exercise price and the withholding taxes (but only if such tendered shares
were held by the Holder for at least six months). Stock Reload Options may be
any type of option permitted under the Code and will be granted subject to such
terms, conditions, restrictions and limitations as may be determined by the
Committee from time to time. Such Stock Reload Option shall have an exercise
price equal to the Fair Market Value as of the date of exercise of the
Underlying Option. Unless the Committee determines otherwise, a Stock Reload
Option may be exercised commencing one year after it is granted and shall expire
on the date of expiration of the Underlying Option to which the Reload Option is
related.
Section 6. Stock Appreciation Rights.
6.1 Grant and Exercise. The Committee may grant Stock Appreciation
Rights to participants who have been or are being granted Stock Options under
the Plan as a means of allowing such participants to exercise their Stock
Options without the need to pay the exercise price in cash. In the case of a
Nonqualified Stock Option, a Stock Appreciation Right may be granted either at
or after the time of the grant of such Nonqualified Stock Option. In the case of
an Incentive Stock Option, a Stock Appreciation Right may be granted only at the
time of the grant of such Incentive Stock Option.
6.2 Terms and Conditions. Stock Appreciation Rights shall be
subject to the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as shall be determined by the Committee and set forth in the
Agreement, subject to the limitations, if any, imposed by the Code with respect
to related Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall
terminate and shall no longer be exercisable upon the termination or exercise of
the related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable by surrendering the applicable portion of the related Stock Option.
Upon such exercise and surrender, the Holder shall be entitled to receive a
number of shares of Common Stock equal to the SAR Value divided by the Fair
Market Value on the date the Stock Appreciation Right is exercised.
(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Right shall not affect the number of shares of Common Stock
available for awards under the Plan. The number of shares available for awards
under the Plan will, however, be reduced by the number of shares of Common Stock
acquirable upon exercise of the Stock Option to which such Stock Appreciation
Right relates.
Section 7. Restricted Stock.
7.1 Grant. Shares of Restricted Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be awarded, the number of shares to be awarded, the price
(if any) to be paid by the Holder, the time or times within which such awards
may be subject to forfeiture ("Restriction Period"), the vesting schedule and
rights to acceleration thereof and all other terms and conditions of the awards.
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7.2 Terms and Conditions. Each Restricted Stock award shall be subject
to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions) and the enjoyment of all rights appurtenant thereto are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
(b) Rights of Holder. Restricted Stock shall constitute issued
and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that: (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Agreement, subject to Section 10 below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 10 below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
Section 8. Deferred Stock.
8.1 Grant. Shares of Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the eligible persons to whom and the time or times at which grants of Deferred
Stock will be awarded, the number of shares of Deferred Stock to be awarded to
any person, the duration of the period ("Deferral Period") during which, and the
conditions under which, receipt of the shares will be deferred, and all the
other terms and conditions of the awards.
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8.2 Terms and Conditions. Each Deferred Stock award shall be
subject to the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
the Additional Deferral Period referred to in Section 8.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
Stock shall not have any rights of a Stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Common Stock. The shares of Common Stock
issuable upon expiration of the Deferral Period shall not be deemed outstanding
by the Company until the expiration of such Deferral Period and the issuance and
delivery of such Common Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the Deferral
Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 10 below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event
("Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 9. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject to
limitations under applicable law, that are denominated or payable in, valued in
whole or in part by reference to, or otherwise based on or related to, shares of
Common Stock, as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation, purchase rights, shares of Common Stock
awarded which are not subject to any restrictions or conditions, convertible or
exchangeable debentures, or other rights convertible into shares of Common Stock
and awards valued by reference to the value of securities of or the performance
of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone
or in addition to or in tandem with any other awards under this Plan or any
other plan of the Company. Each other Stock-Based Award shall be subject to such
terms and conditions as may be determined by the Committee.
Section 10. Accelerated Vesting and Exercisability.
If (i) any person or entity other than the Company and/or any
officer, director or principal stockholder (i.e., a holder (beneficially or of
record)) of more than ten percent of the Company's voting stock) of the Company
as of the Effective Date acquire securities of the Company (in one or more
transactions) having 25% or more of the total voting power of all the Company's
securities then outstanding and (ii) the Board of Directors of the Company does
not authorize or otherwise approve such acquisition, then the vesting periods of
any and all Stock Options and other awards granted and outstanding under the
Plan shall be accelerated and all such Stock Options and awards will immediately
and entirely vest and the respective holders thereof will have the immediate
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right to purchase and/or receive any and all Common Stock subject to such Stock
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Stock Options and awards.
Additionally, if any of the following events occur, then the
vesting periods of any and all Stock Options and other awards granted and
outstanding under the Plan shall be accelerated and all such Stock Options and
awards will immediately and entirely vest and the respective holders thereof
will have the immediate right to purchase and/or receive any and all Common
Stock subject to such Stock Options and awards on the terms set forth in this
Plan and the respective agreements respecting such Stock Options and awards:
(a) any "person" or "group" (within the meaning of Section
13(d) and 14(d) of the Exchange Act becomes the "beneficial owner" (within the
meaning of Rule 13d-3 under the Exchange Act) of Common Stock having thirty-five
percent (35%) or more of the total voting power of all the Company's voting
capital stock then outstanding; provided, however, that there shall be no such
acceleration if such person is or group includes an individual who, as of the
Effective Date, is an executive officer of the Company and beneficially owns
(within the meaning of Rule 13d-3 under the Exchange Act) in excess of three
percent of the outstanding Common Stock of the Company, or an Affiliate or
Associate (within the meaning of Rule 12b-2 under the Exchange Act) of such
individual;
(b) a merger or consolidation of the Company other than one
resulting in the Company's voting securities outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation;
(c) the sale or other disposition of all or substantially all
of the Company's assets or the approval of a plan of liquidation of the Company;
or
(d) individuals who on the Effective Date constituted the
Board of Directors (together with any directors elected after the Effective Date
whose election by the Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of at least a majority of the
directors then in office who were either directors on the Effective Date or
whose election or nomination for election was previously so approved) cease for
any reason other than death or disability to constitute a majority of the Board
of Directors then in office.
Section 11. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made that would impair the rights of a
Holder under any Agreement theretofore entered into hereunder without the
Holder's consent.
Section 12. Term of Plan.
12.1 Effective Date. The Plan shall be effective as of March 28, 2000,
subject to the approval of the Plan by the Company's stockholders within one
year after the Effective Date. Any awards granted under the Plan prior to such
approval shall be effective when made (unless otherwise specified by the
Committee at the time of grant), but shall be conditioned upon, and subject to,
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such approval of the Plan by the Company's stockholders and no awards shall vest
or otherwise become free of restrictions prior to such approval.
12.2 Termination Date. Unless terminated by the Board, this Plan shall
continue to remain effective until such time as no further awards may be granted
and all awards granted under the Plan are no longer outstanding. Notwithstanding
the foregoing, grants of Incentive Stock Options may be made only during the ten
year period following the Effective Date.
Section 13. General Provisions.
13.1 Written Agreements. Each award granted under the Plan shall be
confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder, or such other document as may be determined by the
Committee. The Committee may terminate any award made under the Plan if the
Agreement relating thereto is not executed and returned to the Company within 10
days after the Agreement has been delivered to the Holder for his or her
execution.
13.2 Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
13.3 Employees.
(a) Engaging in Competition With the Company; Solicitation of
Customers and Employees; Disclosure of Confidential Information. If a Holder's
employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within twelve months after the date thereof such Holder either
(i) accepts employment with any competitor of, or otherwise engages in
competition with, the Company or any of its Subsidiaries, (ii) solicits any
customers or employees of the Company or any of its Subsidiaries to do business
with or render services to the Holder or any business with which the Holder
becomes affiliated or to which the Holder renders services, or (iii) discloses
to anyone outside the Company or uses any confidential information or material
of the Company or any of its Subsidiaries in violation of the Company's policies
or any agreement between the Holder and the Company or any of its Subsidiaries,
the Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award that was realized or obtained by such
Holder at any time during the period beginning on the date that is twelve months
prior to the date such Holder's employment with the Company is terminated.
(b) Termination for Cause. The Committee may, if a Holder's
employment with the Company or a Subsidiary is terminated for cause, annul any
award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any award that was realized or obtained by such
Holder at any time during the period beginning on that date that is twelve
months prior to the date such Holder's employment with the Company is
terminated.
(c) No Right of Employment. Nothing contained in the Plan or
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
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13.4 Company Policy. Each person acquiring shares of Common Stock
pursuant to a Stock Option or other award under the Plan shall be required to
abide by all policies of the Company in effect at the time of such acquisition
and thereafter with respect to the ownership and trading of the Company's
securities.
13.5 Additional Incentive Arrangements. Nothing contained in the Plan
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of Common Stock and cash otherwise
than under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
13.6 Withholding Taxes. Not later than the date as of which an amount
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any Stock Option or other award under the Plan, the
Holder shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditioned upon such payment or arrangements and the Company
or the Holder's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Holder from the Company or any Subsidiary.
13.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of New York (without regard to choice of law provisions); provided,
however, that all matters relating to or involving corporate law shall be
governed by the laws of the State of Delaware.
13.8 Other Benefit Plans. Any award granted under the Plan shall not be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or any Subsidiary and shall not affect any benefits under any
other benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation (unless required by
specific reference in any such other plan to awards under this Plan).
13.9 Non-Transferability. Except as otherwise expressly provided in
this Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
13.10 Applicable Laws. The obligations of the Company with respect to
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933, as amended, and (ii) the rules and regulations of any securities
exchange on which the Common Stock may be listed.
13.11 Conflicts. If any of the terms or provisions of the Plan or an
Agreement conflict with the requirements of Section 422 of the Code, then such
terms or provisions shall be deemed inoperative to the extent they so conflict
with such requirements. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provisions of any Agreement conflict with
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any terms or provisions of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
13.12 Non-Registered Stock. The shares of Common Stock to be
distributed under this Plan have not been, as of the Effective Date, registered
under the Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Common Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Common Stock on a national securities
exchange or any other trading or quotation system, including the Nasdaq National
Market and Nasdaq SmallCap Market.
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Plan Amendments
Initials of
Date Approved Attorney
Date Approved by Stockholders, Sections Description of Effecting
by Board if necessary Amended Amendments Amendment
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