HS RESOURCES, INC.
2000 PERFORMANCE AND EQUITY INCENTIVE PLAN
Adopted and Effective April 11, 2000
EFFECTIVE APRIL 11, 2000
CONTENTS
SECTIONS PAGE
1. NAME AND PURPOSE.................................................1
2. DEFINITIONS......................................................1
3. ADMINISTRATION OF THE PLAN.......................................4
4. SHARES SUBJECT TO THE PLAN.......................................6
5. ELIGIBILITY......................................................7
6. ELECTIONS, PAYMENTS, DIVIDENDS, WITHHOLDING, AND
BONUSES..........................................................7
7. OPTIONS..........................................................8
8. STOCK APPRECIATION RIGHTS........................................9
9. RESTRICTED STOCK.................................................9
10. PERFORMANCE SHARES..............................................10
11. CASH PERFORMANCE AWARDS.........................................11
12. OTHER STOCK-BASED PERFORMANCE AWARDS............................11
13. TRANSFERABILITY.................................................12
14. TERMINATION OF SERVICE..........................................12
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15. CHANGE IN CONTROL...............................................13
16. TERM, AMENDMENT, SUSPENSION OR TERMINATION OF THE
PLAN............................................................13
17. INVESTMENT PURPOSE..............................................14
18. MISCELLANEOUS...................................................14
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HS RESOURCES, INC.
2000 PERFORMANCE AND EQUITY INCENTIVE PLAN
1. NAME AND PURPOSE.
a. This plan is the HS RESOURCES, INC. 2000 PERFORMANCE AND
EQUITY INCENTIVE PLAN, adopted and effective as of April 11, 2000
(the "Plan").
b. The purposes of the Plan are (i) to enhance the profitability
and value of the Company for the benefit of its shareholders by
providing equity ownership opportunities and performance-based
incentives to better align the interests of officers and key
employees with those of shareholders; (ii) to attract and retain
the best possible personnel for positions of substantial
responsibility with the Company; and (iii) to provide additional
incentive to Participants to promote the success of the Company.
The Plan provides employees, officers and directors of the
Company an opportunity to acquire Shares of the Stock of the
Company pursuant to Incentive Stock Options and Non-Statutory
Stock Options, and to receive Restricted Stock, Stock
Appreciation Rights, Performance Shares, other Stock-Based
Awards and Benefits, and to receive Cash Awards.
2. DEFINITIONS.
For purposes of interpreting the Plan and related documents and Agreements (as
defined), the following definitions shall apply:
a. "Affiliates" means any corporation or other entity which is
affiliated with the Company through stock ownership or otherwise
and is treated as a common employer under the provisions of
Section 1114(b) and (c) of the Code.
b. "Agreement" means the document which evidences the grant of any
Benefit under the Plan and which sets forth the Benefit and the
terms, conditions and provisions of, and restrictions relating
to, such Benefit.
c. "Benefit" means any benefit granted to a Participant under the Plan.
d. "Board" means the Board of Directors of the Company.
e. "Cash Award" means a Benefit payable in the form of cash.
f. "Cause" means any of the following, as determined by the Company:
i. Willful dishonesty towards the Company, fraud upon the Company
or deliberate injury or intended injury to the Company;
ii. Conviction of a felony;
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iii. Willful participation in activities which constitute
unlawful activities, such as gender-based harassment;
iv. Conviction of a misdemeanor involving moral turpitude;
v. Gross negligence or willful misconduct in the performance of
duties;
vi. Continued abuse of alcohol or drugs on the job or otherwise
materially affecting job performance; or
vii. Failure to perform duties substantially in accordance with
instructions of relevant superiors and Company policies and
procedures.
g. A "Change in Control" shall be deemed to have taken place if:
i. any "person" or "group" (within the meaning of Sections 13(d)
and 14(d)(2) of the 1934 Act), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company becomes
the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of more than 33- 1/3% of the then outstanding
voting stock of the Company;
ii. at any time during any period of three consecutive years (not
including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board (and any new director whose
election by the Board or whose 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 such period or whose election or nomination for election was previously
so approved) cease for any reason to constitute a majority thereof; or
iii. 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) at least 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 the
stockholders 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.
h. "Code" means the Internal Revenue Code of 1986, as amended.
i. "Committee" means the committee appointed by the Board pursuant to
Section 3 hereof to administer the Plan.
j. "Company" means HS Resources, Inc., a Delaware corporation and its
Affiliates, if any.
k. "Effective Date" means April 11, 2000.
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l. "Fair Market Value" shall mean, with respect to Shares, the last
reported trade of such Shares on the New York Stock Exchange for
the date in question. If Fair Market Value is in reference to
property other than Shares, the Fair Market Value of such other
property shall be determined by such methods or procedures as
shall be established from time to time by the Committee.
m. "Fiscal Year" means the taxable year of the Company which is the
calendar year.
n. "Grant Date" means the date on which the Committee takes valid
action to grant a Benefit hereunder; provided, however, that the
Committee may expressly provide for a Grant Date other than the
date on which the Committee takes action, and further provided
that the Grant Date of an Option intended to qualify as an
Incentive Stock Option shall be not earlier than the first date
such grant may be given effect under the Code. The Grant Date of
Restricted Stock shall be the date determined under Section 9.1
below.
o. "Incentive Stock Option" or "ISO" means an Option designated as an
Incentive Stock Option and satisfying the requirements of
Section 422 of the Code.
p. "Non-Employee Director" means a director of the Company who meets
the definition of a "non-employee director" set forth in SEC
Rule 16b-3, as amended, or any successor rule and the definition
of outside director set forth in Treas. Reg.ss.1.162-27(e)(3).
q. "Non-Statutory Stock Option" or "NSO" means an Option other than an
ISO.
r. "Option" means an option to purchase one or more Shares pursuant to
this Plan.
s. "Optionee" means a Participant who receives an Option.
t. "Option Price" means the purchase price for each Share subject to an
Option.
u. "Other Stock-Based Award" means an award under Article 12 that is
valued in whole or in part by reference to, or is otherwise based
on, Shares.
v. "Participant" means any person who receives a Benefit under this
Plan.
w. "Performance Share" means a Share awarded to a Participant under
Article 10 of the Plan.
x. "Plan" means this HS Resources, Inc. 2000 Performance and Equity
Incentive Plan and all amendments and supplements thereto.
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y. "Plan Year" means each 12-month period during the term of the Plan
commencing the Effective Date or an anniversary thereof.
z. "Restricted Stock" means a Share which, at the time it is granted or
sold by the Company, is not transferable and is subject to a
substantial risk of forfeiture, within the meaning of Section 83
of the Code.
aa. "Rule 16b-3" means the rule promulgated by the SEC, as amended, or
any successor rule in effect from time to time.
bb. "SEC" means the Securities and Exchange Commission.
cc. "Share" means a share of Common Stock of the Company.
dd. "SAR" means a Stock Appreciation Right, which is the right to
receive an amount equal to the appreciation, if any, in the Fair
Market Value of a Share from the date of the grant of the right
to the date of its payment.
ee. "Ultimate Vesting Date" shall mean with respect to Performance
Shares the date nine years from the effective date of grant of a
Performance Share award.
3. ADMINISTRATION OF THE PLAN.
a. COMMITTEE. The Plan shall be administered by the Committee. The
Committee shall consist of not fewer than two members of the
Board to be appointed by the Board. The Board may from time to
time remove members or add members to the Committee. Vacancies
on the Committee, howsoever caused, shall be filled by the
Board. Any power, authority, or decision-making granted to the
Committee under this Plan may also be exercised by the Board.
The Committee shall hold meetings at such times and places as it
shall determine. Two members of the Committee shall constitute a
quorum and acts of the Committee at a meeting at which a quorum
is present, or acts approved in writing by all the members of
the Committee shall be the valid acts of the Committee.
b. PARTICIPANTS. The Committee may from time to time determine which
salaried employees or directors of the Company shall be granted
Benefits under the Plan, the terms and conditions thereof,
including without limitation the purchase price, if any, of
Restricted Stock and the exercise price of Options, and the
number of Shares which shall be granted. The Committee shall
report to the Board the names of Participants, the number of
Shares and the terms and conditions of Benefits granted under
this Plan.
c. RULES AND REGULATIONS. The Committee is authorized to establish such
rules and regulations consistent with provisions of the Plan as
it may deem appropriate for the proper administration of the
Plan, and to make such interpretations of and determinations
under the Plan, and to take such steps
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in connection with the Plan or the Benefits granted thereunder
as it may deem necessary or advisable. Except as may be provided
in an Agreement, any Benefit granted may be converted, modified,
forfeited or canceled, prospectively or retroactively, in whole
or in part, by the Committee in its sole discretion, but,
subject to Section 14.1, no such action may impair the rights of
any Participant without his or her consent, no such action shall
change the exercise price of any Benefit that has been
previously granted and cancellation and regrant shall not be
used as a method to reprice options. The Committee may, in its
sole discretion, but subject to the minimum restrictions,
conditions and vesting periods set forth herein, waive, in whole
or in part, any restrictions or conditions applicable to, or
accelerate the vesting of, any Benefit. No member of the
Committee shall be liable for any action or determination made
in good faith, and all members of the Committee shall, in
addition to their rights as directors, be fully protected by the
Company with respect to any such action, determination or
interpretation. The determination, interpretations and other
actions of the Committee pursuant to the provisions of the Plan
shall be final, binding and conclusive for all purposes and on
all persons.
d. RULE 16B-3 GRANTS. For Committee approval of any grant of a Benefit
to an officer or director of the Company, as defined in Rule
16b-3 or any successor rule, the Committee shall be composed
entirely of two or more Non-Employee Directors (or such
composition as is required by any successor rule); provided,
however, that if the Committee is not composed as such, the
Board shall have the right to take such action with respect to
any Benefit granted to an officer or director as it deems
necessary or advisable to comply with Rule 16b-3 and any related
rules, including but not limited to seeking shareholder
ratification of such Benefit or imposing a six-month period
prior to sale of the Award or any Shares underlying the Benefit.
e. DELEGATION. Except with respect to awards intended to qualify for
exemption under Section 162(m) of the Code, the Committee may
delegate to a separate committee composed of at least one member
of the Board the limited authority to grant Benefits to persons
other than officers or directors and establish the terms of such
Benefits at the time of the grant.
f. GRANT EVIDENCED BY AGREEMENT. The grant of any Benefit under the
Plan shall be evidenced by an Agreement which shall describe the
specific Benefit granted and the terms and conditions of the
Benefit. The granting of any Benefit shall be subject to, and
conditioned upon, the recipient's execution of any Agreement
required by the Committee. Except as otherwise provided in an
Agreement, all capitalized terms used in the Agreement shall
have the same meaning as in the Plan, and the Agreement shall be
subject to all of the terms of the Plan.
g. PROVISIONS OF AGREEMENT. Each Agreement shall contain such
provisions as the Committee shall determine in its sole
discretion to be necessary, desirable
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and appropriate for the Benefit granted which may include, but
not necessarily be limited to, the following: description of the
type of Benefit; the Benefit's duration; its transferability; if
an Option, the Option Price, and the person or persons who may
exercise the Option; the effect upon such Benefit of the
Participant's death, disability, retirement, change of duties or
termination of employment; the Benefit's conditions; subject to
the provisions of Section 14.1, when, if, and how any Benefit
may be forfeited, converted into another Benefit, modified,
exchanged for another Benefit, or replaced; and the restrictions
on any Shares purchased or granted under the Plan.
h. AMENDMENTS TO BENEFITS. The Committee may, subject to the minimum
restrictions, conditions and vesting periods set forth herein,
waive any conditions of or rights of the Company under any
outstanding Benefit, prospectively or retroactively. The
Committee may not, however, reprice options (or cancel and
regrant options in order to reprice) and, except as otherwise
provided herein, may not amend, alter, suspend, discontinue or
terminate any outstanding Benefit, prospectively or
retroactively, without the consent of the Participant or holder
or beneficiary thereof,
4. SHARES SUBJECT TO THE PLAN.
a. NUMBER OF SHARES. A combined total of 1,250,000 Shares and SARs for
this purpose are authorized for issuance under the Plan in
accordance with the provisions of the Plan and subject to such
restrictions or other provisions as the Compensation Committee
may from time to time deem necessary. The Shares may be divided
among the various Plan components as the Compensation Committee
shall determine. Shares which may be issued upon the exercise of
Options shall be applied to reduce the maximum number of Shares
remaining available for use under the Plan. The Company shall at
all times during the term of the Plan and while any Options are
outstanding retain as authorized and unissued Shares, or as
treasury Shares, at least the number of Shares from time to time
required under the provisions of the Plan, or otherwise assure
itself of its ability to perform its obligations hereunder.
b. UNUSED AND FORFEITED STOCK. Any Shares that are subject to an Award
under this Plan which are not used because the terms and
conditions of the Award are not met, including any Shares that
are subject to an Option which expires or is terminated for any
reason, shall become automatically available for use under the
Plan.
c. LIMIT ON AN INDIVIDUAL'S BENEFITS. In any given Fiscal Year, no
person eligible under the Plan for Grants may receive Benefits
covering or measured by more than 200,000 Shares (such number of
Shares to be adjusted in accordance with Section 4.5). No more
than $500,000 of Restricted Stock, Performance Shares or Other
Stock-Based Awards (excluding Options and SARs), valued at Fair
Market Value on the date of grant and not taking into account
the risk of forfeiture, may be granted to any Participant in any
Fiscal Year.
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d. LIMIT ON CERTAIN AWARDS. Subject to adjustment pursuant to
Section 4.5, the number of Shares of Restricted Stock or Other
Stock-Based Awards that may be granted pursuant to this Plan for
a purchase price of less than Fair Market Value shall not exceed
100,000 in the aggregate; and the number of Performance Shares
that may be granted pursuant to this Plan for a purchase price
of less than Fair Market Value shall not exceed 300,000 in the
aggregate, plus the number of shares of Restricted Stock
authorized to be issued hereunder that are not used for such
Restricted Stock awards.
e. ADJUSTMENTS. If there is any change in the Shares subject to the
Plan or the Shares subject to any Benefit through merger,
consolidation, reorganization, recapitalization,
reincorporation, stock split, stock dividend, or other change in
the corporate structure of the Company, appropriate
proportionate adjustments or new or substitute Benefits in a new
enterprise shall be made by the Committee in the aggregate
number of Shares subject to the Plan, the price, Fair Market
Value and number of Shares subject to outstanding Benefits in
order to preserve, but not to increase, the Benefits of the
Participant; provided that the number of Shares eligible for
issuance as ISOs may be increased only to reflect a change in
capitalization such as a stock dividend or stock split.
5. ELIGIBILITY.
Persons eligible under the Plan for grant of Benefits are all salaried employees
and directors of the Company. Members of the Board who are not employed as
regular salaried officers or employees of the Company may not receive Incentive
Stock Options.
6. ELECTIONS, PAYMENTS, DIVIDENDS, WITHHOLDING, AND BONUSES.
a. NOTICES. An Option or SAR that is exercisable hereunder may be
exercised by delivering to the Secretary of the Company on any
business day a written notice of exercise, which notice shall
specify the number of Shares with respect to which the Option or
SAR is being exercised, and shall, in the case of Options, be
accompanied by payment in full of the Option Price of the Shares
for which the Option is being exercised.
b. PAYMENTS. For any Benefit that requires a payment by a
Participant to the Company, the amount due the Company is to be
paid in cash, or, with the consent of the Committee:
i. by the tender to the Company of Shares owned by the
Participant and registered in his or her name having a Fair Market Value
equal to the amount due to the Company;
ii. by delivery to the Company of irrevocable instructions to a
broker to deliver to the Company promptly the amount of the proceeds of
the sale of all or a
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portion of the Shares or of a loan from the broker to the Option Holder
necessary to pay the exercise price;
iii. in other property, rights and credits deemed acceptable by the
Committee; or
iv. by any combination of the payment methods specified above.
c. DIVIDEND EQUIVALENTS. Grants of Benefits in Shares or Share
equivalents may include dividend or dividend equivalent payments
or dividend credit rights.
d. CODE SECTION 162(M). The Committee, in its sole discretion, may
require that one or more Agreements contain provisions which
provide that, in the event Section 162(m) of the Code, or any
successor provision relating to excessive employee remuneration,
would operate to disallow a deduction by the Company for all or
part of any Benefit under the Plan, a Participant's receipt of
the portion of such Benefit that would not be deductible by the
Company shall be deferred until the next succeeding year or
years in which the Participant's remuneration does not exceed
the limit set forth in such provision of the Code.
e. WITHHOLDING. The Company may, at the time any distribution is made
under the Plan, whether in cash or in Shares, or at the time any
Option is exercised, withhold from such distribution or Shares
issuable upon the exercise of an Option, any amount necessary to
satisfy federal, state and local withholding requirements with
respect to such distribution or exercise of such Option. Such
withholding may be satisfied, at the Company's option, either by
cash or the Company's withholding of Shares.
f. CASH BONUSES. The Committee, in its discretion, shall have the
authority to approve cash bonuses to designated Participants to
be paid upon their exercise or receipt of (or the lapse of
restrictions relating to) Benefits. The Committee shall have
full authority in its discretion to determine the amount of any
such bonus.
7. OPTIONS.
a. PRICE. The Option Price of the Shares covered by each Option shall
not be less than the Fair Market Value of such Shares on the
Grant Date; provided, however, that in the event the Participant
would otherwise be ineligible to receive an ISO by reason of the
provisions of Sections 422(b)(6) and 424(d) of the Code
(relating to stock ownership of more than 10 percent), the
Option Price of an Option that is intended to be an ISO shall be
not less than 110 percent of the Fair Market Value of a Share at
the time such Option is granted. Such prices shall be subject to
adjustment as provided in Section 4.5 hereof.
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b. TERM. The term of each Option shall be for no more than seven years;
provided, however, that in the event the Participant would
otherwise be ineligible to receive an ISO by reason of the
provisions of Section 422(b)(6) and 424(d) of the Code (relating
to stock ownership of more than 10 percent), an Option granted
to such Participant that is intended to be an ISO shall in no
event be exercisable after the expiration of five years from the
date it is granted.
c. VESTING. Subject to Sections 14.2 and 15, Options shall vest no more
rapidly than ratably over a period of four years from the date of
grant.
d. LIMITS ON ISOS. An Option intended to constitute an ISO (and so
designated at the time of grant) shall qualify as an ISO only to
the extent that the aggregate Fair Market Value (determined at
the time the Option is granted) of the Shares with respect to
which ISOs are exercisable for the first time by the Participant
during any calendar year (under the Plan and all other plans of
the Participant's employer and its parent and subsidiary
corporations within the meaning of Section 422(d) of the Code)
does not exceed $100,000, except as such restriction may be
amended under the Code. This limitation shall be applied by
taking Options into account in the order in which they were
granted.
e. AGREEMENT. The Stock Option Agreement may contain such other terms,
provisions, and conditions as may be determined by the Committee
(not inconsistent with this Plan) including, without limitation,
provisions relating to Stock Appreciation Rights with respect to
Options granted hereunder. If an Option, or any part thereof, is
intended by the Committee to qualify as an ISO, the Stock Option
Agreement shall contain those terms and conditions necessary to
so qualify said Option or such part thereof.
8. STOCK APPRECIATION RIGHTS.
a. GRANT AND PAYMENT. The Committee may grant SARs. Upon electing to
receive payment of an SAR, a Participant shall receive payment in
cash.
b. GRANT OF TANDEM AWARD. SARs may be granted in tandem with Options at
any time prior to exercise of the Option. If SARs are granted in
tandem with an Option, the exercise of the Option shall cause a
proportional reduction in SARs standing to a Participant's
credit which were granted in tandem with the Option; and the
payment of SARs shall cause a proportional reduction of the
Shares under such Option. If SARs are granted in tandem with an
ISO, the SARs shall have such terms and conditions as shall be
required for the ISO to qualify as an ISO.
c. PAYMENT OF BENEFIT. SARs shall be paid by the Company to a
Participant, to the extent payment is elected by the Participant
(and is otherwise due and payable), as soon as practicable after
the date on which such election is made.
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d. TERM. SARs shall be subject to the same term provisions as Options.
e. VESTING. Subject to Sections 14.2 and 15, SARs shall vest no more
rapidly than ratably over a period of four years from the date of
grant.
9. RESTRICTED STOCK.
a. GRANT. The Committee may approve the grant or sale of Restricted
Stock to any eligible person, as specified in Section 5. A grant
or sale of Restricted Stock shall be evidenced by a Restricted
Stock Agreement in such form as the Committee shall approve. The
Grant Date of Restricted Stock shall be (i) for purposes of
corporate law and establishing Fair Market Value, the date on
which the Committee acts to authorize the sale; and (ii) for
purposes of any election under Section 83(b) of the Code, the
date on which the Participant receives a beneficial ownership
interest in such Restricted Stock.
b. PRICE. The Committee shall determine the purchase price per Share
with respect to any sale of Restricted Stock, provided that the
Committee may grant or award Shares of Restricted Stock to a
Participant without requiring payment of cash consideration by
the Participant.
c. RESTRICTIONS. A Participant's right to retain a Restricted Stock
Award granted to him under Section 9.1 shall be subject to such
restrictions as may be established by the Committee with respect
to such award, but must include at least the continuous
employment by the recipient through the period of vesting. The
Committee may in its sole discretion require different periods
of employment or different performance goals and objectives with
respect to different Participants, to different Restricted Stock
Awards or to separate, designated portions of the Shares
constituting a Restricted Stock Award. The Participant is
entitled to voting rights with respect to Restricted Stock.
d. VESTING. Subject to Sections 14.2 and 15, the restrictions to which
a Restricted Stock award are subject shall terminate no sooner
than ratably over a period of four years from the date of grant.
e. CERTIFICATES. The Company shall not be required to issue a
certificate for Restricted Stock prior to the expiration of any
restrictions on the stock, provided the shares of restricted
stock are shown as issued restricted stock in the Company's (or
its transfer agent's) share transfer records. If a certificate
representing Restricted Stock is issued, it shall bear one or
more legends making appropriate reference to the restrictions
imposed on such stock.
10. PERFORMANCE SHARES.
a. GRANT. The Committee may grant awards of Performance Shares.
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b. DESCRIPTION. Performance Shares represent the right of a Participant
to receive Shares or cash equal to the Fair Market Value of such
Shares at a future date in accordance with the terms and
conditions of a grant.
c. AWARD PERIOD AND PERFORMANCE GOALS. The Committee shall determine
and include in a Performance Share award grant the period of
time for which a Performance Share award is made ("Award
Period"); provided that subject to Sections 14.2 and 15, awards
made at any time shall not vest more rapidly than ratably over a
four-year period provided further, however, that an award issued
at any time prior to the end of the second quarter of a Fiscal
Year shall be deemed outstanding for the entire Fiscal Year for
purposes of determining vesting. The Committee shall also
establish performance objectives ("Performance Goals") to be met
by the Company during the Award Period as a condition to payment
of the Performance Share award prior to the Ultimate Vesting
Date, such Performance Goals to be set forth in the grant of any
Performance Share award. The Performance Goals shall be designed
to reward the attainment of an appropriately balanced
combination of the following value measures:
i. At least a 15% compounded annual growth in operating cash flow
on a per-share basis measured over a period of time determined by the
Committee;
ii. At least a 15% annual rate of return on outstanding book
capital calculated using EBITDAX (earnings before interest, taxes,
depreciation, depletion and amortization, exploratory and abandonment,
and geological and geophysical costs) over the weighted average
outstanding book capital, measured on a fiscal year basis; and
iii. At least a 15% compounded annual growth in underlying net
asset value on a per-share basis measured over a period of time
determined by the Committee, using the pre-tax discounted present value
at 10% of the Company's proved reserves (valued using estimated future
product prices and costs) plus the estimated market value of all other
assets, less outstanding debt, excluding deferred taxes.
The Committee shall have broad discretion to determine the interpretation,
calculation, balance and satisfaction of such measures. Performance Shares that
are not paid on account of satisfaction of the applicable Performance Goals
shall, subject to the time in service requirement in Section 10.5, be paid
following the Ultimate Vesting Date.
d. PAYMENT OF PERFORMANCE SHARE AWARDS. The Committee shall establish
the method of calculating the amount of payment to be made under
a Performance Share award if the Performance Goals are met. The
Performance Share award shall be expressed in terms of Shares
and shall be referred to as "Performance Shares." After the
completion of an Award Period, the performance of the Company
shall be measured against the Performance Goals, and the
Committee shall determine whether all, none or any portion of a
Performance
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Share award shall be paid. The Committee, in its discretion, may
elect to make payment in Shares, cash or a combination of Shares
and cash. Any cash payment shall be based on the Fair Market
Value of Performance Shares on, or as soon as practicable prior
to, the date of payment.
e. REQUIREMENT OF EMPLOYMENT. A grantee of a Performance Share award
must remain in the employment of the Company until the
completion of the Award Period in order to be entitled to
payment under the Performance Share award prior to the Ultimate
Vesting Date, provided that the Committee may, in its sole
discretion, provide for a partial payment where such an
exception is deemed equitable. Subject to Sections 14.2 and 15,
a grantee of a Performance Share award must remain in the
employment of the Company until the Ultimate Vesting Date in
order to be entitled to payment under a Performance Share award
that has not vested earlier through satisfaction of the
Performance Goals.
f. CERTIFICATION. The Committee shall certify in writing prior to
payment of the compensation that the Performance Goals and any
other material terms were satisfied. For this purpose, approved
minutes of the Committee meeting in which the certification is
made shall be treated as written certification.
11. CASH PERFORMANCE AWARDS.
a. GRANT. The Committee may grant Cash Awards. Such awards shall be
based on achievement of Performance Goals in the same manner as
Performance Shares as provided in Sections 10.3 through 10.6.
b. LIMITATION. The amount of any Cash Award paid in any Fiscal Year to
any Participant shall not exceed $500,000 paid in such Fiscal
Year.
12. OTHER STOCK-BASED PERFORMANCE AWARDS.
a. OTHER STOCK-BASED AWARDS. The Committee shall have the right to
grant Other Stock-Based Awards. Such awards shall be based on
achievement of Performance Goals in the same manner as
Performance Shares as provided in Sections 10.3 through 10.6 and
subject to Sections 14.2 and 15, shall vest no sooner than
ratably over four years.
b. OTHER BENEFITS. The Committee shall have the right to grant other
types of Benefits under the Plan in addition to those
specifically listed, if the Committee believes that such
Benefits would further the purposes for which the Plan has been
established.
c. TANDEM AWARDS. Benefits may be granted by the Committee in its sole
discretion individually or in tandem; provided, however, that no
Benefit except SARs may be granted in tandem with an ISO.
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13. TRANSFERABILITY.
Each ISO granted pursuant to this Plan shall, during Participant's lifetime, be
exercisable only by the Participant, and neither the ISO nor any right
thereunder (including any SAR) shall be transferable by Participant by operation
of law or otherwise other than by beneficiary designation, will or the laws of
descent and distribution, and shall not be pledged or hypothecated (by operation
of law or otherwise) or subject to execution, attachment or similar processes.
Upon the prior written consent of the Committee in its sole, unfettered
discretion and subject to any conditions associated with such consent, an NSO or
any other Benefit hereunder (including any SAR) may be assigned in whole or in
part during the Participant's lifetime to one or more members of the
Participants' immediate family, to a trust established exclusively for one or
more such family members or pursuant to a qualified domestic relation order as
defined by Title I of the Employee Retirement Income Security Act. The terms
applicable to the assigned portion shall be the same as those in effect
immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Committee may deem appropriate. A Participant's
rights in Restricted Stock are nontransferable except by the laws of descent and
distribution until the restriction lapses as it applies to the Restricted Stock
held by the Participant.
14. TERMINATION OF SERVICE.
a. OPTIONS AND SARS. The following provisions shall govern the exercise
of any Options or SARs held by any employee of the Company whose
employment is terminated:
i. If the Employee's employment with the Company is terminated
for Cause, the Options or SARs held by the Employee shall be
exercisable, to the extent that such Options or SARs were exercisable on
the date the Employee's employment terminated, for a period of thirty
(30) days following such termination of employment; provided, however,
if the termination includes any matter described in Section 2.6(a) of
the definition of Cause herein, at the option of the Committee (in the
case of Options or SARs held by an officer or director) or the Chief
Executive Officer (in any other case) the Options or SARs held by the
Employee may terminate immediately upon the termination of the
Employee's employment with the Company or at any subsequent time.
ii. If the Employee's employment with the Company is terminated
for any reason other than Cause or such Employee's death, disability, or
(in the case of Benefits other than ISOs) retirement, all Options or
SARs held by the Employee shall be exercisable, to the extent that such
Options were exercisable on the date the Employee's employment
terminated, for a period of three (3) months following such termination
of employment, or in the case of SARs or Options other than ISOs, such
longer period as the Committee may determine in its sole discretion.
iii. If the Employee's employment with the Company is terminated
because of such Employee's death or disability within the meaning of
Section 22(e)(3) of the Code or, in the case of Benefits other than ISOs,
retirement as defined in the
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<PAGE>
Company's 401(k) Retirement Plan (or successor plan), all Options or
SARs held by the Employee shall become immediately exercisable and shall
be exercisable for a period of twelve (12) months following such
termination of employment.
iv. In no event may any Option or SAR remain exercisable after the
expiration of the term of the Option or SAR. Upon the expiration of any
thirty (30) day or three (3) or twelve (12) month exercise period, as
applicable, or, if earlier, upon the expiration of the term of the Option,
the Option shall terminate and shall cease to be outstanding for any
Shares for which the Option has not been exercised.
b. RESTRICTED STOCK; PERFORMANCE SHARES. In the event of the death or
disability (within the meaning of Section 22(e) of the Code) of
a Participant, or the retirement of the Participant as defined
in the Company's 401(k) Plan (or successor plan) all employment
periods and other restrictions applicable to Restricted Stock,
Performance Shares or other Benefits then held by such
Participant shall lapse, and such awards shall become fully
nonforfeitable. In the event of a Participant's termination of
employment for any other reason, any Restricted Stock,
Performance Shares or other Benefits as to which the employment
period or other restrictions have not been satisfied shall be
forfeited.
15. CHANGE IN CONTROL.
In the event of a Change in Control of the Company, the contingencies with
respect to Options, SARs and Restricted Stock all outstanding under the Plan as
of the day before the consummation of such Change in Control shall automatically
accelerate for all purposes under this Plan so that each Option or SAR shall
become fully exercisable with respect to the total number of Shares subject to
such Option or SAR as of such date, without regard to the conditions expressed
in the agreements relating to such Option or SAR, and the restrictions on each
Share of Restricted Stock shall lapse and such Shares of Restricted Stock shall
no longer be subject to forfeiture. Performance Goals or other contingencies
with respect to other Benefits shall similarly lapse or be deemed satisfied in
the event of a Change in Control of the Company.
16. TERM, AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN.
a. TERM. The Plan shall commence on the Effective Date, and remain in
effect for ten years from such date. The Committee may deem it
advisable to seek shareholder approval of the Plan during the
first year and again prior to the end of the fifth year
following the Effective Date in order to comply with certain
provisions of Treasury Regulations issued under Section 162(m)
of the Code.
b. SUPERVISION, ETC. The Board may at any time suspend or terminate the
Plan, and may amend it from time to time in such respects as the
Board may deem advisable; provided, however, except as provided
in Section 3.2 hereof, the
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Board shall not amend the Plan in the following respects without
the consent of stockholders then sufficient to approve the Plan
in the first instance:
i. To increase the numerical limitations on number of Shares
issued under the Plan, number of Shares issued to individuals, number of
Shares of issued Restricted Stock or Performance Stock that may be
issued, or to increase the limit on Cash Awards to individuals;
ii. To change the designation or class of persons eligible to
receive Benefits under the Plan.
c. SUSPENSION OR TERMINATION OF PLAN. No Benefit may be granted during
any suspension or after the termination of the Plan, and no
amendment, suspension or termination of the Plan shall, without
the Participant's consent, impair any Participant's rights or
obligations under any Benefit granted under the Plan; provided,
however, that all Participants shall receive the benefits of any
amendments which are made to the Plan.
17. INVESTMENT PURPOSE.
At the time of delivery of any Shares, the Committee may, if it shall deem it
necessary or desirable for any reason connected with any securities law or
regulation, require, as a condition to the issuance of any Shares to
Participant, that Participant represent in writing to the Company that it is
Participant's intention to acquire the Shares for investment and not with a view
to the distribution thereof or that the Participant agree to any other
appropriate restriction on transfer of the Shares. In the event such a
representation is required and made, no Shares shall be issued unless and until
the Company is satisfied with the correctness of such representation and, in
such event, the Committee may require that a legend be placed on the
certificates evidencing any Shares to be issued which legend shall disclose the
existence of an investment representation and such further restrictions on
transfer as may be imposed to comply with applicable laws as the Committee may
deem appropriate to protect the interest of the Company.
18. MISCELLANEOUS.
a. UNFUNDED STATUS OF THE PLAN. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With
respect to any payments or deliveries of Shares not yet made to
a Participant by the Company, nothing contained herein shall
give any rights that are greater than those of a general
creditor of the Company. The Committee may authorize the
creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Shares or payments hereunder
consistent with the foregoing.
b. RULE 16B-3. With respect to Participants subject to Section 16 of
the Exchange Act, transactions under this Plan are intended to
comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act.
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To the extent any provision of the Plan or action by the Plan
administrators fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the
Committee.
c. NUMBER AND GENDER. The masculine, feminine and neuter, wherever used
in the Plan or in any Agreement, shall refer to either the
masculine, feminine or neuter; and, unless the context otherwise
requires, the singular shall include the plural and the plural
the singular.
d. NO EFFECT ON OTHER BENEFITS. The receipt of Benefits under the Plan
shall have no effect on any benefits to which a Participant may
be entitled from the Employer, under another plan or otherwise,
or preclude a Participant from receiving or the Company from
granting any such benefits.
e. GOVERNING LAW. The validity, interpretation and effect of this Plan,
and the rights of all persons hereunder, shall be governed by
and determined in accordance with the laws of the state of
Delaware.
f. NO EMPLOYMENT RIGHT. The grant of any Benefit to any Participant
under this Plan shall not give such Participant any right to be
retained in the employ or service of the Company, and the right
and power of the Company to discharge any such person shall not
be affected by such grant.
g. NO SHAREHOLDER RIGHTS. No Participant nor any person entitled to
exercise an Option under this Plan shall have any of the rights
of a shareholder with respect to the Shares subject to an Option
except to the extent Stock Certificates have been issued.
h. NO RIGHTS TO UNGRANTED BENEFITS. No person shall have any right or
claim whatever, directly, indirectly, or by implication, to
receive a Benefit, nor any expectancy thereof, unless and until
the same shall have been granted to such person by the Committee
as provided herein. The grant of a Benefit shall not create any
right or implication that any other or further Benefit may or
shall be granted at another time. Each Benefit hereunder shall
be separate and distinct from every other grant of a Benefit,
and shall not be considered part of any continuing series of
such grants. Grants may be made inconsistently or not at all
among eligible Participants.
END OF PLAN
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