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EXHIBIT 4(c)
THE 1999 EQUITY PARTICIPATION PLAN
OF
LIBBEY INC.
Libbey Inc., a Delaware corporation, has adopted The 1999
Equity Participation Plan of Libbey Inc. (the "Plan"), effective May 6, 1999,
for the benefit of its eligible employees.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for key Employees (as
such terms are defined below) to further the growth, development and financial
success of the Company by personally benefiting through the ownership of Company
stock and/or rights which recognize such growth, development and financial
success.
(2) To enable the Company to obtain and retain the services of
key Employees considered essential to the long range success of the Company by
offering them an opportunity to own stock in the Company and/or rights which
will reflect the growth, development and financial success of the Company.
ARTICLE I.
DEFINITIONS
1.1. General. Wherever the following terms are used in
the Plan they shall have the meanings specified below, unless the context
clearly indicates otherwise.
1.2. Administrator. "Administrator" shall mean the
Committee unless the Board has assumed the authority for administration of the
Plan generally as provided in Section 10.1.
1.3. Award. "Award" shall mean an Option, a Restricted
Stock award, a Performance Award, a Dividend Equivalents award, a Deferred Stock
award, a Stock Payment award or a Stock Appreciation Right which may be awarded
or granted under the Plan (collectively, "Awards").
1.4. Award Agreement. "Award Agreement" shall mean a
written agreement executed by an authorized officer of the Company and the
Holder which shall contain such terms and conditions with respect to an Award as
the Administrator shall determine, consistent with the Plan.
1.5. Award Limit. "Award Limit" shall mean Seventy-Five
Thousand (75,000) shares of Common Stock, as adjusted pursuant to Section 11.3
of the Plan.
1.6. Board. "Board" shall mean the Board of Directors of
the Company.
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1.7. Change in Control.
(a) any Person (as defined below) is or becomes the Beneficial
Owner (as defined below), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities. For purposes of this Agreement, (A) the
term "Person" is used as such term is used in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that the term shall not include the Company,
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, and any corporation owned, directly or indirectly, by the
shareholders of the Company, in substantially the same proportions as their
ownership of stock of the Company, and (B) the term "Beneficial Owner" shall
have the meaning given to such term in Rule 13d-3 under the Exchange Act; and
provided, further, that this subsection (a) shall not apply to any Person who is
a the Beneficial Owner, directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities as of the effective date of this Plan so
long as such Person does not beneficially own, or increase such beneficial
ownership to twenty five percent (25%) or more of the combined voting power of
the Company's then outstanding securities;
(b) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in Sections 2(a), (c) or (d))
whose election by the Board or nomination for election by the Company's
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of the
period or whose election or nomination for election was previously so approved
(hereinafter referred to as "Continuing Directors"), cease for any reason to
constitute at least a majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 662/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation;
(d) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets; or
(e) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing ten percent (10%) or more
of the combined voting power of the Company's then outstanding securities (a
"10% Owner") and (A) the identity of the Chief Executive Officer of the Company
is changed during the period beginning sixty (60) days before the attainment of
the ten percent (10%) beneficial ownership and ending two (2) years thereafter,
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or (B) individuals constituting at least one-third (1/3) of the members of the
Board at the beginning of such period shall cease for any reason to serve on the
Board during the period beginning sixty (60) days before the attainment of the
ten percent (10%) beneficial ownership and ending two (2) years thereafter;
provided, however, that this subsection (e) shall not apply to any Person who is
a 10% Owner as of the effective date of this Plan so long as such Person does
not increase such beneficial ownership by five percent (5%) or more over the
percentage so owned by such Person as of the effective date of the Plan.
1.8. Code. "Code" shall mean the Internal Revenue Code of
1986, as amended.
1.9. Committee. "Committee" shall mean the Compensation
Committee of the Board, or another committee or subcommittee of the Board,
appointed as provided in Section 10.1.
1.10. Common Stock. "Common Stock" shall mean the common
stock of the Company, par value $.01 per share, and any equity security of the
Company issued or authorized to be issued in the future, but excluding any
preferred stock and any warrants, options or other rights to purchase Common
Stock.
1.11. Company. "Company" shall mean Libbey Inc., a
Delaware corporation.
1.12. Deferred Stock. "Deferred Stock" shall mean Common
Stock awarded under Article VIII of the Plan.
1.13. Dividend Equivalent. "Dividend Equivalent" shall
mean a right to receive the equivalent value (in cash or Common Stock) of
dividends paid on Common Stock, awarded under Article VIII of the Plan.
1.14. DRO. "DRO" shall mean a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended, or the rules thereunder.
1.15. Employee. "Employee" shall mean any officer or other
employee (as defined in accordance with Section 3401(c) of the Code) of the
Company, or of any corporation which is a Subsidiary.
1.16. Exchange Act. "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.17. Fair Market Value. "Fair Market Value" of a share of
Common Stock as of a given date shall be (a) the closing price of a share of
Common Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange
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but is quoted on NASDAQ or a successor quotation system, the mean between the
closing representative bid and asked prices for the Common Stock on the trading
day previous to such date as reported by NASDAQ or such successor quotation
system; or (c) if Common Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the Fair Market Value of a
share of Common Stock as established by the Administrator acting in good faith.
1.18. Holder. "Holder" shall mean a person who has been
granted or awarded an Award.
1.19. Incentive Stock Option. "Incentive Stock Option"
shall mean an option which conforms to the applicable provisions of Section 422
of the Code and which is designated as an Incentive Stock Option by the
Administrator.
1.20. Non-Qualified Stock Option. "Non-Qualified Stock
Option" shall mean an Option which is not designated as an Incentive Stock
Option by the Administrator.
1.21. Option. "Option" shall mean a stock option granted
under Article IV of the Plan. An Option granted under the Plan shall, as
determined by the Administrator, be either a Non-Qualified Stock Option or
an Incentive Stock Option.
1.22. Performance Award. "Performance Award" shall mean a
cash bonus, stock bonus or other performance or incentive award that is paid in
cash, Common Stock or a combination of both, awarded under Article VIII of the
Plan.
1.23. Performance Criteria. "Performance Criteria" shall
mean the following business criteria with respect to the Company, any Subsidiary
or any division or operating unit: (a) net income, (b) pre-tax income, (c)
operating income, (d) cash flow, (e) earnings per share, (f) return on equity,
(g) return on invested capital or assets, (h) cost reductions or savings, (i)
funds from operations, (j) appreciation in the fair market value of Common
Stock, (k) earnings before any one or more of the following items: interest,
taxes, depreciation or amortization, (l) performance against operating budget
goals, and (m) Economic Value Added.
1.24. Plan. "Plan" shall mean The 1999 Equity
Participation Plan of Libbey Inc.
1.25. Restricted Stock. "Restricted Stock" shall mean
Common Stock awarded under Article VII of the Plan.
1.26. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule
16b-3 under the Exchange Act, as such Rule may be amended from time to time.
1.27. Section 162(m) Participant. "Section 162(m)
Participant" shall mean any key Employee designated by the Administrator as a
key Employee whose compensation for the fiscal year in which the key Employee is
so designated or a future fiscal year may be subject to the limit on deductible
compensation imposed by Section 162(m) of the Code.
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1.28. Securities Act. "Securities Act" shall mean the
Securities Act of 1933, as amended.
1.29. Stock Appreciation Right. "Stock Appreciation Right"
shall mean a stock appreciation right granted under Article IX of the Plan.
1.30. Stock Payment. "Stock Payment" shall mean (a) a
payment in the form of shares of Common Stock, or (b) an option or other right
to purchase shares of Common Stock, as part of a deferred compensation
arrangement, made in lieu of all or any portion of the compensation, including
without limitation, salary, bonuses and commissions, that would otherwise become
payable to a key Employee in cash, awarded under Article VIII of the Plan.
1.31. Subsidiary. "Subsidiary" shall mean any corporation
in an unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
1.32. Substitute Award. "Substitute Award" shall mean an
Option granted under this Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no
event shall the term "Substitute Award" be construed to refer to an award made
in connection with the cancellation and repricing of an Option.
1.33. Termination of Employment. "Termination of
Employment" shall mean the time when the employee-employer relationship between
a Holder and the Company or any Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, disability or retirement; but excluding (a)
terminations where there is a simultaneous reemployment or continuing employment
of a Holder by the Company or any Subsidiary, (b) at the discretion of the
Administrator, terminations which result in a temporary severance of the
employee-employer relationship, and (c) at the discretion of the Administrator,
terminations which are followed by the simultaneous establishment of a
consulting relationship by the Company or a Subsidiary with the former employee.
The Administrator, in its absolute discretion, shall determine the effect of all
matters and questions relating to Termination of Employment, including, but not
by way of limitation, the question of whether a Termination of Employment
resulted from a discharge for good cause, and all questions of whether a
particular leave of absence constitutes a Termination of Employment; provided,
however, that, with respect to Incentive Stock Options, unless otherwise
determined by the Administrator in its discretion, a leave of absence, change in
status from an employee to an independent contractor or other change in the
employee-employer relationship shall constitute a Termination of Employment if,
and to the extent that, such leave of absence, change in status or other change
interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under said Section.
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ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. Shares Subject to Plan.
(a) The shares of stock subject to Awards shall be
Common Stock, initially shares of the Company's Common Stock, par value
$.01 per share. The aggregate number of such shares which may be issued
upon exercise of such Options or rights or upon any such awards under
the Plan shall not exceed One Million (1,000,000), of which no more
than One Hundred Thousand (100,000) shares may be issued as Restricted
Stock, Performance Awards or Deferred Stock or any combination thereof.
The shares of Common Stock issuable upon exercise of such Options or
rights or upon any such awards may be either previously authorized but
unissued shares or treasury shares.
(b) The maximum number of shares which may be subject
to Awards, granted under the Plan to any individual in any calendar
year shall not exceed the Award Limit. To the extent required by
Section 162(m) of the Code, shares subject to Options which are
canceled continue to be counted against the Award Limit.
2.2. Add-back of Options and Other Rights. If any Option, or
other right to acquire shares of Common Stock under any other Award under the
Plan, expires or is canceled without having been fully exercised, or is
exercised in whole or in part for cash as permitted by the Plan, the number of
shares subject to such Option or other right but as to which such Option or
other right was not exercised prior to its expiration, cancellation or exercise
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Furthermore, any shares subject to Awards which are adjusted
pursuant to Section 11.3 and become exercisable with respect to shares of stock
of another corporation shall be considered canceled and may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1. Shares
of Common Stock which are delivered by the Holder or withheld by the Company
upon the exercise of any Award under the Plan, in payment of the exercise price
thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. If any shares of
Restricted Stock are surrendered by the Holder or repurchased by the Company
pursuant to Section 7.4 or 7.5 hereof, such shares may again be optioned,
granted or awarded hereunder, subject to the limitations of Section 2.1.
Notwithstanding the provisions of this Section 2.2, no shares of Common Stock
may again be optioned, granted or awarded if such action would cause an
Incentive Stock Option to fail to qualify as an incentive stock option under
Section 422 of the Code.
ARTICLE III.
GRANTING OF AWARDS
3.1. Award Agreement. Each Award shall be evidenced by an
Award Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based
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compensation as described in Section 162(m)(4)(C) of the Code shall contain
such terms and conditions as may be necessary to meet the applicable provisions
of Section 162(m) of the Code. Award Agreements evidencing Incentive Stock
Options shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code.
3.2. Provisions Applicable to Section 162(m) Participants.
(a) The Committee, in its discretion, may determine
whether an Award is to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code.
(b) Notwithstanding anything in the Plan to the
contrary, the Committee may grant any Award to a Section 162(m)
Participant, including Restricted Stock the restrictions with respect
to which lapse upon the attainment of performance goals which are
related to one or more of the Performance Criteria and any performance
or incentive award described in Article VIII that vests or becomes
exercisable or payable upon the attainment of performance goals which
are related to one or more of the Performance Criteria.
(c) To the extent necessary to comply with the
performance-based compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles VII and VIII
which may be granted to one or more Section 162(m) Participants, no
later than ninety (90) days following the commencement of any fiscal
year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section
162(m) of the Code), the Committee shall, in writing, (i) designate one
or more Section 162(m) Participants, (ii) select the Performance
Criteria applicable to the fiscal year or other designated fiscal
period or period of service, (iii) establish the various performance
targets, in terms of an objective formula or standard, and amounts of
such Awards, as applicable, which may be earned for such fiscal year or
other designated fiscal period or period of service and (iv) specify
the relationship between Performance Criteria and the performance
targets and the amounts of such Awards, as applicable, to be earned by
each Section 162(m) Participant for such fiscal year or other
designated fiscal period or period of service. Following the completion
of each fiscal year or other designated fiscal period or period of
service, the Committee shall certify in writing whether the applicable
performance targets have been achieved for such fiscal year or other
designated fiscal period or period of service. In determining the
amount earned by a Section 162(m) Participant, the Committee shall have
the right to reduce (but not to increase) the amount payable at a given
level of performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or
corporate performance for the fiscal year or other designated fiscal
period or period of service.
(d) Furthermore, notwithstanding any other provision
of the Plan or any Award which is granted to a Section 162(m)
Participant and is intended to qualify as performance-based
compensation as described in Section 162(m)(4)(C) of the Code shall
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be subject to any additional limitations set forth in Section 162(m) of
the Code (including any amendment to Section 162(m) of the Code) or any
regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the
extent necessary to conform to such requirements.
3.3. Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan, the Plan, and any Award granted
or awarded to any individual who is then subject to Section 16 of the Exchange
Act, shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, the Plan and
Awards granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.
3.3. Consideration. In consideration of the granting of an
Award under the Plan, the Holder shall agree, in the Award Agreement, to remain
in the employ of (or, as applicable, to consult for) the Company or any
Subsidiary for a period of at least one year (or such shorter period as may be
fixed in the Award Agreement or by action of the Administrator following grant
of the Award) after the Award is granted.
3.4. At-Will Employment. Nothing in the Plan or in any Award
Agreement hereunder shall confer upon any Holder any right to continue in the
employ of the Company or any Subsidiary, or shall interfere with or restrict in
any way the rights of the Company and any Subsidiary, which are hereby expressly
reserved, to discharge any Holder at any time for any reason whatsoever, with or
without cause, except to the extent expressly provided otherwise in a written
employment agreement between the Holder and the Company and any Subsidiary.
ARTICLE IV.
GRANTING OF OPTIONS
4.1. Eligibility. Any Employee selected by the Committee
pursuant to Section 4.4(a)(i) shall be eligible to be granted an Option.
4.2. Disqualification for Stock Ownership. No person may be
granted an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
4.3. Qualification of Incentive Stock Options. No
Incentive Stock Option shall be granted to any person who is not an Employee.
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4.4. Granting of Options.
(a) The Committee shall from time to time, in
its absolute discretion, and subject to applicable limitations of the
Plan:
(i) Determine which Employees are key
Employees and select from among them (including Employees who
have previously received Awards under the Plan) as in its
opinion should be granted Options;
(ii) Subject to the Award Limit,
determine the number of shares to be subject to such Options
granted to the selected key Employees;
(iii) Subject to Section 4.3, determine
whether such Options are to be Incentive Stock Options or
Non-Qualified Stock Options and whether such Options are to
qualify as performance-based compensation as described in
Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of
such Options, consistent with the Plan; provided, however,
that the terms and conditions of Options intended to qualify
as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall include, but not be limited to,
such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.
(b) Upon the selection of a key Employee to be
granted an Option, the Committee shall instruct the Secretary of the
Company to issue the Option and may impose such conditions on the grant
of the Option as it deems appropriate.
(c) Any Incentive Stock Option granted under the Plan
may be modified by the Committee, with the consent of the Holder, to
disqualify such Option from treatment as an "incentive stock option"
under Section 422 of the Code.
4.6. Options in Lieu of Cash Compensation. Options may be
granted under the Plan to Employees in lieu of cash bonuses which would
otherwise be payable to such Employees, pursuant to such policies which may be
adopted by the Administrator from time to time.
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ARTICLE V.
TERMS OF OPTIONS
5.1. Option Price. The price per share of the shares subject
to each Option shall not be less than 100% of the Fair Market Value of a share
of Common Stock on the date the Option is granted and in the case of Incentive
Stock Options granted to an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary or parent corporation
thereof (within the meaning of Section 422 of the Code), such price shall not be
less than 110% of the Fair Market Value of a share of Common Stock on the date
the Option is granted (or the date the Option is modified, extended or renewed
for purposes of Section 424(h) of the Code).
5.2. Option Term. The maximum term of each Non-Qualified Stock
Option shall be ten (10) years and one (1) day from the date the Non-Qualified
Stock Option is granted. The maximum term of each Incentive Stock Option shall
be ten (10) years from the date the Incentive Stock Option is granted, or five
(5) years from the date the Incentive Stock Option is granted if the Incentive
Stock Option is granted to an individual then owning (within the meaning of
Section 424(d) of the Code) more than 10% of the total combined voting power of
all classes of stock of the Company or any Subsidiary or parent corporation
thereof (within the meaning of Section 422 of the Code). Except as limited by
requirements of Section 422 of the Code and regulations and rulings thereunder
applicable to Incentive Stock Options, the Committee may extend the term of any
outstanding Option in connection with any Termination of Employment of the
Holder, or amend any other term or condition of such Option relating to such a
termination.
5.3. Option Vesting
(a) The period during which the right to exercise, in
whole or in part, an Option granted to an Employee vests in the Holder
shall be set by the Committee and the Committee may determine that an
Option may not be exercised in whole or in part for a specified period
after it is granted; provided, however, that, unless the Committee
otherwise provides in the terms of the Award Agreement or otherwise, no
Option shall be exercisable by any Holder who is then subject to
Section 16 of the Exchange Act within the period ending six months and
one day after the date the Option is granted. At any time after grant
of an Option, the Committee may, in its sole and absolute discretion
and subject to whatever terms and conditions it selects, accelerate the
period during which an Option granted to an Employee vests.
(b) No portion of an Option which is unexercisable at
Termination of Employment shall thereafter become exercisable, except
as may be otherwise provided by the Committee either in the Award
Agreement or by action of the Committee following the grant of the
Option.
(c) To the extent that the aggregate Fair Market
Value of stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code, but without regard to Section
422(d) of the Code) are exercisable for the first time by a Holder
during any calendar year (under the Plan and all other incentive stock
option plans of the Company and any parent or subsidiary corporation,
within the meaning of
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Section 422 of the Code) of the Company, exceeds $100,000, such Options
shall be treated as Non-Qualified Options to the extent required by
Section 422 of the Code. The rule set forth in the preceding sentence
shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 5.3(c), the Fair Market
Value of stock shall be determined as of the time the Option with
respect to such stock is granted.
5.5. Substitute Awards.
Notwithstanding the foregoing provisions of this Article V to
the contrary, in the case of an Option that is a Substitute Award, the price per
share of the shares subject to such Option may be less than the Fair Market
Value per share on the date of grant, provided, that the excess of:
(a) the aggregate Fair Market Value (as of the date
such Substitute Award is granted) of the shares subject to the
Substitute Award; over
(b) the aggregate exercise price thereof; does not
exceed the excess of;
(c) the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute
Award, such fair market value to be determined by the Committee) of the
shares of the predecessor entity that were subject to the grant assumed
or substituted for by the Company; over
(d) the aggregate exercise price of such shares.
ARTICLE VI.
EXERCISE OF OPTIONS
6.1. Partial Exercise. An exercisable Option may be
exercised in whole or in part. However, an Option shall not be exercisable with
respect to fractional shares and the Administrator may require that, by the
terms of the Option, a partial exercise be with respect to a minimum number of
shares.
6.2. Manner of Exercise. All or a portion of an
exercisable Option shall be deemed exercised upon delivery of all of the
following to the Secretary of the Company or his office:
(a) A written notice complying with the applicable
rules established by the Administrator stating that the Option, or a
portion thereof, is exercised. The notice shall be signed by the Holder
or other person then entitled to exercise the Option or such portion of
the Option;
(b) Such representations and documents as the
Administrator, in its absolute discretion, deems necessary or advisable
to effect compliance with all applicable
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provisions of the Securities Act and any other federal or state
securities laws or regulations. The Administrator may, in its absolute
discretion, also take whatever additional actions it deems appropriate
to effect such compliance including, without limitation, placing
legends on share certificates and issuing stop-transfer notices to
agents and registrars;
(c) In the event that the Option shall be exercised
pursuant to Section 11.1 by any person or persons other than the
Holder, appropriate proof of the right of such person or persons to
exercise the Option; and
(d) Full cash payment to the Secretary of the Company
for the shares with respect to which the Option, or portion thereof, is
exercised. However, the Administrator, may in its discretion (i) allow
a delay in payment up to thirty (30) days from the date the Option, or
portion thereof, is exercised; (ii) allow payment, in whole or in part,
through the delivery of shares of Common Stock which have been owned by
the Holder for at least six months, duly endorsed for transfer to the
Company with a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof;
(iii) allow payment, in whole or in part, through the surrender of
shares of Common Stock then issuable upon exercise of the Option having
a Fair Market Value on the date of Option exercise equal to the
aggregate exercise price of the Option or exercised portion thereof;
(iv) allow payment, in whole or in part, through the delivery of
property of any kind which constitutes good and valuable consideration;
(v) allow payment, in whole or in part, through the delivery of a full
recourse promissory note bearing interest (at no less than such rate as
shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Administrator; (vi)
allow payment, in whole or in part, through the delivery of a notice
that the Holder has placed a market sell order with a broker with
respect to shares of Common Stock then issuable upon exercise of the
Option, and that the broker has been directed to pay a sufficient
portion of the net proceeds of the sale to the Company in satisfaction
of the Option exercise price, provided that payment of such proceeds is
then made to the Company upon settlement of such sale; or (vii) allow
payment through any combination of the consideration provided in the
foregoing subparagraphs (ii), (iii), (iv), (v) and (vi). In the case of
a promissory note, the Administrator may also prescribe the form of
such note and the security to be given for such note. The Option may
not be exercised, however, by delivery of a promissory note or by a
loan from the Company when or where such loan or other extension of
credit is prohibited by law.
6.3. Conditions to Issuance of Stock Certificates. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all
stock exchanges on which such class of stock is then listed;
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(b) The completion of any registration or other
qualification of such shares under any state or federal law, or under
the rulings or regulations of the Securities and Exchange Commission or
any other governmental regulatory body which the Administrator shall,
in its absolute discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance
from any state or federal governmental agency which the Administrator
shall, in its absolute discretion, determine to be necessary or
advisable;
(d) The lapse of such reasonable period of time
following the exercise of the Option as the Administrator may establish
from time to time for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for
such shares, including payment of any applicable withholding tax, which
in the discretion of the Administrator may be in the form of
consideration used by the Holder to pay for such shares under Section
6.2(d).
6.4. Rights as Stockholders. Holders shall not be, nor have
any of the rights or privileges of, stockholders of the Company in respect of
any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such Holders.
6.5. Ownership and Transfer Restrictions. The Administrator,
in its absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Award Agreement and may be referred to on the certificates evidencing such
shares. The Holder shall give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(a) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder or (b) one year after the transfer of such shares to such
Holder.
6.7. Limitations on Exercise of Options. Holders may be
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.
ARTICLE VII.
AWARD OF RESTRICTED STOCK
7.1. Eligibility. Subject to the Award Limit and the
limitation on the number of shares available for grant as Restricted Stock set
forth in Section 2.1, Restricted Stock may be awarded to any Employee who the
Committee determines is a key Employee and who should receive such an Award.
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7.2. Award of Restricted Stock
(a) The Committee may from time to time, in its
absolute discretion:
(i) Determine which Employees are key
Employees and select from among them (including Employees who
have previously received other awards under the Plan) as in
its opinion should be awarded Restricted Stock; and
(ii) Determine the purchase price, if any,
and other terms and conditions applicable to such Restricted
Stock, consistent with the Plan.
(b) The Committee shall establish the purchase
price, if any, and form of payment for Restricted Stock; provided,
however, that such purchase price shall be no less than the par value
of the Common Stock to be purchased, unless otherwise permitted by
applicable state law. In all cases, legal consideration shall be
required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee to be
awarded Restricted Stock, the Committee shall instruct the Secretary of
the Company to issue such Restricted Stock and may impose such
conditions on the issuance of such Restricted Stock as it deems
appropriate.
7.3. Rights as Stockholders. Subject to Section 7.4, upon
delivery of the shares of Restricted Stock to the escrow holder pursuant to
Section 7.6, the Holder shall have, unless otherwise provided by the Committee,
all the rights of a stockholder with respect to said shares, subject to the
restrictions in his Award Agreement, including the right to receive all
dividends and other distributions paid or made with respect to the shares;
provided, however, that in the discretion of the Committee, any extraordinary
distributions with respect to the Common Stock shall be subject to the
restrictions set forth in Section 7.4.
7.4. Restriction. All shares of Restricted Stock issued under
the Plan (including any shares received by holders thereof with respect to
shares of Restricted Stock as a result of stock dividends, stock splits or any
other form of recapitalization) shall, in the terms of each individual Award
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
that, unless the Committee otherwise provides in the terms of the Award
Agreement or otherwise, no share of Restricted Stock granted to a person subject
to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and provided, further, that, except with
respect to shares of Restricted Stock granted to Section 162(m) Participants, by
action taken after the Restricted Stock is issued, the Committee may, on such
terms and conditions as it may determine to be appropriate, remove any or all of
the restrictions imposed by the terms of the Award
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Agreement. Restricted Stock may not be sold or encumbered until all restrictions
are terminated or expire. If no consideration was paid by the Holder upon
issuance, a Holder's rights in unvested Restricted Stock shall lapse, and such
Restricted Stock shall be surrendered to the Company without consideration, upon
Termination of Employment with the Company; provided, however, except with
respect to shares of Restricted Stock granted to Section 162(m) Participants,
the Committee in its sole and absolute discretion may provide that no such lapse
or surrender shall occur in the event of a Termination of Employment without
cause or following any Change in Control of the Company or because of the
Holder's retirement, or otherwise.
7.5. Repurchase of Restricted Stock. The Committee shall
provide in the terms of each individual Award Agreement that the Company shall
have the right to repurchase from the Holder the Restricted Stock then subject
to restrictions under the Award Agreement immediately upon a Termination of
Employment between the Holder and the Company, at a cash price per share equal
to the price paid by the Holder for such Restricted Stock; provided, however,
that, except with respect to shares of Restricted Stock granted to Section
162(m) Participants, the Committee in its sole and absolute discretion may
provide that no such right of repurchase shall exist in the event of a
Termination of Employment without cause or following any Change in Control of
the Company or because of the Holder's retirement, death or disability or
otherwise.
7.6. Escrow. The Secretary of the Company or such other escrow
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
7.7. Legend. In order to enforce the restrictions imposed upon
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Award Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
7.8. Section 83(b) Election. If a Holder makes an election
under Section 83(b) of the Code, or any successor section thereto, to be taxed
with respect to the Restricted Stock as of the date of transfer of the
Restricted Stock rather than as of the date or dates upon which the Holder would
otherwise be taxable under Section 83(a) of the Code, the Holder shall deliver a
copy of such election to the Company immediately after filing such election with
the Internal Revenue Service.
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ARTICLE VIII.
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK, STOCK PAYMENTS
8.1. Eligibility. Subject to the Award Limit, one or more
Performance Awards, Dividend Equivalents, awards of Deferred Stock, and/or Stock
Payments may be granted to any Employee whom the Committee determines is a key
Employee and who should receive such an Award.
8.2. Performance Awards. Any key Employee selected by the
Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to any one or more of the Performance Criteria
or other specific performance criteria determined appropriate by the Committee,
in each case on a specified date or dates or over any period or periods
determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular key Employee.
8.3. Dividend Equivalents.
(a) Any key Employee selected by the Committee may be
granted Dividend Equivalents based on the dividends declared on Common
Stock, to be credited as of dividend payment dates, during the period
between the date a Stock Appreciation Right, Deferred Stock or
Performance Award is granted, and the date such Stock Appreciation
Right, Deferred Stock or Performance Award is exercised, vests or
expires, as determined by the Committee. Such Dividend Equivalents
shall be converted to cash or additional shares of Common Stock by such
formula and at such time and subject to such limitations as may be
determined by the Committee.
(b) Any Holder of an Option may be granted Dividend
Equivalents based on the dividends declared on Common Stock, to be
credited as of dividend payment dates, during the period between the
date an Option is granted, and the date such Option is exercised, vests
or expires, as determined by the Committee. Such Dividend Equivalents
shall be converted to cash or additional shares of Common Stock by such
formula and at such time and subject to such limitations as may be
determined by the Committee.
(d) Dividend Equivalents granted with respect to
Options intended to be qualified performance-based compensation for
purposes of Section 162(m) of the Code shall be payable, with respect
to pre-exercise periods, regardless of whether such Option is
subsequently exercised.
8.4. Stock Payments. Any key Employee selected by the
Committee may receive Stock Payments in the manner determined from time to time
by the Committee. The
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number of shares shall be determined by the Committee and may be based upon the
Performance Criteria or other specific performance criteria determined
appropriate by the Committee, determined on the date such Stock Payment is made
or on any date thereafter.
8.5. Deferred Stock. Any key Employee selected by the
Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock shall
be determined by the Committee and may be linked to the Performance Criteria or
other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee. Common Stock underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested, pursuant to
a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Holder of Deferred Stock shall have no
rights as a Company stockholder with respect to such Deferred Stock until such
time as the Award has vested and the Common Stock underlying the Award has been
issued.
8.6. Term. The term of a Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment shall be set by the
Committee in its discretion.
8.7. Exercise or Purchase Price. The Committee may
establish the exercise or purchase price of a Performance Award, shares of
Deferred Stock, or shares received as a Stock Payment; provided, however, that
such price shall not be less than the par value for a share of Common Stock,
unless otherwise permitted by applicable state law.
8.8. Exercise Upon Termination of Employment.
A Performance Award, Dividend Equivalent, award of Deferred Stock and/or Stock
Payment is exercisable or payable only while the Holder is an Employee;
provided, however, that except with respect to Performance Awards granted to
Section 162(m) Participants, that the Administrator in its sole and absolute
discretion may provide that the Performance Award, Dividend Equivalent award of
Deferred Stock and/or Stock Payment may be exercised or paid subsequent to a
Termination of Employment without cause, or following a Change in Control of the
Company, or because of the Holder's retirement, death or disability, or
otherwise.
8.9. Form of Payment. Payment of the amount determined
under Section 8.2 or 8.3 above shall be in cash, in Common Stock or a
combination of both, as determined by the Committee. To the extent any payment
under this Article VIII is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 6.3.
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ARTICLE IX.
STOCK APPRECIATION RIGHTS
9.1. Grant of Stock Appreciation Rights. A Stock Appreciation
Right may be granted to any key Employee selected by the Committee. A Stock
Appreciation Right may be granted (a) in connection and simultaneously with the
grant of an Option, (b) with respect to a previously granted Option, or (c)
independent of an Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.
9.2. Coupled Stock Appreciation Rights.
(a) A Coupled Stock Appreciation Right ("CSAR") shall
be related to a particular Option and shall be exercisable only when
and to the extent the related Option is exercisable.
(b) A CSAR may be granted for no more than the number
of shares subject to the simultaneously or previously granted Option to
which it is coupled.
(c) A CSAR shall entitle the Holder (or other person
entitled to exercise the Option pursuant to the Plan) to surrender to
the Company unexercised a portion of the Option to which the CSAR
relates (to the extent then exercisable pursuant to its terms) and to
receive from the Company in exchange therefor an amount determined by
multiplying the difference obtained by subtracting the Option exercise
price from the Fair Market Value of a share of Common Stock on the date
of exercise of the CSAR by the number of shares of Common Stock with
respect to which the CSAR shall have been exercised, subject to any
limitations the Committee may impose.
9.3. Independent Stock Appreciation Rights.
(a) An Independent Stock Appreciation Right ("ISAR")
shall be unrelated to any Option and shall have a term set by the
Committee. An ISAR shall be exercisable in such installments as the
Committee may determine. An ISAR shall cover such number of shares of
Common Stock as the Committee may determine; provided, however, that
unless the Committee otherwise provides in the terms of the ISAR or
otherwise, no ISAR granted to a person subject to Section 16 of the
Exchange Act shall be exercisable until at least six months have
elapsed from (but excluding) the date on which the Option was granted.
The exercise price per share of Common Stock subject to each ISAR shall
be set by the Committee. An ISAR is exercisable only while the Holder
is an Employee; provided that the Committee may determine that the ISAR
may be exercised subsequent to Termination of Employment without cause,
or following a
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Change in Control of the Company, or because of the Holder's
retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Holder (or other person
entitled to exercise the ISAR pursuant to the Plan) to exercise all or
a specified portion of the ISAR (to the extent then exercisable
pursuant to its terms) and to receive from the Company an amount
determined by multiplying the difference obtained by subtracting the
exercise price per share of the ISAR from the Fair Market Value of a
share of Common Stock on the date of exercise of the ISAR by the number
of shares of Common Stock with respect to which the ISAR shall have
been exercised, subject to any limitations the Committee may impose.
9.4. Payment and Limitations on Exercise.
(a) Payment of the amounts determined under Section
9.2(c) and 9.3(b) above shall be in cash, in Common Stock (based on its
Fair Market Value as of the date the Stock Appreciation Right is
exercised) or a combination of both, as determined by the Committee. To
the extent such payment is effected in Common Stock it shall be made
subject to satisfaction of all provisions of Section 6.3 above
pertaining to Options.
(b) Holders of Stock Appreciation Rights may be
required to comply with any timing or other restrictions with respect
to the settlement or exercise of a Stock Appreciation Right, including
a window-period limitation, as may be imposed in the discretion of the
Committee.
ARTICLE X.
ADMINISTRATION
10.1. Compensation Committee. The Compensation Committee
(or another committee or a subcommittee of the Board assuming the functions of
the Committee under the Plan) shall consist solely of two or more Independent
Directors appointed by and holding office at the pleasure of the Board, each of
whom is both a "non-employee director" as defined by Rule 16b-3 and an "outside
director" for purposes of Section 162(m) of the Code. Appointment of Committee
members shall be effective upon acceptance of appointment. Committee members may
resign at any time by delivering written notice to the Board. Vacancies in the
Committee may be filled by the Board.
10.2. Duties and Powers of Committee. It shall be the duty
of the Committee to conduct the general administration of the Plan in accordance
with its provisions. The Committee shall have the power to interpret the Plan
and the Award Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Award Agreement
provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement
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are not affected adversely. Any such grant or award under the Plan need not be
the same with respect to each Holder. Any such interpretations and rules with
respect to Incentive Stock Options shall be consistent with the provisions of
Section 422 of the Code. In its absolute discretion, the Board may at any time
and from time to time exercise any and all rights and duties of the Committee
under the Plan except with respect to matters which under Rule 16b-3 or Section
162(m) of the Code, or any regulations or rules issued thereunder, are required
to be determined in the sole discretion of the Committee.
10.3. Majority Rule; Unanimous Written Consent. The
Committee shall act by a majority of its members in attendance at a meeting at
which a quorum is present or by a memorandum or other written instrument signed
by all members of the Committee.
10.4. Compensation; Professional Assistance; Good Faith
Actions. Members of the Committee shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Awards, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation.
10.5. Delegation of Authority to Grant Awards. The
Committee may, but need not, delegate from time to time some or all of its
authority to grant Awards under the Plan to a committee consisting of one or
more members of the Committee or of one or more officers of the Company;
provided, however, that the Committee may not delegate its authority to grant
Awards to individuals (i) who are subject on the date of the grant to the
reporting rules under Section 16(a) of the Exchange Act, (ii) who are Section
162(m) Participants or (iii) who are officers of the Company who are delegated
authority by the Committee hereunder. Any delegation hereunder shall be subject
to the restrictions and limits that the Committee specifies at the time of such
delegation of authority and may be rescinded at any time by the Committee. At
all times, any committee appointed under this Section 10.5 shall serve in such
capacity at the pleasure of the Committee.
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ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1. Not Transferable. No Award under the Plan may be sold,
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the Administrator,
pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such
shares have lapsed. No Award or interest or right therein shall be liable for
the debts, contracts or engagements of the Holder or his successors in interest
or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.
During the lifetime of the Holder, only he may exercise an
Option or other Award (or any portion thereof) granted to him under the Plan,
unless it has been disposed of with the consent of the Administrator pursuant to
a DRO. After the death of the Holder, any exercisable portion of an Option or
other Award may, prior to the time when such portion becomes unexercisable under
the Plan or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Holder's
will or under the then applicable laws of descent and distribution.
Notwithstanding the foregoing provisions of this Section 11.1, the
Administrator, in its sole discretion, may determine to grant to any Holder an
Award which, by its terms as set forth in the applicable Award Agreement, may be
transferred by the Holder, in writing and with prior written notice to the
Administrator, by gift, without the receipt of any consideration, to a member of
the Holder's immediate family, as defined in Rule 16a-1 under the Exchange Act,
or to a trust for the exclusive benefit of, or any other entity owned solely by,
such members, provided, that an Award that has been so transferred shall
continue to be subject to all of the terms and conditions of the Award as
applicable to the original Holder, and the transferee shall execute any and all
such documents requested by the Administrator in connection with the transfer,
including without limitation to evidence the transfer and to satisfy any
requirements for an exemption for the transfer under applicable federal and
state securities laws.
11.2. Amendment, Suspension or Termination of the Plan. Except
as otherwise provided in this Section 11.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Administrator. However, without approval of the Company's
stockholders given within twelve months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
11.3, increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan. No amendment, suspension or termination of
the Plan
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shall, without the consent of the Holder alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No Awards may be granted or awarded
during any period of suspension or after termination of the Plan, and in no
event may any Incentive Stock Option be granted under the Plan after the first
to occur of the following events:
(a) The expiration of ten years from the date
the Plan is adopted by the Board; or
(b) The expiration of ten years from the date
the Plan is approved by the Company's stockholders under Section 11.4.
11.3. Changes in Common Stock or Assets of the Company,
Acquisition or Liquidation of the Company and Other Corporate Events.
(a) Subject to Section 11.3 (d), in the event that
the Administrator determines that any dividend or other distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, liquidation, dissolution, or sale, transfer,
exchange or other disposition of all or substantially all of the assets
of the Company, or exchange of Common Stock or other securities of the
Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate
transaction or event, in the Administrator's sole discretion, affects
the Common Stock such that an adjustment is determined by the
Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to an Award, then the
Administrator shall, in such manner as it may deem equitable, adjust
any or all of
(i) the number and kind of shares of Common
Stock (or other securities or property) with respect to which
Awards may be granted or awarded (including, but not limited
to, adjustments of the limitations in Section 2.1 on the
maximum number and kind of shares which may be issued and
adjustments of the Award Limit),
(ii) the number and kind of shares of
Common Stock (or other securities or property) subject to
outstanding Awards, and
(iii) the grant or exercise price with
respect to any Award.
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(b) Subject to Sections 11.3(b)(vii) and 11.3(d), in
the event of any transaction or event described in Section 11.3(a) or
any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of
the Company or any affiliate, or of changes in applicable laws,
regulations, or accounting principles, the Administrator, in its sole
and absolute discretion, and on such terms and conditions as it deems
appropriate, either by the terms of the Award or by action taken prior
to the occurrence of such transaction or event and either automatically
or upon the Holder's request, is hereby authorized to take any one or
more of the following actions whenever the Administrator determines
that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any Award under the Plan,
to facilitate such transactions or events or to give effect to such
changes in laws, regulations or principles:
(i) To provide for either the purchase of
any such Award for an amount of cash equal to the amount that
could have been attained upon the exercise of such Award or
realization of the Holder's rights had such Award been
currently exercisable or payable or fully vested or the
replacement of such Award with other rights or property
selected by the Administrator in its sole discretion;
(ii) To provide that the Award cannot
vest, be exercised or become payable after such event;
(iii) To provide that such Award shall be
exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in Section 5.3 or 5.4 or the
provisions of such Award;
(iv) To provide that such Award be assumed
by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar
options, rights or awards covering the stock of the successor
or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of
shares and prices; and
(v) To make adjustments in the number and
type of shares of Common Stock (or other securities or
property) subject to outstanding Awards, and in the number and
kind of outstanding Restricted Stock or Deferred Stock and/or
in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding
options, rights and awards and options, rights and awards
which may be granted in the future.
(vi) To provide that, for a specified period
of time prior to such event, the restrictions imposed under an
Award Agreement upon some or all shares of Restricted Stock or
Deferred Stock may be
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terminated, and, in the case of Restricted Stock, some or all
shares of such Restricted Stock may cease to be subject to
repurchase under Section 7.5 or forfeiture under Section 7.4
after such event.
(vii) Notwithstanding any other provision of
the Plan, in the event of a Change in Control, each
outstanding Award shall, immediately prior to the effective
date of the Change in Control, automatically become fully
exercisable for all of the shares of Common Stock at the time
subject to such rights and may be exercised for any or all of
those shares as fully-vested shares of Common Stock.
(vii) In the event of any transaction
described in Section 11.3(a), each outstanding Award shall,
immediately prior to the effective date of such transaction,
automatically become fully exercisable for all of the shares
of Common Stock at the time subject to such rights or fully
vested, as applicable, and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. However,
an outstanding right shall not so accelerate if and to the
extent: (i) such right is, in connection with such
transaction, either to be assumed by the successor or survivor
corporation (or parent thereof) or to be replaced with a
comparable right with respect to shares of the capital stock
of the successor or survivor corporation (or parent thereof)
or (ii) the acceleration of exercisability of such right is
subject to other limitations imposed by the Administrator at
the time of grant. The determination of comparability of
rights under clause (i) above shall be made by the
Administrator, and its determination shall be final, binding
and conclusive.
(c) Subject to Sections 11.3(d), 3.2 and 3.3, the
Administrator may, in its discretion, include such further provisions
and limitations in any Award, agreement or certificate, as it may deem
equitable and in the best interests of the Company.
(d) With respect to Awards which are granted to
Section 162(m) Participants and are intended to qualify as
performance-based compensation under Section 162(m)(4)(C), no
adjustment or action described in this Section 11.3 or in any other
provision of the Plan shall be authorized to the extent that such
adjustment or action would cause such Award to fail to so qualify under
Section 162(m)(4)(C), or any successor provisions thereto. No
adjustment or action described in this Section 11.3 or in any other
provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1)
of the Code. Furthermore, no such adjustment or action shall be
authorized to the extent such adjustment or action would result in
short-swing profits liability under Section 16 or violate the exemptive
conditions of Rule 16b-3 unless the Administrator determines that the
Award is not to comply with such exemptive conditions. The number of
shares of Common Stock subject to any Award shall always be rounded to
the next whole number.
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(e) Notwithstanding the foregoing, in the event that
the Company becomes a party to a transaction that is intended to
qualify for "pooling of interests" accounting treatment and, but for
one or more of the provisions of this Plan or any Award Agreement would
so qualify, then this Plan and any Award Agreement shall be interpreted
so as to preserve such accounting treatment, and to the extent that any
provision of the Plan or any Award Agreement would disqualify the
transaction from pooling of interests accounting treatment (including,
if applicable, an entire Award Agreement), then such provision shall be
null and void. All determinations to be made in connection with the
preceding sentence shall be made by the independent accounting firm
whose opinion with respect to "pooling of interests" treatment is
required as a condition to the Company's consummation of such
transaction.
(f) The existence of the Plan, the Award Agreement
and the Awards granted hereunder shall not affect or restrict in any
way the right or power of the Company or the shareholders of the
Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company's capital structure or
its business, any merger or consolidation of the Company, any issue of
stock or of options, warrants or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are
superior to or affect the Common Stock or the rights thereof or which
are convertible into or exchangeable for Common Stock, or the
dissolution or liquidation of the company, or any sale or transfer of
all or any part of its assets or business, or any other corporate act
or proceeding, whether of a similar character or otherwise.
11.4. Approval of Plan by Stockholders. The Plan will be
submitted for the approval of the Company's stockholders within twelve months
after the date of the Board's initial adoption of the Plan. Awards may be
granted or awarded prior to such stockholder approval, provided that such Awards
shall not be exercisable nor shall such Awards vest prior to the time when the
Plan is approved by the stockholders, and provided further that if such approval
has not been obtained at the end of said twelve-month period, all Awards
previously granted or awarded under the Plan shall thereupon be canceled and
become null and void. In addition, if the Board determines that Awards other
than Options or Stock Appreciation Rights which may be granted to Section 162(m)
Participants should continue to be eligible to qualify as performance-based
compensation under Section 162(m)(4)(C) of the Code, the Performance Criteria
must be disclosed to and approved by the Company's stockholders no later than
the first stockholder meeting that occurs in the fifth year following the year
in which the Company's stockholders previously approved the Performance
Criteria.
11.5. Tax Withholding. The Company shall be entitled to
require payment in cash or deduction from other compensation payable to each
Holder of any sums required by federal, state or local tax law to be withheld
with respect to the issuance, vesting, exercise or payment of any Award. The
Administrator may in its discretion and in satisfaction of the foregoing
requirement allow such Holder to elect to have the Company withhold shares of
Common Stock otherwise issuable under such Award (or allow the return of shares
of Common Stock) having a Fair Market Value equal to the sums required to be
withheld.
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11.6. Loans. The Committee may, in its discretion, extend one
or more loans to key Employees in connection with the exercise or receipt of an
Award granted or awarded under the Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under the Plan. The terms and conditions of any such loan
shall be set by the Committee.
11.7. Forfeiture Provisions. Pursuant to its general authority
to determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in the terms of Awards made under
the Plan, or to require a Holder to agree by separate written instrument, that
(a) (i) any proceeds, gains or other economic benefit actually or constructively
received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Common Stock underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised portion of the
Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of
Employment occurs prior to a specified date, or within a specified time period
following receipt or exercise of the Award, or (ii) the Holder at any time, or
during a specified time period, engages in any activity in competition with the
Company, or which is inimical, contrary or harmful to the interests of the
Company, as further defined by the Administrator or (iii) the Holder incurs a
Termination of Employment for cause.
11.8. Effect of Plan Upon Options and Compensation Plans. The
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees of the Company or any Subsidiary or (b)
to grant or assume options or other rights or awards otherwise than under the
Plan in connection with any proper corporate purpose including but not by way of
limitation, the grant or assumption of options in connection with the
acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, partnership, limited liability
company, firm or association.
11.9. Compliance with Laws. The Plan, the granting and
vesting of Awards under the Plan and the issuance and delivery of shares of
Common Stock and the payment of money under the Plan or under Awards granted or
awarded hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including but not limited to state and
federal securities law and federal margin requirements) and to such approvals by
any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Company, be necessary or advisable in connection therewith. Any
securities delivered under the Plan shall be subject to such restrictions, and
the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem
necessary or desirable to assure compliance with all applicable legal
requirements. To the extent permitted by applicable law, the Plan and Awards
granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
11.10. Titles. Titles are provided herein for convenience only
and are not to serve as a basis for interpretation or construction of the Plan.
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11.11. Governing Law. The Plan and any agreements hereunder
shall be administered, interpreted and enforced under the internal laws of the
State of Delaware without regard to conflicts of laws thereof.
* * *
I hereby certify that the foregoing Plan was duly adopted by
the Board of Directors of Libbey, Inc. on March 27, 1999.
Executed on this 30th day of March, 1999.
---------------------------------
Secretary
