<PAGE> 1
As filed with the Securities and Exchange Commission on March 5, 1998
REGISTRATION STATEMENT NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
BAY APARTMENT COMMUNITIES, INC.
(Exact name of Registrant as specified in its charter)
Maryland 77-0404318
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
4340 STEVENS CREEK BOULEVARD, SUITE 275
SAN JOSE, CALIFORNIA 95129
(408) 983-1500
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
BAY APARTMENT COMMUNITIES, INC. --
1994 STOCK INCENTIVE PLAN
(Full Title of the Plan)
-------------------------
GILBERT M. MEYER
CHAIRMAN OF THE BOARD AND PRESIDENT
BAY APARTMENT COMMUNITIES, INC.
4340 STEVENS CREEK BOULEVARD, SUITE 275
SAN JOSE, CALIFORNIA 95129
(408) 983-1500
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
----------------------------
With copies to:
DAVID W. WATSON, ESQ.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
(617) 570-1000
-----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities Being Registered Registered (1) Offering Price Per Share Aggregate Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, 480,000 shares $37.34375(2) $17,925,000 $5,288
$.01 par value
====================================================================================================================================
</TABLE>
(1) Plus such additional number of shares as may be required pursuant to the
1994 Stock Incentive Plan in the event of a stock dividend, reverse stock
split, split-up, recapitalization or other similar event.
(2) This estimate is made pursuant to Rule 457(c) and (h) under the Securities
Act of 1933, as amended ("the Securities Act"), solely for purposes of
determining the registration fee and is based upon the market value of
outstanding shares of Bay Apartment Communities, Inc.'s common stock on
March 3, 1998, utilizing the average of the high and low sale prices
as reported on the New York Stock Exchange.
================================================================================
<PAGE> 2
This Registration Statement on Form S-8 relates to 480,000 additional
shares of common stock, par value $.01 per share (the "Common Stock"), of Bay
Apartment Communities, Inc. (the "Company"), which may be issued under the
Company's 1994 Stock Incentive Plan, as amended and restated (the "Plan"). The
Company hereby incorporates by reference the contents of the Registration
Statement on Form S-8, File No. 333-16809, filed with the Securities and
Exchange Commission (the "Commission") on November 26, 1996, covering an
aggregate of 1,520,000 shares of Common Stock.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Company hereby incorporates by reference the documents listed in (a)
through (d) below, which have been previously filed with the Commission.
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) The Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(c) The Company's (i) Current Report on Form 8-K dated January 21, 1997;
(ii) Current Report on Form 8-K dated April 18, 1997, as amended by
Current Reports on Form 8-K/A dated April 18, 1997, as filed on April
21, 1997 and June 16, 1997, respectively; (iii) Current Report on Form
8-K dated July 25, 1997; (iv) Current Report on Form 8-K dated August
14, 1997; (v) Current Report on Form 8-K dated September 4, 1997; (vi)
Current Report on Form 8-K dated September 10, 1997; (vii) Current
Report on Form 8-K dated September 23, 1997; (viii) Current Report on
Form 8-K dated October 31, 1997; (ix) Current Report on Form 8-K dated
December 16, 1997; (x) Current Report on Form 8-K dated December 18,
1997; (xi) Current Report on Form 8-K dated December 18, 1997; and
(xii) Current Report on Form 8-K dated January 14, 1998;
(d) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A, filed with the Commission on
December 7, 1993, under Section 12 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and any amendments or reports
filed for the purpose of updating such description.
In addition, all documents subsequently filed with the Commission by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereunder have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing of such
documents.
ITEM 8. EXHIBITS.
The following is a complete list of exhibits filed or incorporated by
reference as part of this registration statement.
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on signature page of this registration
statement).
99.1 Bay Apartment Communities, Inc. -- 1994 Stock Incentive Plan, as
amended and restated.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on this 27th day of
February, 1998.
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
--------------------
Gilbert M. Meyer
Chairman of the Board and President
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Gilbert
M. Meyer and Max L. Gardner as his or her true and lawful attorney-in-fact and
agent, with full power of substitution, for him or her and in his or her name,
place and stead, in any and all capacities to sign any or all amendments or
post-effective amendments to this registration statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent or his or her substitute may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
<S> <C> <C>
Chairman of the Board, President February 27, 1998
/s/ Gilbert M. Meyer and Chief Executive Officer
- ----------------------------- (Principal Executive Officer)
GILBERT M. MEYER
/s/ Max L. Gardner Executive Vice President,
- ----------------------------- Chief Operating Officer and February 27, 1998
MAX L. GARDNER Director
/s/ Bruce A. Choate Director February 27, 1998
- -----------------------------
BRUCE A. CHOATE
/s/ Brenda J. Mixson Director February 27, 1998
- -----------------------------
BRENDA J. MIXSON
/s/ Thomas H. Nielsen Director February 27, 1998
- -----------------------------
THOMAS H. NIELSEN
/s/ John J. Healy, Jr. Director February 27, 1998
- -----------------------------
JOHN J. HEALY, JR.
/s/ Jeffrey B. Van Horn Vice President, Chief Financial Officer, February 27, 1998
- ----------------------------- Secretary and Treasurer
JEFFREY B. VAN HORN (Principal Financial and Accounting Officer)
</TABLE>
<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
24.1 Powers of Attorney (included on signature page of this registration
statement).
99.1 Bay Apartment Communities, Inc. -- 1994 Stock Incentive Plan, as
amended and restated.
<PAGE> 1
[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP] Exhibit 5.1
March 5, 1998
Bay Apartment Communities, Inc.
4340 Stevens Creek Boulevard, Suite 275
San Jose, CA 95129
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Bay Apartment
Communities, Inc., a Maryland corporation (the "Company"), in connection with
the registration on Form S-8, pursuant to the Securities Act of 1933, as amended
(the "Securities Act"), of 480,000 shares (the "Shares") of the Company's common
stock, par value $.01 per share (the "Common Stock"), which may be issued
pursuant to the Bay Apartment Communities, Inc. 1994 Stock Incentive Plan, as
amended and restated (the "Plan").
In connection with rendering this opinion, we have examined the Articles of
Incorporation and the Bylaws of the Company, each as amended to date; such
records of the corporate proceedings of the Company as we deemed material; a
registration statement on Form S-8 under the Securities Act relating to the
Shares (the "Registration Statement") and the prospectus contained therein (the
"Prospectus"); the Plan, as amended and restated to the date hereof; the option
agreements issued to certain officers, employees and Directors of the Company;
and such other certificates, receipts, records and documents as we considered
necessary for the purposes of this opinion.
We are attorneys admitted to practice in the Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America and the Maryland General Corporation Law.
Based upon the foregoing, we are of the opinion that upon the issuance of
the Shares in accordance with the terms of the Plan and the receipt of full
consideration therefor, the Shares will be validly issued, fully paid and
nonassessable shares of the Company's Common Stock.
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Securities Act and applicable requirements of state laws
regulating the offer and sale of securities, as to which we express no opinion.
<PAGE> 2
[2ND SHEET OF Goodwin, Procter & Hoar LLP]
Bay Apartment Communities, Inc.
March 5, 1998
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus which is a part of the Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Bay Apartment Communities, Inc. on Form S-8 (File No. 333- ) of our report
dated January 24, 1997, except for note 14 for which the date is March 7, 1997,
on our audits of the consolidated financial statements and financial statement
schedule of Bay Apartment Communities, Inc. as of December 31, 1996 and 1995,
and for the two years in the period ended December 31, 1996, the period from
March 17, 1994 to December 31, 1994, and the period January 1, 1994 to March 16,
1994, for the Greenbriar Group, which report is included in the 1996 Annual
Report on Form 10-K, of our reports dated March 18, 1997, on our audits of the
Historical Summary of Revenues and Direct Operating Expenses of Rancho
Penasquitos Racquet Club for the year ended December 31, 1996, the Historical
Summary of Revenues and Direct Operating Expenses of The Village Apartments for
the year ended December 31, 1996, the Historical Summary of Revenues and Direct
Operating Expenses of Banbury Cross Apartments for the year ended December 31,
1996, and the Historical Summary of Revenues and Direct Operating Expenses of
Villa Serena Apartments for the year ended December 31, 1996, which are included
in the Current Report on Form 8-K dated April 18, 1997, of our report dated
March 18, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Genesee Gardens Apartments for the year ended December 31,
1996, which is included in the Current Report on Form 8-K/A dated April 18,
1997, of our report dated June 2, 1997, on our audit of the Historical Summary
of Revenues and Direct Operating Expenses of Regency Apartments for the year
ended December 31, 1996, and of our report dated June 2, 1997, on our audit of
the Historical Summary of Revenues and Direct Operating Expenses of Amador Oaks
Apartments for the year ended December 31, 1996, which reports are included in
the Current Report on Form 8-K dated August 14, 1997, of our report dated
September 6, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Lakeside Apartments for the year ended December 31, 1996,
which reports are included in the Current Report on Form 8-K dated September 4,
1997, of our report dated August 29, 1997, on our audit of the Historical
Summary of Revenues and Direct Operating Expenses of Gallery Place Apartments
for the year ended December 31, 1996, of our report dated September 18, 1997, on
our audit of the Historical Summary of Revenues and Direct Operating Expenses of
Landing West Apartments for the year ended December 31, 1996, which reports are
included in the Current Report on Form 8-K dated September 23, 1997, of our
report dated October 20, 1997, on our audit of the Historical Summary of
Revenues and Direct Operating Expenses of Creekside Apartments for the year
ended December 31, 1996, of our report dated November 14, 1997, on our audit of
the Historical Summary of Revenues and Direct Operating Expenses of Warner Oaks
Apartments for the year ended December 31, 1996, of our report dated November
14, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Viewpointe Apartments for the year ended December 31,
1996, of our report dated November 5, 1997, on our audit of the Historical
Summary of Revenues and Direct Operating Expenses of Governor's Square East and
West
<PAGE> 2
Apartments for the year ended December 31, 1996, which reports are included in
the Current Report on Form 8-K dated October 31, 1997, of our report dated
November 14, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Arbor Park Apartments for the 12 months ended May 31,
1997, of our report dated November 14, 1997, on our audit of the Historical
Summary of Revenues and Direct Operating Expenses of Amberway Apartments for the
12 months ended May 31, 1997, of our report dated November 14, 1997, on our
audit of the Historical Summary of Revenues and Direct Operating Expenses of
Mission Bay Club Apartments for the 12 months ended May 31, 1997, of our report
dated November 14, 1997, on our audit of the Historical Summary of Revenues and
Direct Operating Expenses of Pacifica Club Apartments for the 12 months ended
May 31, 1997, of our report dated November 14, 1997, on our audit of the
Historical Summary of Revenues and Direct Operating Expenses of Westwood Club
Apartments for the 12 months ended May 31, 1997, and of our report dated
December 11, 1997, on our audit of the Historical Summary of Revenues and Direct
Operating Expenses of Waterhouse Place Apartments for the year ended December
31, 1996, which reports are included in the Current Report on Form 8-K dated
December 18, 1997.
/s/ COOPERS & LYBRAND L.L.P.
San Francisco, California
March 5, 1998
<PAGE> 1
Exhibit 99.1
BAY APARTMENT COMMUNITIES, INC.
1994 STOCK INCENTIVE PLAN
As Amended and Restated on February 26, 1998
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Bay Apartment Communities, Inc. 1994 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees, Directors and other key persons of Bay Apartment
Communities, Inc. (the "Company") and its Subsidiaries upon whose judgment,
initiative and efforts the Company largely depends for the successful conduct of
its business to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"ACT" means the Securities Exchange Act of 1934, as amended.
"AWARD" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, Unrestricted Stock Awards and Performance
Share Awards.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means and shall be limited to a vote of the Board of Directors
resolving that the participant should be dismissed as a result of (i) any
material breach by the participant of any agreement to which the participant and
the Company are parties, (ii) any act (other than retirement) or omission to act
by the participant which may have a material and adverse effect on the business
of the Company or any Subsidiary or on the participant's ability to perform
services for the Company or any Subsidiary, including, without limitation, the
commission of any crime (other than ordinary traffic violations), or (iii) any
material misconduct or neglect of duties by the participant in connection with
the business or affairs of the Company or any Subsidiary.
"CHANGE OF CONTROL" is defined in Section 13.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" means the Board or any Committee of the Board referred to in
Section 2.
<PAGE> 2
"DISABILITY" means disability as set forth in Section 22(e)(3) of the Code.
"EFFECTIVE DATE" means the date on which the Plan is approved by
shareholders as set forth in Section 15.
"FAIR MARKET VALUE" on any given date means the last reported sale price at
which Stock is traded on such date or, if no Stock is traded on such date, the
most recent date on which Stock was traded, as reflected on the New York Stock
Exchange.
"INCENTIVE STOCK OPTION" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
"PERFORMANCE SHARE AWARD" means Awards granted pursuant to Section 8.
"RESTRICTED STOCK AWARD" mean Awards granted pursuant to Section 6.
"STOCK" means the Common Stock, $.01 par value per share, of the Company,
subject to adjustments pursuant to Section 3.
"SUBSIDIARY" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50% or
more of the total combined voting power of all classes of stock or other
interests in one of the other corporations or entities in the chain.
"UNRESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT
PARTICIPANTS AND DETERMINE AWARDS
(a) COMMITTEE. The Plan shall be administered by all of the Non-Employee
Director members of the Compensation Committee of the Board, or a committee of
not less than two Non-Employee Directors performing similar functions, as
appointed by the Board from time to time. Each member of the Committee shall be
an "outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder and a "non-employee director" within the
meaning of Rule 16b-3(b)(3)(i) promulgated under the Act, or any successor
definition under said rule.
<PAGE> 3
(b) POWERS OF COMMITTEE. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:
(i) to select the officers and other employees of the Company and its
Subsidiaries to whom Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, Unrestricted Stock Awards and Performance Shares, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award,
which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;
(v) to accelerate the exercisability or vesting of all or any portion
of any Award in circumstances involving a Change of Control or the death,
disability or termination of employment of a Plan participant;
(vi) subject to the provisions of Section 5(a)(ii), to extend the
period in which Stock Options may be exercised;
(vii) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or credit
amounts constituting interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and practices
for administration of the Plan and for its own acts and proceedings as it
shall deem advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to
decide all disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
<PAGE> 4
(c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Committee's authority and duties with respect to Awards, including
the granting thereof, to individuals who are not subject to the reporting and
other provisions of Section 16 of the Act or Acovered employees' within the
meaning of Section 162(m) of the Code. The Committee may revoke or amend the
terms of a delegation at any time but such action shall not invalidate any prior
actions of the Committee's delegate or delegates that were consistent with the
terms of the Plan.
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) SHARES ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 2,000,000. For purposes of this
limitation, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares may be issued up to such maximum number pursuant to any type
or types of Award, including Incentive Stock Options; provided, however, that
Stock Options with respect to no more than 300,000 shares of Stock may be
granted to any one individual participant during any one calendar year period.
Shares issued under the Plan may be authorized but unissued shares or shares
reacquired by the Company.
(b) RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options that can be granted to any one individual participant, (iii)
the number and kind of shares or other securities subject to any then
outstanding Awards under the Plan, and (iv) the price for each share subject to
any then outstanding Stock Options under the Plan, without changing the
aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options) as to which such Stock Options remain exercisable. The
adjustment by the Committee shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Committee in its discretion may make a cash payment in
lieu of fractional shares.
(c) MERGERS. Upon consummation of a consolidation or merger or sale of all
or substantially all of the assets of the Company in which outstanding shares of
Stock are exchanged for securities, cash or other property of an unrelated
corporation or business entity or in the event of a liquidation of the Company
(in each case, a "Transaction"), the Board, or the board of directors of any
corporation assuming the obligations of the Company, may, in its discretion,
take any one or more of the following actions, as to outstanding Stock Options:
(i) provide that such Stock Options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof), (ii) upon written notice to the optionees, provide that all
unexercised Stock Options will terminate immediately prior to the consummation
of the Transaction unless exercised by the optionee within a specified period
following the date of such notice, and/or (iii) in the event of a business
combination under the terms of which holders of the Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the business combination, make or provide for a cash payment to the optionees
equal to the difference between (A) the value (as determined by the Committee)
of the consideration payable per share of Stock pursuant to the business
combination (the "Merger Price") times the number of shares of Stock subject
to such outstanding Stock Options (to the extent then exercisable at prices not
in excess of the Merger Price) and (B) the aggregate exercise price of all such
outstanding Stock Options in exchange for the termination of such Stock Options.
In the event Stock Options will terminate upon the consummation of the
Transaction, each optionee shall be permitted, within a specified period
determined by the Committee, to exercise all non-vested Stock Options, subject
to the consummation of the Transaction.
<PAGE> 5
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers, other
employees, Non-Employee Directors and key persons of the Company and its
Subsidiaries who are responsible for or contribute to the management, growth or
profitability of the Company and its Subsidiaries and who are selected from time
to time by the Committee, in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non- Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any option
does not qualify as an Incentive Stock Option, it shall constitute a
Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after February
26, 2008.
<PAGE> 6
(a) STOCK OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The Committee in
its discretion may grant Stock Options to employees and key persons of the
Company or any Subsidiary. Stock Options granted to employees and key persons
pursuant to this Section 5(a) shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(i) EXERCISE PRICE. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined
by the Committee at the time of grant but shall be not less than 100% of
Fair Market Value on the date of grant. If an employee owns or is deemed
to own (by reason of the attribution rules applicable under Section 424(d)
of the Code) more than 10% of the combined voting power of all classes of
stock of the Company or any Subsidiary or parent corporation and an
Incentive Stock Option is granted to such employee, the option price shall
be not less than 110% of Fair Market Value on the grant date.
(ii) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of
the Company or any Subsidiary or parent corporation and an Incentive Stock
Option is granted to such employee, the term of such option shall be no
more than five years from the date of grant.
(iii) EXERCISABILITY; RIGHTS OF A SHAREHOLDER. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the grant
date. The Committee may at any time accelerate the exercisability of all
or any portion of any Stock Option. An optionee shall have the rights of a
shareholder only as to shares acquired upon the exercise of a Stock Option
and not as to unexercised Stock Options.
(iv) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be
made by one or more of the following methods:
(A) In cash, by certified bank check or other instrument
acceptable to the Committee;
(B) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been held by the
optionee for at least six months, if permitted by the Committee in its
discretion. Such surrendered shares shall be valued at Fair Market
Value on the exercise date; or
<PAGE> 7
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the Committee
shall prescribe as a condition of such payment procedure. Payment
instruments will be received subject to collection.
The delivery of certificates representing shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price for
such shares and the fulfillment of any other requirements contained in the Stock
Option or applicable provisions of laws.
(v) TERMINATION BY REASON OF DEATH. If any optionee's employment (or
other business relationship) by the Company and its Subsidiaries terminates
by reason of death, the Stock Option may thereafter be exercised, to the
extent exercisable at the date of death, by the legal representative or
legatee of the optionee, for a period of six months (or such longer period
as the Committee shall specify at any time) from the date of death, or
until the expiration of the stated term of the Option, if earlier.
(vi) TERMINATION BY REASON OF DISABILITY.
(A) Any Stock Option held by an optionee whose employment (or
other business relationship) by the Company and its Subsidiaries has
terminated by reason of Disability may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for a period
of twelve months (or such longer period as the Committee shall specify
at any time) from the date of such termination of employment (or other
business relationship), or until the expiration of the stated term of
the Option, if earlier.
(B) The Committee shall have sole authority and discretion to
determine whether a participant's employment (or other business
relationship) has been terminated by reason of Disability.
(C) Except as otherwise provided by the Committee at the time of
grant, the death of an optionee during a period provided in this
Section 5(a)(vi) for the exercise of a Non-Qualified Stock Option shall
extend such period for six months from the date of death, subject to
termination on the expiration of the stated term of the Option, if
earlier.
(vii) TERMINATION FOR CAUSE. If any optionee's employment (or other
business relationship) by the Company and its Subsidiaries has been
terminated for Cause, any Stock Option held by such optionee shall
immediately terminate and be of no further force and effect; provided,
however, that the Committee may, in its sole discretion, provide that such
stock option can be exercised for a period of up to 30 days from the date
of termination of employment (or other business relationship) or until the
expiration of the stated term of the Option, if earlier.
<PAGE> 8
(viii) OTHER TERMINATION. Unless otherwise determined by the Committee,
if an optionee's employment (or other business relationship) by the Company
and its Subsidiaries terminates for any reason other than death,
Disability, or for Cause, any Stock Option held by such optionee may
thereafter be exercised, to the extent it was exercisable on the date of
termination of employment (or other business relationship), for three
months (or such longer period as the Committee shall specify at any time)
from the date of termination of employment (or other business relationship)
or until the expiration of the stated term of the Option, if earlier.
(ix) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its Subsidiaries become exercisable
for the first time by an optionee during any calendar year shall not exceed
$100,000.
(x) FORM OF SETTLEMENT. Shares of Stock issued upon exercise of a Stock
Option shall be free of all restrictions under the Plan, except as
otherwise provided in this Plan.
(b) RELOAD OPTIONS. At the discretion of the Committee, Options granted
under the Plan may include a so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of shares of Stock equal to the
number delivered to exercise the original Option.
(c) STOCK OPTIONS GRANTED TO NON-EMPLOYEE DIRECTORS.
(i) AUTOMATIC GRANT OF OPTIONS.
(A) Each Non-Employee Director who is serving as a Director of the
Company on the fifth business day after each annual meeting of
stockholders, beginning with the 1996 annual meeting of stockholders,
shall automatically be granted on such day a Non-Qualified Stock Option
to acquire 5,000 shares of Stock.
<PAGE> 9
(B) The exercise price per share for the Stock covered by a Stock
Option granted under this Section 5(c) shall be equal to the Fair
Market Value of the Stock on the date the Stock Option is granted.
(C) The Committee, in its discretion, may grant additional Non-
Qualified Stock Options to Non-Employee Directors.
(ii) EXERCISE; TERMINATION; NON-TRANSFERABILITY.
(A) Except as provided in Section 13, no Option granted under
Section 5(c) may be exercised before the first anniversary of the date
upon which it was granted; provided, however, that any Option so
granted shall become exercisable upon the termination of service of the
Non-Employee Director because of Disability or death. No Option issued
under this Section 5(c) shall be exercisable after the expiration of
ten years from the date upon which such Option is granted.
(B) The rights of a Non-Employee Director in an Option granted
under Section 5(c) shall terminate six months after such Director
ceases to be a Director of the Company or the specified expiration
date, if earlier; provided, however, that if the Non-Employee Director
ceases to be a Director for Cause, the rights shall terminate
immediately on the date on which he ceases to be a Director.
(C) Any Option granted to a Non-Employee Director and outstanding
on the date of his death may be exercised by the legal representative
or legatee of the optionee for a period of six months from the date of
death or until the expiration of the stated term of the Option, if
earlier.
(D) Options granted under this Section 5(c) may be exercised only
by written notice to the Company specifying the number of shares to be
purchased. Payment of the full purchase price of the shares to be
purchased may be made by one or more of the methods specified in
Section 5(a)(iv). An optionee shall have the rights of a shareholder
only as to shares acquired upon the exercise of a Stock Option and not
as to unexercised Stock Options.
(iii) LIMITED TO NON-EMPLOYEE DIRECTORS. The provisions of this
Section 5(c) shall apply only to Options granted or to be granted to
Non-Employee Directors, and shall not be deemed to modify, limit or
otherwise apply to any other provision of this Plan or to any Option issued
under this Plan to a participant who is not a Non-Employee Director of the
Company. To the extent inconsistent with the provisions of any other
Section of this Plan, the provisions of this Section 5(c) shall govern the
rights and obligations of the Company and Non-Employee Directors respecting
Options granted or to be granted to Non-Employee Directors.
<PAGE> 10
(d) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee. Notwithstanding the foregoing, the Committee may
permit the optionee to transfer, without consideration for the transfer, his
Non-Qualified Stock Options to members of his immediate family, to trusts for
the benefit of such family members, to partnerships in which such family members
are the only partners, or to charitable organizations, provided that the
transferee agrees in writing with the Company to be bound by all of the terms
and conditions of this Plan and the applicable option agreement.
SECTION 6. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARD. The Committee may grant Restricted
Stock Awards to any participant. A Restricted Stock Award is an Award entitling
the recipient to acquire, at no cost or for a purchase price determined by the
Committee, shares of Stock subject to such restrictions and conditions as the
Committee may determine at the time of grant ("Restricted Stock"). Conditions
may be based on continuing employment (or other business relationship) and/or
achievement of pre-established performance goals and objectives. In addition,
a Restricted Stock Award may be granted to an employee by the Committee in lieu
of a cash bonus due to such employee pursuant to any other plan of the Company.
(b) ACCEPTANCE OF AWARD. A participant who is granted a Restricted Stock
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within 60 days (or such shorter time period as the
Committee may specify) following the award date by making payment to the
Company, if required, in cash, by certified or bank check or other instrument or
form of payment acceptable to the Committee in an amount equal to the specified
purchase price, if any, of the shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Stock in such form as the Committee shall
determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Stock Award. Unless the
Committee shall otherwise determine, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company until such shares
are vested as provided in Section 6(e) below.
(d) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment (or
other business relationship) by the Company and its Subsidiaries for any reason
(including death, retirement, Disability, and for Cause), the Company shall have
the right, at the discretion of the Committee, to repurchase shares of
Restricted Stock with respect to which conditions have not lapsed at their
purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or forfeiture
not later than the 90th day following such termination of employment (or other
business relationship), unless otherwise specified in the written instrument
evidencing the Restricted Stock Award.
<PAGE> 11
(e) VESTING OF RESTRICTED STOCK. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company's right of repurchase or forfeiture shall
lapse. The vesting period for Restricted Stock shall be at least three years,
except that in the case of Restricted Stock that becomes transferable and no
longer subject to forfeiture upon the attainment of such pre-established
performance goals, objectives and other conditions, the vesting period shall be
at least one year. Subsequent to such date or dates and/or the attainment of
such pre-established performance goals, objectives and other conditions, the
shares on which all restrictions have lapsed shall no longer be Restricted Stock
and shall be deemed "vested."
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.
SECTION 7. UNRESTRICTED STOCK AWARDS
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee may, in its sole
discretion, grant (or sell at a purchase price determined by the Committee) an
Unrestricted Stock Award to any participant which will entitle such participant
to receive shares of Stock free of any restrictions under the Plan
("Unrestricted Stock"). Unrestricted Stock Awards may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration, or in lieu of any cash compensation due to such participant.
(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF COMPENSATION. Upon
the request of a participant and with the consent of the Committee, each such
participant may, pursuant to an advance written election delivered to the
Company no later than the date or dates specified by the Committee, receive a
portion of the cash compensation otherwise due to such participant in
Unrestricted Stock either currently or on a deferred basis.
(c) RESTRICTIONS ON TRANSFERS. The right to receive Unrestricted Stock
on a deferred basis may not be sold, assigned, transferred, pledged or otherwise
encumbered, other than by will or the laws of descent and distribution.
SECTION 8. PERFORMANCE SHARE AWARDS
(a) NATURE OF PERFORMANCE SHARES. A Performance Share Award is an award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to any
participants, including those who qualify for awards under other performance
plans of the Company. The Committee in its sole discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals applicable under each such Award, the periods during which performance is
to be measured, and all other limitations and conditions applicable to the
awarded Performance Shares; provided, however, that the Committee may rely on
the performance goals and other standards applicable to other performance unit
plans of the Company in setting the standards for Performance Share Awards under
the Plan.
<PAGE> 12
(b) RESTRICTIONS ON TRANSFER. Performance Share Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance Share
Award shall have the rights of a shareholder only as to shares actually received
by the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Committee).
(d) TERMINATION. Except as may otherwise be provided by the Committee at
any time prior to termination of employment (or other business relationship),
a participant's rights in all Performance Share Awards shall automatically
terminate upon the participant's termination of employment (or other business
relationship) by the Company and its Subsidiaries for any reason (including
death, Disability and for Cause).
(e) ACCELERATION, WAIVER, ETC. At any time prior to the participant's
termination of employment (or other business relationship) by the Company and
its Subsidiaries, the Committee may in its sole discretion accelerate, waive or,
subject to Section 11, amend any or all of the goals, restrictions or conditions
imposed under any Performance Share Award.
SECTION 9. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(b) PAYMENT IN SHARES. Subject to approval by the Committee, a participant
may elect to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to any Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due, or (ii) transferring to the Company shares of Stock
owned by the participant with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due.
<PAGE> 13
SECTION 10. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment (or other business relationship):
(a) a transfer to the employment (or other business relationship) of the
Company from a Subsidiary or from the Company to a Subsidiary, or from one
Subsidiary to another Subsidiary; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment (or other business relationship) is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was
granted or if the Committee otherwise so provides in writing.
SECTION 11. AMENDMENTS AND TERMINATION
The Board may at any time amend or discontinue the Plan and the Committee
may at any time amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. In addition, the Committee may amend any outstanding Award to reduce
the exercise or purchase price in order to fulfill a legitimate corporate
purpose (e.g., to retain a key employee) or to maintain the value of such
outstanding Award under circumstances beyond the control of the Company's
management, but in no event shall such amendments be made to outstanding Awards
representing greater than 10% of the total number of shares of Stock authorized
for issuance pursuant to the Plan. To the extent required by the Code to ensure
that Options that have been granted hereunder qualify as Incentive Stock
Options, Plan amendments shall be subject to approval by the Company's
stockholders.
SECTION 12. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
<PAGE> 14
SECTION 13. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section 13:
(a) Each Stock Option shall automatically become fully exercisable
notwithstanding any provision to the contrary herein.
(b) Restrictions and conditions on Restricted Stock Awards and
Performance Share Awards shall automatically be deemed waived, and the
recipients of such Awards shall become entitled to receipt of the Stock subject
to such Awards unless the Committee shall otherwise expressly provide at the
time of grant.
(c) "CHANGE OF CONTROL" shall mean the occurrence of any one of the
following events:
(i) any "PERSON," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan of the Company or any of its Subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule 12b-2
under the Act) of such person, shall become the "beneficial owner" (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing 40% or more of either (A) the
combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors
("Voting Securities") or (B) the then outstanding shares of Stock of the
Company (in either such case other than as a result of the acquisition of
securities directly from the Company); or
(ii) persons who, as of the date of the closing of the Company's
initial public offering, constitute the Company's Board of Directors (the
"Incumbent Directors") cease for any reason, including, without limitation,
as a result of a tender offer, proxy contest, merger or similar
transaction, to constitute at least a majority of the Board, provided that
any person becoming a director of the Company subsequent to the Closing of
the Company's initial public offering whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent
Directors shall, for purposes of this Plan, be considered an Incumbent
Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
stockholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 50% of the
voting stock of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single
plan) of all or substantially all of the assets of the Company or (C) any
plan or proposal for the liquidation or dissolution of the Company;
<PAGE> 15
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of Stock beneficially owned by any person to 40%
or more of the shares of Stock then outstanding or (y) the proportionate voting
power represented by the Voting Securities beneficially owned by any person to
40% or more of the combined voting power of all then outstanding Voting
Securities; provided, however, that if any person referred to in clause (x) or
(y) of this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a "CHANGE OF CONTROL"
shall be deemed to have occurred for purposes of the foregoing clause (i).
SECTION 14. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee may
require each person acquiring shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
SECTION 15. EFFECTIVE DATE OF PLAN
This Plan has been amended and restated as of February 26, 1998 to
reflect, in addition to other changes, an increase of 480,000 shares reserved
and available for issuance under the Plan.
<PAGE> 16
SECTION 16. GOVERNING LAW
This Plan shall be governed by Maryland law except to the extent such law
is preempted by federal law.
DATE OF APPROVAL OF INITIAL PLAN BY
SHAREHOLDERS: February 15, 1994
DATE OF APPROVAL OF FIRST AMENDED AND
RESTATED PLAN BY BOARD OF DIRECTORS: August 28, 1996
DATE OF APPROVAL OF FIRST AMENDED AND
RESTATED PLAN BY SHAREHOLDERS: April 25, 1997
DATE OF APPROVAL OF SECOND AMENDED AND
RESTATED PLAN BY BOARD OF DIRECTORS: February 26, 1998
DATE OF APPROVAL OF SECOND AMENDED AND
RESTATED PLAN BY SHAREHOLDERS: ________________
16
