Exhibit 10.1
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
(As Amended Through September 1, 2000)
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
(As Amended Through September 1, 2000)
TABLE OF CONTENTS
Page
1. NAME AND PURPOSE 1
1.1. Name.............................................................1
1.2. Purpose..........................................................1
2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION 1
2.1. General Definitions..............................................1
2.1.1. Affiliate.............................................1
2.1.2. Agreement.............................................1
2.1.3. Benefit...............................................1
2.1.4. Board.................................................1
2.1.5. Cash Award............................................2
2.1.6. Change of Control.....................................2
2.1.7. Code..................................................3
2.1.8. Company...............................................3
2.1.9. Committee.............................................3
2.1.10. Common Stock.........................................3
2.1.11. Effective Date.......................................4
2.1.12. Employee.............................................4
2.1.13. Employer.............................................4
2.1.14. Exchange Act.........................................4
2.1.15. Fair Market Value....................................4
2.1.16. Fiscal Year..........................................4
2.1.17. ISO..................................................4
2.1.18. NQSO.................................................4
2.1.19. Option...............................................4
2.1.20. Other Stock Based Award..............................4
2.1.21. Parent...............................................4
2.1.22. Participant..........................................5
2.1.23. Performance Based Compensation.......................5
2.1.24. Performance Share....................................5
2.1.25. Plan.................................................5
2.1.26. Reload Option........................................5
2.1.27. Restricted Stock.....................................5
2.1.28. Rule 16b-3...........................................5
2.1.29. SEC..................................................5
2.1.30. Share................................................5
2.1.31. SAR..................................................6
2.1.32. Subsidiary...........................................6
2.2. Other Definitions................................................6
2.3. Conflicts........................................................6
3. COMMON STOCK 6
3.1. Number of Shares.................................................6
i
<PAGE>
3.2. Reusage..........................................................6
3.3. Adjustments......................................................7
4. ELIGIBILITY 7
4.1. Determined By Committee..........................................7
5. ADMINISTRATION 7
5.1. Committee........................................................7
5.2. Authority........................................................7
5.3. Delegation.......................................................8
5.4. Determination....................................................8
6. AMENDMENT 8
6.1. Power of Board...................................................8
6.2. Limitation.......................................................8
7. TERM AND TERMINATION 9
7.1. Term.............................................................9
7.2. Termination......................................................9
8. MODIFICATION OR TERMINATION OF BENEFITS 9
8.1. General..........................................................9
8.2. Committee's Right................................................9
9. CHANGE OF CONTROL 9
9.1. Vesting and Payment..............................................9
9.2. Other Action....................................................10
10. AGREEMENTS AND CERTAIN BENEFITS 10
10.1. Grant Evidenced by Agreement...................................10
10.2. Provisions of Agreement........................................10
10.3. Transferability................................................11
11. REPLACEMENT AND TANDEM AWARDS 11
11.1. Replacement....................................................11
11.2. Tandem Awards..................................................11
12. PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING 11
12.1. Payment........................................................11
12.2. Dividend Equivalents...........................................11
12.3. Deferral.......................................................12
12.4. Withholding....................................................12
13. OPTIONS 12
13.1. Types of Options...............................................12
13.2. Grant of ISOs and Option Price.................................12
13.3. Other Requirements for ISOs....................................12
13.4. NQSOs..........................................................12
13.5. Determination by Committee.....................................12
14. SARS 13
14.1. Grant and Payment..............................................13
14.2. Grant of Tandem Award..........................................13
14.3. ISO Tandem Award...............................................13
14.4. Payment of Award...............................................13
ii
<PAGE>
15. ANNUAL LIMITATIONS 13
15.1. Limitation on Options and SARs.................................13
15.2. Computations...................................................13
16. RESTRICTED STOCK AND PERFORMANCE SHARES 13
16.1. Restricted Stock...............................................13
16.2. Cost of Restricted Stock.......................................14
16.3. Non-Transferability............................................14
16.4. Performance Shares.............................................14
16.5. Grant..........................................................14
17. CASH AWARDS 14
17.1. Grant..........................................................14
17.2. Rule 16b-3.....................................................14
17.3. Restrictions...................................................14
18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS 15
18.1. Other Stock Based Awards.......................................15
18.2. Other Benefits.................................................15
19. MISCELLANEOUS PROVISIONS 15
19.1. Underscored References.........................................15
19.2. Number and Gender..............................................15
19.3. Unfunded Status of Plan........................................15
19.4. Termination of Employment......................................15
19.5. Designation of Beneficiary.....................................15
19.6. Governing Law..................................................16
19.7. Purchase for Investment........................................16
19.8. No Employment Contract.........................................16
19.9. No Effect on Other Benefits....................................16
iii
<PAGE>
APPLIED DIGITAL SOLUTIONS, INC.
1999 FLEXIBLE STOCK PLAN
(As Amended Through September 1, 2000)
1. NAME AND PURPOSE
1.1. Name.
The name of this Plan is the "Applied Digital Solutions, Inc.
1999 Flexible Stock Plan."
1.2. Purpose.
The Company has established this Plan to attract, retain,
motivate and reward Employees and other individuals, to encourage ownership of
the Company's Common Stock by Employees and other individuals, and to promote
and further the best interests of the Company by granting cash and other awards.
This Plan is intended to be "Broadly Based" (as such term is used for purposes
of rules promulgated by The National Association of Securities Dealers).
2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
2.1. General Definitions.
The following words and phrases, when used in the Plan, unless
otherwise specifically defined or unless the context clearly otherwise requires,
shall have the following respective meanings:
2.1.1. Affiliate.
A Parent or Subsidiary of the Company.
2.1.2. Agreement.
The document which evidences the grant of any Benefit
under the Plan and which sets forth the Benefit and the terms,
conditions and provisions of, and restrictions relating to, such
Benefit.
2.1.3. Benefit.
Any benefit granted to a Participant under the Plan.
2.1.4. Board.
The Board of Directors of the Company.
1
<PAGE>
2.1.5. Cash Award.
A Benefit payable in the form of cash.
2.1.6. Change of Control.
The occurrence of any of the following:
(a) An acquisition of any Common Stock or other voting
securities of the Company entitled to vote generally for the election of
directors (the "Voting Securities") by any "Person" or "Group" (as each
such term is used for purposes of Section 13(d) or 14(d) of the Exchange
Act), immediately after which such Person or Group, as the case may be,
has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than 20% of the then outstanding shares
of Common Stock or the combined voting power of the Company's then
outstanding Voting Securities; provided, however, that in determining
whether a Change of Control has occurred, shares of Common Stock or
Voting Securities that are acquired in a Non-Control Acquisition (as
defined below) shall not constitute an acquisition which would cause a
Change of Control. A "Non-Control Acquisition" shall mean an acquisition
by (i) the Company, (ii) any Subsidiary or (ii) any employee benefit
plan maintained by the Company or any Subsidiary, including a trust
forming part of any such plan (an "Employee Benefit Plan");
(b) When, during any 2-year period, individuals who, at the
beginning of the 2-year period, constitute the Board (the "Incumbent
Board"), cease for any reason to constitute at least 50% of the members
of the Board; provided, however, that (i) if the election or nomination
for election by the Company's shareholders of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such
new director shall, for purposes hereof, be deemed to be a member of the
Incumbent Board; and (ii) no individual shall be deemed to be a member
of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf
of a Person or Group other than the Board (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest;
(c) The consummation of:
(i) a merger, consolidation or reorganization involving
the Company or any Subsidiary, unless the merger, consolidation
or reorganization is a Non-Control Transaction. A "Non-Control
Transaction" shall mean a merger, consolidation or
reorganization of the Company or any Subsidiary where:
(A) the shareholders of the Company immediately
prior to the merger, consolidation or reorganization
own, directly or indirectly, immediately following such
merger, consolidation or reorganization, at least 50% of
the combined voting power of the outstanding voting
securities of the corporation resulting from such
merger, consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as
their ownership of the Common Stock or Voting
Securities, as the case may be, immediately prior to the
merger, consolidation or reorganization,
2
<PAGE>
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of
the agreement providing for the merger, consolidation or
reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving
Corporation, or a corporation beneficially owning,
directly or indirectly, a majority of the voting
securities of the Surviving Corporation, and
(C) no Person or Group, other than (1) the Company,
(2) any Subsidiary, (3) any Employee Benefit Plan or (4)
any other Person or Group who, immediately prior to the
merger, consolidation or reorganization, had Beneficial
Ownership of not less than 20% of the then outstanding
Voting Securities or Common Stock, has Beneficial
Ownership of 20% or more of the combined voting power of
the Surviving Corporation's then outstanding voting
securities or common stock;
(d) A complete liquidation or dissolution of the
Company; or
(e) The sale or other disposition of all or
substantially all of the assets of the Company to any Person
(other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred solely because any Person or Group (the "Subject
Person") acquired Beneficial Ownership of more than the permitted amount of the
then outstanding Voting Securities or Common Stock of the Company as a result of
an acquisition of Voting Securities or Common Stock by the Company which, by
reducing the number of shares of Voting Securities or Common Stock then
outstanding, increases the proportional number of shares beneficially owned by
the Subject Person; provided, however, that if a Change of Control would have
occurred (but for the operation of this sentence) as a result of the acquisition
of Voting Securities or Common Stock by the Company, and after such acquisition
by the Company, the Subject Person becomes the beneficial owner of any
additional shares of Voting Securities or Common Stock, which increases the
percentage of the then outstanding shares of Voting Securities or Common Stock
beneficially owned by the Subject Person, then a Change of Control shall be
deemed to have occurred.
2.1.7. Code.
The Internal Revenue Code of 1986, as amended. Any
reference to the Code includes the regulations promulgated pursuant to
the Code.
2.1.8. Company.
Applied Digital Solutions, Inc.
2.1.9. Committee.
The Committee described in Section 5.1.
2.1.10. Common Stock.
The Company's common stock which presently has a par
value of $.001 per Share.
3
<PAGE>
2.1.11. Effective Date.
The date that the Plan is approved by the shareholders
of the Company which must occur within one year before or after
approval by the Board. Any grants of Benefits prior to the approval by
the shareholders of the Company shall be void if such approval is not
obtained.
2.1.12. Employee.
Any person employed by the Employer.
2.1.13. Employer.
The Company and all Affiliates.
2.1.14. Exchange Act.
The Securities Exchange Act of 1934, as amended.
2.1.15. Fair Market Value.
The closing price of Shares on the Nasdaq National
Market on a given date, or, in the absence of sales on a given date,
the closing price on the Nasdaq National Market on the last day on
which a sale occurred prior to such date.
2.1.16. Fiscal Year.
The taxable year of the Company which is the calendar
year.
2.1.17. ISO.
An Incentive Stock Option as defined in Section 422 of
the Code.
2.1.18. NQSO.
A non-qualified stock Option, which is an Option that
does not qualify as an ISO.
2.1.19. Option.
An option to purchase Shares granted under the Plan.
2.1.20. Other Stock Based Award.
An award under Section 18 that is valued in whole or in
part by reference to, or otherwise based on, Common Stock.
2.1.21. Parent.
Any corporation (other than the Company or a Subsidiary)
in an unbroken chain of corporations ending with the Company, if, at
the time of the grant of an Option or other Benefit, each of the
4
<PAGE>
corporations (other than the Company) owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
2.1.22. Participant.
An individual who is granted a Benefit under the Plan.
Benefits may be granted only to Employees, members of the Board,
employees and owners of entities which are not Affiliates but which
have a direct or indirect ownership interest in an Employer or in which
an Employer has a direct or indirect ownership interest, individuals
who, and employees and owners of entities which, are customers and
suppliers of an Employer, individuals who, and employees and owners of
entities which, render services to an Employer, and individuals who,
and employees and owners of entities, which have ownership or business
affiliations with any individual or entity previously described.
2.1.23. Performance Based Compensation.
Compensation which meets the requirements of Section
162(m)(4)(C) of the Code.
2.1.24. Performance Share.
A Share awarded to a Participant under Section 16 of the
Plan.
2.1.25. Plan.
The Applied Digital Solutions, Inc. 1999 Flexible Stock
Plan and all amendments and supplements to it.
2.1.26. Reload Option.
An Option to purchase the number of Shares used by a
Participant to exercise an Option and to satisfy any withholding
requirement incident to the exercise of such Option.
2.1.27. Restricted Stock.
Shares issued under Section 15 of the Plan.
2.1.28. Rule 16b-3.
Rule 16b-3 promulgated by the SEC, as amended, or any
successor rule in effect from time to time.
2.1.29. SEC.
The Securities and Exchange Commission.
2.1.30. Share.
A share of Common Stock.
5
<PAGE>
2.1.31. SAR.
A stock appreciation right, which is the right to
receive an amount equal to the appreciation, if any, in the Fair Market
Value of a Share from the date of the grant of the right to the date of
its payment.
2.1.32. Subsidiary.
Any corporation, other than the Company, in an unbroken
chain of corporations beginning with the Company if, at the time of
grant of an Option or other Benefit, each of the corporations, other
than the last corporation in the unbroken chain, owns stock possessing
50% or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
2.2. Other Definitions.
In addition to the above definitions, certain words and phrases
used in the Plan and any Agreement may be defined in other portions of the Plan
or in such Agreement.
2.3. Conflicts.
In the case of any conflict in the terms of the Plan relating to
a Benefit, the provisions in the section of the Plan which specifically grants
such Benefit shall control those in a different section. In the case of any
conflict between the terms of the Plan relating to a Benefit and the terms of an
Agreement relating to a Benefit, the terms of the Plan shall control.
3. COMMON STOCK
3.1. Number of Shares.
The number of Shares which may be issued or sold or for which
Options, SARs or Performance Shares may be granted under the Plan shall be
17,000,000 Shares, plus an annual increase, effective as of the first day of
each calendar year, commencing with 2001, equal to 10% of the number of
outstanding Shares as of the first day of such calendar year, but in no event
more than 30,000,000 Shares in the aggregate. Such Shares may be authorized but
unissued Shares, Shares held in the treasury, or both. The full number of Shares
available may be used for any type of Option or other Benefit; provided,
however, that the number of Shares that may be issued under ISOs shall not
exceed 15,000,000.
3.2. Reusage.
If an Option or SAR expires or is terminated, surrendered, or
canceled without having been fully exercised, if Restricted Shares or
Performance Shares are forfeited, or if any other grant results in any Shares
not being issued, the Shares covered by such Option or SAR, grant of Restricted
Shares, Performance Shares or other grant, as the case may be, shall again be
available for use under the Plan. Any Shares which are used as full or partial
payment to the Company upon exercise of an Option or for any other Benefit that
requires a payment to the Company shall be available for purposes of the Plan.
6
<PAGE>
3.3. Adjustments.
If there is any change in the Common Stock of the Company by
reason of any stock dividend, spin-off, split-up, spin-out, recapitalization,
merger, consolidation, reorganization, combination or exchange of shares, or
otherwise, the number of SARs and number and class of shares available for
Options and grants of Restricted Stock, Performance Shares and Other Stock Based
Awards and the number of Shares subject to outstanding Options, SARs, grants of
Restricted Stock which are not vested, grants of Performance Shares which are
not vested, and Other Stock Based Awards, and the price thereof, as applicable,
shall be appropriately adjusted by the Committee.
4. ELIGIBILITY
4.1. Determined By Committee.
The Participants and the Benefits they receive under the Plan
shall be determined solely by the Committee. In making its determinations, the
Committee shall consider past, present and expected future contributions of
Participants and potential Participants to the Employer, including, without
limitation, the performance of, or the refraining from the performance of,
services. Unless specifically provided otherwise herein, all determinations of
the Committee in connection with the Plan or an Agreement shall be made in its
sole discretion.
5. ADMINISTRATION
5.1. Committee.
The Plan shall be administered by the Committee. The Committee
shall consist of the Board, unless the Board appoints a Committee of two or more
but less than all of the Board. If the Committee does not include the entire
Board, it shall serve at the pleasure of the Board, which may from time to time
appoint members in substitution for members previously appointed and fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it may determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting. Any decision
or determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held.
5.2. Authority.
Subject to the terms of the Plan, the Committee shall have
discretionary authority to:
(a) determine the individuals to whom Benefits are granted, the
type and amounts of Benefits to be granted and the date of issuance and
duration of all such grants;
(b) determine the terms, conditions and provisions of, and
restrictions relating to, each Benefit granted;
(c) interpret and construe the Plan and all Agreements;
7
<PAGE>
(d) prescribe, amend and rescind rules and regulations relating
to the Plan;
(e) determine the content and form of all Agreements;
(f) determine all questions relating to Benefits under the Plan;
(g) maintain accounts, records and ledgers relating to Benefits;
(h) maintain records concerning its decisions and proceedings;
(i) employ agents, attorneys, accountants or other persons for
such purposes as the Committee considers necessary or desirable;
(j) take, at any time, any action described in Section 9.1 or
permitted by Section 9.2(a), irrespective of whether any Change of
Control has occurred or is imminent;
(k) determine, except to the extent otherwise provided in the
Plan, whether and the extent to which Benefits under the Plan will be
structured to conform to the requirements applicable to
Performance-Based Compensation, and to take such action, establish such
procedures, and impose such restrictions at the time such Benefits are
granted as the Committee determines to be necessary or appropriate to
conform to such requirements; and
(l) do and perform all acts which it may deem necessary or
appropriate for the administration of the Plan and carry out the
purposes of the Plan.
5.3. Delegation.
Except as required by Rule 16b-3 with respect to grants of
Options, Stock Appreciation Awards, Performance Shares, Other Stock Based
Awards, or other Benefits to individuals who are subject to Section 16 of the
Exchange Act or as otherwise required for compliance with Rule 16b-3 or other
applicable law, the Committee may delegate all or any part of its authority
under the Plan to any Employee, Employees or committee.
5.4. Determination.
All determinations of the Committee shall be final.
6. AMENDMENT
6.1. Power of Board.
Except as hereinafter provided, the Board shall have the sole
right and power to amend the Plan at any time and from time to time.
6.2. Limitation.
The Board may not amend the Plan, without approval of the
shareholders of the Company:
8
<PAGE>
(a) in a manner which would cause Options which are intended to
qualify as ISOs to fail to qualify;
(b) in a manner which would cause the Plan to fail to meet the
requirements of Rule 16b-3; or
(c) in a manner which would violate applicable law.
7. TERM AND TERMINATION
7.1. Term.
The Plan shall commence as of the Effective Date and, subject to
the terms of the Plan, including those requiring approval by the shareholders of
the Company and those limiting the period over which ISOs or any other Benefits
may be granted, shall continue in full force and effect until terminated.
7.2. Termination.
The Plan may be terminated at any time by the Board.
8. MODIFICATION OR TERMINATION OF BENEFITS
8.1. General.
Subject to the provisions of Section 8.2, the amendment or
termination of the Plan shall not adversely affect a Participant's right to any
Benefit granted prior to such amendment or termination.
8.2. Committee's Right.
Any Benefit granted may be converted, modified, forfeited or
canceled, in whole or in part, by the Committee if and to the extent permitted
in the Plan or applicable Agreement or with the consent of the Participant to
whom such Benefit was granted. Except as may be provided in an Agreement, the
Committee may, in its sole discretion, in whole or in part, waive any
restrictions or conditions applicable to, or accelerate the vesting of, any
Benefit.
9. CHANGE OF CONTROL
9.1. Vesting and Payment.
In the event of a Change of Control:
(a) all outstanding Options shall become fully exercisable,
except to the extent that the right to exercise the Option is subject to
restrictions established in connection with an SAR that is issued in
tandem with the Option;
9
<PAGE>
(b) all outstanding SARs shall become immediately payable,
except to the extent that the right to exercise the SAR is subject to
restrictions established in connection with an Option that is issued in
tandem with the SAR;
(c) all Shares of Restricted Stock shall become fully vested;
(d) all Performance Shares shall be deemed to be fully earned
and shall be paid out in such manner as determined by the Committee; and
(e) all Cash Awards, Other Stock Based Awards and other Benefits
shall become fully vested and/or earned and paid out in such manner as
determined by the Committee.
9.2. Other Action.
In the event of a Change of Control, the Committee, in its sole
discretion, may, in addition to the provisions of Section 9.1 above and to the
extent not inconsistent therewith:
(a) provide for the purchase of any Benefit for an amount of
cash equal to the amount which could have been attained upon the
exercise or realization of such Benefit;
(b) make such adjustment to the Benefits then outstanding as the
Committee deems appropriate to reflect such transaction or change;
and/or
(c) cause the Benefits then outstanding to be assumed, or new
Benefits substituted therefor, by the surviving corporation in such
change.
10. AGREEMENTS AND CERTAIN BENEFITS
10.1. Grant Evidenced by Agreement.
The grant of any Benefit under the Plan may be evidenced by an
Agreement which shall describe the specific Benefit granted and the terms and
conditions of the Benefit. The granting of any Benefit shall be subject to, and
conditioned upon, the recipient's execution of any Agreement required by the
Committee. Except as otherwise provided in an Agreement, all capitalized terms
used in the Agreement shall have the same meaning as in the Plan, and the
Agreement shall be subject to all of the terms of the Plan.
10.2. Provisions of Agreement.
Each Agreement shall contain such provisions that the Committee
shall determine to be necessary, desirable and appropriate for the Benefit
granted which may include, but not necessarily be limited to, the following with
respect to any Benefit: description of the type of Benefit; the Benefit's
duration; its transferability; if an Option, the exercise price, the exercise
period and the person or persons who may exercise the Option; the effect upon
such Benefit of the Participant's death, disability, changes of duties or
termination of employment; the Benefit's conditions; when, if, and how any
Benefit may be forfeited, converted into another Benefit, modified, exchanged
for another Benefit, or replaced; and the restrictions on any Shares purchased
or granted under the Plan.
10
<PAGE>
10.3. Transferability.
Unless otherwise specified in an Agreement or permitted by the
Committee, each Benefit granted shall be not transferable other than by will or
the laws of descent and distribution and shall be exercisable during a
Participant's lifetime only by him.
11. REPLACEMENT AND TANDEM AWARDS
11.1. Replacement.
The Committee may permit a Participant to elect to surrender a
Benefit in exchange for a new Benefit.
11.2. Tandem Awards.
Awards may be granted by the Committee in tandem. However, no
Benefit may be granted in tandem with an ISO except SARs.
12. PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
12.1. Payment.
Upon the exercise of an Option or in the case of any other
Benefit that requires a payment by a Participant to the Company, the amount due
the Company is to be paid:
(a) in cash, including by means of a so-called "cashless
exercise" of an Option;
(b) by the surrender of all or part of a Benefit (including the
Benefit being exercised);
(c) by the tender to the Company of Shares owned by the optionee
and registered in his name having a Fair Market Value equal to the
amount due to the Company;
(d) in other property, rights and credits deemed acceptable by
the Committee, including the Participant's promissory note;
(e) by any combination of the payment methods specified in (a),
(b), (c) and (d) above.
Notwithstanding, the foregoing, any method of payment other than
(a) may be used only with the consent of the Committee or if and to the extent
so provided in an Agreement. The proceeds of the sale of Shares purchased
pursuant to an Option and any payment to the Company for other Benefits shall be
added to the general funds of the Company or to the Shares held in treasury, as
the case may be, and used for the corporate purposes of the Company as the Board
shall determine.
12.2. Dividend Equivalents.
Grants of Benefits in Shares or Share equivalents may include
dividend equivalent payments or dividend credit rights.
11
<PAGE>
12.3. Deferral.
The right to receive any Benefit under the Plan may, at the
request of the Participant, be deferred for such period and upon such terms as
the Committee shall determine, which may include crediting of interest on
deferrals of cash and crediting of dividends on deferrals denominated in Shares.
12.4. Withholding.
The Company may, at the time any distribution is made under the
Plan, whether in cash or in Shares, or at the time any Option is exercised,
withhold from such distribution or Shares issuable upon the exercise of an
Option, any amount necessary to satisfy federal, state and local income and/or
other tax withholding requirements with respect to such distribution or exercise
of such Options. The Committee or the Company may require a participant to
tender to the Company cash and/or Shares in the amount necessary to comply with
any such withholding requirements.
13. OPTIONS
13.1. Types of Options.
It is intended that both ISOs and NQSOs, which may be Reload
Options, may be granted by the Committee under the Plan.
13.2. Grant of ISOs and Option Price.
Each ISO must be granted to an Employee and granted within ten
years from the earlier of the date of adoption by the Board or the Effective
Date. The purchase price for Shares under any ISO shall be no less than the Fair
Market Value of the Shares at the time the Option is granted.
13.3. Other Requirements for ISOs.
The terms of each Option which is intended to qualify as an ISO
shall meet all requirements of Section 422 of the Code.
13.4. NQSOs.
The terms of each NQSO shall provide that such Option will not
be treated as an ISO. The purchase price for Shares under any NQSO shall be no
less than 85% of the Fair Market Value of the Shares at the time the Option is
granted.
13.5. Determination by Committee.
Except as otherwise provided in Section 13.2 through Section
13.4, the terms of all Options shall be determined by the Committee.
12
<PAGE>
14. SARS
14.1. Grant and Payment.
The Committee may grant SARs. Upon electing to receive payment
of a SAR, a Participant shall receive payment in cash, in Shares, or in any
combination of cash and Shares, as the Committee shall determine.
14.2. Grant of Tandem Award.
The Committee may grant SARs in tandem with an Option, in which
case: the exercise of the Option shall cause a correlative reduction in SARs
standing to a Participant's credit which were granted in tandem with the Option;
and the payment of SARs shall cause a correlative reduction of the Shares under
such Option.
14.3. ISO Tandem Award.
When SARs are granted in tandem with an ISO, the SARs shall have
such terms and conditions as shall be required for the ISO to qualify as an ISO.
14.4. Payment of Award.
SARs shall be paid by the Company to a Participant, to the
extent payment is elected by the Participant (and is otherwise due and payable),
as soon as practicable after the date on which such election is made.
15. ANNUAL LIMITATIONS
15.1. Limitation on Options and SARs.
The number of (a) Shares covered by Options where the purchase
price is no less than the Fair Market Value of the Shares on the date of grant
plus (b) SARs which may be granted to any Participant in any Fiscal Year shall
not exceed 5,000,000.
15.2. Computations.
For purposes of Section 15.1: Shares covered by an Option that
is canceled shall count against the maximum, and, if the exercise price under an
Option is reduced, the transaction shall be treated as a cancellation of the
Option and a grant of a new Option; and SARs covered by a grant of SARs that is
canceled shall count against the maximum, and, if the Fair Market Value of a
Share on which the appreciation under a grant of SARs will be calculated is
reduced, the transaction will be treated as a cancellation of the SARs and the
grant of a new grant of SARs.
16. RESTRICTED STOCK AND PERFORMANCE SHARES
16.1. Restricted Stock.
The Committee may grant Benefits in Shares available under
Section 3 of the Plan as Restricted Stock. Shares of Restricted Stock shall be
issued and delivered at the time of the grant or as otherwise determined by the
13
<PAGE>
Committee, but shall be subject to forfeiture until provided otherwise in the
applicable Agreement or the Plan. Each certificate representing Shares of
Restricted Stock shall bear a legend referring to the Plan and the risk of
forfeiture of the Shares and stating that such Shares are nontransferable until
all restrictions have been satisfied and the legend has been removed. At the
discretion of the Committee, the grantee may or may not be entitled to full
voting and dividend rights with respect to all shares of Restricted Stock from
the date of grant.
16.2. Cost of Restricted Stock.
Unless otherwise determined by the Committee, grants of Shares
of Restricted Stock shall be made at a per Share cost to the Participant equal
to par value.
16.3. Non-Transferability.
Shares of Restricted Stock shall not be transferable until after
the removal of the legend with respect to such Shares.
16.4. Performance Shares.
Performance Shares are the right of an individual to whom a
grant of such Shares is made to receive Shares or cash equal to the Fair Market
Value of such Shares at a future date in accordance with the terms and
conditions of such grant. The terms and conditions shall be determined by the
Committee, in its sole discretion, but generally are expected to be based
substantially upon the attainment of targeted profit and/or performance
objectives.
16.5. Grant.
The Committee may grant an award of Performance Shares. The
number of Performance Shares and the terms and conditions of the grant shall be
set forth in the applicable Agreement.
17. CASH AWARDS
17.1. Grant.
The Committee may grant Cash Awards at such times and (subject
to Section 17.2) in such amounts as it deems appropriate.
17.2. Rule 16b-3.
The amount of any Cash Award in any Fiscal Year to any
Participant who is subject to Section 16 of the Exchange Act shall not exceed
the greater of $100,000 or 100% of his cash compensation (excluding any Cash
Award under this Section 17) for such Fiscal Year.
17.3. Restrictions.
Cash Awards may be subject or not subject to conditions (such as
an investment requirement), restricted or nonrestricted, vested or subject to
forfeiture and may be payable currently or in the future or both.
14
<PAGE>
18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS
18.1. Other Stock Based Awards.
The Committee shall have the right to grant Other Stock Based
Awards which may include, without limitation, the grant of Shares based on
certain conditions, the payment of cash based on the performance of the Common
Stock, and the grant of securities convertible into Shares.
18.2. Other Benefits.
The Committee shall have the right to provide types of Benefits
under the Plan in addition to those specifically listed, if the Committee
believes that such Benefits would further the purposes for which the Plan was
established.
19. MISCELLANEOUS PROVISIONS
19.1. Underscored References.
The underscored references contained in the Plan are included
only for convenience, and they shall not be construed as a part of the Plan or
in any respect affecting or modifying its provisions.
19.2. Number and Gender.
The masculine and neuter, wherever used in the Plan, shall refer
to either the masculine, neuter or feminine; and, unless the context otherwise
requires, the singular shall include the plural and the plural the singular.
19.3. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments or deliveries
of Shares not yet made to a Participant by the Company, nothing contained herein
shall give any rights that are greater than those of a general creditor of the
Company. The Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver Shares or
payments hereunder consistent with the foregoing.
19.4. Termination of Employment.
If the employment of a Participant by the Company terminates for
any reason, except as otherwise provided in an Agreement, all unexercised,
deferred, and unpaid Benefits may be exercisable or paid only in accordance with
rules established by the Committee. These rules may provide, as the Committee
may deem appropriate, for the expiration, forfeiture, continuation, or
acceleration of the vesting of all or part of the Benefits.
19.5. Designation of Beneficiary.
A Participant may file with the Committee a written designation
of a beneficiary or beneficiaries (subject to such limitations as to the classes
and number of beneficiaries and contingent beneficiaries as the Committee may
from time to time prescribe) to exercise, in the event of the death of the
15
<PAGE>
Participant, an Option, or to receive, in such event, any Benefits. The
Committee reserves the right to review and approve beneficiary designations. A
Participant may from time to time revoke or change any such designation of
beneficiary and any designation of beneficiary under the Plan shall be
controlling over any other disposition, testamentary or otherwise; provided,
however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the Committee may
determine to recognize only an exercise by the legal representative of the
recipient, in which case the Company, the Committee and the members thereof
shall not be under any further liability to anyone.
19.6. Governing Law.
This Plan shall be construed and administered in accordance with
the laws of the State of Missouri.
19.7. Purchase for Investment.
The Committee may require each person purchasing Shares pursuant
to an Option or other award under the Plan to represent to and agree with the
Company in writing that such person is acquiring the Shares for investment and
without a view to distribution or resale. The certificates for such Shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer. All certificates for Shares delivered under the Plan
shall be subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under all applicable laws, rules and regulations,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate references to such restrictions.
19.8. No Employment Contract.
Neither the adoption of the Plan nor any Benefit granted
hereunder shall confer upon any Employee any right to continued employment nor
shall the Plan or any Benefit interfere in any way with the right of the
Employer to terminate the employment of any of its Employees at any time.
19.9. No Effect on Other Benefits.
The receipt of Benefits under the Plan shall have no effect on
any benefits to which a Participant may be entitled from the Employer, under
another plan or otherwise, or preclude a Participant from receiving any such
benefits.
16
