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EXHIBIT 10.1
2000 EMPLOYEE STOCK OPTION PLAN
SECTION 1. INTRODUCTION.
1.1 PURPOSE. The purpose of the 2000 Employee Stock Option Plan (the
"Plan") is to advance and promote the interests of Mack-Cali Realty Corporation
(the "Corporation") and its Subsidiaries by providing employees, consultants and
advisors of the Corporation or its Subsidiaries with an incentive to achieve
corporate objectives, to attract and retain employees, consultants and advisors
of outstanding competence and to provide such individuals with an equity
interest in the Corporation through the acquisition of Common Stock and by
providing for payments to such individuals based on the appreciation in value or
value of such Common Stock. The Plan is intended to be construed as an employee
benefit plan that satisfies the requirements for exemption from the restrictions
of Section 16(b) of the Securities Exchange Act of 1934, as amended, pursuant to
the applicable rules promulgated thereunder.
1.2 DEFINITIONS. The following definitions are applicable to the Plan:
(a) Award.
"Award" means Options, Restricted Stock, Stock Appreciation Rights (SARs) or
any combination thereof, granted under the Plan.
(b) Award Agreement.
"Award Agreement" means the written agreement by which an Award shall be
evidenced.
(c) Beneficiary.
"Beneficiary" means the beneficiary or beneficiaries designated in
accordance with Section 5.8 hereof to receive the amount, if any, payable under
the Plan upon the death of a Participant.
(d) Board.
"Board" means the Board of Directors of the Corporation.
(e) Change in Control.
"Change in Control" means that any of the following events has occurred:
(i) any "person" or "group" of persons, as such terms are used in
Sections 13 and 14 of the Exchange Act, other than the Corporation,
any of its Subsidiaries, or any employee benefit plan sponsored by
the Corporation or any of its Subsidiaries, becomes the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange
Act) of thirty percent (30%) or more of the Common Stock issued and
outstanding immediately prior to such acquisition;
(ii) any Common Stock is purchased pursuant to a tender or exchange
offer other than an offer by the Corporation; or
(iii) the dissolution or liquidation of the Corporation or the
consummation of any merger or consolidation of the Corporation or
any sale or other disposition of all or substantially all of its
assets, if the shareholders of the Corporation immediately before
such transaction own, immediately after consummation of such
transaction, equity securities (other than options and other rights
to acquire equity securities) possessing less than thirty percent
(30%) of the voting power of the surviving or acquiring
corporation.
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PROVIDED, HOWEVER, that notwithstanding anything in the Plan to the contrary, no
Change in Control shall be deemed to have occurred and no rights arising upon a
Change in Control described in Sections 2.2(f) and 4.7 hereof shall exist unless
(i) on a Plan wide basis, the Board directs to the contrary by resolution
adopted prior to the Change in Control or (ii) on a Participant by Participant
basis with respect to individual Participants who have employment or other
agreements with the Corporation or any Subsidiary which contain a definition of
change in control, the definition of change in control is met under such
employment or other agreement and such employment or other agreement specifies
that a change in control under such other employment or other agreement will be
considered a Change in Control for purposes of the Plan. Any resolution of the
Board adopted in accordance with the provisions of this Section directing that
this Section and Sections 2.2(f) and 4.7 hereof or any of such Sections become
ineffective may be rescinded or countermanded at any time with or without
retroactive effect by such Board.
(f) Code.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(g) Committee.
"Committee" means the committee appointed pursuant to Section 1.3 hereof or
if no such Committee is appointed, the Board.
(h) Common Stock.
"Common Stock" means the common stock, $.01 par value per share, of the
Corporation.
(i) Corporation.
"Corporation" means Mack-Cali Realty Corporation.
(j) Effective Date.
"Effective Date" means September 11, 2000.
(k) Eligible Individual.
"Eligible Individual" means any Key Employee, consultant or advisor of the
Corporation or any Subsidiary.
(l) Exchange Act.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
References to a particular section of, or rule under the Exchange Act include
references to successor provisions.
(m) Fair Market Value.
"Fair Market Value" means the fair market value of the Common Stock based
upon the closing price of a Share as quoted on the New York Stock Exchange at
the end of the last business day preceding the Grant Date or other date of
determination, as reported in the New York edition of The Wall Street Journal.
(n) Incentive Stock Option.
"Incentive Stock Option" means an Option to purchase Common Stock that
qualifies as an incentive stock option within the meaning of Section 422 of the
Code.
(o) Immediate Family.
"Immediate Family" means, with respect to a particular Participant, the
Participant's spouse, children and grandchildren.
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(p) Key Employee.
"Key Employee" means any employee of the Corporation or any of its
Subsidiaries, including any officer or director who is also an employee, who, in
the judgment of the Committee, is considered important to the future of the
Corporation. Nothing shall limit the Board from designating all or substantially
all employees as eligible for grants.
(q) Mature Shares.
"Mature Shares" means Shares for which the holder thereof has good title,
free andclear of all liens and encumbrances, and which such holder either
(i) has held for at least six (6) months or (ii) has purchased from the open
market.
(r) Non-qualified Stock Option.
"Non-qualified Stock Option" means an Option to purchase Common Stock that
does not qualify as an Incentive Stock Option.
(s) Option.
"Option" means an Incentive Stock Option or a Non-qualified Stock Option
granted under the Plan.
(t) Option Price.
"Option Price" means the purchase price per Share of an Option.
(u) Option Term.
"Option Term" means the period beginning on the Grant Date of an Option and
ending on the expiration date of such Option, as specified in the Award
Agreement for such Option and as may, in the discretion of the Committee, and
consistent with the provisions of the Plan, be extended from time to time.
(v) Participant.
"Participant" means an Eligible Individual who has been granted an Award or
a Permitted Transferee.
(w) Permitted Transferee.
"Permitted Transferee" means a person to whom an Award may be transferred or
assigned in accordance with Section 5.8 hereof.
(x) Plan.
"Plan" means the 2000 Employee Stock Option Plan, as the same may be amended
from time to time.
(y) Restricted Stock.
"Restricted Stock" means Shares which are subject to forfeiture if the
Participant does not satisfy the Restrictions specified in the Award Agreement
applicable to such Restricted Stock.
(z) Restricted Period.
"Restricted Period" means the period of time Restricted Stock are subject to
the Restrictions specified in the Award Agreement applicable to such Restricted
Stock.
(aa) Restrictions.
"Restrictions" means those restrictions and conditions placed upon
Restricted Stock as determined by the Board in accordance with Section 4.2
hereof.
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(bb) Rule 16b-3.
"Rule 16b-3" means Rule 16b-3 of the SEC under the Exchange Act, as amended
from time to time, together with any successor rule.
(cc) SEC.
"SEC" means the Securities and Exchange Commission.
(dd) Section 16 Participant.
"Section 16 Participant" means a Participant who is subject to potential
liability under Section 16(b) of the Exchange Act with respect to transactions
involving equity securities of the Corporation.
(ee) Share.
"Share" means a share of Common Stock.
(ff) Stock Appreciation Right or SAR.
"Stock Appreciation Right" or "SAR" means a right granted under the Plan in
connection with an Option, or separately, to receive the appreciation in value
of Shares.
(gg) Subsidiary.
"Subsidiary" means, for purposes of grants of Incentive Stock Options, a
corporation as defined in Section 424(f) of the Code (with the Corporation
treated as the employer corporation for purposes of this definition) and, for
all other purposes, a corporation or other entity with respect which the
Corporation (i) owns, directly or indirectly, fifty percent (50%) or more of the
then outstanding common stock in any corporation or (ii) has a fifty percent
(50%) or more ownership interest in any other entity.
(hh) 10% Owner.
"10% Owner" means a person who owns capital stock (including stock treated
as owned under Section 424(d) of the Code) possessing more than ten percent
(10%) of the combined voting power of all classes of capital stock of the
Corporation or any Subsidiary where "voting power" means the combined voting
power of the then outstanding securities of a corporation entitled to vote
generally in the election of directors.
1.3 ADMINISTRATION. The Plan shall be administered by a committee (the
"Committee), which shall consist of two or more directors of the Corporation,
all of whom qualify as "Non Employee Directors" as defined in Rule 16b-3. The
number of members of the Committee shall from time to time be increased or
decreased, and shall be subject to such conditions, in each case as the Board
deems appropriate to permit transactions in Shares pursuant to the Plan to
satisfy such conditions of Rule 16b-3 as then in effect. In the event that the
Compensation Committee of the Board (the "Compensation Committee) meets the
requirements set forth in this Section 1.3 hereof, such Compensation Committee
shall be the Committee hereunder unless otherwise determined by the Board.
A majority of the members of the Committee shall constitute a quorum. The
Committee may act at a meeting, including a telephonic meeting, by action of a
majority of the members present, or without a meeting by unanimous written
consent.
Subject to the express provisions of the Plan, the Committee shall have full
and final authority and discretion as follows:
(i) to select the Participants from Eligible Individuals;
(ii) to grant Options and/or Restricted Stock to Participants in such
combination and in such amounts as it shall determine and to
determine the terms and conditions applicable to each such Award,
including the benefit payable under any SAR, and whether or not
specific
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Awards shall be identifiable with other specific Awards, and if so
whether they shall be exercisable cumulatively with, or
alternatively to, such other specific Award;
(iii) to determine the amount, if any, that a Participant shall pay for
Restricted Stock, the nature of the Restrictions applicable to the
Restricted Stock, and the duration of the Restricted Period
applicable to the Restricted Stock;
(iv) to determine the actual amount earned by each Participant with
respect to such Awards, the terms and conditions of all Award
Agreements (which need not be identical) and with the consent of
the Participant, to amend any such Award Agreement at any time,
among other things, to permit transfers of such Awards to the
extent permitted by the Plan, except that consent of the
Participant shall not be required for any amendment which (A) does
not adversely affect the rights of the Participant or (B) is
necessary or advisable (as determined by the Committee) to carry
out the purpose of the Award as a result of any change in
applicable law; PROVIDED, HOWEVER, that the Committee shall not
have the authority and discretion to re-price any Award;
(v) to determine consistent with the Code whether an Option that is
granted to a Participant is a Non-qualified Stock Option or an
Incentive Stock Option, the number of Shares to be covered by each
such Option and the time or times when and the manner in which each
Option shall be exercisable;
(vi) to amend any Incentive Stock Option with the consent of the
Participant so as to make it a Non-qualified Stock Option;
(vii) to grant a SAR in connection with the grant of an Option or
separately;
(viii) to accelerate the exercisability (including exercisability within a
period of less than one year after the Grant Date) of, and to
accelerate or waive any or all of the terms and conditions
applicable to, any Award or any group of Awards for any reason and
at any time, including in connection with a termination of
employment or consultancy;
(ix) subject to the provisions of the Plan, to extend the time during
which any Award or group of Awards may be exercised;
(x) to treat all or any portion of any period during which a Participant
is on military leave or on an approved leave of absence from the
Corporation or a Subsidiary as a period of employment or service of
such Participant by the Corporation or any Subsidiary for purposes
of accrual of his or her rights under his or her Awards;
(xi) to interpret the Plan and make all determinations necessary or
advisable for the administration of the Plan including the
establishment, amendment or revocation from time to time of
guidelines or regulations for the administration of the Plan, to
cause appropriate records to be established, and to take all other
actions considered necessary or advisable for the administration of
the Plan; and
(xii) to take any other action with respect to any matters relating to
the Plan for which it is responsible.
All decisions, actions or interpretations of the Committee on all matters
relating to the Plan or any Award Agreement shall be final, binding and
conclusive upon all parties. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
Award.
1.4 PARTICIPATION. The Committee may, in its discretion, grant Awards to
any Eligible Individual, whether or not he or she has previously received an
Award. Participation in the Plan shall be limited to those Key Employees,
consultants and advisors who have received written notification from the
Committee, or from a person designated by the Committee, that they have been
selected to participate in the Plan.
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No such Eligible Individuals shall at any time have the right to be a
Participant unless selected by the Committee pursuant to the Plan. No
Participant, having been granted an Award, shall have the right to an additional
Award in the future unless such Award is granted by the Committee.
1.5 MAXIMUM NUMBER OF SHARES AVAILABLE FOR AWARDS. Subject to adjustment
in accordance with Section 5.2 hereof, the maximum number of Shares for which
grants under the Plan shall be available is 2,500,000. In addition, the
Administrative Committee shall have the authority, in its sole discretion, to
grant additional Non-qualified Stock Options to a Participant who exercises an
Option and pays the exercise price in Common Stock, in a quantity equal to the
number of Common Stock delivered to the Corporation upon such exercise. In the
event any Awards granted under the Plan shall be forfeited, terminate or expire,
the number of Shares subject to such Award, to the extent of any such
forfeiture, termination or expiration, shall thereafter again be available for
grant under the Plan. The Common Stock distributed under the Plan may be
authorized and unissued shares, shares held in the treasury of the Corporation,
or shares purchased on the open market by the Corporation (at such time or times
and in such manner as it may determine). The Corporation shall be under no
obligation to acquire Common Stock for distribution to Participants before such
Common Stock is due and distributable.
1.6 GENERAL CONDITIONS TO GRANTS. The Grant Date of an Award shall be the
date on which the Committee grants the Award or such later date as specified in
advance by the Committee. All Awards shall be evidenced by an Award Agreement
and any terms and conditions of an Award not set forth in the Plan shall be set
forth in the Award Agreement related to that Award or in the Participant's
employment or other agreement with the Corporation or any Subsidiary.
SECTION 2. OPTIONS.
2.1 AWARDS OF OPTIONS. Subject to the provisions of the Plan, the
Committee shall determine and designate from time to time those Eligible
Individuals to whom Incentive Stock Options, or Non-qualified Stock Options, or
both, shall be granted and the number of Shares to be granted to each such
Eligible Individual; PROVIDED, HOWEVER, that only Key Employees may receive
Incentive Stock Options and the aggregate fair market value (determined at the
time the Option is granted) of the shares with respect to which any incentive
stock options are exercisable for the first time by any Key Employee during any
calendar year under all incentive stock option plans of the Corporation and any
Subsidiary shall not exceed one hundred thousand dollars ($100,000) or such
other limit set forth in Section 422 of the Code (the "Limitations of the
Code"). If the aggregate fair market value of such shares exceeds the
Limitations of the Code, the excess Shares will be treated as Non-qualified
Options under this Plan. In reducing the number of Incentive Stock Options to
meet the Limitations of the Code, the most recently granted Incentive Stock
Options shall be reduced first. If a reduction of simultaneously granted Options
is necessary to meet the Limitations of the Code, the Committee may designate
which Shares are to be treated as Shares acquired pursuant to an Incentive Stock
Option. In the event that any Incentive Stock Options granted under the Plan
fail to meet the requirements for Incentive Stock Options as set forth in the
Code, such Incentive Stock Options will be treated as Non-qualified Stock
Options under the Plan. In determining the Eligible Individuals who will be
granted Options under the Plan, the Committee may consider such individuals'
responsibilities, service, present and future value to the Corporation or any
Subsidiary and other factors it considers relevant.
2.2 TERMS AND CONDITIONS OF OPTIONS. Except as otherwise provided in a
Participant's employment or other agreement with the Corporation or any
Subsidiary or in an Award Agreement, each Option shall be subject to the
following express terms and conditions and to such other terms and conditions as
the Committee may deem appropriate as set forth in the Award Agreement or the
Participant's employment or other agreement with the Corporation or any
Subsidiary:
(a) OPTION TERM. Each Option shall expire on the tenth (10th)
anniversary of the Grant Date (or in the case of an Incentive Stock Option
granted to a 10% Owner, on the fifth (5th) anniversary of the
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Grant Date) or such earlier period specified in the Participant's Award
Agreement or employment or other agreement with the Corporation or any
Subsidiary. The Committee may extend such Option Term; PROVIDED, HOWEVER,
that (i) such extension shall not in any way disqualify the Option as an
Incentive Stock Option and (ii) the Option Term, including any such
extensions, shall not exceed ten (10) years.
(b) OPTION PRICE. The Option Price per Share shall be determined by the
Committee no later than the Grant Date of any Option; PROVIDED, HOWEVER,
(i) in the case of an Incentive Stock Option, the Option Price shall not be
less than the Fair Market Value of a Share on the Grant Date, and (ii) in
the case of an Incentive Stock Option granted to a 10% Owner, the Option
Price shall not be less than one hundred ten percent (110%) of the Fair
Market Value of a Share on the Grant Date, (but in no event less than the
par value of a Share).
(c) EXERCISE OF OPTION. The exercisability of an Option shall be
determined by the Committee. Subject to acceleration or early expiration as
provided elsewhere in the Plan or in a Participant's employment or other
agreement with the Corporation or any Subsidiary, the vesting of any Option
granted under the Plan shall be subject to the Participant remaining in the
employ of or maintaining a consultancy with the Corporation or any of its
Subsidiaries and shall vest (i) in five (5) equal installments of twenty
percent (20%) of the amount granted, with the first installment vesting on
the December 31st next following the Grant Date and each other installment
vesting on each of the next four December 31st thereafter or (ii) in such
other amounts over such period of time after the Grant Date as the Committee
may designate.
(d) DISQUALIFYING DISPOSITION. The Award Agreement shall require any
Participant who is granted an Incentive Stock Option to notify the
Corporation of any disposition of such Shares issued upon the exercise of
such Incentive Stock Option under the circumstances described in
Section 421(b) of the Code (relating to certain disqualifying dispositions)
(a "Disqualifying Disposition", within ten (10) business days after such
Disqualifying Disposition.
(e) PAYMENT OF PURCHASE PRICE UPON EXERCISE. The purchase price as to
which an Option shall be exercised shall be paid to the Corporation at the
time of exercise either (i) in cash, certified check or wire transfer,
(ii) in such other consideration as the Committee deems appropriate,
including, but not limited to, loans from the Corporation or a third party,
(iii) subject to the approval of the Committee, in Mature Shares already
owned by the Participant having a total fair market value, as determined by
the Committee, equal to the purchase price, or a combination of cash and
Mature Shares having a total fair market value, as so determined, equal to
the purchase price, (iv) subject to the approval of the Committee, in its
sole discretion, by delivering a properly executed exercise notice in a form
approved by the Committee, together with an irrevocable notice of exercise
and irrevocable instructions to a broker to promptly deliver to the
Corporation the amount of applicable sale or loan proceeds sufficient to pay
the purchase price for such Shares, together with the amount of federal,
state and local withholding taxes payable by Participant by reason of such
exercise, or (v) a combination of the foregoing.
(f) EXERCISE IN THE EVENT OF TERMINATION OR CHANGE IN CONTROL. Unless
otherwise provided in a Participant's employment or other agreement with the
Corporation or any Subsidiary or Award Agreement, the following provisions
shall apply upon termination of a Participant's employment or consultancy
with the Corporation or any Subsidiary:
(i) UPON TERMINATION FOR ANY REASON OTHER THAN DUE TO DEATH. If a
Participant's employment or consultancy with the Corporation or any
Subsidiary shall terminate for any reason other than by reason of
his or her death, such Participant may exercise his or her Options,
to the extent that such Participant shall have been entitled to do
so on the date of such termination, at any time, or from time to
time, but not later than (x) the expiration date specified in
Subsection 2.2(a) hereof or (y) three (3) months after the date of
such termination, whichever date is
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earlier and any portion of any Option granted hereunder that is not
vested and exercisable as of the date of the Participant's
termination of employment shall automatically expire and be
forfeited as of such date of termination.
(ii) UPON TERMINATION DUE TO DEATH. In the event a Participant's
employment or consultancy shall terminate by reason of his or her
death, such Participant's Beneficiary, heirs or estate may exercise
his or her Options, to the extent that such Participant, if such
Participant had not died, would have been entitled to do so within
the calendar year following such Participant's death, at any time,
or from time to time, but not later than (x) the expiration date
specified in Subsection 2.2(a) hereof or (y) one year after the
date of death, whichever is earlier and any portion of any Option
granted hereunder that would not have vested and been exercisable
within the calendar year following such Participant's death if such
Participant had not died shall automatically expire and be
forfeited as of the date of such Participant's death.
(iii) UPON A CHANGE IN CONTROL. In the event a Participant's employment
or consultancy shall terminate within six (6) months following a
Change in Control, all Options granted under the Plan which the
Participant shall not then have been entitled to exercise shall be
accelerated as of the date of such termination and the Participant
may exercise all such Options at any time, or from time to time,
but not later than (x) the expiration date specified in Subsection
2.2(a) hereof or (y) three (3) months after such termination,
whichever is earlier.
(g) TRANSFERABILITY OF INCENTIVE STOCK OPTIONS. No Incentive Stock
Option granted under the Plan shall be transferable other than by will or by
the laws of descent and distribution and during the lifetime of the
Participant, shall be exercisable only by the Participant or his or her
guardian or legal representative.
(h) INVESTMENT REPRESENTATION. Each Award Agreement for an Option shall
provide that, upon demand by the Committee for such a representation, the
Participant (or any person acting under Subsection 2.2(e) hereof) shall
deliver to the Committee, at the time of any exercise of an Option or
portion thereof, a written representation that the Shares to be acquired
upon such exercise are to be acquired for investment and not for resale or
with a view to the distribution thereof. Upon such demand, delivery of such
representation prior to the delivery of any Common Stock issued upon
exercise of an Option and prior to the expiration of the Option Term shall
be a condition precedent to the right of the Participant or such other
person to purchase any Common Stock. In the event certificates for Common
Stock are delivered under the Plan with respect to which such an investment
representation has been obtained, the Committee may cause a legend or
legends to be placed on such certificates to make appropriate reference to
such representations and to restrict transfer in the absence of compliance
with applicable federal or state securities laws.
(i) PARTICIPANTS TO HAVE NO RIGHTS AS SHAREHOLDERS. No Participant
shall have any rights as a shareholder with respect to any Common Stock
subject to his or her Option prior to the date of issuance to him or her of
such Common Stock.
(j) OTHER OPTION PROVISIONS. The Committee may require a Participant to
agree, as a condition to receiving an Option under the Plan, that part or
all of any Options previously granted to such Participant under the Plan or
any prior plan of the Corporation be terminated.
2.3 EXERCISE OF OPTIONS. An Option shall be exercised by the delivery to
the Corporation during the Option Term of (x) written notice of intent to
purchase a specific number of Shares subject to the Option and (y) payment in
full of the Option Price of such specific number of Shares.
SECTION 3. STOCK APPRECIATION RIGHTS.
3.1 AWARD OF STOCK APPRECIATION RIGHTS. Subject to the provisions of the
Plan, the Committee shall determine and designate from time to time those
Eligible Individuals to whom SARs shall be granted and
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the number of Shares to be granted to each such Eligible Individual. When
granted SARS may, but need not, be identified with a specific Option (including
any Option granted on or before the Grant Date of the SARs) in a number equal to
or different from the number of SARs so granted. If SARs are identified with
Shares subject to an Option, then, unless otherwise provided in the applicable
Award Agreement, the Participant's associated SARs shall terminate upon (x) the
expiration, termination, forfeiture or cancellation of such Option, or (y) the
exercise of such Option.
3.2 STRIKE PRICE. The strike price ("Strike Price") of any SAR shall
equal, for any SAR that is identified with an Option, the Option Price of such
Option, or for any other SAR, 100% of the Fair Market Value of a Share on the
Grant Date of such SAR; except that the Committee may (x) specify a higher
Strike Price in the Award Agreement or (y) provide that the benefit payable upon
exercise of any SAR shall not exceed a percentage of Fair Market Value of a
Share on such Grant Date as the Committee shall specify.
3.3 VESTING OF SARS. Unless otherwise specified in the applicable Award
Agreement or in the Participant's employment or other agreement with the
Corporation or any Subsidiary, (x) each SAR not identified with any other Award
shall become exercisable with respect to 20% of the Shares subject thereto on
each of the first five December 31st following the Grant Date of such SAR or in
such other amounts and over such other time period as may be determined by the
Committee and (y) each SAR which is identified with any other Award shall become
exercisable as and to the extent that the Option with which such SAR is
identified may be exercised.
3.4 EXERCISE OF SARS. SARs shall be exercised by delivery to the
Corporation of written notice of intent to exercise a specific number of SARs.
Unless otherwise provided in the applicable Award Agreement or a Participant's
employment or other agreement with the Corporation or any Subsidiary, the
exercise of SARs which are identified with Shares subject to an Option shall
result in the cancellation or forfeiture of such Option, to the extent of such
exercise and any such Shares so canceled or forfeited shall not thereafter again
become available for grant under the Plan. The benefit for each SAR shall be
equal to (x) the Fair Market Value of the Share on the date of such exercise,
minus (y) the Strike Price of such SAR. Such benefit shall be payable in cash
(subject to applicable withholding), except that the Committee may provide in
the applicable Award Agreement that benefits may be paid wholly or partly in
Shares.
3.5 NO RIGHTS AS SHAREHOLDERS. No Participant shall have any rights as a
shareholder with respect to any Common Stock subject to his or her SAR.
3.6 EXERCISE IN THE EVENT OF TERMINATION OR CHANGE IN CONTROL. Unless
otherwise provided in a Participant's employment or other agreement with the
Corporation or any Subsidiary or Award Agreement, the following provisions shall
apply upon termination of a Participant's employment or consultancy with the
Corporation or any Subsidiary:
(i) UPON TERMINATION FOR ANY REASON OTHER THAN DUE TO DEATH. If a
Participant's employment or consultancy with the Corporation or any
Subsidiary shall terminate for any reason other than by reason of
his or her death, such Participant may exercise his or her SARs, to
the extent that such Participant shall have been entitled to do so
on the date of such termination, at any time, or from time to time,
but not later than (x) the expiration date specified in Subsection
2.2(a) hereof or (y) three (3) months after the date of such
termination, whichever date is earlier and any SARs granted
hereunder that are not vested and exercisable as of the date of the
Participant's termination of employment shall automatically expire
and be forfeited as of such date of termination.
(ii) UPON TERMINATION DUE TO DEATH. In the event a Participant's
employment or consultancy shall terminate by reason of his or her
death, such Participant's Beneficiary, heirs or estate may exercise
his or her SARs, to the extent that such Participant, if such
Participant had not died, would have been entitled to do so within
the calendar year following such Participant's
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death, at any time, or from time to time, but not later than
(x) the expiration date specified in Subsection 2.2(a) hereof or
(y) one year after the date of death, whichever is earlier and any
SARs granted hereunder that would not have vested and been
exercisable within the calendar year following such Participant's
death if such Participant had not died shall automatically expire
and be forfeited as of the date of such Participant's death.
(iii) UPON A CHANGE IN CONTROL. In the event a Participant's employment
or consultancy shall terminate within six (6) months following a
Change in Control, all SARs granted under the Plan which the
Participant shall not then have been entitled to exercise shall be
accelerated as of the date of such termination and the Participant
may exercise all such SARs at any time, or from time to time, but
not later than (x) the expiration date specified in Subsection
2.2(a) hereof or (y) three (3) months after such termination,
whichever is earlier.
SECTION 4. RESTRICTED STOCK.
4.1 AWARDS OF RESTRICTED STOCK. Restricted Stock awarded under this Plan
shall be subject to certain Restrictions as provided below. All Restrictions
imposed on any such Award of Restricted Stock shall be made by and at the
discretion of the Committee, subject to the provisions of the Plan, and are
binding on the Corporation and the Participants, their Beneficiaries and legal
representatives.
4.2 RESTRICTED PERIOD/RESTRICTIONS. At the time each Award of Restricted
Stock is granted, the Committee (i) shall establish a Restricted Period within
which Restricted Stock awarded to the Participants may not be sold, assigned,
transferred, made subject to gift, or otherwise disposed of, mortgaged, pledged
or otherwise encumbered, if any and (ii) may impose such other Restrictions on
any Restricted Stock as it may deem advisable.
4.3 RIGHTS AS STOCKHOLDERS. Except for the conditions outlined in
Section 4.2 hereof, and the forfeiture conditions described in Section 4.5
hereof, each Participant shall have all rights of a holder of Common Stock,
including the right to receive all dividends or other distributions made or paid
in respect of such Shares and the right to vote such Shares at regular or
special meetings of the shareholders of the Corporation.
4.4 DELIVERY OF SHARES. The certificates for any Restricted Stock awarded
to an Eligible Individual under the Plan shall be held (together with a stock
power executed in blank by the Eligible Individual) in escrow by the Secretary
of the Corporation under the Participant's name in an account maintained by the
Corporation until such Shares of Restricted Stock become nonforfeitable or are
forfeited. At the conclusion of the Restricted Period or the expiration or
attainment of such other Restrictions imposed on any Restricted Stock granted to
a Participant, or upon the prior approval of the Committee as described in
Section 4.5 hereof, and subject to the satisfaction of the Corporation's
withholding obligations described in Section 5.8 hereof, certificates
representing such Shares of Restricted Stock shall be delivered to the
Participant, or the Beneficiary or legal representative of the Participant, free
of the Restrictions set forth in the Award Agreement pursuant to Section 4.2
hereof.
4.5 TERMINATION OF A PARTICIPANT' S EMPLOYMENT OR CONSULTANCY. Unless
otherwise provided in the Award Agreement or in the Participant's employment or
other agreement with the Corporation or any Subsidiary, the following provisions
shall apply upon termination of a Participant's employment or consultancy with
the Corporation or any Subsidiary:
(i) UPON TERMINATION FOR ANY REASON OTHER THAN DUE TO DEATH. If a
Participant's employment or consultancy with the Corporation or any
Subsidiary is terminated, except termination due to death, all
Restricted Stock awarded under the Plan which are then subject to a
Restricted Period or other Restrictions will be forfeited and become
the property of the Corporation on the date of such termination.
However, the Committee may, if it, in its sole discretion,
determines that the circumstances warrant such action, approve the
release of all or any part
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of the Restricted Stock which would otherwise be forfeited pursuant
to this Section, upon such conditions as it shall determine.
(ii) UPON DUE TO DEATH. If a Participant's employment or consultancy
with the Corporation or a Subsidiary is terminated due to death,
all Shares of Restricted Stock awarded under the Plan which are
then subject to a Restricted Period or other Restrictions and which
would have been released, if the Participant had not died, within
the calendar year following the Participant's death shall be
released on the date of such termination as if with respect to such
Shares the Restricted Period had ended and the other Restrictions
had lapsed and certificates representing such Shares of Restricted
Stock shall be delivered to the Participant's Beneficiary or legal
representative free from such Restrictions as soon as practicable
following such termination and all other Shares of Restricted Stock
which would not have been released, if the Participant had not
died, within the calendar year following the Participant's death
will be forfeited and become the property of the Corporation on the
date of such termination.
4.6 SECTION 83(B) ELECTIONS. A Participant who files an election permitted
under Section 83(b) of the Code with the Internal Revenue Service to include the
fair market value of any Restricted Stock in gross income while they are still
subject to a Restricted Period or other Restrictions shall notify the
Corporation of such election within ten (10) days of making such election and
promptly furnish the Corporation with a copy of such election together with the
amount of any federal, state, local or other taxes required to be withheld to
enable the Corporation to claim an income tax deduction with respect to such
election.
4.7 CHANGE IN CONTROL. In the event of a Change in Control, all Restricted
Periods shall end, the Restricted Period or other Restrictions applicable to all
previously granted Awards of Restricted Stock shall end or lapse, as the case
may be, and such Shares shall be released and certificates representing such
Shares of Restricted Stock shall be delivered to the Participants free from such
Restrictions as soon as practicable following such Change in Control.
SECTION 5. GENERAL PROVISIONS.
5.1 GENERAL CREDITOR STATUS. Participants shall have no right, title, or
interest whatsoever in or to any investments which the Corporation may make to
aid it in meeting its obligations under the Plan. Nothing contained in the Plan,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Corporation
and any Participant, Beneficiary, legal representative or any other person. To
the extent that any person acquires a right to receive payments from the
Corporation under the Plan, such right shall be no greater than the right of an
unsecured general creditor of the Corporation. All payments to be made hereunder
shall be paid from the general funds of the Corporation and no special or
separate fund shall be established and no segregation of assets shall be made to
assure payment of such amounts except as expressly set forth in the Plan;
PROVIDED, HOWEVER, that in its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Common Stock or pay cash; PROVIDED, FURTHER, HOWEVER, that,
unless the Committee otherwise determines with the consent of the affected
Participant, the existence of such trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan.
5.2 CERTAIN ADJUSTMENTS TO SHARES. In the event of any change in the
Common Stock by reason of any stock dividend, recapitalization, reorganization,
spin-off, split-off, merger, consolidation, stock split, reverse stock split,
combination or exchange of shares, or any rights offering to purchase Common
Stock at a price substantially below fair market value, or of any similar change
affecting the Common Stock of or by the Corporation, the number and kind of
Shares available for Awards under the Plan and the number and kind of Shares
subject to a Restricted Period or other Restrictions or subject to Options in
outstanding Awards and the Option Price or purchase price per Share thereof
shall be appropriately adjusted consistent with such change in such manner as
the Committee may deem equitable to prevent substantial
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dilution or enlargement of the rights granted to, or available for, the
Participants hereunder. Any adjustment of an Incentive Stock Option pursuant to
this Section shall be made only to the extent not constituting a "modification"
within the meaning of Section 424(h)(3) of the Code, unless the holder of such
Option shall agree otherwise. The Committee shall give notice to each
Participant of any adjustment made pursuant to this Section and, upon notice,
such adjustment shall be effective and binding for all purposes of the Plan.
5.3 SUCCESSOR CORPORATION. The obligations of the Corporation under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Corporation, or
upon any successor corporation or organization succeeding to substantially all
of the assets and business of the Corporation. The Corporation agrees that it
will make appropriate provision for the preservation of Participants' rights
under the Plan in any agreement or plan which it may enter into or adopt to
effect any such merger, consolidation, reorganization or transfer of assets.
5.4 NO CLAIM OR RIGHT UNDER THE PLAN. Neither the Plan nor any action
taken thereunder shall be construed as giving any employee, consultant or
advisor any right to be retained in the employ of or by the Corporation.
5.5 AWARDS NOT TREATED AS COMPENSATION UNDER BENEFIT PLANS. No Award shall
be considered as compensation under any employee benefit plan of the
Corporation, except as specifically provided in any such plan or as otherwise
determined by the Board.
5.6 LISTING AND QUALIFICATION OF COMMON STOCK. The Corporation, in its
discretion, may postpone the issuance or delivery of Common Stock upon any
exercise of an Option or pursuant to an Award of Restricted Stock until
completion of such stock exchange listing or other qualification of such shares
under any state or federal law, rule or regulation as the Corporation may
consider appropriate, and may require any Participant, Beneficiary or legal
representative to make such representations and furnish such information as it
may consider appropriate in connection with the issuance or delivery of the
shares in compliance with applicable laws, rules and regulations.
5.7 WITHHOLDING TAXES. The Corporation may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of all
federal, state and local taxes required by law to be withheld with respect to
Awards granted pursuant to the Plan including, but not limited to (i) accepting
a remittance from the Participant in cash, or in the Committee's discretion in
Mature Shares (ii) deducting the amount required to be withheld from any other
amount then or thereafter payable by the Corporation or Subsidiary to a
Participant, Beneficiary or legal representative or from any Shares due to the
Participant under the Plan, (iii) requiring a Participant, Beneficiary or legal
representative to pay to the Corporation the amount required to be withheld as a
condition of releasing Common Stock or (iv) any combination of the foregoing. In
addition, subject to such rules and regulations as the Committee shall from time
to time establish, Participants shall be permitted to satisfy federal, state and
local taxes, if any, imposed upon the payment of Awards in Common Stock at a
rate up to such Participant's maximum marginal tax rate with respect to each
such tax by (i) irrevocably electing to have the Corporation deduct from the
number of Shares otherwise deliverable in payment of an Award such number of
Shares as shall have a value equal to the amount of tax to be withheld,
(ii) delivering to the Corporation such portion of the Common Stock delivered in
payment of the Award as shall have a value equal to the amount of tax to be
withheld, or (iii) delivering to the Corporation such number of Mature Shares or
combination of Mature Shares and cash as shall have a value equal to the amount
of tax to be withheld.
5.8 NON-TRANSFERABILITY/DESIGNATION AND CHANGE OF BENEFICIARY.
(a) An Award granted hereunder shall not be assignable or transferable
other than by will or by the laws of descent and distribution and may be
exercised during the Participant's lifetime only by the Participant or his
or her guardian or legal representative, except that, subject to
Section 2.2(f) hereof, in respect of Incentive Stock Options, a Participant
may, if permitted by the Committee, in its
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discretion, transfer an Award, or any portion thereof, to one or more
members of the Participant's Immediate Family.
(b) Each Participant shall file with the Committee a written
designation of one or more persons as the Beneficiary who shall be entitled
to receive the amount, if any, payable under the Plan upon his or her death.
A Participant may, from time to time, revoke or change his or her
Beneficiary designation without the consent of any prior Beneficiary by
filing a new designation with the Committee. The last such designation
received by the Committee shall be controlling; PROVIDED, HOWEVER, that no
designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall it be effective as of a date prior to such receipt.
5.9 PAYMENTS TO PERSONS OTHER THAN A PARTICIPANT. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his or her affairs because of illness or accident, or is a minor, or
has died, then any payment due to such person or his or her estate (unless a
prior claim therefor has been made by a duly appointed legal representative),
may, if the Committee so directs the Corporation, be paid to his or her spouse,
a child, a relative, an institution maintaining or having custody of such
person, or any other person deemed by the Committee to be a proper recipient on
behalf of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Committee and the Corporation
therefor.
5.10 NO LIABILITY OF COMMITTEE MEMBERS. No member of the Committee shall
be personally liable by reason of any contract or other instrument executed by
such member or on his or her behalf in his or her capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the
Corporation shall indemnify and hold harmless each employee, officer or director
of the Corporation to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan unless arising out of such person's
own fraud or bad faith. The indemnification provided for in this Section 5.10
shall be in addition to any rights of indemnification such Committee member has
as a director or officer pursuant to law, under the Certificate of Incorporation
or By-Laws of the Corporation.
5.11 AMENDMENT OR TERMINATION. Except as to matters that in the opinion of
the Corporation's legal counsel require stockholder approval, any provision of
the Plan may be modified as to a Participant by an individual agreement approved
by the Committee. The Board may, with prospective or retroactive effect, amend,
suspend or terminate the Plan or any portion thereof at any time; PROVIDED,
HOWEVER, that (i) no amendment that would materially increase the cost of the
Plan to the Corporation may be made by the Board without the approval of the
stockholders of the Corporation and (ii) no amendment, suspension or termination
of the Plan shall deprive any Participant of any rights to Awards previously
made under the Plan without his or her written consent. Subject to earlier
termination pursuant to the provisions of this Section, and unless the
stockholders of the Corporation shall have approved an extension of the Plan
beyond such date, the Plan shall terminate and no further Awards shall be made
under the Plan after the tenth (10th) anniversary of the Effective Date of the
Plan specified in Section 5.15 hereof.
5.12 UNFUNDED PLAN. The Plan is intended to constitute an unfunded
deferred compensation arrangement.
5.13 GOVERNING LAW. The Plan shall be governed by and construed in
accordance with the laws of the State of Maryland, without reference to the
principles of conflicts of law thereof.
5.14 NON-UNIFORM DETERMINATIONS. The Committee's determinations under the
Plan need not be uniform and may be made by the Committee selectively among
persons who receive, or are eligible to receive, Awards whether or not such
persons are similarly situated. Without limiting the generality of the
foregoing, the Committee shall be entitled, to enter into non-uniform and
selective Award Agreements as
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to (a) the identity of the Participant, (b) the terms and provisions of Awards,
and (c) the treatment of termination of employment or consultancies.
5.15 EFFECTIVE DATE. The Plan is effective September 11, 2000.
5.16 NO ILLEGAL TRANSACTIONS. The Plan and all Awards granted pursuant to
it are subject to all applicable laws and regulations. Notwithstanding any
provision of the Plan or any Award, Participants shall not be entitled to
exercise or receive benefits under, any Award, and the Corporation shall not be
obligated to deliver any Shares or deliver any benefits to a Participant, if
such exercise or delivery would constitute a violation by the Participant or the
Corporation of any applicable law or regulation.
5.17 SEVERABILITY. If any part of the Plan is declared by any court of
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other part of the Plan. Any Section or part
of a Section so declared to be unlawful or invalid shall, if possible, be
construed in manner which will give effect to the terms of such Section to the
fullest extent possible while remaining lawful and valid.
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