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EXHIBIT 10.2
GENVEC, INC.
AMENDED AND RESTATED
1993 STOCK INCENTIVE PLAN
(as amended and restated April 28, 1998)
1. PURPOSE. GENVEC, INC. (the "Company") hereby adopts the GenVec, Inc.
1993 Stock Incentive Plan (the "Plan"). The Plan is intended to recognize the
contributions made to the Company by key employees (including employees who are
members of the Board of Directors), consultants and advisors of the Company or
any Affiliate (as defined below), to provide such persons with additional
incentive to devote themselves to the future success of the Company or an
Affiliate, and to improve the ability of the Company or an Affiliate to attract,
retain, and motivate individuals upon whom the Company's sustained growth and
financial success depend, by providing such persons with an opportunity to
acquire or increase their proprietary interest in the Company through receipt of
rights to acquire the Company's Common Stock, par value $.001 per Share (the
"Common Stock") and through receipt of Common Stock subject to conditions of
forfeiture. In addition, the Plan is intended as an additional incentive to
certain directors of the Company who are not employees of the Company or an
Affiliate to serve on the Board of Directors and to devote themselves to the
future success of the Company by providing them with an opportunity to acquire
or increase their proprietary interest in the Company through the receipt of
Options to acquire Common Stock and through receipt of Common Stock subject to
conditions of forfeiture.
2. DEFINITIONS. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
(a) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to the Company within the
meaning of Section 424(e) or (f) of the Code.
(b) "Award" shall mean a grant of Common Stock subject to
conditions of forfeiture made pursuant to the terms of the Plan.
(c) "Award Agreement" shall mean the agreement between the
Company and a Grantee with respect to an Award made pursuant to the Plan.
(d) "Awardee" shall mean a person to whom an Award has been
granted pursuant to the Plan.
(e) "Board of Directors" means the Board of Directors of the
Company.
(f) "Change of Control" shall have the meaning an set forth in
Section 10 of the Plan.
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(g) "Code" means the Internal Revenue Code of 1986, as
amended.
(h) "Committee" shall have the meaning set forth in Section 3
of the Plan.
(i) "Company" means GenVec, Inc., a Delaware corporation.
(j) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code.
(k) "Fair Market Value" shall have the meaning set forth in
Section 8(b) of the Plan.
(l) "Grantee" shall mean a person to whom an Option or an
Award has been granted pursuant to the Plan.
(m) "ISO" means an Option granted under the Plan which is
intended to qualify as an "incentive stock option" within the meaning of Section
422(b) of the Code.
(n) "Non-qualified Stock Option" means an Option granted under
the Plan which is not intended to qualify, or otherwise does not qualify, as an
"incentive stock option" within the meaning of Section 422(b) of the Code.
(o) "Option" means either an ISO or a Non-qualified Stock
Option granted under the Plan.
(p) "Optionee" means a person to whom an Option has been
granted under the Plan, which Option has not been exercised and has not expired
or terminated.
(q) "Option Document" means the document described in Section
8 of the Plan, as applicable, which sets forth the terms and conditions of each
grant of Options.
(r) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as calculated pursuant to Section 8(b) of
the Plan.
(s) "Restricted Stock" means Common Stock subject to
conditions of forfeiture and transfer granted to any person pursuant to an Award
under the Plan.
(t) "Shares" means the Shares of Common Stock of the Company
which are the subject of Options or Awards under the Plan.
3. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE.
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(i) IN GENERAL. Other than as provided below,
the Plan shall be administered by (A) the Board or (B) a Committee, which
Committee shall be constituted to satisfy Applicable Laws. The administrator of
the Plan shall be referred to as the "Committee."
(ii) MULTIPLE ADMINISTRATIVE BODIES. The Plan
may be administered by different Committees with respect to different persons.
(b) POWERS OF THE COMMITTEE. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Committee shall have the authority, in its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the persons to whom Options and
Awards may be granted hereunder;
(iii) to determine the number of Shares to be
covered by each Option and Award;
(iv) to approve forms of agreement for use under
the Plan;
(v) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Option or Award granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Awards may be exercised (which
may be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Award or the Shares relating thereto, based in each case on such factors as
the Committee, in its sole discretion, shall determine;
(vi) to reduce the exercise price of any Option or
Award to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option or Award shall have declined since the date
the Option or Award was granted;
(vii) to institute an option exchange program;
(viii) to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
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(x) to modify or amend each Option or Award (subject
to Section 15(c) of the Plan), including the discretionary authority to extend
the post-termination exercisability period of Options longer than is otherwise
provided for in the Plan;
(xi) to allow Grantees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be
issued upon exercise of an Option or Award that number of Shares having a Fair
Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined. All elections by a Grantee to have
Shares withheld for this purpose shall be made in such form and under such
conditions as the Committee may deem necessary or advisable;
(xii) to authorize any person to execute on behalf
of the Company any instrument required to effect the grant of an Option or Award
previously granted by the Committee;
(xiii) to make all other determinations deemed
necessary or advisable for administering the Plan.
(c) EXCULPATION. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or the
granting of Options or Awards under the Plan, provided that this Section 3(c)
shall not apply to (i) any breach of such member's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith or
involving intentional misconduct or a knowing violation of law, (iii) acts or
omissions that would result in liability under Section 174 of the General
Corporation Law of the State of Delaware, as amended, and (iv) any transaction
from which the member derived an improper personal benefit.
(d) INDEMNIFICATION. Service on the Committee shall constitute
service as a member of the Board of Directors of the Company. Each member of the
Committee shall be entitled without further act on his or her part to indemnity
from the Company to the fullest extent provided by applicable law and the
Company's Certificate of Incorporation and/or By-laws in connection with or
arising out of any action, suit or proceeding with respect to the administration
of the Plan or the granting of Options and Awards thereunder in which he or she
may be involved by reason of his or her being or having been a member of the
Committee, whether or not he or she continues to be a member of the Committee at
the time of the action, suit or proceeding.
4. OPTIONS AND AWARDS UNDER THE PLAN. Options under the Plan may be in
the form of Non-qualified Stock Options, ISOs, or a combination thereof, at the
discretion of the Committee. Awards under the Plan shall be in the form of
Restricted Stock.
5. ELIGIBILITY
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(a) IN GENERAL. All key employees, members of the Board of
Directors, consultants and advisors of the Company or an Affiliate shall be
eligible to receive Options and Awards hereunder.
(b) LIMITATIONS. The following limitations shall apply to
grants of Options:
(i) No Optionee shall be granted, in any fiscal
year of the Company, Options to purchase more than 553,865 Shares.
(ii) In connection with his or her initial service,
an Optionee may be granted Options to purchase up to an additional 553,865
Shares which shall not count against the limit set forth in subsection (i)
above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 11.
6. SHARES SUBJECT TO PLAN. The aggregate maximum number of shares for
which Awards or Options may be granted pursuant to the Plan is 1,846,218 Shares,
plus an increase to be added each year on the date of the annual stockholders'
meeting equal to the number of Shares required to return the maximum aggregate
number of Shares which may be issued pursuant to the Plan to 1,846,218, or such
lesser number as the Board of Directors may determine. The Shares shall be
issued from authorized and unissued Common Stock or Common Stock held in or
hereafter acquired for the treasury of the Company. If an Option terminates or
expires without having been fully exercised for any reason, or if Shares granted
pursuant to an Award are forfeited for any reason, such Shares may again be the
subject of one or more Options or Awards granted pursuant to the Plan.
7. TERM OF THE PLAN. The Plan shall become effective upon its adoption
by the Board of Directors. It shall continue in effect for a term of ten (10)
years, unless sooner terminated by the Board of Directors.
8. OPTION DOCUMENTS AND TERMS. Each Option granted under the Plan shall
be a Non-qualified Stock Option, unless the Option shall be specifically
designated at the time of grant to be an ISO for federal income tax purposes. To
the extent any Option designated an ISO is determined for any reason not to
qualify as an incentive stock option within the meaning of Section 422 of the
Code, such Option shall be treated as a Non-qualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Option Documents in such form as the Committee shall
from time to time approve, which Option Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.
(a) NUMBER OF OPTION SHARES. Each Option Document shall state
the number of Shares to which it pertains. An Optionee may receive more than one
Option, which may include
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Options which are intended to be ISO's and Options which are not intended to be
ISO's, but only on the terms and subject to the conditions and restrictions of
the Plan.
(b) OPTION PRICE. Each Option Document shall state the Option
Price which, for a Non-qualified Stock Option, may be less than, equal to, or
greater than the Fair Market Value of the Shares on the date the Option is
granted and, for an ISO, shall be at least 100% of the Fair Market Value of the
Shares on the date the Option is granted as determined by the Committee in
accordance with this Section 8(b); provided, however, that if an ISO is granted
to an Optionee who then owns, directly or by attribution under Section 424(d) of
the Code, shares possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or an Affiliate, then the Option
Price shall be at least 110% of the Fair Market Value of the Shares on the date
the Option is granted. If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Committee deems reliable. If
the Common Stock is regularly quoted by a recognized securities dealer but
selling prices are not reported, its Fair Market Value shall be the mean between
the high bid and low asked prices for the Common Stock on the last market
trading day prior to the day of determination. In the absence of an established
market for the Common Stock, the Fair Market Value thereof shall be determined
in good faith by the Committee.
(c) EXERCISE. No Option shall be deemed to have been exercised
prior to the receipt by the Company of written notice of such exercise and of
payment in full of the Option Price for the Shares to be purchased. Each such
notice shall specify the number of Shares to be purchased and shall (unless the
Shares are covered by a then current registration statement or a Notification
under Regulation A under the Securities Act of 1933, as amended (the "Act")),
contain the Optionee's acknowledgment in form and substance satisfactory to the
Company that (a) such Shares are being purchased for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to the Company, may be made without violating
the registration provisions of the Act), (b) the Optionee has been advised and
understands that (i) the Shares have not been registered under the Act and are
"restricted securities" within the meaning of Rule 144 under the Act and are
subject to restrictions on transfer and (ii) the Company is under no obligation
to register the Shares under the Act or to take any action which would make
available to the Optionee any exemption from such registration, (c) such Shares
may not be transferred without compliance with all applicable federal and state
securities laws, and (d) an appropriate legend referring to the foregoing
restrictions on transfer and any other restrictions imposed under the Option
Documents or as may be endorsed on the certificates. Notwithstanding the
foregoing, if the Company determines that issuance of Shares should be delayed
pending (A) registration under federal or state securities laws, (B) the receipt
of an opinion of counsel satisfactory to the Company that an appropriate
exemption from such registration is available, (C) the listing or inclusion of
the Shares on any securities exchange or an automated quotation system or (D)
the consent or approval of any governmental regulatory body whose consent or
approval is necessary in connection with the
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issuance of such Shares, the Company may defer exercise of any Option granted
hereunder until any of the events described in this sentence has occurred.
(d) MEDIUM OF PAYMENT. An Optionee shall pay for Shares (i) in
cash, (ii) by certified or cashier's check payable to the order of the Company,
or (iii) by such other mode of payment as the Committee may approve, including
payment through a broker in accordance with procedures permitted by Regulation T
of the Federal Reserve Board. Furthermore, the Committee may provide in an
Option Document that payment may be made in whole or in part in shares of the
Company's Common Stock held by the Optionee for at least six (6) months on the
date of surrender. If payment is made in whole or in part in shares of Common
Stock, then the Optionee shall deliver to the Company certificates registered in
the name of such Optionee representing the shares owned by such Optionee, free
of all liens, claims and encumbrances of every kind and having an aggregate Fair
Market Value on the date of delivery that is at least as great as the Option
Price of the Shares (or relevant portion thereof) with respect to which such
Option is to be exercised by the payment in shares of Common Stock, endorsed in
blank or accompanied by stock powers duly endorsed in blank by the Optionee. In
the event that certificates for shares of Common Stock delivered to the Company
represent a number of shares of Common Stock in excess of the number of shares
of Common Stock required to make payment for the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to be exercised
by payment in shares of Common Stock, the stock certificate issued to the
Optionee shall represent (i) the Shares in respect of which payment is made, and
(ii) such excess number of shares of Common Stock. Notwithstanding the
foregoing, the Committee may impose from time to time such limitations and
prohibitions on the use of shares of Common Stock to exercise an Option as it
deems appropriate.
(e) TERMINATION OF OPTIONS.
(i) No Option shall be exercisable after the
first to occur of the following:
(A) Expiration of the Option term
specified in the Option Document, which, in the case of an ISO, shall not occur
after (1) ten years from the date of grant, or (2) five years from the date of
grant of an ISO if the Optionee on the date of grant owns, directly or by
attribution under Section 424(d) of the Code, shares possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of an Affiliate;
(B) Expiration of three months from the date
the Optionee's employment or service with the Company or its Affiliates
terminates for any reason other than Disability or death or as otherwise
specified in Section 8(e)(i)(D) or 8(e)(i)(E) below;
(C) Expiration of one year from the date
such employment or service with the Company or its Affiliates terminates due to
the Optionee's Disability or death;
(D) A finding by the Committee, after full
consideration of the facts presented on behalf of both the Company and the
Optionee, that the Optionee has breached his or her employment or service
contract with the Company or an Affiliate, or has been engaged in
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disloyalty to the Company or an Affiliate, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his or her employment or service, or has disclosed trade secrets or
confidential information of the Company or an Affiliate. In such event, in
addition to immediate termination of the Option, the Optionee shall
automatically forfeit all Shares for which the Company has not yet delivered the
share certificates upon refund by the Company of the Option Price.
Notwithstanding anything herein to the contrary, the Company may withhold
delivery of share certificates pending the resolution of any inquiry that could
lead to a finding resulting in a forfeiture;
(E) The date, if any, set by the Board of
Directors as an accelerated expiration date in the event of the liquidation or
dissolution of the Company; or
(F) The occurrence of such other event or
events as may be set forth in the Option Document as causing an accelerated
expiration of the Option.
(ii) The terms of an executive severance agreement or
other agreement between the Company and an Optionee, approved by the Committee,
whether entered into prior or subsequent to the grant of an Option, which
provide for Option exercise dates later than those set forth in Section 8(a)(i)
shall be deemed to be Option terms approved by the Committee and consented to by
the Optionee.
(f) TRANSFERS. No Option granted under the Plan may be
transferred, except by will or by the laws of descent and distribution. During
the lifetime of the person to whom an Option is granted, such Option may be
exercised only by such person. Notwithstanding the foregoing, a Non-qualified
Stock Option may be transferred pursuant to the terms of a "qualified domestic
relations order," within the meaning of Sections 401(a)(13) and 414(p) of the
Code or within the meaning of Title I of the Employee Retirement Income Security
Act of 1974, as amended, or pursuant to a transfer approved in writing by the
Committee, in which event the Option may be exercised by the transferee.
(g) LIMITATION ON ISO GRANTS. In no event shall the aggregate
Fair Market Value of the Shares (determined at the time the ISO is granted) with
respect to which incentive stock options under all incentive stock option plans
of the Company and its Affiliates are exercisable for the first time by the
Optionee during any calendar year exceed $100,000.
(h) OTHER PROVISIONS. Subject to the provisions of the Plan,
the Option Documents shall contain such other provisions including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee shall deem advisable.
(i) AMENDMENT. Subject to the provisions of the Plan, the
Committee shall have the right to amend Option Documents issued to an Optionee,
subject to the Optionee's consent if
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such amendment is not favorable to the Optionee, except that the consent of the
Optionee shall not be required for any amendment made pursuant to Section
8(e)(i)(E) or Section 10 of the Plan, as applicable.
9. [INTENTIONALLY DELETED]
10. CHANGE OF CONTROL. In the event of a Change of Control, the
Committee may take whatever action it deems necessary or desirable with respect
to the Options and Awards outstanding, including, without limitation,
accelerating the expiration or termination date in the respective Option
Documents to a date no earlier than thirty (30) days after notice of such
acceleration is given to the Optionees. In addition to the foregoing, in the
event of a Change of Control, Options granted pursuant to the Plan and held by
Optionees who are employees, advisors, or consultants of the Company or members
of the Board of Directors at the time of a Change of Control shall become
immediately exercisable in full and the restrictions applicable to Restricted
Stock awarded to Awardees who are employees, advisors, or consultants of the
Company or members of the Board of Directors at the time of a Change of Control
shall immediately lapse and the Restricted Stock held by the Company shall be
delivered to the Grantees.
A "Change of Control" shall be deemed to have occurred upon
the earliest to occur of the following events: (i) the date the stockholders of
the Company (or the Board of Directors, if stockholder action is not required)
approve a plan or other arrangement pursuant to which the Company will be
dissolved or liquidated, or (ii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) approve a
definitive agreement to sell or otherwise dispose of substantially all of the
assets of the Company, or (iii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) and the stockholders
of the other constituent corporation (or its board of directors if stockholder
action is not required) have approved a definitive agreement to merge or
consolidate the Company with or into such other corporation, other than, in
either case, a merger or consolidation of the Company in which holders of shares
of the Company's Common Stock immediately prior to the merger or consolidation
will have at least a majority of the ownership of common stock of the surviving
corporation (and, if one class of common stock is not the only class of voting
securities entitled to vote on the election of directors of the surviving
corporation, a majority of the voting power of the surviving corporation's
voting securities) immediately after the merger or consolidation, which common
stock (and, if applicable, voting securities) is to be held in the same
proportion as such holders' ownership of Common Stock of the Company immediately
before the merger or consolidation, or (iv) the date any entity, person or
group, within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Securities Exchange Act of 1934, as amended, other than the Company or any of
its subsidiaries or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries, or any person who does not
conduct any active trade or business shall have become the beneficial owner of,
or shall have obtained voting control over, more than fifty percent (50%) of the
outstanding shares of the Company's Common Stock, or (v) the date that fewer
than a majority of the Board of Directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the effective date of this Plan, or (B) are elected, or
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nominated for election to the Board of Directors with the affirmative votes of
at least a majority of those directors whose election or nomination was not in
connection with any transaction described in subsections (i) to (iv) or in
connection with an actual or threatened proxy contest relating to the election
of directors of the Company.
11. ADJUSTMENTS ON CHANGES IN CAPITALIZATION.
(a) In the event that the outstanding Shares are changed by
reason of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination or exchange of shares and the like
(not including the issuance of Common Stock on the conversion of other
securities of the Company which are outstanding on the date of grant and which
are convertible into Common Stock) or dividends payable in Shares, an equitable
adjustment shall be made by the Committee in the aggregate number of shares
available under the Plan and in the number of Shares and price per Share subject
to outstanding Options. Unless the Committee makes other provisions for the
equitable settlement of outstanding options, if the Company shall be
reorganized, consolidated, or merged with another corporation, or if all or
substantially all of the assets of the Company shall be sold or exchanged, an
Optionee shall at the time of issuance of the stock under such corporate event
be entitled to receive upon the exercise of his or her Option the same number
and kind of shares of stock or the same amount of property, cash or securities
as he or she would have been entitled to receive upon the occurrence of any such
corporate event as if he or she had been, immediately prior to such event, the
holder of the number of shares covered by his or her Option.
(b) Any adjustment under this Section 11 in the number of
Shares subject to Options shall apply proportionately to only the unexercised
portion of any Option granted hereunder. If fractions of a Share would result
from any such adjustment, the adjustment shall be revised to the next lower
whole number of shares.
(c) The Committee shall have authority to determine the
adjustments to be made under this Section, and any such determination by the
Committee shall be final, binding and conclusive.
12. TERMS AND CONDITIONS OF AWARDS. Awards granted pursuant to the Plan
shall be evidenced by written Award Agreements in such form as the Committee
shall from time to time approve, which Award Agreements shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall from time to time require which are not
inconsistent with the terms of the Plan. The Committee may, in its sole
discretion, shorten or waive any term or condition with respect to all or any
portion of any Award. Notwithstanding the foregoing, all restrictions shall
lapse or terminate with respect to Restricted Stock upon the death or Disability
of the Awardee.
(a) NUMBER OF SHARES. Each Award Agreement shall state the
number of Shares to which it pertains.
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(b) PURCHASE PRICE. Each Award Agreement shall specify the
purchase price, if any, which applies to the Award. If the Board specifies a
purchase price, the Awardee shall be required to make payment on or before the
date specified in the Award Agreement. An Awardee shall pay for such Shares (i)
in cash, (ii) by certified check payable to the order of the Company, or (iii)
by such other mode of payment as the Committee may approve.
(c) RESTRICTIONS ON TRANSFER AND FORFEITURES. A stock
certificate representing the Restricted Stock granted to an Awardee shall be
registered in the Awardee's name but shall be held in escrow by the Company's
Treasurer, together with an undated stock power executed by the Awardee with
respect to each stock certificate representing Restricted Stock registered in
such Awardee's name. The Awardee shall generally have the rights and privileges
of a stockholder as to such Restricted Stock including the right to vote such
Restricted Stock and to receive and retain all cash dividends with respect to
them, except that the following restrictions shall apply: (i) the employee shall
not be entitled to delivery of the certificate until the expiration or
termination of any period designated by the Committee ("Restricted Period") and
the satisfaction of any other conditions prescribed by the Committee; and (ii)
all distributions with respect to the Restricted Stock other than cash
dividends, such as stock dividends, stock splits or distributions of property,
and any distributions (other than cash dividends) subsequently made with respect
to other distributions, shall be delivered to the Treasurer of the Company,
together with appropriate stock powers or other instruments of transfer signed
and delivered to the Treasurer by the Grantee, to be held by the Treasurer and
released to either the Grantee or the Company, as the case may be, together with
the Shares to which they relate; (iii) the Grantee will have no right to sell,
exchange, transfer, pledge, hypothecate or otherwise dispose of any of the
Restricted Stock or distributions (other than cash dividends) with respect
thereto; and (iv) all of the Restricted Stock shall be forfeited and all rights
of the Awardee with respect to such Restricted Stock shall terminate without
further obligation on the part of the Company unless the Awardee has remained an
employee or in service to the Company, any of its affiliates or any combination
thereof until the expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the Committee applicable to
such Restricted Stock. Upon the forfeiture of any Restricted Stock, such
forfeited shares shall be transferred to the Company without further action by
the Awardee.
(d) LAPSE OF RESTRICTIONS. Upon the expiration or termination
of the Restricted Period and the satisfaction of any other conditions prescribed
by the Committee as provided for in the Plan, the restrictions applicable to the
Restricted Stock shall lapse and a stock certificate for the number of Shares
with respect to which the restrictions have lapsed shall be delivered, free of
all such restrictions, except any that may be imposed by law or pursuant to any
shareholders agreement then in effect, to the Awardee or the beneficiary or
estate, as the case may be. The Company shall not be required to deliver any
fractional share of Common Stock but will pay, in lieu thereof, the fair market
value (determined as of the date the restrictions lapse) of such fractional
share to the Awardee or the Awardee's beneficiary or estate, as the case may be.
The Award may provide for the lapse of restrictions on transfer and forfeiture
conditions in installments.
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(e) SECTION 83(b) ELECTIONS. An Awardee who files an election
with the Internal Revenue Service to include the fair market value of any
Restricted Stock in gross income while they are still subject to restrictions
shall promptly furnish the Company 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 Company to claim an income tax deduction with respect to such
election.
(f) Upon a finding by the Committee, after full consideration
of the facts presented on behalf of both the Company and the Awardee, that the
Awardee has breached his or her employment or service contract with the Company
or an Affiliate, or has been engaged in disloyalty to the Company or an
Affiliate, including, without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or her employment or
service, or has disclosed trade secrets or confidential information of the
Company or an Affiliate, Awardee shall automatically forfeit all Restricted
Stock for which (i) the Company has not yet delivered the Share certificates to
the Awardee; (ii) the Restricted Period has not expired or (iii) any
restrictions applicable to the Restricted Stock have not lapsed. Notwithstanding
anything herein to the contrary, the Company may withhold delivery of Restricted
Stock certificates pending the resolution of any inquiry that could lead to a
finding resulting in a forfeiture.
(g) AMENDMENT. Subject to the provisions of the Plan, the
Committee shall have the right to amend Awards issued to an Awardee, subject to
the Awardee's consent if such amendment is not favorable to the Awardee, except
that the consent of the Awardee shall not be required for any amendment made
pursuant to Section 10 of the Plan.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board of Directors may at
any time amend, alter, suspend or terminate the Plan.
(b) SHAREHOLDER APPROVAL. The Board of Directors shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable
to comply with applicable laws.
(c) EFFECT OF AMENDMENT OR TERMINATION. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company. Termination of the Plan shall not affect the Administrator's
ability to exercise the powers granted to it hereunder with respect to Options
granted under the Plan prior to the date of such termination.
14. NO COMMITMENT TO RETAIN. The grant of an Option or Award pursuant
to the Plan shall not be construed to imply or to constitute evidence of any
agreement, express or implied, on the part of the Company or any Affiliate to
retain the Grantee in the employ of the Company or an Affiliate and/or as a
member of the Company's Board of Directors or in any other capacity.
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<PAGE>
15. WITHHOLDING OF TAXES. Whenever the Company proposes or is required
to deliver or transfer Shares in connection with the exercise of an Option or
Award, the Company shall have the right to (a) require the recipient to remit or
otherwise make available to the Company an amount sufficient to satisfy any
federal, state and/or local withholding tax requirements prior to the delivery
or transfer of any certificate or certificates for such Shares or (b) take
whatever other action it may deem necessary to protect its interests with
respect to tax liabilities. The Company's obligation to make any delivery or
transfer of Shares shall be conditioned on the Grantee's compliance, to the
Company's satisfaction, with any withholding requirement.
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