EXHIBIT 10.1
ANADIGICS, INC.
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1995 LONG TERM INCENTIVE AND SHARE AWARD PLAN
AS AMENDED MAY 29, 1997 AND MAY 24, 2000
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1. Purposes. The purposes of the 1995 Long Term Incentive and Share Award
Plan are to advance the interests of ANADIGICS, Inc. and its shareholders by
providing a means to attract, retain, and motivate employees and directors of
the Company upon whose judgment, initiative and efforts the continued success,
growth and development of the Company is dependent.
2. Definitions. For purposes of the Plan, the following terms shall be
defined as set forth below:
a. Affiliate means any entity other than the Company and its Subsidiaries
that is designated by the Board or the Committee as a participating employer
under the Plan, provided that the 'Company directly or indirectly owns at least
20% of the combined voting power of all classes of stock of such entity or at
least 20% of the ownership interests in such entity.
b. Award means any Option, SAR, Restricted Share, Restricted Share Unit,
Performance Share, Performance Unit, Dividend Equivalent, or Other Share-Based
Award granted to an Eligible Employee under the Plan.
c. "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
d. "Beneficiary" means the person, persons, trust or trusts which have been
designated by such Eligible Employee in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Eligible Employee, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.
e. "Board" means the Board of Directors of the Company.
f. "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
g. "Committee" means the Compensation Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan;
provided, however, that
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the Committee shall consist of two or more directors of the Company, each of
whom is a 'disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act, to the extent applicable.
h. "Company" means ANADIGICS, Inc., a corporation organized under the laws
of Delaware, or any successor corporation.
i. "Director" means a non-employee member of the Board.
j. "Director's Option" means a NQSO granted to a Director under Section 7.
k. "Dividend Equivalent" means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.
l. Eligible Employee" means any employee of the Company or its Subsidiaries
and Affiliates, including any director who is an employee.
m. "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.
n. "Fair Market Value" means, with respect to Shares or other property, the
fair market value of such Shares or other property determined by such methods or
procedures as shall be established from time to time by the Committee. Unless
otherwise determined by the Committee in good faith, the Fair Market Value of
Shares as of any given date prior to the existence of a public market for the
Company's Shares shall mean the Company's book value. Thereafter, unless
otherwise determined by the Committee in good faith, the Fair Market Value of
Shares shall mean the mean between the high and low selling prices per Share on
the immediately preceding date (or, if the Shares were not traded on that day,
the next preceding day that the Shares were traded) on the principal exchange on
which the Shares are traded, as such prices are officially quoted on such
exchange.
o. "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.
p. "NQSO" means any Option that is not an ISO.
q. "Option" means a right, granted under Section 5 (b) or Section 7, to
purchase Shares.
r. "Other Share-Based Award" means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.
s. "Participant" means an Eligible Employee or Director who has been
granted an Award or Director's Option under the Plan.
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t. "Performance Share" means a performance share granted under Section
5(f).
u. "Performance Unit" means a performance unit granted under Section 5(f).
v. "Plan" means this 1995 Long Term Incentive and Share Award Plan.
w. "Restricted Shares" means an Award of Shares under Section 5(d) that may
be subject to certain restrictions and to a risk of forfeiture.
x. "Restricted Share Unit' means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.
y. "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
z. "SAR" or "Share Appreciation Right" means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.
aa. "Shares" means common stock, $.0l par value per share, of the Company.
bb. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
3. Administration.
a. Authority of the Committee. Except as provided in Section 7, the Plan
shall be administered by the Committee, and the Committee shall have full and
final authority to take the following actions, in each case subject to and
consistent with the provisions of the Plan:
(i) to select Eligible Employees to whom Awards may be granted;
(ii) to designate Affiliates;
(iii) to determine the type or types of Awards to be granted to each
Eligible Employee;
(iv) to determine the type and number of Awards to be granted, the number
of Shares to which an Award may relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, any exercise price, grant
price, or purchase price, and any bases for adjusting such exercise, grant or
purchase price, any restriction or condition, any schedule for lapse of
restrictions or conditions relating to transferability or forfeiture,
exercisability, or settlement of an
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Award, and waiver or accelerations thereof, and waivers of performance
conditions relating to an Award, based in each case on such considerations as
the Committee shall determine), and all other matters to be determined in
connection with an Award;
(v) to determine whether, to what extent, and under what circumstances an
Award may be settled, or the exercise price of an Award may be paid, in cash,
Shares, other Awards, or other property, or an Award may be canceled, forfeited,
exchanged, or surrendered;
(vi) to determine whether, to what extent, and under what circumstances
cash, Shares, other Awards, or other property payable with respect to an Award
will be deferred either automatically, at the election of the Committee, or at
the election of the Eligible Employee;
(vii) to prescribe the form of each Award Agreement, which need not be
identical for each Eligible Employee;
(viii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the plan and any Award,
rules and regulations, Award Agreement, or other instrument hereunder;
(x) to accelerate the exercisability or vesting of all or any portion of
any Award or to extend the period during which an Award is exercisable; and
(xi) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.
b. Manner of Exercise of Committee Authority. The Committee shall have sole
discretion in exercising its authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, Subsidiaries, Affiliates, Eligible
Employees, any person claiming any rights under the Plan from or through any
Eligible Employee, and shareholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be
construed as limiting any power or authority of the Committee. The Committee may
delegate to officers or managers of the Company or any Subsidiary or Affiliate
the authority, subject to such terms as the Committee shall determine, to
perform administrative functions and, with respect to Awards granted to persons
not subject to Section 16 of the Exchange Act, to perform such other functions
as the Committee may determine, to the extent permitted under Rule 16b-3 (if
applicable) and applicable law.
c. Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him or her by any officer or other employee of the Company or any Subsidiary or
Affiliate, the Company's independent certified public accountants, or other
professional retained by the Company to assist in the administration of
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the Plan. No member of the Committee, nor any officer or employee of the Company
acting on behalf of the Committee, shall be personally liable for any action,
determination, or interpretation taken or made in good faith with respect to the
Plan, and all members of the Committee and any officer or employee of the
Company acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination, or interpretation.
4. Shares Subject to the Plan.
a. Subject to adjustment as provided in Section 4(c) hereof, the total
number of Shares reserved for issuance in connection with Awards and Director's
Options under the Plan shall be 4,912,500. No Award or Director's option may be
granted if the number of Shares to which such Award or Director's Option
relates, when added to the number of Shares previously issued under the Plan,
exceeds the number of Shares reserved under the preceding sentence. If any
Awards or Director's Options are forfeited, canceled, terminated, exchanged or
surrendered or such Award or Director's Option is settled in cash or otherwise
terminates without a distribution of Shares to the Participant, any Shares
counted against the number of Shares reserved and available under the Plan with
respect to such Award or Director's Option shall, to the extent of any such
forfeiture, settlement, termination, cancellation, exchange or surrender, again
be available for Awards or Director's Options under the Plan; provided, however,
that in the case of forfeiture, cancellation, exchange or surrender of
Restricted Shares or Restricted Share Units with respect to which dividends or
Dividend Equivalents have been paid or accrued, such number of Shares shall not
be available for Awards or Director's Options unless, in the case of Shares with
respect to which dividends or Dividend Equivalents were accrued but unpaid, such
dividends and Dividend Equivalents are also forfeited, canceled, exchanged or
surrendered. Upon the exercise of any Award granted in tandem with any other
Awards, such related Awards shall be canceled to the extent of the number of
Shares as to which the Award is exercised. Subject to adjustment as provided in
Section 4(c) hereof, the maximum number of Shares with respect to which options
or SARs may be granted during a calendar year to any Eligible Employee under
this Plan shall be 225,000 Shares.
b. Any Shares distributed pursuant to an Award or Director's Option may
consist, in whole or in part, of authorized and unissued Shares or treasury
Shares including Shares acquired by purchase in the open market or in private
transactions.
c. In the event that the Committee shall determine that any dividend in
Shares, recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Eligible Employees under the Plan, then the Committee shall make such
equitable changes or adjustments as it deems appropriate and, in such manner as
it may deem equitable, adjust any or all of (i) the number and kind of shares
which may thereafter be issued under the Plan, (ii) the number and kind of
shares, other securities or other consideration issued or issuable in respect of
outstanding Awards, and (iii) the exercise price, grant price, or purchase price
relating to any Award; provided, however, in each case that, with respect to
ISOs, such adjustment shall be made in accordance with Section 424(h) of the
Code, unless the Committee determines otherwise. In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria
and performance objectives included
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in, Awards in recognition of unusual or non-recurring events (including, without
limitation, events described in the preceding sentence) affecting the Company or
any Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable laws,
regulations, or accounting principles; provided, however, that, if an Award
Agreement specifically so provides, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as performance-based
compensation for purposes of Section 162(m)(4)(C) of the Code and the
regulations thereunder.
5. Specific Terms of Awards.
a. General. Awards may be granted on the terms and conditions set forth in
this Section 5. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(d)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms regarding forfeiture
of Awards or continued exercisability of Awards in the event of termination of
employment by the Eligible Employee.
b. Options. The Committee is authorized to grant Options, which may be
NQSOs or ISOs, to Eligible Employees on the following terms and conditions:
(i) Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Committee, and the Committee may, without
limitation, set an exercise price that is based upon achievement of performance
criteria if deemed appropriate by the Committee.
(ii) Time and Method of Exercise. The Committee shall determine at the date
of grant or thereafter the time or times at which an Option may be exercised in
whole or in part (including, without limitation, upon achievement of performance
criteria if deemed appropriate by the Committee), the methods by which such
exercise price may be paid or deemed to be paid (including, without limitation,
broker-assisted exercise arrangements), the form of such payment (including,
without limitation, cash, Shares, notes or other property), and the methods by
which Shares will be delivered or deemed to be delivered to Eligible Employees.
(iii) ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Section 422 of the Code, including but not
limited to the requirement that no ISO shall be granted more than ten years
after the earlier of the date of adoption or shareholder approval of the Plan.
c. SARS. The Committee is authorized to grant SARs (Share Appreciation
Rights) to Eligible Employees on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Eligible Employee to whom
it is granted a right to receive with respect to each Share subject thereto,
upon exercise thereof, the excess of (1) the Fair Market Value of one Share on
the date of exercise (or, if the Committee
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shall so determine in the case of any such right, the Fair Market Value of one
Share at any time during a specified period before or after the date of
exercise) over (2) the exercise price of the SAR as determined by the Committee
as of the date of grant of the SAR (which, in the case of an SAR granted in
tandem with an option, shall be equal to the exercise price of the underlying
Option).
(ii) Other Terms. The Committee shall determine, at the time of grant or
thereafter, the time or times at which an SAR may be exercised in whole or in
part, the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be
delivered to Eligible Employees, whether or not an SAR shall be in tandem with
any other Award, and any other terms and conditions of any SAR. Unless the
Committee determines otherwise, an SAR (1) granted in tandem with an NQSO may be
granted at the time of grant of the related NQSO or at any time thereafter or
(2) granted in tandem with an ISO may only be granted at the time of grant of
the related ISO.
d. Restricted Shares. The Committee is authorized to grant Restricted
Shares to Eligible Employees on the following terms and conditions:
(i) Issuance and Restrictions. Restricted Shares shall be subject to such
restrictions on transferability and other restrictions, if any, as the Committee
may impose at the date of grant or thereafter, which restrictions may lapse
separately or in combination at such times, under such circumstances (including,
without limitation, upon achievement of performance criteria if deemed
appropriate by the Committee), in such installments, or otherwise, as the
Committee may determine. Except to the extent restricted under the Award
Agreement relating to the Restricted Shares, an Eligible Employee granted
Restricted Shares shall have all of the rights of a shareholder including,
without limitation, the right to vote Restricted Shares and the right to receive
dividends thereon.
(ii) Forfeiture. Except as otherwise determined by the Committee, at the
date of grant or thereafter, upon termination of employment during the
applicable restriction period, Restricted Shares and any accrued but unpaid
dividends or Dividend Equivalents that are at that time subject to restrictions
shall be forfeited; provided, however, that the Committee may provide, by rule
or regulation or in any Award Agreement, or may determine in any individual
case, that restrictions or forfeiture conditions relating to Restricted Shares
will be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Restricted Shares.
(iii) Certificates for Shares. Restricted Shares granted under the Plan may
be evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Shares are registered in the name of the Eligible
Employee, such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Shares, and
the Company shall retain physical possession of the certificate.
(iv) Dividends. Dividends paid on Restricted Shares shall be either paid at
the dividend payment date, or deferred for payment to such date as determined by
the Committee, in cash or in unrestricted Shares having a Fair Market Value
equal to the amount of such dividends. Shares distributed in connection with a
Share split or dividend in Shares, and other property distrib-
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uted as a dividend, shall be subject to restrictions and a risk of forfeiture to
the same extent as the Restricted Shares with respect to which such Shares or
other property has been distributed.
e. Restricted Share Units. The Committee is authorized to grant Restricted
Share Units to Eligible Employees, subject to the following terms and
conditions:
(i) Award and Restrictions. Delivery of Shares or cash, as the case may be,
will occur upon expiration of the deferral period specified for Restricted Share
Units by the Committee (or, if permitted by the Committee, as elected by the
Eligible Employee). In addition, Restricted Share Units shall be subject to such
restrictions as the Committee may impose, if any (including, without limitation,
the achievement of performance criteria if deemed appropriate by the Committee),
at the date of grant or thereafter, which restrictions may lapse at the
expiration of the deferral period or at earlier or later specified times,
separately or in combination, in installments or otherwise, as the Committee may
determine.
(ii) Forfeiture. Except as otherwise determined by the Committee at date of
grant or thereafter, upon termination of employment (as determined under
criteria established by the Committee) during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the Award
Agreement evidencing the Restricted Share Units), or upon failure to satisfy any
other conditions precedent to the delivery of Shares or cash to which such
Restricted Share Units relate, all Restricted Share Units that are at that time
subject to deferral or restriction shall be forfeited; provided, however, that
the Committee may provide, by rule or regulation or in any Award Agreement, or
may determine in any individual case, that restrictions or forfeiture conditions
relating to Restricted Share Units will be waived in whole or in part in the
event of termination resulting from specified causes, and the Committee may in
other cases waive in whole or in part the forfeiture of Restricted Share Units.
f. Performance Shares and Performance Units. The Committee is authorized to
grant Performance Shares or Performance Units or both to Eligible Employees on
the following terms and conditions:
(i) Performance Period. The Committee shall determine a performance period
(the "Performance Period") of one or more years and shall determine the
performance objectives for grants of Performance Shares and Performance Units.
Performance objectives may vary from Eligible Employee to Eligible Employee and
shall be based upon such performance criteria as the Committee may deem
appropriate. Performance Periods may overlap and Eligible Employees may
participate simultaneously with respect to Performance Shares and Performance
Units for which different Performance Periods are prescribed.
(ii) Award Value. At the beginning of a Performance Period, the Committee
shall determine for each Eligible Employee or group of Eligible Employees with
respect to that Performance Period the range of number of Shares, if any, in the
case of Performance Shares, and the range of dollar values, if any, in the case
of Performance Units, which may be fixed or may vary in accordance with such
performance or other criteria specified by the Committee, which shall be paid to
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an Eligible Employee as an Award if the relevant measure of Company performance
for the Performance Period is met.
(iii) Significant Events. If during the course of a Performance Period
there shall occur significant events as determined by the Committee which the
Committee expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided, however, that,
if an Award Agreement so provides, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as performance-based
compensation for purposes of Section 162(m)(4)(C) of the Code and the
regulations thereunder.
(iv) Forfeiture. Except as otherwise determined by the Committee, at the
date of grant or thereafter, upon termination of employment during the
applicable Performance Period, Performance Shares and Performance Units for
which the Performance Period was prescribed shall be forfeited; provided,
however, that the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in an individual case, that restrictions or
forfeiture conditions relating to Performance Shares and Performance Units will
be waived in whole or in part in the event of terminations resulting from
specified causes, and the Committee may in other cases waive in whole or in part
the forfeiture of Performance Shares and Performance Units.
(v) Payment. Each Performance Share or Performance Unit may be paid in
whole Shares, or cash, or a combination of Shares and cash either as a lump sum
payment or in installments, all as the Committee shall determine, at the time of
grant of the Performance Share or Performance Unit or otherwise, commencing as
soon as practicable after the end of the relevant Performance Period.
g. Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Eligible Employees, The Committee may provide, at the date of
grant or thereafter, that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Shares, or
other investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents) shall be subject to
all conditions and restrictions of the underlying Awards to which they relate.
h. Other Share-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Eligible Employees such other
Awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a "bonus" and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee
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shall determine. Cash awards, as an element of or supplement to any other Award
under the Plan, shall also be authorized pursuant to this Section 5(h).
6. Certain Provisions Applicable to Awards.
a. Stand-Alone, Additional, Tandem and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted to Eligible
Employees either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of an Eligible Employee to receive payment from
the Company or any Subsidiary or Affiliate. Awards may be granted in addition to
or in tandem with such other Awards or awards, and may be granted either as of
the same time as or a different time from the grant of such other Awards or
awards. The per Share exercise price of any option, grant price of any SAR, or
purchase price of any other Award conferring a right to purchase Shares which is
granted, in connection with the substitution of awards granted under any other
plan or agreement of the Company or any Subsidiary or Affiliate or any business
entity to be acquired by the Company or any Subsidiary or Affiliate, shall be
determined by the Committee, in its discretion.
b. Terms of Awards. The term of each Award granted to an Eligible Employee
shall be for such period as may be determined by the Committee; provided,
however, that in no event shall the term of any ISO or an SAR granted in tandem
therewith exceed a period of ten years from the date of its grant (or such
shorter period as may be applicable under Section 422 of the Code).
c. Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a Subsidiary
or Affiliate upon the grant, maturation, or exercise of an Award may be made in
such forms as the Committee shall determine at the date of grant or thereafter,
including, without limitation, cash, Shares, or other property, and may be made
in a single payment or transfer, in installments, or on a deferred basis. The
Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments.
d. Nontransferability. Awards (except for vested Shares) shall not be
transferable by an Eligible Employee except by will or the laws of descent and
distribution (except pursuant to a Beneficiary designation) and shall be
exercisable during the lifetime of an Eligible Employee only by such Eligible
Employee or his guardian or legal representative. An Eligible Employee's rights
under the Plan may not be pledged, mortgaged, hypothecated, or otherwise
encumbered, and shall not be subject to claims of the Eligible Employees
creditors.
7. Director's Options
a. Annual Grant. On January 1 of each year, beginning with January 1, 1996,
each Director in office on such date shall automatically be granted a NQSO to
purchase 10,000 Shares with an exercise price per Share equal to 100 percent of
the Market Value of one Share on the date of grant; provided, however, that such
price shall be at least equal to the par value of a Share. Each Op-
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tion granted to a Director under this paragraph (a) shall become fully
exercisable on December 31 of the year the option is granted, and shall expire
(unless terminated earlier under paragraph (d) below) on the tenth anniversary
of the date of grant.
b. Initial Grants. Upon consummation of the Company's initial public
offering of Shares, each Director in office on the date of such consummation
shall automatically be granted a NQSO to purchase 15,000 Shares with an exercise
price per Share equal to the initial public offering price per Share of Shares
sold in the initial public offering. In addition, each Director who first
becomes a Director after the date of the initial public offering will
automatically be granted a NQSO on the date he or she is first elected to the
Board to purchase 15,000 Shares with an exercise price per Share equal to 100%
of the Market Value of one Share on the date of grant; provided, however, that
such price shall be at least equal to the par value of a Share. Each Option
granted to a Director under this paragraph (b) shall become exercisable in three
equal installments, commencing on the date of grant and annually thereafter.
Each Option granted under this paragraph (b) shall expire (unless terminated
earlier under paragraph (d) below) on the tenth anniversary of the date of
grant.
c. Market Value. For purposes of this Section 7, Market Value shall mean
the mean between the high and low selling prices per Share on the immediately
preceding date (or, if the Shares were not traded on that day, the next
preceding day that the Shares were traded) on the principal exchange on which
the Shares are traded, as such prices are officially quoted on such exchange.
d. Termination of Service. If a person ceases to be a Director, (i) due to
retirement after attainment of age 65, (ii) due to death or disability, or (iii)
at the end of his or her elected term, all of his or her outstanding Options, to
the extent not already exercisable in full, shall become immediately and fully
exercisable at the time of termination of service, and all of such Director's
Options may be exercised at any time prior to the expiration dates of such
Options. If the Director's service terminates for any other reason during his or
her elected term, all Options which are not then exercisable shall be cancelled
on the date service terminates, and options which are then exercisable may be
exercised at any time within six months after the date of such termination, b ut
not later than the expiration date of the Options.
e. Time and Method of Exercise. The exercise price of a Director's Option
shall be paid to the Company at the time of exercise either in cash, or in
Shares already owned by the optionee and having a total Market Value equal to
the exercise price, or in a combination of cash and such Shares.
f. Nontransferability. No Director's Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the optionee, a Director's Option shall be exercisable
only by him or her or by his or her guardian or legal representative.
g. Adjustments. In the event that subsequent to the Effective Date any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other such change, affects the Shares such that they are
increased or decreased or changed into or exchanged for a different number or
kind of shares,
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other securities of the Company or of another corporation or other
consideration, then in order to maintain the proportionate interest of the
Director and preserve the value of the Director's Option, (i) there shall
automatically be substituted for each Share subject to an unexercised Director's
Option and each Share to be issued under Section 7(a) subsequent to such event
the number and kind of shares, other securities or other consideration into
which each outstanding Share shall be changed or for which each such Share shall
be exchanged, and (ii) the exercise price shall be increased or decreased
proportionately so that the aggregate purchase price for the Shares subject to
any unexercised Director's Option shall remain the same as immediately prior to
such event.
h. Administration. To the extent the Plan relates to Director's Options, it
is intended to operate automatically and not require administration. However, to
the extent that administration is necessary with respect to such grants, the
Plan shall be administered by the Secretary of the Company. Since the Director's
Options are awarded automatically, this function will be limited to ministerial
matters. The plan administrator will have no discretion with respect to the
selection of Director optionees, the determination of the exercise price of
Director's Options, the timing of such grants or number of Shares covered by the
Director's Options.
8. General Provisions.
a. Compliance with Legal and Trading Requirements. The Plan, the granting
and exercising of Awards or Director's options thereunder, and the other
obligations of the Company under the Plan and any Award Agreement, shall be
subject to all applicable federal and state laws, rules and regulations, and to
such approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Shares
under any Award or Director's Option until completion of such stock exchange or
market system listing or registration or qualification of such Shares or other
required action under any state or federal law, rule or regulation as the
Company may consider appropriate, and may require any Participant to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of Shares in compliance with applicable
laws, rules and regulations. No provisions of the Plan shall be interpreted or
construed to obligate the Company to register any Shares under federal or state
law.
b. No Right to Continued Employment or Service. Neither the Plan nor any
action taken thereunder shall be construed as giving any employee or director
the right to be retained in the employ or service of the Company or any of its
Subsidiaries or Affiliates, nor shall it interfere in any way with the right of
the Company or any of its Subsidiaries or Affiliates to terminate any employee's
or director's employment or service at any time.
c. Taxes. The Company or any Subsidiary or Affiliate is authorized to
withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to an Eligible Employee, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other
action as the Committee may deem advisable to enable the Company and Eligible
Employees to satisfy obligations for the payment of withholding taxes and other
tax obligations relating to any Award. This
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authority shall include authority to withhold or receive Shares or other
property and to make cash payments in respect thereof in satisfaction of an
Eligible Employee's tax obligations.
d. Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of shareholders of the Company or
Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company's shareholders to the extent such shareholder approval is required (i)
in order to insure that Awards granted under the Plan are exempt under Rule
16b-3 or (ii) under Section 422 of the Code; provided, however, that, without
the consent of an affected Participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may impair the rights or, in any
other manner, adversely affect the rights of such Participant under any Award or
Director's Option theretofore granted to him or her. Notwithstanding the other
provisions of this paragraph, Section 7 and the other provisions of this Plan
applicable to Director's Options may not be amended more than once every six
months other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules thereunder.
e. No Rights to Awards; No Shareholder Riqhts. No Eligible Employee or
employee shall have any claim to be granted any Award under the Plan, and there
is no obligation for uniformity of treatment of Eligible Employees and
employees. No Award shall confer on any Eligible Employee any of the rights of a
shareholder of the Company unless and until Shares are duly issued or
transferred to the Eligible Employee in accordance with the terms of the Award.
f. Unfunded Status of Awards. The Plan is intended to constitute an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award or Director's Option, nothing
contained in the Plan or any Award or Director's Option shall give any such
Participant any rights that are greater than those of a general creditor of the
Company; provided, however, that the Committee may authorize the creation of
trusts or make other arrangements to meet the Company's obligations under the
Plan to deliver cash, Shares, other Awards, or other property pursuant to any
Award, which trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan unless the Committee otherwise determines with the
consent of each affected Participant.
g. Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including, without
limitation, the granting of options and other awards otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.
h. Not Compensation for Benefit Plans. No Award payable under this Plan
shall be deemed salary or compensation for the purpose of computing benefits
under any benefit plan or other arrangement of the Company for the benefit of
its employees or directors unless the Company shall determine otherwise.
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i. No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award or Director's Option. In the case of Awards to
Eligible Employees, the Committee shall determine whether cash, other Awards, or
other property shall be issued or paid in lieu of such fractional Shares or
whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated. In the case of Director's options, cash shall be paid in
lieu of such fractional shares.
j. Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating toand any Award Agreement shall be determined in
the Plan, and any Award Agreement shall determined in accordance with the laws
of New York without giving effect to principles of conflict of laws.
k. Effective Date; Plan Termination. The Plan shall become effective as of
February 28, 1995 (the "Effective Date") upon approval by the affirmative votes
of the holders of a majority of voting securities of the Company. The Plan shall
terminate as to future awards on the date which is ten (10) years after the
Effective Date.
l. Titles and Headings. The titles and headings of the sections in the Plan
are for convenience of reference only. In the event of any conflict, the text of
the Plan, rather than such titles or headings, shall control.
