<PAGE> 1
As filed with the Securities and Exchange Commission on October 30, 1996
Registration Statement No. 33 -
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
C.P. CLARE CORPORATION
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 04-2561471
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Indemnification No.)
430 BEDFORD STREET
LEXINGTON, MASSACHUSETTS 02173
(Address of principal executive offices) (Zip Code)
C.P. CLARE CORPORATION
1995 STOCK OPTION AND INCENTIVE PLAN
--------------------
ARTHUR BUCKLAND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
430 Bedford Street
Lexington, MA 02173
(Name and address of agent for service)
(617) 863-8700
(Telephone number, including area code, of agent for service)
--------------------
Copies to
LORI M. HENDERSON
CORPORATE COUNSEL
C.P. Clare Corporation
430 Bedford Street
Lexington, MA 02173
(617) 863-8700
<TABLE>
CALCULATION OF REGISTRATION FEE
======================================================================================================
<CAPTION>
Title of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered (1) Offering Price Per Aggregate Registration fee
Share (2) Offering Price
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 1,000,000 $8.375 $8,375,000 $2,537.88
$0.01 par value
======================================================================================================
<FN>
(1) Plus such additional number of shares as may be required pursuant to the option plan in the event
of a stock dividend, stock split, split-up, recapitalizaton or other similar event.
(2) This estimate is made pursuant to Rule 457(c) and Rule 457(h)(1) under the Securities Act of 1933,
as amended, solely for the purpose of determining the amount of the registration fee and is based
solely upon the market value of outstanding shares of the Company's common stock on October 25,
1996, utilizing the average of the high and low sale prices reported on the Nasdaq National Market
on that date.
</TABLE>
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Registration Statement on Form S-8 relates to shares of the Common
Stock, par value $.01 per share (the "Common Stock"), of C.P. Clare Corporation
(the "Company") which may be issued under the Company's 1995 Stock Option and
Incentive Plan, as amended (the "Plan"). The Company hereby incorporates by
reference the registration statement on Form S-8, File No. 33-94038, filed with
the Securities and Exchange Commission on June 28, 1995 covering 1,220,266
shares of Common Stock which may be issued pursuant to the Plan. This
Registration Statement covers up to 1,000,000 additional shares of Common Stock
which may be issued pursuant to the Plan.
ITEM 8. EXHIBITS
- ----------------
The following is a complete list of exhibits filed or incorporated by
reference as part of this registration statement.
Exhibit No.
- -----------
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
securities being registered.
23.1 Consent of Counsel (included in Exhibit 5.1 hereto)
23.2 Consent of Arthur Andersen LLP, Independent Public Accounts.
24.1 Power of Attorney (included in signature page of this registration
statement).
99.1 C.P. Clare Corporation 1995 Stock Option and Incentive Plan, as amended.
<PAGE> 3
EXHIBIT INDEX
Exhibit No.
- -----------
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the securities being registered.
23.1 Consent of Counsel (included in Exhibit 5.1 hereto)
23.2 Consent of Arthur Andersen LLP, Independent Public
Accountants
24.1 Power of Attorney (included in signature page of this
registration statement)
99.1 C.P. Clare Corporation 1995 Stock Option and Incentive Plan,
as amended.
<PAGE> 4
SIGNATURES
Pursuant to the requirements on the Securities Act of 1933, as amended, the
registrant certifies that is has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Town of Lexington, Commonwealth of Massachusetts, on October
30, 1996
C.P. CLARE CORPORATION
By: /s/ Arthur Buckland
-----------------------------------
Arthur Buckland
President & Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated.
Each person whose signature appears below constitutes and appoints Arthur
Buckland and Jacqueline Arthur, and each of them, as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him and in this
name, place and stead, in any and all capacities to sign any or all amendments
or post-effective amendments to this registration statement ,and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each of said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Signature Title Date
- --------- ----- ----
/s/ Arthur Buckland President, Chief Executive October 30, 1996
- --------------------------- Officer and Chairman of the
Arthur Buckland Board (Principal Executive
Officer)
/s/ Jacqueline Arthur Vice President and Chief October 30, 1996
- --------------------------- Financial Officer (Principal
Jacqueline Arthur Financial and Accounting
Officer)
/s/ Winston R. Hindle, Jr. Director October 30, 1996
- ---------------------------
Winston R. Hindle, Jr.
/s/ James K. Sims
- --------------------------- Director October 30, 1996
James K. Sims
/s/ John G. Turner
- --------------------------- Director October 30, 1996
John G. Turner
/s/ Clemente C. Tiampo
- --------------------------- Director October 30, 1996
Clemente C. Tiampo
<PAGE> 1
EXHIBIT 5.1
October 23, 1996
C.P. Clare Corporation
430 Bedford Street
Lexington, MA 02173
Re: C.P. Clare Corporation
1995 Stock Option and Incentive Plan
------------------------------------
Ladies and Gentlemen:
This opinion is furnished in connection with the registration, pursuant to
the Securities Act of 1933, as amended (the "Act"), of 1,000,000 shares of the
Common Stock, par value $0.01 per share (the "Shares"), of C.P. Clare
Corporation (the "Company") which may be issued upon the exercise of options
granted under the Company's 1995 Stock Option and Incentive Plan (the "Option
Plan").
We have acted as counsel to the Company in connection with the preparation
of the Option Plan and the registration of the Shares under the Act. We have
examined the Amended and Restated Articles of Organization and the By-Laws of
the Company; such records of proceedings of the Company's Board of Directors as
we have deemed material; a Registration Statement on Form S-8 under the Act
relating to the Shares (the "Registration Statement"); and such other
certificates, records, instruments and documents as we considered necessary for
the purposes of this opinion.
We are attorneys admitted to practice in the Commonwealth of Massachusetts.
We express no opinion concerning the laws of any jurisdictions other than the
laws of the United States of America and the Commonwealth of Massachusetts.
Based upon and subject to the foregoing, we are of the opinion that upon
the issuance and delivery of the Shares against payment therefor in accordance
with the terms of the Registration Statement, the Option Plan and the option
agreements under the Option Plan, the Shares will be legally issued, fully paid
and non-assessable shares of the Company's Common Stock.
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Act, applicable requirements of state laws regulating
the offer and sale of securities and applicable requirements of the National
Association of Securities Dealers, Inc.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the use of our name in the Registration
Statement and the filing of this opinion with the Registration Statement.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated May 1, 1996
included in C.P. Clare Corporation's Form 10-K for the year ended March 31, 1996
and to all reference to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 23, 1996
<PAGE> 1
EXHIBIT 99.1
CP CLARE CORPORATION
1995 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the CP CLARE CORPORATION 1995 Stock Option and
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees, consultants and Directors of CP CLARE CORPORATION (the
"Company") and its Subsidiaries upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.
This Plan supersedes, amends and restates the CP Clare Corporation Amended
and Restated 1994 Employee, Director and Consultant Stock Option Plan (the "1994
Plan"), subject to Section 2(d) below.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights.
"Board" means the Board of Directors of the Company.
"Cause" means the occurrence of one or more of the following: (i) employee
or Independent Director is convicted of, pleads guilty to, or confesses to any
felony or any act of fraud, misappropriation or embezzlement which has an
immediate and materially adverse effect on the Company or any Subsidiary, as
determined by the Board in good faith in its sole discretion, (ii) employee or
Independent Director engages in a fraudulent act to the material damage or
prejudice of the Company or any Subsidiary or in conduct or activities
materially damaging to the property, business or reputation of the Company or
any Subsidiary, all as determined by the Board in good faith in its sole
discretion, (iii) any material act or omission by employee or Independent
Director involving malfeasance or negligence in the performance of employee's or
Independent Director's duties to the Company or any Subsidiary to the material
detriment of the Company or any Subsidiary, as determined by the Board in good
faith in its sole discretion, which has not been corrected by employee or
Independent Director within 30 days after written notice from the Company of any
such act or omission, (iv) failure by employee to comply in any material respect
with the terms of his employment agreement, if any, or any written policies or
directives of the Board as determined by the Board in good faith in its sole
discretion, which has not been corrected by employee within 30 days after
written notice from the Company of such failure, or (v) material breach by
employee of his noncompetition agreement with the Company, if any, as determined
by the Board in good faith in its sole discretion.
"Change of Control" is defined in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2.
"Disability" means an employee's inability to perform his normal required
services for the Company and its Subsidiaries for a period of six consecutive
months by reason of the employee's mental or physical disability, as determined
by the Committee in good faith in its sole discretion.
"Disinterested Person" means an Independent Director who qualifies as such
under Rule 16b-3(c)(2)(i) promulgated under the Act, or any successor definition
under said Rule.
"Dividend Equivalent Right" means Awards granted pursuant to Section 10.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 17.
<PAGE> 2
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related rules, regulations and interpretations.
"Fair Market Value" on any given date means the last reported sale price at
which Stock is traded on such date or, if no Stock is traded on such date, the
most recent date on which Stock was traded, as reflected on the NASDAQ National
Market or, if applicable, any other national stock exchange on which the Stock
is traded or if the Stock is not traded on a national exchange, the fair market
value of the Stock as determined by the Board or the Committee in good faith;
provided, however, that "Fair Market Value" on the effective date of the
Company's initial public offering shall be the offering price to the public on
such date.
"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is not also an
employee of the Company or any Subsidiary.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Performance Share Award" means Awards granted pursuant to Section 9.
"Restricted Stock Award" means Awards granted pursuant to Section 7.
"Retirement" means the employee's termination of employment with the
Company and its Subsidiaries after attainment of the age and/or service
requirements to qualify for early or normal retirement under the Company's
qualified retirement plan.
"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means Awards granted pursuant to Section 6.
"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company if each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests possessing 50% or
more of the economic interest or the total combined voting power of all classes
of stock or other interests in one of the other corporations or entities in the
chain.
"Unrestricted Stock Award" means Awards granted pursuant to Section 8.
SECTION 2. ADMINISTRATION OF PLAN; AUTHORITY TO SELECT PARTICIPANTS AND
DETERMINE AWARDS
(a) COMMITTEE. The Plan shall be administered by all of the Independent
Director members of the Compensation Committee of the Board, or any other
committee of not less than two Independent Directors performing similar
functions, as appointed by the Board from time to time (the "Committee"). Each
member of the Committee shall be a Disinterested Person and an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.
(b) POWERS OF COMMITTEE. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:
(i) to select the officers, other employees and consultants of the
Company and its Subsidiaries to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Unrestricted Stock Awards, Performance
Share Awards and Dividend Equivalent Rights, or any combination of the
foregoing, granted to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by any
Award;
2
<PAGE> 3
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award,
which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;
(v) to accelerate the exercisability or vesting of all or any portion
of any Award;
(vi) subject to the provisions of Section 5(a)(iii), to extend the
period in which Stock Options may be exercised;
(vii) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or credit
amounts constituting interest (at rates determined by the Committee) or
dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and practices
for administration of the Plan and for its own acts and proceedings as it
shall deem advisable; to interpret the terms and provisions of the Plan and
any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to
decide all disputes arising in connection with the Plan; and to otherwise
supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.
(c) DELEGATION OF AUTHORITY TO GRANT OPTIONS. The Committee may, in its
sole discretion, delegate to the President and Chief Executive Officer of the
Company power and authority, under Section 2(b) (including paragraphs (i)
through (iv) thereof) and Section 5, to grant Options to employees of the
Company effective on the first day of the employee's employment with the
Company; provided, however, that no such grant shall be made to an employee who
is subject to the reporting requirements of Section 16 of the Act; and provided
further that the power and authority delegated hereunder shall not include any
power and authority conferred by paragraphs (v) through (viii) of Section 2(b)
or by Section 14 or any power and authority under Section 5 to alter the rights
of the employee or otherwise exercise discretion with respect to the Option
after the grant date. The power and authority delegated hereunder shall be
subject to such additional limitations as the Committee may specify.
(d) PRIOR GRANTS UNDER 1994 PLAN. Options granted to an optionee under the
1994 Plan (or its predecessors) shall not be subject to any terms in this Plan
that would be deemed to modify, extend or renew such option within the meaning
of Section 424(h) of the Code.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 3,680,000 shares which represents
the total of (i) 2,000,000 shares authorized under the 1994 Plan, (ii) 680,000
additional shares authorized in connection with the approval of this Plan and
(iii) 1,000,000 additional shares authorized on March 28, 1996. For purposes of
this limitation, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number pursuant to
any type or types of Award; provided, however, that Stock Options or Stock
Appreciation Rights with respect to not more than 1,000,000 shares of Stock may
be granted to any one individual participant during any calendar year period.
The shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company. Upon the exercise
of a Stock Appreciation Right settled in shares of Stock, the right to purchase
an equal number of shares of Stock covered by a related Stock Option, if any,
shall be deemed to have been surrendered and will no longer be exercisable, and
said number of shares of Stock shall no longer be available under the Plan.
(b) RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
3
<PAGE> 4
reverse stock split or other similar transaction, the outstanding shares of
Stock are increased or decreased or are exchanged for a different number or kind
of shares or other securities of the Company, or additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or Stock Appreciation Rights that can be granted to any one
individual participant, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, and (iv) the price for
each share subject to any then outstanding Stock Options under the Plan, without
changing the aggregate exercise price as to which such Stock Options and Stock
Appreciation Rights remain exercisable. The adjustment by the Committee shall be
final, binding and conclusive. No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Committee in its
discretion may make a cash payment in lieu of fractional shares.
(c) MERGERS. In the event a consolidation or merger or sale of all or
substantially all of the assets of the Company in which outstanding shares of
Common Stock are exchanged for securities, cash or other property of any other
corporation or business entity or in the event of a liquidation of the Company,
the Board, or the board of directors of any corporation assuming the obligations
of the Company, may, in its discretion, take any one or more of the following
actions, as to outstanding Stock Options and Stock Appreciation Rights: (i)
provide that such Stock Options shall be assumed or equivalent options shall be
substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), (ii) upon written notice to the optionees, provide that all
unexercised Stock Options and Stock Appreciation Rights will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice, and/or
(iii) in the event of a business combination under the terms of which holders of
the Stock of the Company will receive upon consummation thereof a cash payment
for each share surrendered in the business combination, make or provide for a
cash payment to the optionees equal to the difference between (A) the value (as
determined by the Committee) of the consideration payable per share of Stock
pursuant to the business combination (the "Merger Price") times the number of
shares of Stock subject to such outstanding Stock Options and Stock Appreciation
Rights (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such outstanding Stock
Options and Stock Appreciation Rights in exchange for the termination of such
Stock Options and Stock Appreciation Rights.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees and consultants
of another corporation who concurrently become employees of the Company or a
Subsidiary as the result of a merger or consolidation of the employing
corporation with the Company or a Subsidiary or the acquisition by the Company
or a Subsidiary of property or stock of the employing corporation. The Committee
may direct that the substitute awards be granted on such terms and conditions as
the Committee considers appropriate in the circumstances.
SECTION 4. ELIGIBILITY
Participants in the Plan will be such full or part-time officers and other
employees and consultants of the Company and its Subsidiaries who are
responsible for or contribute to the management, growth or profitability of the
Company and its Subsidiaries as are selected from time to time by the Committee,
in its sole discretion, or by the President and Chief Executive Officer of the
Company pursuant to authority delegated under Section 2(c). Independent
Directors are also eligible to participate in the Plan but only to the extent
provided in Section 5(c) and Section 8 below.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Committee (or, if granted pursuant to authority delegated under Section 2(c),
the President and Chief Executive Officer) may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or NonQualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is
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<PAGE> 5
a "subsidiary corporation" within the meaning of Section 424(f) of the Code. To
the extent that any Option does not qualify as an Incentive Stock Option, it
shall constitute a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after March 12,
2005.
(a) Stock Options Granted to Employees. The Committee in its discretion may
grant Stock Options to eligible employees of the Company or any Subsidiary.
Stock Options granted to employees pursuant to this Section 5(a) shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable:
(i) EXERCISE PRICE. the exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined
by the Committee at the time of grant but shall not be less than 100% of
the Fair Market Value on the date of grant in the case of Incentive Stock
Options, or 85% of the Fair Market Value on the date of grant, in the case
of Non-Qualified Stock Options. Notwithstanding the foregoing, with respect
to Non-Qualified Stock Options which are granted in lieu of cash bonus, the
exercise price per share shall not be less than 50% of the Fair Market
Value on the date of grant. If an employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the option price of such Incentive
Stock Option shall be not less than 110% of the Fair Market Value on the
grant date.
(ii) GRANT OF DISCOUNT OPTIONS IN LIEU OF CASH BONUS. In the sole
discretion of the Committee, an employee may be granted a Non-Qualified
Stock Option in lieu of cash bonus, or any portion thereof, to which he may
become entitled pursuant to any other plan of the Company. The exercise
price per share shall be determined by the Committee but shall not be less
than 50% of the Fair Market Value of the Stock on the date the Stock Option
is granted. The number of shares of Stock subject to the Stock Option shall
be determined by dividing the amount of the bonus to be paid pursuant to
this Section 5(a)(ii) by the difference between the Fair Market Value of
the Stock on the date the Stock Option is granted and the exercise price
per Stock Option. The Stock Option shall be granted for whole number of
shares so determined; the value of any fractional share shall be paid in
cash.
(iii) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10% of the combined voting power of all classes of stock of
the Company or any parent or subsidiary corporation and an Incentive Stock
Option is granted to such employee, the term of such option shall be no
more than five years from the date of grant.
(iv) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock Options shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Committee at or after the grant
date. The Committee may at any time accelerate the exercisability of all or
any portion of any Stock Option. An optionee shall have the rights of a
stockholder only as to shares acquired upon the exercise of a Stock Option
and not as to unexercised Stock Options.
(v) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made
by one or more of the following methods:
(A) In cash, by certified or bank check or other instrument
acceptable to the Committee;
(B) In the form of shares of Stock that are not then subject to
restrictions under any Company plan and that have been held by the
optionee for at least six months, if permitted by the Committee in its
discretion. Such surrendered shares shall be valued at Fair Market Value
on the exercise date; or
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable
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<PAGE> 6
and acceptable to the Company to pay the purchase price; provided that
in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures
and enter into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection. The delivery of
certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his stead in accordance with the provisions of the Stock
Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Stock Option or
applicable provisions of laws.
(vi) TERMINATION BY REASON OF DEATH. Any Stock Option held by an
optionee whose employment by the Company and its Subsidiaries is terminated
by reason of death shall become fully exercisable and may thereafter be
exercised by the legal representative or legatee of the optionee, for a
period of 12 months (or such longer period as the Committee shall specify
at any time) from the date of death, or until the expiration of the stated
term of the Option, if earlier.
(vii) Termination by Reason of Disability.
------------------------------------
(A) Any Stock Option held by an optionee whose employment by the
Company and its Subsidiaries is terminated by reason of Disability shall
become fully exercisable and may thereafter be exercised, for a period
of 12 months (or such longer period as the Committee shall specify at
any time) from the date of such termination of employment, or until the
expiration of the stated term of the Option, if earlier.
(B) The Committee shall have sole authority and discretion to
determine whether a participant's employment has been terminated by
reason of Disability.
(C) The death of an optionee during the period provided in this
Section 5(a)(vii) for the exercise of a Stock Option shall extend such
period for six months (or for such longer period as the Committee shall
specify at any time) from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(viii) Termination by Reason of Retirement.
------------------------------------
(A) Any Stock Option held by an optionee whose employment by the
Company and its Subsidiaries is terminated by reason of Retirement may
thereafter be exercised, to the extent it was exercisable at the time of
such termination, for a period of 12 months (or such other period as the
Committee shall specify at any time) from the date of such termination
of employment, or until the expiration of the stated term of the Option,
if earlier.
(B) The death of an optionee during a period provided in this
Section 5(a)(viii) for the exercise of a Stock Option shall extend such
period for six months (or for such longer period as the Committee shall
specify at any time) from the date of death, subject to termination on
the expiration of the stated term of the Option, if earlier.
(ix) TERMINATION FOR CAUSE. If any optionee's employment by the
Company and its Subsidiaries is terminated for Cause, any Stock Option held
by such optionee, including any Stock Option that is immediately
exercisable at the time of such termination, shall immediately terminate
and be of no further force and effect; provided, however, that the
Committee may, in its sole discretion, provide that such Stock Option can
be exercised for a period of up to 30 days from the date of termination of
employment or until the expiration of the stated term of the Option, if
earlier.
(x) OTHER TERMINATION. Unless otherwise determined by the Committee,
if an optionee's employment by the Company and its Subsidiaries terminates
for any reason other than death, Disability, Retirement, or for Cause, any
Stock Option held by such optionee may thereafter be exercised, to the
extent it was exercisable on the date of termination of employment, for
three months (or such longer
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period as the Committee shall specify at any time) from the date of
termination of employment or until the expiration of the stated term of the
Option, if earlier.
(xi) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
shares of stock with respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its parent and subsidiary
corporations become exercisable for the first time by an optionee during
any calendar year shall not exceed $100,000. To the extent that any Stock
Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option.
(b) RELOAD OPTIONS. At the discretion of the Committee, Options granted
under Section 5(a) may include a so-called "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(v)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Committee may provide) to purchase that number of shares of Stock equal to the
number delivered to exercise the original Option.
(c) Stock Options Granted to Independent Directors.
-----------------------------------------------
(i) Automatic Grant of Options.
---------------------------
(A) Each Independent Director shall be granted on the effective
date of the Company's initial public offering a Non-Qualified Stock
Option to acquire 10,000 shares of Stock.
(B) Each Independent Director who is first elected to serve as a
Director after the effective date of the Company's initial public
offering shall be granted, on the fifth business day after his election,
a Non-Qualified Stock Option to acquire 10,000 shares of Stock.
(C) Each Independent Director who is serving as Director of the
Company on the fifth business day after each annual meeting of
shareholders, beginning with the annual meeting following the grant of a
Stock Option to the Independent Director pursuant to (A) or (B) above,
shall automatically be granted on such day a Non-Qualified Stock Option
to acquire 5,000 shares of Stock.
(D) The exercise price per share for the Stock covered by any Stock
Option granted under this Section 5(c) shall be equal to the Fair Market
Value of the Stock on the date the Stock Option is granted.
(ii) Exercise; Termination; Non-transferability.
-------------------------------------------
(A) Subject to the provisions of Section 15, each Option granted
under Section 5(c) shall become exercisable one year after the date of
grant or upon the death of the Optionee, if sooner, provided that the
Optionee has been a Director throughout such period. An Option granted
under Section 5(c) shall not be exercisable after the expiration of ten
years from the date of grant.
(B) If an Independent Director ceases to be a Director for any
reason other than Cause or death, an Option granted under this Section
5(c) may thereafter be exercised, if it is exercisable in accordance
with Section 5(c)(ii)(A) above, for a period of six months from the date
such optionee ceases to be a Director of the Company or until the
specified expiration date, if earlier. If the optionee ceases to be a
Director for Cause, all rights in an Option granted under this Section
5(c) shall terminate immediately on the date on which he ceases to be a
Director.
(C) No Stock Option granted under this Section 5(c) shall be
transferable by the optionee otherwise than by will or by the laws of
descent and distribution, and such Options shall be exercisable during
the optionee's lifetime only by the optionee. Any Option granted to an
Independent Director and exercisable on the date of his death in
accordance with Section 5(c)(ii)(A), may be exercised by the legal
representative or legatee of the optionee for a period of six months
from the date of death or until the expiration of the stated term of the
option, if earlier.
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(D) Options granted under this Section 5(c) may be exercised only
by written notice to the Company specifying the number of shares to be
purchased. Payment of the full purchase price of the shares to be
purchased may be made by one or more of the methods specified in Section
5(a)(v). An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.
(iii) LIMITED TO INDEPENDENT DIRECTORS. The provisions of this Section
5(c) shall apply only to Options granted or to be granted to Independent
Directors, and shall not be deemed to modify, limit or otherwise apply to
any other provision of this Plan or to any Option issued under this Plan to
a participant who is not an Independent Director of the Company. To the
extent inconsistent with the provisions of any other Section of this Plan,
the provisions of this Section 5(c) shall govern the rights and obligations
of the Company and Independent Directors respecting Options granted or to
be granted to Independent Directors. The provisions of this Section 5(c)
which affect the price, date of exercisability, option period or amount of
shares of Stock under an Option shall not be amended more than once in any
six-month period, other than to comport with changes in the Code or ERISA.
(d) STOCK OPTIONS GRANTED TO CONSULTANTS. The Committee in its discretion
may grant Non-Qualified Stock Options to eligible consultants of the Company or
any Subsidiary, on such terms and conditions, not inconsistent with the terms of
the Plan, as the Committee shall deem desirable; provided, however, that (i) the
exercise price per share for the Stock covered by a Stock Option granted
pursuant to this Section 5(d) shall not be less than 85% of the Fair Market
Value on the date of grant, (ii) the method of exercise of such Stock Option
shall be limited to one or more of the methods described in Section 5(a)(v)
hereof, and (iii) such Stock Option shall not include a "reload" feature as
described in Section 5(b) hereof or any similar feature.
(e) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee. Notwithstanding the foregoing, the Committee may
provide in an option agreement that the optionee may transfer, without
consideration for the transfer, his Stock Options to members of his immediate
family, to trusts for the benefit of such family members and to partnerships in
which such family members are the only partners.
(f) FORM OF SETTLEMENT. Shares of Stock issued upon exercise of a Stock
Option shall be free of all restrictions under the Plan, except as otherwise
provided in the Plan.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an
Award entitling the recipient to receive an amount in cash or shares of Stock or
a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise over the exercise price per Stock
Appreciation Right set by the Committee at the time of grant, which price shall
not be less than 85% of the Fair Market Value of the Stock on the date of grant
(or over the option exercise price per share, if the Stock Appreciation Right
was granted in tandem with a Stock Option) multiplied by the number of shares of
Stock with respect to which the Stock Appreciation Right shall have been
exercised, with the Committee having the right to determine the form of payment.
(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted to any eligible employee or consultant of the Company or
any Subsidiary by the Committee in tandem with, or independently of, any Stock
Option granted pursuant to Section 5 of the Plan. In the case of a Stock
Appreciation Right granted in tandem with a Non-Qualified Stock Option, such
Stock Appreciation Right may be granted either at or after the time of the grant
of such Option. In the case of a Stock Appreciation Right granted in tandem with
an Incentive Stock Option, such Stock Appreciation Right may be granted only at
the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.
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(c) TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the applicable
portion of any related Option shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with an Option shall
be transferable only when and to the extent that the underlying Option
would be transferable. Stock Appreciation Rights not granted in tandem with
a Option shall not be transferable otherwise than by will or the laws of
descent or distribution. All Stock Appreciation Rights shall be exercisable
during the participant's lifetime only by the participant or the
participant's legal representative.
(iv) No Stock Appreciation Right may be exercised for a period of six
months after the date of grant.
(d) RULES RELATING TO EXERCISE. In the case of a participant subject to the
restrictions of Section 16(b) of the Act, no Stock Appreciation Right (as
referred to in Rule 16b-3(e) or any successor rule under the Act) shall be
exercised except in compliance with any applicable requirements of Rule 16b-3 or
any successor rule. If a full or partial settlement in cash would result, (i)
such a participant may not exercise a Stock Appreciation Right or any related
Stock Option during the first six months of the term of the Stock Appreciation
Right or Option to be exercised; and (ii) such a participant may exercise a
Stock Appreciation Right only either: (A) during the period beginning on the
third business day following the date of release of quarterly or annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date, unless a different period is specified by Rule
16b-3(e) or any successor rule under the Act; (B) pursuant to an irrevocable
election to exercise made at least six months in advance of the effective date
of the election, which election shall be subject to the consent or disapproval
of the Committee; or (C) pursuant to an election to exercise incident to death,
Retirement, Disability or termination of employment. Notwithstanding the
foregoing, Section 6(e)(ii)(A) shall not be applicable until the Company has
been subject to the reporting requirements of Section 13(a) of the Act for at
least a year prior to the exercise and has filed all reports and statements
required to be filed pursuant to that Section for a year.
SECTION 7. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARDS. The Committee may grant Restricted
Stock Awards to any eligible employee or consultant of the Company or any
Subsidiary. A Restricted Stock Award is an Award entitling the recipient to
acquire, at no cost or for a purchase price determined by the Committee, shares
of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant ("Restricted Stock"). Conditions may be based on
continuing employment (or other business relationship) and/or achievement of
pre-established performance goals and objectives. Restricted Stock Awards may be
granted or sold as described in the preceding sentences in respect of past
services or other valid consideration, or in lieu of any cash compensation due
to the recipient.
(b) ACCEPTANCE OF AWARD. A participant who is granted a Restricted Stock
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within 60 days (or such shorter date as the
Committee may specify) following the award date by making payment to the
Company, if required, by certified or bank check or other instrument or form of
payment acceptable to the Committee in an amount equal to the specified purchase
price, if any, of the shares covered by the Award and by executing and
delivering to the Company a written instrument that sets forth the terms and
conditions of the Restricted Stock Award in such form as the Committee shall
determine.
(c) RIGHTS AS A STOCKHOLDER. Upon complying with Section 7(b) above, a
participant shall have the rights of a stockholder with respect to the voting of
the Restricted Stock, subject to such conditions contained in the written
instrument evidencing the Restricted Stock Award. Unless the Committee shall
otherwise
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determine, certificates evidencing the Restricted Stock shall remain in the
possession of the Company until such Restricted Stock is vested as provided in
Section 7(e) below.
(d) RESTRICTIONS. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award. In
the case of Restricted Stock granted to an employee, if the participant's
employment by the Company and its Subsidiaries terminates for any reason other
than death or Disability, the Company shall have the right, at the discretion of
the Committee, to repurchase Restricted Stock with respect to which conditions
have not lapsed at their purchase price, or to require forfeiture of such shares
to the Company if acquired at no cost, from the participant or the participant's
legal representative. The Company must exercise such right of repurchase or
forfeiture not later than the 90th day following such termination of employment
(unless otherwise specified in the written instrument evidencing the Restricted
Stock Award). Restricted Stock granted to a consultant shall be subject to such
repurchase and forfeiture provisions as the Committee shall specify at the time
of grant.
(e) VESTING OF RESTRICTED STOCK. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company's right of repurchase or forfeiture shall
lapse. Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the shares
on which all restrictions have lapsed shall no longer be Restricted Stock and
shall be deemed "vested." A participant whose employment is terminated for
reason of death or Disability shall become fully vested on his termination date
in any Restricted Stock he received as an employee to the extent such vesting is
otherwise contingent only on continued service with the Company. Where vesting
is contingent on attainment of pre-established performance goals, the vesting of
Restricted Stock in the case of death or Disability shall remain dependent on
the attainment of such goals and shall be determined as of such date or dates
specified by the Committee.
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.
SECTION 8. UNRESTRICTED STOCK AWARDS
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee may, in its sole
discretion, grant (or sell at a purchase price determined by the Committee) an
Unrestricted Stock Award to any eligible employee or consultant of the Company
or any Subsidiary, pursuant to which the recipient may receive shares of Stock
free of any restrictions ("Unrestricted Stock") under the Plan. Unrestricted
Stock Awards may be granted or sold as described in the preceding sentence in
respect of past services or other valid consideration, or in lieu of any cash
compensation due to the recipient.
(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF COMPENSATION. Upon
the request of an eligible employee of the Company or any Subsidiary and with
the consent of the Committee, such employee may, pursuant to an irrevocable
written election delivered to the Company no later than the date or dates
specified by the Committee, receive a portion of the cash compensation otherwise
due to such employee in the form of shares of Unrestricted Stock (valued at Fair
Market Value on the date or dates the cash compensation would otherwise be
paid). With respect to any employee who is subject to Section 16 of the Act,
such irrevocable election shall become effective no earlier than six months and
one day following the date of such election and the revocation of such election
shall be effective six months and one day following the date of the revocation.
(c) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF DIRECTOR FEES. Each
Independent Director may, pursuant to an irrevocable written election delivered
to the Company, receive all or a portion of such Independent Director's director
fees in shares of Unrestricted Stock (valued at Fair Market Value on the date or
dates that the director fees would otherwise be paid in cash). Such election
shall be effective no earlier than six months and one day following the date of
such election. Any revocation of such election shall be effective six months and
one day following the date of the revocation.
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(d) DEFERRAL OF AWARDS. Each Independent Director who has made an election
to receive shares of Unrestricted Stock under Section 8(c) above will have the
right to defer receipt of up to 100% of such shares of Unrestricted Stock
payable to such Independent Director in accordance with such rules and
procedures as may from time to time be established by the Company for that
purpose, and such election shall be effective on the later of the date six
months and one day from the date of such election or the beginning of the next
calendar year. The deferred Unrestricted Stock shall be entitled to receive
Dividend Equivalent Rights settled in shares of Stock.
(e) RESTRICTIONS ON TRANSFERS. The right to receive Unrestricted Stock on a
deferred basis may not be sold, assigned, transferred, pledged or otherwise
encumbered, other than by will or the laws of descent and distribution.
SECTION 9. PERFORMANCE SHARE AWARDS
(a) NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award is an
award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to any eligible
employee or consultant of the Company or any Subsidiary, including those who
qualify for awards under other performance plans of the Company. The Committee
in its sole discretion shall determine whether and to whom Performance Share
Awards shall be made, the performance goals applicable under each such Award,
the periods during which performance is to be measured, and all other
limitations and conditions applicable to the awarded Performance Shares;
provided, however, that the Committee may rely on the performance goals and
other standards applicable to other performance unit plans of the Company in
setting the standards for Performance Share Awards under the Plan.
(b) RESTRICTIONS ON TRANSFER. Performance Share Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) RIGHTS AS A SHAREHOLDER. A participant receiving a Performance Share
Award shall have the rights of a shareholder only as to shares actually received
by the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Committee).
(d) TERMINATION. Except as may otherwise be provided by the Committee at
any time prior to termination of employment (or other business relationship in
respect of which the Awards were granted), a participant's rights in all
Performance Share Awards shall automatically terminate upon the termination of
the participant's employment by (or such other business relationship with) the
Company and its Subsidiaries for any reason.
(e) ACCELERATION, WAIVER, ETC. At any time prior to the termination of the
participant's employment by the Company and its Subsidiaries (or other business
relationship with the Company and its Subsidiaries in respect of which the Award
was granted), the Committee may in its sole discretion accelerate, waive or,
subject to Section 13, amend any or all of the goals, restrictions or conditions
imposed under any Performance Share Award.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
(a) DIVIDEND EQUIVALENT RIGHTS. A Dividend Equivalent Right is an award
entitling the recipient to receive credits based on cash dividends that would be
paid on the shares of Stock specified in the Dividend Equivalent Right (or other
award to which it relates) if such shares were held by the recipient. A Dividend
Equivalent Right may be granted hereunder to an eligible employee or consultant,
as a component of another award or as a freestanding award. A Dividend
Equivalent Right may also be granted to an Independent Director pursuant to
Section 8(d). The terms and conditions of Dividend Equivalent Rights shall be
specified in the grant. Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently
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or may be deemed to be reinvested in additional shares of Stock, which may
thereafter accrue additional equivalents. Any such reinvestment shall be at Fair
Market Value on the date of reinvestment or such other price as may then apply
under a dividend reinvestment plan sponsored by the Company, if any. Dividend
Equivalent Rights may be settled in cash or shares of Stock or a combination
thereof, in a single installment or installments. A Dividend Equivalent Right
granted as a component of another award may provide that such Dividend
Equivalent Right shall be settled upon exercise, settlement, or payment of, or
lapse of restrictions on, such other award, and that such Dividend Equivalent
Right shall expire or be forfeited or annulled under the same conditions as such
other award. A Dividend Equivalent Right granted as a component of another award
may also contain terms and conditions different from such other award.
(b) INTEREST EQUIVALENTS. Any award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.
SECTION 11. TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includible in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(b) PAYMENT IN STOCK. A participant may elect to have such tax withholding
obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Stock to be issued pursuant to any Award a number of
shares with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due, or (ii) transferring to
the Company shares of Stock owned by the participant with an aggregate Fair
Market Value (as of the date the withholding is effected) that would satisfy the
withholding amount due. With respect to any participant who is subject to
Section 16 of the Act, the following additional restrictions shall apply:
(A) the election to satisfy tax withholding obligations relating to an
Award in the manner permitted by this Section 11(b) shall be made either
(1) during the period beginning on the third business day following the
date of release of quarterly or annual summary statements of sales and
earnings of the Company and ending on the twelfth business day following
such date, or (2) at least six months prior to the date as of which the
receipt of such an Award first becomes a taxable event for Federal income
tax purposes;
(B) such election shall be irrevocable;
(C) such election shall be subject to the consent or disapproval of
the Committee; and
(D) the Stock withheld to satisfy tax withholding must pertain to an
Award which has been held by the participant for at least six months from
the date of grant of the Award.
Notwithstanding the foregoing, the first sentence of Section 11(b)(A) shall not
be applicable until the Company has been subject to the reporting requirements
of Section 13(a) of the Act for at least a year prior to the election and has
filed all reports and statements required to be filed pursuant to that Section
for that year.
SECTION 12. TRANSFER, LEAVE OF ABSENCE, ETC
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or
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under the policy pursuant to which the leave of absence was granted or if the
Committee otherwise so provides in writing.
SECTION 13. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise or
purchase price, but such price, if any, must satisfy the requirements which
would apply to the substitute or amended Award if it were then initially granted
under this Plan) for the purpose of satisfying changes in law or for any other
lawful purpose, but no such action shall adversely affect rights under any
outstanding Award without the holder's consent.
SECTION 14. STATUS OF PLAN
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 15. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section 15:
(a) Each outstanding Stock Option and Stock Appreciation Right shall
automatically become fully exercisable notwithstanding any provision to the
contrary herein.
(b) Each Restricted Stock Award and Performance Share Award shall be
subject to such terms, if any, with respect to a Change of Control as have been
provided by the Committee in connection with such Award.
(c) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together
with all "affiliates" and "associates" (as such terms are defined in Rule
12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 50% or more of either
(A) the combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board of Directors
("Voting Securities") or (B) the then outstanding shares of Stock of the
Company (in either such case other than as a result of an acquisition of
securities directly from the Company); or
(ii) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the Effective Date whose election or nomination for election
was approved by a vote of at least a majority of the Incumbent Directors
shall, for purposes of this Plan, be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the
shareholders of the Company, immediately prior to the consolidation or
merger, would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate 60% or more of
the voting shares of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if any),
(B) any sale, lease, exchange or
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other transfer (in one transaction or a series of transactions contemplated
or arranged by any party as a single plan) of all or substantially all of
the assets of the Company or (C) any plan or proposal for the liquidation
or dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Stock or other Voting Securities outstanding, increases (x) the
proportionate number of shares of Stock beneficially owned by any person to 50%
or more of the shares of Stock then outstanding or (y) the proportionate voting
power represented by the Voting Securities beneficially owned by any person to
50% or more of the combined voting power of all then outstanding Voting
Securities; provided, however, that if any person referred to in clause (x) or
(y) of this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a "Change of Control"
shall be deemed to have occurred for purposes of the foregoing clause (i).
SECTION 16. GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee may
require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Committee may require the placing of such
stop-orders and restrictive legends on certificates for Stock and Awards as it
deems appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have mailed such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
SECTION 17. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a majority
of the shares of stock of the Company present or represented and entitled to
vote at a meeting of stockholders. Subject to such approval by the stockholders
and to the requirement that no Stock may be issued hereunder prior to such
approval, Stock Options and other Awards may be granted hereunder on and after
adoption of this Plan by the Board. The Plan was adopted by the Board of
Directors of the Corporation in March 1995 and approved by the Stockholders in
April 1995. The Plan was amended and restated as of May 19, 1995 and October 2,
1995. The plan was further amended as of March 28, 1996, which amendment was
approved by stockholders on September 17, 1996.
SECTION 18. GOVERNING LAW
This Plan shall be governed by Massachusetts law except to the extent such
law is preempted by federal law.
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