<PAGE> 1
As filed with the Securities and Exchange Commission on October 21, 1998
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.)
78 CHERRY HILL DRIVE
BEVERLY, MASSACHUSETTS 01915
(978) 524-6700
(Address of principal executive offices) (Zip Code)
C.P. CLARE CORPORATION
1995 STOCK OPTION AND INCENTIVE PLAN
-------------------------------------
ARTHUR BUCKLAND
PRESIDENT AND CHIEF EXECUTIVE OFFICER
78 Cherry Hill Drive
Beverly, MA 01915
(978) 524-6700
(Name and address of agent for service)
-------------------------------------
Copies to
LORI M. HENDERSON
VICE PRESIDENT AND CORPORATE COUNSEL
C.P. Clare Corporation
78 Cherry Hill Drive
Beverly, MA 01915
(978) 524-6700
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE PROPOSED MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PRICE PER SHARE PRICE FEE
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 500,000 $4.15625(2) $2,078,125 $613.05
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus such additional number of shares as may be required pursuant to the
CP Clare Corporation 1995 Stock Option and Incentive Plan, as amended in
the event of a stock dividend, stock split, split-up, recapitalization or
other similar event.
(2) This estimate is made pursuant to Rules 457 (c) and (h) 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 20,
1998, utilizing the average of the high and low sale prices reported on the
NASDAQ National Market on the date.
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 1,200,266
shares of Common Stock which may be issued pursuant to the Plan and the
registration statement on Form S-8, file No. 333-15097, filed with the
Securities and Exchange Commission on October 30, 1996 covering 1,000,000 shares
of Common Stock which may be issued pursuant to the Plan. This Registration
Statement covers up to 500,000 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 Lori M. Henderson, Esq. as to the legality of 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> 3
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 of 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 Beverly, Commonwealth of Massachusetts, on
October 21, 1998.
C.P. CLARE CORPORATION
By: /s/ Arthur Buckland
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 Thomas Sager, and each of them, as his true and lawful
attorney-in-fact and agent, with full power of substitution, for him in his
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Arthur Buckland President, Chief Executive Officer October 21, 1998
- ---------------------------- (Principal Executive Officer)
Arthur Buckland
/s/ Thomas B. Sager Vice President and Chief October 21, 1998
- ---------------------------- Financial Officer (Principal
Thomas B. Sager Financial and Accounting Officer)
/s/ Winston R. Hindle, Jr. Director October 21, 1998
- ----------------------------
Winston R. Hindle, Jr.
/s/ James K. Sims Director October 21, 1998
- ----------------------------
James K. Sims
/s/ John G. Turner Director October 21, 1998
- ----------------------------
John G. Turner
/s/ Clemente C. Tiampo Director October 21, 1998
- ----------------------------
Clemente C. Tiampo
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[CP Clare Corporation Logo] 78 Cherry Hill Drive
Beverly, MA 01915-1048
Tel: 978/524-6700
Fax: 978/524-4700
October 20, 1998
C.P. Clare Corporation
78 Cherry Hill Drive
Beverly, MA 01915
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 500,000 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, as amended
(the "Option Plan").
I am counsel to the Company and 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. I 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 I 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 I considered
necessary for the purposes of this opinion.
I am admitted to practice in the Commonwealth of Massachusetts. I
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, I am 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 requirement of state laws
regulating the offer and sale of securities and applicable requirements of the
National Association of Securities Dealers, Inc.
I understand that this opinion is to be used in connection with the
Registration Statement. I consent to the use of my name in the Registration
Statement and the filing of this opinion with the Registration Statement.
Very truly yours,
/s/ Lori M. Henderson
Lori M. Henderson
Vice President and Corporate Counsel
<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 April 29, 1998
included in C.P. Clare Corporation's Form 10-K for the year ended March 31,
1998 and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Boston, Massachusetts
October 16, 1998
<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.
"Administrator" means the Board or the Committee.
"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.
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"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 two or more independent Directors
appointed by the Board to administer the Plan, all of which shall be "Outside
Directors" within the meaning of Section 162m of the Code and the rules
promulgated thereunder and of "Non-Employee Directors" within the meaning of
Rule 16b-3, promulgated under the Act, or any successor rule.
"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.
"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.
"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.
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"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) ADMINISTRATOR. The Plan shall be administered by the
Administrator.
(b) POWERS OF ADMINISTRATOR. The Administrator 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;
(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;
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(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 Administrator e shall be
binding on all persons, including the Company and Plan participants.
(c) DELEGATION OF AUTHORITY TO GRANT OPTIONS. The Administrator
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; 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 Administrator 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 4,180,000 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, (iii) 1,000,000 additional shares authorized on March 28, 1996 and
(iv) 500,000 additional shares authorized on June 17, 1998. 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
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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,
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 Administrator 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
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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
Administrator, 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
Administrator (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 Non- Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is 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 Administrator 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 Administrator 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 Administrator 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.
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(ii) GRANT OF DISCOUNT OPTIONS IN LIEU OF CASH BONUS. In
the sole discretion of the Administrator, 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
Administrator 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 Administrator, 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
Administrator 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 Administrator;
(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 Administrator 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 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
Administrator shall prescribe as a condition of such payment
procedure.
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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
Administrator 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 Administrator 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 Administrator 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 Administrator 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
Administrator 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 Administrator 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.
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(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
Administrator, 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 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 Administrator,
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
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Independent Director pursuant to (A) or (B) above, shall
automatically be granted on such day a Non-Qualified Stock
Option to acquire 10,000 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.
(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.
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(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 Administrator 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 Administrator 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 Administrator 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.
(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:
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(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.
SECTION 7. RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARDS. The Administrator 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 Administrator 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 Administrator 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 Administrator 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
Administrator shall otherwise 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 Administrator , 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
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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 Administrator shall specify at the time of grant.
(e) VESTING OF RESTRICTED STOCK. The Administrator 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 Administrator.
(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 Administrator may, in
its sole discretion, grant (or sell at a purchase price determined by the
Administrator) 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 Administrator, such employee may,
pursuant to an irrevocable written election delivered to the Company no later
than the date or dates specified by the Administrator 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).
(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).
(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
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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 at
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 Administrator 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 Administrator 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 Administrator).
(d) TERMINATION. Except as may otherwise be provided by the
Administrator 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 Administrator 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
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(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 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 Administrator 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. Subject to approval by the Administrator,
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
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:
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(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 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
Administrator 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 Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator 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
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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 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
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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. The Plan was further amended as
of June 17, 1998 and July 14, 1998, which amendments were approved by
Stockholders on September 24, 1998.
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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