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MANGOSOFT, INC.
1999 INCENTIVE COMPENSATION PLAN
(AS AMENDED AND RESTATED AS OF MAY 1, 2000)
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TABLE OF CONTENTS
Page
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ARTICLE I PURPOSE .......................................................1
ARTICLE II DEFINITIONS ...................................................1
ARTICLE III ADMINISTRATION ................................................7
ARTICLE IV SHARE AND OTHER LIMITATIONS ..................................10
ARTICLE V ELIGIBILITY ..................................................13
ARTICLE VI STOCK OPTIONS ................................................14
ARTICLE VII STOCK APPRECIATION RIGHTS.....................................16
ARTICLE VIII RESTRICTED STOCK..............................................19
ARTICLE IX PERFORMANCE SHARES............................................21
ARTICLE X PERFORMANCE UNITS ............................................23
ARTICLE XI OTHER STOCK-BASED AWARDS .....................................25
ARTICLE XII NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY........................................26
ARTICLE XIII NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS.....................28
ARTICLE XIV CHANGE IN CONTROL PROVISIONS..................................31
ARTICLE XV TERMINATION OR AMENDMENT OF PLAN..............................34
ARTICLE XVI UNFUNDED PLAN.................................................34
ARTICLE XVII GENERAL PROVISIONS............................................35
ARTICLE XVIII EFFECTIVE DATE OF PLAN........................................38
ARTICLE XIX TERM OF PLAN..................................................38
EXHIBIT A
PERFORMANCE CRITERIA........................................................A-1
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MANGOSOFT, INC.
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1999 INCENTIVE COMPENSATION PLAN
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As Amended and Restated as of May 1, 2000
ARTICLE I
PURPOSE
The purpose of this MangoSoft, Inc. 1999 Incentive Compensation Plan,
as amended and restated as of May 1, 2000 (the "Plan"), is to enhance the
profitability and value of MangoSoft, Inc. (the "Company") for the benefit of
its stockholders by enabling the Company (i) to offer employees of and
Consultants to the Company and its Affiliates stock-based incentives and other
equity interests in the Company, thereby creating a means to raise the level of
stock ownership by employees and Consultants in order to attract, retain and
reward such individuals and strengthen the mutuality of interests between such
individuals and the Company's stockholders, and (ii) to make equity based awards
to Non-Employee Directors, thereby creating a means to attract, retain and
reward such Non-Employee Directors and strengthen the mutuality of interests
between Non-Employee Directors and the Company's stockholders.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Acquisition Event" has the meaning set forth in Section
4.2(d).
2.2 "Affiliate" means each of the following: (i) any Subsidiary;
(ii) any Parent; (iii) any corporation, trade or business (including,
without limitation, a partnership or limited liability company) which
is directly or indirectly controlled 50% or more (whether by ownership
of stock, assets or an equivalent ownership interest or voting
interest) by the Company or one of its Affiliates; and (iv) any other
entity in which the Company or any of its Affiliates has a material
equity interest and which is designated as an "Affiliate" by resolution
of the Committee.
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2.3 "Award" means any award under this Plan of any: (i) Stock
Option; (ii) Stock Appreciation Right; (iii) Restricted Stock; (iv)
Performance Share; (v) Performance Unit; or (vi) Other Stock-Based
Award.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means, with respect to a Participant's Termination of
Employment or Termination of Consultancy: (i) in the case where there
is no employment agreement, consulting agreement, Change in Control
agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the grant of the Award (or
where there is such an agreement but it does not define "cause" (or
words of like import)), termination due to a Participant's
insubordination, dishonesty, incompetence, moral turpitude, disclosure
to anyone outside the Company or its Affiliates of confidential
information, competitive solicitation of the customers of the Company
or its Affiliates, other misconduct of any kind or the refusal to
perform his or her duties or responsibilities for any reason other than
illness or incapacity; or (ii) in the case where there is an employment
agreement, consulting agreement, Change in Control agreement or similar
agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines "cause"
(or words of like import), as defined under such agreement; provided,
however, that with regard to any agreement that conditions "cause" on
occurrence of a change in control, such definition of "cause" shall not
apply until a Change in Control actually takes place and then only with
regard to a termination thereafter. With respect to a Participant's
Termination of Directorship, "cause" shall mean an act or failure to
act that constitutes cause for removal of a director under applicable
state law.
2.6 "Change in Control" has the meaning set forth in Article XIV.
2.7 "Code" means the Internal Revenue Code of 1986, as amended.
Any reference to any section of the Code shall also be a reference to
any successor provision.
2.8 "Committee" means: (a) with respect to the application of this
Plan to Eligible Employees and Consultants, a committee or subcommittee
of the Board appointed from time to time by the Board, which committee
or subcommittee shall consist of two or more non-employee directors,
each of whom is intended to be, to the extent required by Rule 16b-3, a
"non-employee director" as defined in Rule 16b-3 and, to the extent
required by Section 162(m) of the Code and any regulations thereunder,
an "outside director" as defined under Section 162(m) of the Code;
provided, however, that if and to the extent that no Committee exists
which has the authority to administer this Plan, the functions of the
Committee shall be exercised by the Board and all references herein to
the Committee shall be deemed to be references to the Board; and (b)
with respect to the application of this Plan to Non-Employee Directors,
the Board. If for any reason the appointed Committee does not meet the
requirements of Rule 16b-3 or Section 162(m) of the Code, such
noncompliance with the requirements of Rule 16b-3 or Section 162(m) of
the Code shall
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not affect the validity of the awards, grants, interpretations or
other actions of the Committee.
2.9 "Common Stock" means the common stock, $.001 par value per
share, of the Company, and such other securities as may be substituted
(or resubstituted) for stock pursuant to Section 4.2(b).
2.10 "Company" means MangoSoft, Inc., a Nevada corporation, and
its successors by operation of law.
2.11 "Consultant" means any advisor or consultant to the Company
or its Affiliates, including any advisory board member.
2.12 "Disability" means, with respect to an Eligible Employee,
Consultant or Non-Employee Director, a permanent and total disability
as defined in Section 22(e)(3) of the Code. A Disability shall only be
deemed to occur at the time of the determination by the Committee of
the Disability.
2.13 "Effective Date" means September 7, 1999.
2.14 "Eligible Employee" means each employee of the Company or an
Affiliate.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also
be a reference to any successor provision.
2.16 "Fair Market Value" means, unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder,
as of any date, the last sales price reported for the Common Stock on
the applicable date: (i) as reported on the principal national
securities exchange in the United States on which it is then traded or
The Nasdaq Stock Market, Inc. or (ii) if not traded on any such
national securities exchange or The Nasdaq Stock Market, Inc. as quoted
on an automated quotation system sponsored by the National Association
of Securities Dealers, Inc., or if the Common Stock shall not have been
reported or quoted on such date, on the first day prior thereto on
which the Common Stock was reported or quoted; provided that the
Committee may modify the definition of Fair Market Value to reflect any
changes in the trading practices of any exchange on which the Common
Stock is listed or traded. If the Common Stock is not readily tradable
on a national securities exchange, the Nasdaq Stock Market, Inc. or any
system sponsored by the National Association of Securities Dealers,
Inc., its Fair Market Value shall be set in good faith by the Committee
on the advice of a registered investment advisor (as defined under the
Investment Advisors Act of 1940). For purposes of the grant of any
Stock Option, the applicable date shall be the date on which the Stock
Option is granted, or if the sale of the Common Stock shall not have
been reported on such date, on the first day prior thereto on which the
sale of Common Stock was reported or quoted.
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For purposes of the conversion of a Performance Unit to shares of
Common Stock for reference purposes, the applicable date shall be the
date determined by the Committee in accordance with Section 10.1. For
purposes of the exercise of any Stock Appreciation Right, the
applicable date shall be the date a notice of exercise is received by
the Committee or, if not a day on which the applicable market is open,
the next day that it is open.
2.17 "Incentive Stock Option" means any Stock Option awarded to an
Eligible Employee under this Plan intended to be and designated as an
"Incentive Stock Option" within the meaning of Section 422 of the Code.
2.18 "Limited Stock Appreciation Right" means an Award of a
limited Tandem Stock Appreciation Right or a Non-Tandem Stock
Appreciation Right made pursuant to Section 7.5 of this Plan.
2.19 "Non-Employee Director" means a director of the Company who
is not an active employee of the Company or an Affiliate.
2.20 "Non-Qualified Stock Option" means any Stock Option awarded
under this Plan that is not an Incentive Stock Option.
2.21 "Non-Tandem Stock Appreciation Right" means a Stock
Appreciation Right entitling a Participant to receive an amount in cash
or Common Stock (as determined by the Committee in its sole discretion)
equal to the excess of: (i) the Fair Market Value of a share of Common
Stock as of the date such right is exercised, over (ii) the aggregate
exercise price of such right.
2.22 "Other Stock-Based Award" means an Award of Common Stock and
other Awards made pursuant to Article XI that are valued in whole or in
part by reference to, or are payable in or otherwise based on, Common
Stock, including, without limitation, an Award valued by reference to
performance of an Affiliate.
2.23 "Parent" means any parent corporation of the Company within
the meaning of Section 424(e) of the Code.
2.24 "Participant" means any Eligible Employee or Consultant to
whom an Award has been made under this Plan and each Non-Employee
Director of the Company; provided, however, that a Non-Employee
Director shall be a Participant for purposes of the Plan solely with
respect to awards of Stock Options pursuant to Article XIII.
2.25 "Performance Criteria" has the meaning set forth in Exhibit
A.
2.26 "Performance Cycle" has the meaning set forth in Section
10.1.
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2.27 "Performance Goal" means the objective performance goals
established by the Committee in accordance with Section 162(m) of the
Code and based on one or more Performance Criteria.
2.28 "Performance Period" has the meaning set forth in Section
9.1.
2.29 "Performance Share" means an Award made pursuant to Article
IX of this Plan of the right to receive Common Stock or, as determined
by the Committee in its sole discretion, cash of an equivalent value at
the end of the Performance Period or thereafter.
2.30 "Performance Unit" means an Award made pursuant to Article X
of this Plan of the right to receive a fixed dollar amount, payable in
cash or Common Stock (or a combination of both) as determined by the
Committee in its sole discretion, at the end of a specified Performance
Cycle or thereafter.
2.31 "Plan" means this MangoSoft Inc. 1999 Incentive Compensation
Plan, as amended and restated as of May 1, 2000.
2.32 "Reference Stock Option" has the meaning set forth in Section
7.1.
2.33 "Restricted Stock" means an Award of shares of Common Stock
under this Plan that is subject to restrictions under Article VIII.
2.34 "Restriction Period" has the meaning set forth in Section
8.3(a) with respect to Restricted Stock.
2.35 "Retirement" means a Termination of Employment or Termination
of Consultancy without Cause by a Participant at or after age 65 or
such earlier date after age 50 as may be approved by the Committee with
regard to such Participant. With respect to a Participant's Termination
of Directorship, Retirement shall mean the failure to stand for
reelection or the failure to be reelected at or after a Participant has
attained age 65 or, with the consent of the Board, before age 65 but
after age 50.
2.36 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provisions.
2.37 "Section 162(m) of the Code" means Section 162(m) of the Code
and any Treasury regulations thereunder.
2.38 "Securities Act" means the Securities Act of 1933, as
amended. Any reference to any section of the Securities Act shall also
be a reference to any successor provision.
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2.39 "Stock Appreciation Right" or "SAR" means the right pursuant
to an Award granted under Article VII.
2.40 "Stock Option" or "Option" means any option to purchase
shares of Common Stock granted to Eligible Employees or Consultants
under Article VI or to Non-Employee Directors under Article XIII.
2.41 "Subsidiary" means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
2.42 "Tandem Stock Appreciation Right" means a Stock Appreciation
Right entitling the holder to surrender to the Company all (or a
portion) of a Stock Option in exchange for an amount in cash or Common
Stock (as determined by the Committee in its sole discretion) equal to
the excess of: (i) the Fair Market Value, on the date such Stock Option
(or such portion thereof) is surrendered, of the Common Stock covered
by such Stock Option (or such portion thereof), over (ii) the aggregate
exercise price of such Stock Option (or such portion thereof).
2.43 "Ten Percent Stockholder" means a person owning stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company, its Subsidiaries or its Parent.
2.44 "Termination of Consultancy" means, with respect to a
Consultant, that the Consultant is no longer acting as a consultant to
the Company or an Affiliate. In the event an entity shall cease to be
an Affiliate, there shall be deemed a Termination of Consultancy of any
individual who is not otherwise a Consultant to the Company or another
Affiliate at the time the entity ceases to be an Affiliate.
2.45 "Termination of Directorship" means, with respect to a
Non-Employee Director, that the Non-Employee Director has ceased to be
a director of the Company.
2.46 "Termination of Employment" means: (i) a termination of
employment (for reasons other than a military or personal leave of
absence granted by the Company) of a Participant from the Company and
its Affiliates; or (ii) when an entity which is employing a Participant
ceases to be an Affiliate, unless the Participant otherwise is, or
thereupon becomes, employed by the Company or another Affiliate. The
Committee may otherwise define Termination of Employment in the Award
agreement or, if no rights of a Participant are reduced, may otherwise
define Termination of Employment thereafter.
2.47 "Transfer" means anticipate, alienate, attach, sell, assign,
pledge, encumber, charge, hypothecate or otherwise transfer and
"Transferred" has a correlative meaning.
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ARTICLE III
ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted
by the Committee.
3.2 Grants of Awards. The Committee shall have full authority to
grant to Eligible Employees and Consultants, pursuant to the terms of
this Plan: (i) Stock Options; (ii) Tandem Stock Appreciation Rights and
Non-Tandem Stock Appreciation Rights; (iii) Restricted Stock; (iv)
Performance Shares; (v) Performance Units; or (vi) Other Stock-Based
Awards. All Awards shall be granted by, confirmed by, and subject to
the terms of, a written agreement executed by the Company and the
Participant. In particular, the Committee shall have the authority:
(a) to select the Eligible Employees and Consultants to whom
Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Awards, including
any combination of two or more Awards, are to be granted hereunder
to one or more Eligible Employees or Consultants;
(c) to determine, in accordance with the terms of this Plan,
the number of shares of Common Stock to be covered by each Award
granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions or waiver
thereof, regarding any Award and the shares of Common Stock
relating thereto, based on such factors, if any, as the Committee
shall determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or Restricted
Stock under Section 6.3(d) or, with respect to Stock Options
granted to Non-Employee Directors, Section 13.4(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans (which shall be on a recourse basis
and bear interest at the rate the Committee shall provide) to
Eligible Employees and Consultants in order to exercise Stock
Options under this Plan or to purchase Awards under this Plan
(including shares of Common Stock);
(g) to determine whether a Stock Option is an Incentive Stock
Option or Non-Qualified Stock Option, whether a Stock Appreciation
Right is a Tandem
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Stock Appreciation Right or Non-Tandem Stock Appreciation
Right or whether an Award is intended to satisfy Section 162(m) of
the Code;
(h) to determine whether to require an Eligible Employee or
Consultant, as a condition of the granting of any Award, not to
sell or otherwise dispose of shares of Common Stock acquired
pursuant to the exercise of an Option or an Award for a period of
time as determined by the Committee, in its sole discretion,
following the date of the acquisition of such Option or Award;
(i) to modify, extend or renew an Award, subject to Article
XV herein, provided, however, that if an Award is modified,
extended or renewed and thereby deemed to be the issuance of a new
Award under the Code or the applicable accounting rules, the
exercise price of an Award may continue to be the original
exercise price even if less than the Fair Market Value of the
Common Stock at the time of such modification, extension or
renewal; and
(j) to offer to buy out an Option previously granted, based
on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time such offer is made.
3.3 Guidelines. Subject to Article XV hereof, the Committee shall
have the authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing this Plan and perform all
acts, including the delegation of its administrative responsibilities,
as it shall, from time to time, deem advisable; to construe and
interpret the terms and provisions of this Plan and any Award issued
under this Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The Committee may correct
any defect, supply any omission or reconcile any inconsistency in this
Plan or in any agreement relating thereto in the manner and to the
extent it shall deem necessary to effectuate the purpose and intent of
this Plan. The Committee may adopt special guidelines and provisions
for persons who are residing in, or subject to, the taxes of, countries
other than the United States to comply with applicable tax and
securities laws and may impose any limitations and restrictions that it
deems necessary to the comply with the applicable tax and securities
laws of such jurisdictions. To the extent applicable, this Plan is
intended to comply with Section 162(m) of the Code and the applicable
requirements of Rule 16b-3 and shall be limited, construed and
interpreted in a manner so as to comply therewith.
3.4 Decisions Final. Any decision, interpretation or other action
made or taken in good faith by or at the direction of the Company, the
Board or the Committee (or any of its members) arising out of or in
connection with this Plan shall be within the absolute discretion of
all and each of them, as the case may be, and shall be final, binding
and conclusive on the Company and all employees and Participants and
their respective heirs, executors, administrators, successors and
assigns.
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3.5 Procedures. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the
Committee shall hold meetings, subject to the By-Laws of the Company,
at such times and places as the Committee shall deem advisable,
including, without limitation, by telephone conference or by written
consent. A majority of the Committee members shall constitute a quorum.
All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by
all the Committee members in accordance with the By-Laws of the
Company, shall be fully as effective as if it had been made by a vote
at a meeting duly called and held. The Committee shall keep minutes of
its meetings and shall make such rules and regulations for the conduct
of its business as it shall deem advisable.
3.6 Designation of Consultants/Liability.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the
administration of this Plan and may grant authority to officers to
execute agreements or other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of this
Plan and may rely upon any opinion received from any such counsel
or consultant and any computation received from any such
consultant or agent. Expenses incurred by the Committee or Board
in the engagement of any such counsel, consultant or agent shall
be paid by the Company. The Committee, its members and any person
designated pursuant to paragraph (a) above shall not be liable for
any action or determination made in good faith with respect to
this Plan. To the maximum extent permitted by applicable law, no
officer of the Company or member or former member of the Committee
or of the Board shall be liable for any action or determination
made in good faith with respect to this Plan or any Award granted
under it. To the maximum extent permitted by applicable law and
the Certificate of Incorporation and By-Laws of the Company and to
the extent not covered by insurance, each officer and member or
former member of the Committee or of the Board shall be
indemnified and held harmless by the Company against any cost or
expense (including reasonable fees of counsel reasonably
acceptable to the Company) or liability (including any sum paid in
settlement of a claim with the approval of the Company), and
advanced amounts necessary to pay the foregoing at the earliest
time and to the fullest extent permitted, arising out of any act
or omission to act in connection with this Plan, except to the
extent arising out of such officer's, member's or former member's
own fraud or bad faith. Such indemnification shall be in addition
to any rights of indemnification the officers, directors or
members or former officers, directors or members may have under
applicable law or under the Certificate of Incorporation or
By-Laws of the Company or any Affiliate. Notwithstanding anything
else herein, this indemnification will not apply to the
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actions or de(b) terminations made by an individual with
regard to Awards granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 Shares.
(a) General Limitation. The aggregate number of shares of
Common Stock that may be the subject of Awards under this Plan at
the time of any new grant (and with no reduction of the
outstanding Awards) shall be limited to 8,000,000 shares of Common
Stock (subject to any increase or decrease pursuant to Section
4.2). The shares of Common Stock available under this Plan may be
either authorized and unissued Common Stock or Common Stock held
in or acquired for the treasury of the Company or both. To the
extent that an Incentive Stock Option is disqualified and no
longer an Incentive Stock Option, the number of shares of Common
Stock underlying the Stock Option shall continue to count against
the aggregate limit of 8,000,000 shares of Common Stock set forth
herein. If any Stock Option or Stock Appreciation Right granted
under this Plan expires, terminates or is canceled for any reason
without having been exercised in full or, with respect to Stock
Options, the Company repurchases any Stock Option, the number of
shares of Common Stock underlying such unexercised or repurchased
Stock Option or any unexercised Stock Appreciation Right shall
again be available for the purposes of Awards under this Plan. If
any shares of Restricted Stock, Performance Shares or Performance
Units awarded under this Plan to a Participant are forfeited or
repurchased by the Company for any reason, the number of forfeited
or repurchased shares of Restricted Stock, Performance Shares or
Performance Units shall again be available for the purposes of
Awards under this Plan. If a Tandem Stock Appreciation Right is
granted or a Limited Stock Appreciation Right is granted in tandem
with a Stock Option, such grant shall only apply once against the
maximum number of shares of Common Stock which may be issued under
this Plan. In determining the number of shares of Common Stock
available for Awards other than Awards of Incentive Stock Options,
if Common Stock has been exchanged by a Participant as full or
partial payment to the Company, or for withholding, in connection
with the exercise of a Stock Option or the number shares of Common
Stock otherwise deliverable has been reduced for withholding, the
number of shares of Common Stock exchanged as payment in
connection with the exercise or for withholding or reduced shall
again be available for purposes of Awards under this Plan.
(b) Individual Participant Limitations. (i) The maximum
number of shares of Common Stock subject to any Award of Stock
Options, Stock Appreciation Rights, Performance Shares or shares
of Restricted Stock or Other Stock-Based Award for which the grant
of such Award or the lapse of the relevant Restriction
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Period is subject to the attainment of Performance Goals in
accordance with Section 8.3(a)(ii) or Section 11.1 herein which
may be granted under this Plan during any fiscal year of the
Company to each Eligible Employee or Consultant shall be 1,000,000
shares per type of Award (subject to any increase or decrease
pursuant to Section 4.2), provided that the maximum number of
shares of Common Stock for all types of Awards does not exceed
1,000,000 (subject to any increase or decrease pursuant to Section
4.2) during any fiscal year of the Company. If a Tandem Stock
Appreciation Right is granted or a Limited Stock Appreciation
Right is granted in tandem with a Stock Option, it shall apply
against the Eligible Employee's or Consultant's individual share
limitations for both Stock Appreciation Rights and Stock Options.
(ii) There are no annual individual Eligible Employee or
Consultant share limitations on Restricted Stock or Other
Stock-Based Awards or for which the grant of such Award or the
lapse of the relevant Restriction Period is not subject to
attainment of Performance Goals in accordance with Section
8.3(a)(ii) or Section 11.1 hereof.
(iii) The maximum value at grant of Performance Units which
may be granted under this Plan during any fiscal year of the
Company to each Eligible Employee or Consultant shall be
$1,000,000. Each Performance Unit shall be referenced to one share
of Common Stock and shall be charged against the available shares
under this Plan at the time the unit value measurement is
converted to a referenced number of shares of Common Stock in
accordance with Section 10.1.
(iv) The individual Participant limitations set forth in this
Section 4.1(b) shall be cumulative; that is, to the extent that
shares of Common Stock for which Awards are permitted to be
granted to an Eligible Employee or a Consultant during a fiscal
year are not covered by an Award to such Eligible Employee or
Consultant in a fiscal year, the number of shares of Common Stock
available for Awards to such Eligible Employee or Consultant shall
automatically increase in the subsequent fiscal years during the
term of the Plan until used.
4.2 Changes.
(a) The existence of this Plan and the Awards granted
hereunder shall not affect in any way the right or power of the
Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in
the Company's capital structure or its business, any merger or
consolidation of the Company or any Affiliate, any issue of
bonds, debentures, preferred or prior preference stock ahead
of or affecting Common Stock, the dissolution or liquidation of
the Company or any Affiliate, any sale or transfer of
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all or part of the assets or business of the Company or any
Affiliate or any other corporate act or proceeding.
(b) Subject to the provisions of Section 4.2(d), in the event
of any such change in the capital structure or business of the
Company by reason of any stock split, reverse stock split, stock
dividend, combination or reclassification of shares,
recapitalization, or other change in the capital structure of the
Company, merger, consolidation, spin-off, reorganization, partial
or complete liquidation, issuance of rights or warrants to
purchase any Common Stock or securities convertible into Common
Stock, or any other corporate transaction or event having an
effect similar to any of the foregoing and effected without
receipt of consideration by the Company, then the aggregate number
and kind of shares which thereafter may be issued under this Plan,
the number and kind of shares or other property (including cash)
to be issued upon exercise of an outstanding Stock Option or other
Awards granted under this Plan and the purchase price thereof
shall be appropriately adjusted consistent with such change in
such manner as the Committee may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or
available for, Participants under this Plan, and any such
adjustment determined by the Committee in good faith shall be
final, binding and conclusive on the Company and all Participants
and employees and their respective heirs, executors,
administrators, successors and assigns.
(c) Fractional shares of Common Stock resulting from any
adjustment in Options or Awards pursuant to Section 4.2(a) or (b)
shall be aggregated until, and eliminated at, the time of exercise
by rounding-down for fractions less than one-half and rounding-up
for fractions equal to or greater than one-half. No cash
settlements shall be made with respect to fractional shares
eliminated by rounding. Notice of any adjustment shall be given by
the Committee to each Participant whose Award has been adjusted
and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of this Plan.
(d) In the event of a merger or consolidation in which the
Company is not the surviving entity or in the event of any
transaction that results in the acquisition of substantially all
of the Company's outstanding Common Stock by a single person or
entity or by a group of persons and/or entities acting in concert,
or in the event of the sale or transfer of all or substantially
all of the Company's assets (all of the foregoing being referred
to as "Acquisition Events"), then the Committee may, in its sole
discretion, terminate all outstanding Stock Options and Stock
Appreciation Rights, effective as of the date of the Acquisition
Event, by delivering notice of termination to each Participant at
least 30 days prior to the date of consummation of the Acquisition
Event, in which case during the period from the date on which such
notice of termination is delivered to the consummation of the
Acquisition Event, each such Participant shall have the right to
exercise in full all of his or her Stock Options and Stock
Appreciation Rights that are then outstanding (without
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regard to any limitations on exercisability otherwise
contained in the Stock Option or Award Agreements), but any such
exercise shall be contingent upon and subject to the occurrence of
the Acquisition Event, and, provided that, if the Acquisition
Event does not take place within a specified period after giving
such notice for any reason whatsoever, the notice and exercise
pursuant thereto shall be null and void.
If an Acquisition Event occurs, to the extent the Committee does
not terminate the outstanding Stock Options and Stock Appreciation
Rights pursuant to this Section 4.2(d), then the provisions of Section
4.2(b) shall apply.
4.3 Minimum Purchase Price. Notwithstanding any provision of this
Plan to the contrary, if authorized but previously unissued shares of
Common Stock are issued under this Plan, such shares shall not be
issued for a consideration which is less than as permitted under
applicable law.
ARTICLE V
ELIGIBILITY
5.1 General Eligibility. All Eligible Employees and Consultants
and prospective employees of and Consultants to the Company and its
Affiliates are eligible to be granted Non-Qualified Stock Options,
Stock Appreciation Rights, Restricted Stock, Performance Shares,
Performance Units or Other Stock-Based Awards. Eligibility for the
grant of an Award and actual participation in this Plan shall be
determined by the Committee in its sole discretion. The vesting and
exercise of Awards granted to a prospective employee or Consultant are
conditioned upon such individual actually becoming an Eligible Employee
or Consultant.
5.2 Incentive Stock Options. All Eligible Employees of the
Company, its Subsidiaries and its Parent (if any) are eligible to be
granted Incentive Stock Options under this Plan. Eligibility for the
grant of an Award and actual participation in this Plan shall be
determined by the Committee in its sole discretion.
5.3 Non-Employee Directors. Non-Employee Directors are only
eligible to receive an Award of Stock Options in accordance with
Article XIII of the Plan.
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ARTICLE VI
STOCK OPTIONS
6.1 Stock Options. Each Stock Option granted hereunder shall be
one of two types: (i) an Incentive Stock Option intended to satisfy the
requirements of Section 422 of the Code; or (ii) a Non-Qualified Stock
Option.
6.2 Grants. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified
Stock Options or both types of Stock Options (in each case with or
without Stock Appreciation Rights). To the extent that any Stock Option
does not qualify as an Incentive Stock Option (whether because of its
provisions or the time or manner of its exercise or otherwise), such
Stock Option or the portion thereof which does not qualify, shall
constitute a separate Non-Qualified Stock Option. The Committee shall
have the authority to grant any Consultant one or more Non-Qualified
Stock Options (with or without Stock Appreciation Rights).
Notwithstanding any other provision of this Plan to the contrary or any
provision in an agreement evidencing the grant of a Stock Option to the
contrary, any Stock Option granted to an Eligible Employee of an
Affiliate (other than an Affiliate which is a Parent or a Subsidiary)
shall be a Non-Qualified Stock Option.
6.3 Terms of Stock Options. Stock Options granted under this Plan
shall be subject to the following terms and conditions, and shall be in
such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
desirable:
(a) Exercise Price. The exercise price per share of Common
Stock subject to an Incentive Stock Option or a Stock Option
intended to be "performance-based" for purposes of Section 162(m)
of the Code shall be determined by the Committee at the time of
grant, but shall not be less than 100% of the Fair Market Value of
the Common Stock at the time of grant; provided, however, that if
an Incentive Stock Option is granted to a Ten Percent Stockholder,
the exercise price shall be no less than 110% of the Fair Market
Value of the Common Stock. The exercise price per share of Common
Stock subject to a Non-Qualified Stock Option shall be determined
by the Committee.
(b) Stock Option Term. The term of each Stock Option shall be
fixed by the Committee; provided, however, that no Stock Option
shall be exercisable more than 10 years after the date such Stock
Option is granted; and further provided that the term of an
Incentive Stock Option granted to a Ten Percent Stockholder shall
not exceed 5 years.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as
shall be determined by the Committee
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at grant. If the Committee provides, in its discretion, that
any Stock Option is exercisable subject to certain limitations
(including, without limitation, that such Stock Option is
exercisable only in installments or within certain time periods),
the Committee may waive such limitations on the exercisability at
any time at or after grant in whole or in part (including, without
limitation, waiver of the installment exercise provisions or
acceleration of the time at which such Stock Option may be
exercised), based on such factors, if any, as the Committee shall
determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise and waiting period provisions apply under subsection (c)
above, Stock Options may be exercised in whole or in part at any
time and from time to time during the Stock Option term by giving
written notice of exercise to the Committee specifying the number
of shares to be purchased. Such notice shall be accompanied by
payment in full of the purchase price as follows: (i) in cash or
by check, bank draft or money order payable to the order of the
Company; (ii) if the Common Stock is traded on a national
securities exchange, The Nasdaq Stock Market, Inc. or quoted on a
national quotation system sponsored by the National Association of
Securities Dealers, through a "cashless exercise" procedure
whereby the Participant delivers irrevocable instructions to a
broker to deliver promptly to the Company an amount equal to the
purchase price; or (iii) on such other terms and conditions as may
be acceptable to the Committee (including, without limitation, the
relinquishment of Stock Options or by payment in full or in part
in the form of Common Stock owned by the Participant for a period
of at least 6 months (and for which the Participant has good title
free and clear of any liens and encumbrances) based on the Fair
Market Value of the Common Stock on the payment date as determined
by the Committee). No shares of Common Stock shall be issued until
payment therefor, as provided herein, has been made or provided
for.
(e) Incentive Stock Option Limitations. To the extent that
the aggregate Fair Market Value (determined as of the time of
grant) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by an Eligible Employee
during any calendar year under this Plan and/or any other stock
option plan of the Company, any Subsidiary or any Parent exceeds
$100,000, such Options shall be treated as Non-Qualified Stock
Options. In addition, if an Eligible Employee does not remain
employed by the Company, any Subsidiary or any Parent at all times
from the time an Incentive Stock Option is granted until 3 months
prior to the date of exercise thereof (or such other period as
required by applicable law), such Stock Option shall be treated as
a Non-Qualified Stock Option. Should any provision of this Plan
not be necessary in order for the Stock Options to qualify as
Incentive Stock Options, or should any additional provisions be
required, the Committee may amend this Plan accordingly, without
the necessity of obtaining the approval of the stockholders of the
Company.
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(f) Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the
limitations of this Plan, Stock Options shall be evidenced by such
form of agreement or grant as is approved by the Committee, and
the Committee may (i) modify, extend or renew outstanding Stock
Options granted under this Plan (provided that the rights of a
Participant are not reduced without his consent), and (ii) accept
the surrender of outstanding Stock Options (up to the extent not
theretofore exercised) and authorize the granting of new Stock
Options in substitution therefor (to the extent not theretofore
exercised).
(g) Other Terms and Conditions. Stock Options may contain
such other provisions, which shall not be inconsistent with any of
the terms of this Plan, as the Committee shall deem appropriate
including, without limitation, permitting "reloads" such that the
same number of Stock Options are granted as the number of Stock
Options exercised, shares used to pay for the exercise price of
Stock Options or shares used to pay withholding taxes ("Reloads").
With respect to Reloads, the exercise price of the new Stock
Option shall be the Fair Market Value on the date of the "reload"
and the term of the Stock Option shall be the same as the
remaining term of the Stock Options that are exercised, if
applicable, or such other exercise price and term as determined by
the Committee.
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 Tandem Stock Appreciation Rights. Stock Appreciation Rights
may be granted in conjunction with all or part of any Stock Option (a
"Reference Stock Option") granted under this Plan ("Tandem Stock
Appreciation Rights"). In the case of a Non-Qualified Stock Option,
such rights may be granted either at or after the time of the grant of
such Reference Stock Option. In the case of an Incentive Stock Option,
such rights may be granted only at the time of the grant of such
Reference Stock Option. Consultants shall not be eligible for a grant
of Tandem Stock Appreciation Rights granted in conjunction with all or
part of an Incentive Stock Option.
7.2 Terms and Conditions of Tandem Stock Appreciation Rights.
Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall
be determined from time to time by the Committee, including Article XII
and the following:
(a) Term. A Tandem Stock Appreciation Right or applicable
portion thereof granted with respect to a Reference Stock Option
shall terminate and no longer be exercisable upon the termination
or exercise of the Reference Stock Option, except that, unless
otherwise determined by the Committee, in its sole
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discretion, at the time of grant, a Tandem Stock Appreciation
Right granted with respect to less than the full number of shares
covered by the Reference Stock Option shall not be reduced until
and then only to the extent the exercise or termination of the
Reference Stock Option causes the number of shares covered by the
Tandem Stock Appreciation Right to exceed the number of shares
remaining available and unexercised under the Reference Stock
Option.
(b) Exercisability. Tandem Stock Appreciation Rights shall be
exercisable only at such time or times and to the extent that the
Reference Stock Options to which they relate shall be exercisable
in accordance with the provisions of Article VI and this Article
VII.
(c) Method of Exercise. A Tandem Stock Appreciation Right may
be exercised by a Participant by surrendering the applicable
portion of the Reference Stock Option. Upon such exercise and
surrender, the Participant shall be entitled to receive an amount
determined in the manner prescribed in this Section 7.2. Stock
Options which have been so surrendered, in whole or in part, shall
no longer be exercisable to the extent the related Tandem Stock
Appreciation Rights have been exercised.
(d) Payment. Upon the exercise of a Tandem Stock Appreciation
Right, a Participant shall be entitled to receive up to, but no
more than, an amount in cash and/or Common Stock (as chosen by the
Committee in its sole discretion at grant, or thereafter if no
rights of a Participant are reduced) equal in value to the excess
of the Fair Market Value of one share of Common Stock over the
option price per share specified in the Reference Stock Option,
multiplied by the number of shares in respect of which the Tandem
Stock Appreciation Right shall have been exercised.
(e) Deemed Exercise of Reference Stock Option. Upon the
exercise of a Tandem Stock Appreciation Right, the Reference Stock
Option or part thereof to which such Stock Appreciation Right is
related shall be deemed to have been exercised for the purpose of
the limitation set forth in Article IV of this Plan on the number
of shares of Common Stock to be issued under this Plan.
7.3 Non-Tandem Stock Appreciation Rights. Non-Tandem Stock
Appreciation Rights may also be granted without reference to any Stock
Option granted under this Plan.
7.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall
be determined from time to time by the Committee, including Article XII
and the following:
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(a) Term. The term of each Non-Tandem Stock Appreciation
Right shall be fixed by the Committee, but shall not be greater
than ten (10) years after the date the right is granted.
(b) Exercisability. Non-Tandem Stock Appreciation Rights
shall be exercisable at such time or times and subject to such
terms and conditions as shall be determined by the Committee at
grant. If the Committee provides, in its discretion, that any such
right is exercisable subject to certain limitations (including,
without limitation, that it is exercisable only in installments or
within certain time periods), the Committee may waive such
limitation on the exercisability at any time at or after grant in
whole or in part (including, without limitation, waiver of the
installment exercise provisions or acceleration of the time at
which rights may be exercised), based on such factors, if any, as
the Committee shall determine, in its sole discretion.
(c) Method of Exercise. Subject to whatever installment
exercise and waiting period provisions apply under subsection (b)
above, Non-Tandem Stock Appreciation Rights may be exercised in
whole or in part at any time and from time to time during the
option term, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to
be exercised.
(d) Payment. Upon the exercise of a Non-Tandem Stock
Appreciation Right a Participant shall be entitled to receive, for
each right exercised, up to, but no more than, an amount in cash
and/or Common Stock (as chosen by the Committee in its sole
discretion at grant, or thereafter if no rights of a Participant
are reduced) equal in value to the excess of the Fair Market Value
of one share of Common Stock on the date the right is exercised
over the Fair Market Value of one share of Common Stock on the
date the right was awarded to the Participant.
7.5 Limited Stock Appreciation Rights. The Committee may, in its
sole discretion, grant a Tandem Stock Appreciation Right or a
Non-Tandem Stock Appreciation Right as a Limited Stock Appreciation
Right. Limited Stock Appreciation Rights may be exercised only upon the
occurrence of a Change in Control or such other event as the Committee
may, in its sole discretion, designate at the time of grant or
thereafter. Upon the exercise of limited Stock Appreciation Rights,
except as otherwise provided in an Award agreement, the Participant
shall receive in cash or Common Stock, as determined by the Committee,
an amount equal to the amount (i) set forth in Section 7.2(d) with
respect to Tandem Stock Appreciation Rights, or (ii) set forth in
Section 7.4(d) with respect to Non-Tandem Stock Appreciation Rights, as
applicable.
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ARTICLE VIII
RESTRICTED STOCK
8.1 Awards of Restricted Stock. Shares of Restricted Stock may be
issued to Eligible Employees or Consultants either alone or in addition
to other Awards granted under this Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the
price (if any) to be paid by the recipient (subject to Section 8.2),
the time or times within which such Awards may be subject to
forfeiture, the vesting schedule and rights to acceleration thereof,
and all other terms and conditions of the Awards. The Committee may
condition the grant or vesting of Restricted Stock upon the attainment
of specified performance goals, including established Performance Goals
in accordance with Section 162(m) of the Code, or such other factors as
the Committee may determine, in its sole discretion.
8.2 Awards and Certificates. An Eligible Employee or Consultant
selected to receive Restricted Stock shall not have any rights with
respect to such Award, unless and until such Participant has delivered
to the Company a fully executed copy of the applicable Award agreement
relating thereto and has otherwise complied with the applicable terms
and conditions of such Award. Further, such Award shall be subject to
the following conditions:
(a) Purchase Price. The purchase price of Restricted Stock
shall be fixed by the Committee. Subject to Section 4.3, the
purchase price for shares of Restricted Stock may be zero to the
extent permitted by applicable law, and, to the extent not so
permitted, such purchase price may not be less than par value.
(b) Acceptance. Awards of Restricted Stock must be accepted
within a period of 90 days (or such shorter period as the
Committee may specify at grant) after the Award date by executing
a Restricted Stock Award agreement and by paying whatever price
(if any) the Committee has designated thereunder.
(c) Legend. Each Participant receiving shares of Restricted
Stock shall be issued a stock certificate in respect of such
shares of Restricted Stock, unless the Committee elects to use
another system, such as book entries by the transfer agent, as
evidencing ownership of shares of Restricted Stock. Such
certificate shall be registered in the name of such Participant,
and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award,
substantially in the following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the MangoSoft, Inc. (the "Company")
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1999 Incentive Compensation Plan (the "Plan") and an
Agreement entered into between the registered owner and the
Company dated . Copies of such Plan and Agreement
are on file at the principal office of the Company."
(d) Custody. The Committee may require that any stock
certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and that,
as a condition to the grant of such Award of Restricted Stock, the
Participant shall have delivered a duly signed stock power,
endorsed in blank, relating to the Common Stock covered by such
Award.
8.3 Restrictions and Conditions on Restricted Stock Awards. Shares
of Restricted Stock awarded pursuant to this Plan shall be subject to
Article XII and the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting.
(i) The Participant shall not be permitted to Transfer shares of
Restricted Stock awarded under this Plan during the period or
periods set by the Committee (the "Restriction Period") commencing
on the date of such Award, as set forth in the Restricted Stock
Award agreement and such agreement shall set forth a vesting
schedule and any events which would accelerate vesting of the
shares of Restricted Stock. Within these limits, based on service,
attainment of Performance Goals pursuant to Section 8.3(a)(ii)
below and/or such other factors or criteria as the Committee may
determine in its sole discretion, the Committee may provide for
the lapse of such restrictions in installments in whole or in
part, or may accelerate the vesting of all or any part of any
Restricted Stock Award and/or waive the deferral limitations for
all or any part of any Restricted Stock Award.
(ii) Objective Performance Goals, Formulae or Standards. If
the grant of shares of Restricted Stock or the lapse of
restrictions is based on the attainment of Performance Goals, the
Committee shall establish the Performance Goals and the applicable
vesting percentage of the Restricted Stock Award applicable to
each Participant or class of Participants in writing prior to the
beginning of the applicable fiscal year or at such later date as
otherwise determined by the Committee and while the outcome of the
Performance Goals are substantially uncertain. Such Performance
Goals may incorporate provisions for disregarding (or adjusting
for) changes in accounting methods, corporate transactions
(including, without limitation, dispositions and acquisitions) and
other similar type events or circumstances. With regard to a
Restricted Stock Award that is intended to comply with Section
162(m) of the Code, to the extent any such provision would create
impermissible discretion under Section 162(m) of the Code or
otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect. The applicable Performance Goals shall
be based on one or more of the Performance Criteria set forth in
Exhibit A hereto.
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(b) Rights as Stockholder. Except as provided in this
subsection (b) and subsection (a) above and as otherwise
determined by the Committee, the Participant shall have, with
respect to the shares of Restricted Stock, all of the rights of a
holder of shares of Common Stock of the Company including, without
limitation, the right to receive any dividends, the right to vote
such shares and, subject to and conditioned upon the full vesting
of shares of Restricted Stock, the right to tender such shares.
The Committee may, in its sole discretion, determine at the time
of grant that the payment of dividends shall be deferred until,
and conditioned upon, the expiration of the applicable Restriction
Period.
(c) Lapse of Restrictions. If and when the Restriction Period
expires without a prior forfeiture of the Restricted Stock subject
to such Restriction Period, the certificates for such shares shall
be delivered to the Participant. All legends shall be removed from
said certificates at the time of delivery to the Participant
except as otherwise required by applicable law.
ARTICLE IX
PERFORMANCE SHARES
9.1 Award of Performance Shares. Performance Shares may be awarded
either alone or in addition to other Awards granted under this Plan.
The Committee shall, in its sole discretion, determine the Eligible
Employees and Consultants to whom and the time or times at which such
Performance Shares shall be awarded, the duration of the period (the
"Performance Period") during which, and the conditions under which, a
Participant's right to Performance Shares will be vested and the other
terms and conditions of the Award in addition to those set forth in
Section 9.2.
Each Performance Share awarded shall be referenced to one share of
Common Stock. Except as otherwise provided herein, the Committee shall
condition the right to payment of any Performance Share Award upon the
attainment of objective Performance Goals established pursuant to
Section 9.2(c) below and such other non-performance based factors or
criteria as the Committee may determine in its sole discretion.
9.2 Terms and Conditions. A Participant selected to receive
Performance Shares shall not have any rights with respect to such
Awards, unless and until such Participant has delivered a fully
executed copy of a Performance Share Award agreement evidencing the
Award to the Company and has otherwise complied with the following
terms and conditions:
(a) Earning of Performance Share Award. At the expiration of
the applicable Performance Period, the Committee shall determine
the extent to which
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the Performance Goals established pursuant to Section 9.2(c)
are achieved and the percentage of each Performance Share Award
that has been earned.
(b) Payment. Following the Committee's determination in
accordance with subsection (a) above, shares of Common Stock or,
as determined by the Committee in its sole discretion, the cash
equivalent of such shares shall be delivered to the Participant,
in an amount equal to such Participant's earned Performance Share
Award. Notwithstanding the foregoing, except as may be set forth
in the agreement covering the Award, the Committee may, in its
sole discretion and in accordance with Section 162(m) of the Code,
award an amount less than the earned Performance Share Award
and/or subject the payment of all or part of any Performance Share
Award to additional vesting and forfeiture conditions as it deems
appropriate.
(c) Objective Performance Goals, Formulae or Standards. The
Committee shall establish the objective Performance Goals for the
earning of Performance Shares based on a Performance Period
applicable to each Participant or class of Participants in writing
prior to the beginning of the applicable Performance Period or at
such later date as permitted under Section 162(m) of the Code and
while the outcome of the Performance Goals are substantially
uncertain. Such Performance Goals may incorporate, if and only to
the extent permitted under Section 162(m) of the Code, provisions
for disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation,
dispositions and acquisitions) and other similar type events or
circumstances. To the extent any such provision would create
impermissible discretion under Section 162(m) of the Code or
otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect. The applicable Performance Goals shall
be based on one or more of the Performance Criteria set forth in
Exhibit A hereto.
(d) Dividends and Other Distributions. At the time of any
Award of Performance Shares, the Committee may, in its sole
discretion, award an Eligible Employee or Consultant the right to
receive the cash value of any dividends and other distributions
that would have been received as though the Eligible Employee or
Consultant had held each share of Common Stock referenced by the
earned Performance Share Award from the last day of the first year
of the Performance Period until the actual distribution to such
Participant of the related share of Common Stock or cash value
thereof. Such amounts, if awarded, shall be paid to the
Participant as and when the shares of Common Stock or cash value
thereof are distributed to such Participant and, at the discretion
of the Committee, may be paid with interest from the first day of
the second year of the Performance Period until such amounts and
any earnings thereon are distributed. The applicable rate of
interest shall be determined by the Committee in its sole
discretion; provided, however, that for each fiscal year or part
thereof, the applicable interest rate shall
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not be greater than a rate equal to the four-year U.S.
Government Treasury rate on the first day of each applicable
fiscal year.
ARTICLE X
PERFORMANCE UNITS
10.1 Awards of Performance Units. Performance Units may be awarded
either alone or in addition to other Awards granted under this Plan.
The Committee shall, in its sole discretion, determine the Eligible
Employees to whom and the time or times at which such Performance Units
shall be awarded, the duration of the period (the "Performance Cycle")
during which, and the conditions under which, a Participant's right to
Performance Units will be vested and the other terms and conditions of
the Award in addition to those set forth in Section 10.2.
Performance Units shall be awarded in a dollar amount determined
by the Committee and shall be converted for purposes of calculating
growth in value to a referenced number of shares of Common Stock based
on the Fair Market Value of shares of Common Stock at the close of
trading on the first business day following the announcement of the
annual financial results of the Company for the fiscal year of the
Company immediately preceding the fiscal year of the commencement of
the relevant Performance Cycle, provided that the Committee may provide
that the minimum price for such conversion shall be the Fair Market
Value on the date of grant.
Each Performance Unit shall be referenced to one share of Common
Stock. Except as otherwise provided herein, the Committee shall
condition the right to payment of any Performance Unit Award upon the
attainment of objective Performance Goals established pursuant to
Section 10.2(a) and such other non-performance based factors or
criteria as the Committee may determine in its sole discretion. The
cash value of any fractional Performance Unit Award subsequent to
conversion to shares of Common Stock shall be treated as a dividend or
other distribution under Section 10.2(e) to the extent any portion of
the Performance Unit Award is earned.
10.2 Terms and Conditions. The Performance Units awarded pursuant
to this Article 10 shall be subject to the following terms and
conditions:
(a) Performance Goals. The Committee shall establish the
objective Performance Goals for the earnings of Performance Units
based on a Performance Cycle applicable to each Participant or
class of Participants in writing prior to the beginning of the
applicable Performance Cycle or at such later date as permitted
under Section 162(m) of the Code and while the outcome of the
Performance Goals are substantially uncertain. Such Performance
Goals may incorporate, if and only to the extent permitted under
Section 162(m) of the Code, provisions for
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disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation,
dispositions and acquisitions) and other similar type events or
circumstances. To the extent any such provision would create
impermissible discretion under Section 162(m) of the Code or
otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect. The applicable Performance Goals shall
be based on one or more of the Performance Criteria set forth in
Exhibit A hereto.
(b) Vesting. At the expiration of the Performance Cycle, the
Committee shall determine and certify in writing the extent to
which the Performance Goals have been achieved, and the percentage
of the Performance Units of each Participant that have vested.
(c) Payment. Subject to the applicable provisions of the
Award agreement and this Plan, at the expiration of the
Performance Cycle, cash and/or shares of Common Stock (as the
Committee may determine in its sole discretion at grant, or
thereafter if no rights of a Participant are reduced) shall be
delivered to the Participant in payment of the vested Performance
Units covered by the Performance Unit Award. Notwithstanding the
foregoing, except as may be set forth in the agreement covering
the Award, the Committee may, in its sole discretion, and to the
extent applicable and permitted under Section 162(m) of the Code,
award an amount less than the earned Performance Unit Award and/or
subject the payment of all or part of any Performance Unit Award
to additional vesting and forfeiture conditions as it deems
appropriate.
(d) Accelerated Vesting. Based on service, performance and/or
such other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate the
vesting of all or any part of any Performance Unit Award and/or
waive the deferral limitations for all or any part of such Award.
(e) Dividends and Other Distributions. At the time of any
Award of Performance Units, the Committee may, in its sole
discretion, award an Eligible Employee or Consultant the right to
receive the cash value of any dividends and other distributions
that would have been received as though the Eligible Employee or
Consultant had held each share of Common Stock referenced by the
earned Performance Unit Award from the last day of the first year
of the Performance Cycle until the actual distribution to such
Participant of the related share of Common Stock or cash value
thereof. Such amounts, if awarded, shall be paid to the
Participant as and when the shares of Common Stock or cash value
thereof are distributed to such Participant and, at the discretion
of the Committee, may be paid with interest from the first day of
the second year of the Performance Cycle until such amounts and
any earnings thereon are distributed. The applicable rate of
interest shall be determined by the Committee in its sole
discretion; provided, however, that for each fiscal year or part
thereof, the applicable interest rate shall
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not be greater than a rate equal to the four-year U.S.
Government Treasury rate on the first day of each applicable
fiscal year.
ARTICLE XI
OTHER STOCK-BASED AWARDS
11.1 Other Awards. Other Stock-Based Awards may be granted either
alone or in addition to or in tandem with Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or
Performance Units.
Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at
which such Awards shall be made, the number of shares of Common Stock
to be awarded pursuant to such Awards, and all other conditions of the
Awards. The Committee may also provide for the grant of Common Stock
under such Awards upon the completion of a specified performance period
and upon attainment of specified Performance Goals which shall be based
on one or more Performance Criteria set forth in Exhibit A hereto.
11.2 Terms and Conditions. Other Stock-Based Awards made pursuant
to this Article XI shall be subject to the following terms and
conditions:
(a) Non-Transferability. Subject to the applicable provisions
of the Award agreement and this Plan, shares of Common Stock
subject to Awards made under this Article XI may not be
Transferred prior to the date on which the shares are issued, or,
if later, the date on which any applicable restriction,
performance or deferral period lapses.
(b) Dividends. Unless otherwise determined by the Committee
at the time of Award, subject to the provisions of the Award
agreement and this Plan, the recipient of an Award under this
Article XI shall be entitled to receive, currently or on a
deferred basis, dividends or dividend equivalents with respect to
the number of shares of Common Stock covered by the Award, as
determined at the time of the Award by the Committee, in its sole
discretion.
(c) Vesting. Any Award under this Article XI and any Common
Stock covered by any such Award shall vest or be forfeited to the
extent so provided in the Award agreement, as determined by the
Committee, in its sole discretion.
(d) Waiver of Limitation. The Committee may, in its sole
discretion, waive in whole or in part any or all of the
limitations imposed hereunder (if any) with respect to any or all
of an Award under this Article XI.
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(e) Price. Common Stock or Other Stock-Based Awards issued on
a bonus basis under this Article XI may be issued for no cash
consideration; Common Stock or Other Stock-Based Awards purchased
pursuant to a purchase right awarded under this Article XI shall
be priced as determined by the Committee. Subject to Section 4.3,
the purchase price of shares of Common Stock or Other Stock-Based
Awards may be zero to the extent permitted by applicable law, and,
to the extent not so permitted, such purchase price may not be
less than par value. The purchase of shares of Common Stock or
Other Stock-Based Awards may be made on either an after-tax or
pre-tax basis, as determined by the Committee; provided, however,
that if the purchase is made on a pre-tax basis, such purchase
shall be made pursuant to a deferred compensation program
established by the Committee, which will be deemed a part of this
Plan.
ARTICLE XII
NON-TRANSFERABILITY AND TERMINATION OFEMPLOYMENT/CONSULTANCY
12.1 Non-Transferability. No Stock Option, Stock Appreciation
Right, Performance Unit, Performance Share or Other Stock-Based Award
shall be Transferable by the Participant otherwise than by will or by
the laws of descent and distribution. All Stock Options and all Stock
Appreciation Rights shall be exercisable, during the Participant's
lifetime, only by the Participant. Tandem Stock Appreciation Rights
shall be Transferable, to the extent permitted above, only with the
underlying Stock Option. Shares of Restricted Stock under Article VIII
may not be Transferred prior to the date on which shares are issued,
or, if later, the date on which any applicable restriction, performance
or deferral period lapses. No Award shall, except as otherwise
specifically provided by law or herein, be Transferable in any manner,
and any attempt to Transfer any such Award shall be void, and no such
Award shall in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person who shall be
entitled to such Award, nor shall it be subject to attachment or legal
process for or against such person. Notwithstanding the foregoing, the
Committee may determine at the time of grant or thereafter, that a
Non-Qualified Stock Option granted pursuant to Article VI (other than a
Non-Qualified Stock Option granted to a Non-Employee Director) that is
otherwise not transferable pursuant to this Article XII is transferable
in whole or part and in such circumstances, and under such conditions,
as specified by the Committee.
12.2 Termination of Employment or Termination of Consultancy. The
following rules apply with regard to the Termination of Employment or
Termination of Consultancy of a Participant:
(a) Rules Applicable to Stock Options and Stock Appreciation
Rights. Unless otherwise determined by the Committee at grant or,
if no rights of the Participant are reduced, thereafter:
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(i) Termination by Reason of Death, Disability or Retirement.
If a Participant's Termination of Employment or Termination of
Consultancy is by reason of death, Disability or Retirement, all
Stock Options and Stock Appreciation Rights held by such
Participant may be exercised, to the extent exercisable at the
Participant's Termination of Employment or Termination of
Consultancy, by the Participant (or, in the case of death, by the
legal representative of the Participant's estate) at any time
within a period of one year from the date of such Termination of
Employment or Termination of Consultancy, but in no event beyond
the expiration of the stated terms of such Stock Options and Stock
Appreciation Rights; provided, however, that, in the case of
Retirement, if the Participant dies within such exercise period,
all unexercised Stock Options and Non-Tandem Stock Appreciation
Rights held by such Participant shall thereafter be exercisable,
to the extent to which they were exercisable at the time of death,
for a period of one year from the date of such death, but in no
event beyond the expiration of the stated term of such Stock
Options and Non-Tandem Stock Appreciation Rights.
(ii) Involuntary Termination Without Cause. If a
Participant's Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause, all Stock
Options and Stock Appreciation Rights held by such Participant may
be exercised, to the extent exercisable at Termination of
Employment or Termination of Consultancy, by the Participant at
any time within a period of 90 days from the date of such
Termination of Employment or Termination of Consultancy, but in no
event beyond the expiration of the stated term of such Stock
Options and Stock Appreciation Rights.
(iii) Voluntary Termination. If a Participant's Termination
of Employment or Termination of Consultancy is voluntary (other
than a voluntary termination described in Section 12.2(a)(iv)(B)
below), all Stock Options and Stock Appreciation Rights held by
such Participant may be exercised, to the extent exercisable at
Termination of Employment or Termination of Consultancy, by the
Participant at any time within a period of 30 days from the date
of such Termination of Employment or Termination of Consultancy,
but in no event beyond the expiration of the stated terms of such
Stock Options and Stock Appreciation Rights.
(iv) Termination for Cause. If a Participant's Termination of
Employment or Termination of Consultancy (A) is for Cause or (B)
is a voluntary termination (as provided in subsection (iii) above)
within 90 days after an event which would be grounds for a
Termination of Employment or Termination of Consultancy for Cause,
all Stock Options and Stock Appreciation Rights held by such
Participant shall thereupon terminate and expire as of the date of
such Termination of Employment or Termination of Consultancy.
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(b) Rules Applicable to Restricted Stock. Subject to the
applicable provisions of the Restricted Stock Award agreement and
this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the relevant
Restriction Period, all Restricted Stock still subject to
restriction will vest or be forfeited in accordance with the terms
and conditions established by the Committee at grant or
thereafter.
(c) Rules Applicable to Performance Shares and Performance
Units. Subject to the applicable provisions of the Award agreement
and this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the Performance
Period, the Performance Cycle or other period or restriction as
may be applicable for a given Award, the Performance Shares or
Performance Units in question will vest (to the extent applicable
and to the extent permissible under Section 162(m) of the Code) or
be forfeited in accordance with the terms and conditions
established by the Committee at grant or thereafter.
(d) Rules Applicable to Other Stock-Based Awards. Subject to
the applicable provisions of the Award agreement and this Plan,
upon a Participant's Termination of Employment or Termination of
Consultancy for any reason during any period or restriction as may
be applicable for a given Award, the Other Stock-Based Awards in
question will vest or be forfeited in accordance with the terms
and conditions established by the Committee at grant or
thereafter.
ARTICLE XIII
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
13.1 Stock Options. The terms of this Article XIII shall apply
only to Stock Options granted to Non-Employee Directors.
13.2 Non-Qualified Stock Options. Stock Options granted under this
Article XIII shall be Non-Qualified Stock Options.
13.3 Terms of Stock Options. Stock Options granted under this
Article XIII shall be subject to the following terms and conditions,
and shall be in such form and contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Board
shall deem desirable:
(a) Stock Option Price. The Stock Option price per share of
Common Stock purchasable under a Stock Option shall be determined
by the Board at the time of grant but shall not be less than 100%
of the Fair Market Value of the share of Common Stock at the time
of grant.
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(b) Stock Option Term. The term of each Stock Option shall be
5 years.
(c) Exercisability. Stock Options granted to Non-Employee
Directors shall vest and become exercisable in accordance with
their specific Award agreements.
(d) Method of Exercise. Stock Options may be exercised in
whole or in part at any time and from time to time during the
Stock Option term, by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase
price as follows: (i) in cash or by check, bank draft or money
order payable to the Company; (ii) if the Common Stock is traded
on a national securities exchange, through a "cashless exercise"
procedure whereby the Participant delivers irrevocable
instructions to a broker to deliver promptly to the Company an
amount equal to the purchase price; or (iii) such other
arrangement for the satisfaction of the purchase price, as the
Board may accept. If and to the extent determined by the Board in
its sole discretion at or after grant, payment in full or in part
may also be made in the form of Common Stock owned by the
Participant for at least 6 months (and for which the Participant
has good title free and clear of any liens and encumbrances) based
on the Fair Market Value of the Common Stock on the payment date.
No shares of Common Stock shall be issued until payment, as
provided herein, therefor has been made or provided for.
(e) Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the
limitations of the Plan, a Stock Option shall be evidenced by such
form of agreement or grant as is approved by the Board, and the
Board may modify, extend or renew outstanding Stock Options
granted under the Plan (provided that the rights of a Participant
are not reduced without his consent).
13.4 Termination of Directorship. The following rules apply with
regard to Stock Options upon the Termination of Directorship:
(a) Termination of Directorship by Reason of Death,
Disability or Otherwise Ceasing to be a Director. Except as
otherwise provided herein, upon the Termination of Directorship by
reason of death, Disability, resignation, failure to stand for
reelection or failure to be reelected or otherwise, all
outstanding Stock Options exercisable and not exercised shall
remain exercisable by the Participant or, in the case of death, by
the Participant's estate or by the person given authority to
exercise such Stock Options by his or her will or by operation of
law, at any time within a period of one year from the date of such
Termination of Directorship, but in no event beyond the expiration
of the stated term of such Stock Option.
(b) Cancellation of Options. Except as provided in (a) above,
no Stock Options that were not exercisable as of the date of
Termination of Directorship
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shall thereafter become exercisable upon a Termination of
Directorship for any reason or no reason whatsoever, and such
Stock Options shall terminate and become null and void upon a
Termination of Directorship. If a Non-Employee Director's
Termination of Directorship is for Cause, all Stock Options held
by the Non-Employee Director shall thereupon terminate and expire
as of the date of termination.
13.5 Exercisability. All Stock Options granted to Non-Employee
Directors and not previously exercisable shall become fully exercisable
immediately upon a Change in Control.
13.6 Changes.
(a) The Awards to a Non-Employee Director shall be subject to
Sections 4.2(a), (b) and (c) of the Plan and this Section 13.6,
but shall not be subject to Section 4.2(d).
(b) If the Company shall not be the surviving corporation in
any merger or consolidation, or if the Company is to be dissolved
or liquidated, then, unless the surviving corporation assumes the
Stock Options or substitutes new Stock Options which are
determined by the Board in its sole discretion to be substantially
similar in nature and equivalent in terms and value for Stock
Options then outstanding, upon the effective date of such merger,
consolidation, liquidation or dissolution, any unexercised Stock
Options shall expire without additional compensation to the holder
thereof; provided, that, the Board shall deliver notice to each
Non-Employee Director at least 30 days prior to the date of
consummation of such merger, consolidation, dissolution or
liquidation which would result in the expiration of the Stock
Options and during the period from the date on which such notice
of termination is delivered to the consummation of the merger,
consolidation, dissolution or liquidation, such Participant shall
have the right to exercise in full, effective as of such
consummation, all Stock Options that are then outstanding (without
regard to limitations on exercise otherwise contained in the Stock
Options) but contingent on occurrence of the merger,
consolidation, dissolution or liquidation, and, provided that, if
the contemplated transaction does not take place within a 90 day
period after giving such notice for any reason whatsoever, the
notice, accelerated vesting and exercise shall be null and void
and, if and when appropriate, new notice shall be given as
aforesaid.
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ARTICLE XIV
CHANGE IN CONTROL PROVISIONS
14.1 Benefits. In the event of a Change in Control of the Company,
except as otherwise provided by the Committee upon the grant of an
Award, the Participant shall be entitled to the following benefits:
(a) Subject to paragraph (c) below with regard to Stock
Options, (i) all outstanding Stock Options granted and not
previously exercisable shall become exercisable upon a Change in
Control, (ii) all restrictions to which any shares of Restricted
Stock granted prior to the Change in Control are subject shall
lapse upon a Change in Control, and (iii) the conditions required
for vesting of any unvested Performance Units and/or Performance
Shares shall be deemed to be satisfied upon a Change in Control.
(b) The Committee, in its sole discretion, may provide for
the purchase of any Stock Option by the Company or an Affiliate
for an amount of cash equal to the excess of the Change in Control
Price (as defined below) of the shares of Common Stock covered by
such Stock Options, over the aggregate exercise price of such
Stock Options. For purposes of this Section 14.1, Change in
Control Price shall mean the higher of (i) the highest price per
share of Common Stock paid in any transaction related to a Change
in Control of the Company, or (ii) the highest Fair Market Value
per share of Common Stock at any time during the sixty (60) day
period preceding a Change in Control.
(c) Notwithstanding anything to the contrary herein, unless
the Committee provides otherwise at the time a Stock Option is
granted hereunder or thereafter, no acceleration of exercisability
shall occur with respect to such Stock Options if the Committee
reasonably determines in good faith, prior to the occurrence of
the Change in Control, that the Stock Options shall be honored or
assumed, or new rights substituted therefor (each such honored,
assumed or substituted stock option hereinafter called an
"Alternative Option"), by a Participant's employer (or the parent
or a subsidiary of such employer) immediately following the Change
in Control, provided that any such Alternative Option must meet
the following criteria:
(i) the Alternative Option must be based on stock which
is traded on an established securities market, or which will
be so traded within 30 days of the Change in Control;
(ii) the Alternative Option must provide such
Participant with rights and entitlements substantially
equivalent to or better than the rights,
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terms and conditions applicable under such Stock Option,
including, but not limited to, an identical or better
exercise schedule; and
(iii) the Alternative Option must have economic value
substantially equivalent to the value of such Stock Option
(determined at the time of the Change in Control).
For purposes of Incentive Stock Options, any assumed
or substituted Stock Option shall comply with the requirements
of Treasury Regulation ss. 1.425-1 (and any amendments
thereto).
(d) Notwithstanding anything else herein, the Committee may,
in its sole discretion, provide for accelerated vesting of an
Award or accelerated lapsing of restrictions on shares of
Restricted Stock at any time.
(e) If the Company and the other party to a transaction
constituting a Change in Control agree that such transaction
shall be treated as a "pooling of interests" for financial
reporting purposes, and if the transaction is in fact so treated,
then acceleration of exercisability, vesting or lapse of the
applicable Restriction Period shall not occur to the extent the
Company's independent public accountants determine in good faith
that such acceleration would preclude "pooling of interests"
accounting.
14.2 Change in Control. A "Change in Control" shall be deemed to
have occurred if:
(i) any Person (other than the Company, any trustee or other
fiduciary holding securities under any employee benefit plan of
the Company, or any company owned, directly or indirectly, by the
stockholders of the Company immediately prior to the occurrence
with respect to which the evaluation is being made in
substantially the same proportions as their ownership of the
common stock of the Company) acquires securities of the Company
and immediately thereafter is the Beneficial Owner (except that a
Person shall be deemed to be the Beneficial Owner of all shares
that any such Person has the right to acquire pursuant to any
agreement or arrangement or upon exercise of conversion rights,
warrants or options or otherwise, without regard to the sixty day
period referred to in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then
outstanding securities (except that an acquisition of securities
directly from the Company shall not be deemed an acquisition for
purposes of this clause (i));
(ii) during any period of 2 consecutive years, individuals
who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who has
entered into an agreement with the Company
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to effect a transaction described in clause (i), (iii), or
(iv) of this paragraph) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote
of at least two-thirds of the directors then still in office who
either were directors at the beginning of the two-year period or
whose election or nomination for election was previously so
approved but excluding for this purpose any such new director
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents
by or on behalf of an individual, corporation, partnership, group,
associate or other entity or Person other than the Board, cease
for any reason to constitute at least a majority of the Board;
(iii) the consummation of a merger or consolidation of the
Company with any other entity, other than (I) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto confining to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or resulting entity) more
than 50% of the combined voting power of the surviving or
resulting entity outstanding immediately after such merger or
consolidation or (II) a merger or consolidation in which no
premium is intended to be paid to any stockholder participating in
the merger or consolidation;
(iv) the stockholders of the Company approve a plan or
agreement for the sale or disposition of all or substantially all
of the consolidated assets of the Company (other than such a sale
or disposition immediately after which such assets will be owned
directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of the
common stock of the Company immediately prior to such sale or
disposition) in which case the Board shall determine the effective
date of the Change in Control resulting therefrom; or
(v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of the Company or
its ownership.
For purposes of this definition:
(A) The term "Beneficial Owner"shall have the meaning
ascribed to such term in Rule 13d-3 under the Exchange Act
(including any successor to such Rule).
(B) The term "Person" shall have the meaning ascribed to such
term in Section 3(a)(9) of the Exchange Act and used in
Sections 13(d) and 14(d) thereof, Including "group" as
defined in Section 13(d) thereof.
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ARTICLE XV
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the
Committee may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of this Plan (including any
amendment deemed necessary to ensure that the Company may comply with
any regulatory requirement referred to in Article XVII), or suspend or
terminate it entirely, retroactively or otherwise; provided, however,
that, unless otherwise required by law or specifically provided herein,
the rights of a Participant with respect to Awards granted prior to
such amendment, suspension or termination, may not be impaired without
the consent of such Participant and, provided further, without the
approval of the stockholders of the Company in accordance with
applicable state law, to the extent required by the applicable
provisions of Rule 16b or Section 162(m) of the Code, or, to the extent
applicable to Incentive Stock Options, Section 422 of the Code, no
amendment may be made which would (i) increase the aggregate number of
shares of Common Stock that may be issued under this Plan; (ii)
increase the maximum individual Participant limitations for a fiscal
year under Section 4.1(b); (iii) change the classification of employees
or Consultants eligible to receive Awards under this Plan; (iv)
decrease the minimum option price of any Stock Option or Stock
Appreciation Right; (v) extend the maximum option period under Section
6.3; (vi) materially alter the Performance Criteria for the Award of
Restricted Stock, Performance Units or Performance Shares as set forth
in Exhibit A; or (vii) require stockholder approval in order for this
Plan to continue to comply with the applicable provisions of Section
162(m) of the Code or, to the extent applicable to Incentive Stock
Options, Section 422 of the Code. In no event may this Plan be amended
without the approval of the stockholders of the Company in accordance
with the applicable state law to increase the aggregate number of
shares of Common Stock that may be issued under this Plan, decrease the
minimum exercise price of any Stock Option or Stock Appreciation Right,
or to make any other amendment that would require stockholder approval
under the rules of any exchange or system on which the Company's
securities are listed or traded at the request of the Company.
The Committee may amend the terms of any Award theretofore
granted, prospectively or retroactively, but, subject to Article IV
above or as otherwise specifically provided herein, no such amendment
or other action by the Committee shall impair the rights of any holder
without the holder's consent.
ARTICLE XVI
UNFUNDED PLAN
Unfunded Status of Plan. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect
to any payments as to which a
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Participant has a fixed and vested interest but which are not yet
made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a
general creditor of the Company.
ARTICLE XVII
GENERAL PROVISIONS
17.1 Legend. The Committee may require each person receiving
shares pursuant to an Award under this Plan to represent to and agree
with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any
legend required by this Plan, the certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on Transfer.
All certificates for shares of Common Stock delivered under this
Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Stock is then listed or
any national securities association system upon whose system the Stock
is then quoted, any applicable Federal or state securities law, and any
applicable corporate law, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate
reference to such restrictions.
17.2 Other Plans. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
17.3 No Right to Employment/Consultancy/Directorship. Neither this
Plan nor the grant of any Award hereunder shall give any Participant or
other employee or Consultant any right with respect to continuance of
employment or Consultancy by the Company or any Affiliate, nor shall
there be a limitation in any way on the right of the Company or any
Affiliate by which an employee is employed or a Consultant is retained
to terminate his employment or Consultancy at any time.
Neither this Plan nor the grant of any Award hereunder shall
impose any obligations on the Company to retain any Participant as a
director nor shall it impose on the part of any Participant the
obligation to remain as a director of the Company.
17.4 Withholding of Taxes. The Company shall have the right to
deduct from any payment to be made to a Participant, or to otherwise
require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash hereunder, payment by the Participant
of, any Federal, state or local taxes required by law to be withheld.
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Upon the vesting of Restricted Stock, or upon making an election under
Code Section 83(b), a Participant shall pay all required withholding to
the Company.
Any such withholding obligation with regard to any Participant may
be satisfied, subject to the consent of the Committee, by reducing the
number of shares of Common Stock otherwise deliverable or by delivering
shares of Common Stock already owned. Any fraction of a share of Common
Stock required to satisfy such tax obligations shall be disregarded and
the amount due shall be paid instead in cash by the Participant.
17.5 Listing and Other Conditions.
(a) As long as the Common Stock is listed on a national
securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to
an Award shall be conditioned upon such shares being listed on
such exchange or system. The Company shall have no obligation to
issue such shares unless and until such shares are so listed, and
the right to exercise any Stock Option with respect to such shares
shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of shares of Common Stock
pursuant to an Award is or may in the circumstances be unlawful or
result in the imposition of excise taxes on the Company under the
statutes, rules or regulations of any applicable jurisdiction, the
Company shall have no obligation to make such sale or delivery, or
to make any application or to effect or to maintain any
qualification or registration under the Securities Act or
otherwise with respect to shares of Common Stock or Awards, and
the right to exercise any Stock Option shall be suspended until,
in the opinion of said counsel, such sale or delivery shall be
lawful or will not result in the imposition of excise taxes on the
Company.
(c) Upon termination of any period of suspension under this
Section 17.5, any Award affected by such suspension which shall
not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which
would otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any
Stock Option.
17.6 Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the
law that might otherwise govern under applicable Delaware principles of
conflict of laws).
17.7 Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used
in the feminine gender in all cases where they would so apply, and
wherever any words are used herein in the singular
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form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
17.8 Other Benefits. No Award payment under this Plan shall be
deemed compensation for purposes of computing benefits under any
retirement plan of the Company or its subsidiaries nor affect any
benefits under any other benefit plan now or subsequently in effect
under which the availability or amount of benefits is related to the
level of compensation.
17.9 Costs. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock
pursuant to any Awards hereunder.
17.10 No Right to Same Benefits. The provisions of Awards need not
be the same with respect to each Participant, and such Awards to
individual Participants need not be the same in subsequent years.
17.11 Death/Disability. The Committee may in its discretion
require the transferee of a Participant to supply it with written
notice of the Participant's death or Disability and to supply it with a
copy of the will (in the case of the Participant's death) or such other
evidence as the Committee deems necessary to establish the validity of
the transfer of an Award. The Committee may also require that the
agreement of the transferee to be bound by all of the terms and
conditions of this Plan.
17.12 Section 16(b) of the Exchange Act. All elections and
transactions under this Plan by persons subject to Section 16 of the
Exchange Act involving shares of Common Stock are intended to comply
with any applicable exemptive condition under Rule 16b-3. The Committee
may establish and adopt written administrative guidelines, designed to
facilitate compliance with Section 16(b) of the Exchange Act, as it may
deem necessary or proper for the administration and operation of this
Plan and the transaction of business thereunder.
17.13 Severability of Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provisions had not been
included.
17.14 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered
part of this Plan, and shall not be employed in the construction of
this Plan.
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ARTICLE XVIII
EFFECTIVE DATE OF PLAN
The Plan became effective September 7, 1999 and is amended and restated
as of May 1, 2000, subject to the approval of the amended and restated Plan by
the stockholders of the Company.
ARTICLE XIX
TERM OF PLAN
No Award shall be granted pursuant to this Plan on or after the tenth
anniversary of the earlier of the date this Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
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EXHIBIT APERFORMANCE CRITERIA
Performance Goals established for purposes of conditioning the grant of
an Award of Restricted Stock based on performance or the vesting of
performance-based Awards of Restricted Stock, Performance Units, Performance
Shares and/or other stock-based Awards shall be based on one or more of the
following performance criteria ("Performance Criteria"): (1) earnings per share;
(2) increase in revenues or margin; (3) increase in cash flow; (4) operating
margin; (5) return on net assets, return on assets, return on investment, return
on capital, return on equity; (6) economic value added; (7) direct contribution;
(8) attainment of a certain target level of, or a specified percentage increase
in, net income, pretax earnings, pretax earnings before interest, depreciation
and amortization, pretax earnings after interest expense and before
extraordinary or special items, operating income, income before interest income
or expense, unusual items and income taxes (local, state or federal) and
excluding budgeted and actual bonuses which might be paid under any ongoing
bonus plans of the Company; (9) attainment of a certain target level of, or a
specified percentage increase in, working capital; (10) management of fixed
costs or variable costs; (11) identification or consummation of investment
opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestitures; (12)
total shareholder return; (13) debt reduction; and (14) any of the above goals
determined on an absolute or relative basis or as compared to the performance of
a published or special index deemed applicable by the Committee including, but
not limited to, the Standard & Poors 500 Stock Index or a group of comparative
companies.
In addition, such Performance Criteria may be based upon the attainment
of specified levels of Company (or subsidiary, division or other operational
unit of the Company) performance under one or more of the measures described
above relative to the performance of other corporations. To the extent permitted
under Code Section 162(m), but only to the extent permitted under Code Section
162(m) (including, without limitation, compliance with any requirements for
stockholder approval), the Committee may: (i) designate additional business
criteria on which the Performance Criteria may be based or (ii) adjust, modify
or amend the aforementioned business criteria.
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