<PAGE>
MANGOSOFT, INC.
1999 INCENTIVE COMPENSATION PLAN
(AS AMENDED AND RESTATED AS OF MAY 1, 2000)
<PAGE>
TABLE OF CONTENTS
Page
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
i
<PAGE>
MANGOSOFT, INC.
-------------------------------
1999 INCENTIVE COMPENSATION PLAN
-------------------------------
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.
<PAGE>
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
2
<PAGE>
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.
3
<PAGE>
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.
4
<PAGE>
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.
5
<PAGE>
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.
6
<PAGE>
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
7
<PAGE>
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.
8
<PAGE>
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
9
<PAGE>
actions or determinations 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
10
<PAGE>
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
11
<PAGE>
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
12
<PAGE>
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.
13
<PAGE>
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
NonQualified 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
14
<PAGE>
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.
15
<PAGE>
(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
16
<PAGE>
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:
17
<PAGE>
(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.
18
<PAGE>
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")
19
<PAGE>
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.
20
<PAGE>
(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
21
<PAGE>
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
22
<PAGE>
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
23
<PAGE>
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
24
<PAGE>
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.
25
<PAGE>
(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 OF
EMPLOYMENT/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:
26
<PAGE>
(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.
27
<PAGE>
(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.
28
<PAGE>
(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
29
<PAGE>
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 Acceleration of 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.
30
<PAGE>
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,
31
<PAGE>
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
32
<PAGE>
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.
33
<PAGE>
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
34
<PAGE>
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.
35
<PAGE>
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
36
<PAGE>
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.
37
<PAGE>
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.
38
<PAGE>
EXHIBIT A
PERFORMANCE 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.
A-1
