Exhibit 4.3
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LEUCADIA NATIONAL CORPORATION
1999 STOCK OPTION PLAN
AS AMENDED THROUGH MAY 16, 2000
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LEUCADIA NATIONAL CORPORATION
1999 STOCK OPTION PLAN
TABLE OF CONTENTS
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I. Purposes............................................................................1
II. Amount of Stock Subject to the Plan.................................................1
III. Administration......................................................................2
IV. Eligibility.........................................................................3
V. Option Price and Payment............................................................3
VI. Terms of Options and Limitations on the Right of Exercise...........................4
VII. Stock Appreciation Rights...........................................................4
VIII. Termination of Employment...........................................................6
IX. Exercise of Options.................................................................7
X. Stock Option Grants to Director Participants........................................7
XI. Director Participant's Exercise of Options..........................................7
XII. Director Participant's Termination..................................................8
XIII. Director Participant's Ineligibility for Other Grants...............................8
XIV. Use of Proceeds.....................................................................9
XV. Non-Transferability of Options and Stock Appreciation Rights........................9
XVI. Adjustment Provisions; Effect of Certain Transactions...............................9
XVII. Right to Terminate Employment......................................................10
XVIII. Purchase for Investment............................................................10
XIX. Issuance of Stock Certificates; Legends; Payment of Expenses.......................11
XX. Withholding Taxes..................................................................11
XXI. Listing of Shares and Related Matters..............................................12
XXII. Foreign Laws.......................................................................12
XXIII. Amendment of the Plan...............................................................12
XXIII. Duration; Termination or Suspension of the Plan....................................12
XXIV. Savings Provision..................................................................13
XXV. Governing Law......................................................................13
XXVI. Partial Invalidity.................................................................13
XXVII. Effective Date.....................................................................13
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LEUCADIA NATIONAL CORPORATION
1999 STOCK OPTION PLAN
I. PURPOSES
Leucadia National Corporation (the "Company") desires to afford its
directors and certain of its key employees and certain key employees of any
subsidiary corporation or parent corporation of the Company now existing or
hereafter formed or acquired who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such directors and key employees an increased interest in and
a greater concern for the welfare of the Company and its subsidiaries.
The stock options ("Options") and stock appreciation rights ("Rights")
offered pursuant to this 1999 Stock Option Plan, as amended (the "Plan"), are a
matter of separate inducement and are not in lieu of any salary or other
compensation for the services of any director or key employee.
The Company, by means of the Plan, seeks to retain the services of
persons now holding directorships and key positions and to secure and retain the
services of persons capable of filling such positions.
The Options granted under the Plan are intended to be either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do not
meet the requirements for Incentive Options ("Non-Qualified Options"), but the
Company makes no warranty as to the qualification of any Option as an Incentive
Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of Common Shares, par value $1.00 per share (the
"Shares"), of the Company which either may be purchased pursuant to the exercise
of Options granted under the Plan or acquired pursuant to the exercise of Rights
granted under the Plan shall not exceed, in the aggregate, One Million Two
Hundred Thousand (1,200,000), such number to be subject to adjustment in
accordance with Article XVI of the Plan. Shares that are the subject of Rights
and/or related Options shall be counted only once in determining whether the
maximum number of Shares that may be purchased or awarded under the Plan has
been exceeded.
Shares which may be acquired under the Plan may be either authorized
but unissued Shares, Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that Options and/or
Rights granted under the Plan expire or terminate without having been exercised,
the Shares covered by such expired or terminated Options or Rights may again be
subject to an Option or Right under the Plan.
Except as provided in Articles X through XIII, XXIV, and XXVIII hereof,
the Committee (as defined in Article III) may, from time to time beginning on
April 1, 1999 (the "Effective Date"), grant to certain key employees and
directors of the Company, or certain key employees of any subsidiary corporation
or parent corporation of the Company now existing or hereafter formed or
acquired, Incentive Options, Non-Qualified Options and/or Rights under the terms
hereinafter set forth.
Provisions of the Plan that pertain to Options or Rights granted to a
director or employee shall apply to Options, Rights or any combination thereof.
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As used in the Plan, the term "parent corporation" and "subsidiary
corporation" shall mean a corporation coming within the definition of such terms
contained in Sections 424(e) and 424(f) of the Code, respectively.
III. ADMINISTRATION
The Plan will be administered by the Board of Directors of the Company
or by a committee (the "Committee") appointed by the Board of Directors of the
Company from among its members (which may be the Option Committee) and shall be
comprised, unless otherwise determined by the Board of Directors, solely of not
less than two members who shall be (i) "Non-Employee Directors" within the
meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and (ii)
"outside directors" within the meaning of Treasury Regulation Section
1.162-27(e)(3) under Section 162(m) of the Code. If the Board of Directors of
the Company administers the Plan rather than a committee of the Board of
Directors, then all references to "Committee" in the Plan shall be deemed to
mean a reference to the Board of Directors of the Company.
The Committee is authorized, subject to the provisions of the Plan, to
establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make such determinations and interpretations
and to take such action in connection with the Plan and any Benefits granted
hereunder as it deems necessary or advisable. Subject to the express provisions
of the Plan, including, without limitation, Articles X through XIII hereof, the
Committee also shall have authority to construe the Plan and the Options and
Rights granted thereunder, to amend the Plan and the Options and Rights granted
thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the Options (which need not
be identical) and Rights (which need not be identical) and to make all other
determinations necessary or advisable for administering the Plan. The Committee
also shall have the authority to require, in its discretion, as a condition of
the granting of any such Option or Right, that the employee agree (a) not to
sell or otherwise dispose of Shares acquired pursuant to the exercise of such
Option or Right for a period of six (6) months following the date of the
acquisition of such Option or Right and (b) that in the event of termination of
employment of such employee, other than as a result of dismissal without cause,
such employee will not, for a period to be fixed at the time of the grant of the
Option or Right, enter into any other employment or participate directly or
indirectly in any other business or enterprise which is competitive with the
business of the Company or any subsidiary corporation or parent corporation of
the Company, or enter into any employment in which such employee will be called
upon to utilize special knowledge obtained through employment with the Company
or any subsidiary corporation or parent corporation thereof.
All determinations and interpretations made by the Committee shall be
binding and conclusive on all participants and their legal representatives. No
member of the Committee and no employee of the Company shall be liable for any
act or failure to act hereunder, except in circumstances involving his or her
bad faith, gross negligence or willful misconduct, or for any act or failure to
act hereunder by any other member or employee or by any agent to whom duties in
connection with the administration of this Plan have been delegated. The Company
shall indemnify members of the Committee and any agent of the Committee who is
an employee of the Company, a subsidiary or an affiliate against any and all
liabilities or expenses to which they may be subjected by reason of any act or
failure to act with respect to their duties on behalf of the Plan, except in
circumstances involving such person's bad faith, gross negligence or willful
misconduct.
The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee, or any person to whom it has delegated duties as aforesaid, may
employ one or more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan. The Committee may employ
such legal or other counsel, consultants and agents as it may deem desirable for
the administration of the Plan and may rely upon any opinion or computation
received from any such counsel, consultant or agent. Expenses incurred by the
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Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company, or the subsidiary or affiliate whose employees have benefitted
from the Plan, as determined by the Committee.
IV. ELIGIBILITY
Options and Rights may be granted only to salaried key employees of the
Company or any subsidiary corporation or parent corporation of the Company now
existing or hereafter formed or acquired, except as hereinafter provided, and
Non-Qualified Options shall be granted to non-employee directors of the Company
(including former officers or key employees) ("Director Participants") only
pursuant to and in accordance with the provisions of Articles X through XIII
hereof. Any person who shall have retired from the active employment by the
Company or any subsidiary corporation or parent corporation of the Company,
although such person shall have entered into a consulting contract with the
Company or a subsidiary corporation or parent corporation of the Company, shall
not be eligible to receive an Option or Right.
The Plan does not create a right in any person to participate in the
Plan, nor does it create a right in any person to have any Options or Rights
granted to him or her.
The aggregate number of Shares with respect to which Options and/or
Rights may be granted under the Plan to any employee in any one taxable year is
300,000.
V. OPTION PRICE AND PAYMENT
The price for each Share purchasable under any Option granted hereunder
shall be such amount as the Committee may determine; provided, however, that the
price shall not be less than one hundred percent (100%) of the Fair Market Value
(as defined below) of the Shares on the date the Option is granted; provided,
further, that in the case of an Incentive Option granted to a person who, at the
time such Option is granted, owns shares of the Company or any subsidiary
corporation or parent corporation of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any subsidiary corporation or parent corporation of the Company,
the purchase price for each Share shall not be less than one hundred ten percent
(110%) of the Fair Market Value per Share at the date the Option is granted. In
determining the stock ownership of an employee for any purpose under the Plan,
the rules of Section 424(d) of the Code shall be applied, and the Committee may
rely on representations of fact made to it by the employee and believed by it to
be true.
Except as set forth in Article XVI, for purposes of this Plan and any
Options and/or Rights awarded hereunder, Fair Market Value shall be the closing
price of the Shares on the date of calculation (or on the last preceding trading
date if Shares were not traded on such date) if the Shares are readily tradeable
on a national securities exchange or other market system, and if the Shares are
not readily tradeable, Fair Market Value shall mean the amount determined in
good faith by the Committee as the fair market value of the Shares of the
Company.
Upon the exercise of an Option granted hereunder, the Company shall
cause the purchased Shares to be issued only when it shall have received the
full purchase price for the Shares in cash; provided, however, that in lieu of
cash, the holder of an Option may, if the terms of such Option so provide and to
the extent permitted by applicable law, exercise an Option (a) in whole or in
part, by delivering to the Company Shares (in proper form for transfer and
accompanied by all requisite stock transfer tax stamps or cash in lieu thereof)
owned by such holder having a Fair Market Value equal to the cash exercise price
applicable to that portion of the Option being exercised by the delivery of such
Shares, the Fair Market Value of the Shares so delivered to be determined as of
the date immediately preceding the date on which the Option is exercised, or as
may be required in order to comply with or to conform to the requirements of any
applicable laws or regulations, or (b) in part, by delivering to the Company an
executed promissory note on such terms and conditions as the Committee shall
determine, at the time of grant, in its sole discretion; provided, however, that
(i) the principal amount of such note shall not exceed ninety percent (90%) (or
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such lesser percentage as would be permitted by applicable margin regulations)
of the aggregate purchase price of the Shares then being purchased pursuant to
the exercise of such Option and (ii) payment for Shares with a promissory note
is permissible under applicable law. The Committee may prescribe any other
method of paying the exercise price that it determines to be consistent with
applicable law and the purpose of the Plan.
VI. TERMS OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Any Option granted hereunder shall be exercisable at such times, in
such amounts and during such period or periods as the Committee shall determine
at the date of the grant of such Option; provided, however, that an Incentive
Option shall not be exercisable after the expiration of ten (10) years from the
date such Option is granted; provided, further, that in the case of an Incentive
Option granted to a person who, at the time such Incentive Option is granted,
owns stock of the Company or any subsidiary corporation or parent corporation of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any subsidiary corporation or
parent corporation of the Company, such Incentive Option shall not be
exercisable after the expiration of five (5) years from the date such Incentive
Option is granted. Notwithstanding anything herein to the contrary, Incentive
Options may not be granted after the tenth anniversary of the Effective Date.
Each Option shall be subject to such additional terms and conditions as
may from time to time be prescribed by the Committee (which terms and conditions
may be subsequently waived by the Committee), subject to the limitations
contained in the Plan. The Committee shall have the right to accelerate, in
whole or in part, from time to time, conditionally or unconditionally, rights to
exercise any Option granted hereunder.
To the extent that an Option is not exercised within the period of
exercisability specified therein, it shall expire as to the then unexercised
part.
Except to the extent otherwise provided under the Code, to the extent
that the aggregate Fair Market Value of stock for which Incentive Options (under
all stock option plans of the Company and of any parent corporation or
subsidiary corporation of the Company) are exercisable for the first time by an
employee during any calendar year exceeds one hundred thousand dollars
($100,000), such Options shall be treated as Non-Qualified Options. For purposes
of this limitation, (a) the Fair Market Value of stock is determined as of the
time the Option is granted and (b) the limitation will be applied by taking into
account Options in the order in which they were granted.
In no event shall an Option granted hereunder be exercised for a
fraction of a Share.
A person entitled to receive Shares upon the exercise of an Option
shall not have the rights of a stockholder with respect to such Shares until the
date of issuance of a stock certificate to him for such Shares; provided,
however, that until such stock certificate is issued, any holder of an Option
using previously acquired Shares in payment of an option exercise price shall
continue to have the rights of a shareholder with respect to such previously
acquired Shares.
VII. STOCK APPRECIATION RIGHTS
In the discretion of the Committee, a Right may be granted (a) alone,
(b) simultaneously with the grant of an Option (either Incentive or
Non-Qualified) and in conjunction therewith or in the alternative thereto or (c)
subsequent to the grant of a Non-Qualified Option and in conjunction therewith
or in the alternative thereto.
The exercise price of a Right granted alone shall be determined by the
Committee but shall not be less than one hundred percent (100%) of the Fair
Market Value of one Share on the date of grant of such Right. A Right granted
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simultaneously with or subsequent to the grant of an Option and in conjunction
therewith or in the alternative thereto shall have the same exercise price as
the related Option, shall be transferable only upon the same terms and
conditions as the related Option, and shall be exercisable only to the same
extent as the related Option; provided, however, that a Right, by its terms,
shall be exercisable only when the Fair Market Value of the Shares subject to
the Right and related Option exceeds the exercise price thereof.
Upon exercise of a Right granted simultaneously with or subsequent to
an Option and in the alternative thereto, the number of Shares for which the
related Option shall be exercisable shall be reduced by the number of Shares for
which the Right shall have been exercised. The number of Shares for which a
Right shall be exercisable shall be reduced upon any exercise of a related
Option by the number of Shares for which such Option shall have been exercised.
Any Right shall be exercisable upon such additional terms and
conditions as may from time to time be prescribed by the Committee.
A Right shall entitle the holder upon exercise thereof to receive from
the Company, upon a written request filed with the Secretary of the Company at
its principal offices (the "Request"), a number of Shares (with or without
restrictions as to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of cash, or any
combination of Shares and cash, as specified in the Request (but subject to the
approval of the Committee, in its sole discretion, at any time up to and
including the time of payment, as to the making of any cash payment), having an
aggregate Fair Market Value equal to the product of (a) the excess of the Fair
Market Value, on the day of such Request, of one Share over the exercise price
per Share specified in such Right or its related Option, multiplied by (b) the
number of Shares for which such Right shall be exercised; provided, however,
that the Committee, in its discretion, may impose a maximum limitation on the
amount of cash, the Fair Market Value of Shares, or a combination thereof, which
may be received by a holder upon exercise of a Right.
Any election by a holder of a Right to receive cash in full or partial
settlement of such Right, and any exercise of such Right for cash, may be made
only by a Request filed with the Corporate Secretary of the Company during the
period beginning on the third business day following the date of release for
publication by the Company of quarterly or annual summary statements of earnings
and ending on the twelfth business day following such date. Within thirty (30)
days after the receipt by the Company of a Request to receive cash in full or
partial settlement of a Right or to exercise such Right for cash, the Committee
shall, in its sole discretion, either consent to or disapprove, in whole or in
part, such Request.
If the Committee disapproves in whole or in part any election by a
holder to receive cash in full or partial settlement of a Right or to exercise
such Right for cash, such disapproval shall not affect such holder's right to
exercise such Right at a later date, to the extent that such Right shall be
otherwise exercisable, or to elect the form of payment at a later date, provided
that an election to receive cash upon such later exercise shall be subject to
the approval of the Committee. Additionally, such disapproval shall not affect
such holder's right to exercise any related Option or Options granted to such
holder under the Plan.
A holder of a Right shall not be entitled to request or receive cash in
full or partial payment of such Right during the first six (6) months of its
term; provided, however, that such prohibition shall not apply if the holder of
such Right is not subject to the reporting requirements of Section 16(a) of the
Exchange Act.
For all purposes of this Article VII, the fair market value of Shares
shall be determined in accordance with the principles set forth in Article V
hereof.
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VIII. TERMINATION OF EMPLOYMENT
Upon termination of employment of any employee with the Company and all
subsidiary corporations and parent corporations of the Company, any Option or
Right previously granted to the employee, unless otherwise specified by the
Committee in the Option or Right, shall, to the extent not theretofore
exercised, terminate and become null and void; provided, however, that:
(a) if the employee shall die while in the employ of such
corporation or during either the three (3) month or one (1) year
period, whichever is applicable, specified in clause (b) below and at a
time when such employee was entitled to exercise an Option or Right as
herein provided, the legal representative of such employee, or such
person who acquired such Option or Right by bequest or inheritance or
by reason of the death of the employee, may, not later than one (1)
year from the date of death, exercise such Option or Right, to the
extent not theretofore exercised, in respect of any or all of such
number of Shares as specified by the Committee in such Option or Right;
and
(b) if the employment of any employee to whom such Option or
Right shall have been granted shall terminate by reason of the
employee's retirement (at such age or upon such conditions as shall be
specified by the Committee), disability (as described in Section
22(e)(3) of the Code) or dismissal by the employer other than for cause
(as defined below), and while such employee is entitled to exercise
such Option or Right as herein provided, such employee shall have the
right to exercise such Option or Right so granted in respect of any or
all of such number of Shares as specified by the Committee in such
Option or Right, at any time up to and including (i) three (3) months
after the date of such termination of employment in the case of
termination by reason of retirement or dismissal other than for cause,
and (ii) one (1) year after the date of termination of employment in
the case of termination by reason of disability.
In no event, however, shall any person be entitled to exercise any
Option or Right after the expiration of the period of exercisability of such
Option or Right, as specified therein.
If an employee voluntarily terminates his or her employment, or is
discharged for cause, any Option or Right granted hereunder shall, unless
otherwise specified by the Committee, forthwith terminate with respect to any
unexercised portion thereof.
If an Option or Right granted hereunder shall be exercised by the legal
representative of a deceased grantee or by a person who acquired an Option or
Right granted hereunder by bequest or inheritance or by reason of the death of
any employee or former employee, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative or other person to exercise such Option
or Right.
For the purposes of the Plan, the term "for cause" shall mean (a) with
respect to an employee who is a party to a written employment agreement with,
or, alternatively, participates in a compensation or benefit plan of the Company
or a subsidiary corporation or parent corporation of the Company, which
agreement or plan contains a definition of "for cause" or "cause" (or words of
like import) for purposes of termination of employment thereunder by the Company
or such subsidiary corporation or parent corporation of the Company, "for cause"
or "cause" as defined therein; or (b) in all other cases, as determined by the
Committee or the Board of Directors, in its sole discretion, (i) the willful
commission by an employee of an act that causes or may cause substantial damage
to the Company or a subsidiary corporation or parent corporation of the Company;
(ii) the commission by an employee of an act of fraud in the performance of such
employee's duties on behalf of the Company or a subsidiary corporation or parent
corporation of the Company; (iii) conviction of the employee for commission of a
felony in connection with the performance of his duties on behalf of the Company
or a subsidiary corporation or parent corporation of the Company, or (iv) the
continuing failure of an employee to perform the duties of such employee to the
Company or a subsidiary corporation or parent corporation of the Company after
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written notice thereof and a reasonable opportunity to be heard and cure such
failure are given to the employee by the Committee.
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time of the
determination, the individual was an "employee" of such corporation for purposes
of Section 422(a) of the Code. If an individual is on leave of absence taken
with the consent of the corporation by which such individual was employed, or is
on active military service, and is determined to be an "employee" for purposes
of the exercise of an Option or Right, such individual shall not be entitled to
exercise such Option or Right during such period and while the employment is
treated as continuing intact unless such individual shall have obtained the
prior written consent of such corporation, which consent shall be signed by the
chairman of the board of directors, the president, a senior vice-president or
other duly authorized officer of such corporation.
A termination of employment shall not be deemed to occur by reason of
(i) the transfer of an employee from employment by the Company to employment by
a subsidiary corporation or a parent corporation of the Company or (ii) the
transfer of an employee from employment by a subsidiary corporation or a parent
corporation of the Company to employment by the Company or by another subsidiary
corporation or parent corporation of the Company.
In the event of the complete liquidation or dissolution of a subsidiary
corporation, or if ownership of 50% or more of such corporation ceases to be
held by the Company or another subsidiary corporation, any unexercised Options
or Rights theretofore granted to any person employed by such subsidiary
corporation will be deemed cancelled unless such person is employed by the
Company or by any parent corporation or another subsidiary corporation after the
occurrence of such event. If an Option or Right is to be cancelled pursuant to
the provisions of the previous sentence, notice of such cancellation will be
given to each employee holding unexercised Options, and such holder will have
the right to exercise such Options or Rights in full (without regard to any
limitation set forth or imposed pursuant to Article VI) during the thirty (30)
day period following notice of such cancellation.
IX. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to
all or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company at the principal
business office of the Company, specifying the number of Shares to be purchased
and accompanied by payment of the purchase price. Subject to the terms of
Articles XVIII, XIX, XX and XXI hereof, the Company shall cause certificates for
the Shares so purchased to be delivered at the principal business office of the
Company, against payment of the full purchase price, on the date specified in
the notice of exercise.
X. STOCK OPTION GRANTS TO DIRECTOR PARTICIPANTS
Subject to the terms and conditions of Articles X through XIII hereof,
commencing with the Annual Meeting of Shareholders of the Company to be held in
2000, each Director Participant of the Company shall automatically be granted a
Non-Qualified Option to purchase 1,000 Shares on the date on which the annual
meeting of the Company's shareholders including any adjournments thereof is held
in each year. However, the Board of Directors may, in its discretion, after
payment of the cash dividend declared by the Company on April 1, 1999, make a
one-time discretionary grant to the Director Participants of Non-Qualified
Options. The purchase price of the Shares covered by the Non-Qualified Options
granted pursuant to this Article X shall be the Fair Market Value of such Shares
on the date of grant.
XI. DIRECTOR PARTICIPANT'S EXERCISE OF OPTIONS
A Non-Qualified Option granted to any Director Participant of the
Company shall not be exercisable for the twelve-month period immediately
following the grant of such Non-Qualified Option. Thereafter, the Non-Qualified
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Option shall be exercisable for the period ending five years from the date of
grant of such Non-Qualified Option, except to the extent such exercise is
further limited or restricted pursuant to the provisions hereof.
If, in any year of the Non-Qualified Option, such Non-Qualified Option
shall not be exercised for the total number of Shares available for purchase
during that year, the Non-Qualified Option shall not thereby terminate as to
such unexercised portion, but shall be cumulative. As used herein, the term
"year of the Non-Qualified Option" shall mean a one (1) year period commencing
with the date of, or the anniversary of the date of, the granting of such
Non-Qualified Option.
XII. DIRECTOR PARTICIPANT'S TERMINATION
If a Director Participant's service as a director of the Company is
terminated, any Non-Qualified Option previously granted to such Director
Participant shall, to the extent not theretofore exercised, terminate and become
null and void; provided, however, that:
(a) if a Director Participant holding an outstanding
Non-Qualified Option dies, such Non-Qualified Option shall, to the
extent not theretofore exercised, remain exercisable for one (1) year
after such Director Participant's death, by such Director Participant's
legatee, distributee, guardian or legal or personal representative; and
(b) if the service of a Director Participant to whom such
Non-Qualified Option shall have been granted shall terminate by reason
of (i) such Director Participant's disability (as described in Section
22(e)(3) of the Code), (ii) voluntary retirement from service as a
director of the Company, or (iii) failure of the Company to retain or
nominate for re-election such Director Participant who is otherwise
eligible, unless due to any act of (A) fraud or intentional
misrepresentation, or (B) embezzlement, misappropriation or conversion
of assets or opportunities of the Company or any direct or indirect
subsidiary of the Company, while such Director Participant is entitled
to exercise such Non-Qualified Option as herein provided, such Director
Participant shall have the right to exercise such Non-Qualified Option
so granted in respect of any or all of such number of Shares subject to
such Non-Qualified Option at any time up to and including (X) three (3)
months after the date of such termination of service in the case of
termination by reason of voluntary retirement or failure of the Company
to retain or nominate for re-election such Director Participant who is
otherwise eligible, unless due to any act of (1) fraud or intentional
misrepresentation, or (2) embezzlement, misappropriation or conversion
of assets or opportunities of the Company or any direct or indirect
subsidiary of the Company, and (Y) one (1) year after the date of
termination of service in the case of termination by reason of
disability; and
(c) if the Director Participant shall die during either the
three (3) month or one (1) year period, whichever is applicable,
specified in clause (b) above and at a time when such Director
Participant was entitled to exercise a Non-Qualified Option as herein
provided, the legal representative of such Director Participant, or
such person who acquired such Non-Qualified Option by bequest or
inheritance or by reason of the death of the Director Participant may,
not later than one (1) year from the date of death, exercise such
Non-Qualified Option, to the extent not theretofore exercised, in
respect of any or all of such number of Shares subject to such
Non-Qualified Option.
In no event, however, shall a Director Participant be entitled to
exercise any Option after the expiration of the period of exercisability of such
Option, as specified therein.
XIII. DIRECTOR PARTICIPANT'S INELIGIBILITY FOR OTHER GRANTS
Any Director Participant eligible to receive an Option pursuant to
Article X hereof shall be ineligible to receive any other grant or award under
any other Article of this Plan.
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XIV. USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to the Options granted
hereunder are to be added to the general funds of the Company and used for its
general corporate purposes as the Board of Directors shall determine.
XV. NON-TRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS
Neither an Option nor a Right granted hereunder shall be transferable,
whether by operation of law or otherwise, other than by will or the laws of
descent and distribution, and any Option or Right granted hereunder shall be
exercisable, during the lifetime of the holder, only by such holder. Except to
the extent provided above, Options and Rights may not be assigned, transferred,
pledged, hypothecated or disposed of in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.
Notwithstanding the foregoing, at the discretion of the Committee, an award of
an Option (other than an Incentive Option) and/or a Right may permit the
transferability of such Option and/or Right by a participant solely to the
participant's spouse, siblings, parents, children and grandchildren or trusts
for the benefit of such persons or partnerships, corporations, limited liability
companies or other entities owned solely by such persons, including trusts for
such persons, subject to any restriction included in the award of the Option
and/or Right.
XVI. ADJUSTMENT PROVISIONS; EFFECT OF CERTAIN TRANSACTIONS
(a) If there shall be any change in the Shares of the Company, through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, reverse stock split, split up, spinoff, combination of shares, exchange
of shares, dividend in kind or other like change in capital structure or
distribution to shareholders of the Company (other than normal cash dividends),
in order to prevent dilution or enlargement of participants' rights under the
Plan, the Committee shall adjust, in an equitable manner, the number and kind of
shares that may be issued under the Plan, the number and kind of shares subject
to outstanding Options and Rights, the consideration to be received upon
exercise of Options or in respect of Rights, the exercise price applicable to
outstanding Options and Rights, and/or the fair market value of the Shares and
other value determinations applicable to outstanding Options and Rights.
Appropriate adjustments may also be made by the Committee in the terms of any
Options and Rights under the Plan to reflect such changes or distributions and
to modify any other terms of outstanding Options and Rights on an equitable
basis. In addition, the Committee is authorized to make adjustments to the terms
and conditions of, and the criteria included in, Options and Rights in
recognition of unusual or nonrecurring events affecting the Company or the
financial statements of the Company, or in response to changes in applicable
laws, regulations, or accounting principles.
(b) Notwithstanding any other provision of this Plan, if there is an
Extraordinary Event with respect to the Company, all then outstanding Options
and Rights that have not vested or become exercisable at the time of such
Extraordinary Event shall immediately vest and become exercisable. For purposes
of this Article XVI(b), an "Extraordinary Event" with respect to the Company
shall be deemed to have occurred upon any of the following events:
(i) A change in control of the direction and administration of
the Company's business of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A (or any successor rule or regulation) of
Regulation 14A promulgated under the Exchange Act whether or not the Company is
then subject to such reporting requirement; or
(ii) The Company's Board of Directors shall approve a sale of
all or substantially all of the assets of the Company, a partial liquidation of
the Company under Section 302(b)(4) of the Code or other extraordinary corporate
contraction or distribution or other extraordinary transaction that is
determined by the Board of Directors to be appropriate and in the best interests
of the Company and which by its terms precludes the existence of Company
securities convertible into Shares; or
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(iii) The Company's Board of Directors shall approve any
merger, consolidation, or like business combination or reorganization of the
Company, the consummation of which would result in the occurrence of any event
described in Article XVI(b)(i) or (ii) above.
Notwithstanding the foregoing, (A) any spin-off of a division or subsidiary of
the Company to its shareholders and (B) any event listed in (i) through (iii)
above that the Board of Directors determines not to be an Extraordinary Event
with respect to the Company, shall not constitute an Extraordinary Event with
respect to the Company.
The Committee, in its discretion, may determine that, upon the
occurrence of an Extraordinary Event with respect to the Company, each Option
and Right outstanding hereunder shall terminate within a specified number of
days after notice to the holder, and such holder shall receive with respect to
each Share that is subject to an Option or a Right (assuming no exercise) an
amount equal to the excess of the "fair market value" of such Share over the
exercise price per share of such Option or Right (as the case may be); such
amount to be payable in cash, in one or more kinds of property (including the
property, if any, payable in the transaction, if any) or in a combination
thereof, as the Committee, in its discretion, shall determine. For purposes of
this provision, the "fair market value" of the Shares shall be determined by the
Board of Directors in good faith and shall be not less than the Fair Market
Value determined in accordance with Article V as of the date of the occurrence
of the Extraordinary Event. The provisions contained in the preceding sentence
shall be inapplicable to an Option or Right granted within six (6) months before
the occurrence of an Extraordinary Event if the holder of such Option or Right
is subject to the reporting requirements of Section 16(a) of the Exchange Act
and no exception from liability under Section 16(b) of the Exchange Act is
otherwise available to such holder.
XVII. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or on any
subsidiary corporation or parent corporation thereof to continue the employment
or directorship of any holder of an Option or Right and it shall not impose any
obligation on the part of any holder of an Option or Right to remain in the
employ of the Company or of any subsidiary corporation or parent corporation
thereof. Termination of service of a Director Participant shall be governed by
the provisions of Article XII hereof.
XVIII. PURCHASE FOR INVESTMENT
Except as hereinafter provided, the Committee may require the holder of
an Option or Right granted hereunder, as a condition of exercise of such Option
or Right, to execute and deliver to the Company a written statement, in form
satisfactory to the Committee, in which such holder represents and warrants that
such holder is purchasing or acquiring the Shares acquired thereunder for such
holder's own account, for investment only and not with a view to the resale or
distribution thereof, and agrees that any subsequent resale or distribution of
any of such Shares shall be made only pursuant to either (i) a Registration
Statement on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), which Registration Statement has become effective and is
current with regard to the Shares being sold, or (ii) a specific exemption from
the registration requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer of sale or sale of such Shares,
obtain a prior favorable written opinion of counsel, in form and substance
satisfactory to counsel for the Company, as to the application of such exemption
thereto. The foregoing restriction shall not apply to (x) issuances by the
Company so long as the Shares being issued are registered under the Securities
Act and a prospectus in respect thereof is current or (y) reofferings of Shares
by affiliates of the Company (as defined in Rule 405 or any successor rule or
regulation promulgated under the Securities Act) if the Shares being reoffered
are registered under the Securities Act and a prospectus in respect thereof is
current.
Nothing herein shall be construed as requiring the Company to register
Shares subject to any Option or Right under the Securities Act. In addition, if
at any time the Committee shall determine that the listing or qualification of
the Shares subject to such Option or Right on any securities exchange or under
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any applicable law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of an Option or Right, or the issuance of Shares thereunder, such
Option or Right may not be exercised in whole or in part unless such listing,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee.
XIX. ISSUANCE OF STOCK CERTIFICATES; LEGENDS; PAYMENT OF EXPENSES
Upon any exercise of an Option or Right which may be granted hereunder
and, in the case of an Option, payment of the purchase price, a certificate or
certificates for the Shares shall be issued by the Company in the name of the
person exercising the Option or Right and shall be delivered to or upon the
order of such person.
The Company may endorse such legend or legends upon the certificates
for Shares issued pursuant to the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such Shares as the Committee,
in its discretion, determines to be necessary or appropriate to (a) prevent a
violation of, or to perfect an exemption from, the registration requirements of
the Securities Act, (b) implement the provisions of the Plan and any agreement
between the Company and the optionee or grantee with respect to such Shares, or
(c) permit the Company to determine the occurrence of a disqualifying
disposition, as described in Section 421(b) of the Code, of Shares transferred
upon exercise of an Incentive Option granted under the Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares, as well as all fees and expenses necessarily
incurred by the Company in connection with such issuance or transfer, except
fees and expenses which may be necessitated by the filing or amending of a
Registration Statement under the Securities Act, which fees and expenses shall
be borne by the recipient of the Shares unless such Registration Statement has
been filed by the Company for its own corporate purposes (and the Company so
states) in which event the recipient of the Shares shall bear only such fees and
expenses as are attributable solely to the inclusion of the Shares he or she
receives in the Registration Statement.
All Shares issued as provided herein shall be fully paid and
nonassessable to the extent permitted by law.
XX. WITHHOLDING TAXES
The Company may require an employee exercising a Right or a
Non-Qualified Option granted hereunder, or disposing of Shares acquired pursuant
to the exercise of an Incentive Option in a disqualifying disposition (within
the meaning of Section 421(b) of the Code), to reimburse the corporation that
employs such employee for any taxes required by any government to be withheld or
otherwise deducted and paid by such corporation in respect of the issuance or
disposition of such Shares. In lieu thereof, the corporation that employs such
employee shall have the right to withhold the amount of such taxes from any
other sums due or to become due from such corporation to the employee upon such
terms and conditions as the Committee shall prescribe. The corporation that
employs such employee may, in its discretion, hold the stock certificate to
which such employee is entitled upon the exercise of an Option as security for
the payment of such withholding tax liability, until cash sufficient to pay that
liability has been accumulated. In addition, at any time that the Company
becomes subject to a withholding obligation under applicable law with respect to
the exercise of a Right or Non-Qualified Option (the "Tax Date"), except as set
forth below, a holder of a Right or Non-Qualified Option may elect to satisfy,
in whole or in part, the holder's related personal tax liabilities (an
"Election") by (a) directing the Company to withhold from Shares issuable in the
related exercise either a specified number of Shares or Shares having a
specified value (in each case not in excess of the related personal tax
liabilities), (b) tendering Shares previously issued pursuant to the exercise of
an Option or Right or other Shares owned by the holder or (c) combining any or
all of the foregoing options in any fashion. Once made, an Election shall be
irrevocable. The withheld Shares and other Shares tendered in payment should be
valued at their Fair Market Value on the Tax Date. The Committee may disapprove
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of any Election, suspend or terminate the right to make Elections or provide
that the right to make Elections shall not apply to particular Shares or
exercises. The Committee may impose any additional conditions or restrictions on
the right to make an Election as it shall deem appropriate. In addition, the
Company shall be authorized to effect any such withholding upon exercise of a
Non-Qualified Option or Right by retention of Shares issuable upon such exercise
having a Fair Market Value at the date of exercise which is equal to the amount
to be withheld; provided, however, that the Company shall not be authorized to
effect such withholding without the prior written consent of the employee if
such withholding would subject such employee to liability under Section 16(b) of
the Exchange Act. The Committee may prescribe such rules as it determines with
respect to employees subject to the reporting requirements of Section 16(a) of
the Exchange Act to effect such tax withholding in compliance with the Rules
established by the Securities and Exchange Commission (the "Commission") under
Section 16 of the Exchange Act and the positions of the staff of the Commission
thereunder expressed in no-action letters exempting such tax withholding from
liability under Section 16(b) of the Exchange Act.
XXI. LISTING OF SHARES AND RELATED MATTERS
The Board of Directors may delay any issuance or delivery of Shares if
it determines that listing, registration or qualification of Shares covered by
the Plan upon any national securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the sale or
purchase of Shares under the Plan, until such listing, registration,
qualification, consent or approval shall have been effected or obtained, or
otherwise provided for, free of any conditions not acceptable to the Board of
Directors.
XXII. FOREIGN LAWS
The Committee may grant Options and Rights to individual participants
who are subject to the tax laws of nations other than the United States, which
Options and Rights may have terms and conditions as determined by the Committee
as necessary to comply with applicable foreign laws. The Committee may take any
action which it deems advisable to obtain approval of such Options and Rights by
the appropriate foreign governmental entity; provided, however, that no such
Options or Rights may be granted pursuant to this Article XXII and no action may
be taken which would result in a violation of the Exchange Act, the Code or any
other applicable law.
XXIII. AMENDMENT OF THE PLAN
The Board of Directors may, from time to time, amend the Plan, provided
that no amendment shall be made, without the approval of the shareholders of the
Company, that will increase the total number of Shares reserved for Options and
Rights under the Plan or the maximum number of Shares with respect to which
Options and/or Rights may be granted under the Plan to any one employee (other
than an increase resulting from an adjustment provided for in Article XVI
hereof) or alter the class of eligible participants in the Plan. The Committee
shall be authorized to amend the Plan and the Options granted hereunder to
permit the Incentive Options granted hereunder to continue to qualify as
incentive stock options within the meaning of Section 422 of the Code and the
Treasury regulations promulgated thereunder. Except to the extent and in the
circumstances expressly permitted under Article XVI, the rights and obligations
under any Option or Right granted before amendment of the Plan or any
unexercised portion of such Option or Right shall not be adversely affected by
amendment of the Plan or the Option or Right without the consent of the holder
of such Option or Right.
XXIII. DURATION; TERMINATION OR SUSPENSION OF THE PLAN
The Plan shall continue indefinitely until terminated by the Board of
Directors or the Committee or unless terminated pursuant to Article XXVIII. The
Board of Directors may at any time suspend or terminate the Plan. Options and
Rights may not be granted while the Plan is suspended or after it is terminated.
Rights and obligations under any Option or Right granted while the Plan is in
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effect shall not be altered or impaired by suspension or termination of the
Plan, except upon the consent of the person to whom the Option or Right was
granted. The power of the Committee to construe and administer any Options or
Rights granted prior to the termination or suspension of the Plan under Article
III nevertheless shall continue after such termination or during such
suspension.
XXIV. SAVINGS PROVISION
With respect to persons subject to Section 16 of the Exchange Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any provision of the Plan or action by the Committee fails to so comply, it
shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
XXV. GOVERNING LAW
The Plan, such Options and Rights as may be granted hereunder and all
related matters shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York.
XXVI. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not be
deemed to affect the validity of any other provision.
XXVII. EFFECTIVE DATE
The Plan shall become effective at 9:00 A.M., New York City time, on
the Effective Date; provided, however, that if the Plan is not approved by a
vote of the shareholders of the Company at an annual meeting or any special
meeting or by unanimous written consent within twelve (12) months after the
Effective Date, the Plan and any Options or Rights granted thereunder shall
terminate.
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