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Exhibit 4(f)
ADVANTA CORP. 2000 OMNIBUS
STOCK INCENTIVE PLAN
AS ADOPTED BY THE BOARD OF DIRECTORS
(EFFECTIVE AS OF APRIL 5, 2000)
1. Purpose. Advanta Corp., a Delaware corporation (the "Company"),
hereby adopts the Advanta Corp. 2000 Omnibus Stock Incentive Plan (the "Plan"),
which is intended to function as an amendment and restatement of all other stock
option and award plans of the Company. The Plan is intended to recognize the
contributions made to Company by employees (including employees who are members
of the Board of Directors) of Company or any Affiliate (as defined herein), to
provide such persons with additional incentive to devote themselves to the
future success of Company or an Affiliate, and to improve the ability of Company
or an Affiliate to attract, retain, and motivate individuals upon whom Company's
sustained growth and financial success depend. Through the Plan, Company will
provide such persons with an opportunity to acquire or increase their
proprietary interest in Company, and to align their interest with the interests
of shareholders, through receipt of rights to acquire the Company's Class B
Common Stock, par value $0.01 per share (the "Common Stock") and through the
transfer or issuance of Common Stock or other Awards (as defined herein). In
addition, the Plan is intended as an additional incentive to directors of
Company or of any Affiliate who are not employees of Company or an Affiliate to
serve on the Board of Directors of Company or on the boards of directors (or any
similar governing body) of an Affiliate and to devote themselves to the future
success of Company by providing them with an opportunity to acquire or increase
their proprietary interest in Company through the receipt of rights to acquire
Common Stock. Furthermore, the Plan may be used to encourage consultants and
advisors of Company to further the success of Company. The Plan is also intended
to permit grants of Awards that will constitute "performance-based compensation"
as that term is used for purposes of Section 162(m) of the Code, at the
discretion of the Committee.
2. Definitions. Unless the context clearly indicates otherwise, the
following capitalized terms when used in the Plan shall have the following
meanings:
(a) "Affiliate" means a corporation which is a parent
corporation or a subsidiary corporation with respect to Company within the
meaning of Section 424(e) or (f) of the Code, of any successor provision, and,
for purposes of Grants other than ISOs, any corporation, partnership, joint
venture or other entity in which the Company, directly or indirectly, has an
equity interest of at least twenty percent (20%) or a significant financial
interest, as determined by the Committee.
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(b) "Award" shall mean a transfer of Common Stock made
pursuant to the terms of the Plan subject to such terms, benefits or
restrictions as the Committee shall specify in the Grant Document.
(c) "Board" or "Board of Directors" means the Board of
Directors of Company.
(d) "Capitalization Adjustment" means the adjustment to the
number or class of shares subject to any Grant and the Option Price, exercise
price, purchase price or other payment or deemed payment required in connection
with any Grant, as permitted to be made pursuant to the provisions of Section 14
of the Plan.
(e) "Change of Control" shall be deemed to have occurred upon
the earliest to occur of the following dates:
(i) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a plan or
other arrangement pursuant to which the Company will be dissolved or liquidated;
or
(ii) the date the stockholders of the Company (or the
Board of Directors, if stockholder action is not required) approve a definitive
agreement to sell or otherwise dispose of substantially all of the assets of the
Company; or
(iii) the date the stockholders of the Company (or
the Board of Directors, if stockholder action is not required) and the
stockholders of the other constituent corporation (or its board of directors if
stockholder action is not required) have approved a definitive agreement to
merge or consolidate the Company with or into such other corporation, other
than, in either case, a merger or consolidation of the Company in which holders
of shares of the Company's Class A Common Stock immediately prior to the merger
or consolidation will have at least a majority of the voting power of the
surviving corporation's voting securities immediately after the merger or
consolidation, which voting securities are to be held in the same proportion as
such holders' ownership of Class A Common Stock of the Company immediately
before the merger or consolidation; or
(iv) the date any entity, person or group, within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act (other than
(A) the Company or any of its subsidiaries or any employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its subsidiaries
or (B) any person who, on the date the Plan is effective, shall have been the
beneficial owner of or have voting control over shares of common stock of the
Company possessing more than twenty-five percent (25%) of the aggregate voting
power of the Company's Class A Common Stock) shall have become the beneficial
owner of, or shall have obtained voting control over, more than twenty five
percent (25%) of the outstanding shares of the Company's Class A Common Stock;
or
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(v) the first day after the date this Plan is
effective when directors are elected such that a majority of the Board of
Directors shall have been members of the Board of Directors for less than two
(2) years, unless the nomination for election of each new director who was not a
director at the beginning of such two (2) year period was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period.
(f) "Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute, and the rules and regulations issued pursuant
to that statute or any successor statute.
(g) "Committee" shall have the meaning set forth in Section 3
of the Plan.
(h) "Common Stock" shall mean the Company's Class B Common
Stock, par value $0.01 per Share.
(i) "Company" means Advanta Corp., a Delaware corporation.
(j) "Covered Employee" means any Employee who is treated as a
"covered employee" for purposes of Code Section 162(m).
(k) "Disability" means a condition of a Grantee that
constitutes a "disability" as that term is defined in Section 22(e)(3) of the
Code.
(l) "Employee" means an employee of Company or an Affiliate.
(m) "Fair Market Value" means, with respect to a share of the
Common Stock:
(i) if the Common Stock is listed on a national
securities exchange or included in the NASDAQ National Market System, the
closing price thereof on the relevant date; or
(ii) if the Common Stock is not so listed or
included, the mean between the last reported "bid" and "asked" prices thereof on
the relevant date, as reported on NASDAQ; or
(iii) if not so reported, as reported by the National
Daily Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines.
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Provided, however, that if the Common Stock is not traded in a public market,
the Fair Market Value of a share shall be as determined in good faith by the
Committee, taking into account all relevant facts and circumstances.
(n) "Fiscal Year Grant Limitation" means the limitation on the
number of shares of Common Stock that may be subject to Grants made to any one
person during any one fiscal year of the Company, which limitation shall be
900,000 shares, subject to a permitted Capitalization Adjustment.
(o) "Grant" shall mean any Option, Award or SAR granted under
the Plan.
(p) "Grantee" shall mean a person to whom an Option, Award or
SAR has been granted pursuant to the Plan.
(q) "Grant Document" shall mean the document provided to a
Grantee by the Company describing and establishing the terms of any Grant made
pursuant to the Plan.
(r) "ISO" means an Option granted under the Plan which is
intended to qualify as an "incentive stock option" within the meaning of Section
422(b) of the Code.
(s) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any successor statute, and the rules and regulations issued
pursuant to that statute or any successor statute.
(t) "Non-Employee Director" shall mean a member of the Board
who is a "non-employee director" as that term is defined in paragraph (b)(3) of
Rule 16b-3 (as defined herein) and an "outside director" as that term is defined
in Treasury Regulations Section 1.162-27 promulgated under the Code.
(u) "Non-Employee Director Committee" means a committee
designated by the Board to act as the Committee with respect to the Plan that
consists solely of two or more Non-Employee Directors.
(v) "Non-qualified Stock Option" means an Option granted under
the Plan which is not intended to qualify, or otherwise does not qualify, as an
ISO.
(w) "Option" means either an ISO or a Non-qualified Stock
Option granted under the Plan.
(x) "Option Price" means the price at which Shares may be
purchased upon exercise of an Option, as set forth in the Grant Document.
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(y) "Performance-Based Award" means an Award granted pursuant
to the applicable provisions of the Plan that is intended to result in
recognition of income by the Grantee that qualifies as Performance-Based
Compensation.
(z) "Performance-Based Compensation" means remuneration
payable or recognized by an Employee solely on account of the attainment of one
or more Performance Goals that meets the requirements to be treated as
"performance-based compensation" under Code Section 162(m)(4)(C).
(aa) "Performance Goal" means, with respect to a Performance
Period, an objective performance goal or goals that have been established by the
Committee, consistent with the express terms of the Plan, which must be met in
order for any Performance-Based Award to become vested or transferred to a
Grantee with respect to such Performance Period.
(bb) "Performance Period" means the Company's fiscal year or
such other period as may be established as a Performance Period by the Committee
from time to time.
(cc) "Rule 16b-3" means Rule 16b-3 promulgated under the
Exchange Act, or any successor rule.
(dd) "SAR" means a stock appreciation right granted under the
Plan, as defined in Section 11 hereof.
(ee) "Section 16 Officers" means any person who is an
"officer" within the meaning of Rule 16a-1(f) promulgated under the Exchange Act
or any successor rule, and who is subject to the reporting requirements under
Section 16 of the Exchange Act with respect to Company's Common Stock.
(ff) "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute, and the rules and regulations issued pursuant
to that statute or any successor statute.
(gg) "Shares" means the shares of Common Stock (including
hypothetical shares of Common Stock referenced under the terms of a Grant
Document applicable to an SAR) which are subject to any Grant made under the
Plan.
3. Administration of the Plan. The Board may administer the Plan and/or
it may, in its discretion, designate a committee or committees composed of two
or more of directors to operate and administer the Plan with respect to all or a
designated portion of the participants. To the extent that the Committee is
empowered to grant options to Section 16 Officers or persons whose compensation
might have limits on deductibility under Code Section 162(m), the Board may, at
its discretion, appoint a separate committee to administer the Plan with respect
to those persons, each member of such committee being a Non-Employee Director.
Any such committee
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designated by the Board, and the Board itself in its administrative capacity
with respect to the Plan, is referred to as the "Committee."
(a) Meetings. The Committee shall hold meetings at such times
and places as it may determine. The Committee may take action only upon the
agreement of a majority of the whole Committee. Any action which the Committee
shall take through a written instrument signed by all its members shall be as
effective as though it had been taken at a meeting duly called and held.
(b) Exculpation. No member of the Board of Directors shall be
personally liable for monetary damages for any action taken or any failure to
take any action in connection with the administration of the Plan or making any
Grants under the Plan, provided that this Subsection 3(b) shall not apply to (i)
any breach of such member's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or involving intentional misconduct or
a knowing violation of law, (iii) acts or omissions that would result in
liability under Section 174 of the General Corporation Law of the State of
Delaware, as amended, and (iv) any transaction from which the member derived an
improper personal benefit.
(c) Indemnification. Service on the Committee shall constitute
service as a member of the Board. Each member of the Committee shall be
entitled, without further act on the member's part, to indemnity from Company
and limitation of liability to the fullest extent provided by applicable law and
by Company's Articles of Incorporation and/or Bylaws in connection with or
arising out of any action, suit or proceeding with respect to the administration
of the Plan or the issuance of any Grant thereunder in which the member may be
involved by reason of the member being or having been a member of the Committee,
whether or not the member continues to be such member of the Committee at the
time of the action, suit or proceeding.
(d) Interpretation and Authority of the Committee. The
Committee shall have the power and authority to (i) interpret the Plan, (ii)
adopt, amend and revoke policies, rules and/or regulations for its
administration that are not inconsistent with the express terms of the Plan, and
(iii) waive requirements relating to formalities or other matters that do not
either modify the substance of the rights intended to be granted by means of
Grants made under the Plan or constitute a material amendment for any purpose
under the Code. In addition, the Committee shall, subject to any specific
provisions or limitations applicable under the Plan, have the authority to make
such adjustments to the terms and conditions of any Grants made under the Plan
in order to take into account any facts and circumstances that influence the
effectiveness of the Plan as a method of providing appropriate current
performance incentives for recipients of Grants, including, but not limited to,
any facts and circumstances related to levels of compensation and bonuses paid
by other similarly situated employers, and current needs of the Company to
encourage the retention of valued Employees and to reward high levels of
performance by such Employees. Any such actions by the Committee shall be final,
binding and conclusive on all parties in interest.
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4. Grants of Options under the Plan. Grants of Options under the Plan
may be in the form of a Non-qualified Stock Option, an ISO or a combination
thereof, at the discretion of the Committee.
5. Eligibility. All Employees, members of the Board, members of the
boards of directors (or any similar governing body) of any Affiliate and
consultants and advisors to the Company or any Affiliate shall be eligible to
receive Grants hereunder. Consultants and advisors shall be eligible only if
they render bona fide services to Company unrelated to the offer or sale of
securities. The Committee, in its sole discretion, shall determine whether an
individual qualifies as an Employee.
6. Shares Subject to Plan. The aggregate maximum number of Shares as to
which Grants may be issued pursuant to the Plan is 20,000,000 (subject to a
permitted Capitalization Adjustment). The Shares shall be issued from authorized
and unissued Common Stock or Common Stock held in or hereafter acquired for the
treasury of Company. If a Grant terminates or expires without having been fully
exercised for any reason or has been conveyed back to Company pursuant to the
terms of a Grant Document, the Shares as to which the Grant was not exercised or
the Shares that were conveyed back to Company shall again be available for
issuance pursuant to the terms of one or more Grants pursuant to the Plan.
7. Fiscal Year Grant Limitation. Notwithstanding anything herein to the
contrary, no Grantee shall be issued Grants during any one fiscal year of the
Company for shares of Common Stock in excess of the Fiscal Year Grant
Limitation.
8. Term of the Plan. The Plan is effective as of April 5, 2000, the
date on which it was adopted by the Board, subject to the approval of the Plan
within one year after such date by the shareholders in the manner required by
state law. If the Plan is not so approved by the shareholders, all Grants issued
under the Plan shall be null and void. No Grants may be issued under the Plan on
or after April 5, 2010.
9. Options. Each Option granted under the Plan shall be a Non-qualified
Stock Option unless the Option shall be specifically designated at the time of
grant to be an ISO. If any Option designated an ISO is determined for any reason
not to qualify as an incentive stock option within the meaning of Section 422 of
the Code, such Option shall be treated as a Non-qualified Stock Option for all
purposes under the provisions of the Plan. Options granted pursuant to the Plan
shall be evidenced by the Grant Documents in such form as the Committee shall
approve from time to time, which Grant Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions as the Committee shall require from time to time which are not
inconsistent with the terms of the Plan.
(a) Number of Option Shares. Each Grant Document shall state
the number of Shares to which it pertains. A Grantee may receive more than one
Option, which may include Options which are intended to be ISOs and Options
which are not intended to be ISOs, but only on the terms and subject to the
conditions and restrictions of the Plan. Notwithstanding
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anything herein to the contrary, no Grantee shall be granted Options during any
one fiscal year of Company for more than the Fiscal Year Grant Limitation.
(b) Option Price. Each Grant Document shall state the Option
Price, which, for a Non-qualified Stock Option, shall, unless otherwise
specified in the Grant Document, be the Fair Market Value of the Shares on the
date the Option is granted and, for an ISO, shall in all cases be at least 100%
of the Fair Market Value of the Shares on the date the Option is granted as
determined by the Committee in accordance with this Subsection 9(b); and
provided, further, that if an ISO is granted to a Grantee who then owns,
directly or by attribution under Section 424(d) of the Code, shares possessing
more than ten percent of the total combined voting power of all classes of stock
of Company or an Affiliate, then, to the extent required by Section 424(d) of
the Code, the Option Price shall be at least 110% of the Fair Market Value of
the Shares on the date the Option is granted.
(c) Exercise. No Option shall be deemed to have been exercised
prior to the receipt by Company of written notice of such exercise and, unless
arrangements satisfactory to Company have been made for payment through a broker
in accordance with procedures permitted by rules or regulations of the Federal
Reserve Board, receipt of payment in full of the Option Price for the Shares to
be purchased. Each such notice shall specify the number of Shares to be
purchased and, unless the Shares are covered by a then current registration
statement or a Notification under Regulation A under the Securities Act, shall
contain the Grantee's acknowledgment, in form and substance satisfactory to
Company, that (i) such Shares are being purchased for investment and not for
distribution or resale (other than a distribution or resale which, in the
opinion of counsel satisfactory to Company, may be made without violating the
registration provisions of the Securities Act), (ii) the Grantee has been
advised and understands that (A) the Shares have not been registered under the
Securities Act and are "restricted securities" within the meaning of Rule 144
under the Securities Act and are subject to restrictions on transfer, and (B)
Company is under no obligation to register the Shares under the Securities Act
or to take any action which would make available to the Grantee any exemption
from such registration, (iii) such Shares may not be transferred without
compliance with all applicable federal and state securities laws, and (iv) an
appropriate legend referring to the foregoing restrictions on transfer and any
other restrictions imposed under the Grant Documents may be endorsed on the
certificates. Notwithstanding the foregoing, if Company determines that issuance
of Shares should be delayed pending registration under federal or state
securities laws, the receipt of an opinion of counsel satisfactory to Company
that an appropriate exemption from such registration is available, the listing
or inclusion of the Shares on any securities exchange or an automated quotation
system, or the consent or approval of any governmental regulatory body whose
consent or approval is necessary in connection with the issuance of such Shares,
Company may defer exercise of any Option granted hereunder until any of the
events described in this sentence has occurred.
(d) Medium of Payment. Subject to the terms of the applicable
Grant Document, a Grantee shall pay for Shares (i) in cash, (ii) by certified or
cashier's check payable to the order of Company, or (iii) by such other mode of
payment as the Committee may
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approve, including payment through a broker in accordance with procedures
permitted by rules or regulations of the Federal Reserve Board. The Grantee may
also exercise the Option in any other manner as is approved by the Committee or
as specifically provided for in the applicable Grant Document. Furthermore, the
Committee may provide in a Grant Document that payment may be made in whole or
in part in shares of Company's Common Stock held by the Grantee. If payment is
made in whole or in part in shares of Company's Common Stock, then the Grantee
shall deliver to Company certificates registered in the name of such Grantee
representing the shares owned by such Grantee, free of all liens, claims and
encumbrances of every kind and having an aggregate Fair Market Value on the date
of delivery that is at least as great as the Option Price of the Shares (or
relevant portion thereof) with respect to which such Option is to be exercised
by the payment in shares of Common Stock, endorsed in blank or accompanied by
stock powers duly endorsed in blank by the Grantee. In the event that
certificates for shares of Company's Common Stock delivered to Company represent
a number of shares in excess of the number of shares required to make payment
for the Option Price of the Shares (or relevant portion thereof) with respect to
which such Option is to be exercised by payment in shares of Common Stock, the
stock certificate or certificates issued to the Grantee shall represent (i) the
Shares in respect of which payment is made, and (ii) such excess number of
shares. Notwithstanding the foregoing, the Committee may impose from time to
time such limitations and prohibitions on the use of shares of the Common Stock
to exercise an Option as it deems appropriate.
(e) Termination of Options.
(i) No Option shall be exercisable after the first to
occur of the following:
(A) Expiration of the Option term specified
in the Grant Document, which, in the case of an ISO, shall not occur after (i)
ten (10) years from the date of grant, or (ii) five (5) years from the date of
grant if the Grantee on the date of grant owns, directly or by attribution under
Section 424(d) of the Code, shares possessing more than ten percent of the total
combined voting power of all classes of stock of Company or of an Affiliate;
(B) Except to the extent otherwise provided
in a Grantee's Grant Document, a finding by the Committee, after full
consideration of the facts presented on behalf of both Company and the Grantee,
that the Grantee has been engaged in disloyalty to Company or an Affiliate,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty in the course of his employment or service, or has
disclosed trade secrets or confidential information of Company or an Affiliate.
In such event, in addition to immediate termination of the Option, the Grantee
shall automatically forfeit all Shares for which Company has not yet delivered
the share certificates upon refund by Company of the Option Price.
Notwithstanding anything herein to the contrary, Company may withhold delivery
of share certificates pending the resolution of any inquiry that could lead to a
finding resulting in a forfeiture;
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(C) The date, if any, set by the Committee
as an accelerated expiration date in the event of the liquidation or dissolution
of Company;
(D) The occurrence of such other event or
events as may be set forth in this Plan or the Grant Document as causing an
accelerated expiration of the Option; or
(E) Except as otherwise set forth in the
Grant Document and subject to the foregoing provisions of this Subsection 9(e),
the applicable date set forth below in connection with the Grantee's termination
of employment or service with the Company or any Affiliate. For these purposes
the applicable date is: (1) where the Grantee resigns from his or her employment
or service with the Company or any Affiliate without such resignation having
been solicited by the Company or the Affiliate, as the case may be, the date of
such resignation; (2) where the Grantee's termination of employment or service
with the Company or any Affiliate is due to the Grantee's death or Disability,
the date that is one hundred eighty (180) days following such termination; (3)
where the Grantee's termination of employment or service with the Company or any
Affiliate is due to the Grantee's retirement, the second anniversary of such
termination; (4) where the Grantee is a member of the Board or of any board of
directors (or similar governing body) of an Affiliate and is not an Employee and
such Grantee's service is terminated for any reason other than Disability or
death, 90 days following the date of such termination of service; and (5) in all
other cases, 30 days after the Grantee's termination of employment or service
with the Company or any Affiliate. With respect to this Subsection 9(e)(i)(E),
the only Options that may be exercised subsequent to the Grantee's termination
of employment or service with the Company or an Affiliate are those Options
which were exercisable on the last date of such employment or service and not
Options which, if the Grantee were still employed or rendering service during
such post termination period, would become exercisable, unless the Grant
Document specifically provides to the contrary or the Committee otherwise
approves. The terms of an executive severance agreement or other agreement
between Company and a Grantee, approved by the Committee or the Board, whether
entered into prior or subsequent to the grant of an Option, which provide for
Option exercise dates later than those set forth in Subsection 9(e)(i) shall be
deemed to be Option terms approved by the Committee and consented to by the
Grantee.
(ii) Notwithstanding the foregoing, the Committee may
extend the period during which all or any portion of an Option may be exercised
to a date no later than the Option term specified in the Grant Document pursuant
to Subsection 9(e)(i)(A), provided that any change pursuant to this Subsection
9(e)(ii) which would cause an ISO to become a Non-qualified Stock Option may be
made only with the consent of the Grantee.
(iii) Notwithstanding anything to the contrary
contained in the Plan or a Grant Document, an ISO shall be treated as a
Non-qualified Stock Option to the extent such ISO is exercised at any time after
the expiration of the time period permitted under the Code for the exercise of
an ISO.
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(f) Transfers. Except as otherwise provided in this Subsection
9(f), no Option granted under the Plan may be transferred, except by will or by
the laws of descent and distribution, and, during the lifetime of the person to
whom an Option is granted, such Option may be exercised only by the Grantee.
Notwithstanding the foregoing, an Option, other than an ISO, shall be
transferable pursuant to a "domestic relations order" as defined in the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules thereunder, and also shall be transferable, without payment of
consideration, to (a) immediate family members of the holder (i.e., spouse or
former spouse, parents, issue, including adopted and "step" issue, or siblings),
(b) trusts for the benefit of immediate family members, and (c) partnerships
whose only partners are such family members, and (d) to any transferee permitted
by a rule adopted by the Committee or approved by the Committee in an individual
case. Any transferee will be subject to all of the conditions set forth in the
Option prior to its transfer.
(g) Limitation on ISO Grants. To the extent that the aggregate
Fair Market Value of the shares of Common Stock (determined at the time the ISO
is granted) with respect to which ISOs under all incentive stock option plans of
Company or its Affiliates are exercisable for the first time by the Grantee
during any calendar year exceeds $100,000, such ISOs shall, to the extent of
such excess, be treated as Non-qualified Stock Options.
(h) Other Provisions. Subject to the provisions of the Plan,
the Grant Documents shall contain such other provisions, including, without
limitation, provisions authorizing the Committee to accelerate the
exercisability of all or any portion of an Option granted pursuant to the Plan,
additional restrictions upon the exercise of the Option or additional
limitations upon the term of the Option, as the Committee deems advisable.
10. Change of Control. In the event of a Change of Control, Options and
SARs granted pursuant to the Plan shall become immediately exercisable in full,
and all Awards shall become fully vested. In addition, the Committee may take
whatever action it deems necessary or desirable with respect to outstanding
Grants, including, without limitation, with respect to Options and SARs,
accelerating the expiration or termination date in the applicable Grant Document
to a date no earlier than thirty (30) days after notice of such acceleration is
given to the Grantees; provided, however, that such accelerated expiration date
may not be earlier than the date as of which the Grant has become fully vested
and exercisable.
11. Stock Appreciation Rights (SARs).
(a) In General. Subject to the terms and conditions of the
Plan, the Committee may, in its sole and absolute discretion, grant a right
(which right shall be referred to as an "SAR"), which may or may not be granted
in conjunction with an Option, which right shall entitle the Grantee to receive
a payment upon exercise equal to the excess of the Fair Market Value of a
specified number of Shares, determined as of the date the SAR is exercised, over
the "purchase price" specified in the Grant Document applicable to the SAR. The
SAR may be exercisable in whole or in part, and at such times and under such
circumstances as are set forth in the Grant Document applicable to the SAR. In
the event an SAR is granted in conjunction with
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an Option, the exercise of the SAR shall result in a cancellation of the Option
to the same extent as the SAR is exercised, and the exercise of the Option shall
result in a cancellation of the SAR to the same extent as the Option is
exercised, and the terms and conditions, including the number of Shares subject
to the SAR, the "purchase price" and the times and circumstances in which the
SAR may be exercised, shall be the same as are applicable to the Option. Except
as may otherwise be provided in a Grant Document, such payment may be made, as
determined by the Committee in accordance with Subsection 12(c) below and set
forth in the applicable Grant Document, either in Shares or in cash or in any
combination thereof. For purposes of the annual and aggregate limitations on
shares of Common Stock that may be subject to Grants under the Plan, the grant
of an SAR not in conjunction with an Option shall be treated as though such SAR
constituted an Option.
(b) Grant. Each SAR shall relate either to a specific Option
granted under the Plan or to a hypothetical Option that could have been granted
under the Plan. Where an SAR is granted in conjunction with an Option granted
under the Plan, the Grant Document applicable to the Option shall include
provisions indicating the SAR rights. Where an SAR is granted independent of an
Option granted under the Plan, the Grant Document applicable to such SAR shall
indicate the relevant terms and conditions applicable to the SAR, including, but
not limited to, the number of hypothetical Shares subject to the terms of the
SAR, the "purchase price" to be taken into account upon exercise of the SAR, and
such other terms and conditions as would be permitted or as are required with
respect to the grant of an Option under the Plan. SARs shall be exercisable at
such times and under such terms and conditions as the Committee, in its sole and
absolute discretion, shall determine; provided, however, that an SAR that is
granted concurrent with an Option shall be exercisable only at such times and by
such individuals as the related Option may be exercised under the Plan and the
Grant Document.
(c) Payment. The Committee shall have sole discretion to
determine whether payment in respect of SARs exercised by any Grantee shall be
made in shares of Common Stock, or in cash, or in a combination thereof. If
payment is made in Common Stock, the number of shares which shall be issued
pursuant to the exercise of SARs shall be determined by dividing the amount of
the payment provided for in Section 11(a) above by the Fair Market Value of a
share of Common Stock on the exercise date of the SARs. No fractional share of
Common Stock shall be issued on exercise of an SAR; cash may be paid by Company
to the person exercising an SAR in lieu of any such fractional share, if the
Committee so determines. If payment on exercise of an SAR is to be made in cash,
the person exercising the SAR shall receive such cash payment as soon as
practicable following the date of exercise.
12. Terms and Conditions of Awards. Awards granted pursuant to the Plan
shall be evidenced by written Grant Documents in such form as the Committee
shall from time to time approve, which Grant Documents shall comply with and be
subject to the following terms and conditions and such other terms and
conditions which the Committee shall from time to time require which are not
inconsistent with the terms of the Plan.
<PAGE> 13
(a) Number of Shares. Each Grant Document shall state the
number of Shares or other units or rights to which it pertains.
(b) Purchase Price. Each Grant Document shall specify the
purchase price, if any, which applies to the Award. If the Board specifies a
purchase price, the Grantee shall be required to make payment on or before the
payment date specified in the Grant Document. A Grantee shall make payment (i)
in cash, (ii) by certified check payable to the order of Company, or (iii) by
such other mode of payment as the Committee may approve.
(c) Grant. In the case of an Award which provides for a grant
of Shares without any payment by the Grantee, the grant shall take place on the
date specified in the Grant Document. In the case of an Award which provides for
a payment, the grant shall take place on the date the initial payment is
delivered to Company, unless the Committee or the Grant Document otherwise
specifies. Stock certificates evidencing Shares granted pursuant to an Award
shall be issued in the sole name of the Grantee. Notwithstanding the foregoing,
as a precondition to a grant, Company may require an acknowledgment by the
Grantee as required with respect to Options under Subsection 9(c).
(d) Conditions. The Committee may specify in a Grant Document
any conditions under which the Grantee of that Award shall be required to convey
to Company the Shares covered by the Award. Upon the occurrence of any such
specified condition, the Grantee shall forthwith surrender and deliver to
Company the certificates evidencing such Shares as well as completely executed
instruments of conveyance. The Committee, in its discretion, may provide that
certificates for Shares transferred pursuant to an Award be held in escrow by
Company or its designee until such time as each and every condition has lapsed
and that the Grantee be required, as a condition of the Award, to deliver to
such escrow agent or Company officer stock transfer powers covering the Shares
subject to the Award duly endorsed by the Grantee. Unless otherwise provided in
the Grant Document or determined by the Committee, dividends and other
distributions made on Shares held in escrow shall be deposited in escrow, and
held in escrow until such time as the Shares on which the distributions were
made are released from escrow. Stock certificates evidencing Shares subject to
conditions shall bear a legend to the effect that the Shares evidenced thereby
are subject to repurchase by, or conveyance to, Company in accordance with the
terms applicable to such Shares under an Award made pursuant to the Plan, and
that the Shares may not be sold or otherwise transferred.
(e) Lapse of Conditions. Upon termination or lapse of all
forfeiture conditions, Company shall cause certificates without the legend
referring to Company's repurchase or acquisition right (but with any other
legends that may be appropriate) evidencing the Shares covered by the Award to
be issued to the Grantee upon the Grantee's surrender to Company of the legended
certificates held by the Grantee.
(f) Rights as Shareholder. Upon payment of the purchase price,
if any, for Shares covered by an Award and compliance with the acknowledgment
requirement of Subsection 9(c), the Grantee shall have all of the rights of a
shareholder with respect to the
<PAGE> 14
Shares covered thereby, including the right to vote the Shares and (subject to
the provisions of Subsection 12(d)) to receive all dividends and other
distributions paid or made with respect thereto, except to the extent otherwise
provided by the Committee or in the Grant Document.
13. Performance-Based Awards. In addition to any other terms or
conditions as may be established with respect to any Awards granted hereunder,
the Non-Employee Director Committee shall have the authority to make Awards
subject to such additional terms and conditions such that the remuneration
attributable to any such Award shall be recognized by a Covered Employee only
under circumstances such that such remuneration constitutes Performance-Based
Compensation.
(a) In the event the Committee determines to grant
Performance-Based Awards pursuant to this Section 13, the Committee shall, prior
to or within the first ninety (90) days of a Performance Period, establish in
writing with respect to such Performance Period, one or more specific
Performance Goals and an objective formula or method for computing the amount of
bonus compensation payable to each Grantee if the specified Performance Goals
are attained. Notwithstanding the foregoing sentence, the Performance Goals for
any Performance Period may not be established after 25 percent of the period of
service represented by the Performance Period has elapsed.
(b) Performance Goals shall be based upon one or more of the
following business criteria for the Company as a whole or any of its
subsidiaries, operating divisions or other operating units: Stock price; market
share; gross revenue; net revenue; pretax income; operating income; cash flow;
earnings per share; return on equity; return on invested capital or assets; cost
reductions and savings; return on revenues or productivity; or any variations of
the preceding business criteria, which may be modified at the discretion of the
Committee, to take into account extraordinary items or which may be adjusted to
reflect such costs or expense as the Committee deems appropriate. In addition,
to the extent consistent with the goal of providing for deductibility under
Section 162(m) of the Code, Performance Goals may be based upon a Grantee's
attainment of personal objectives with respect to any of the foregoing
Performance Goals or implementing policies and plans, negotiating transactions
and sales, developing long-term business goals or exercising managerial
responsibility. Measurements of the Company's or a Grantee's performance against
the Performance Goals established by the Committee shall be objectively
determinable and shall be determined according to generally accepted accounting
principles as in existence on the date on which the Performance Goals are
established and without regard to any changes in such principles after such
date.
(c) A Performance-Based Award shall consist of an Award that
meets the requirements of this Section 13, and which either is granted only on
the attainment by the close of the Performance Period of the Performance Goal or
Goals established with respect to such an Award, or may not become vested unless
by the close of the Performance Period applicable to such Award the Performance
Goal or Goals established with respect to such an Award have been achieved. The
Committee may establish any other terms or conditions with respect to a
Performance-Based Award as are consistent with the provisions of the Plan.
<PAGE> 15
14. Adjustments on Changes in Capitalization.
(a) In the event that the outstanding Shares are changed by
reason of a reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination or exchange of shares and the like
(not including the issuance of Common Stock on the conversion of other
securities of Company which are convertible into Common Stock) or dividends
payable in shares of Common Stock, a Capitalization Adjustment may be made by
the Committee as it deems appropriate in the aggregate number and/or class of
shares available under the Plan and in the number of shares, class of shares and
price per share subject to outstanding Grants. Unless the Committee makes other
provisions for the equitable settlement of outstanding Grants, if Company shall
be reorganized, consolidated, or merged with another corporation, or if all or
substantially all of the assets of Company shall be sold or exchanged, a Grantee
shall at the time of issuance of the stock under such corporate event be
entitled to receive, with respect to or upon the exercise of his or her Grant,
as the case may be, the same number and kind of shares of stock or the same
amount of property, cash or securities as the Grantee would have been entitled
to receive upon the occurrence of any such corporate event as if the Grantee had
been, immediately prior to such event, the holder of the number of shares
covered by his or her Grant; provided, however, that with respect to an SAR, the
Grantee shall only be entitled to receive payment in the form of property other
than cash to the extent such settlement of the SAR is provided for in the
applicable Grant Document.
(b) Any adjustment under this Section 14 in the number of
Shares subject to Grants shall apply proportionately to only the unexercised
portion of any Option or SAR granted hereunder. If a fraction of a Share would
result from any such adjustment, the fraction shall be eliminated, unless the
Committee otherwise determines.
(c) The Committee shall have authority to determine the
Capitalization Adjustments to be made under this Section, which may include both
adjustments to the number of shares and class of Company stock to be issued in
connection with or on the exercise of Grants and that are available generally
for Grants under the Plan, and any such determination by the Committee shall be
final, binding and conclusive.
15. Amendments.
(a) The Board may amend the Plan from time to time in such
manner as it may deem advisable. Nevertheless, the Board may not change the
class of persons eligible to receive an ISO or increase the maximum number of
Shares as to which Grants may be issued under the Plan, or to any individual
under the Plan in any year, without obtaining approval, within twelve months
before or after such action, by the shareholders in the manner required by state
law. No amendment to the Plan shall adversely affect any outstanding Grant,
however, without the consent of the Grantee.
(b) Subject to the provisions of the Plan, the Committee shall
have the right to amend any Grant Document issued to a Grantee, subject to the
Grantee's consent, if such
<PAGE> 16
amendment is not favorable to the Grantee or if such amendment has the effect of
changing an ISO to a Non-qualified Stock Option; provided, however, that the
consent of the Grantee shall not be required for any amendment made pursuant to
Subsection 9(e)(i)(C) or Section 10 of the Plan, as applicable.
16. No Commitment to Retain. The making of a Grant pursuant to the
Plan shall not be construed to imply or to constitute evidence of any agreement,
express or implied, on the part of Company or any Affiliate to retain the
Grantee as an employee, director, consultant or advisor of Company or any
Affiliate, or in any other capacity.
17. Withholding of Taxes. In connection with any event relating to
any Grant under the Plan, Company shall have the right to (a) require the
recipient to remit or otherwise make available to Company an amount sufficient
to satisfy any federal, state and/or local withholding tax requirements prior to
the delivery or transfer of any certificates for such Shares, or (b) take
whatever other action it deems necessary to protect its interests with respect
to tax liabilities, including, without limitation, withholding any Shares, funds
or other property otherwise due to the Grantee. The Company's obligations under
the Plan shall be conditioned on the Grantee's compliance, to Company's
satisfaction, with any withholding requirement.
