As adopted January 24, 1997,
amended through February 19, 1999.
EMS TECHNOLOGIES, INC.
1997 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 1
(a)"Award" 1
(b)"Board" 1
(c)"Code" 1
(d)"Committee" 1
(e)"Company" 1
(f)"Director" 2
(g)"Disinterested Person" 2
(h)"Employee" 2
(i) "Employer" 2
(j)"Fair Market Value" 3
(k)"Grantee" 3
(l)"ISO" 3
(m)"1934 Act" 3
(n)"Officer" 3
(o)"Option" 3
(p)"Option Agreement" 4
(q)"Optionee" 4
(r)"Option Price" 4
(s)"Parent" 4
(t)"Plan" 4
(u)"Purchasable" 4
(v)"Qualified Domestic Relations Order" 4
(w)"Reload Option" 4
(x)"Restricted Stock" 5
(y)"Restriction Agreement" 5
(z)"Stock" 5
(aa)"Subsidiary" 5
ARTICLE II THE PLAN 5
Section 2.1 Name 5
Section 2.2 Purpose 5
Section 2.3 Effective Date 5
Section 2.4 Termination Date 5
ARTICLE III ELIGIBILITY 6
ARTICLE IV ADMINISTRATION 6
Section 4.1 Duties and Powers of the Committee 6
Section 4.2 Interpretation; Rules 6
Section 4.3 No Liability 7
Section 4.4 Majority Rule 7
Section 4.5 Company Assistance 7
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN 7
Section 5.1 Limitations 7
Section 5.2 Antidilution 8
ARTICLE VI OPTIONS 9
Section 6.1 Types of Options Granted 9
Section 6.2 Option Grant and Agreement 10
Section 6.3 Optionee Limitations 10
Section 6.4 $100,000 Limitation 11
Section 6.5 Option Price 11
Section 6.6 Exercise Period 11
Section 6.7 Option Exercise 12
Section 6.8 Nontransferability of Option 13
Section 6.9 Termination of Employment 14
Section 6.10 Employment Rights 14
Section 6.11 Certain Successor Options 14
Section 6.12 Conditions to Issuing Option Stock 15
Section 6.13 Automatic Option Grants to
Certain Directors 15
ARTICLE VII RESTRICTED STOCK 17
Section 7.1 Awards of Restricted Stock 17
Section 7.2 Non-Transferability 18
Section 7.3 Lapse of Restrictions 18
Section 7.4 Termination of Employment 18
Section 7.5 Treatment of Dividends 18
Section 7.6 Delivery of Shares 18
Section 7.7 Payment of Withholding Taxes 19
ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN 20
ARTICLE IX MISCELLANEOUS 20
Section 9.1 Replacement or Amended Grants 20
Section 9.2 Forfeiture for Competition 20
Section 9.3 Plan Binding on Successors 21
Section 9.4 Headings Not a Part of Plan 21
EMS TECHNOLOGIES, INC. 1997
STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the meanings hereinafter
set forth unless the context clearly indicates to the contrary:
(a)"Award" shall mean a grant of Restricted Stock.
(b)"Board" shall mean the Board of Directors of the Company.
(c)"Code" shall mean the United States Internal Revenue Code
of 1986, as amended, including effective date and transition
rules (whether or not codified).
Any reference herein to a specific section or sections of the
Code shall be deemed to include a reference to any corresponding
provision of future law.
(d)"Committee" shall mean a committee of at least two
Directors appointed from time to time by the Board, having the
duties and authority set forth herein in addition to any other
authority granted by the Board; provided, however, that with
respect to any Options or Awards granted to an individual who is
also an Officer or Director, the Committee shall consist of at
least two Non-Employee Directors (who need not be members of the
Committee with respect to Options or Awards granted to any other
individuals), and all authority and discretion shall be exercised
by such Non-Employee Directors, and references herein to the
"Committee" shall mean such Non-Employee Directors insofar as any
actions or determinations of the Committee shall relate to or
affect Options or Awards made to or held by any Officer or
Director.
(e)"Company" shall mean EMS Technologies, Inc., a Georgia
corporation.
(f)"Director" shall mean a member of the Board.
(g)"Employee" shall mean any employee of the Company or any
Subsidiary of the Company.
(h)"Employer" shall mean the corporation that employs a
Grantee.
(i)"Fair Market Value" of the shares of Stock on any date
shall mean
(i) the closing sales price, regular way, or in the
absence thereof the mean of the last reported bid and asked
quotations, on such date on the exchange having the greatest
volume of trading in the shares during the thirty-day period
preceding such date (or if such exchange was not open for trading
on such date, the next preceding date on which it was open); or
(ii) if there is no price as specified in (i), the
final reported sales price, or if not reported in the following
manner, the mean of the closing high bid and low asked prices, in
the over-the-counter market for the shares as reported by the
National Association of Securities Dealers Automatic Quotation
System or, if not so reported, then as reported by the National
Quotation Bureau Incorporated, or if such organization is not in
existence, by an organization providing similar services, on such
date (or if such date is not a date for which such system or
organization generally provides reports, then on the next
preceding date for which it does so); or
(iii)if there also is no price as specified in (ii),
the price determined by the Committee by reference to bid-and-
asked quotations for the shares provided by members of an
association of brokers and dealers registered pursuant to
subsection 15(b) of the 1934 Act, which members make a market in
the shares, for such recent dates as the Committee shall
determine to be appropriate for fairly determining current market
value; or
(iv) if there also is no price as specified in (iii),
the amount determined in good faith by the Committee based on
such relevant facts, which may include opinions of independent
experts, as may be available to the Committee.
(j)"Grantee" shall mean an Employee, former employee or
other person who is an Optionee or who has received an Award of
Restricted Stock.
(k) "ISO" shall mean an Option that complies with and is
subject to the terms, limitations and conditions of Code section
422 and any regulations promulgated with respect thereto.
(l) "1934 Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(m) "Non-Employee Director" shall have the meaning set forth
for such term or corresponding concept in Rule 16b-3 under the
1934 Act, as the same may be in effect from time to time, or in
any successor rule thereto, and shall be determined for all
purposes under the Plan according to interpretative or "no-
action" positions with respect thereto issued by the Securities
and Exchange Commission or its staff; provided, however, that to
the extent it is determined and intended that Options qualify as
"performance-based compensation" within the meaning of section
162(m) of the Code, a person shall be a "Non-Employee Director"
only if he or she is also an "outside director" within the
meaning of such section 162(m).
(n) "Officer" shall mean a person who constitutes an officer
of the Company for the purposes of Section 16 of the 1934 Act, as
determined by reference to such Section 16 and to the rules,
regulations, judicial decisions, and interpretative or "no-
action" positions with respect thereto of the Securities and
Exchange Commission or its staff, as the same may be in effect or
set forth from time to time.
(o) "Option" shall mean a contractual right to purchase
Stock granted pursuant to the provisions of Article VI hereof.
(p) "Option Agreement" shall mean an agreement between the
Company and an Optionee setting forth the terms of an Option.
(q) "Optionee" shall mean a person to whom an Option has
been granted hereunder.
(r) "Option Price" shall mean the price at which an Optionee
may purchase a share of Stock pursuant to an Option.
(s) "Parent", when used with respect to any subject
corporation, shall mean any other corporation that owns stock
possessing 50% or more of the total combined voting power of all
classes of stock of the subject corporation or that owns such
stock of another corporation in an unbroken chain of corporations
having such ownership of the stock of another corporation and
ending with the subject corporation.
(t) "Plan" shall mean the 1997 Stock Incentive Plan of the
Company.
(u) "Purchasable," when used to describe Stock, shall refer
to Stock that may be purchased by an Optionee under the terms of
this Plan on or after a certain date specified in the applicable
Option Agreement.
(v) "Qualified Domestic Relations Order" shall have the
meaning set forth in the Code or in the Employee Retirement
Income Security Act of 1974, as amended, or the rules and
regulations promulgated under the Code or such Act.
(w) "Reload Option" shall mean an Option that is granted,
without further action of the Committee,
(i) to an Optionee who surrenders or authorizes the
withholding of shares of Stock in payment of amounts specified in
paragraphs 6.7(c) or 6.7(d) hereof,
(ii) for the same number of shares as is so paid,
(iii) as of the date of such payment and at an Option
Price equal to the Fair Market Value of the Stock on such date,
and
(iv) otherwise on the same terms and conditions as the
Option whose exercise has occasioned such payment, subject to
such contingencies, conditions or other terms as the Committee
shall specify at the time such exercised Option is granted.
(x) "Restricted Stock" shall mean Stock issued, subject to
restrictions, to an Employee pursuant to Article VII hereof.
(y) "Restriction Agreement" shall mean the agreement setting
forth the terms of an Award, and executed by a Grantee as
provided in Section 7.1 hereof.
(z) "Stock" shall mean the $.10 par value common stock of
the Company or, in the event that the outstanding shares of such
stock are hereafter changed into or exchanged for shares of a
different class of stock or securities of the Company or some
other corporation, such other stock or securities.
(aa) "Subsidiary", when used with respect to any subject
corporation, shall mean any other corporation as to which the
subject corporation is a Parent.
ARTICLE II
THE PLAN
2.1 Name.
This plan shall be known as the "EMS Technologies, Inc. 1997
Stock Incentive Plan."
2.2 Purpose.
The purpose of the Plan is to advance the interests of the
Company, its shareholders, and any Subsidiary of the Company, by
offering certain Employees and Directors an opportunity to
acquire or increase their proprietary interests in the Company.
Options and Awards will promote the growth and profitability of
the Company and any Subsidiary of the Company, because Grantees
will be provided with an additional incentive to achieve the
Company's objectives through participation in its success and
growth.
2.3 Effective Date.
The Plan shall become effective on January 24, 1997.
2.4 Termination Date.
No further Options or Awards shall be granted hereunder on or
after January 24, 2007, but all Options or Awards granted prior
to that time shall remain in effect in accordance with their
terms.
ARTICLE III
ELIGIBILITY
The persons eligible to participate in this Plan shall consist
only of Directors and those Employees whose participation the
Committee determines is in the best interests of the Company.
However, no ISO's may be granted, and no Options or Awards may be
granted to any Director or Officer, prior to the approval of this
Plan by the Company's shareholders. Persons who are not Employees
but who serve as directors of any Subsidiary of the Company shall
also be eligible to participate in this Plan, and references
herein to "Employee" shall be deemed to include any such persons
to the extent appropriate for him or her to become a Grantee.
ARTICLE IV
ADMINISTRATION
4.1 Duties and Powers of the Committee.
The Plan shall be administered by the Committee. The Committee
shall select one of its members as its Chairman and shall hold
its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such
rules and regulations for the conduct of its business as it may
deem necessary. The Committee shall have the power to act by
unanimous written consent in lieu of a meeting, and shall have
the right to meet telephonically. In administering the Plan, the
Committee's actions and determinations shall be binding on all
interested parties. The Committee shall have the power to grant
Options or Awards in accordance with the provisions of the Plan.
Subject to the provisions of the Plan, the Committee shall have
the discretion and authority to determine those individuals to
whom Options or Awards will be granted and whether such Options
shall be accompanied by the right to receive Reload Options, the
number of shares of Stock subject to each Option or Award, such
other matters as are specified herein, and any other terms and
conditions of an Option Agreement or Restriction Agreement. To
the extent not inconsistent with the provisions of the Plan, the
Committee shall have the authority to amend or modify an
outstanding Option Agreement or Restriction Agreement, or to
waive any provision thereof, provided that the Grantee consents
to such action.
4.2 Interpretation; Rules.
Subject to the express provisions of the Plan, the Committee also
shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to
it, and to make all other determinations necessary or advisable
in the administration of the Plan, including, without limitation,
the amending or altering of any Options or Awards granted
hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
4.3 No Liability.
Neither any member of the Board nor any member of the Committee
shall be liable to any person for any act or determination made
in good faith with respect to the Plan or any Option or Award
granted hereunder.
4.4 Majority Rule.
A majority of the members of the Committee shall constitute a
quorum, and any action taken by a majority at a meeting at which
a quorum is present, or any action taken without a meeting
evidenced y a writing executed by all the members of the
Committee, shall constitute the action of the Committee.
4.5 Company Assistance.
The Company shall supply full and timely information to the
Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of
employment, and such other pertinent facts as the Committee may
require. The Company shall furnish the Committee with such
clerical and other assistance as is necessary in the performance
of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 Limitations.
Shares subject to an Option or issued as an Award may be either
authorized and unissued shares or shares issued and later
acquired by the Company. Subject to any antidilution adjustment
pursuant to the provisions of Section 5.2 hereof, the maximum
number of shares of Stock that may be issued hereunder shall be
825,000 (of which a maximum of 80,000 shares may be issued as
Restricted Stock). Shares
(i) covered by any unexercised portion of an Option
that has terminated for any reason;
(ii) covered by any forfeited portion of an Award
(except any portion as to which the Grantee has received, and not
forfeited, dividends or other benefits of ownership other than
voting rights);
(iii) withheld in payment of the Option Price or
withholding taxes; or
(iv) issued hereunder but equal to the number of shares
surrendered in payment of the Option Price or withholding taxes
or purchased by the Company for an aggregate price not exceeding
the aggregate cash received from Grantees in payment of Option
Prices or withholding taxes, may each again be optioned or
awarded under the Plan, and such shares shall not be considered
as having been optioned or issued in computing the number of
shares of Stock remaining available for option or award
hereunder.
5.2 Antidilution.
(a) In the event that the outstanding shares of Stock are
changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of merger,
consolidation, reorganization, recapitalization,
reclassification, combination or exchange of shares, stock split
or stock dividend, or in the event that any spin-off, spin-out or
other distribution of assets materially affects the price of the
Company's stock:
(i) The aggregate number and kind of shares of Stock
for which Options or Awards may be granted hereunder shall be
adjusted proportionately by the Committee; and
(ii) The rights of Optionees (concerning the number of
shares subject to Options and the Option Price) under outstanding
Options and the rights of the holders of Awards (concerning the
terms and conditions of the lapse of any then-remaining
restrictions), shall be adjusted proportionately by the
Committee.
(b) If the Company shall be a party to any reorganization in
which it does not survive, involving merger, consolidation, or
acquisition of the stock or substantially all the assets of the
Company, the Committee, in its discretion, may:
(i) notwithstanding other provisions hereof, declare
that all Options granted under the Plan shall become exercisable
immediately notwithstanding the provisions of the respective
Option Agreements regarding exercisability, that all such Options
shall terminate a specified period of time after the Committee
gives written notice of the immediate right to exercise all such
Options and of the decision to terminate all Options not
exercised within such period, and that all then-remaining
restrictions pertaining to Awards under the Plan shall
immediately lapse; or
(ii) notify all Grantees that all Options or Awards
granted under the Plan shall be assumed by the successor
corporation or substituted on an equitable basis with options or
restricted stock issued by such successor corporation.
(c) If the Company is to be liquidated or dissolved in
connection with a reorganization described in paragraph 5.2(b),
the provisions of such paragraph shall apply. In all other
instances, the adoption of a plan of dissolution or liquidation
of the Company shall, notwithstanding other provisions hereof,
cause all then-remaining restrictions pertaining to Awards under
the Plan to lapse, and shall cause every Option outstanding under
the Plan to terminate to the extent not exercised prior to the
adoption of the plan of dissolution or liquidation by the
shareholders, provided that, notwithstanding other provisions
hereof, the Committee may declare all Options granted under the
Plan to be exercisable at any time on or before the fifth
business day following such adoption notwithstanding the
provisions of the respective Option Agreements regarding
exercisability.
(d) The adjustments described in paragraphs (a) through (c)
of this Section 5.2, and the manner of their application, shall
be determined solely by the Committee, and any such adjustment
may provide for the elimination of fractional share interests.
The adjustments required under this Article V shall apply to any
successors of the Company and shall be made regardless of the
number or type of successive events requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 Types of Options Granted.
Within the limitations provided herein, Options may be granted to
one Employee at one or several times or to different Employees at
the same time or at different times, in either case under
different terms and conditions, as long as the terms and
conditions of each Option are consistent with the provisions of
the Plan. Without limitation of the foregoing, Options may be
granted subject to conditions based on the financial performance
of the Company or any other factor the Committee deems relevant.
6.2 Option Grant and Agreement. Each Option granted or modified
hereunder shall be evidenced
(a) by either minutes of a meeting or a written consent of
the Committee, and
(b) by a written Option Agreement executed by the Company
and the Optionee. The terms of the Option, including the Option's
duration, time or times of exercise, exercise price, whether the
Option is intended to be an ISO, whether the Option is
transferable under paragraph 6.8(b), and whether the Option is to
be accompanied by the right to receive a Reload Option, shall be
stated in the Option Agreement. Separate Option Agreements shall
be used for Options intended to be ISO's and those not so
intended, but any failure to use such separate Agreements shall
not invalidate, or otherwise adversely affect the Optionee's
rights under and interest in, the Options evidenced thereby.
6.3 Optionee Limitations.
The Committee shall not grant an ISO to any person who, at the
time the ISO would be granted:
(a) is not an Employee; or
(b) owns or is considered to own stock possessing more than
10% of the total combined voting power of all classes of stock of
the Employer, or any Parent or Subsidiary of the Employer;
provided, however, that this limitation shall not apply if at the
time an ISO is granted the Option Price is at least 110% of the
Fair Market Value of the Stock subject to such Option and such
Option by its terms would not be exercisable after the expiration
of five years from the date on which the Option is granted. For
the purpose of this paragraph (b), a person shall be considered
to own
(i) the stock owned, directly or indirectly, by or for
his brothers and sisters (whether by the whole or half blood),
spouse, ancestors and lineal descendants,
(ii) the stock owned, directly or indirectly, by or for
a corporation, partnership, estate, or trust in proportion to
such person's stock interest, partnership interest or beneficial
interest therein, and
(iii) the stock which such person may purchase under
any outstanding options of the Employer or of any Parent or
Subsidiary of the Employer.
6.4 Certain Limitations
(a) Limitation on Number of Shares. No Optionee shall be
granted, during any calendar year, Options to purchase in excess
of 50,000 shares of stock.
(b) $100,000 Limitation on ISO's. Except as provided below,
the Committee shall not grant an ISO to, or modify the exercise
provisions of outstanding ISO's held by, any person who, at the
time the ISO is granted (or modified), would thereby receive or
hold any incentive stock options (as described in Code section
422) of the Employer and any Parent or Subsidiary of the
Employer, such that the aggregate Fair Market Value (determined
as of the respective dates of grant or modification of each
option) of the stock with respect to which such incentive stock
options are exercisable for the first time during any calendar
year is in excess of $100,000; provided, that the foregoing
restriction on modification of outstanding ISO's shall not
preclude the Committee from modifying an outstanding ISO if, as a
result of such modification and with the consent of the Optionee,
such Option no longer constitutes an ISO; and provided that, if
the $100,000 limitation described in this Section 6.4 is
exceeded, an Option that otherwise qualifies as an ISO shall be
treated as an ISO up to the limitation and the excess shall be
treated as an Option not qualifying as an ISO. The preceding
sentence shall be applied by taking options intended to be ISO's
into account in the order in which they were granted.
6.5 Option Price.
The Option Price under each Option shall be determined by the
Committee. However, the Option Price shall not be less than the
Fair Market Value of the Stock on the date that the Option is
granted (or, in the case of an ISO that is subsequently modified,
on the date of such modification).
6.6 Exercise Period.
The period for the exercise of each Option granted hereunder
shall be determined by the Committee, but the Option Agreement
with respect to each Option intended to be an ISO shall provide
that such Option shall not be exercisable after a date not more
than ten years from the date of grant (or modification) of the
Option. In addition, no Option granted to an Employee who is also
an Officer or Director shall be exercisable prior to the
expiration of six months from the date such Option is granted,
other than in the case of the death or disability of such
Employee.
6.7 Option Exercise.
(a) Unless otherwise provided in the Option Agreement, an
Option may be exercised at any time or from time to time during
the term of the Option as to any or all whole shares that have
become Purchasable under the provisions of the Option, but not at
any time as to less than 100 shares unless the remaining shares
that have become so Purchasable are less than 100 shares. The
Committee shall have the authority to prescribe in any Option
Agreement that the Option may be exercised only in accordance
with a vesting schedule during the term of the Option.
(b) An Option shall be exercised by
(i) delivery to the Treasurer of the Company at its
principal office of written notice of exercise with respect to a
specified number of shares of Stock, and
(ii) payment to the Company at that office of the full
amount of the Option Price for such number of shares.
(c) The Option Price shall be paid in full upon the exercise
of the Option. The Committee may provide in an Option Agreement
that, in lieu of cash, all or any portion of the Option Price may
be paid by
(i) tendering to the Company shares of Stock duly
endorsed for transfer and owned by the Optionee, or
(ii) delivering to the Company an attestation of the
Optionee's then-current ownership of a number of shares equal to
the number thereby authorized to be withheld by the Company from
the shares otherwise deliverable upon exercise of the Option, in
each case to be credited against the Option Price at the Fair
Market Value of such shares on the date of exercise (however, no
fractional shares may be so transferred, and the Company shall
not be obligated to make any cash payments in consideration of
any excess of the aggregate Fair Market Value of shares
transferred over the aggregate Option Price).
(d) In addition to and at the time of payment of the Option
Price, the Optionee shall pay to the Company in cash the full
amount of any federal, state and local income, employment or
other taxes required to be withheld from the income of such
Optionee as a result of such exercise. However, in the discretion
of the Committee any Option Agreement may provide that all or any
portion of such tax obligations, together with additional taxes
not exceeding the actual additional taxes to be owed by the
Optionee as a result of such exercise, may, upon the irrevocable
election of the Optionee, be paid by
(i) tendering to the Company whole shares of Stock duly
endorsed for transfer and owned by the Optionee,
(ii) delivering to the Company an attestation of the
Optionee's then-current ownership of a number of shares equal to
the number thereby authorized to be withheld by the Company from
the shares otherwise deliverable upon exercise of the Option, or
(iii) authorizing the Company to withhold shares of
Stock otherwise issuable upon exercise of the Option, in either
case in that number of shares having a Fair Market Value on the
date of exercise equal to the amount of such taxes thereby being
paid, in all cases subject to such restrictions as the Committee
may from time to time determine, including any such restrictions
as may be necessary or appropriate to satisfy the conditions of
the exemption set forth in Rule 16b-3 under the 1934 Act.
(e) The holder of an Option shall not have any of the rights
of a shareholder with respect to the shares of Stock subject to
the Option until such shares have been issued upon exercise of
the Option.
6.8 Nontransferability of Option.
(a) Except as provided in paragraph 6.8(b), no Option or any
rights therein shall be transferable by an Optionee other than by
will or the laws of descent and distribution, or (except for an
ISO) pursuant to a Qualified Domestic Relations Order. During the
lifetime of an Optionee, an Option granted to that Optionee shall
be exercisable only by such Optionee, by such Optionee's guardian
or other legal representative, should one be appointed, or by
such Optionee's transferee permitted under paragraph 6.8(b).
(b) The Committee may, in its discretion, provide that all
or a portion of an Option (other than an ISO) may be transferred
by the Optionee to
(i) the spouse, children or grandchildren of the
Optionee ("Immediate Family Members"),
(ii) a trust or trusts for the exclusive benefit of
such Immediate Family Members, or
(iii) a partnership in which the Optionee and or such
Immediate Family Members are the only partners.
Following transfer, any such Option shall continue to be subject
to the same terms and conditions as were applicable immediately
prior to transfer, including those terms and conditions governing
transfer and the effect on such Option of the termination of
employment of the Optionee. The Company shall have no obligation
to any transferee to provide notice of any termination of an
Option as a result of termination of the Optionee's employment.
The Committee may specify as a condition of any such transfer the
manner in which the Optionee shall remain responsible for the
payment of taxes required to be withheld as a result of the
exercise of such transferred Option.
6.9 Termination of Employment.
The Committee shall have the power to specify, with respect to
the Options granted to any particular Optionee, the effect upon
such Optionee's right to exercise an Option of the termination of
such Optionee's employment under various circumstances, which
effect may include (but is not limited to) immediate or deferred
termination of such Optionee's rights under an Option, or
acceleration of the date at which an Option may be exercised in
full. With respect to an ISO, such effects shall be consistent
with applicable requirements for treatment as an ISO.
6.10 Employment Rights.
Options granted under the Plan shall not be affected by any
change of employment so long as the Optionee continues to be an
Employee. Nothing in the Plan or in any Option Agreement shall
confer on any person any right to continue in the employ of the
Company or any Subsidiary of the Company, or shall interfere in
any way with the right of the Company or any such Subsidiary to
terminate such person's employment at any time.
6.11 Certain Successor Options.
To the extent not inconsistent with the terms, limitations and
conditions of Code section 422, and any regulations promulgated
with respect thereto, an Option issued in respect of an option
held by an employee to acquire stock of any entity acquired, by
merger or otherwise, by the Company (or by any Subsidiary of the
Company) may contain terms that differ from those stated in this
Article VI, but solely to the extent necessary to preserve for
any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code
section 424(a).
6.12 Conditions to Issuing Option Stock.
The Company shall not be required to issue or deliver any Stock
upon the full or partial exercise of any Option prior to
fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other
qualification of such shares that the Company shall determine to
be necessary or advisable under any federal or state law or under
the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, or the
Company's determination that an exemption is available from such
registration or qualification;
(c) The obtaining of any approval or other clearance from
any federal or state governmental agency that the Company shall
determine to be necessary or advisable; and
(d) The lapse of such reasonable period of time following
exercise as shall be appropriate for reasons of administrative
convenience. Unless the shares of Stock covered by the Plan shall
be the subject of an effective registration statement under the
Securities Act of 1933, as amended, stock certificates issued and
delivered to Optionees shall bear such restrictive legends as the
Company shall deem necessary or advisable pursuant to applicable
federal and state securities laws.
6.13 Automatic Option Grants to Certain Directors.
(a) Options for New Directors. Each person who is not an
Employee, or an employee of any Parent of the Company, shall
automatically, and without any action of the Board or the
Committee, be granted, on the first day on which such person
serves as a Director, an Option for the purchase of 10,000 shares
of Stock if such first day of service occurs prior to 1999, and
of 15,000 shares if such first day occurs in 1999 or thereafter
(subject in all cases to automatic proportionate adjustment for
stock splits or stock dividends, and otherwise to proportionate
adjustment by the Committee as provided in Section 5.2). Each
such Option shall become exercisable as to one-fifth of the
subject shares on the date that is six months after the date of
grant, and as to an additional one-fifth of the subject shares on
each of the first, second, third and fourth anniversaries of such
six-month date. Persons receiving such Option prior to 1999
shall also be granted, automatically and without further action
of the Board or the Committee, upon election in 1999 to a further
term of service as a Director, an Option for 1,000 shares for
each 2,000 shares of such original Option not yet exercisable as
of such 1999 election, which additional Option shall become
exercisable as to 1,000 shares on each date on which an
additional 2,000 shares of the original Option becomes
exercisable.
(b) Additional Options for Continuing Service. Each person
who is not at that time an Employee, or an employee of any Parent
of the Company, shall automatically and without any action of the
Board or the Committee, be granted, on the date on which such
person is elected to a new one-year term of service beginning
after such person has completed five one-year terms of service
following the grant (whether under this Plan or otherwise)to such
person of options for at least 10,000 shares that become
exercisable based on continued service as a Director, and on each
subsequent date on which such person is elected to a further term
of service as a Director, an Option for the purchase of 2,500
shares of Stock for elections arriving prior to 1999, and of
3,000 shares for elections occurring in 1999 and thereafter
(subject in all cases to automatic proportionate adjustment for
stock splits or stock dividends, and otherwise to proportionate
adjustment by the Committee as provided in Section 5.2). Each
such Option shall become exercisable on the date that is six
months after the date of grant.
(c) Other Terms of Automatic Options. Each Option
automatically granted under this Section 6.13 shall not be an
ISO, shall not include the right to receive a Reload Option, and
shall have an Option Price equal to the Fair Market Value of the
Stock on the date of grant. Each such Option shall become
immediately exercisable in the event a party other than the
Company or any Parent or Subsidiary of the Company purchases or
otherwise acquires shares of Stock pursuant to a tender offer or
exchange offer for such shares, or any person or group becomes
the beneficial owner (for the purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) of 50% or more of
the outstanding shares of the Stock. To the extent such an Option
shall have become exercisable, it shall be non-forfeitable and
shall remain exercisable until the tenth anniversary of its date
of grant, but if the Grantee ceases to be a Director for any
reason, any portion of such Option that is not at that time
exercisable shall immediately terminate and shall not thereafter
become exercisable. The Option Price for each such Option may be
paid in cash or in the manners specified in the second sentence
of paragraph 6.7(c) hereof. In addition, any taxes related to the
exercise of each such Option may be paid in the manner
contemplated in the second sentence of paragraph 6.7(d) hereof.
ARTICLE VII
RESTRICTED STOCK
7.1 Awards of Restricted Stock.
The Committee may grant Awards of Restricted Stock upon
determination by the Committee, acting pursuant to the delegation
hereby of the Board's authority to make such determinations, that
the value or other benefit to the Company of the services of a
Grantee theretofore performed or to be performed as a condition
of the lapse of restrictions applicable to such Restricted Stock,
or the benefit to the Company of the incentives created by the
issuance thereof, is adequate consideration for the issuance of
such shares. Each such Award shall be governed by a Restriction
Agreement between the Company and the Grantee. Each Restriction
Agreement shall contain such restrictions, terms and conditions
as the Committee shall, in its discretion, determine, and may
require that an appropriate legend be placed on the certificates
evidencing the subject Restricted Stock. Shares of Restricted
Stock granted pursuant to an Award hereunder shall be issued in
the name of the Grantee as soon as reasonably practicable after
the Award is granted, provided that the Grantee has executed the
Restriction Agreement governing the Award, the appropriate blank
stock powers and, in the discretion of the Committee, an escrow
agreement and any other documents which the Committee may require
as a condition to the issuance of such shares. If a Grantee shall
fail to execute the foregoing documents, within any time period
prescribed by the Committee, the Award shall be null and void. At
the discretion of the Committee, shares of Restricted Stock
issued in connection with an Award shall be held by the Company
or deposited together with the stock powers with an escrow agent
designated by the Committee. Unless the Committee determines
otherwise and as set forth in the Restriction Agreement, upon
issuance of such shares, the Grantee shall have all of the rights
of a shareholder with respect to such shares, including the right
to vote the shares and to receive all dividends or other
distributions paid or made with respect to them.
7.2 Non-Transferability.
Until any restrictions upon Restricted Stock awarded to a Grantee
shall have lapsed in a manner set forth in Section 7.3, such
shares of Restricted Stock shall not be transferable other than
by will or the laws of descent and distribution, or pursuant to a
Qualified Domestic Relations Order, nor shall they be delivered
to the Grantee.
7.3 Lapse of Restrictions.
Restrictions upon Restricted Stock awarded hereunder shall lapse
at such time or times (but, with respect to any award to an
Employee who is also a Director or Officer, not less than six
months after the date of the Award) and on such terms and
conditions as the Committee shall, in its discretion, determine
at the time the Award is granted or thereafter.
7.4 Termination of Employment.
The Committee shall have the power to specify, with respect to
each Award granted to any particular Employee, the effect upon
such Grantee's rights with respect to such Restricted Stock of
the termination of such Grantee's employment under various
circumstances, which effect may include (but is not limited to)
immediate or deferred forfeiture of such Restricted Stock or
acceleration of the date at which any then-remaining restrictions
shall lapse.
7.5 Treatment of Dividends.
At the time an Award of Restricted Stock is made the Committee
may, in its discretion, determine that the payment to the Grantee
of any dividends, or a specified portion thereof, declared or
paid on such Restricted Stock shall be
(i) deferred until the lapsing of the relevant
restrictions, and
(ii) held by the Company for the account of the Grantee
until such time.
In the event of such deferral, there shall be credited at the end
of each year (or portion thereof) interest on the amount of the
account at the beginning of the year at a rate per annum
determined by the Committee. Payment of deferred dividends,
together with interest thereon, shall be made upon the lapsing of
restrictions imposed on such Restricted Stock, and any dividends
deferred (together with any interest thereon) in respect of
Restricted Stock shall be forfeited upon any forfeiture of such
Restricted Stock.
7.6 Delivery of Shares.
Within a reasonable period of time following the lapse of the
restrictions on shares of Restricted Stock, the Committee shall
cause a stock certificate or certificates to be delivered to the
Grantee with respect to such shares. Such shares shall be free of
all restrictions hereunder, except that if the shares of stock
covered by the Plan shall not be the subject of an effective
registration statement under the Securities Act of 1933, as
amended, such stock certificates shall bear such restrictive
legends as the Company shall deem necessary or advisable pursuant
to applicable federal and state securities laws.
7.7 Payment of Withholding Taxes.
(a) The Restriction Agreement may authorize the Company to
withhold from compensation otherwise due to the Grantee the full
amount of any federal, state and local income, employment or
other taxes required to be withheld from the income of such
Grantee as a result of the lapse of the restrictions on shares of
Restricted Stock, or otherwise as a result of the recognition of
taxable income with respect to an Award. At the time of and as a
condition to the delivery of a stock certificate or certificates
pursuant to Section 7.6, the Grantee shall pay to the Company in
cash any balance owed with respect to such withholding
requirements.
(b) In the discretion of the Committee, any Restriction
Agreement may provide that all or any portion of the tax
obligations otherwise payable in the manner set forth in
paragraph 7.7(a), together with additional taxes not exceeding
the actual additional taxes to be owed by the Grantee with
respect to the Award, may, upon the irrevocable election of the
Grantee, be paid by tendering to the Company whole shares of
Stock duly endorsed for transfer and owned by the Grantee, or by
authorizing the Company to withhold and cancel shares of Stock
otherwise deliverable pursuant to Section 7.6, in either case in
that number of shares having a Fair Market Value on the date that
taxable income is recognized equal to the amount of such taxes
thereby being paid, in all cases subject to such restrictions as
the Committee may from time to time determine.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time,
(i) cause the Committee to cease granting Options and
Awards,
(ii) terminate the Plan, or
(iii) in any respect amend or modify the Plan.
However, the Board (unless its actions are approved or ratified
by the shareholders of the Company within twelve months of the
date the Board amends the Plan) may not amend the Plan to
materially increase the number of shares of Stock available under
the Plan to Directors or Officers. No termination, amendment or
modification of the Plan shall affect adversely a Grantee's
rights under an Option Agreement or Restriction Agreement without
the consent of the Grantee or his or her legal representative.
From and after the first date on which an Option is automatically
granted pursuant to Section 6.13, the provisions of such Section
6.13 may not be amended in any manner more frequently than once
every six months, other than to comport with changes in the Code,
the Employee Retirement Income Security Act of 1974, as amended,
or the rules and regulations promulgated under the Code or such
Act.
ARTICLE IX
MISCELLANEOUS
9.1 Replacement or Amended Grants.
At the sole discretion of the Committee, and subject to the terms
of the Plan, the Committee may modify outstanding Options or
Awards or accept the surrender of outstanding Options or Awards
on terms specified by the Committee, which terms may include the
grant of new Options or Awards in substitution for them. However
no modification of an Option or Award shall adversely affect a
Grantee's rights under an Option Agreement or Restriction
Agreement without the consent of the Grantee or his or her legal
representative.
9.2 Forfeiture for Competition.
If a Grantee provides services to a competitor of the Company or
any of its Subsidiaries, whether as an employee, officer,
director, independent contractor, consultant, agent or otherwise,
such services being of a nature that can reasonably be expected
to involve the skills and experience used or developed by the
Grantee while a Director or an Employee, then that Grantee's
rights under any Options outstanding hereunder shall be forfeited
and terminated, and any shares of Restricted Stock held by such
Grantee subject to remaining restrictions shall be forfeited,
subject in each case to a determination to the contrary by the
Committee.
9.3 Plan Binding on Successors.
The Plan shall be binding upon the successors of the Company.
9.4 Headings Not a Part of Plan.
Headings of Articles and Sections hereof are inserted for
convenience and reference, and do not constitute a part of the
Plan.