As adopted January 24, 1997
and amended through
April 28, 2000
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
TABLE OF CONTENTS (Cont'd)
Page
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 19
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 21
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 by 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 1,250,000 (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 Member"),
(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 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 (or its equivalent) 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 occurring 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, and no
modification of an existing Option, or grant of a new Option in
substitution for the surrender of an existing Option, shall be at
an Option Price lower than that of the existing Option at the time
it was first granted (as thereafter adjusted pursuant to Section
5.2).
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.