ANALEX CORPORATION
2000 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Analex Corporation 2000 Stock
Incentive Plan (the "Plan") is to further the interests of
Analex Corporation, a Delaware corporation (the "Company"),
and its shareholders by providing incentives in the form of
grants of stock options and stock appreciation rights to key
employees and other persons who contribute materially to the
success and profitability of the Company. The Plan is a
continuation, in the form of an amendment and restatement,
of an existing plan previously known as the Analex
Corporation 2000 Stock Option Plan.
2. Definitions. The following definitions shall apply to the
Plan:
(a) "Board" means the board of directors of the Company.
(b) "Change of Control" means:
i. a determination or agreement by the Company to
sell substantially all of its assets, merge,
dissolve, liquidate or reorganize;
ii. a determination or agreement by the holders of a
majority of the Common Stock of the Company to
sell a majority of the outstanding Common Stock of
the Company to a third party; or
iii. the occurrence of any other change in control
event, as defined by the Board.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Committee" means the Compensation Committee of the
Board. The Committee shall (i) consist of not less than
three (3) members of the Board who are not employees of
the Company, (ii) be constituted to satisfy the
applicable requirements of Rule 16b-3 for qualification
of the transactions contemplated under the Plan for
exemption under Rule 16b-3, and (iii) be constituted to
satisfy the applicable requirements of Code Section
162(m) for qualification of the transactions
contemplated under the Plan for exemption under Code
Section 162(m). The Board may from time to time remove
members from, or add members to, the Committee.
Vacancies on the Committee, howsoever caused, shall be
filled by the Board.
(e) "Common Stock" means the Common Stock, par value $0.02,
of the Company, or such other class of shares or
securities to which the Plan may apply pursuant to
Section 9 of the Plan.
(f) "Company" means Analex Corporation, a Delaware
corporation.
(g) "Date of Grant" means the date on which an Option or
SAR is granted.
(h) "Disability" means total and permanent inability, by
reason of illness or accident, to perform the duties of
the Recipient's occupation or position with the
Company, as determined by the Board based upon medical
evidence acceptable to the Board.
(i) "Eligible Person" means any person who performs or has
in the past performed services for the Company, whether
as a director, officer, Employee, consultant or other
independent contractor, and any person who performs
services relating to the Company as an employee or
independent contractor of a corporation or other entity
that provides services for the Company.
(j) "Employee" means any person employed on an hourly or
salaried basis by the Company. In the case of a
Recipient who is an Employee of the Company, such
person must be employed by the Company at the time the
Option or SAR is granted.
(k) "Fair Market Value" as of a particular date shall mean
the fair market value of the Common Stock. If the
Common Stock is admitted to trading on a national
securities exchange, fair market value of the Common
Stock on any date shall be the closing price reported
for the Common Stock on the last day preceding such
date on which a sale was reported. If the Common Stock
is admitted to quotation on the National Association of
Securities Dealers Automated Quotation ("Nasdaq")
System or other comparable quotation system and has
been designated as a National Market System ("NMS")
security, fair market value of the Common Stock on any
date shall be the closing sale price reported for the
Common Stock on such system on the last date preceding
such date on which a sale was reported. If the Common
Stock is admitted to quotation on the Nasdaq System but
has not been designated as an NMS security, the fair
market value of the Common Stock on any date shall be
the average of the highest bid and lowest asked prices
of such Common Stock on such system on the last date
preceding such date on which both bid and ask prices
were reported. If the Board determines that the value
of the Common Stock determined on the basis of selling
or bid and asked prices as provided above in this
Section 2(k) does not reflect the fair market value of
the Common Stock, then the fair market value of the
Common Stock shall be determined by the Board in its
sole discretion and in good faith as required by
Section 422 of the Code. If the Common Stock is not
admitted to trading on a national securities exchange
or to quotation on the Nasdaq System or other
comparable quotation system, then the fair market value
of the Common Stock shall be determined by the Board in
its sole discretion and in good faith as required by
Section 422 of the Code.
(l) "Incentive Stock Option" means a stock option, granted
pursuant to this Plan or any other Company plan, that
satisfies the requirements of Section 422 of the Code
and that entitles the Recipient to purchase stock of
the Company. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that
is a subsidiary corporation within the meaning of
Section 424(f) of the Code. To the extent that any
Option does not qualify as an Incentive Stock Option,
it shall be deemed a Non-Qualified Stock Option.
(m) "Non-Qualified Stock Option" means a stock option,
granted pursuant to the Plan, that is not an Incentive
Stock Option and that entitles the Recipient to
purchase stock of the Company.
(n) "Option" means an Incentive Stock Option or a Non-
Qualified Stock Option.
(o) "Option Agreement" means a written agreement, between
the Company and a Recipient, that sets out the terms
and restrictions of an Option.
(p) "Option Shareholder" means a Recipient who has acquired
Shares upon exercise of an Option.
(q) "Option Shares" means Shares that a Recipient receives
upon exercise of an Option.
(r) "Plan" means this Analex Corporation 2000 Stock
Incentive Plan (formerly known as "Analex Corporation
2000 Stock Option Plan" and "Hadron, Inc. 2000 Stock
Option Plan"), as amended and restated, through
February 22, 2006, and as further amended from time to
time.
(s) "Recipient" means an individual who receives an Option
or a Stock Appreciation Right.
(t) "Rule 16b-3" means Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended, or any
successor to Rule 16b-3, as in effect when discretion
is being exercised with respect to the Plan.
(u) "SAR Agreement" means a written agreement, between the
Company and a Recipient, that sets out the terms and
conditions of a SAR.
(v) "Share" means a share of the Common Stock, as adjusted
in accordance with Section 9 of the Plan.
(w) "Stock Appreciation Right" or "SAR" means an award made
pursuant to Section 7 of the Plan.
3. Administration. The Committee shall administer the Plan.
The Committee has the exclusive power to select the
Recipients of Options and SARs pursuant to the Plan, to
establish the terms of the Options and SARs granted to each
Recipient, to modify or amend any Option, and to make all
other determinations necessary or advisable. The Committee
has the sole discretion to determine whether the performance
of an Eligible Person warrants the grant of an Option or
SAR, and to determine the size and type of the Option or
SAR. The Committee has full and exclusive power to construe
and interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, and to take all
actions necessary or advisable for the Plan's
administration. The Committee, in the exercise of its
powers, may correct any defect or supply any omission, or
reconcile any inconsistency in the Plan, or in any
Agreement, in the manner and to the extent it deems
necessary or expedient to make the Plan fully effective. In
exercising this power, the Committee may retain counsel at
the expense of the Company. The Committee also has the
power to determine the duration and purposes of leaves of
absence which may be granted to a Recipient without
constituting a termination of the Recipient's employment for
purposes of the Plan. Any of the Committee's determinations
shall be final and binding on all persons. A member of the
Committee shall not be liable for performing any act or
making any determination in good faith.
4. Shares Subject to Plan; Substitution Awards.
(a) Subject to the provisions of Section 9 of the Plan and
the authority granted to the Committee pursuant to
Section 3 above, the maximum aggregate number of Shares
that may be subject to Options and SARs is Six Hundred
Thousand (600,000). The Shares may be authorized but
unissued Shares, or may be treasury stock of the
Company. If an unexercised Option or SAR expires or
becomes unexercisable, the unpurchased Shares subject
to such Option or SAR shall be available for other
Options or SARs. If any Shares (whether subject to or
received pursuant to an Option or SAR granted under the
Plan, purchased on the open market, or otherwise
obtained, and including Shares that are deemed (by
attestation or otherwise) to have been delivered to the
Company as payment for all or any portion of the
exercise price of an Option) are withheld or applied as
payment by the Company in connection with the exercise
of an Option or SAR or the withholding of taxes related
thereto, such Shares, to the extent of any such
withholding or payment, shall again be available or
shall increase the number of Shares available, as
applicable, for future Options or SARs under the Plan.
The Board may from time to time determine the
appropriate methodology for calculating the number of
Shares issued pursuant to the Plan.
(b) The Committee may grant Options and SARs under the Plan
in substitution for stock and stock based awards held
by employees, directors or other key persons of another
corporation in connection with a merger or other
consolidation of the employing corporation with and
into the Company or a subsidiary of the Company or the
acquisition by the Company or a subsidiary of the
Company of the property or stock of the employing
corporation. The Committee may direct that the
substitute awards be granted on such terms and
conditions as they deem appropriate under the
circumstances. Any substitute awards granted under
this provision shall not count against the share
limitation set forth in Section 4(a) above.
5. Eligibility; Non-Employee Director Grants.
(a) Any Eligible Person that the Committee in its sole
discretion designates is eligible to receive an Option
or a SAR. However, only an Employee may receive an
Incentive Stock Option. The Committee's grant of an
Option or SAR to a Recipient in any year does not
entitle the Recipient to an Option or SAR in any other
year. Furthermore, the Committee may grant Options and
SARs on different terms to different Recipients and/or
to the same Recipient if the Recipient is award more
than one Option or SAR. The Committee may consider
such factors as it deems pertinent in selecting
Recipients and in determining the types and sizes of
their Options and SARs. Recipients may include persons
who previously received stock, stock options, stock
appreciation rights, or other benefits under the Plan
or another plan of the Company, whether or not the
previously granted benefits have been fully exercised
or vested. Nothing in the Plan or any Option or SAR,
or in any agreement entered into pursuant to the Plan
shall confer upon any Employee, director or outside
consultant the right to continue in the employ or
service of the Company or effect any right which the
Company may have to terminate the employment or service
of such Employee, director, or outside consultant
regardless of the effect of such termination of
employment or service on the rights of the Employee,
director or outside consultant under the Plan or any
Option or SAR.
(b) Each non-employee director elected or appointed to the
Board shall automatically receive, on the date of his
or her first initial appointment to the Board, an
Option to purchase 5,000 shares of Common Stock (the
"Initial Option") at a per share exercise price equal
to the Fair Market Value of the Common Stock on the
initial grant date. In addition, each non-employee
director shall automatically receive on each
anniversary of his initial election or appointment to
the Board or, in the case of current directors, each
anniversary of the date the Plan was adopted by the
Board, an option to purchase 5,000 shares of the
company's Common Stock exercisable at a per share value
equal to the Fair Market Value for the Common Stock on
the applicable additional grant date to the extent that
options remain available under the Plan. Each Option
granted under this Section 5(b) shall terminate, to the
extent not exercised prior thereto, upon the earlier to
occur of (i) the tenth anniversary of grant and (ii)
ninety days after the cessation of the Recipient's
service as a member of the Board (to the extent vested
upon the date of such cessation), unless the Committee
or the Board sets an earlier or later expiration in
establishing the terms of the Option at grant or a
later expiration date subsequent to the Date of Grant
but prior to the end of the 90-day period following the
Recipient's cessation as a member of the Board.
6. Options. The Committee may grant Options to purchase Common
Stock to Recipients in such amounts as the Committee
determines in its sole discretion. Except as otherwise
limited herein, an Option may be in the form of an Incentive
Stock Option or a Non-Qualified Stock Option. The Committee
may grant an Option alone or in addition to another Option
or a SAR. Each Option shall satisfy the following
requirements:
(a) Written Agreement. Each Option granted to a Recipient
shall be evidenced by an Option Agreement. The terms
of the Option Agreement need not be identical for
different Recipients or for the same Recipient if
awarded more than one Option. The Option Agreement
shall contain such provisions as the Committee deems
appropriate and shall include a description of the
substance of each of the requirements in this Section
6.
(b) Designation of Type of Option. Each Option Agreement
shall state on its face whether the Option is intended
to be a "tax qualified," incentive stock option under
Code Section 422, or a "nonqualified," stock option
subject to Code Section 83.
(c) Number of Shares. Each Option Agreement shall specify
the number of Shares that the Recipient may purchase
upon exercise of the Option.
(d) Exercise Price.
(i) Incentive Stock Options. Except as provided in
subsection 6(m) of the Plan, the exercise price of
each Share subject to an Incentive Stock Option
shall equal the exercise price designated by the
Committee, but shall not be less than the Fair
Market Value of the Share on the Date of Grant.
(ii) Non-Qualified Stock Options. In the case of
Options intended to be "nonqualified" stock
options issued to Employees, the exercise price
shall be at least one hundred percent (100%) of
the fair market value of a Share of Common Stock
on the Grant Date, such that the amount of
compensation such Recipient/Employee shall realize
on exercise shall be based solely on the increase
in the value of the Shares of Common Stock
subsequent to the Grant Date, as required by
Regulation Section 1.162-27. Notwithstanding the
foregoing, such exercise price may be less than
one hundred percent (100%) of the fair market
value of a Share of Common Stock on the Grant Date
if the amount below fair market value is
attributable to the attainment of a performance
goal that satisfies the requirements of Regulation
Section 1.162-27 and Code Section 162(m), or any
successor statute or Regulation regarding the same
subject matter. The exercise price of "Non-
Qualified Stock Options" issued to non-Employees
shall equal the exercise price designated by the
Committee. Notwithstanding the foregoing, in no
event will the exercise price of a Non-Qualified
Stock Option be less than the par value of the
Common Stock on the Grant Date.
(e) Duration of Option.
(i) Incentive Stock Option. Except as otherwise
provided in Section 6, an Incentive Stock Option
shall expire on the earlier of the tenth
anniversary of the Date of Grant or the date set
by the Committee on the Date of Grant.
(ii) Non-Qualified Stock Option. Except as otherwise
provided in this Section 6, a Non-Qualified Stock
Option shall expire on the tenth anniversary of
its Date of Grant or, at such earlier or later
date set by the Committee on the Date of Grant.
(f) Vesting of Option. Each Option Agreement shall specify
the vesting schedule applicable to the Option. The
Committee, in its sole discretion, may accelerate the
vesting of any Option at any time.
(g) Death. If a Recipient dies, an Option granted to the
Recipient shall expire on the earlier of the one-year
anniversary of the date of the Recipient's death or the
date specified in Section 6(e) of the Plan. During the
one-year period following the Recipient's death, the
Option may be exercised by the beneficiary or the
estate of the Recipient to the extent it could have
been exercised at the time the Recipient died, subject
to any adjustment under Section 9 of the Plan.
(h) Disability. If the Recipient terminates employment
with the Company because of his Disability, an Option
granted to the Recipient shall expire on the earlier of
the one-year anniversary of the Recipient's last day of
employment with the Company or the date specified in
subsection 6(e) of the Plan. During the one-year period
following the Recipient's termination of employment by
reason of Disability, the Option may be exercised as to
the number of Shares for which it could have been
exercised at the time the Recipient became disabled,
subject to any adjustments under Section 9 of the Plan.
(i) Retirement. If the Recipient terminates employment
with the Company by reason of normal retirement under
the Company's retirement policies, an Option granted to
the Recipient shall expire on the earlier of ninety
days after the Recipient's last day of employment or
the date specified in subsection 6(e) of the Plan.
During the ninety day period following the Recipient's
normal retirement, the Option may be exercised as to
the number of Shares for which the Option would have
been exercisable on the retirement date, subject to any
adjustment under Section 9 of the Plan.
(j) Termination of Service. Subject to Section 6(e) of the
Plan, if the Recipient's employment with the Company
terminates for any reason other than death, Disability
or retirement, an Option granted to the Recipient shall
expire at 5:00 p.m. on the last day of the Recipient's
employment with the Company, unless the Committee sets
a later expiration date on the Date of Grant or a later
expiration date subsequent to the Date of Grant but
prior to the Recipient's last day of employment. The
Committee may not delay the expiration of an Incentive
Stock Option more than 90 days after termination of the
Recipient's employment. During any delay of the
expiration date, the Option shall be exercisable only
to the extent it is exercisable on the date the
Recipient's employment terminates, subject to any
adjustment under Section 9 of the Plan.
(k) Cause. Notwithstanding any provisions set forth in the
Plan, if the Recipient (i) commits any act of
malfeasance or wrongdoing affecting the Company or any
parent or subsidiary, (ii) breaches any covenant not to
compete or employment agreement with the Company, or
(iii) willfully and continuously fails to perform
substantially his duties with the Company (other than
any failure due to the Recipient's death or
Disability), any unexercised portion of the Option
shall expire immediately upon the earlier of the
occurrence of such event or the last day the Recipient
is employed by the Company. No act or failure to act
shall be deemed willful unless the Recipient acts or
fails to act not in good faith and without reasonable
belief that his action or failure is in the best
interest of the Company.
(l) Conditions Required for Exercise. An Option is
exercisable only to the extent it is vested according
to the terms of the Option Agreement. Furthermore, an
Option is exercisable only if the issuance of Shares
upon exercise would comply with applicable securities
laws. Each Option Agreement shall specify any
additional conditions required for the exercise of the
Option, such as the execution of a Stock Restriction
Agreement by the Recipient in a form specified by the
Company.
(m) Ten Percent Shareholders. An Incentive Stock Option
granted to an individual who, on the Date of Grant,
owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the
Company, shall have an exercise price of 110 percent of
Fair Market Value on the Date of Grant and shall be
exercisable only during the five-year period
immediately following the Date of Grant. For purposes
of calculating stock ownership of any person, the
attribution rules of Code Section 424(d) shall apply,
and any stock that such person may purchase under
outstanding options shall not be considered.
(n) Maximum Option Grants. The aggregate Fair Market
Value, determined on the Date of Grant, of Shares with
respect to which any Incentive Stock Options under the
Plan and all other plans of the Company become
exercisable by any individual for the first time in any
calendar year shall not exceed $100,000. To the extent
that any Stock Option exceeds this limit, it shall be
deemed a Non-Qualified Stock Option.
(o) Method of Exercise. An Option shall be deemed
exercised when the person entitled to exercise the
Option (i) delivers written notice to the Secretary of
the Company (or his delegate, in his absence) of the
decision to exercise, (ii) concurrently tenders to the
Company full payment for the Shares to be purchased
pursuant to the exercise, and (iii) complies with any
other requirements in the Recipient's Option Agreement
and such other reasonable requirements as the Committee
establishes pursuant to Section 8 of the Plan. Payment
for Shares with respect to which an Option is exercised
may be made (i) in cash or (ii) by certified check, in
an amount equal to the full exercise price. No person
shall have the rights of a shareholder with respect to
Shares subject to an Option until a certificate or
certificates for the Shares have been delivered to him.
A partial exercise of an Option shall not affect the
holder's right to exercise the remainder of the Option
from time to time in accordance with the Plan.
(p) Loan from Company to Exercise Option. The Committee
may, in its discretion and subject to the requirements
of applicable law, recommend to the Company that it
lend the Recipient the funds needed by the Recipient to
exercise an Option. The Recipient shall apply to the
Company for the loan, completing the forms and
providing the information required by the Company. The
loan shall be secured by such collateral as the Company
may require, subject to its underwriting requirements
and the requirements of applicable law. The Recipient
shall execute a promissory note and any other documents
deemed necessary by the Company.
(q) Designation of Beneficiary. Each Recipient may file
with the Company a written designation of a beneficiary
to receive the Recipient's Options in the event of the
Recipient's death prior to full exercise of such
Options. If the Recipient does not designate a
beneficiary, or if the designated beneficiary does not
survive the Recipient, the Recipient's estate shall be
his beneficiary. Recipients may, by written notice to
the Company, change a beneficiary designation.
(r) Nontransferability of Option. An Option granted under
the Plan is not transferable except by will or the laws
of descent and distribution. During the lifetime of
the Recipient, all rights of the Option are exercisable
only by the Recipient.
(s) Change of Control. In the event of a Change of Control,
the portion of any outstanding Option that is not yet
vested and/or exercisable, shall become fully vested
and exercisable on the date immediately prior to the
consummation of such Change of Control or such other
date prior to such Change of Control as determined by
the Board; provided, however that such accelerated
vesting and exercisability shall be subject to such
additional terms, conditions, requirements or
restrictions as the Board may determine in its sole
discretion, except, however, that the Board shall not
impose any such additional terms, conditions,
requirements or restrictions if the Board determines
that Recipient will be terminated from his or her
current position as a result of or in connection with
such Change of Control. If a Change of Control occurs,
the Committee in its discretion may, at the time an
Option is awarded or at any time thereafter, take one
or more of the following actions: (i) provide for
payment to the Recipient of cash or other property with
a Fair Market Value equal to the amount that would have
been received upon the exercise of the Option had the
Option been exercised or paid upon the Change of
Control, (ii) adjust the terms of the Option in a
manner determined by the Committee to reflect the
Change of Control, (iii) cause the Option to be
assumed, or new rights substituted therefor, by another
entity, (iv) make such other provision as the Committee
may consider equitable to Recipients and in the best
interests of the Company, or (v) designate a date when
each outstanding Option, if not exercised, shall
terminate; provided however, that such a date shall not
be so designated unless the Committee provides at least
30 days advance written notice of the date of
termination to each Recipient. In any such event, all
other provisions, terms and conditions of this Plan
shall remain in full force and effect and the Committee
is expressly authorized to take the action described in
the preceding sentence and to amend this Plan or take
such other actions as may be necessary, appropriate or
incidental to the actions described above.
7. Stock Appreciation Rights. The Committee may award
SARs covering Shares to Recipients in such amounts as the
Committee determines in its sole discretion. A SAR may be
granted in tandem with an Option (at or after the grant of
the Option), or alone and unrelated to an Option. Each SAR
granted to a Recipient will satisfy the following
requirements:
(a) Written Agreement. Each SAR granted to a Recipient
shall be evidenced by a SAR Agreement. The terms of
the SAR Agreement need not be identical for different
Recipients or the same Recipient if awarded more than
one SAR. The SAR Agreement shall contain such
provisions as the Committee deems appropriate and shall
include a description of the substance of each of the
requirements in this Section 7.
(b) Number of Shares. Each SAR Agreement shall specify the
number of Shares covered by the SAR granted to the
Recipient. The limitation described in this Section
7(b) shall be adjusted proportionately in accordance
with Section 9 of the Plan. If a SAR is cancelled in
the same fiscal year of the Company in which it was
granted (other than in connection with a transaction
described in Section 9 of the Plan), the canceled SAR
will be counted against the limitation described in
this Section 7(b).
(c) Exercise Price. The exercise price of the SAR shall be
at least one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date.
(d) Value and Settlement of SAR. Upon exercise of all or a
specified portion of the SAR, the Grantee shall be
entitled to receive Shares with an aggregate Fair
Market Value on the date of exercise of the SAR equal
to the amount determined by multiplying (i) a specified
percentage of the amount (if any) by which the Fair
Market Value of a Share on the date of exercise of the
SAR exceeds the SAR exercise price, by (ii) the number
of Shares with respect to which the SAR shall have been
exercised.
(e) Duration of SAR. Except as otherwise provided in this
Section 7, a SAR shall expire on the tenth anniversary
of its Date of Grant or, at such earlier or later date
set by the Committee on the Date of Grant.
(f) Vesting of SAR. Each SAR Agreement shall specify the
vesting schedule applicable to the SAR. The Committee,
in its sole and absolute discretion, may accelerate the
vesting of any SAR at any time.
(g) Death. If a Recipient dies, a SAR granted to the
Recipient shall expire on the earlier of the one-year
anniversary of the Recipient's death or the date
specified in Section 7(e) of the Plan. During the
period following the Recipient's death, the SAR may be
exercised by the beneficiary or the estate of the
Recipient to the extent it could have been exercised at
the time the Recipient died, subject to any adjustment
under Section 9 of the Plan.
(h) Disability. If the Recipient terminates employment
with the Company because of his Disability, a SAR
granted to the Recipient shall expire on the earlier of
the one-year anniversary date of the Recipient's last
day of employment or the date specified in Section 7(e)
of the Plan. During the one-year period following the
Recipient's termination of employment by reason of
Disability, the SAR may be exercised to the extent it
could have been exercised at the time the Recipient
became disabled, subject to any adjustments under
Section 9 of the Plan.
(i) Retirement. If the Recipient's employment terminates
by reason of normal retirement under the Company's
retirement policies, a SAR granted to the Recipient
shall expire on the earlier of 90 days after the last
day of employment or the date specified in Section 7(e)
of the Plan. During the 90-day period following the
Recipient's normal retirement, the SAR may be exercised
to the extent it would have been exercisable on the
retirement date, subject to any adjustment under
Section 9 of the Plan.
(j) Termination of Service. Subject to Section 7(e) of the
Plan, if the Recipient's employment with the Company
terminates for any reason other than death, Disability,
or retirement, a SAR granted to the Recipient shall 30
days after Recipient's last day of employment, unless
the Committee sets a later expiration date on the Date
of Grant. During any delay of the expiration date, the
SAR shall be exercisable only to the extent it is
exercisable on the date the Recipient's employment
terminates, subject to any adjustment under Section 9
of the Plan.
(k) Cause. Notwithstanding any provisions set forth
herein or in the Plan, if the Recipient (i) commits any
act of malfeasance or wrongdoing affecting the Company
or any parent or subsidiary, (ii) breaches any covenant
not to compete or employment agreement with the
Company, or (iii) willfully and continuously fails to
perform substantially his duties with the Company
(other than any failure due to the Recipient's death or
Disability), any unexercised part of the SAR shall
expire immediately upon the earlier of the occurrence
of such event or the last day the Recipient is employed
by the Company. No act or failure to act shall be
deemed willful unless the Recipient acts or fails to
act not in good faith and without reasonable belief
that his action or failure is in the best interest of
the Company.
(l) Conditions Required for Exercise. A SAR is exercisable
only to the extent it is vested according to the terms
of the SAR Agreement. Furthermore, a SAR is
exercisable only if the issuance of Shares upon
exercise would comply with applicable securities laws.
Each SAR Agreement shall specify any additional
conditions required for the exercise of the SAR.
(m) Method of Exercise. A SAR granted under this Plan
shall be deemed exercised when the person entitled to
exercise the SAR delivers written notice to the
President of the Company (or his delegate, in his
absence) of the decision to exercise, and complies with
such other reasonable requirements as the Committee
establishes pursuant to Section 8 of the Plan. A
partial exercise of a SAR will not affect the holder's
right to exercise the SAR from time to time in
accordance with this Plan as to the remaining Shares
subject to the SAR.
(n) Designation of Beneficiary. Each Recipient may file
with the Company a written designation of a beneficiary
to receive the Recipient's SARs in the event of the
Recipient's death prior to full exercise of such SARs.
If the Recipient does not designate a beneficiary, or
if the designated beneficiary does not survive the
Recipient, the Recipient's estate shall be his
beneficiary. Recipients may, by written notice to the
Company, change a beneficiary designation.
(o) Nontransferability of SARS.
(i) Except as provided in subsection 7(o)(iii) below,
each SAR shall be exercisable only by the
Recipient during the Recipient's lifetime, or, if
permissible under applicable law, by the
Recipient's guardian or legal representative.
(ii) Except as provided in subsection 7(o)(iii) below,
no SAR (prior to the time, if applicable, Shares
are issued in respect of such SAR), and no right
under any SAR, may be assigned, alienated,
pledged, attached, sold or otherwise transferred
to encumbered by a Recipient otherwise than by
will or by the laws of descent and distribution
and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance
shall be void and unenforceable against the
Company; provided, that the designation of a
beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or
encumbrance.
(iii) To the extent and in the manner permitted by
applicable law, and to the extent and in the
manner permitted by the Committee, and subject to
such terms and conditions as may be prescribed by
the Committee, a Recipient may transfer a SAR to:
(A) a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-
law, father-in-law, son-in-law, daughter-in-
law, brother-in-law, or sister-in-law of the
Recipient (including adoptive relationships);
(B) any person sharing the Recipient's household
(other than a tenant or employee);
(C) a trust in which persons described in (A) and
(B) have more than 50 percent of the
beneficial interest;
(D) a foundation in which persons described in
(A) or (B) or the Recipient control the
management of assets; or
(E) any other entity in which the persons
described in (A) or (B) or the Recipient own
more than 50 percent of the voting interests;
provided such transfer is not for value. The
following shall not be considered transfers for
value: a transfer under a domestic relations order
in settlement of marital property rights, and a
transfer to an entity in which more than 50
percent of the voting interests are owned by
persons described in (A) above or the Recipient,
in exchange for an interest in such entity.
(p) Change of Control. In the event of a Change of Control,
any portion of any outstanding SAR that is not yet
vested and/or exercisable, shall become fully vested
and exercisable on the date immediately prior to the
consummation of such Change of Control or such other
date prior to such Chang of Control as determined by
the Board; provided, however that such accelerated
vesting and exercisability shall be subject to such
additional terms, conditions, requirements or
restrictions as the Board may determine in its sole
discretion, except, however, that the Board shall not
impose any such additional terms, conditions,
requirements or restrictions if the Board determines
that Recipient will be terminated from his current
position as a result of or in connection with such
Change of Control. If a Change of Control occurs, the
Committee in its discretion may, at the time a SAR is
awarded or at any time thereafter, take one or more of
the following actions: (i) provide for payment to the
Recipient of cash or other property with a Fair Market
Value equal to the amount that would have been received
upon the exercise of the SAR had the SAR been exercised
or paid upon the Change of Control, (ii) adjust the
terms of the SAR in a manner determined by the
Committee to reflect the Change of Control, (iii) cause
the SAR to be assumed, or new rights substituted
therefor, by another entity, (iv) make such other
provision as the Committee may consider equitable to
Recipients and in the best interests of the Company, or
(v) designate a date when each outstanding SAR, if not
exercised, shall terminate; provided however, that such
a date shall not be so designated unless the Committee
provides at least 30 days advance written notice of the
date of termination to each Recipient. In any such
event, all other provisions, terms and conditions of
this Plan shall remain in full force and effect and the
Committee is expressly authorized to take the action
described in the preceding sentence and to amend this
Plan or take such other actions as may be necessary,
appropriate or incidental to the actions described
above.
8. Taxes; Compliance with Law; Approval of Regulatory Bodies;
Legends. The Company shall have the right to withhold from
payments otherwise due and owing to the Recipient or his
beneficiary or to require the Recipient or his beneficiary
to remit to the Company in cash upon demand an amount
sufficient to satisfy any federal (including FICA and FUTA
amounts), state, and/or local withholding tax requirements
at the time the Recipient or his beneficiary recognizes
income for federal, state, and/or local tax purposes with
respect to any Option or SAR.
The Board may grant Options and SARs and the Company may
deliver Shares under the Plan only in compliance with all
applicable federal and state laws and regulations and the
rules of all stock exchanges on which the Company's stock is
listed at any time. An Option or SAR is exercisable only if
either (i) a registration statement pertaining to the Shares
to be issued upon exercise of the Option or SAR has been
filed with and declared effective by the Securities and
Exchange Commission and remains effective on the date of
exercise, or (ii) an exemption from the registration
requirements of applicable securities laws is available.
The Plan does not require the Company, however, to file such
a registration statement or to assure the availability of
such exemptions. Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements,
and shall be subject to such transfer restrictions, as the
Board deems advisable to assure compliance with federal and
state laws and regulations and with the requirements of this
Section 8. No Option or SAR may be exercised, and Shares
may not be issued under the Plan, until the Company has
obtained the consent or approval of every regulatory body,
federal or state, having jurisdiction over such matters as
the Board deems advisable.
Each person who acquires the right to exercise an Option or
SAR or to ownership of Shares by bequest or inheritance may
be required by the Board to furnish reasonable evidence of
ownership of the Option or SAR as a condition to his
exercise of the Option or SAR or receipt of Shares. In
addition, the Board may require such consents and releases
of taxing authorities as the Board deems advisable.
With respect to persons subject to Section 16 of the 1934
Act, transactions under the Plan are intended to comply with
all applicable conditions of Rule 16b-3 under the 1934 Act,
as such Rule may be amended from time to time, or its
successor under the 1934 Act. To the extent any provision
of the Plan or action by the Board or the Company fails to
so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Board.
9. Adjustments.
(a) If a stock dividend, stock split, share combination,
exchange of shares, recapitalization, consolidation, spin-
off, reorganization, or liquidation of or by the Company
shall occur, the Board shall adjust the number and class of
Shares for which Options and SARs are authorized to be
granted, the number and class of Shares then subject to
Options and SARs previously granted, and the price per Share
payable upon exercise of each Option and the exercise price
of each SAR to the extent the Board deems appropriate to
reflect the applicable transaction.
(b) The Board or the Committee may also adjust the number
of shares subject to outstanding Awards and the exercise
price and the terms of outstanding Awards to take into
consideration material changes in accounting practices or
principles, extraordinary dividends, acquisitions or
dispositions of stock or property or any other event if it
is determined by the Board of the Committee that such
adjustment is appropriate to avoid distortion in the
operation of the Plan, provided that no such adjustment
shall be made in the case of an Incentive Stock Option,
without the consent of the Recipient, if it would constitute
a modification, extension or renewal of the Option within
the meaning of Section 424(h) of the Code.
10. Liability of the Company. The Company shall not be liable
to any person for any tax consequences incurred by a
Recipient or other person with respect to an Option or SAR.
11. Indemnity of Board or Committee. The Company hereby
indemnifies and holds harmless the members of the Board or
the Committee against all liability and expenses (including
reasonable attorney, paralegal, and professional fees and
court costs) arising from any threatened, pending or
completed action, suit, proceeding (including administrative
proceedings or investigations) or appeal, incurred by reason
of the fact that such individual is or was a member of the
Board (for the purposes of administration of the Plan) or
the Committee, provided that such individual (i) acted, in
good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the Company
as well as the Employees, directors, outside consultants and
Recipients, or (ii) with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
12. Amendment and Termination of Plan. The Board may alter,
amend, suspend or terminate the Plan, provided that no such
action shall deprive a Recipient, without his consent, of
any Option or SAR granted to the Recipient pursuant to the
Plan or of any of his/her rights under such Option or SAR.
Except as provided otherwise in this Section 12, the Board
shall obtain shareholder approval of any amendment of the
Plan or any Option or SAR to the extent the Board determines
that it is desirable to obtain approval of the Company's
shareholders, to retain eligibility for exemption from the
limitations of Code Section 162(m), to have available the
ability for Options to qualify under Code Section 422 as
Incentive Stock Options, to comply with the requirements of
any exchange or quotation system on which the Common Stock
is listed or quoted, or for any other purpose the Board
deems appropriate.
13. Trading Policy Restrictions. Option and SAR exercises under
the Plan shall be subject at all times to the Company's
insider trading policy related restrictions, terms and
conditions as may be established by the Board, or any
committee thereof, from time to time.
14. Expenses of Plan. The Company shall bear the expenses of
administering the Plan.
15. Duration of Plan. Options and SARs may be granted only
during the 10 years immediately following the original
effective date of the Plan.
16. Notices. All notices to the Company shall be in writing and
shall be delivered to the Secretary of the Company. All
notices to a Recipient shall be delivered personally or
mailed to the Recipient at his address appearing in the
Company's personnel records. The address of any person may
be changed at any time by written notice given in accordance
with this Section 16.
17. Applicable Law. The validity, interpretation, and
enforcement of the Plan are governed in all respects by the
laws of Delaware and the United States of America.
18. Effective Date. The effective date of the Plan shall be the
earlier of (i) the date on which the Board adopts the Plan
or (ii) the date on which the shareholders approve the Plan.
Date Plan adopted by Board of Directors: September 12, 2000
(subject to shareholder approval)
Date Plan adopted by Shareholders: December 5, 2000
Date Plan initially amended and restated by the Board of
Directors: May 20, 2003
Date Plan again amended and restated by the Board of Directors:
February 22,2006