EXHIBIT EX-10.30
TRANSAMERICA CORPORATION
1995 PERFORMANCE STOCK OPTION PLAN
TRANSAMERICA CORPORATION, hereby adopts the Transamerica Corporation
1995 Performance Stock Option Plan, effective as of January 26, 1995, as
follows:
Section 1. Background and Purpose
1.1 Background and Effective Date. The Plan permits the grant of
Options and Tandem Limited Stock Appreciation Rights. The Plan is effective as
of January 26, 1995, subject to ratification by an affirmative vote of the
holders of a majority of the Shares which are present in person or by proxy
and entitled to vote at the 1995 Annual Meeting of Stockholders. Awards may be
granted prior to the receipt of such vote, but such grants shall be null and
void if such vote is not in fact received.
1.2 Purpose of the Plan. The Plan is intended to attract, motivate,
and retain key executives of the Corporation and its Affiliates. The Plan is
intended to motivate Participants to manage the Corporation to provide a
superior return to stockholders. The Plan is further intended to align
Participants' interests with those of the Corporation's stockholders.
Section 2. Definitions
The following words and phrases shall have the following meanings unless
a different meaning is plainly required by the context:
2.1 "1934 Act" means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
2.2 "Affiliate" means any corporation or any other entity (including,
but not limited to, partnerships and joint ventures) controlling, controlled
by, or under common control with the Corporation.
2.3 "Award" means, individually or collectively, a grant under the
Plan of Options and/or TLSARs.
2.4 "Award Agreement" means the written agreement setting forth the
terms and provisions applicable to each Award.
2.5 "Board" means the Board of Directors of the Corporation.
2.6 "Change of Control" means the occurrence of any of the following:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of 20% or more of either (1) the then-outstanding shares of common
stock of the Corporation (the "Outstanding Corporation Common Stock") or (2)
the combined voting power of the then-outstanding voting securities of the
Corporation entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that for
purposes of this paragraph (a) the following acquisitions shall not
constitute, or be deemed to cause, a Change of Control: (i) any acquisition
directly from the Corporation, (ii) any acquisition by the Corporation, (iii)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the Corporation
or (iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (1), (2) and (3) of paragraph (c) below; or
(b) individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Corporation's stockholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of the
Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (1) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the then outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be, (2) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Corporation or of such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then-outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (3) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(d) approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.
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2.7 "Change of Control Value" means the greater of (a) the highest Fair
Market Value of a Share during the period of 60 consecutive days which ends on
the date of a Change of Control, or (b) the highest price per Share paid in
the transaction which gives rise to the Change of Control.
2.8 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under
such section, and any comparable provision of any future legislation or
regulation amending, supplementing or superseding such section or regulation.
2.9 "Committee" means the Management Development and Compensation
Committee of the Board, or any other committee appointed by the Board
(pursuant to Section 3.1) to administer the Plan.
2.10 "Corporation" means Transamerica Corporation, a Delaware
corporation, or any successor thereto.
2.11 "Director" means any individual who is a member of the Board.
2.12 "Disability" means a Termination of Employment by reason of the
Executive's becoming permanently and totally disabled. An Executive shall be
deemed to have become permanently and totally disabled for purposes of the
Plan if (and only if) he or she has become permanently and totally disabled
under the long-term disability plan sponsored by his or her employer.
2.13 "Early Retirement" means a Termination of Employment by reason of
the Executive's early retirement at or after his or her "Early Retirement
Date" under the Retirement Plan for Salaried U.S. Employees of Transamerica
Corporation and Affiliates (or any successor thereto).
2.14 "Executive" means an employee of the Corporation or of an
Affiliate who is a member of the SEC and/or the SMC, whether such employee is
a member at the time the Plan is adopted or becomes a member subsequent to the
adoption of the Plan.
2.15 "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option or TLSAR.
2.16 "Fair Market Value" means the last quoted per Share selling price
for Shares on the relevant date, as quoted in the New York Stock Exchange
Composite Transactions Index published in The Wall Street Journal, or if there
were no sales on such date, the last quoted selling price on the nearest day
after the relevant date, as determined by the Committee.
2.17 "Grant Date" means, with respect to an Award, the date that the
Award was granted.
2.18 "Normal Retirement" means a Termination of Employment by reason of
the Executive's retirement at or after his or her "Normal Retirement Date"
under the Retirement Plan for Salaried U.S. Employees of Transamerica
Corporation and Affiliates (or any successor thereto).
2.19 "Option" means an option to purchase Shares which is granted under
Section 5 and which is not intended to be an Incentive Stock Option under
Section 422 of the Code.
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2.20 "Participant" means an Executive who has an outstanding Award.
2.21 "Plan" means the Transamerica Corporation 1995 Performance Stock
Option Plan, as set forth in this instrument and as hereafter amended from
time to time.
2.22 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act.
2.23 "SEC" means the Corporation's Senior Executive Committee (or any
successor thereto).
2.24 "SMC" means the Corporation's Senior Management Council (or any
successor thereto).
2.25 "Section 16 Person" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.
2.26 "Shares" means the shares of common stock of the Corporation.
2.27 "Tandem Limited Stock Appreciation Right" or "TLSAR" means an
Award granted under Section 6 in connection with a related Option, the
exercise of which shall require forfeiture of the related Option or portion
thereof (and when the Option is exercised, the TLSAR shall be similarly
cancelled).
2.28 "Termination of Employment" means a cessation of the employee-
employer relationship between an Executive and the Corporation or an Affiliate
for any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, Disability, Early Retirement, Normal
Retirement, or the disaffiliation of an Affiliate, but excluding any such
termination where there is a simultaneous reemployment by the Corporation or
an Affiliate.
Section 3. Administration
3.1 The Committee. The Plan shall be administered by the Committee.
The Committee shall consist of not less than two Directors. The members of the
Committee shall be appointed from time to time by, and shall serve at the
pleasure of, the Board. The Committee shall be comprised solely of Directors
who both are (a) "disinterested persons" under Rule 16b-3, and (b) "outside
directors" under section 162(m) of the Code.
3.2 Authority of the Committee. It shall be the duty of the Committee
to administer the Plan in accordance with the Plan's provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer
the Plan and to control its operation, including, but not limited to, the
power to (a) determine which Executives shall be granted Awards, (b) prescribe
the terms and conditions of the Awards, (c) interpret the Plan and the Awards,
(d) adopt such procedures and subplans as are necessary or appropriate to
permit participation in the Plan by Executives who are foreign nationals or
employed outside of the United States, (e) adopt rules for the administration,
interpretation and application of the Plan as are consistent therewith, and
(f) interpret, amend or revoke any such rules. Except as provided in Section
4.3, after an Award has been granted, the Committee shall not reduce the
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Exercise Price of the Award (or cancel the Award and grant a substitute Award
having a lower Exercise Price).
3.3 Delegation by the Committee. The Committee, in its sole
discretion and on such terms and conditions as it may provide, may delegate
all or any part of its authority and powers under the Plan to one or more
directors or officers of the Corporation; provided, however, that the
Committee may not delegate its authority and powers (a) with respect to
Section 16 Persons, or (b) in any way which would jeopardize the Plan's
qualification under section 162(m) of the Code or Rule 16b-3.
3.4 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
Section 4. Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in Section
4.3, the total number of Shares available for grant under the Plan shall not
exceed 5,000,000. Shares granted under the Plan may be either authorized but
unissued Shares or treasury Shares.
4.2 Lapsed Awards. If an Award (or portion thereof) is cancelled,
terminates, expires, or lapses for any reason other than failure of an Option
to become exercisable due to the price of the Shares not reaching the Fair
Market Value specified in the Award Agreement for the required time during the
specified period, any Shares subject to such Award again shall be available to
be the subject of an Award. If an Option (or portion thereof) is cancelled,
terminates, expires, or lapses due to failure of the Option to become
exercisable on account of the price of the Shares not reaching the Fair Market
Value specified in the Award Agreement for the required time during the
specified period, any Shares subject to such Option shall not be available to
be the subject of another Award.
4.3 Adjustments in Awards and Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, distribution or
other change in the corporate structure of the Corporation affecting the
Shares, the Committee shall adjust the number and class of securities which
may be delivered under the Plan, the number, class, and price of the
securities subject to outstanding Awards, the prices set forth in Sections
5.4.1 and 5.4.2 (and if applicable, of Options granted pursuant to Section
5.4.6) and the numerical limit of Section 5.1, in such manner as the Committee
(in its sole discretion) shall determine to be appropriate to prevent the
dilution or diminution of Awards. Notwithstanding the preceding sentence, the
number of Shares subject to any Award shall always be a whole number.
Section 5. Options
5.1 Grant of Options. Subject to the terms and provisions of the
Plan, Options may be granted to Executives at any time and from time to time
as determined by the Committee in its sole discretion. The Committee, in its
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sole discretion, shall determine the number of Shares subject to each Option,
provided that during any calendar year, no Participant shall be granted
Options covering more than 1,700,000 Shares.
5.2 Option Agreement. Each Option shall be evidenced by an Award
Agreement. The Award Agreement shall specify the Exercise Price, the
expiration date of the Option, the number of Shares to which the Option
pertains, any conditions to exercise of the Option, and such other terms and
conditions as the Committee, in its sole discretion, shall determine.
5.3 Exercise Price. The Exercise Price for each Option shall be
determined by the Committee in accordance with the provisions of this Section
5.3.
5.3.1 Options Granted to SEC Members. The Exercise Price of Options
that are granted on January 26, 1995, to members of the SEC shall be
determined as follows. (The Fair Market Value of a Share on January 26,1995,
was $50.75 per Share.)
(a) The Exercise Price for one of the Options granted to each such
Executive shall be $60 per Share. The Option shall cover not more than 30% of
the total Shares covered by all Options granted to the Executive on January
26, 1995.
(b) The Exercise Price for one of the Options granted to each such
Executive shall be $82 per Share. The Option shall cover not more than 30% of
the total Shares covered by all Options granted to the Executive on January
26, 1995.
(c) The Exercise Price for one of the Options granted to each such
Executive shall be $100 per Share. The Option shall cover not less than 40% of
the total Shares covered by all Options granted to the Executive on January
26, 1995.
(d) Notwithstanding the preceding, in the case of a member of the SEC
who is expected to be eligible for Normal Retirement prior to January 1, 2002,
(1) one of the Options granted to the Executive shall have an Exercise Price
of $60 per Share and shall cover not more than 30% of the Shares covered by
all Options granted to the Executive on January 26, 1995, and (2) the other
Option granted to the Executive shall have an Exercise Price of $82 per Share
and shall cover the remaining balance of the Shares covered by all Options
granted to the Executive on January 26, 1995.
5.3.2 Options Granted to Other SMC Members. In the case of each
Option that is granted on January 26, 1995, to a member of the SMC (but not of
the SEC), the Exercise Price for 100% of the Shares covered by the Option
shall be $100 per Share. (The Fair Market Value of a Share on January 26,
1995, was $50.75 per Share.)
5.3.3 Options Granted After January 26, 1995. In the case of each
Option that is granted after January 26, 1995, the Exercise Price(s) of the
Option shall be determined by the Committee in its discretion, provided that
any such Exercise Prices shall represent an appropriate premium over the then
Fair Market Value of a Share, as determined by the Committee.
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5.4 Exercisability of Options. Each Option shall become exercisable
in accordance with the provisions of this Section 5.4.
5.4.1 Options Granted to SEC Members. Each Option that is granted on
January 26, 1995, to an Executive who is a member of the SEC shall become
exercisable in accordance with the provisions of this Section 5.4.1, but
subject to the special rules of Sections 5.4.3, 5.4.4, and 5.4.5.
(a) With respect to an Option that has an Exercise Price of $60 per
share, the right to exercise 33-1/3% of the Shares covered by the Option shall
accrue on the third anniversary of the Grant Date, the right to exercise an
additional 33-1/3% of such Shares shall accrue on the fourth anniversary of
the Grant Date, and the right to exercise the remaining Shares shall accrue on
the fifth anniversary of the Grant Date, provided in each case that the
Participant remains an Executive on the applicable anniversary date.
(b) With respect to an Option that has an Exercise Price of $82 per
share, the right to exercise 100% of the Shares covered by the Option shall
accrue on the tenth trading day (occurring within a period of 30 consecutive
trading days) on which the Fair Market Value of a Share is at least $82,
provided that such tenth trading day occurs not later than five years after
the Grant Date.
(c) With respect to an Option that has an Exercise Price of $100 per
share, the right to exercise 100% of the Shares covered by the Option shall
accrue on the tenth trading day (occurring within a period of 30 consecutive
trading days) on which the Fair Market Value of a Share is at least $100,
provided that such tenth trading day occurs not later than seven years after
the Grant Date.
5.4.2 Options Granted to Other SMC Members. Each Option that is
granted on January 26, 1995, to an Executive who is a member of the SMC (but
not of the SEC) shall become exercisable as to 100% of the Shares covered by
the Option on the tenth trading day (occurring within a period of 30
consecutive trading days) on which the Fair Market Value of a Share is at
least $100, provided that such tenth trading day occurs within seven years of
the Grant Date.
5.4.3 Special Rule for Normal Retirement. If a Participant incurs a
Termination of Employment on account of Normal Retirement, the following
special rules shall apply (subject to Section 5.5). If within six months after
the Participant's Normal Retirement, the right to exercise any particular
Shares would have accrued (had the Participant not incurred a Termination of
Employment), by virtue of additional service, changes in the Fair Market Value
of the Shares or the occurrence of a Change of Control the right to exercise
such Shares shall accrue on the date that such right otherwise would have
accrued. If more than six months following the Participant's Normal
Retirement, the right to exercise any particular Shares would have accrued
(had the Participant not incurred a Termination of Employment), by virtue of
additional service, changes in the Fair Market Value of the Shares or the
occurrence of Change of Control the right to exercise a portion of such Shares
shall accrue on the date that such right otherwise would have accrued. The
Committee shall determine such portion on a pro-rata basis, based on the time
elapsed from the Grant Date to the date of Normal Retirement and the vesting
date.
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5.4.4 Special Rule for Disability or Death. If a Participant incurs a
Termination of Employment on account of Disability or death, the following
special rules shall apply (subject to Section 5.5). If the date of the
Participant's Disability or death is within six months of the date when the
right to exercise any Shares would have accrued (had the Participant not
incurred a Termination of Employment), by virtue of additional service,
changes in the Fair Market Value of the Shares or the occurrence of a Change
of Control the right to exercise such Shares shall accrue on the date that
such right otherwise would have accrued. If the date of the Participant's
Disability or death is more than six months prior to the date when the right
to exercise any particular Shares would have accrued (had the Participant not
incurred a Termination of Employment), by virtue of additional service,
changes in the Fair Market Value of the Shares or the occurrence of a Change
of Control the right to exercise a portion of such Shares shall accrue on the
date that such right otherwise would have accrued. The Committee shall
determine such portion on a pro-rata basis, based on the time elapsed from the
Grant Date to the date of Disability or death and the vesting date.
5.4.5 Special Rule for Change of Control. With respect to each Option
with an Exercise Price of $60 per share, if a Change of Control occurs prior
to the Participant's Termination of Employment, the right to exercise 100% of
the Shares subject to such Option shall accrue on the date that the Change of
Control occurs.
5.4.6 Options Granted After January 26, 1995. The periods of
exercisability of each Option that is granted after January 26, 1995, shall be
determined by the Committee in its sole discretion.
5.5 Expiration of Options. The expiration date for each Option shall
be determined in accordance with the provisions of this Section 5.5.
5.5.1 Options Granted to SEC and SMC Members. Each Option (or portion
thereof) that is granted on January 26, 1995, to a Participant who is a member
of the SEC or SMC shall terminate upon the first to occur of the following
events:
(a) The expiration of ten years from the Grant Date (12 years in the
case of Options with an Exercise Price of $100 per share); or
(b) The expiration of three months from the date of the Optionee's
Termination of Employment for a reason other than Early Retirement, Normal
Retirement, Disability or death; or
(c) The expiration of three years from the date of the Optionee's
Termination of Employment by reason of Disability; or
(d) The expiration of five years from the date of the Optionee's
Termination of Employment by reason of Early or Normal Retirement; or
(e) In the case of an Option referred to in Sections 5.4.1(b), 5.4.1(c)
or 5.4.2 (or, if applicable, 5.4.6) which has not been exercised, the date on
which the Option no longer may become exercisable (due to the failure of the
Shares to reach the specified Fair Market Value for the required time during
the specified period).
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In addition, an Option (or applicable portion thereof) with respect to
which a related TLSAR has been granted shall terminate upon exercise of the
related TLSAR.
5.5.2 Special Rule for Death. Notwithstanding any contrary provision
of Section 5.5.1, if the Optionee dies prior to the expiration of his or her
Option in accordance with Section 5.5.1, the Option shall terminate three
years after his or her death.
5.5.3 Options Granted After January 26, 1995. The provisions for
expiration of each Option that is granted after January 26, 1995, shall be
determined by the Committee in its sole discretion.
5.6 Payment. Options shall be exercised by the Participant's delivery
of a written notice of exercise to the Secretary of the Corporation (or his or
her designee), setting forth the number of Shares with respect to which the
Option is to be exercised, and accompanied by full payment for the Shares.
Upon the exercise of any Option, the Exercise Price shall be payable to the
Corporation in full in cash. The Committee, in its sole discretion, also may
permit exercise (a) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan. As soon as practicable after
receipt of a written notification of exercise and full payment for the Shares
purchased, the Corporation shall deliver to the Participant (or the
Participant's designated broker), Share certificates (which may be in book
entry form) representing such Shares.
5.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as needed to comply with applicable federal securities laws, the requirements
of any national securities exchange or system upon which Shares are then
listed or traded, or any blue sky or state securities laws.
Section 6. Tandem Limited Stock Appreciation Rights
6.1 Grant of TLSARs. Subject to the terms and provisions of the Plan,
TLSARs may be granted to Executives at any time and from time to time as
determined by the Committee in its sole discretion, provided that such grants
shall be only in conjunction with all or any part of any Option, and may be
granted either at or after the Grant Date of the Option. A TLSAR (or
applicable portion thereof) granted with respect to a given Option shall
terminate upon the termination or exercise of the related Option. The
Committee, in its sole discretion, shall determine the number of Shares
subject to each TLSAR, provided that during any calendar year, no Participant
shall be granted TLSARs covering more than 235,000 Shares.
6.2 TLSAR Agreement. Each TLSAR shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
TLSAR, the number of Shares to which the TLSAR pertains, any conditions to
exercise of the TLSAR, and such other terms and conditions as the Committee,
in its sole discretion, shall determine.
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6.3 Exercise Price. The Committee, subject to the provisions of the
Plan, shall have sole discretion to determine the Exercise Price of each
TLSAR, provided that such Exercise Price shall be not less than 100% of the
Fair Market Value of a Share on the Grant Date.
6.4 Exercisability. Each TLSAR which has not otherwise expired shall
become exercisable immediately upon the occurrence of a Change of Control,
provided that in no event may a TLSAR granted to a Section 16 Person become
exercisable until at least six months after the Grant Date (or such shorter
period as may be permissible while maintaining compliance with Rule 16b-3).
6.5 Expiration of TLSARs. The Committee, in its sole discretion,
shall determine when each TLSAR shall expire, provided that (a) no TLSAR may
have a term longer than would be permitted by applying the rules of Section
5.5 (regarding the expiration of Options), and (b) each TLSAR shall terminate
no later than the last day of the period of 60 consecutive days which begins
on the date of the Change of Control.
6.6 Payment of TLSAR Amount. Upon exercise of a TLSAR, the
Participant shall be entitled to receive payment from the Corporation in an
amount determined by multiplying:
(a) The amount by which the Change of Control Value of a Share on the
date of exercise exceeds the Exercise Price; times
(b) The number of Shares with respect to which the TLSAR is exercised.
Each TLSAR shall be paid in cash, provided that if the Committee
determines that any such payment would cause a Change of Control transaction
to be ineligible for pooling of interests accounting under APB No. 16, which
transaction (but for such payment) otherwise would have been eligible for such
accounting treatment, the Committee, in its sole discretion, may determine
that any TLSAR shall be paid in Shares having a Fair Market Value equal to the
cash amount foregone.
Section 7. Miscellaneous
7.1 No Effect on Employment. Nothing in the Plan shall interfere with
or limit in any way the right of the Corporation to terminate any
Participant's employment at any time, with or without cause. For purposes of
the Plan, transfer of employment of a Participant between the Corporation and
any one of its Affiliates (or between Affiliates) shall not be deemed a
Termination of Employment.
7.2 Participation. No Executive shall have the right to be selected
to receive an Option, or, having been so selected, to be selected to receive a
future Option.
7.3 Indemnification. Each person who is or shall have been a member
of the Committee, or of the Board, shall be indemnified and held harmless by
the Corporation against and from (a) any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection
with or resulting from any claim, action, suit, or proceeding to which he or
she may be a party or in which he or she may be involved by reason of any
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action taken or failure to act under the Plan or any Award Agreement, and (b)
from any and all amounts paid by him or her in settlement thereof, with the
Corporation's approval, or paid by him or her in satisfaction of any judgment
in any such claim, action, suit, or proceeding against him or her, provided he
or she shall give the Corporation an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Corporation's Certificate of Incorporation or By-laws, by
contract, as a matter of law, or otherwise, or under any power that the
Corporation may have to indemnify them or hold them harmless.
7.4 Successors. All obligations of the Corporation under the Plan,
with respect to Awards granted hereunder, shall be binding on any successor to
the Corporation, whether the existence of such successor is the result of a
direct or indirect purchase, merger, consolidation, or other acquisition, of
all or substantially all of the business or assets of the Corporation.
7.5 Beneficiary Designations. If permitted by the Committee, a
Participant may name a beneficiary or beneficiaries to whom any vested but
unpaid Award shall be transferred in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant
and shall be effective only if given in a form and manner acceptable to the
Committee. In the absence of any such designation, and subject to the terms of
the Plan and of the applicable Award Agreement, any unexercised vested Option
may be exercised by the administrator or executor of the Participant's estate.
This Section 7.5 shall not be effective until specifically authorized by the
Committee.
7.6 Domestic Relations Orders. If permitted by the Committee, and
under such procedures as the Committee may adopt from time to time, an Award
may be transferred to a Participant's spouse, former spouse or dependent
pursuant to a court-approved domestic relations order which relates to the
provision of child support, alimony payments or marital property rights. This
Section 7.6 shall not be effective until specifically authorized by the
Committee.
7.7 Bona Fide Gifts. If permitted by the Committee, and under such
procedures as the Committee may adopt from time to time, an Award may be
transferred, by bona fide gift and not for any consideration, to a member of
the Participant's immediate family or tax-qualified, not-for-profit
organization. This Section 7.7 shall not be effective until specifically
authorized by the Committee.
7.8 Nontransferability of Awards. No Award granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than (a) by will, (b) by the laws of descent and
distribution, or (c) to the limited extent provided in Sections 7.5, 7.6, and
7.7. Except as provided in Sections 7.6 and 7.7, all rights with respect to an
Award granted to a Participant shall be available during his or her lifetime
only to the Participant.
7.9 No Rights as Stockholder. No Participant (nor any beneficiary)
shall have any of the rights or privileges of a stockholder of the Corporation
with respect to any Shares issuable pursuant to an Award (or exercise
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thereof), unless and until certificates representing such Shares shall have
been issued, recorded on the records of the Corporation or its transfer agents
or registrars, and delivered to the Participant (or beneficiary).
Section 8. Amendment, Termination, and Duration
8.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. However, (a) if and to the extent required to maintain the
Plan's qualification under Rule 16b-3 and/or Section 162(m) of the Code, any
such amendment shall be subject to stockholder approval, and (b) the amendment
or termination of the Plan shall not, without the consent of the Participant,
alter or impair any rights or obligations under any Award theretofore granted
to any Participant.
8.2 Duration of the Plan. The Plan shall commence on the date
specified herein, and subject to Section 8.1 (regarding the Board's right to
amend or terminate the Plan), shall remain in effect thereafter.
Section 9. Tax Withholding
9.1 Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Corporation shall have
the power and the right to deduct or withhold, or require a Participant to
remit to the Corporation, an amount sufficient to satisfy federal, state, and
local taxes (including the Participant's FICA obligation) required to be
withheld with respect to such Award (or exercise thereof).
9.2 Withholding Arrangements. The Committee, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may
permit a Participant to satisfy such tax withholding obligation, in whole or
in part by (a) electing to have the Corporation withhold otherwise deliverable
Shares, or (b) delivering to the Corporation already-owned Shares having a
Fair Market Value equal to the amount required to be withheld. The amount of
the withholding requirement shall be deemed to include any amount which the
Committee agrees may be withheld at the time the election is made, not to
exceed the amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with respect to the
Award on the date that the amount of tax to be withheld is to be determined.
The Fair Market Value of the Shares to be withheld or delivered shall be
determined as of the date that the taxes are required to be withheld.
Section 10. Legal Construction
10.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
10.2 Severability. In the event any provision of the Plan shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
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10.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
10.4 Securities Law Compliance. With respect to Section 16 Persons
and unless otherwise specifically determined by the Committee, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3. To the extent any provision of the Plan, Award Agreement or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
10.5 Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of
California.
10.6 Captions. Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.
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