EXHIBIT 10.1
AMGEN INC.
AMENDED AND RESTATED 1991 EQUITY INCENTIVE PLAN
1. PURPOSE.
(a) The purpose of the Amended and Restated 1991 Equity
Incentive Plan (the "Plan") is to provide a means by which employees
or directors of and consultants to Amgen Inc., a Delaware corporation
(the "Company"), and its Affiliates, as defined in paragraph 1(b),
directly, or indirectly through Trusts, may be given an opportunity
to benefit from increases in value of the stock of the Company
through the granting of (i) incentive stock options, (ii)
nonqualified stock options, (iii) stock bonuses, and (iv) rights to
purchase restricted stock, all as defined below.
(b) The word "Affiliate" as used in the Plan means any
parent corporation or subsidiary corporation of the Company, as those
terms are defined in Sections 424(e) and (f), respectively, of the
Internal Revenue Code of 1986, as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now employed by or serving as directors or
consultants to the Company, to secure and retain the services of
persons capable of filling such positions, and to provide incentives
for such persons to exert maximum efforts for the success of the
Company.
(d) The Company intends that the rights issued under the
Plan ("Stock Awards") shall, in the discretion of the Board of
Directors of the Company (the "Board") or any committee to which
responsibility for administration of the Plan has been delegated
pursuant to paragraph 2(c), be either (i) stock options granted
pursuant to Sections 5 or 6 hereof, including incentive stock options
as that term is used in Section 422 of the Code ("Incentive Stock
Options"), or options which do not qualify as Incentive Stock Options
("Nonqualified Stock Options") (together hereinafter referred to as
"Options"), or (ii) stock bonuses or rights to purchase restricted
stock granted pursuant to Section 7 hereof.
(e) The word "Trust" as used in the Plan shall mean a
trust created for the benefit of the employee, director or
consultant, his or her spouse, or members of their immediate family.
The word optionee shall mean the person to whom the option is granted
or the employee, director or consultant for whose benefit the option
is granted to a Trust, as the context shall require.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and
until the Board delegates administration to a committee, as provided
in paragraph 2(c).
(b) The Board shall have the power, subject to, and within
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the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the
persons eligible under the Plan shall be granted Stock Awards; when
and how Stock Awards shall be granted; whether a Stock Award will be
an Incentive Stock Option, a Nonqualified Stock Option, a stock
bonus, a right to purchase restricted stock, or a combination of the
foregoing; the provisions of each Stock Award granted (which need not
be identical), including the time or times when a person shall be
permitted to purchase or receive stock pursuant to a Stock Award; and
the number of shares with respect to which Stock Awards shall be
granted to each such person.
(2) To construe and interpret the Plan and Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in the
Plan or in any Stock Award, in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.
(3) To amend the Plan as provided in Section 15.
(4) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the
best interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members of the Board
(the "Committee"). One or more of these members may be non-employee
directors and outside directors, if required and as defined by the
provisions of paragraphs 2(d) and 2(e). If administration is
delegated to a Committee, the Committee shall have, in connection
with the administration of the Plan, the powers theretofore possessed
by the Board (except amendment of Section 6 or the options granted
thereunder shall only be by action taken by the Board or a committee
of one or more members of the Board to which such authority has been
specifically delegated by the Board), subject, however, to such
resolutions, not inconsistent with the provisions of the Plan, as may
be adopted from time to time by the Board. Notwithstanding anything
else in this paragraph 2(c) to the contrary, at any time the Board or
the Committee may delegate to a committee of one or more members of
the Board the authority to grant or amend options to all employees,
directors or consultants or any portion or class thereof.
(d) The term "non-employee director" shall mean a member
of the Board who (i) is not currently an officer of the Company or a
parent or subsidiary of the Company (as defined in Rule 16a-1(f)
promulgated by the Securities and Exchange Commission under Section
16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) or an employee of the Company or a parent or subsidiary of the
Company; (ii) does not receive compensation from the Company or a
parent or subsidiary of the Company for services rendered in any
capacity other than as a member of the Board (including a consultant)
in an amount required to be disclosed to the Company's stockholders
under Rule 404 of Regulation S-K promulgated by the Securities and
Exchange Commission ("Rule 404"); (iii) does not possess an interest
in any other transaction required to be disclosed under Rule 404; or
(iv) is not engaged in a business relationship required to be
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disclosed under Rule 404, as all of these provisions are interpreted
by the Securities and Exchange Commission under Rule 16b-3
promulgated under the Exchange Act.
(e) The term "outside director," as used in this Plan,
shall mean an administrator of the Plan, whether a member of the
Board or of any Committee to which responsibility for administration
of the Plan has been delegated pursuant to paragraph 2(c), who is
considered to be an "outside director" in accordance with the rules,
regulations or interpretations of Section 162(m) of the Code.
(f) Any requirement that an administrator of the Plan be a
"non-employee director" or "outside director" shall not apply if the
Board or the Committee expressly declares that such requirement shall
not apply.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of Section 12 relating to
adjustments upon changes in stock, the stock that may be issued
pursuant to Stock Awards granted under the Plan shall not exceed in
the aggregate Forty Eight Million (48,000,000) shares of the
Company's $.0001 par value common stock (the "Common Stock"). If any
Stock Award granted under the Plan shall for any reason expire or
otherwise terminate without having been exercised in full, the Common
Stock not purchased under such Stock Award shall again become
available for the Plan. Shares repurchased by the Company pursuant
to any repurchase rights reserved by the Company pursuant to the Plan
shall not be available for subsequent issuance under the Plan.
(b) The Common Stock subject to the Plan may be unissued
shares or reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an
eligible person under the Plan only if the aggregate fair market
value (determined at the time the Incentive Stock Option is granted)
of the Common Stock with respect to which incentive stock options (as
defined by the Code) are exercisable for the first time by such
optionee during any calendar year under all such plans of the Company
and its Affiliates does not exceed one hundred thousand dollars
($100,000). If it is determined that an entire Option or any portion
thereof does not qualify for treatment as an Incentive Stock Option
by reason of exceeding such maximum, such Option or the applicable
portion shall be considered a Nonqualified Stock Option.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to
employees (including officers) of the Company or its Affiliates. A
director of the Company shall not be eligible to receive Incentive
Stock Options unless such director is also an employee of the Company
or any Affiliate. Stock Awards other than Incentive Stock Options
may be granted to employees (including officers) or directors of or
consultants to the Company or any Affiliate or to Trusts of any such
employee, director or consultant.
(b) A director shall in no event be eligible for the
benefits of the Plan (other than from a Director NQSO under Section 6
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of the Plan) unless and until such director is expressly declared
eligible to participate in the Plan by action of the Board or the
Committee, and only if, at any time discretion is exercised by the
Board or the Committee in the selection of a director as a person to
whom Stock Awards may be granted, or in the determination of the
number of shares which may be covered by Stock Awards granted to a
director, the Plan complies with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in effect.
The Board shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Exchange Act, as from time to time in effect.
Notwithstanding the foregoing, the restrictions set forth in
this paragraph 4(b) shall not apply if the Board or Committee
expressly declares that such restrictions shall not apply.
(c) No person shall be eligible for the grant of an
Incentive Stock Option under the Plan if, at the time of grant, such
person owns (or is deemed to own pursuant to Section 424(d) of the
Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of
any of its Affiliates unless the exercise price of such Incentive
Stock Option is at least one hundred and ten percent (110%) of the
fair market value of the Common Stock at the date of grant and the
Incentive Stock Option is not exercisable after the expiration of
five (5) years from the date of grant.
(d) Stock Awards shall be limited to a maximum of 500,000
shares of Common Stock per person per calendar year, which reflects
the Company's two for one stock split in August 1995.
5. TERMS OF DISCRETIONARY STOCK OPTIONS.
An option granted pursuant to this Section 5 (a
"Discretionary Stock Option") shall be in such form and shall contain
such terms and conditions as the Board or the Committee shall deem
appropriate. The provisions of separate Options need not be
identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) No Option shall be exercisable after the expiration of
ten (10) years from the date it was granted.
(b) The exercise price of each Incentive Stock Option and
each Nonqualified Stock Option shall be not less than one hundred
percent (100%) of the fair market value of the Common Stock subject
to the Option on the date the Option is granted.
(c) The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either: (i) in cash at the time the Option
is exercised; or (ii) at the discretion of the Board or the
Committee, either at the time of grant or exercise of the Option (A)
by delivery to the Company of shares of Common Stock that have been
held for the period required to avoid a charge to the Company's
reported earnings and valued at the fair market value on the date of
exercise, (B) according to a deferred payment or other arrangement
with the person to whom the Option is granted or to whom the Option
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is transferred pursuant to paragraph 5(d), or (C) in any other form
of legal consideration that may be acceptable to the Board or the
Committee in their discretion; including but not limited to payment
of the purchase price pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before
Common Stock is issued or the receipt of irrevocable instruction to
pay the aggregate exercise price of the Company from the sales
proceeds before Common Stock is issued.
In the case of any deferred payment arrangement, interest shall
be payable at least annually and shall be charged at not less than
the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Code, of any amounts
other than amounts stated to be interest under the deferred payment
arrangement.
(d) An Option granted to a natural person shall be
exercisable during the lifetime of such person only by such person,
provided that such person during such person's lifetime may designate
a Trust to be such person's beneficiary with respect to any Incentive
Stock Options granted after February 25, 1992 and with respect to any
Nonqualified Stock Options, and such beneficiary shall, after the
death of the person to whom the Option was granted, have all the
rights that such person has while living, including the right to
exercise the Option. In the absence of such designation, after the
death of the person to whom the Option is granted, the Option shall
be exercisable by the person or persons to whom the optionee's rights
under such Option pass by will or by the laws of descent and
distribution.
(e) The total number of shares of Common Stock subject to
an Option may, but need not, be allotted in periodic installments
(which may, but need not, be equal). From time to time during each
of such installment periods, the Option may become exercisable
("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which
the Option was not fully exercised. During the remainder of the term
of the Option (if its term extends beyond the end of the installment
periods), the Option may be exercised from time to time with respect
to any shares then remaining subject to the Option. The provisions
of this paragraph 5(e) are subject to any Option provisions governing
the minimum number of shares as to which an Option may be exercised.
(f) The Company may require any optionee, or any person to
whom an Option is transferred under paragraph 5(d), as a condition of
exercising any such Option: (i) to give written assurances
satisfactory to the Company as to such person's knowledge and
experience in financial and business matters and/or to employ a
purchaser representative who has such knowledge and experience in
financial and business matters, and that such person is capable of
evaluating, alone or together with the purchaser representative, the
merits and risks of exercising the Option; and (ii) to give written
assurances satisfactory to the Company stating that such person is
acquiring the Common Stock subject to the Option for such person's
own account and not with any present intention of selling or
otherwise distributing the Common Stock. These requirements, and any
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assurances given pursuant to such requirements, shall be inoperative
if: (x) the issuance of the shares upon the exercise of the Option
has been registered under a then currently effective registration
statement under the Securities Act of 1933, as amended (the
"Securities Act"); or (y) as to any particular requirement, a
determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then
applicable securities law.
(g) An Option shall terminate three (3) months after
termination of the optionee's employment or relationship as a
consultant or director with the Company or an Affiliate, unless: (i)
such termination is due to the optionee's permanent and total
disability, within the meaning of Section 422(c)(6) of the Code, in
which case the Option may, but need not, provide that it may be
exercised at any time within one (1) year following such termination
of employment or relationship as a consultant or director; (ii) the
optionee dies while in the employ of or while serving as a consultant
or director to the Company or an Affiliate, or within not more than
three (3) months after termination of such employment or relationship
as a consultant or director, in which case the Option may, but need
not, provide that it may be exercised at any time within eighteen
(18) months following the death of the optionee by the person or
persons to whom the optionee's rights under such Option pass by will
or by the laws of descent and distribution; or (iii) the Option by
its term specifies either (A) that it shall terminate sooner than
three (3) months after termination of the optionee's employment or
relationship as a consultant or director with the Company or an
Affiliate; or (B) that it may be exercised more than three (3) months
after termination of the optionee's employment or relationship as a
consultant or director with the Company or an Affiliate. This
paragraph 5(g) shall not be construed to extend the term of any
Option or to permit anyone to exercise the Option after expiration of
its term, nor shall it be construed to increase the number of shares
as to which any Option is exercisable from the amount exercisable on
the date of termination of the optionee's employment or relationship
as a consultant or director.
(h) The Option may, but need not, include a provision
whereby the optionee may elect at any time during the term of the
optionee's employment or relationship as a consultant or director
with the Company or any Affiliate to exercise the Option as to any
part or all of the shares subject to the Option prior to the stated
vesting dates of the Option. Any shares so purchased from any
unvested installment or Option may be subject to a repurchase right
in favor of the Company or to any other restriction the Board or the
Committee determines to be appropriate.
(i) To the extent provided by the terms of an Option, each
optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (i) tendering a
cash payment; (ii) authorizing the Company to withhold from the
shares of the Common Stock otherwise issuable to the optionee as a
result of the exercise of the Option a number of shares having a fair
market value less than or equal to the amount of the withholding tax
obligation; or (iii) delivering to the Company owned and unencumbered
shares of the Common Stock having a fair market value less than or
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equal to the amount of the withholding tax obligation.
(j) Without in any way limiting the authority of the Board
or Committee to make or not to make grants of Discretionary Stock
Options under this Section 5, the Board or Committee shall have the
authority (but not an obligation) to include as part of any Option
agreement a provision entitling the optionee to a further Option (a
"Re-Load Option") in the event the optionee exercises the Option
evidenced by the Option agreement, in whole or in part, by
surrendering other shares of Common Stock in accordance with this
Plan and the terms and conditions of the Option agreement. Any such
Re-Load Option (i) shall be for a number of shares equal to the
number of shares surrendered as part or all of the exercise price of
such Option; (ii) shall have an expiration date which is the same as
the expiration date of the Option the exercise of which gave rise to
such Re-Load Option; and (iii) shall have an exercise price which is
equal to one hundred percent (100%) of the fair market value of the
Common Stock subject to the Re-Load Option on the date of exercise of
the original Option or, in the case of a Re-Load Option which is an
Incentive Stock Option and which is granted to a 10% stockholder (as
defined in paragraph 4(c)), shall have an exercise price which is
equal to one hundred and ten percent (110%) of the fair market value
of the Common Stock subject to the Re-Load Option on the date of
exercise of the original Option.
Any such Re-Load Option may be an Incentive Stock
Option or a Nonqualified Stock Option, as the Board or Committee may
designate at the time of the grant of the original Option, provided,
however, that the designation of any Re-Load Option as an Incentive
Stock Option shall be subject to the one hundred thousand dollars
($100,000) annual limitation on exercisability of Incentive Stock
Options described in paragraph 3(c) of the Plan and in Section 422(d)
of the Code. There shall be no Re-Load Option on a Re-Load Option.
Any such Re-Load Option shall be subject to the availability of
sufficient shares under paragraph 3(a) and shall be subject to such
other terms and conditions as the Board or Committee may determine.
6. TERMS OF NON-DISCRETIONARY OPTIONS.
(a) On January 27 of each year commencing January 27,
1998, each person who is at that time an Eligible Director of the
Company, (as defined in paragraph 6(k)), shall automatically be
granted under the Plan, without further action by the Company, the
Board, or the Company's stockholders, a Nonqualified Stock Option (a
"Director NQSO") to purchase four thousand (4,000) shares of Common
Stock on the terms and conditions set forth herein. An Eligible
Director may designate that such Director NQSO be granted in the name
of a Trust instead of in the name of such Eligible Director. The
number of shares to be granted hereunder shall not be adjusted as
provided for in Section 12. The Director NQSO shall be on the terms
and conditions set forth herein and should the date of grant set
forth above be a Saturday, Sunday or legal holiday, such grant shall
be made on the next business day.
(b) Each person who, after January 27 of any year
commencing January 27, 1998 and prior to November 1 of any year,
becomes an Eligible Director, shall, upon the date such person
becomes an Eligible Director, automatically be granted under the
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Plan, without further action by the Company, the Board, or the
Company's stockholders, a Director NQSO to purchase fifteen thousand
(15,000) shares of Common Stock on the terms and conditions set forth
herein. An Eligible Director may designate that such Director NQSO
be granted in the name of a Trust instead of in the name of such
Eligible Director. The number of shares to be granted under this
Section 6 shall not be adjusted as provided for in Section 12. The
Director NQSO shall be on the terms and conditions set forth herein
and should the date of grant set forth above be a Saturday, Sunday or
legal holiday, such grant shall be made on the next business day.
(c) Each Director NQSO granted pursuant to this Section 6
(or any Director Re-Load Option granted pursuant to paragraph 6(j))
shall be in such form and shall contain such terms and conditions as
the Board or the Committee shall deem appropriate. The provisions of
separate Director NQSO's need not be identical, but each Director
NQSO shall include (through incorporation of provisions hereof by
reference in the Director NQSO or otherwise) the substance of each of
the following provisions as set forth in paragraphs 6(d) through
6(j), inclusive.
(d) The term of each Director NQSO shall be ten (10) years
from the date it was granted.
(e) The exercise price of each Director NQSO shall be one
hundred percent (100%) of the fair market value of the Common Stock
subject to such Director NQSO on the date such Director NQSO is
granted.
(f) The purchase price of Common Stock acquired pursuant
to a Director NQSO shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash at the time
the Director NQSO is exercised; (ii) by delivery to the Company of
shares of Common Stock that have been held for the period required to
avoid a charge to the Company's reported earnings and valued at their
fair market value on the date of exercise; or (iii) pursuant to a
program developed under Regulation T as promulgated by the Federal
Reserve Board which results in the receipt of cash (or a check) by
the Company before Common Stock is issued or the receipt of
irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds before Common Stock is issued.
(g) A Director NQSO shall be exercisable during the
lifetime of the Eligible Director with respect to whom it was granted
only by the person to whom it was granted (whether the Eligible
Director or a Trust), provided that such person during the Eligible
Director's lifetime may designate a Trust to be a beneficiary with
respect to the Director NQSO, and such beneficiary shall, after the
death of the Eligible Director to whom the Director NQSO was granted,
have all of the rights designated for such beneficiary. In the
absence of such designation, after the death of the Eligible Director
with respect to whom the Director NQSO was granted, if such Director
NQSO was granted to the Eligible Director, the Director NQSO shall be
exercisable by the person or persons to whom the optionee's rights
under such option pass by will or by the laws of descent and
distribution.
(h) A Director NQSO shall not vest with respect to an
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Eligible Director, or the affiliate of such Eligible Director, as the
case may be, (i) unless the Eligible Director, has, at the date of
grant, provided three (3) years of prior continuous service as an
Eligible Director, or (ii) until the date upon which such Eligible
Director has provided one year of continuous service as an Eligible
Director following the date of grant of such Director NQSO, whereupon
such Director NQSO shall become fully vested and exercisable in
accordance with its terms.
(i) The Company may require any optionee under this
Section 6, or any person to whom a Director NQSO is transferred under
paragraph 6(g), as a condition of exercising any such option: (i) to
give written assurances satisfactory to the Company as to such
person's knowledge and experience in financial and business matters
and/or to employ a purchaser representative who has such knowledge
and experience in financial and business matters, and that such
person is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Director NQSO;
and (ii) to give written assurances satisfactory to the Company
stating that such person is acquiring the Common Stock subject to the
Director NQSO for such person's own account and not with any present
intention of selling or otherwise distributing the stock. These
requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the
exercise of the Director NQSO has been registered under a then
currently effective registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), or (ii), as to any
particular requirement, a determination is made by counsel for the
Company that such requirement need not be met in the circumstances
under the then applicable securities laws.
(j) Subject to the last sentence of this paragraph 6(j),
each Director NQSO shall include a provision entitling the optionee
to a further Nonqualified Stock Option (a "Director Re-Load Option")
in the event the optionee exercises the Director NQSO evidenced by
the Director NQSO grant, in whole or in part, by surrendering other
shares of Common Stock in accordance with the Plan and the terms of
the Director NQSO grant. Any such Director Re-Load Option (i) shall
be for a number of shares equal to the number of shares surrendered
as part or all of the exercise price of the original Director NQSO;
(ii) shall have an expiration date which is the same as the
expiration date of the original Director NQSO; and (iii) shall have
an exercise price which is equal to one hundred percent (100%) of the
fair market value of the Common Stock subject to the Director Re-Load
Option on the date of exercise of the original Director NQSO. Any
such Director Re-Load Option shall be subject to the availability of
sufficient shares under paragraph 3(a). There shall be no Director
Re-Load Option on a Director Re-Load Option.
(k) For purposes of this Section 6, the term "Eligible
Director" shall mean a member of the Board who is not an employee of
the Company or any Affiliate, and the term "affiliate" shall mean a
person that directly or indirectly controls, is controlled by, or is
under common control with, the Eligible Director.
7. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
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Each stock bonus or restricted stock purchase agreement
shall be in such form and shall contain such terms and conditions as
the Board or the Committee shall deem appropriate. The terms and
conditions of stock bonus or restricted stock purchase agreements may
change from time to time, and the terms and conditions of separate
agreements need not be identical, but each stock bonus or restricted
stock purchase agreement shall include (through incorporation of
provisions hereof by reference in the agreement or otherwise) the
substance of each of the following provisions as appropriate:
(a) The purchase price under each stock purchase agreement
shall be such amount as the Board or Committee shall determine and
designate in such agreement. Notwithstanding the foregoing, the
Board or the Committee may determine that eligible participants in
the Plan may be awarded stock pursuant to a stock bonus agreement in
consideration for past services actually rendered to the Company or
for its benefit.
(b) No rights under a stock bonus or restricted stock
purchase agreement shall be assignable by any participant under the
Plan, either voluntarily or by operation of law, except where such
assignment is required by law or expressly authorized by the terms of
the applicable stock bonus or restricted stock purchase agreement.
(c) The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the
time of purchase; (ii) at the discretion of the Board or the
Committee, according to a deferred payment or other arrangement with
the person to whom the Common Stock is sold; or (iii) in any other
form of legal consideration that may be acceptable to the Board or
the Committee in their discretion; including but not limited to
payment of the purchase price pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which
results in the receipt of cash (or a check) by the Company before
Common Stock is issued or the receipt of irrevocable instruction to
pay the aggregate exercise price of the Company from the sales
proceeds before Common Stock is issued. Notwithstanding the
foregoing, the Board or the Committee to which administration of the
Plan has been delegated may award Common Stock pursuant to a stock
bonus agreement in consideration for past services actually rendered
to the Company or for its benefit.
(d) Shares of Common Stock sold or awarded under the Plan
may, but need not, be subject to a repurchase option in favor of the
Company in accordance with a vesting schedule to be determined by the
Board or the Committee.
(e) In the event a person ceases to be an employee of or
ceases to serve as a director or consultant to the Company or an
Affiliate, the Company may repurchase or otherwise reacquire any or
all of the shares of Common Stock held by that person which have not
vested as of the date of termination under the terms of the stock
bonus or restricted stock purchase agreement between the Company and
such person.
8. CANCELLATION AND RE-GRANT OF OPTIONS.
The Board or the Committee shall have the authority to
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effect, at any time and from time to time, with the consent of the
affected holders of Options, (i) the repricing of any outstanding
Options under the Plan and/or (ii) the cancellation of any
outstanding Options under the Plan and the grant in substitution
therefor of new Options under the Plan covering the same or different
numbers of shares of Common Stock, but having an exercise price per
share not less than one hundred percent (100%) of the fair market
value per share of Common Stock on the new grant date or, in the case
of a 10% stockholder (as defined in paragraph 4(c)), not less than
one hundred and ten percent (110%) of the fair market value per share
of Common Stock on the new grant date.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards granted under the
Plan, the Company shall keep available at all times the number of
shares of Common Stock required to satisfy such Stock Awards up to
the number of shares of Common Stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority
as may be required to issue and sell shares of Common Stock under the
Stock Awards granted under the Plan; provided, however, that this
undertaking shall not require the Company to register under the
Securities Act either the Plan, any Stock Award granted under the
Plan or any Common Stock issued or issuable pursuant to any such
Stock Award. If, after reasonable efforts, the Company is unable to
obtain from any such regulatory commission or agency the authority
that counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common
Stock upon exercise of such Stock Awards unless and until such
authority is obtained.
10. USE OF PROCEEDS FROM COMMON STOCK.
Proceeds from the sale of Common Stock pursuant to Stock
Awards granted under the Plan shall constitute general funds of the
Company.
11. MISCELLANEOUS.
(a) The Board or Committee shall have the power to
accelerate the time during which a Stock Award may be exercised or
the time during which a Stock Award or any part thereof will vest,
notwithstanding the provisions in the Stock Award stating the time
during which it may be exercised or the time during which it will
vest. Each Discretionary Stock Option providing for vesting pursuant
to paragraph 5(e) shall also provide that if the employee's
employment or a director's or consultant's affiliation with the
Company is terminated by reason of death or disability (within the
meaning of Title II or XVI of the Social Security Act and as
determined by the Social Security Administration), the vesting
schedule of Discretionary Stock Options granted to such employee,
director or consultant or to the Trusts of such employee, director or
consultant shall be accelerated by twelve months for each full year
the employee has been employed by or the director or consultant has
been affiliated with the Company. Discretionary Stock Options
11
granted under the Plan that are outstanding on February 25, 1992,
shall be amended to include the accelerated vesting upon death
provided for in the preceding sentence of this paragraph 11(a) and
Discretionary Stock Options granted under the Plan that are
outstanding on June 18, 1996, shall be amended to include the
accelerated vesting upon disability provided for in the preceding
sentence of this paragraph 11(a).
(b) Neither an optionee nor any person to whom an Option
is transferred under the provisions of the Plan shall be deemed to be
the holder of, or to have any of the rights of a holder with respect
to, any shares subject to such Option unless and until such person
has satisfied all requirements for exercise of the Option pursuant to
its terms.
(c) Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any eligible
employee, consultant, director, optionee or holder of Stock Awards
under the Plan any right to continue in the employ of the Company or
any Affiliate or to continue acting as a consultant or director or
shall affect the right of the Company or any Affiliate to terminate
the employment or consulting relationship or directorship of any
eligible employee, consultant, director, optionee or holder of Stock
Awards under the Plan with or without cause. In the event that a
holder of Stock Awards under the Plan is permitted or otherwise
entitled to take a leave of absence, the Company shall have the
unilateral right to (i) determine whether such leave of absence will
be treated as a termination of employment or relationship as
consultant or director for purposes hereof, and (ii) suspend or
otherwise delay the time or times at which exercisability or vesting
would otherwise occur with respect to any outstanding Stock Awards
under the Plan.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
If any change is made in the Common Stock subject to the
Plan, or subject to any Stock Award granted under the Plan (through
merger, consolidation, reorganization, recapitalization, stock
dividend, dividend in property other than cash, stock split,
liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the
receipt of consideration by the Company), the Plan and outstanding
Stock Awards will be appropriately adjusted in the class(es) and
maximum number of shares subject to the Plan, the maximum number of
shares which may be granted to a participant in a calendar year, and
the class(es) and number of shares and price per share of stock
subject to outstanding Stock Awards; provided, that the minimum and
maximum number of shares of Common Stock to be granted as provided
for in paragraphs 6(a) and 6(b) shall not be so adjusted. Such
adjustment shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The
conversion of any convertible securities of the Company shall not be
treated as a "transaction not involving the receipt of
consideration".)
13. CHANGE OF CONTROL.
(a) Notwithstanding anything to the contrary in this Plan,
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in the event of a Change in Control (as hereinafter defined), then,
to the extent permitted by applicable law: (i) the time during which
Stock Awards become vested shall automatically be accelerated so that
the unvested portions of all Stock Awards shall be vested prior to
the Change in Control and (ii) the time during which the Options may
be exercised shall automatically be accelerated to prior to the
Change in Control. Upon and following the acceleration of the
vesting and exercise periods, at the election of the holder of the
Stock Award, the Stock Award may be: (x) exercised (with respect to
Options) or, if the surviving or acquiring corporation agrees to
assume the Stock Awards or substitute similar stock awards, (y)
assumed; or (z) replaced with substitute stock awards. Options not
exercised, substituted or assumed prior to or upon the Change in
Control shall be terminated.
(b) For purposes of the Plan, a "Change of Control" shall
be deemed to have occurred at any of the following times:
(i) upon the acquisition (other than from the
Company) by any person, entity or "group," within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this
purpose, the Company or its affiliates, or any employee benefit plan
of the Company or its affiliates which acquires beneficial ownership
of voting securities of the Company), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
fifty percent (50%) or more of either the then outstanding shares of
Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the
election of directors; or
(ii) at the time individuals who, as of April 2,
1991, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board, provided that
any person becoming a director subsequent to April 2, 1991, whose
election, or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or nomination
of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
shall be, for purposes of the Plan, considered as though such person
were a member of the Incumbent Board; or
(iii) immediately prior to the consummation by the
Company of a reorganization, merger, consolidation, (in each case,
with respect to which persons who were the stockholders of the
Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than fifty
percent (50%) of the combined voting power entitled to vote generally
in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities) or a
liquidation or dissolution of the Company or of the sale of all or
substantially all of the assets of the Company; or
(iv) the occurrence of any other event which the
Incumbent Board in its sole discretion determines constitutes a
Change of Control.
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14. QUALIFIED DOMESTIC RELATIONS ORDERS.
(a) Anything in the Plan to the contrary notwithstanding,
rights under Stock Awards may be assigned to an Alternate Payee to
the extent that a QDRO so provides. (The terms "Alternate Payee" and
"QDRO" are defined in paragraph 14(c) below.) The assignment of a
Stock Award to an Alternate Payee pursuant to a QDRO shall not be
treated as having caused a new grant. The transfer of an Incentive
Stock Option to an Alternate Payee may, however, cause it to fail to
qualify as an Incentive Stock Option. If a Stock Award is assigned
to an Alternate Payee, the Alternate Payee generally has the same
rights as the grantee under the terms of the Plan; provided however,
that (i) the Stock Award shall be subject to the same vesting terms
and exercise period as if the Stock Award were still held by the
grantee, (ii) an Alternate Payee may not transfer a Stock Award and
(iii) an Alternate Payee is ineligible for Re-Load Options described
at paragraph 5(j) or Director Re-Load Options described at paragraph
6(j).
(b) In the event of the Plan administrator's receipt of a
domestic relations order or other notice of adverse claim by an
Alternate Payee of a grantee of a Stock Award, transfer of the
proceeds of the exercise of such Stock Award, whether in the form of
cash, stock or other property, may be suspended. Such proceeds shall
thereafter be transferred pursuant to the terms of a QDRO or other
agreement between the grantee and Alternate Payee. A grantee's
ability to exercise a Stock Award may be barred if the Plan
administrator receives a court order directing the Plan administrator
not to permit exercise.
(c) The word "QDRO" as used in the Plan shall mean a court
order (i) that creates or recognizes the right of the spouse, former
spouse or child (an "Alternate Payee") of an individual who is
granted a Stock Award to an interest in such Stock Award relating to
marital property rights or support obligations and (ii) that the
administrator of the Plan determines would be a "qualified domestic
relations order," as that term is defined in section 414(p) of the
Code and section 206(d) of the Employee Retirement Income Security
Act ("ERISA"), but for the fact that the Plan is not a plan described
in section 3(3) of ERISA.
15. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may
amend the Plan. However, except as provided in Section 12 relating
to adjustments upon changes in the Common Stock, no amendment shall
be effective unless approved by the stockholders of the Company
within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) increase the number of shares reserved for Stock
Awards under the Plan;
(ii) modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to satisfy the
14
requirements of Section 422(b) of the Code); or
(iii) modify the Plan in any other way if such
modification requires stockholder approval in order for the Plan to
satisfy the requirements of Section 422(b) of the Code.
(b) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not
limited to, amendments to the Plan intended to satisfy the
requirements of Section 162(m) of the Code and the regulations
promulgated thereunder regarding the exclusion of performance-based
compensation from the limit on corporate deductibility of
compensation to certain executive officers.
(c) It is expressly contemplated that the Board may amend
the Plan in any respect the Board deems necessary or advisable to
provide optionees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations
promulgated thereunder relating to employee Incentive Stock Options
and/or to bring the Plan and/or Options granted under it into
compliance therewith.
(d) Rights and obligations under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment
of the Plan, unless: (i) the Company requests the consent of the
person to whom the Stock Award was granted; and (ii) such person
consents in writing.
16. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on December
31, 2000. No Stock Awards may be granted under the Plan while the
Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Awards granted
while the Plan is in effect shall not be impaired by suspension or
termination of the Plan, except with the consent of the person to
whom the Stock Award was granted.
17. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board.
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