EXHIBIT 10.9
PAREXEL INTERNATIONAL CORPORATION
SECOND AMENDED AND RESTATED 1995 STOCK PLAN
(as amended by the Board of Directors on July 8, 1997
and
approved by the Stockholders on November 13, 1997
and
as amended further by the Board of Directors on September 24,
1998)
1. Purpose.
A. This Amended and Restated 1995 Stock Plan (the
"Plan") is intended to provide incentives: (a) to the
officers and other employees of PAREXEL International
Corporation (the "Company"), and of any present or future
parent or subsidiary of the Company (collectively, "Related
Corporations"), by providing them with opportunities to
purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" ("ISOs")
under Section 422(b) of the Internal Revenue Code of 1986, as
amended (the "Code"); (b) to directors, officers, employees
and consultants of the Company and Related Corporations by
providing them with opportunities to purchase stock in the
Company pursuant to options granted hereunder which do not
qualify as ISOs ("Non-Qualified Options"); (c) to directors,
officers, employees and consultants of the Company and
Related Corporations by providing them with awards of stock
in the Company ("Awards"); and (d) to directors, officers,
employees and consultants of the Company and Related
Corporations by providing them with opportunities to make
direct purchases of stock in the Company ("Purchases").
B. Certain Definitions. Both ISOs and Non-Qualified
Options are referred to hereafter individually as an "Option"
and collectively as "Options." Options, Awards and
authorizations to make Purchases are referred to hereafter
collectively as "Stock Rights." As used herein, the terms
"parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation," respectively, as those terms are
defined in Section 424 of the Code.
2. Administration of the Plan.
A. Board or Committee Administration. The Plan shall
be administered by the Board or, subject to paragraph 2D
(relating to compliance with Section 162(m) of the Code), by
a committee appointed by the Board (the "Committee").
Hereinafter, all references in this Plan to the "Committee"
shall mean the Board if no Committee has been appointed.
With respect to Stock Rights granted pursuant to the Plan and
subject to ratification of the grant or authorization of each
Stock Right pursuant to the Plan by the Board (if so required
by applicable state law), and subject to the terms of the
Plan, the Committee shall have the authority to (i) determine
the employees of the Company and Related Corporations (from
among the class of employees eligible under paragraph 3 to
receive ISOs) to whom ISOs shall be granted, and determine
(from among the class of individuals and entities eligible
under paragraph 3 to receive Non-Qualified Options and Awards
and to make Purchases) to whom Non-Qualified Options, Awards
and authorizations to make Purchases may be granted;
(ii) determine the time or times at which Options or Awards
shall be granted or Purchases made; (iii) determine the
option price of shares subject to each Option, which price
shall not be less than the minimum price specified in
paragraph 14, and the purchase price of shares subject to
each Purchase; (iv) determine whether each Option granted
shall be an ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 15) the time or times when each Option
shall become exercisable and the duration of the exercise
period; (vi) determine whether restrictions such as
repurchase options are to be imposed on shares subject to
Options, Awards and Purchases and the nature of such
restrictions, if any, and (vii) interpret the Plan and
prescribe and rescind rules and regulations relating to it.
If the Committee determines to issue a Non-Qualified Option,
it shall take whatever actions it deems necessary, under
Section 422 of the Code and the regulations promulgated
thereunder, to ensure that such Option is not treated as an
ISO. The interpretation and construction by the Committee of
any provisions of the Plan or of any Stock Right granted
under it shall be final unless otherwise determined by the
Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem
best. No member of the Board or the Committee shall be
liable for any action or determination made in good faith
with respect to the Plan or any Stock Right granted under it.
B. Committee Actions. The Committee may select one of
its members as its chairman, and shall hold meetings at such
time and places as it may determine. Acts by a majority of
the members of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee (if
consistent with applicable state law), shall constitute the
valid acts of the Committee. From time to time the Board may
increase the size of the Committee and appoint additional
members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies
however caused, or remove all members of the Committee and
thereafter directly administer the Plan.
C. Grant of Stock Rights to Board Members. In
addition to the Non-Qualified Options granted to non-employee
directors pursuant to the Plan, Stock Rights may be granted
pursuant to this Plan to members of the Board. Members of
the Board who either (i) are eligible to receive grants of
Stock Rights pursuant to the Plan or (ii) have been granted
Stock Rights may vote on any matters affecting the
administration of the Plan or the grant of any Stock Rights
pursuant to the Plan, except that no such member shall act
upon the granting to himself of Stock Rights, but any such
member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is
taken with respect to the granting to him of Stock Rights.
D. Performance-Based Compensation. The Board, in its
discretion, may take such action as may be necessary to
ensure that Stock Rights granted under the Plan qualify as
"qualified performance-based compensation" within the meaning
of Section 162(m) of the Code and applicable regulations
promulgated thereunder ("Performance-Based Compensation").
Such action may include, in the Board's discretion, some or
all of the following (i) if the Board determines that Stock
Rights granted under the Plan generally shall constitute
Performance-Based Compensation, the Plan shall be
administered, to the extent required for such Stock Rights to
constitute Performance-Based Compensation, by a Committee
consisting solely of two or more "outside directors" (as
defined in applicable regulations promulgated under Section
162(m) of the Code), (ii) if any Non-Qualified Options with
an exercise price less than the fair market value per share
of Common Stock are granted under the Plan and the Board
determines that such Options should constitute
Performance-Based Compensation, such options shall be made
exercisable only upon the attainment of a pre-established,
objective performance goal established by the Committee, and
such grant shall be submitted for, and shall be contingent
upon shareholder approval and (iii) Stock Rights granted
under the Plan may be subject to such other terms and
conditions as are necessary for compensation recognized in
connection with the exercise or disposition of such Stock
Right or the disposition of Common Stock acquired pursuant to
such Stock Right, to constitute Performance-Based
Compensation.
3. Eligible Optionees. ISOs may be granted only to
employees of the Company or any Related Corporation. Non-
Qualified Options, Awards and authorizations to make Purchases
may be granted pursuant to Part I to any employee, officer or
director (whether or not also an employee) or consultant of the
Company or any Related Corporation. With respect to Stock Rights
granted pursuant to the Plan, the Committee may take into
consideration a recipient's individual circumstances in
determining whether to grant an ISO, a Non-Qualified Option, an
Award or an authorization to make a Purchase. Granting of any
Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify him from,
participation in any other grant of Stock Rights.
4. Stock. The stock subject to Options, Awards and
Purchases shall be authorized but unissued shares of Common Stock
of the Company, par value $.01 per share (the "Common Stock"), or
shares of Common Stock reacquired by the Company in any manner.
The aggregate number of shares which may be issued pursuant to
the Plan, subject to adjustment as provided in paragraph 11 of
the Plan, is the sum of (x) 2,000,000, plus (y) a number equal to
600,000 minus the number of shares issued upon the exercise of
options granted under the 1995 Non-Employee Director Stock Option
Plan of the Company (the "Director Plan), subject to adjustment
as provided in paragraph 11. If any Stock Right granted under
the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject
to such Stock Right shall again be available for grants of Stock
Rights under the Plan.
No employee of the Company or any Related Corporation may be
granted Options to acquire, in the aggregate, more than 998,000
shares of Common Stock under the Plan. If any Option granted
under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be
exercisable in whole or in part or shall be repurchased by the
Company, the shares subject to such Option shall be included in
the determination of the aggregate number of shares of Common
Stock deemed to have been granted to such employee under the
Plan.
5. Means of Exercising Stock Rights. A Stock Right (or
any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal office address.
Such notice shall identify the Stock Right being exercised and
specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase
price therefor either (a) in United States dollars in cash or by
check, (b) at the discretion of the Committee, through delivery
of shares of Common Stock owned by the optionee free and clear of
any restrictions (other than those arising under securities laws)
for at least six months having a fair market value equal as of
the date of the exercise to the cash exercise price of the Stock
Right, (c) at the discretion of the Committee and consistent with
applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of
the Common Stock acquired upon exercise of the Stock Right and an
authorization to the broker or selling agent to pay that amount
to the Company, which sale shall be at the participant's
direction at the time of exercise, or (d) at the discretion of
the Committee, by any combination of (a), (b) and (c) above. If
the Committee exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in
clauses (b), (c) or (d) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of a Stock Right shall not
have the rights of a shareholder with respect to the shares
covered by his Stock Right until the date of issuance of a stock
certificate to him for such shares. Except as expressly provided
in paragraph 11 below with respect to changes in capitalization
and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such
stock certificate is issued. The stock certificates representing
such shares shall carry such appropriate legend, and such written
instructions shall be given to the Company's transfer agent, as
may be deemed necessary or advisable by counsel to the Company in
order to comply with the requirements of the Securities Act of
1933, as amended, (the "Act") or any state securities laws.
6. Application Of Funds. The proceeds received by the
Company from the sale of shares pursuant to Options granted and
Purchases authorized under the Plan shall be used for general
corporate purposes.
7. Withholding of Additional Income Taxes. Upon the
exercise of a Non-Qualified Option, the transfer of a Non-
Qualified Option pursuant to an arms-length transaction, the
grant of an Award, the making of a Purchase of Common Stock for
less than its fair market value, the making of a Disqualifying
Disposition (as described in paragraph 22), the vesting or
transfer of restricted stock or securities acquired on the
exercise of a Stock Right hereunder, or the making of a
distribution or other payment with respect to such stock or
securities, the Company may withhold taxes in respect of amounts
that constitute compensation includible in gross income. The
Committee in its discretion may condition (i) the exercise of an
Option, (ii) the transfer of a Non-Qualified Option, (iii) the
grant of an Award, (iv) the making of a Purchase of Common Stock
for less than its fair market value, or (v) the vesting or
transferability of restricted stock or securities acquired by
exercising a Stock Right, on the grantee's making satisfactory
arrangement for such withholding. Such arrangement may include
payment by the grantee in cash or by check of the amount of the
withholding taxes or, at the discretion of the Committee, by the
grantee's delivery of previously held shares of Common Stock held
by the grantee for at least six months or the withholding from
the shares of Common Stock otherwise deliverable upon exercise of
a Stock Right shares having an aggregate fair market value equal
to the amount of such withholding taxes.
8. Governmental and Securities Law Regulation.
A. The Company's obligation to sell and deliver shares
of the Common Stock under this Plan is subject to the
approval of any governmental authority required in connection
with the authorization, issuance or sale of such shares. The
Company shall have no obligation to deliver any stock
certificate or certificates upon exercise of an Option until
one of the following conditions shall be satisfied:
(i) The shares with respect to which the Option has
been exercised are at the time of the issue of such shares
effectively registered under applicable Federal and state
securities laws as now in force or hereafter amended; or
(ii) Counsel for the Company shall have given an
opinion that such shares are exempt from registration under
Federal and state securities laws as now in force or
hereafter amended; and the Company has complied with all
applicable laws and regulations with respect thereto,
including without limitation all regulations required by any
stock exchange upon which the Company's outstanding Common
Stock is then listed.
B. If in the opinion of legal counsel for the Company
the issuance or sale of any shares of Common Stock pursuant
to the exercise of an Option would not be lawful for any
reason, including without limitation the inability of the
Company to obtain from any governmental authority or
regulatory body having jurisdiction the authority deemed by
such counsel to be necessary to such issuance or sale, the
Company shall not be obligated to issue or sell any shares of
Common Stock pursuant to the exercise of an Option to an
optionee or any other authorized person unless a registration
statement that complies with the provisions of the Act in
respect of such shares of Common Stock is in effect at the
time thereof, or other appropriate action has been taken
under and pursuant to the terms and provisions of the Act, or
the Company receives evidence satisfactory to such counsel
that the issuance and sale of such shares of Common Stock, in
the absence of an effective registration statement or other
appropriate action, would not constitute a violation of the
Act or any applicable state securities law. The Company is
in no event obligated to register any such shares of Common
Stock, to comply with any exemption from registration
requirements or to take any other action which may be
required in order to permit, or to remedy or remove any
prohibition or limitation on, the issuance or sale of such
shares of Common Stock of any optionee or other authorized
person.
C. Government regulations may impose reporting or
other obligations on the Company with respect to the Plan.
For example, the Company may be required to send tax
information statements to employees and former employees that
exercise ISOs under the Plan, and the Company may be required
to file tax information returns reporting the income received
by grantees of Stock Rights in connection with the Plan.
D. If requested by the Company, an optionee shall
deliver to the Company written representations and warranties
upon exercise of the Option that are necessary to show
compliance with Federal and state securities laws, including
representations and warranties to the effect that a purchase
of shares under an Option granted pursuant to this Plan is
made for investment and not with a view to their distribution
(as that term is used in the Act.)
9. Compliance with Regulations. It is the Company's
intent that the Plan comply in all respects with Section 162(m)
of the Code and Rule 16b-3 under the Securities Exchange Act of
1934 (or any successor or amended version thereof) and any
applicable Securities and Exchange Commission interpretations
thereof ("Rule 16b-3"). If any provision of this Plan is deemed
not to be in compliance with Rule 16b-3, the provision shall be
null and void.
10. Governing Law; Construction. The validity and
construction of the Plan and the instruments evidencing Stock
Rights shall be governed by the laws of the Commonwealth of
Massachusetts, or the laws of any jurisdiction in which the
Company or its successors in interest may be organized. In
construing this Plan, the singular shall include the plural and
the masculine gender shall include the feminine and neuter,
unless the context otherwise requires.
11. Adjustments. Upon the occurrence of any of the
following events, an optionee's rights with respect to Options
granted to him shall be adjusted as hereinafter provided, unless
otherwise specifically provided in the written agreement between
the optionee and the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the shares of
Common Stock shall be subdivided or combined into a greater
or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock
deliverable upon the exercise of outstanding Options, as well
as any Non-Qualified Options to be granted under Part II,
shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in
the purchase price per share to reflect such subdivision,
combination or stock dividend.
B. Consolidations or Mergers. If the Company is to be
consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of
directors of any entity assuming the obligations of the
Company hereunder (the "Successor Board"), shall, as to
outstanding Options granted pursuant to the Plan, either
(i) make appropriate provision for the continuation of such
Options by substituting on an equitable basis for the shares
then subject to such Options the consideration payable with
respect to the outstanding shares of Common Stock in
connection with the Acquisition; or (ii) upon written notice
to the optionees, provide that all Options granted must be
exercised, to the extent then exercisable, within a specified
number of days of the date of such notice, at the end of
which period the Options shall terminate; or (iii) terminate
all Options granted in exchange for a cash payment equal to
the excess of the fair market value of the shares subject to
such Options (to the extent then exercisable) over the
exercise price thereof.
C. Recapitalization or Reorganization. In the event
of a recapitalization or reorganization of the Company (other
than a transaction described in subparagraph B above)
pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares
of Common Stock, an optionee upon exercising an Option shall
be entitled to receive for the purchase price paid upon such
exercise the securities he would have received if he had
exercised his Option prior to such recapitalization or
reorganization.
D. Modification of ISOs. Notwithstanding the
foregoing, any adjustments made pursuant to subparagraphs A,
B or C with respect to ISOs shall be made only after the
Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in
Section 424 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs or would cause
adverse tax consequences to the holders, it may refrain from
making such adjustments.
E. Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, each
Option granted pursuant to this Plan will terminate
immediately prior to the consummation of such proposed action
or at such other time and subject to such other conditions as
shall be determined by the Committee.
F. Issuances of Securities. Except as expressly
provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of
shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities
of the Company.
G. Fractional Shares. No fractional shares shall be
issued under the Plan and the optionee shall receive from the
Company cash in lieu of such fractional shares.
H. Adjustments. Upon the happening of any of the
events described in subparagraphs A, B or C above, the class
and aggregate number of shares set forth in paragraph 4
hereof that are subject to Stock Rights which previously have
been or subsequently may be granted shall also be
appropriately adjusted to reflect the events described in
such subparagraphs.
12. Term and Amendment of Plan. This Plan was initially
adopted by the Board on September 14, 1995 and approved by the
Stockholders of the Company on November 3, 1995, and amended and
restated by the Board on July 8, 1997 subject, with respect to
the validation of ISOs granted under the Plan, to approval of the
Plan by the stockholders of the Company at the next Annual
Meeting (or Special Meeting in Lieu of Annual Meeting) of
Stockholders. The Plan was further amended by the Board on
September __, 1998. The Plan shall expire at the end of the day
on September 13, 2005 (except as to Options outstanding on that
date). The Board may terminate or amend the Plan in any respect
at any time, except that, without the affirmative vote of the
holders of a majority of the shares of Common Stock present in
person or by proxy and voting on such matter obtained within 12
months before or after the Board adopts a resolution authorizing
any of the following actions: (a) the total number of shares
that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 11); (b) the benefits accruing
to participants under the Plan may not be materially increased;
(c) the requirements as to eligibility for participation in the
Plan may not be materially modified; (d) the provisions of
paragraph 3 regarding eligibility for grants of ISOs may not be
modified; (e) the provisions of paragraph 14 regarding the
exercise price at which shares may be offered pursuant to ISOs
may not be modified (except by adjustment pursuant to
paragraph 11); (f) the expiration date of the Plan may not be
extended; and (g) the Board may not take any action which would
cause the Plan to fail to comply with Rule 16b-3. Except as
otherwise provided in this paragraph 12, in no event may action
of the Board or stockholders alter or impair the rights of a
grantee, without his consent, under any Stock Right previously
granted to him.
13. Non-Formula Grant of Stock Rights.
Stock Rights may be granted at any time prior to September
14, 2005. The date of grant of a Stock Right will be the date
specified by the Committee at the time it grants the Stock Right;
provided, however, that such date shall not be prior to the date
on which the Committee acts to approve the grant.
14. Minimum Option Price; ISO Limitations.
A. Price for Non-Qualified Options. Subject to
paragraph 2D, the exercise price per share specified in the
agreement relating to each Non-Qualified Option shall in no
event be less than the minimum legal consideration required
therefor under the laws of the Commonwealth of Massachusetts
or the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
B. Price for ISOs. The exercise price per share
specified in the agreement relating to each ISO granted under
the Plan shall not be less than the fair market value per
share of Common Stock on the date of such grant. In the case
of an ISO to be granted to an employee owning stock
possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or any
Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one
hundred ten percent (110%) of the fair market value per share
of Common Stock on the date of grant. For purposes of
determining stock ownership under this paragraph, the rules
of Section 424(d) of the Code shall apply.
C. $100,000 Annual Limitation on ISO Vesting. Each
eligible employee may be granted Options treated as ISOs only
to the extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related
Corporation, ISOs do not become exercisable for the first
time by such employee during any calendar year with respect
to stock having a fair market value (determined at the time
the ISOs were granted) in excess of $100,000. The Company
intends to designate any Options granted in excess of such
limitation as Non-Qualified Options.
D. Determination of Fair Market Value. If, at the
time an Option is granted under the Plan, the Company's
Common Stock is publicly traded, "fair market value" shall be
determined as of the last business day for which the prices
or quotes discussed in this sentence are available prior to
the date such Option is granted and shall mean (i) the
average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or (ii) the last
reported sale price (on that date) of the Common Stock on the
Nasdaq National Market, if the Common Stock is not then
traded on a national securities exchange; or (iii) the
closing bid price (or average of bid prices) last quoted (on
that date) by an established quotation service for over-the-
counter securities, if the Common Stock is not reported on
the Nasdaq National Market. However, if the Common Stock is
not publicly traded at the time an Option is granted under
the Plan, "fair market value" shall be deemed to be the fair
value of the Common Stock as determined by the Committee
after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions
negotiated at arm's length.
15. Option Duration. Subject to earlier termination as
provided in paragraphs 17 and 18, each Option shall expire on the
date specified by the Committee, but not more than (i) eight
years from the date of grant in the case of Options generally and
(ii) five years from the date of grant in the case of ISOs
granted to an employee owning stock possessing more than ten
percent (10%) of the total combined voting power of all classes
of stock of the Company or any Related Corporation, as determined
under paragraph 14B. Subject to earlier termination as provided
in paragraphs 17 and 18, the term of each ISO shall be the term
set forth in the original instrument granting such ISO, except
with respect to any part of such ISO that is converted into a Non-
Qualified Option pursuant to paragraph 21.
16. Exercise of Option. Subject to the provisions of
paragraphs 17 through 21, each Option shall be exercisable as
follows:
A. Vesting. The Option shall either be fully
exercisable on the date of grant or shall become exercisable
thereafter in such installments as the Committee may specify.
B. Full Vesting of Installments. Once an installment
becomes exercisable it shall remain exercisable until
expiration or termination of the Option, unless otherwise
specified by the Committee.
C. Partial Exercise. Each Option or installment may
be exercised at any time or from time to time, in whole or in
part, for up to the total number of shares with respect to
which it is then exercisable.
D. Acceleration of Vesting. The Committee shall have
the right to accelerate the date of exercise of any
installment of any Option; provided that the Committee shall
not, without the consent of an optionee, accelerate the
exercise date of any installment of any Option granted to any
employee as an ISO (and not previously converted into a Non-
Qualified Option pursuant to paragraph 21) if such
acceleration would violate the annual vesting limitation
contained in Section 422(d) of the Code, as described in
paragraph 14C.
17. Termination of Employment. If an ISO optionee
ceases to be employed by the Company and all Related Corporations
other than by reason of death or disability as defined in
paragraph 18, no further installments of his ISOs shall become
exercisable, and his ISOs shall terminate after the passage of
sixty (60) days from the date of termination of his employment,
but in no event later than on their specified expiration dates,
except to the extent that such ISOs (or unexercised installments
thereof) have been converted into Non-Qualified Options pursuant
to paragraph 21. For purposes of this paragraph 17, employment
shall be considered as continuing uninterrupted during any bona
fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the
period of such leave does not exceed 90 days or, if longer, any
period during which such optionee's right to reemployment is
guaranteed by statute or contract. A bona fide leave of absence
with the written approval of the Committee shall not be
considered an interruption of employment under this paragraph 17,
provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of
the optionee after the approved period of absence. ISOs granted
under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as
the optionee continues to be an employee of the Company or any
Related Corporation. Nothing in the Plan shall be deemed to give
any grantee of any Stock Right the right to be retained in
employment or other service by the Company or any Related
Corporation for any period of time.
18. Death; Disability.
A. Death. If an ISO optionee ceases to be employed by
the Company and all Related Corporations by reason of his
death, any ISO of his may be exercised, to the extent of the
number of shares with respect to which he could have
exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the
ISO by will or by the laws of descent and distribution, at
any time prior to the earlier of the specified expiration
date of the ISO or 180 days from the date of the optionee's
death.
B. Disability. If an ISO optionee ceases to be
employed by the Company and all Related Corporations by
reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment,
to the extent of the number of shares with respect to which
he could have exercised it on that date, at any time prior to
the earlier of the specified expiration date of the ISO or
180 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term
"disability" shall mean "permanent and total disability" as
defined in Section 22(e)(3) of the Code or any successor
statute.
19. Transferability and Assignability. Except as set forth
below, (i) no Stock Right shall be assignable or transferable by
an optionee except by will or by the laws of descent and
distribution; and (ii) during the lifetime of the optionee each
Stock Right shall be exercisable only by him. Notwithstanding
the foregoing, the Committee may, in its discretion, authorize
all or a portion of any Non-Qualified Option to be transferable
by the optionee to (i) the spouse, children or grandchildren of
the optionee ("Immediate Family Members"), (ii) a trust or trusts
for the exclusive benefit of such Immediate Family Members, or
(iii) a partnership of which such Immediate Family Members are
the only partners, provided that (x) only the Committee may in
its discretion permit transfers to other persons or entities, (y)
the stock option agreement pursuant to which the Non-Qualified
Option is granted must be approved by the Committee, and must
expressly provide for transferability at the date of grant in a
manner consistent with the Plan, and (z) subsequent transfers of
the transferred Non-Qualified Option shall be prohibited except
in accordance with this paragraph. Following any such transfer,
the Non-Qualified Option shall continue to be subject to the same
terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of paragraph 11, hereof, the
term "optionee" shall be deemed to refer to the transferee. The
events of termination of Business Relationship set forth in the
grantee's option agreement shall continue to be applied with
respect to the original optionee, following which the Non-
Qualified Option shall be exercisable by the transferee only to
the extent, and for the periods specified therein.
20. Terms and Conditions of Options. Options shall be
evidenced by instruments (which need not be identical) in such
forms as the Committee may from time to time approve. Such
instruments shall conform to the terms and conditions set forth
in paragraphs 14 through 19 hereof and may contain such other
provisions as the Committee deems advisable which are not
inconsistent with the Plan, including restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The
Committee may specify that any Non-Qualified Option shall be
subject to the restrictions set forth herein with respect to
ISOs, or to such other termination and cancellation provisions as
the Committee may determine. The Committee may from time to time
confer authority and responsibility on one or more of its own
members and/or one or more officers of the Company to execute and
deliver such instruments. The proper officers of the Company are
authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such
instruments.
21. Conversion of ISOs into Non-Qualified Options.
The Committee, at the written request or with the written consent
of any optionee, may in its discretion take such actions as may
be necessary to convert such optionee's ISOs (or any installments
or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time
prior to the expiration of such ISOs, regardless of whether the
optionee is an employee of the Company or a Related Corporation
at the time of such conversion. Such actions may include, but
shall not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of
such ISOs. At the time of such conversion, the Committee (with
the consent of the optionee) may impose such conditions on the
exercise of the resulting Non-Qualified Options as the Committee
in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in this Part I
shall be deemed to give any optionee the right to have such
optionee's ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Committee takes
appropriate action.
22. Notice to Company of Disqualifying Disposition. By
accepting an ISO, each optionee agrees to notify the Company in
writing immediately after he makes a Disqualifying Disposition
(as described in Sections 421, 422 and 424 of the Code and
regulations thereunder) of any stock acquired pursuant to the
exercise of ISOs granted under this Part I. A Disqualifying
Disposition is generally any disposition occurring within
two years of the date the ISO was granted or within one year of
the date the ISO was exercised, whichever period ends later.