Exhibit 10.1
ARONEX PHARMACEUTICALS, INC.
AMENDED AND RESTATED 1989 STOCK OPTION PLAN
1. Purpose of the Plan
This Aronex Pharmaceuticals, Inc. Amended and Restated 1989 Stock Option
Plan is intended to promote the interests of the Company by providing the
employees and consultants of the Company, who are largely responsible for the
management, growth and protection of the business of the Company, with a
proprietary interest in the Company.
2. Definitions
As used in the Plan, the following definitions apply to the terms
indicated below:
(a)"Board of Directors" shall mean the Board of Directors of Aronex
Pharmaceuticals, Inc.
(b)"Cause," when used in connection with the termination of a
Participant's employment with the Company, shall mean the termination of
the Participant's employment by the Company by reason of (i) the conviction
of the Participant of a crime involving moral turpitude by a court of
competent jurisdiction as to which no further appeal can be taken; (ii) the
proven commission by the Participant of an act of fraud upon the Company;
(iii) the willful and proven misappropriation of any funds or property of
the Company by the Participant; (iv) the willful, continued and
unreasonable failure by the Participant to perform duties assigned to him
and agreed to by him; (v) the knowing engagement by the Participant in any
direct, material conflict of interest with the Company without compliance
with the Company's conflict of interest policy, if any, then in effect;
(vi) the knowing engagement by the Participant, without the written
approval of the Board of Directors of the Company, in any activity which
competes with the business of the Company or which would result in a
material injury to the Company; or (vii) the knowing engagement in any
activity which would constitute a material violation of the provisions of
the Company's Insider Trading Policy or Business Ethics Policy, if any,
then in effect.
(c)"Change in Control" shall mean the occurrence of any of the
following events:
(i) any Person becomes, after the effective date of this Plan, the
"beneficial owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's
then outstanding securities;
(ii) Individuals who constitute the Incumbent Board cease, for any
reason, to constitute at least a majority of the Board of Directors;
provided, however, that any person becoming a director subsequent to
the Effective Date who was nominated for election by at least 66 2/3 %
of the Incumbent Board (other than the 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 Board of
Directors, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this
Plan, considered a member of the Incumbent Board;
(iii) the Board of Directors determines in its sole and absolute
discretion that there has been a change in control of the Company.
(d)"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(e)"Committee" shall mean the Compensation Committee of the Board of
Directors or such other committee as the Board of Directors shall appoint
from time to time to administer the Plan.
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(f)"Common Stock" shall mean the Company's common stock, $.001 par
value per share.
(g)"Company" shall mean Aronex Pharmaceuticals, Inc., a Delaware
corporation, and each of its Subsidiaries, and its successors.
(h)"Consultant" shall mean any person who is engaged by the Company or
any Parent or Subsidiary to render consulting services and is compensated
for such consulting services.
(i)"Disability" shall mean the physical or mental disability of the
Participant to such an extent that the Participant is unable substantially
to perform his or her usual duties at the Company for a period of 60
consecutive days, or a written certification by two doctors selected by the
Participant and acceptable to the Company that the Participant is
substantially unable to perform such duties.
(j)"Effective Date" shall mean the date upon which the Plan is
approved by the affirmative vote of the holders of the requisite majority
of the outstanding shares of the Company's capital stock.
(k)"Employee" shall mean any person employed by the Company or any
Parent or Subsidiary of the Company. The payment of a director's fee by the
Company shall not be sufficient to constitute "employment" by the Company.
(l)"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(m)the "Fair Market Value" of a share of Common Stock on any date
shall be (i) the closing sales price on the immediately preceding business
day of a share of Common Stock as reported on the principal securities
exchange on which shares of Common Stock are then listed or admitted to
trading or (ii) if not so reported, the average of the closing bid and
asked prices for a share of Common Stock on the immediately preceding
business day as quoted on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or (iii) if not quoted on NASDAQ, the
average of the closing bid and asked prices for a share of Common Stock as
quoted by the National Quotation Bureau's "Pink Sheets" or the National
Association of Securities Dealers' OTC Bulletin Board System. If the price
of a share of Common Stock shall not be so reported, the Fair Market Value
of a share of Common Stock shall be determined by the Committee in its
absolute discretion.
(n)"Incentive Award" shall mean an Option, a grant of Restricted Stock
or a Stock Bonus granted pursuant to the terms of the Plan.
(o)"Incentive Stock Option" shall mean an Option which is an
"incentive stock option" within the meaning of Section 422 of the Code and
which is identified as an Incentive Stock Option in the agreement by which
it is evidenced.
(p)"Incumbent Board" shall mean the Board of Directors as constituted
on the Effective Date.
(q)"Issue Date" shall mean the date established by the Committee on
which certificates representing shares of Restricted Stock shall be issued
by the Company pursuant to the terms of Section 7(d) hereof.
(r)"Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option and which is identified as a Non-Qualified Stock
Option in the agreement by which it is evidenced.
(s)"Option" shall mean an option to purchase shares of Common Stock of
the Company granted pursuant to Section 6 hereof. Each Option shall be
identified either as an Incentive Stock Option or a Non-Qualified Stock
Option in the agreement by which it is evidenced.
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(t)"Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 425(e) of the Code.
(u)"Participant" shall mean an employee or consultant of the Company
who is eligible to participate in the Plan and to whom an Incentive Award
is granted pursuant to the Plan and his successors, heirs, executors and
administrators, as the case may be, to the extent permitted hereby.
(v)"Person" shall mean a "person," as such term is used in Sections
13(d) and 14(d) of the Exchange Act, and the rules and regulations in
effect from time to time thereunder.
(w)"Plan" shall mean this Amended and Restated 1989 Stock Option Plan,
as it may be amended from time to time.
(x)"Qualified Domestic Relations Order" shall mean a qualified
domestic relations order as defined in the Code, in Title I of the Employee
Retirement Income Security Act, or in the rules and regulations as may be
in effect from time to time thereunder.
(y)"Regulations" shall mean all regulations promulgated pursuant to
the Code.
(z)"Restricted Stock" shall mean a share of Common Stock which is
granted pursuant to the terms and subject to the restrictions set forth in
Section 7 hereof.
(aa)"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
(ab)"Stock Bonus" shall mean a grant of a bonus payable in shares of
Common Stock pursuant to Section 8 hereof.
(ac)"Subsidiary" or "Subsidiaries" shall mean any and all corporations
in which at the pertinent time the Company owns, directly or indirectly,
stock vested with more than fifty percent of the total combined voting
power of all classes of stock of such corporation.
(ad)"Vesting Date" shall mean the date established by the Committee on
which a share of Restricted Stock may vest.
3. Stock Subject to the Plan
Under the Plan, the Committee may grant to Participants (i) Options, (ii)
Restricted Stock, and/or (iii) Stock Bonuses.
The Committee may grant Options, shares of Restricted Stock and Stock
Bonuses under the Plan with respect to a number of shares of Common Stock that
in the aggregate does not exceed the greater of (i) 2,490,000 shares and (ii)
ten percent of the issued and outstanding shares of Common Stock determined as
of the close of business on the last day of the preceding fiscal quarter of the
Company. The Company will, during the term of this Plan, reserve and keep
available for issuance a sufficient number of shares of Common Stock to satisfy
the requirements of the Plan.
The total number of shares of Common Stock with respect to which Incentive
Stock Options may be granted under the Plan shall be 2,490,000 shares, subject
to adjustment on the same basis as outstanding Options are adjusted pursuant to
Section 9(b).
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The maximum number of shares of Common Stock subject to Options which may
be issued to any Participant during any period of three consecutive years is
500,000 shares, subject to adjustment on the same basis as outstanding Options
are adjusted pursuant to Section 9(b).
If any outstanding Option expires, terminates or is canceled for any
reason, the shares of Common Stock subject to the unexercised portion of such
Option shall again be available for grant under the Plan. If any shares of
Restricted Stock or any shares of Common Stock granted in a Stock Bonus are
forfeited or canceled for any reason, such shares shall again be available for
grant under the Plan.
Shares of Common Stock issued under the Plan may be either newly issued or
treasury shares, at the discretion of the Committee.
4. Administration of the Plan
The Plan shall be administered by the Committee, which shall consist of
two or more persons each of whom shall be a "non-employee director" within the
meaning of Rule l6b-3(b)(3)(i) promulgated under Section 16 of the Exchange Act
and an "outside director" within the meaning of Section 162(m) of the Code. The
Committee shall from time to time designate the Participants who shall be
granted Incentive Awards and the amount and type of such Incentive Awards.
The Committee shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and the terms of
any Incentive Award issued under it and to adopt such rules and regulations for
administering the Plan as it may deem necessary. Decisions of the Committee
shall be final and binding on all parties.
The Committee may, in its absolute discretion (i) accelerate the date on
which any Option granted under the Plan becomes exercisable, (ii) extend the
date on which any Option granted under the Plan ceases to be exercisable or
(iii) accelerate the Vesting Date or Issue Date, or waive any condition imposed
pursuant to Section 7(b) hereof, with respect to any share of Restricted Stock
granted under the Plan.
In addition, the Committee may, in its absolute discretion, grant
Incentive Awards to Participants on the condition that such Participants
surrender to the Committee for cancellation such other Incentive Awards
(including, without limitation, Incentive Awards with higher exercise prices) as
the Committee specifies. Notwithstanding Section 3 hereof, Incentive Awards
granted on the condition of surrender of outstanding Incentive Awards shall not
count against the limits set forth in such Section 3 until such time as such
Incentive Awards are surrendered.
Whether an authorized leave of absence or absence in military or
government service shall constitute termination of employment shall be
determined by the Committee in its absolute discretion.
No member of the Committee shall be liable for any action, omission, or
determination relating to the Plan, and the Company shall indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated from and against any cost or
expense (including attorneys' fees) or liability (including any sum paid in
settlement of a claim with the approval of the Committee) arising out of any
action, omission or determination relating to the Plan, unless, in either case,
such action, omission or determination was taken or made by such member,
director or employee in bad faith and without reasonable belief that it was in
the best interests of the Company.
5. Eligibility
All Employees and Consultants of the Company shall be eligible to receive
Incentive Awards pursuant to the Plan; however, Incentive Stock Options may only
be granted to Employees of the Company.
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6. Options
The Committee may grant Options pursuant to the Plan, which Options shall
be evidenced by agreements in such form as the Committee shall from time to time
approve. Options shall comply with and be subject to the following terms and
conditions:
(a)Identification of Options
All Options granted under the Plan shall be clearly identified in the
agreement evidencing such Options as either Incentive Stock Options or as
Non-Qualified Stock Options.
(b)Exercise Price
The exercise price of any Non-Qualified Stock Option granted under the
Plan shall be such price as the Committee shall determine on the date on
which such Non-Qualified Stock Option is granted; provided, that such
price may not be less than the minimum price required by law. Except as
provided in Section 6(d) hereof, the exercise price of any Incentive Stock
Option granted under the Plan shall be not less than 100% of the Fair
Market Value of a share of Common Stock on the date on which such
Incentive Stock Option is granted.
(c)Term and Exercise of Options
(1) Each Option shall be exercisable on such date or dates, during
such period and for such number of shares of Common Stock as shall be
determined by the Committee on the day on which such Option is granted
and set forth in the agreement evidencing the Option; provided,
however, that (A) no Incentive Stock Option shall be exercisable after
the expiration of seven years from the date such Incentive Stock Option
was granted, and (B) no Non-Qualified Stock Option shall be exercisable
after the expiration of seven years and one day from the date such
Non-Qualified Stock Option was granted; and, provided, further, that
each Option shall be subject to earlier termination, expiration or
cancellation as provided in the Plan.
(2) Each Option shall be exercisable in whole or in part with
respect to whole shares of Common Stock. The partial exercise of an
Option shall not cause the expiration, termination or cancellation of
the remaining portion thereof. Upon the partial exercise of an Option,
the agreement evidencing such Option shall be returned to the
Participant exercising such Option together with the delivery of the
certificates described in Section 6(c)(5) hereof.
(3) An Option shall be exercised by delivering notice to the
Company's principal office, to the attention of its Secretary, no fewer
than five business days in advance of the effective date of the
proposed exercise. Such notice shall be accompanied by the agreement
evidencing the Option, shall specify the number of shares of Common
Stock with respect to which the Option is being exercised and the
effective date of the proposed exercise, and shall be signed by the
Participant. The Participant may withdraw such notice at any time prior
to the close of business on the business day immediately preceding the
effective date of the proposed exercise, in which case such agreement
shall be returned to the Participant. Payment for shares of Common
Stock purchased upon the exercise of an Option shall be made on the
effective date of such exercise either (i) in cash, by certified check,
bank cashier's check or wire transfer or (ii) subject to the approval
of the Committee, in shares of Common Stock owned by the Participant
and valued at their Fair Market Value on the effective date of such
exercise, or partly in shares of Common Stock with the balance in cash,
by certified check, bank cashier's check or wire transfer. Any payment
in shares of Common Stock shall be effected by the delivery of such
shares to the Secretary of the Company, duly endorsed in blank or
accompanied by stock powers duly executed in blank, together with any
other documents and evidences as the Secretary of the Company shall
require from time to time.
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(4) Any Option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a Participant if (i) the
broker-dealer has received from the Participant or the Company a duly
endorsed agreement evidencing such Option and instructions signed by
the Participant requesting the Company to deliver the shares of Common
Stock subject to such Option to the broker-dealer on behalf of the
Participant and specifying the account into which such shares should be
deposited, (ii) adequate provision has been made with respect to the
payment of any withholding taxes due upon such exercise and (iii) the
broker-dealer and the Participant have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR Part 220.
(5) Certificates for shares of Common Stock purchased upon the
exercise of an Option shall be issued in the name of the Participant
and delivered to the Participant as soon as practicable following the
effective date on which the Option is exercised; provided, however,
that such delivery shall be effected for all purposes when a stock
transfer agent of the Company shall have deposited such certificates in
the United States mail, addressed to the Participant.
(6) During the lifetime of a Participant each Option granted to him
shall be exercisable only by him. No Option shall be assignable or
transferable otherwise than by will or by the laws of descent and
distribution or pursuant to a Qualified Domestic Relations Order.
(d)Limitations on Grant of Incentive Stock Options
(1) The aggregate Fair Market Value of shares of Common Stock with
respect to which Incentive Stock Options are exercisable for the first
time by a Participant during any calendar year under the Plan and any
other stock option plan of the Company or any Subsidiary of the Company
shall not exceed $100,000. Such Fair Market Value shall be determined
as of the date on which each such Incentive Stock Option is granted. If
the aggregate Fair Market Value of shares of Common Stock underlying
such Incentive Stock Options exceeds $100,000, then Incentive Stock
Options granted hereunder to such Participant shall, to the extent and
in the order required by Regulations promulgated under the Code (or any
other authority having the force of Regulations), automatically be
deemed to be Non-Qualified Stock Options, but all other terms and
provisions of such Incentive Stock Options shall remain unchanged. In
the absence of such Regulations (and authority), or if such Regulations
(or authority) require or permit a designation of the options which
shall cease to constitute Incentive Stock Options, Incentive Stock
Options shall, to the extent of such excess and in the order in which
they were granted, automatically be deemed to be Non-Qualified Stock
Options, but all other terms and provisions of such Incentive Stock
Options shall remain unchanged.
(2) No Incentive Stock Option may be granted to an individual if, at
the time of the proposed grant, such individual owns stock possessing
more than ten percent of the total combined voting power of all classes
of stock of the Company or any of its Subsidiaries unless (i) the
exercise price of such Incentive Stock Option is at least 110 % of the
Fair Market Value of a share of Common Stock at the time such Incentive
Stock Option is granted and (ii) such Incentive Stock Option is not
exercisable after the expiration of five years from the date such
Incentive Stock Option is granted.
(e)Effect of Termination of Employment Unless otherwise expressly
provided for by the Committee in its approval of an Option:
(1) If the employment of a Participant with the Company shall
terminate for any reason other than Cause, Disability, the voluntary
retirement of the Participant in accordance with the Company's
retirement policy as then in effect or the death of the Participant (i)
Options granted to such Participant, to the extent that they were
exercisable at the time of such termination, shall remain exercisable
until the expiration of one month after such termination, on which date
they shall expire, and (ii) Options granted to such Participant, to the
extent that they were not exercisable at the time of such termination,
shall expire at the close of business on the date of such termination;
provided, however, that the Committee may extend
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such period in its sole discretion (except that the agreement of the
holder of any Incentive Stock Option shall be required as a condition
to such extension if the effect of such extension would be to make such
option ineligible for treatment as an Incentive Stock Option under the
Code; and provided further, no Option shall be exercisable after the
expiration of its term.
(2) If the employment of a Participant with the Company shall
terminate on account of the Disability, the voluntary retirement of the
Participant in accordance with the Company's retirement policy as then
in effect or the death of the Participant (i) Options granted to such
Participant, to the extent that they were exercisable at the time of
such termination, shall remain exercisable until the expiration of one
year after such termination, on which date they shall expire, and (ii)
Options granted to such Participant, to the extent that they were not
exercisable at the time of such termination, shall expire at the close
of business on the date of such termination; provided, however, the
Committee may extend such period in its sole discretion (except that
the agreement of the holder of any Incentive Stock Option shall be
required as a condition to such extension if the effect of such
extension would be to make such option ineligible for treatment as an
Incentive Stock Option under the Code; and provided further, that no
Option shall be exercisable after the expiration of its term.
(3) In the event of the termination of a Participant's employment
for Cause, all outstanding Options granted to such Participant shall
expire at the commencement of business on the date of such termination.
(f)Acceleration of Exercise Date Upon Change in Control
Upon the occurrence of a Change in Control, each Option granted under
the Plan and outstanding at such time shall become fully and immediately
exercisable and shall remain exercisable until its expiration, termination
or cancellation pursuant to the terms of the Plan.
7. Restricted Stock
The Committee may grant shares of Restricted Stock pursuant to the
Plan. Each grant of shares of Restricted Stock shall be evidenced by an
agreement in such form as the Committee shall from time to time approve. Each
grant of shares of Restricted Stock shall comply with and be subject to the
following terms and conditions:
(a)Issue Date and Vesting Date
At the time of the grant of shares of Restricted Stock, the Committee
shall establish an Issue Date or Issue Dates and a Vesting Date or Vesting
Dates with respect to such shares. The Committee may divide such shares
into classes and assign a different Issue Date and/or Vesting Date for
each class. Except as provided in Sections 7(c) and 7(f) hereof, upon the
occurrence of the Issue Date with respect to a share of Restricted Stock,
a share of Restricted Stock shall be issued in accordance with the
provisions of Section 7(d) hereof. Provided that all conditions to the
vesting of a share of Restricted Stock imposed pursuant to Section 7(b)
hereof are satisfied, and except as provided in Sections 7(c) and 7(f)
hereof, upon the occurrence of the Vesting Date with respect to a share of
Restricted Stock, such share shall vest and the restrictions of Section
7(c) hereof shall cease to apply to such share.
(b)Conditions to Vesting
At the time of the grant of shares of Restricted Stock, the Committee
may impose such restrictions or conditions, not inconsistent with the
provisions hereof, to the vesting of such shares as it in its absolute
discretion deems appropriate. By way of example and not by way of
limitation, the Committee may require, as a condition to the vesting of
any class or classes of shares of Restricted Stock, that the Participant
or the
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Company achieve certain performance criteria, such criteria to be
specified by the Committee at the time of the grant of such shares.
(c)Restrictions on Transfer Prior to Vesting
Prior to the vesting of a share of Restricted Stock, no transfer of a
Participant's rights with respect to such share, whether voluntary or
involuntary, by operation of law or otherwise, shall vest the transferee
with any interest or right in or with respect to such share, but
immediately upon any attempt to transfer such rights, such share, and all
of the rights related thereto, shall be forfeited by the Participant and
the transfer shall be of no force or effect.
(d)Issuance of Certificates
(1) Except as provided in Sections 7(c) or 7(f) hereof, reasonably
promptly after the Issue Date with respect to shares of Restricted
Stock, the Company shall cause to be issued a stock certificate,
registered in the name of the Participant to whom such shares were
granted, evidencing such shares; provided, that the Company shall not
cause to be issued such a stock certificates unless it has received a
stock power duly endorsed in blank with respect to such shares. Each
such stock certificate shall bear the following legend:
The transferability of this certificate and the shares of stock
represented hereby are subject to the restrictions, terms and
conditions (including forfeiture and restrictions against transfer)
contained in the Aronex Pharmaceuticals, Inc. 1989 Stock Option Plan
and an Agreement entered into between the registered owner of such
shares and Aronex Pharmaceuticals, Inc. A copy of the Plan and the
Agreement is on file in the office of the Secretary of Aronex
Pharmaceuticals, Inc., 3400 Research Forest Drive, The Woodlands,
Texas 77381-4223
Such legend shall not be removed from the certificate evidencing such
shares until such shares vest pursuant to the terms hereof.
(2) Each certificate issued pursuant to Paragraph 7(d)(1) hereof,
together with the stock powers relating to the shares of Restricted
Stock evidenced by such certificate, shall be held by the Company. The
Company shall issue to the Participant a receipt evidencing the
certificates held by it which are registered in the name of the
Participant.
(e)Consequences Upon Vesting
Upon the vesting of a share of Restricted Stock pursuant to the terms
hereof, the restrictions of Section 7(c) hereof shall cease to apply to
such share. Reasonably promptly after a share of Restricted Stock vests
pursuant to the terms hereof, the Company shall cause to be issued and
delivered to the Participant to whom such shares were granted, a
certificate evidencing such share, free of the legend set forth in
Paragraph 7(d)(1) hereof, together with any other property of the
Participant held by Company pursuant to Section 7(d) hereof; provided,
however, that such delivery shall be effected for all purposes when the
Company shall have deposited such certificate and other property in the
United States mail, addressed to the Participant.
(f)Effect of Termination of Employment
(1) If the employment of a Participant with the Company shall
terminate for any reason other than Cause prior to the vesting of
shares of Restricted Stock granted to such Participant, a portion of
such shares, to the extent not forfeited or canceled on or prior to
such termination pursuant to any provision hereof, shall vest on the
date of such termination. The portion referred to in the preceding
sentence shall
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be determined by the Committee at the time of the grant of such shares
of Restricted Stock and may be based on the achievement of any
conditions imposed by the Committee with respect to such shares
pursuant to Section 10(b). Such portion may equal zero.
(2) In the event of the termination of a Participant's employment
for Cause, all shares of Restricted Stock granted to such Participant
which have not vested as of the date of such termination shall
immediately be forfeited.
(g)Effect of Change in Control
Upon the occurrence of a Change in Control, all shares of Restricted
Stock which have not theretofore vested (including those with respect to
which the Issue Date has not yet occurred) shall immediately vest.
8. Stock Bonuses
The Committee may, in its absolute discretion, grant Stock Bonuses in such
amounts as it shall determine from time to time. A Stock Bonus shall be paid at
such time and subject to such conditions as the Committee shall determine at the
time of the grant of such Stock Bonus. Certificates for shares of Common Stock
granted as a Stock Bonus shall be issued in the name of the Participant to whom
such grant was made and delivered to such Participant as soon as practicable
after the date on which such Stock Bonus is required to be paid.
9. Adjustment Upon Changes in Common Stock
(a)Outstanding Restricted Stock
Unless the Committee in its absolute discretion otherwise determines,
if a Participant receives any securities or other property (including
dividends paid in cash) with respect to a share of Restricted Stock, the
Issue Date with respect to which occurs prior to such event, but which has
not vested as of the date of such event, as a result of any dividend,
stock split recapitalization, merger, consolidation, combination, exchange
of shares or otherwise, such securities or other property will not vest
until such share of Restricted Stock vests, and shall be held by the
Company pursuant to Paragraph 7(d)(2) hereof.
The Committee may, in its absolute discretion, adjust any grant of
shares of Restricted Stock, the Issue Date with respect to which has not
occurred as of the date of the occurrence of any of the following events,
to reflect any dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares or similar corporate change
as the Committee may deem appropriate to prevent the enlargement or
dilution of rights of Participants under the grant.
(b)Outstanding Options, Increase or Decrease in Issued Shares Without
Consideration
Subject to any required action by the stockholders of the Company, in
the event of any increase or decrease in the number of issued shares of
Common Stock resulting from a subdivision or consolidation of shares of
Common Stock or the payment of a stock dividend (but only on the shares of
Common Stock), or any other increase or decrease in the number of such
shares effected without receipt of consideration by the Company, the
Committee shall proportionally adjust the number of shares and the
exercise price per share of Common Stock subject to each outstanding
Option. Conversion of any of the Company's convertible securities shall
not be deemed to have been "effected without receipt of consideration by
the Company."
(c)Outstanding Options, Certain Mergers
Subject to any required action by the stockholders of the Company, if
the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the
holders
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of shares of Common Stock receive securities of another corporation), each
Option outstanding on the date of such merger or consolidation shall
entitle the Participant to acquire upon exercise the securities which a
holder of the number of shares of Common Stock subject to such Option
would have received in such merger or consolidation.
(d)Outstanding Options, Certain Other Transactions
In the event of a dissolution or liquidation of the Company, a sale of
all or substantially all of the Company's assets, a merger or
consolidation involving the Company in which the Company is not the
surviving corporation or a merger or consolidation involving the Company
in which the Company is the surviving corporation but the holders of
shares of Common Stock receive securities of another corporation and/or
other property, including cash, the Committee shall, in its absolute
discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence of such
event, each Option outstanding immediately prior to such event (whether
or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant to whom such Option was granted an
amount in cash, for each share of Common Stock subject to such Option
equal to the excess of (A) the value, as determined by the Committee in
its absolute discretion, of the property (including cash) received by
the holder of a share of Common Stock as a result of such event over
(B) the exercise price of such Option; or
(ii) provide for the exchange of each Option outstanding immediately
prior to such event (whether or not then exercisable) for an option on
some or all of the property for which such Option is exchanged and,
incident thereto, make an equitable adjustment as determined by the
Committee in its absolute discretion in the exercise price of the
option, or the number of shares or amount of property subject to the
option or, if appropriate, provide for a cash payment to the
Participant to whom such Option was granted in partial consideration
for the exchange of the Option.
(e)Outstanding Options, Other Changes
In the event of any change in the capitalization of the Company or
corporate change other than those specifically referred to in Sections
9(b), (c) or (d) hereof, the Committee may, in its absolute discretion,
make such adjustments in the number and class of shares subject to Options
outstanding on the date on which such change occurs and in the per share
exercise price of each such Option as the Committee may consider
appropriate to prevent dilution or enlargement of rights.
(f)No Other Rights
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of
any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation,
merger or consolidation of the Company or any other corporation. Except as
expressly provided in the Plan, 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 of shares of Common Stock subject to an
Incentive Award or the exercise price of any Option.
10. Rights as a Stockholder
No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Incentive Award granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such shares. Except as otherwise expressly provided in Section 9
hereof, no adjustment to any Incentive Award shall be made for dividends or
other rights for which the record date occurs prior to the date such stock
certificate is issued.
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11. No Special Employment Rights; No Right to Incentive Award
Nothing contained in the Plan or any Incentive Award shall confer upon any
Participant any right with respect to the continuation of his employment by the
Company or interfere in any way with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant of an Incentive
Award.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant or any other Participant or other person at any time nor preclude
the Committee from making subsequent grants to such Participant or any other
Participant or other person.
12. Securities Matters
(a)The Company shall be under no obligation to effect the registration
pursuant to the Securities Act of any shares of Common Stock to be issued
hereunder or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be issued or delivered any certificates evidencing
shares of Common Stock pursuant to the Plan unless and until the Company
is advised by its counsel that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authority and the requirements of any securities exchange on
which shares of Common Stock are traded. The Committee may require, as a
condition of the issuance and delivery of certificates evidencing shares
of Common Stock pursuant to the terms hereof, that the recipient of such
shares make such covenants, agreements and representations, and that such
certificates bear such legends, as the Committee, in its sole discretion,
deems necessary or desirable.
(b)The exercise of any Option granted hereunder shall only be effective
at such time as counsel to the Company shall have determined that the
issuance and delivery of shares of Common Stock pursuant to such exercise
is in compliance with all applicable laws, regulations of governmental
authorities and the requirements of any securities exchange on which
shares of Common Stock are traded. The Company may, in its sole
discretion, defer the effectiveness of any exercise of an Option granted
hereunder in order to allow the issuance of shares of Common Stock
pursuant thereto to be made pursuant to registration or an exemption from
registration or other methods for compliance available under federal or
state securities laws. The Company shall inform the Participant in writing
of its decision to defer the effectiveness of the exercise of an Option
granted hereunder. During the period that the effectiveness of the
exercise of an Option has been deferred, the Participant may, by written
notice, withdraw such exercise and obtain the refund of any amount paid
with respect thereto.
13. Withholding Taxes
Whenever shares of Common Stock are to be issued upon the exercise of an
Option, the occurrence of the Issue Date or Vesting Date with respect to a share
of Restricted Stock or the payment of a Stock Bonus, the Company shall have the
right to require the Participant to remit to the Company in cash an amount
sufficient to satisfy federal, state and local withholding tax requirements, if
any, attributable to such exercise, occurrence or payment prior to the delivery
of any certificate or certificates for such shares.
14. Amendment of the Plan
The Board of Directors may at any time suspend or discontinue the Plan or
revise or amend it in any respect whatsoever, provided, however, that without
approval of the holders of a majority of the outstanding shares of Common Stock
present in person or by proxy at an annual or special meeting of stockholders,
no revision or amendment shall (i) increase the number of shares of Common Stock
that may be issued under the Plan, except as provided in Section
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9 hereof, (ii) materially increase the benefits accruing to individuals holding
Incentive Awards granted pursuant to the Plan or (iii) materially modify the
requirements as to eligibility for participation in the Plan.
15. No Obligation to Exercise
The grant to a Participant of an Option shall impose no obligation upon
such Participant to exercise such Option.
16. Transfers Upon Death
Upon the death of a Participant, outstanding Incentive Awards granted to
such Participant may be exercised only by the executors or administrators of the
Participant's estate or by any person or persons who shall have acquired such
right to exercise by will or by the laws of descent and distribution. No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise any Incentive Award, shall be effective to bind the
Company unless the Committee shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such evidence as the Committee may
deem necessary to establish the validity of the transfer and (b) an agreement by
the transferee to comply with all the terms and conditions of the Incentive
Award that are or would have been applicable to the Participant and to be bound
by the acknowledgments made by the Participant in connection with the grant of
the Incentive Award.
17. Expenses and Receipts
The expenses of the Plan shall be paid by the Company. Any proceeds
received by the Company in connection with any Incentive Award will be used for
general corporate purposes.
18. Failure to Comply
In addition to the remedies of the Company elsewhere provided for herein,
failure by a Participant to comply with any of the terms and conditions of the
Plan or the agreement executed by such Participant evidencing an Incentive
Award, unless such failure is remedied by such Participant within ten days after
having been notified of such failure by the Committee, shall be grounds for the
cancellation and forfeiture of such Incentive Award, in whole or in part as the
Committee, in its absolute discretion, may determine.
19. Effective Date and Term of Plan
The amendment and restatement of this Plan shall become effective, subject
to stockholder approval, on April 1, 1997. The amendment and restatement of this
Plan, and all Incentive Awards granted pursuant to the amendment and restatement
of this Plan prior to stockholder approval, shall be void and of no further
force and effect unless the amendment and restatement of this Plan shall have
been approved by the requisite vote of the stockholders entitled to vote at a
meeting of the stockholders of the Company called for such purpose prior to July
30, 1997. In the event such stockholder approval is not obtained, this Plan
shall continue in existence with the terms and conditions in effect prior to the
effective date of the amendment and restatement provided for hereby. No
Incentive Award shall be granted pursuant to this Plan on or after December 31,
1999.
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