SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
CHECK THE APPROPRIATE BOX:
Preliminary information statement
---
X Definitive information statement
---
Confidential, for use of the Commission only (as permitted by
--- Rule 14c-5(d) (2))
JUNIPER GROUP, INC.
(Name of Registrant As Specified in Charter)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
X No Fee Required.
- ---
Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth in the amount on which the filing fee
is calculated and state how it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: N/A
_ Fee paid previously with preliminary materials.
_ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
JUNIPER GROUP, INC.
111 Great Neck Rd., Suite 604
GREAT NECK, NEW YORK 11021
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NOTICE OF STOCKHOLDER ACTION IN LIEU OF SPECIAL MEETING
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TO THE STOCKHOLDERS
OF JUNIPER GROUP, INC.:
This Information Statement is furnished to the stockholders of Juniper
Group, Inc., a Nevada corporation (the "Company"), in connection with the
following corporate action approved by the written consent of the stockholders
of the Company owning sufficient voting securities to approve such action:
Approval and adoption of the Company's 2001 Equity Incentive Plan.
The Company is not asking you for a proxy and you are requested not to
send a proxy. Your vote or consent is not requested or required to approve the
2001 Equity Incentive Plan. This Information Statement is provided solely for
your information.
By Order of the Board of Directors
/s/ Vlado P. Hreljanovic
-----------------------------------------
Vlado P. Hreljanovic
President
October 29, 2001
JUNIPER GROUP, INC.
111 Great Neck Road, Suite 604
Great Neck, New York 11021
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INFORMATION STATEMENT
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General Information
This Information Statement is being furnished by Juniper Group, Inc., a
Nevada corporation (the "Company"), in connection with the following corporate
action approved by the written consent of the stockholders of the Company owning
sufficient voting securities of the Company to approve such action:
Approval and adoption of the Company's 2001 Equity Incentive
Plan (the "2001 Plan").
THE COMPANY IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND THE COMPANY A PROXY.
The Company's authorized capital consists of 75,000,000 shares of the
common stock, par value $.001 per share (the "Common Stock") and 375,000 shares
of preferred stock, par value $.10 per share (the "Preferred Stock"). As of
September 18, 2001, the date for determination of the stockholders entitled to
give consent in respect of the approval and adoption of the 2001 Plan (the
"Record Date"), there were 4,519,127 shares of Common Stock issued and
outstanding and 3,000,000 shares of Common Stock reserved for issuance upon
exercise of options, warrants and similar rights to acquire shares of Common
Stock; the number of shares of Common Stock that consented to the aforementioned
actions was 2,487,556, representing 55% of the total amount outstanding. As of
the Record Date, there were 34,817 shares of the Company's Preferred Stock
issued and outstanding. Shares of the Company's Preferred Stock do not have
voting rights. The holders of Common Stock are entitled to vote on all matters
to come before a vote of stockholders of the Company. Each share of Common Stock
entitles the holder thereof to one vote on all matters submitted to stockholders
for a vote.
The purposes of the Company's 2001 Plan are to enable the Company and
its subsidiaries and affiliates to attract and retain highly qualified personnel
who will contribute to its success, and to provide incentives to participants in
the 2001 Plan that are linked directly to increases in stockholder value which
will therefore inure to the benefit of all of its stockholders. The Board of
Directors has reserved 3,000,000 shares of Common Stock for issuance in
connection with grants made under the 2001 Plan. Such awards can be in the form
of incentive stock options, nonqualified stock options, restricted stock awards,
performance grants, stock appreciation rights, stock bonuses
1
and any other type of award deemed consistent with the purposes of the 2001
Plan. The form of the 2001 Plan is attached hereto as Exhibit A.
The approximate date upon which this Information Statement will first
be sent to stockholders is November 12, 2001.
THE ACTION HEREIN DESCRIBED HAS BEEN APPROVED BY STOCKHOLDERS
OF THE COMPANY WHO OWN SUFFICIENT VOTING SECURITIES TO APPROVE
SUCH ACTION. YOUR VOTE OR CONSENT IS NOT REQUESTED OR REQUIRED
TO APPROVE SUCH ACTION. THIS INFORMATION STATEMENT IS PROVIDED
SOLELY FOR YOUR INFORMATION.
No Appraisal Rights
Under the applicable provisions of the Nevada General Corporation Law,
the Company's stockholders are not entitled to any dissenters' appraisal rights
in connection with the adoption of the 2001 Plan.
2
TABLE OF CONTENTS
Page
----
INFORMATION STATEMENT................................................. 1
General Information.......................................... 1
No Appraisal Rights.......................................... 2
APPROVAL AND ADOPTION OF 2001 EQUITY INCENTIVE PLAN................... 4
Plan Summary................................................. 4
CERTAIN INFORMATION CONCERNING THE COMPANY............................ 10
Security Ownership........................................... 11
Executive Compensation....................................... 11
ADDITIONAL INFORMATION................................................ 17
Material Incorporated by Reference........................... 17
APPENDIX ............................................................. A-1
Appendix A - 2001 Equity Incentive Plan...................... A-1
3
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APPROVAL AND ADOPTION OF 2001 EQUITY INCENTIVE PLAN
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The Company's board of directors and stockholders have previously
approved the 2001 Plan and the Board of Directors subsequently amended the 2001
Plan as permitted by such 2001 Plan.
Plan Summary
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The 2001 Plan authorizes the granting of awards to the Company's officers,
directors and employees, as well as to third parties providing services to the
Company such as independent contractors, consultants and advisors. The 2001 Plan
is administered by the Company's board of directors and, at the board's sole
discretion, may be administered by a committee appointed by the board which
shall serve at the pleasure of the board. Such administering body, whether the
board or a committee, is referred to in this Information Statement as the
"administrator". Members of the board are eligible to receive awards under the
2001 Plan.
Awards can be stock options, each referred to as an "Option", stock
appreciation rights, each referred to as a "SAR", performance grants, each
referred to as a "PG", restricted stock awards, each referred to as an "RSA",
stock bonuses and/or other types of awards deemed by the administrator to be
consistent with the purposes of the 2001 Plan. The administrator determines the
number of shares to be covered by an award, the term and exercise price, if any,
of the award and other terms and provisions of the award.
Shares Available for Issuance
- -----------------------------
Up to 3,000,000 shares of the Company's authorized but unissued Common
Stock are subject to award under the 2001 Plan. Any SARs granted concurrently
with the grant of Options are not subject to the foregoing limitation. Shares of
Common Stock will again be available for issuance under the 2001 Plan that are
subject to:
(a) issuance upon exercise of an Option previously granted but no longer
subject to such Option for any reason other than exercise of such Option;
(b) an Award previously granted but forfeited or repurchased by the Company at
the original issue price; and
(c) an Award previously granted that otherwise terminates without shares being
issued.
4
Stock Options
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An Option granted under the 2001 Plan may be an incentive stock option,
referred to in this Information Statement as an "ISO", or a nonqualified stock
option. Unless specifically designated by the administrator as an ISO, an Option
granted under the 2001 Plan shall be a nonqualified stock option. ISOs may be
granted only to the Company's employees (including officers and directors who
are also employees) or employees of any "parent", "subsidiary" or "affiliate" as
such terms are defined in the 2001 Plan. The exercise price for Options shall be
determined by the administrator but, in the case of an ISO, may not be less than
100% of the per share fair market value of the Company's Common Stock on the
date the Option is granted (110% of fair market value, in the case of an ISO
granted to any person who owns more than 10% of the Company's voting power) and,
in the case of a nonqualified stock option, may not be less than 85% of the per
share fair market value of the Company's Common Stock on the date the Option is
granted. In general, the exercise price is payable in cash, by check or, in the
discretion of the administrator, by (i) cancellation of indebtedness of the
Company owed to the participant; (ii) surrender of shares that either (a) have
been owned by the participant for more than six months and have been paid for
within the meaning of Rule 144 under the Securities Act of 1933 or (b) were
obtained by the participant in the public market; (iii) delivery of a full
recourse promissory note; (iv) waiver of compensation due or accrued to the
participant for services rendered; (v) with respect only to purchases upon
exercise of an Option, and provided that a public market exists, (a) through a
"same day sale" commitment from the participant and a broker-dealer that is a
member of the National Association of Securities Dealers, or (b) through a
"margin" commitment from the participant and an NASD dealer; (vi) with respect
only to the Company's officers, directors and employees, and with respect only
to purchases upon exercise of an Option, by "cashless exercise; or (vii) any
combination of the foregoing; or (viii) by any other lawful means as the
administrator may determine. The aggregate fair market value (determined on the
date of grant) of the shares of the Company's Common Stock for which ISOs may be
granted to any participant under the 2001 Plan and any other plan by the Company
or any parent, subsidiary or affiliate, which are exercisable for the first time
by such participant during any calendar year, may not exceed $100,000. To the
extent such limitation is exceeded, such Options shall be treated as
nonqualified stock options.
Options granted under the 2001 Plan become exercisable at such times as
the administrator determines. Unless otherwise provided, each Option shall
become exercisable in equal amounts of up to one-fourth (1/4) of the shares of
Common Stock subject to such Option on each of the first four anniversaries of
the date the Option was granted. The administrator may specify a reasonable
minimum number of shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent the participant from
exercising the Option for the full number of shares for which the Option is then
exercisable. No option will be exercisable after the expiration of ten years
from the date of grant, and no ISO granted to a person who, directly or
indirectly, owns more than 10% of the total combined voting power of all of the
Company's classes of stock or of any parent, subsidiary or affiliate, will be
exercisable after the expiration of five years from the date of grant.
The Options granted under the 2001 Plan are not transferable other than
by will or the laws of descent and distribution, or pursuant to a domestic
relations order. Options which have become exercisable by the date of
termination of employment or of service must be exercised within certain
specified periods of time from the date of termination, depending upon the
reason for termination and/or the discretion of the administrator.
5
SARs
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A SAR is the right to receive payment based on the appreciation in the
fair market value of the Company's Common Stock from the date of grant to the
date of exercise. At the administrator's sole discretion, the administrator may
grant a SAR concurrently with the grant of an Option, PG or other award. Such
SAR is only exercisable at such time, and to the extent, that the related
Option, PG or other award is exercisable. Upon exercise of a SAR, the holder
receives for each share with respect to which the SAR is exercised an amount
equal to the difference between the exercise price under the related Option, PG
or other award and the fair market value of a share of Common Stock on the date
of exercise of the SAR. Such amount will be applied against the exercise price
due in connection with the exercise of the related Option, PG or other award.
Each SAR granted concurrently with an Option, PG or other award will have the
same termination provisions and exercisability periods as the related Option, PG
or other award.
In its discretion, the administrator may also grant SARs independently
of any Option, subject to such conditions consistent with the terms of the 2001
Plan as the administrator may provide in the agreement relating to an award
under the 2001 Plan, such an agreement referred to in this Information Statement
as an "award agreement". Upon the exercise of a SAR granted independently of any
Option, the holder receives for each share with respect to which the SAR is
exercised an amount in cash based on the percentage specified in the related
award agreement of the excess, if any, of fair market value of a share of the
Company's Common Stock on the date of exercise over such fair market value on
the date the SAR was granted. The administrator, in its discretion, can
authorize the payment of such amount in cash, shares of Common Stock or a
combination thereof. The termination provisions and exercisability periods of a
SAR granted independently of any Option will be determined by the administrator.
Restricted Stock Awards
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An RSA is an award of a fixed number of shares of the Company's Common
Stock which may be subject to transfer restrictions, as determined by the
administrator. The administrator specifies the number of shares of the Company's
Common Stock to be issued, the purchase price, if any, the participant must pay
for such shares, and the restrictions, if any, imposed on such shares. Shares
included in an RSA may not be sold, assigned, transferred, pledged or otherwise
disposed of or encumbered until they have vested. Upon the date a participant is
no longer employed by or performing services for the Company for any reason,
shares subject to the participant's RSAs which have not become vested by that
date shall each be forfeited in accordance with the terms of the award
agreement, unless the administrator determines otherwise. If a participant paid
cash in connection with the RSA, the award agreement shall specify whether
and to what extent such cash shall be returned upon forfeiture.
Performance Grant
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A PG is an award of a fixed number of shares of the Company's Common
Stock, the issuance of which is contingent upon the attainment of such
performance objectives, and the
6
payment of such consideration, if any, as is specified by the administrator.
Upon the termination of the participant's employment with the Company, shares of
Common Stock subject to the participant's PG which have not been issued shall be
forfeited in accordance with the terms of the related award agreements.
The 2001 Plan permits a participant to satisfy the participant's tax
withholding with shares of the Company's Common Stock instead of cash, if the
administrator agrees.
Amendment and Change of Control
The terms of any outstanding award under the 2001 Plan may be amended
from time to time by the administrator in any manner that the administrator
deems appropriate (including, but not limited to, acceleration of the date of
exercise of any award and/or payments thereunder, or reduction of the exercise
price of an award); provided, however, that no such amendment shall adversely
affect in a material manner any right of a participant under such award without
the participant's written consent.
In addition, immediately upon the occurrence of a "change of control"
(as discussed below), the date of exercise of certain awards shall accelerate
and certain restrictions applicable to RSAs shall lapse, as more fully set forth
in the 2001 Plan. The 2001 Plan defines a change in control to have occurred
only when any of the following events first occurs: (a) if a "person," as
defined in Sections 3(a) and 13(d) of the Securities Exchange Act of 1934, who
is not currently such, becomes the beneficial owner, directly or indirectly, of
the Company's securities representing 20% or more of the combined voting power
of the Company's then outstanding voting securities; or (b) three or more
directors, whose election or nomination for election is not approved by a
majority of the incumbent Board of Directors, are elected within any single
24-month period to serve on the Board of Directors; or (c) members of the
incumbent Board of Directors cease to constitute a majority of the Board of
Directors without approval of the remaining members of the incumbent Board of
Directors; or (d) any merger (other than a merger where the Company is the
survivor and there is no accompanying change in control under clauses (a), (b)
or (c) of this paragraph), consolidation, liquidation or dissolution, or the
sale of all or substantially all of the Company's assets. However, a change in
control shall not be deemed to occur pursuant to clause (a) of this paragraph
solely because 20% or more of the combined voting power of the Company's
outstanding securities is acquired by one or more employee benefit plans
maintained by the Company or by any other employer, the majority interest in
which is held, directly or indirectly, by the Company.
Termination or Suspension of the 2001 Plan
The Company's Board of Directors may, at any time, terminate or suspend
the 2001 Plan. The 2001 Plan currently provides that the Board of Directors may
amend or suspend the 2001 Plan at any time without the approval of the holders
of a majority of the shares of Common Stock except where the failure to obtain
such approval would adversely affect the compliance of the 2001 Plan with
Sections 162 and 422 of the Internal Revenue Code of 1986, referred to in this
Information Statement as the "Code", Rule 16b-3 under the Exchange Act or other
applicable
7
law.
Federal Income Tax Consequences
THE FOLLOWING IS A GENERAL SUMMARY AS OF THE DATE OF THIS INFORMATION
STATEMENT, OF THE FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY AND
PARTICIPANTS UNDER THE 2001 PLAN. FEDERAL TAX LAWS MAY CHANGE AND THE FEDERAL,
STATE AND LOCAL TAX CONSEQUENCES FOR ANY SUCH PARTICIPANT WILL DEPEND UPON HIS
OR HER INDIVIDUAL CIRCUMSTANCES. EACH PARTICIPANT HAS BEEN AND IS ENCOURAGED TO
SEEK THE ADVICE OF A QUALIFIED TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF
PARTICIPATION IN THE 2001 PLAN.
ISOs granted under the 2001 Plan are intended to qualify as incentive
stock options in accordance with the provisions of Section 422 of the Code. All
other Options granted under the 2001 Plan are nonqualified stock options and not
entitled to special tax treatment under Section 422 of the Code. Generally, the
grant of an ISO will not result in taxable income to the recipient at the time
of the grant, and the Company will not be entitled to an income tax deduction at
such time. The grant of nonqualified stock options will not result in taxable
income to the recipient at the time of the grant to the extent that it is
granted at 100% of the fair market value of the Company's Common Stock at such
time. So long as such Option does not result in taxable income to the recipient
at the time of the grant, the Company will not be entitled to an income tax
deduction.
Upon the exercise of an ISO granted under the 2001 Plan, the recipient
will not be treated as receiving any taxable income, and the Company will not be
entitled to an income tax deduction. Upon the exercise of a nonqualified stock
option, an employee who is not one of the Company's directors or executive
officers will be treated as receiving compensation, taxable as ordinary income,
in an amount equal to the excess of the fair market value of the underlying
shares of the Company's Common Stock at the time of exercise, over the exercise
price. The date of recognition and determination of the ordinary compensation
income attributable to shares received upon exercise of an Option by an
executive officer of the Company, while he or she is subject to Section 16(b) of
the Exchange Act, is generally delayed until six months after such exercise,
unless that person elects to be taxed as of the date of exercise. The Company
will receive an income tax deduction for the amount treated as compensation
income to the recipient at the time and in the amount that the recipient
recognizes such income.
Upon subsequent disposition of the shares subject to the Option, any
differences between the tax basis of the shares and the amount realized on the
disposition is generally treated as long-term or short-term capital gain or
loss, depending on the holding period of the shares of the Company's Common
Stock; provided, that if the shares subject to an ISO are disposed of prior to
the expiration of two years from the date of grant and one year from the date of
exercise, the gain realized on the disposition will be treated as ordinary
compensation income to the optionee.
Upon any grant of restricted stock or other award under the 2001 Plan,
taxable income
8
generally will be recognized by the recipient thereof to the extent that there
is no substantial risk of forfeiture thereof. The satisfaction of any of the
restrictions thereon generally will result in the recipient thereof being deemed
to have received taxable income to the extent of the value of such award with
respect to which such restrictions have been satisfied.
Awards Granted Under The 2001 Plan
The 2001 Plan currently authorizes the issuance of a maximum of
3,000,000 shares of the Company's Common Stock. The Company has not issued any
shares of Common Stock, SARs, RSAs or PGs under the 2001 Plan. No shares of
Common Stock shall be issued in excess of 20% of the shares of Common Stock
outstanding as of the date of issuance and no ISOs shall be issued unless and
until the 2001 Plan has been approved by the stockholders of the Company.
Term of The Option Plan
Unless terminated earlier or extended as provided in the 2001 Plan, the
2001 Plan will expire on September 14, 2011.
ERISA
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The 2001 Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended.
Resale Restrictions
The Company has registered the shares of Common Stock issuable under
the 2001 Plan under the Securities Act in a registration statement on Form S-8
(Registration No.: 333-70592). As such, there are no restrictions on the resale
of such shares, other than a participant's compliance with any applicable state
securities laws or exemptions from such laws. However, the Company's affiliates
may be subject to the sale restrictions set forth in Rule 144 under the
Securities Act.
Delivery of Documents to Security Holders Sharing an Address
Only one Information Statement is being delivered to multiple security
holders sharing an address. The Company will provide you without charge, upon
your request, with a copy of this Information Statement, any or all reports,
proxy statements and other documents filed by the Company with the SEC, as well
as any or all of the documents incorporated by reference in this Information
Statement or the related registration statement (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
such documents). For further information, please contact Juniper Group, Inc.,
111 Great Neck Road, Suite 604, Great Neck, New York 11201, Attention: Investor
Relations Department. The Company's telephone number is (516) 829-4670.
9
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CERTAIN INFORMATION CONCERNING THE COMPANY
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SECURITY OWNERSHIP
For purposes of the disclosure set forth in this Information Statement, all
amounts of shares of the Common Stock have been adjusted to reflect the
one-for-ten (1:10) reverse stock split of the Common Stock in December 2000,
unless otherwise indicated.
The Common Stock is the only class of voting securities of the Company
presently outstanding. The following table sets forth, as of September 25, 2001,
information with respect to the beneficial ownership of shares of the Common
Stock, by:
o each person known by the Company to beneficially own 5% or more of the
outstanding shares of the Common Stock, based on filings with the
Securities and Exchange Commission and certain other information,
o each of the Company's directors,
o each of the Company's "named executive officers", and
o all of the Company's executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the
SEC and includes voting and investment power. In addition, under SEC rules, a
person is deemed to be the beneficial owner of securities which may be acquired
by such person upon the exercise of options and warrants or the conversion of
convertible securities within 60 days from the date on which beneficial
ownership is to be determined.
Except as otherwise indicated in the notes to the following table,
o the Company believes that all shares are beneficially owned, and investment
and voting power is held by, the persons named as owners, and
o unless indicated otherwise, the address for each beneficial owner listed in
the table is c/o Juniper Group, Inc., 111 Great Neck Road, Suite 604, Great
Neck, New York 11021
Amount and Nature of Common Stock Percentage of Shares of Common
Name of Beneficial Owner Beneficially Owned Stock Beneficially Owned
- ------------------------- --------------------------------- ------------------------------
Vlado P. Hrejanovic 984,091 (1) 19.22%
Harold A. Horowitz 212,779 (2) 4.61%
Barry S. Huston 72,556 (3) 1.59%
10
All officers and directors as a group 1,377,330 (4) 25.89%
(4 persons)
(1) Includes 600,000 shares of Common Stock issuable upon exercise of options
granted to Mr. Hreljonovic which are exercisable upon effectiveness of
shareholder approval of the 2001 Plan, which is expected to occur within
the next 60 days. Does not include an aggregate of 293,380 shares of Common
Stock owned by Mr. Hreljanovic's children.
(2) Includes 100,000 shares of Common Stock issuable upon exercise of options
granted to Mr. Horowitz which are exercisable upon effectiveness of
shareholder approval of the 2001 Plan, which is expected to occur within
the next 60 days.
(3) Includes 50,000 shares of Common Stock issuable upon exercise of options
granted to Mr. Huston which are exercisable upon shareholder approval of
the 2001 Plan, which is expected to occur within the next 60 days.
(4) Includes 57,904 shares of Common Stock beneficially owned by Yvonne T.
Paultre, the Company's Secretary, and 50,000 shares of Common Stock
issuable upon exercise of options granted to Ms. Paultre which are
exercisable upon effectiveness of shareholder approval of the 2001 Plan,
which is expected to occur within the next 60 days.
EXECUTIVE COMPENSATION
----------------------
The following summary compensation table sets forth, for the three
years ended December 31, 2000, the cash and other compensation paid to Vlado P.
Hreljanovic, the Company's President, Chief Executive Officer and Chairman of
the Board of Directors. No other individual served as an executive officer of
the Company during 2000, whose total compensation, for services rendered during
2000, was $100,000 or more.
11
Summary Compensation Table
--------------------------
Name and Principal Other Annual
Position Year Salary Bonus Compensation
- ------------------ ---- ------- -----
Vlado P. Hrejanovic, 2000 $76,200 (1) - (2) $60,183 (3)
President, Chief
Executive Office and
Chairman of the Board of 1999 $178,377 - (4) $40,400 (5)
Directors
1998 $175,460 $86,191 (6) $31,200 (7)
(1) During 2000, Mr. Hreljanovic received 50,145 shares as payment of his
salary of $76,200. Mr. Hreljanovic was granted and accepted options to
purchase 28,293 shares of Common Stock exercisable at $4.375 per share,
with a provision for a cashless exercise, in lieu of the balance of his
salary of $106,658.
(2) In recognition of efforts exerted on behalf of the Company and its
subsidiaries in 2000, Mr. Hreljanovic was granted and accepted options to
purchase 25,000 shares of Common Stock exercisable at $4.375 per share,
with a provision for a cashless exercise. As of December 31, 2000, these
options were exercised for 9,784 net shares.
(3) Other compensation for Mr. Hreljanovic in 2000 was primarily comprised of
automobile lease payments and insurance of $31,900, and health and life
insurance of $28,283.
(4) In recognition of efforts exerted on behalf of the Company and its
subsidiaries in 1999, Mr. Hreljanovic was granted and accepted options to
purchase 38,354 shares of Common Stock, exercisable at prices ranging from
$4.80 to $6.80 per share, with a provision for cashless exercise. As of
December 31, 2000, all options had been exercised.
(5) Other compensation for Mr. Hreljanovic in 1999 was primarily comprised of
automobile repairs and insurance of $13,000, and health and life insurance
of $27,400.
(6) Paid in 57,461 shares of the Common Stock, valued at $86,191, issued on
January 1, 1998, in recognition of efforts exerted by Mr. Hreljanovic on
behalf of the Company and its subsidiaries.
(7) Other compensation for Mr. Hreljanovic in 1998 was primarily comprised of
automobile repairs and insurance of $12,900, and health and life insurance
of $18,200.
12
Aggregated Option Exercises in 2000 and Fiscal Year-End Option Values
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Set forth in the table below is information, with respect to the named
executive officers, as to:
o the total number of unexercised options held on December 31,
2000, separately identified between those exercisable and
those not exercisable as of such date, and
o the aggregate value of in-the-money, unexercised options held
on December 31, 2000, separately identified between those
exercisable and those not exercisable.
Number of securities
underlying Value of unexercised
unexercised in-the-money
options/SARs at options/SARs at
Fiscal Year End (#) Fiscal Year End ($)
Exercisable/ Exercisable/
Shares Acquired on Unexercisable Unexercisable
Name Exercise Value Realized
- ------ ------------------- -------------- -------------------- --------------------
Vlado P. Hreljanovic 46,641 $811,871 0/0 $0/$0
Chairman of the Board
President & CEO
Harold A. Horowitz 10,175 $50,875 0/0 $0/$0
Director
Marvin Rostolder 3,522 $17,611 0/0 $0/$0
Director
Yvonne T. Paultre 3,522 $17,611 0/0 $0/$0
Secretary
Employment Contracts
--------------------
Mr. Hreljanovic has an Employment Agreement with the Company which expires
on April 30, 2005, and that provides for his employment as President and Chief
Executive Officer at an annual salary adjusted annually for the CPI Index and
for the reimbursement of certain expenses and insurance. Based on the foregoing
formula, Mr. Hreljanovic's salary was approximately $183,000 in 2000, and is
expected to be approximately $188,000 in 2001. Additionally, the employment
agreement provides that Mr. Hreljanovic may receive shares of Common Stock as
consideration for raising funds for the Company. Due to a working capital
deficit, the Company is unable to pay the entire salary in cash to Mr.
Hreljanovic pursuant to his employment agreement. In the best interests of the
Company, in lieu of cash, Mr. Hreljanovic has agreed to accept the issuance of
shares of Common Stock as a part of the payment for the unpaid salary of 2001
and 2000. On September 25, 2001, the Company issued to Mr. Hreljanovic options
to purchase 600,000 shares of Common Stock at a per share exercise price equal
to $0.65, all of which are immediately exercisable upon effectiveness of
shareholder approval of the 2001 Plan. In 2000, the Company issued to Mr.
Hreljanovic options to purchase 25,000 shares of Common Stock at an exercise
price equal to $4.375 per share.
Under the terms of this employment agreement, the Chief Executive
Officer of the
13
Company is entitled to receive a cash bonus of a percentage of the Company's
pre-tax profits if the Company's pre-tax profit exceeds $100,000.
Additionally, if the employment agreement is terminated early by the
Company after a change in control (as defined by the agreement), the officer is
entitled to a lump sum cash payment equal to approximately three times his base
salary.
In December of 2000, the Company hired a new president for its
subsidiary, Juniper Internet Communications, Inc. The terms of employment, which
are not reflected in any written agreement, include a salary of $200,000 per
year and options to purchase 100,000 shares of Common Stock at $1.20 per share
to be vested as certain benchmarks are achieved over a two year period.
Additionally, the terms of employment provide for an auto allowance and health
insurance.
Mr. Richard Vazquez, President of the Company's PartnerCare, Inc.
subsidiary, had an employment agreement which terminated on June 30, 2000. Under
the terms of his agreement, as amended, Mr. Vazquez received options to purchase
shares of the Common Stock. Effective December 2000, Mr. Vazquez and the Company
agreed to an early termination of the Agreement. Accordingly, Mr. Vazquez
surrendered all options previously issued to him and agreed to forego any stock
or options to which he was previously entitled.
Compensation of Directors
- -------------------------
In 2000, Mr. Hreljanovic and Mr. Horowitz received options to purchase
25,000 and 10,000 shares of Common Stock at an exercise price of $4.375 per
share (on a post one-for-ten reverse split basis), respectively, as additional
compensation as members of the board of directors. In 2000, Mr. Huston did not
receive any options.
In 2001, Mr. Hreljanovic received options to purchase an aggregate of
1,331,422 shares of Common Stock, of which 731,422 were exercisable at a per
share exercise price of $1.10, and of which 600,000 are exercisable at a per
share exercise price of $0.65. In 2001, Mr. Huston received options to purchase
an aggregate of 80,000 shares of Common Stock, of which 30,000 are exercisable
at a per share exercise price of $1.00, and 50,000 are exercisable at a per
share exercise price of $0.65. In 2001, Mr. Horowitz received options to
purchase an aggregate of 250,000 shares of Common Stock, of which 150,000 were
exercisable at at a per share exercise price of $1.00, and 100,000 are
exercisable at a per share exercise price of $0.65.
Compensation Plans
- ------------------
1996 Stock Option Plan
- ----------------------
On February 12, 1997, the shareholders of the Company adopted the 1996
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. This Plan, which allows the
Company to grant incentive stock options, non-
14
qualified stock options and stock appreciation rights (collectively "options"),
to employees, including officers, and to non-employees involved in the
continuing development and success of the Company, authorizes the grant of
100,000 shares of common stock. The terms of the options are to be determined by
the Board of Directors.
Options will not have expiration dates later than ten years from the date
of grant (five years from the date of the grant in the case of a 10%
Stockholder). The Option Prices may not be less than the fair market value of
the common shares on the date of grant, except that any option granted to an
employee holding 10% or more of the outstanding voting securities of the Company
must be for an option price not less than 110% of fair market value. At December
31, 2000, all options under the Plan had been exercised.
1998 Stock Option Plan
- -----------------------
On December 30, 1998, the shareholders of the Company adopted the 1998
Stock Option Plan.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase up to an aggregate of 100,000 shares of common stock to
employees, including officers, and to non-employees involved in the continuing
development and success of the Company. The terms of the options are to be
determined by the Board of Directors. Options will not have expiration dates
later than ten years from the date of grant (five years from the date of the
grant in the case of a 10% stockholder). The option prices may be set at any
amount in the discretion of the Board's Compensation Committee. At December 31,
2000, all options under the Plan had been granted.
1999 Stock Option Plan
- ----------------------
On December 27, 1999, the shareholders of the Company adopted the 1999
Stock Option Plan. The Plan supplements the Company's 1989 Restricted Stock,
Non-Qualified and Incentive Stock Option Plan. The Plan also supplements the
Company's 1996 and 1998 Stock Option Plans.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase up to an aggregate of 150,000 shares of common stock to
employees, including officers, and to non-employees involved in the continuing
development and success of the Company. The terms of the options are to be
determined by the Board of Directors. Options will not have expiration dates
later than ten years from the date of grant (five years from the date of the
grant in the case of a 10% stockholder). The option prices may be set at any
amount in the discretion of the Board's Compensation Committee. At December 31,
2000, 13,079 options had been granted, all of which have been exercised.
2000 Stock Option Plan
- ----------------------
On December 28, 2000, the shareholders of the Company adopted the 2000
Stock Option Plan. The
15
Plan supplements the Company's 1989 Restricted Stock, Non-Qualified and
Incentive Stock Option Plan. The Plan also supplements the Company's 1996, 1998
and 1999 Stock Option Plans.
This Plan allows the Company to grant incentive stock options,
non-qualified stock options and stock appreciation rights (collectively
"options") to purchase (post one-for-ten reverse stock split) up to an aggregate
of 150,000 shares of common stock to employees, including officers, and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10% stockholder). The option
prices may be set at any amount in the discretion of the Board's Compensation
Committee. At December 31, 2000, no options under the Plan had been granted.
16
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- -------------------------------------------------------------------------------
MATERIAL INCORPORATED BY REFERENCE
The following documents, and other materials filed by the Company with
the SEC, are incorporated to and specifically made a part of this Information
Statement by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2000;
2. The Company's Current Report on Form 8-K (Date of Report: January 11,
2001), filed with the SEC on January 16, 2001;
3. The Company's Quarterly Reports on Form 10-QSB for the quarters ended March
31, 2001 and June 30, 2001.
All documents filed by the Company with the SEC, after the date of this
Information Statement, pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act, shall also be deemed to be incorporated by reference in this
Information Statement and to be part hereof from the respective dates of filing
of such documents.
Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Information Statement to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Information Statement.
JUNIPER GROUP, INC.
By:/s/ Vlado P. Hreljanovic
------------------------
Name: Vlado P. Hreljanovic
Title: Chairman of the Board,
President and Chief Executive
Officer
17
- -------------------------------------------------------------------------------
APPENDIX A - 2001 EQUITY INCENTIVE PLAN
- -------------------------------------------------------------------------------
JUNIPER GROUP, INC.
2001 EQUITY INCENTIVE PLAN
(as amended through October 29, 2001)
ARTICLE 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
1.1. Purpose. The purposes of this 2001 Equity Incentive Plan are (a) to enable
Juniper Group, Inc. and its subsidiaries and affiliates to attract and
retain highly qualified personnel who will contribute to the success of
Juniper Group, Inc. and (b) to provide incentives to participants in this
2001 Equity Incentive Plan that are linked directly to increases in
stockholder value which will therefore inure to the benefit of all
stockholders of Juniper Group, Inc.
1.2. Definitions. For purposes of this Equity Incentive Plan, except as
otherwise defined, capitalized terms shall have the meanings assigned to
them in this Section 1.2.
"Administrator" means the Board or, if and to the extent the
Board elects to delegate the administration of the Plan or
does not administer the Plan, the Committee.
"Affiliate" means any entity or person that directly, or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, another
entity, where "control" (including the terms "controlled by"
and "under common control with") means the possession,
directly or indirectly, of the power to cause the direction of
the management and policies of the entity, whether through the
ownership of voting securities, by contract or otherwise.
"Award" means any award under the Plan.
"Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the
Participant setting forth the terms and conditions of the
Award.
"Board" means the Board of Directors of the Company.
"Cause" means the commission of any act of a material theft,
embezzlement or fraud involving the Company or any Parent,
Subsidiary or Affiliate of the Company, or a breach of
fiduciary duty to the Company or any Parent, Subsidiary or
Affiliate of the Company.
"Change of Control" shall have the meaning assigned to such
term in Section 15.2.
A-1
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
"Committee" means compensation or other any committee the
Board may appoint to administer the Plan. To the extent
necessary and desirable, the Committee shall be composed
entirely of individuals who meet the qualifications referred
to in Section 162(m) of the Code and Rule 16b-3 under the
Exchange Act. If at any time or to any extent the Board
shall not administer the Plan, then the functions of the
Board specified in the Plan shall be exercised by the
Committee.
"Common Stock" means the common stock, par value $.001
per share, of the Company.
"Company" means Juniper Group, Inc., a Nevada corporation,
or any successor corporation.
"Disability" means the inability of a Participant to perform
substantially his or her duties and responsibilities to the
Company or to any Parent, Subsidiary or Affiliate by reason of
a physical or mental disability or infirmity for a continuous
period of six months, as determined by the Administrator. The
date of such Disability shall be the last day of such
six-month period or the date on which the Participant submits
such medical evidence, satisfactory to the Administrator, that
the Participant has a physical or mental disability or
infirmity that will likely prevent the Participant from
performing the Participant's work duties for a continuous
period of six months or longer, as the case may be.
"Eligible Recipient" means an officer, director, employee,
consultant or advisor of the Company or of any Parent,
Subsidiary or Affiliate. For purposes of the Plan, the term
"employee" shall include all those individuals whose service
with or for the Company and/or any Parent, Subsidiary or
Affiliate of the Company, is within the definition of
"employee" in the Rule as to the Use of Form S-8 contained in
the General Instructions for the registration statement on
Form S-8 promulgated by the Securities and Exchange
Commission.
"Employee Director" means any director of the Company who is
also an employee of the Company or of any Parent, Subsidiary
or Affiliate.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Exercise Price" means the per share price at which a holder
of an Award may purchase the Shares issuable upon exercise of
such Award.
"Fair Market Value" as of a particular date shall mean the
fair market value of a share of Common Stock as determined by
the Administrator; provided, however, that Fair Market Value
shall mean (i) if the Common Stock is listed or admitted to
trade on a national securities exchange, the closing price of
the Common Stock on the Composite Tape, as published in The
Wall Street Journal, of the principal national securities
exchange on which the Common Stock is so listed or admitted
2
to trade, on such date, or, if there is no trading of the
Common Stock on such date, then the closing price of the
Common Stock as quoted on such Composite Tape on the next
preceding date on which there was trading in such shares;
(ii) if the Common Stock is not listed or admitted to trade on
a national securities exchange but is listed and quoted on
The Nasdaq Stock Market ("Nasdaq"), the last sale price for
the Common Stock on such date as reported by Nasdaq, or, if
there is no reported trading of the Common Stock on such date,
then the last sale price for the Common Stock on the next
preceding date on which there was trading in the Common Stock;
(iii) if the Common Stock is not listed or admitted to trade
on a national securities exchange and is not listed and
quoted on Nasdaq, the mean between the closing bid and asked
price for the Common Stock on such date, as furnished by the
National Association of Securities Dealers, Inc. ("NASD");
(iv) if the Common Stock is not listed or admitted to trade on
a national securities exchange, not listed and quoted on
Nasdaq and closing bid and asked prices are not furnished by
the NASD, the mean between the closing bid and asked price for
the Common Stock on such date, as furnished by the National
Quotation Bureau ("NQB") or similar organization; (v) if the
stock is not listed or admitted to trade on a national
securities exchange, not listed and quoted on Nasdaq and if
bid and asked prices for the Common Stock are not furnished by
the NASD, NQB or a similar organization, the value established
in good faith by the Administrator; and (vi) in the case of a
Limited Stock Appreciation Right, the Fair Market Value of a
share of Common Stock shall be the "Change in Control Price"
(as defined in the Award Agreement evidencing such Limited
Stock Appreciation Right) of a share of Common Stock as of the
date of exercise.
"Family Member" means, with respect to any Participant, any of
the following:
(a) such Participant's child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law,
brother-in-law, sister-in-law, including any such
person with such relationship to the Participant by
adoption; (b) any person (other than a tenant or
employee) sharing such Participant's household; (c) a
trust in which the persons identified in clauses (a)
and (b) above have more than fifty percent of the
beneficial interest; (d) a foundation in which the
persons identified in clauses (a) and (b) above or
the Participant control the management of assets; or
(e) any other entity in which the persons identified
in clauses (a) and (b) above or the Participant own
more than fifty percent of the voting interest.
"Incentive Stock Option" means any Option intended to be
designated as an "incentive stock option" within the meaning
of Section 422 of the Code.
"Incumbent Board" means (i) the members of the Board of the
Company on September 14, 2001, to the extent that they
continue to serve as members of the Board, and (ii) any
individual who becomes a member of the Board after
3
September 14, 2001, if such individual's election or
nomination for election as a director was approved by a
vote of at least three-quarters of the then Incumbent Board.
"Limited Stock Appreciation Right" means a Stock Appreciation
Right that can be exercised only in the event of a "Change in
Control" (as defined in the Award Agreement evidencing such
Limited Stock Appreciation Right).
"Non-Employee Director" means a director of the Company who is
not an employee of the Company or of any Parent, Subsidiary or
Affiliate.
"Non-Qualified Stock Option" means any Option that is not an
Incentive Stock Option, including, but not limited to, any
Option that provides (as of the time such Option is granted)
that it will not be treated as an Incentive Stock Option.
"Option" means an option to purchase Shares granted pursuant
to Article 5.
"Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if
each of the corporations in the chain (other than the Company)
owns stock possessing 50% or more of the combined voting power
of all classes of stock in one of the other corporations in
the chain.
"Participant" means any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority to
receive grants of Options, Stock Appreciation Rights, Limited
Stock Appreciation Rights, awards of Restricted Stock,
Performance Shares, other types of awards, or any combination
of the foregoing.
"Performance Grant" shall have the meaning assigned to the
term in Article 8.
"Performance Shares" means Shares that are subject to
restrictions based upon the attainment of specified
performance objectives granted pursuant to Article 8.
"Permitted Transfer" means, as authorized by the Plan and the
Administrator, with respect to an interest in a Non-Qualified
Stock Option, any transfer effected by the Participant during
the Participant's lifetime of an interest in such
Non-Qualified Stock Option but only such transfers which are
by gift or pursuant to domestic relations orders. A permitted
transfer does not include any transfer for value and neither
transfers under a domestic relations order in settlement of
marital property rights or to an entity in which more than 50%
of the voting interests are owned by Family Members or the
Participant in exchange for an interest in that entity are
deemed transfers for value.
"Plan" means this 2001 Equity Incentive Plan.
4
"Related Employment" means the employment or performance of
services by an individual for an employer that is neither the
Company, any Parent, Subsidiary nor Affiliate, provided that
(i) such employment or performance of services is undertaken
by the individual at the request of the Company or any Parent,
Subsidiary or Affiliate, (ii) immediately prior to undertaking
such employment or performance of services, the individual was
employed by or performing services for the Company or any
Parent, Subsidiary or Affiliate or was engaged in Related
Employment, and (iii) such employment or performance of
services is in the best interests of the Company and is
recognized by the Administrator, as Related Employment. The
death or Disability of an individual during a period of
Related Employment shall be treated, for purposes of this
Plan, as if the death or onset of Disability had occurred
while the individual was employed by or performing services
for the Company or a Parent, Subsidiary or Affiliate.
"Restricted Stock" means Shares subject to certain
restrictions granted pursuant to Article 7.
"Restricted Period" means the period of time Restricted Stock
remains subject to restrictions imposed on the Award of such
Restricted Stock.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Shares" means shares of Common Stock reserved for issuance
under or issued pursuant to the Plan, as adjusted pursuant to
Article 4, and any successor security.
"Stock Appreciation Right" means the right pursuant to an
Award granted under Article 6 to receive an amount equal to
the excess, if any, of (i) the Fair Market Value, as of the
date such Stock Appreciation Right or portion thereof is
surrendered, of the Shares covered by such right or such
portion thereof, over (ii) the aggregate exercise price of
such right or such portion thereof as established by the
Administrator at the time of the grant of such Award (or such
other exercise price thereafter established by the
Administrator with the consent of the Participant granted such
Award where required by the Plan).
"Stock Bonus" means an Award granted pursuant to Article 9.
"Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company,
if each of the corporations (other than the last corporation)
in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of
the other corporations in the chain.
"Ten Percent Stockholder" shall have the meaning assigned to
it in Section 5.4.
"Termination" or "Terminated" means, for purposes of the Plan
with respect to a Participant, that such Participant has for
any reason ceased to provide services as
5
an employee, officer, director, consultant, independent
contractor, or advisor to the Company or any Parent,
Subsidiary or Affiliate of the Company. A Participant will
not be deemed to have ceased to provide services in the case
of (i) sick leave, (ii) military leave, or (iii) any other
leave of absence approved by the Administrator, provided,
that such leave is for a period of not more than 90 days,
unless reemployment or reinstatement upon the expiration of
such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from
time to time by the Company and issued and promulgated to
employees and other participants in writing. In
the case of any Participant on an approved leave of absence,
the Administrator may make such provisions respecting
suspension of vesting of any Award previously granted to such
Participant while such Participant is on leave from the
Company or any Parent, Subsidiary or Affiliate of the Company
as the Administrator may deem appropriate, except that in no
event may an Option be exercised after the expiration of the
term set forth in the Award Agreement with respect to such
Option. The Administrator will have sole discretion to
determine whether a Participant has ceased to provide services
and the applicable Termination Date.
"Termination Date" means the effective date of Termination, as
determined by the Administrator.
ARTICLE 2. ADMINISTRATION.
2.1. Administration in Accordance with the Code and Exchange Act. The Plan shall
be administered in accordance with the requirements of Section 162(m) of
the Code (but only to the extent necessary and desirable to maintain
qualification of Awards under the Plan under Section 162(m) of the Code)
and, to the extent applicable, Rule 16b-3 under the Exchange Act ("Rule
16b-3"), by the Board or, at the Board's sole discretion, by the Committee,
which shall be appointed by the Board, and which shall serve at the
pleasure of the Board.
2.2. Administrator's Powers. Subject to the general purposes, terms and
conditions of this Plan, the Administrator will have full power to
implement and carry out this Plan. The Administrator will have the
authority to:
(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this
Plan or any Award;
(c) select persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to
Awards;
(f) determine whether Awards will be granted singly, in combination with,
in tandem with, in replacement of, or as alternatives to, other Awards
under this Plan
6
or any other incentive or compensation plan of the
Company or any Parent, Subsidiary or Affiliate of the Company;
(g) grant waivers of Plan or Award conditions;
(h) determine the vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission or reconcile any inconsistency
in the Plan, any Award or any Award Agreement;
(j) to make any adjustments necessary or desirable as a result of the
granting of an Award to an Eligible Participant located outside the
United States;
(k) determine whether an Award has been earned; and
(l) make all other determinations necessary or advisable for the
administration of the Plan.
2.3. Administrator's Discretion Final. Any determination made by the
Administrator with respect to any Award will be made in its sole
discretion at the time of grant of the Award or, unless in
contravention of any express term of the Plan or Award, at any later
time, and such determination will be final and binding on the Company
and on all persons having an interest in any Award under the Plan.
2.4. Administrator's Method of Acting; Liability. The Administrator may act
only by a majority of its members then in office, except that the
members thereof may authorize any one or more of their members or any
officer of the Company to execute and deliver documents or to take any
other ministerial action on behalf of the Administrator with respect to
Awards made or to be made to Eligible Participants. No member of the
Committee and no officer of the Company shall be liable for anything
done or omitted to be done by such member or officer, by any other
member of the Administrator or by any officer of the Company in
connection with the performance of duties under the Plan, except for
such member's or officer's own willful misconduct or as expressly
provided by law.
ARTICLE 3. PARTICIPATION.
3.1. Affiliates. If a Parent, Subsidiary or Affiliate of the Company wishes to
participate in the Plan and its participation shallhave been approved by
the Board, the board of directors or other governing body of the Parent,
Subsidiary or Affiliate, as the case may be, shall adopt a resolution in
form and substance satisfactory to the Administrator authorizing
participation by the Parent, Subsidiary or Affiliate in the Plan. A Parent,
Subsidiary or Affiliate participating in the Plan may cease to be a
participating company at any time by action of the Board or by action of
the board of directors or other governing body of such Parent, Subsidiary
or Affiliate, which latter action shall be effective not earlier than the
date of delivery to the Secretary of the Company of a certified copy of a
resolution of the Parent, Subsidiary or Affiliate's board of directors or
other governing body taking such action. If the participation in the Plan
of a Parent, Subsidiary or Affiliate shall terminate, such termination
shall not relieve the Parent, Subsidiary or Affiliate of any obligations
theretofore incurred by the Parent, Subsidiary or Affiliate, except as may
be approved by the Administrator.
3.2. Participants. Incentive Stock Options may be granted only to employees
(including officers and directors who are also employees) of the Company,
or any Parent, Subsidiary or Affiliate of the Company. All other Awards may
be granted to employees, officers, directors, consultants, independent
contractors and advisors of the Company or any Parent, Subsidiary or
Affiliate of the Company; provided, that such consultants, contractors and
advisors render bona fide services to the Company or such Parent,
Subsidiary or Affiliate of the Company not in connection with the offer and
sale of securities in a capital-raising transaction. An Eligible
Participant may be granted more than one Award under the Plan.
ARTICLE 4. AWARDS UNDER THE PLAN.
4.1. Types of Awards. Awards under the Plan may include, but need not be limited
to, one or more of the following types, either alone or in any combination
thereof:
(a) Options;
(b) Stock Appreciation Rights;
(c) Restricted Stock;
(d) Performance Grants;
(e) Stock Bonuses; and
(f) any other type of Award deemed by the Committee to be
consistent with the purposes of the Plan (including but not
limited to, Awards of or options or similar rights granted
with respect to unbundled stock units or components thereof,
and Awards to be made to participants who are foreign
nationals or are employed or performing services outside the
United States).
4.2. Number of Shares Available Under the Plan. Subject to Section 4.4, the
total number of Shares reserved and available for grant and issuance
pursuant to the Plan will be 3,000,000, plus Shares that are subject to:
(a) issuance upon exercise of an Option previously granted but
cease to be subject to such Option for any reason other than
exercise of such Option; (b) an Award previously granted but
forfeited or repurchased by the Company at the original issue
price; and (c) an Award previously granted that otherwise
terminates without Shares being issued.
Shares may consist, in whole or in part, of authorized and unissued shares
or treasury shares.
The number of Shares which are transferred to the Company by a
Participant to pay the exercise or purchase price of an award will be subtracted
from the number of Shares issued with respect to such Award for the purpose of
counting Shares used under the Plan. Shares withheld to pay withholding taxes in
connection with the exercise or repayment of an Award will not be counted as
used under the Plan. In addition, shares covered by an award granted under the
Plan which is settled in cash will not be counted as used under the Plan.
8
4.3. Reservation of Shares. At all times, the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Options granted under the Plan and all
other outstanding but unexercised Awards granted under the Plan.
4.4. Adjustment in Number of Shares Available Under the Plan. In the event that
the number of outstanding shares of Common Stock is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision,
combination, reclassification or similar change in the capital structure of
the Company without consideration, then (a) the number of Shares reserved
for issuance under the Plan, (b) the number of Shares that may be granted
pursuant to the Plan, (c) the Exercise Prices of and number of Shares
subject to outstanding Options and other awards, and (d) the exercise
prices of and number of Shares subject to other outstanding Awards, will be
proportionately adjusted, subject to any required action by the Board or
the stockholders of the Company and compliance with applicable securities
laws; provided, however, that, upon occurrence of such an event, fractions
of a Share will not be issued upon exercise of an Award but will, upon such
exercise, either be replaced by a cash payment equal to the Fair Market
Value of such fraction of a Share on the effective date of such an event or
will be rounded up to the nearest whole Share, as determined by the
Administrator.
4.5. Rights with Respect to Common Shares and Other Securities.
---------------------------------------------------------
(a) Unless otherwise determined by the Administrator, a
Participant to whom an Award of Restricted Stock has been made
(and any person succeeding to such Participant's rights with
respect to such Award pursuant to the Plan) shall have, after
issuance of a certificate or copy thereof for the number of
Shares so awarded and prior to the expiration of the
Restricted Period or the earlier repurchase of such Shares as
provided in the Plan or Award Agreement with respect to such
Award of Restricted Stock, ownership of such Shares, including
the right to vote the same and to receive dividends or other
distributions made or paid with respect to such Shares
(provided that such Shares, and any new, additional or
different shares, or other securities or property of the
Company, or other forms of consideration which the participant
may be entitled to receive with respect to such Shares as a
result of a stock split, stock dividend or any other change in
the corporate or capital structure of the Company, shall be
subject to the restrictions of the Plan as determined by the
Administrator), subject, however, to the options, restrictions
and limitations imposed thereon pursuant to the Plan.
Notwithstanding the foregoing, unless otherwise determined by
the Administrator, a Participant with whom an Award Agreement
is made to issue Shares in the future shall have no rights as
a stockholder with respect to Shares related to such Award
Agreement until a stock certificate evidencing such Shares is
issued to such Participant.
(b) Unless otherwise determined by the Administrator, a
Participant to whom a grant of Stock Options, Stock
Appreciation Rights, Performance Grants or any other Award is
made (and any person succeeding to such Participant's rights
9
pursuant to the Plan) shall have no rights as a stockholder
with respect to any Shares or as a holder with respect to
other securities, if any, issuable pursuant to any such Award
until the date a stock certificate evidencing such Shares or
other instrument of ownership, if any, is issued to such
Participant. Except as provided in Section 4.4, no adjustment
shall be made for dividends, distributions or other rights
(whether ordinary or extraordinary, and whether in cash,
securities, other property or other forms of consideration, or
any combination thereof) for which the record date is prior to
the date such stock certificate or other instrument of
ownership, if any, is issued.
ARTICLE 5. STOCK OPTIONS.
5.1. Grant; Determination of Type of Option. The Administrator may grant one or
more Options to an Eligible Participant and will determine (a) whether each
such Option will be an Incentive Stock Option or a Non-Qualified Stock
Option, (b) the number of Shares subject to each such Option, (c) the
Exercise Price of each such Option, (d) the period during which each such
Option may be exercised, and (e) all other terms and conditions of each
such Option, subject to the terms and conditions of this Article 5. The
Administrator may grant an Option either alone or in conjunction with Stock
Appreciation Rights, Performance Grants or other Awards, either at the time
of grant or by amendment thereafter.
5.2. Form of Option Award Agreement. Each Option granted under the Plan will be
evidenced by an Award Agreement which will expressly identify the Option as
an Incentive Stock Option or a Non-Qualified Stock Option, will be in such
form and contain such provisions (which need not be the same for each
Participant or Option) as the Committee may from time to time approve, and
which will comply with and be subject to the terms and conditions of the
Plan.
5.3. Date of Grant. The date of grant of an Option will be the date on which the
Administrator makes the determination to grant such Option, unless
otherwise specified by the Administrator.
5.4. Exercise Period. Each Option shall be exercisable within the times or upon
the occurrence of one or more events determined by the Administrator and
set forth in the Award Agreement governing such Option; provided, however,
that no Option will be exercisable after the expiration of ten years from
the date the Option is granted; and provided, further, however, that no
Incentive Stock Option granted to a person who directly or by attribution
owns more than 10% of the total combined voting power of all classes of
stock of the Company or of any Parent, Subsidiary or Affiliate of the
Company (each, a "Ten Percent Stockholder") will be exercisable after the
expiration of five years from the date such Incentive Stock Option is
granted. The Administrator also may provide for an Option to become
exercisable at one time or from time to time, periodically or otherwise, in
such number of Shares or percentage of Shares as the
10
Administrator determines. Unless otherwise determined by the Administrator,
an Option shall be exercisable as follows:
(a) up to 25% of the number of Shares subject to such Option
commencing on the first anniversary of the date of grant of
such Option; (b) up to an additional 25% of the number of
Shares subject to such Option commencing on the second
anniversary of the date of grant of such Option; (c) up to an
additional 25% of the number of Shares subject to such Option
commencing on the third anniversary of the date of grant of
such Option; and (d) up to an additional 25% of the number of
Shares subject to such Option commencing on the fourth
anniversary of the date of grant of such Option.
5.5. Exercise Price. The Exercise Price of an Option will be determined by
the Administrator when the Option is granted and may be not less than
85% of the per share Fair Market Value of the Shares subject to such
Option on the date of grant of such Option; provided, however, that:
(a) the Exercise Price of an Incentive Stock Option will be not less
than 100% of the per share Fair Market Value of such Shares on the date
of such grant and (b) the Exercise Price of any Incentive Stock Option
granted to a Ten Percent Stockholder will not be less than 110% of the
per share Fair Market Value of such Shares on the date of such grant.
Payment for the Shares purchased shall be made in accordance with
Article 10 of the Plan.
5.6. Method of Exercise. An Option may be exercised only by delivery to the
Company of an irrevocable written exercise notice (a) identifying the
Option being exercised, (b) stating the number of Shares being
purchased, (c) providing any other matters required by the Award
Agreement with respect to such Option, and (d) containing such
representations and agreements regarding Participant's investment
intent and access to information and other matters, if any, as may be
required or desirable by the Company to comply with applicable
securities laws. Such exercise notice shall be accompanied by payment
in full of the Exercise Price for the number of Shares being purchased
in accordance with Article 10 and the executed Award Agreement with
respect to such Option.
5.7. Termination. Notwithstanding anything contained in Section 5.4 or in an
Award Agreement, exercise of Options shall always be subject to the
following:
(a) If the Participant is Terminated for any reason except death or
Disability, then the Participant may exercise each of such
Participant's Options (i) only to the extent that such Options would
have been exercisable on the Termination Date and (ii) no later than
three months after the Termination Date (or such longer time period
not exceeding five years as may be determined by the Administrator,
with any exercise beyond three months after the Termination Date
deemed to be an exercise of an Non-Qualified Stock Option), but in any
event, no later than the original expiration date of such Option;
(b) If the Participant is Terminated because of Participant's death or
Disability (or the Participant dies within three months after a
Termination other than for Cause or because of Participant's
Disability), then each of such Participant's Options (i) may be
exercised only to the extent that such Option would have been
11
exercisable by Participant on the Termination Date and (ii) must be
exercised by Participant (or Participant's legal representative or
authorized assignee) no later than twelve months after the Termination
Date (or such longer time period not exceeding five years as may be
determined by the Administrator, with any such exercise beyond (A)
three months after the Termination Date when the Termination is for
any reason other than the Participant's death or Disability or (B)
twelve months after the Termination Date when the Termination is
because of Participant's death or Disability, deemed to be an exercise
of a Non-Qualified Stock Option), but in any event no later than the
original expiration date of such Option; (c) Notwithstanding the
provisions in paragraphs 5.7(a) and 5.7(b), if a Participant is
terminated for Cause, neither the Participant, the Participant's
estate nor such other person who may then hold an Option shall be
entitled to exercise such Option whatsoever, whether or not, after the
Termination Date, the Participant may receive payment from the Company
or any Parent, Subsidiary or Affiliate of the Company for vacation
pay, for services rendered prior to the Termination Date, for services
rendered for the day on which Termination occurs, for salary in lieu
of notice, for severance or for any other benefits; provided, however,
in making such a determination, the Administrator shall give the
Participant an opportunity to present to the Administrator evidence on
Participant's behalf that the provisions of this paragraph 5.7(c)
should not apply and, in the alternative, paragraph 5.7(a) or 5.7(b)
shall apply; provided, further, however, that, for the purpose of this
paragraph 5.7(c), Termination shall be deemed to occur on the date
when the Company dispatches notice or advice to the Participant that
such Participant is Terminated.
5.8. Limitations on Exercise. The Administrator may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option,
provided, that such minimum number will not prevent Participant from
exercising the Option for the full number of Shares for which the Option is
then exercisable.
5.9. Limitations on Incentive Stock Options. The aggregate Fair Market Value (as
determined as of the date of grant) of Shares with respect to which an
Incentive Stock Option are exercisable for the first time by a Participant
during any calendar year (under the Plan or under any other incentive stock
option plan of the Company, and any Parent, Subsidiary and Affiliate of the
Company) will not exceed $100,000. If the Fair Market Value of Shares on
the date of grant with respect to which Incentive Stock Option(s) are
exercisable for the first time by a Participant during any calendar year
exceeds $100,000, then the Option(s) for the first $100,000 worth of Shares
to become exercisable in such calendar year will be deemed Incentive Stock
Option(s) and the Option(s) that become exercisable in such calendar year
for the number of Shares which have a Fair Market Value in excess of
$100,000 will be deemed to be Non-Qualified Stock Option(s). In the event
that the Code or the regulations promulgated thereunder are amended after
the effective date of the Plan to provide for a different limit on the Fair
Market Value of Shares permitted to be subject to Incentive Stock Options,
such different limit will be
12
automatically incorporated herein and will apply to any Options granted
after the effective date of such amendment.
5.10.Modification, Extension or Renewal. The Administrator may modify, extend or
renew any outstanding Option and authorize the grantof one or more new
Options in substitution therefor; provided that any such action may not,
without the written consent of a Participant, impair any of such
Participant's rights under any Option previously granted. Any outstanding
Incentive Stock Option that is modified, extended, renewed or otherwise
altered will be treated in accordance with Section 424(h) and other
applicable provisions of the Code. The Administrator may reduce the
Exercise Price of any outstanding Option of a Participant without the
consent of the Participant affected by delivering a written notice to the
Participant; provided, however, that the Exercise Price may not be reduced
below the minimum Exercise Price that would be permitted under Section 5.5
for Options granted on the date the action is taken to reduce such Exercise
Price.
5.11.No Disqualification. Notwithstanding any other provision in the Plan, no
term of the Plan relating to an Incentive Stock Option will be interpreted,
amended or altered, nor will any discretion or authority granted under the
Plan be exercised, so as to disqualify the Plan under Section 422 of the
Code or, without the consent of the Participant affected, to disqualify any
Incentive Stock Option under Section 422 of the Code.
5.12.Prohibition Against Transfer. No Option may be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will
or the laws of descent and distribution or pursuant to a domestic relations
order, and a Participant's Option shall be exercisable during such
Participant's lifetime only by such Participant or such person receiving
such Option pursuant to a domestic relations order.
ARTICLE 6. STOCK APPRECIATION RIGHTS.
6.1 Grant of Stock Appreciation Rights.
----------------------------------
(a) The Administrator may grant Stock Appreciation Rights either alone, or
in conjunction with the grant of an Option, Performance Grant or other
Award, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by
an instrument in such form as the Administrator shall prescribe from time
to time in accordance with the Plan and shall comply with the following
terms and conditions, and with such other terms and conditions, including,
but not limited to, restrictions upon the Award of Stock Appreciation
Rights or the Shares issuable upon exercise thereof, as the Administrator
shall establish.
(b) The Administrator shall determine the number of Shares to be subject to
each Award of Stock Appreciation Rights. The number of Shares subject to an
outstanding Award of Stock Appreciation Rights may be reduced on a
share-for-share or other appropriate basis, as determined by the
Administrator, to the extent that Shares under such Award of Stock
Appreciation Rights are used to
13
calculate the cash, Shares, or other securities or property of the Company,
or other forms of payment, or any combination thereof, received pursuant to
exercise of an Option attached to such Award of Stock Appreciation Rights,
or to the extent that any other Award granted in conjunction with such
Award of Stock Appreciation Rights is paid.
6.2. Prohibition Against Transfer. No Award of Stock Appreciation Rights may be
sold, assigned, transferred, pledged, hypothecated or otherwise disposed
of, except by will or the laws of the descent and distribution or pursuant
to a domestic relations order, and Stock Appreciation Rights Awarded to a
Participant shall be exercisable during such Participant's lifetime only by
such Participant or such person receiving such Option pursuant to a
domestic relations order. Unless the Administrator determines otherwise,
the Award of Stock Appreciation Rights to a Participant shall not be
exercisable for at least six months after the date of grant, unless such
Participant is Terminated before the expiration of such six-month period by
reason of such Participant's Disability or death.
6.3. Exercise. The Award of Stock Appreciation Rights shall not be exercisable:
(a) in the case of any Award of Stock Appreciation Rights that
are attached to an Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the
date such Incentive Stock Option is granted, and, in the case
of any other Award of Stock Appreciation Rights, after the
expiration of ten years from the date of such Award. Any Award
of Stock Appreciation Rights may be exercised during such
period only at such time or times and in such installments as
the Administrator may establish; (b) unless the Option or
other Award to which the Award of Stock Appreciation Rights is
attached is at the time exercisable; and (c) unless the
Participant exercising the Award of Stock Appreciation Rights
has been, at all times during the period beginning with the
date of the grant thereof and ending on the date of such
exercise, employed by or otherwise performing services for the
Company or any Parent, Subsidiary or Affiliate of the Company,
except that
(i) in the case of any Award of Stock
Appreciation Rights (other than those attached to an
Incentive Stock Option), if such Participant is
Terminated solely by reason of a period of Related
Employment, the Participant may, during such period
of Related Employment, exercise the Award of Stock
Appreciation Rights as if such Participant had not
been Terminated;
(ii) if such Participant is Terminated by
reason of such Participant's Disability or early,
normal or deferred retirement under an approved
retirement program of the Company or any Parent,
Subsidiary or Affiliate of the Company (or such other
plan or arrangement as may be approved by the
Administrator for this purpose) while holding an
Award of Stock Appreciation Rights which has not
expired and has not been fully exercised, such
Participant may, at any time within three years (or
such other period determined by the Administrator)
after the Termination Date (but in no event after the
Award of Stock Appreciation Rights has
14
expired), exercise the Award of Stock Appreciation
Rights with respect to any Shares as to which such
Participant could have exercised the Award of
Stock Appreciation Rights on the Termination
Date, or with respect to such greater number of
Shares as determined by the Administrator;
(iii) if such Participant is Terminated for
reasons other than Related Employment, Disability,
early, normal or deferred retirement or death while
holding an Award of Stock Appreciation Rights which
has not expired and has not been fully exercised,
such person may exercise the Award of Stock
Appreciation Rights at any time during the period, if
any, which the Administrator approves (but in no
event after the Award of Stock Appreciation Rights
expires) following such Participant's Termination
Date with respect to any Shares as to which such
Participant could have exercised the Award of Stock
Appreciation Rights on such Participant's Termination
Date or as otherwise permitted by the Administrator;
or
(iv) if any Participant to whom an Award of
Stock Appreciation Rights has been granted shall die
holding an Award of Stock Appreciation Rights which
has not expired and has not been fully exercised,
such Participant's executors, administrators, heirs
or distributees, as the case may be, may, at any time
within one year (or such other period determined by
the Administrator) after the date of death (but in no
event after the Award of Stock Appreciation Rights
has expired), exercise the Award of Stock
Appreciation Rights with respect to any Shares as to
which the decedent Participant could have exercised
the Award of Stock Appreciation Rights at the time of
such death, or with respect to such greater number of
Shares as may be determined by the Administrator.
6.4. Exercise.
--------
(a) An Award of Stock Appreciation Rights shall entitle the
Participant (or any person entitled to act under the
provisions of clause (iv) of Paragraph 6.3(c) to either (i)
exercise such Award and receive payment in accordance with
such Award or (ii) surrender unexercised the Option (or other
Award) to which the Stock Appreciation Rights is attached (or
any portion of such Option or other Award) to the Company and
to receive from the Company in exchange therefor, without
payment to the Company, that number of Shares having an
aggregate value equal to the excess of the Fair Market Value
of one Share, at the time of such exercise, over the Exercise
Price per share, times the number of Shares subject to the
Award or the Option (or other Award), or portion thereof,
which is so exercised or surrendered, as the case may be. The
Administrator shall be entitled to elect to settle the
obligation arising out of the exercise of Stock Appreciation
Rights by the payment of cash or other securities or property
of the Company, or other forms of payment, or any combination
thereof, as determined by the Administrator, equal to the
aggregate value of the Shares the Company would otherwise be
obligated to deliver. Any such election by the Administrator
shall be made as soon as practicable after the receipt by the
Company of written notice of the exercise of such Stock
Appreciation Rights. The value of a Share,
15
other securities or property of the Company, or other
forms of payment determined by the Administrator for this
purpose shall be the Fair Market Value of a Share on the
last business day next preceding the date of the
election to exercise such Stock Appreciation Rights,
unless the Administrator determines otherwise and is set
forth in the Award Agreement with respect to such Stock
Appreciation Rights.
(b) An Award of Stock Appreciation Rights may provide that
such Stock Appreciation Rights shall be deemed to have been
exercised at the close of business on the business day
preceding the expiration date of such Stock Appreciation
Rights or of the related Option (or other Award), or such
other date as specified by the Administrator, if at such time
such Stock Appreciation Rights has a positive value. Such
deemed exercise shall be settled or paid in the same manner as
a regular exercise thereof as provided in Paragraph 6.4(a).
6.5. Fractional Shares. No fractional shares may be delivered under this Article
6, but, in lieu thereof, a cash or other adjustment shall be made as
determined by the Administrator.
ARTICLE 7. RESTRICTED STOCK.
7.1. Grant. An Award of Restricted Stock is an offer by the Company to sell to
an Eligible Participant Shares that are subject to restrictions. The
Administrator will determine to whom an offer will be made, the number of
Shares the person may purchase, the Exercise Price to be paid, the
restrictions to which the Shares will be subject, and all other terms and
conditions of the Restricted Stock Award, subject to the provisions of this
Article 7.
7.2 Form of Restricted Stock Award. All purchases under an Award of Restricted
Stock will be evidenced by an Award Agreement that will be in such form
(which need not be the same for each Award of Restricted Stock or
Participant) as the Administrator will from time to time approve, and will
comply with and be subject to the terms and conditions of the Plan. The
offer of Restricted Stock will be accepted by the Participant's execution
and delivery of the Award Agreement evidencing the offer to purchase the
Restricted Stock and full payment for the Shares to the Company within 30
days from the date such Award Agreement is tendered to such Eligible
Participant. If such Eligible Participant does not execute and deliver such
Award Agreement along with full payment for the Shares to the Company
within such 30 day period, then such offer will terminate, unless otherwise
determined by the Administrator.
7.3. Purchase Price. The Exercise Price of Shares sold pursuant to an Award of
Restricted Stock will be determined by the Administrator on the date such
Award is granted, except in the case of a sale to a Ten Percent
Stockholder, in which case the Exercise Price will be 100% of the per share
Fair Market Value on the date such Award is granted of the Shares subject
to the Award. Payment of the Exercise Price may be made in accordance with
Article 10 of the Plan.
16
7.4. Terms of Restricted Stock Awards. Each Award of Restricted Stock shall be
subject to such restrictions as the Administrator may impose. These
restrictions may be based upon completion of a specified number of years of
service with the Company or upon completion of the performance goals as set
out in advance in the Participant's individual Award Agreement. Awards of
Restricted Stock may vary from Participant to Participant and between
groups of Participants. Prior to the grant of an Award of Restricted Stock,
the Administrator shall:
(a) determine the nature, length and starting date of any
performance period for the Restricted Stock Award; (b) select
from among the performance factors to be used to measure
performance goals, if any; and (c) determine the number of
Shares that may be awarded to the Participant.
Prior to the payment of any Restricted Stock pursuant to an Award, the
Administrator shall determine the extent to which such Restricted Stock
Award has been earned. Performance periods may overlap and Participants may
participate simultaneously with respect to Restricted Stock Awards that are
subject to different performance periods and having different performance
goals and other criteria.
7.5. Termination During Performance Period. If a Participant is Terminated
during a performance period with respect to any Award of Restricted Stock
for any reason, then such Participant will be entitled to payment (whether
in Shares, cash or otherwise) with respect to the Restricted Stock Award
only to the extent earned as of the date of Termination in accordance with
the Award Agreement with respect to such Restricted Stock, unless the
Administrator determines otherwise.
ARTICLE 8. PERFORMANCE GRANTS.
8.1. Award. The Award of a Performance Grant ("Performance Grant") to a
Participant will entitle such Participant to receive a specified amount
(the "Performance Grant Actual Value") as determined by the Administrator;
provided that the terms and conditions specified in the Plan and in the
Award of such Performance Grant are satisfied. Each Award of a Performance
Grant shall be subject to the terms and conditions set forth in this
Article 8 and such other terms and conditions, including, but not limited
to, restrictions upon any cash, Shares, other securities or property of the
Company, or other forms of payment, or any combination thereof, issued in
respect of the Performance Grant, as the Administrator shall establish,
shall be embodied in an Award Agreement in such form and substance as is
approved by the Administrator.
8.2. Terms. The Administrator shall determine the value or range of values of a
Performance Grant to be awarded to each Participant selected for an Award
of a Performance Grant and whether or not such Performance Grant is granted
in conjunction with an Award of Options, Stock Appreciation Rights,
Restricted Stock or other type of Award, or any combination thereof, under
the Plan (which may include, but need not be limited to, deferred Awards)
concurrently or subsequently granted to such Participant (the
17
"Associated Award"). As determined by the Administrator, the maximum value
of each Performance Grant (the "Maximum Value") shall be: (a) an amount
fixed by the Administrator at the time the award is made or amended
thereafter; (b) an amount which varies from time to time based in whole or
in part on the then current Fair Market Value of a Share, other securities
or property of the Company, or other securities or property, or any
combination thereof; or (c) an amount that is determinable from criteria
specified by the Administrator.
Performance Grants may be issued in different classes or series having
different names, terms and conditions. In the case of a Performance Grant
awarded in conjunction with an Associated Award, the Performance Grant may
be reduced on an appropriate basis to the extent that the Associated Award
has been exercised, paid to or otherwise received by the participant, as
determined by the Administrator.
8.3. Award Period. The award period ("Performance Grant Award Period") in
respect of any Performance Grant shall be a period determined by the
Administrator. At the time each Performance Grant is made, the
Administrator shall establish performance objectives to be attained within
the Performance Grant Award Period as the means of determining the
Performance Grant Actual Value of such Performance Grant. The performance
objectives shall be based on such measure or measures of performance, which
may include, but need not be limited to, the performance of the
Participant, the Company, one or more Subsidiary, Parent or Affiliate of
the Company, or one or more of divisions or units thereof, or any
combination of the foregoing, as the Administrator shall determine, and may
be applied on an absolute basis or be relative to industry or other
indices, or any combination thereof. Each Performance Grant Actual Value of
a Performance Grant shall be equal to the Performance Grant Maximum Value
of such Performance grant only if the performance objectives are attained
in full, but the Administrator shall specify the manner in which the
Performance Grant Actual Value shall be determined if the performance
objectives are met in part. Such performance measures, the Performance
Grant Actual Value or the Performance Grant Maximum Value, or any
combination thereof, may be adjusted in any manner by the Administrator at
any time and from time to time during or as soon as practicable after the
Performance Grant Award Period, if it determines that such performance
measures, the Performance grant Actual Value or the Performance Grant
Maximum Value, or any combination thereof, are not appropriate under the
circumstances.
8.4. Termination. The rights of a Participant in Performance Grants awarded to
such Participant shall be provisional and may be canceled or paid in whole
or in part, all as determined by the Administrator, if such Participant's
continuous employment or performance of services for the Company, any
Parent, Subsidiary and Affiliate of the Company shall terminate for any
reason prior to the end of the Performance Grant Award Period, except
solely by reason of a period of Related Employment.
18
8.5. Determination of Performance Grant Actual Values. The Committee shall
determine whether the conditions of Paragraphs 8.2 or 8.3 have been met
and, if so, shall ascertain the Performance Grant Actual Value of
Performance Grants. If a Performance Grant has no Performance Grant Actual
Value, the Award of such Performance Grant shall be deemed to have been
canceled and the Associated Award, if any, may be canceled or permitted to
continue in effect in accordance with such Associated Award's terms. If a
Performance Grant has a Performance Grant Actual Value and: (a) was not
awarded in conjunction with an Associated Award, the Administrator shall
cause an amount equal to the Performance Grant Actual Value of such
Performance Grant to be paid to the Participant or the Participant's
beneficiary as provided below; or (b) was awarded in conjunction with an
Associated Award, the Administrator shall determine, in accordance with
criteria specified by the Administrator, whether to (i) to cancel such
Performance Grant, in which event no amount in respect thereof shall be
paid to the Participant or the Participant's beneficiary, and the
Associated Award may be permitted to continue in effect in accordance with
the Associated Award's terms, (ii) pay the Performance Grant Actual Value
to the Participant or the Participant's beneficiary as provided below, in
which event such Associated Award may be canceled, or (iii) pay to the
Participant or the Participant's beneficiary as provided below, the
Performance Grant Actual Value of only a portion of such Performance Grant,
in which case a complimentary portion of the Associated Award may be
permitted to continue in effect in accordance with its terms or be
canceled, as determined by the Administrator.
Such determination by the Administrator shall be made as promptly as
practicable following the end of the Performance Grant Award Period or upon
the earlier termination of employment or performance of services, or at
such other time or times as the Administrator shall determine, and shall be
made pursuant to criteria specified by the Administrator.
8.6. Payment. Payment of any amount in respect of the Performance Grants which
the Administrator determines to pay as provided in this Article 8 shall be
made by the Company as promptly as practicable after the end of the
Performance Grant Award Period or at such other time or times as the
Administrator shall determine, and may be made in cash, Shares, other
securities or property of the Company, or other forms of payment, or any
combination thereof or in such other manner, as determined by the
Administrator. Notwithstanding anything in this Article 8 to the contrary,
the Administrator may determine and pay out a Performance Grant Actual
Value of a Performance Grant at any time during the Performance Grant Award
Period.
ARTICLE 9. STOCK BONUSES.
9.1. Awards of Stock Bonuses. A Stock Bonus is an Award of Shares (which may
consist of Restricted Stock) for services rendered to the Company or any
Parent, Subsidiary or Affiliate of the Company. A Stock Bonus may be
awarded for past services already
19
rendered to the Company, or any Parent, Subsidiary or Affiliate of the
Company pursuant to an Award Agreement (the "Stock Bonus Agreement") that
will be in such form (which need not be the same for each Participant) as
the Administrator will from time to time approve, and will comply with and
be subject to the terms and conditions of the Plan. A Stock Bonus may be
awarded upon satisfaction of such performance goals as are set out in
advance in the Participant's individual Award Agreement that will be in
such form (which need not be the same for each Participant) as the
Administrator will from time to time approve, and will comply with and be
subject to the terms and conditions of the Plan. Stock Bonuses may vary
from Participant to Participant and between groups of Participants, and may
be based upon the achievement of the Company, any Parent, Subsidiary or
Affiliate of the Company and/or individual performance factors or upon such
other criteria as the Administrator may determine.
9.2 Terms of Stock Bonuses. The Administrator will determine the number of
Shares to be awarded to the Participant. If the Stock Bonus is being earned
upon the satisfaction of performance goals set forth in an Award Agreement,
then the Administrator will:
(a) determine the nature, length and starting date of any performance
period for each Stock Bonus;
(b) select from among the performance factors to be used to measure
the performance, if any; and
(c) determine the number of Shares that may be awarded to the
Participant.
Prior to the payment of any Stock Bonus, the Administrator shall determine
the extent to which such Stock Bonuses have been earned. Performance
periods may overlap and Participants may participate simultaneously with
respect to Stock Bonuses that are subject to different performance periods
and different performance goals and other criteria. The number of Shares
may be fixed or may vary in accordance with such performance goals and
criteria as may be determined by the Administrator. The Administrator may
adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such
adjustments as the Administrator deems necessary or appropriate to reflect
the impact of extraordinary or unusual items, events or circumstances to
avoid windfalls or hardships.
9.3. Form of Payment. The earned portion of a Stock Bonus may be paid currently
or on a deferred basis with such interest or dividend equivalent, if any,
as the Administrator may determine. Payment may be made in the form of cash
or whole Shares or a combination thereof, either in a lump sum payment or
in installments, all as the Administrator will determine.
ARTICLE 10. PAYMENT FOR SHARE PURCHASES.
10.1.Payment. Payment for Shares purchased pursuant to this Plan may be made in
cash (by check) or, where expressly approved for the Participant by the
Administrator and where permitted by law:
(a) by cancellation of indebtedness of the Company to the
Participant;
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(b) by surrender of Shares that either (i) have been owned by
the Participant for more than six months and have been paid
for within the meaning of Rule 144 promulgated under the
Securities Act (and, if such shares were purchased from the
Company by use of a promissory note, such note has been fully
paid with respect to such shares) or (ii) were obtained by
Participant in the public market;
(c) by tender of a full recourse promissory note having such
terms as may be approved by the Administrator and bearing
interest at a rate sufficient to avoid imputation of income
under Sections 483 and 1274 of the Code; provided, however,
that Participants who are not employees or directors of the
Company will not be entitled to purchase Shares with a
promissory note unless the note is adequately secured by
collateral other than the Shares;
(d) by waiver of compensation due or accrued to the
Participant for services rendered;
(e) with respect only to purchases upon
exercise of an Option, and provided that a public market for
the Company's stock exists, (i) through a "same day sale"
commitment from the Participant and a broker-dealer that is a
member of the National Association of Securities Dealers (an
"NASD Dealer") whereby the Participant irrevocably elects to
exercise the Option and to sell a portion of the Shares so
purchased to pay for the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to
forward the Exercise Price directly to the Company, or (ii)
through a "margin" commitment from the Participant and an NASD
Dealer whereby the Participant irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the Exercise Price directly to the Company;
(f) with respect only to officers, directors and employees of
the Company, unless otherwise determined by the Administrator,
and with respect only to purchases upon exercise of an Option,
by "cashless exercise," by stating in the Exercise Notice such
intention and the maximum number (the "Maximum Number") of
shares of Common Stock the Participant desires to purchase
(and lose the right to purchase) in consideration of
cancellation of Options in payment for such exercise. The
number of shares of Common Stock the Participant shall receive
upon such exercise shall equal the difference between the
Maximum Number and the quotient that is obtained when the
product of the Maximum Number and the Exercise Price is
divided by the then Fair Market Value per share;
(g) by any combination of the foregoing; or
(h) by any other lawful means as the Administrator, in its
sole discretion, may determine.
10.2.Loan Guarantees. The Company, in its sole discretion, may assist a
Participant in paying for Shares purchased under the Plan by authorizing a
guarantee by the Company of a third-party loan to the Participant.
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ARTICLE 11. DEFERRAL OF COMPENSATION.
11.1.Deferral Terms. The Administrator shall determine whether or not an Award
to a Participant shall be made in conjunction with deferral of such
Participant's salary, bonus or other compensation, or any combination
thereof, and whether or not such deferred amounts may be:
(a) forfeited to the Company or to other Participants, or any
combination thereof, under certain circumstances (which may
include, but need not be limited to, certain types of
termination of employment or performance of services for the
Company, any Parent, Subsidiary and Affiliate); (b) subject to
increase or decrease in value based upon the attainment of or
failure to attain, respectively, certain performance measures;
and/or (c) credited with income equivalents (which may
include, but need not be limited to, interest, dividends or
other rates of return) until the date or dates of payment of
such Award, if any.
ARTICLE 12. DEFERRED PAYMENT OF AWARDS.
12.1.Deferral Terms. The Administrator may specify that the payment of all or
any portion of cash, Shares, other securities or property of the Company,
or any other form of payment, or any combination thereof, under an Award
shall be deferred until a later date. Deferrals shall be for such periods
or until the occurrence of such events, and upon such terms, as the
Administrator shall determine. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of
certain investment equivalents (which may include, but need not be limited
to, government securities, Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but
need not be limited to, interest, dividends or other rates of return, or
any combination thereof) as may accrue thereon until the date or dates of
payment, such investment equivalents and such additional amounts of income
equivalents to be determined by the Administrator.
ARTICLE 13. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN.
13.1.Amendments and Substitutions. The terms of any outstanding Award under the
Plan may be amended from time to time by the Administrator in any manner
that the Administrator deems appropriate (including, but not limited to,
acceleration of the date of exercise of any Award and/or payments
thereunder, or reduction of the Exercise Price of an Award); provided,
however, that no such amendment shall adversely affect in a material manner
any right of a Participant under such Award without the Participant's
written consent. The Administrator may permit or require holders of Awards
to surrender outstanding Awards as a condition precedent to the grant of
new Awards under the Plan.
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ARTICLE 14. DESIGNATION OF BENEFICIARY BY PARTICIPANT.
14.1.Designation. A Participant may designate one or more beneficiaries to
receive any rights and payments to which such Participant may be entitled
in respect of any Award in the event of such Participant's death. Such
designation shall be on a written form acceptable to and filed with the
Administrator. The Administrator shall have the right to review and approve
beneficiary designations. A Participant may change the Participant's
beneficiary(ies) from time to time in the same manner as the original
designation, unless such Participant has made an irrevocable designation.
Any designation of beneficiary under the Plan (to the extent it is valid
and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Administrator.
If no designated beneficiary survives the Participant and is living on the
date on which any right or amount becomes payable to such Participant's
beneficiary(ies), such payment will be made to the legal representatives of
the Participant's estate, and the term "beneficiary" as used in the Plan
shall be deemed to include such person or persons. If there is any question
as to the legal right of any beneficiary to receive a distribution under
the Plan, the Administrator may determine that the amount in question be
paid to the legal representatives of the estate of the Participant, in
which event the Company, the Administrator, the Board and the Committee and
the members thereof will have no further liability to any person or entity
with respect to such amount.
ARTICLE 15. CHANGE IN CONTROL.
15.1. Effect of a Change in Control.
-----------------------------
Upon any Change in Control:
(a) each Stock Option and Stock Appreciation Right that is outstanding
on the date of such Change in Control shall be exercisable in full
immediately;
(b) all restrictions with respect to Restricted Stock shall lapse
immediately, and the Company's right to repurchase or forfeit any
Restricted Stock outstanding on the date of such Change in Control
shall thereupon terminate and the certificates representing such
Restricted Stock and the related stock powers shall be promptly
delivered to the Participants entitled thereto; and
(c) all Performance Grant Award Periods for the purposes of
determining the amounts of Awards of Performance Grants shall end as
of the end of the calendar quarter immediately preceding the date of
such Change in Control, and the amount of the Performance Grant
payable shall be the portion of the maximum possible Performance Grant
allocable to the portion of the Performance Grant Award Period that
had elapsed and the results achieved during such portion of the
Performance Grant Award Period.
15.2.Change of Control. For this purpose, a Change in Control shall be deemed
to occur when and only when any of the following events first occurs:
(a) any person who is not currently such becomes the beneficial
owner, directly or indirectly, of securities of the Company
representing 20% or
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more of the combined voting power of the Company's then
outstanding voting securities; or
(b) three or more directors, whose election or nomination for
election is not approved by a majority of the Incumbent
Board, are elected within any single 24-month period to
serve on the Board; or
(c) members of the Incumbent Board cease to constitute a
majority of the Board without approval of the remaining
members of the Incumbent Board; or
(d) any merger (other than a merger where the Company is the
survivor and there is no accompanying Change in Control
under clauses (a), (b) or (c) of this Section 15.2),
consolidation, liquidation or dissolution of the Company, or
the sale of all or substantially all of the assets of the
Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur pursuant to clause (a) of this Section 15.2 solely because 20%
or more of the combined voting power of the Company's outstanding
securities is acquired by one or more employee benefit plans maintained
by the Company or by any other employer, the majority interest in which
is held, directly or indirectly, by the Company. For purposes of this
Article 15, the terms "person" and "beneficial owner" shall have the
meaning set forth in Sections 3(a) and 13(d) of the Exchange Act, and
in the regulations promulgated thereunder.
ARTICLE 16. PLAN AMENDMENT OR SUSPENSION.
16.1.Plan Amendment or Suspension. The Plan may be amended or suspended in
whole or in part at any time and from time to time by the Board, but no
amendment shall be effective unless and until the same is approved by
stockholders of the Company where the failure to obtain such approval would
adversely affect the compliance of the Plan with Sections 162 and 422 of
the Code, Rule 16b-3 and with other applicable law. No amendment of the
Plan shall adversely affect in a material manner any right of any
Participant with respect to any Award theretofore granted without such
Participant's written consent.
ARTICLE 17. PLAN TERMINATION.
17.1.Method of Plan Termination. The Plan shall terminate upon the earlier of
the following dates or events to occur: (a) upon the adoption of a
resolution of the Board terminating the Plan; or (b) September 14, 2011;
provided, however, that the Board may, prior to the expiration of such
ten-year period, extend the term of the Plan for an additional period of up
to five years for the grant of Awards other than Incentive Stock Options.
17.2.Effect of Termination on Outstanding Awards. No termination of the Plan
shall materially alter or impair any of the rights or obligations of any
person, without such
24
person's consent, under any Award theretofore granted under the Plan,
except that subsequent to termination of the Plan, the Administrator may
make amendments permitted under Article 13.
ARTICLE 18. STOCKHOLDER ADOPTION.
18.1.Stockholder Approval. The Plan shall be submitted to the stockholders of
the Company for their approval and adoption by written consent on or before
November 1, 2001.
18.2.Effectiveness of Plan Prior to Stockholder Approval. The Plan shall be
effective upon approval by the Board; provided that no Shares shall be
issued in excess of 20% of the shares of Common Stock outstanding as of the
date of issuance and no Incentive Stock Options shall be issued unless and
until the Plan has been approved by the stockholders of the Company as
provided in Section 18.1.
ARTICLE 19. TRANSFERABILITY.
19.1.Transferability. Except as may be approved by the Administrator where such
approval shall not adversely affect compliance of the Plan with Sections
162 and 422 of the Code and/or Rule 16b-3, a Participant's rights and
interest under the Plan may not be assigned or transferred, hypothecated or
encumbered in whole or in part either directly or by operation of law or
otherwise (except in the event of a Participant's death) including, but not
by way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner; provided, however, that any Option or
similar right (including, but not limited to, a Stock Appreciation Right)
offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent or pursuant to a domestic relations order and shall
be exercisable during the Participant's lifetime only by such Participant
or such person receiving such option pursuant to a domestic relations
order.
ARTICLE 20. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.
20.1.Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares subject to or issued pursuant to the
Plan until such Shares are issued to the Participant. After Shares are
issued to the Participant, the Participant will be a stockholder and have
all the rights of a stockholder with respect to such Shares, including the
right to vote and receive all dividends or other distributions made or paid
with respect to such Shares; provided, however, that if such Shares are
Restricted Stock, then any new, additional or different securities the
Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock; provided, further, that the
Participant will have no right to retain such stock dividends or stock
distributions with respect to Restricted Stock that is
25
repurchased at the Participant's Exercise Price in accordance with an Award
Agreement with respect to such Restricted Stock.
20.2.Financial Statements. The Company will provide financial statements to
each Participant prior to such Participant's purchase of Shares under the
Plan, and to each Participant annually during the period such Participant
has Awards outstanding; provided, however, the Company will not be required
to provide such financial statements to Participants whose services in
connection with the Company assure them access to equivalent information.
20.3.Restrictions on Shares. At the discretion of the Administrator, the
Company may reserve to itself and/or its assignee(s) in the Award Agreement
a right to repurchase a portion of or all Shares issued pursuant to such
Award Agreement and held by a Participant following such Participant's
Termination at any time within 90 days after the later of Participant's
Termination Date or the date Participant purchases Shares under the Plan,
for cash and/or cancellation of purchase money indebtedness, at the
Participant's Exercise Price or such other price as the Administrator may
determine at the time of the grant of the Award.
ARTICLE 21. CERTIFICATES.
21.1.Legal Restrictions; Stock Legends. All Shares or other securities
delivered under this Plan will be subject to such stock transfer orders,
legends and other restrictions as the Administrator may deem necessary or
advisable, including restrictions under any applicable federal, state or
foreign securities law, or any rules, regulations and other requirements
promulgated under such laws or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted and each stock
certificate evidencing such Shares and other certificates shall be
appropriately legended.
ARTICLE 22. ESCROW; PLEDGE OF SHARES.
22.1 Deposit of Shares; Escrow. To enforce any restrictions on a Participant's
Shares, the Committee may require the Participant to deposit all stock
certificates evidencing Shares, together with stock powers or other
instruments of transfer approved by the Administrator, appropriately
endorsed in blank, with the Company or an agent designated by the Company
to hold in escrow until such restrictions have lapsed or terminated, and
the Administrator may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is
permitted to execute a promissory note as partial or full consideration for
the purchase of Shares under the Plan will be required to pledge and
deposit with the Company all or part of the Shares so purchased as
collateral to secure the payment of Participant's obligation to the Company
under the promissory note; provided, however, that the Administrator may
require or accept other or additional forms of collateral to secure the
payment of such obligation and, in any event, the Company will have full
recourse against the Participant under the promissory note notwithstanding
any pledge of the Participant's Shares or other collateral. In
26
connection with any pledge of the Shares, Participant will be required to
execute and deliver a written pledge agreement in such form as the
Administrator will from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.
ARTICLE 23. EXCHANGE AND BUYOUT OF AWARDS.
23.1.Exchange. The Administrator may, at any time or from time to time,
authorize the Company, with the consent of the respective Participants, to
issue new Awards in exchange for the surrender and cancellation of any or
all outstanding Awards.
23.2 Buyout of Awards. The Administrator may, at any time or from time to time,
authorize the Company to buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Administrator and
the Participant may agree.
ARTICLE 24. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.
24.1.Compliance with Applicable Laws. An Award will not be effective unless
such Award is made in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental body, and the
requirements of any stock exchange or automated quotation system upon which
the Shares may then be listed or quoted, as they are in effect on the date
of grant of the Award and also on the date of exercise or other issuance.
Notwithstanding any other provision in this Plan, the Company will have no
obligation to issue or deliver stock certificates for Shares under this
Plan prior to:
(a) obtaining any approvals from governmental agencies that the
Administrator determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Administrator determines to be necessary or advisable.
24.2.No Obligation to Register Shares or Awards. The Company will be under no
obligation to register the Shares under the Securities Act or to effect
compliance with the registration, qualification or listing requirements of
any state securities laws, stock exchange or automated quotation system,
and the Company will have no liability for any inability or failure to do
so.
ARTICLE 25. NO OBLIGATION TO EMPLOY.
25.1.No Right to Employment or Continuation of Relationship. Nothing in this
Plan or any Award granted under the Plan will confer or be deemed to confer
on any Participant any right to continue in the employ of, or to continue
any other relationship with, the Company or any Parent, Subsidiary or
Affiliate of the Company or limit in any way the
27
right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Participant's employment or other relationship at
any time, with or without cause.
ARTICLE 26. NONEXCLUSIVITY OF THE PLAN.
26.1.Neither the adoption of the Plan by the Board, the submission of the Plan
to the stockholders of the Company for approval, nor any provision of this
Plan will be construed as creating any limitations on the power of the
Board or the Committee to adopt such additional compensation arrangements
as the Board may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and
such arrangements may be either generally applicable or applicable only in
specific cases.
ARTICLE 27. MISCELLANEOUS PROVISIONS.
27.1.No Rights Unless Specifically Granted. No employee or other person shall
have any claim or right to be granted an Award under the Plan under any
contract, agreement or otherwise. Determinations made by the Administrator
under the Plan need not be uniform and may be made selectively among
Eligible Participants under the Plan, whether or not such Eligible
Participants are similarly situated.
27.2.No Rights Until Written Evidence Delivered. No Participant or other person
shall have any right with respect to the Plan, the Shares reserved for
issuance under the Plan or in any Award, contingent or otherwise, until
written evidence of the Award, in the form of an Award Agreement, shall
have been delivered to the recipient and all the terms, conditions and
provisions of the Plan and the Award applicable to such recipient (and each
person claiming under or through such recipient) have been met.
27.3 Compliance with Applicable Law. No Shares, other Company securities or
property, other securities or property, or other forms of payment shall be
issued hereunder with respect to any Award unless counsel for the Company
shall be satisfied that such issuance will be in compliance with applicable
federal, state, local and foreign legal, securities exchange and other
applicable requirements.
27.4 Compliance with Rule 16b-3. It is the intent of the Company that the Plan
comply in all respects with Rule 16b-3 under the Exchange Act, that any
ambiguities or inconsistencies in construction of the Plan be interpreted
to give effect to such intention and that if any provision of the Plan is
found not to be in compliance with Rule 16b-3, such provision shall be
deemed null and void to the extent required to permit the Plan to comply
with Rule 16b-3.
27.5.Right to Withhold Payments. The Company and any Parent, Subsidiary and
Affiliate of the Company shall have the right to deduct from any payment
made under the Plan, any federal, state, local or foreign income or other
taxes required by law to be withheld with
28
respect to such payment. It shall be a condition to the obligation of the
Company to issue Shares, other securities or property of the Company, other
securities or property, or other forms of payment, or any combination
thereof, upon exercise, settlement or payment of any Award under the Plan,
that the Participant (or any beneficiary or person entitled to act) pay to
the Company, upon its demand, such amount as may be requested by the
Company for the purpose of satisfying any liability to withhold federal,
state, local or foreign income or other taxes. If the amount requested is
not paid, the Company may refuse to issue Shares, other securities or
property of the Company, other securities or property, or other forms of
payment, or any combination thereof. Notwithstanding anything in the Plan
to the contrary, the Administrator may permit an Eligible Participant (or
any beneficiary or person entitled to act) to elect to pay a portion or all
of the amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Administrator shall deem to
be appropriate, including, but not limited to, by authorizing the Company
to withhold, or agreeing to surrender to the Company on or about the date
such tax liability is determinable, Shares, other securities or property of
the Company, other securities or property, or other forms of payment, or
any combination thereof, owned by such person or a portion of such forms of
payment that would otherwise be distributed, or have been distributed, as
the case may be, pursuant to such Award to such person, having a fair
market value equal to the amount of such taxes.
27.6.Expenses of Administration. The expenses of the Plan shall be borne by the
Company. However, if an Award is made to an individual employed by or
performing services for a Parent, Subsidiary or Affiliate of the Company:
(a) if such Award results in payment of cash to the Participant, such
Parent, Subsidiary or Affiliate shall pay to the Company an amount equal to
such cash payment unless the Administrator shall otherwise determine;
(b) if the Award results in the issuance by the Company to the
Participant of Shares, other securities or property of the Company, other
securities or property, or other forms of payment, or any combination
thereof, such Parent, Subsidiary or Affiliate of the Company shall, unless
the Administrator shall otherwise determine, pay to the Company an amount
equal to the fair market value thereof, as determined by the Administrator,
on the date such Shares, other securities or property of the Company, other
securities or property, or other forms of payment, or any combination
thereof, are issued (or, in the case of the issuance of Restricted Stock or
of Shares, other securities or property of the Company, or other securities
or property, or other forms of payment subject to transfer and forfeiture
conditions, equal to the fair market value thereof on the date on which
they are no longer subject to such applicable restrictions), minus the
amount, if any, received by the Company in respect of the purchase of such
Shares, other securities or property of the Company, other securities or
property or other forms of payment, or any combination thereof, all as the
Administrator shall determine; and
(c) the foregoing obligations of any such Parent, Subsidiary or
Affiliate of the Company shall survive and remain in effect and binding on
such entity even if its status as a Parent, Subsidiary or Affiliate of the
Company should
29
subsequently cease, except as otherwise agreed by the Company and such
Parent, Subsidiary or Affiliate.
27.7.Unfunded Plan. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under the Plan,
and rights to the payment of Awards shall be no greater than the rights of
the Company's general creditors.
27.8.Acceptance of Award Deemed Consent. By accepting any Award or other
benefit under the Plan, each Participant and each person claiming under or
through such Participant shall be conclusively deemed to have indicated
such Participant's (or other person's) acceptance and ratification of, and
consent to, any action taken by the Company, Administrator, Board or
Committee or their respective delegates under the Plan.
27.9.Fair Market Value Determined By the Administrator. Fair market value in
relation to other securities or property of the Company, other securities
or property or other forms of payment of Awards under the Plan, or any
combination thereof, as of any specific time, shall mean such value as
determined by the Administrator in accordance with the Plan and applicable
law.
27.10. Use of Terms. For the purposes of the Plan, in the use of any term, the
singular includes the plural and the plural includes the singular wherever
appropriate.
27.11. Filing of Reports. The appropriate officers of the Company shall cause to
be filed any reports, returns or other information regarding Awards
hereunder or any Shares issued pursuant hereto as may be required by
Section 13 or 15(d) of the Exchange Act (or any successor provision) or any
other applicable statute, rule or regulation.
27.12. Validity; Construction; Interpretation. The validity, construction,
interpretation, administration and effect of the Plan, and of its rules and
regulations, and rights relating to the Plan and Award Agreements and to
Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Nevada.
30