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Exhibit No. 10
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FIRST EMPIRE STATE CORPORATION
1983 STOCK OPTION PLAN
(COMPOSITE COPY AS OF FEBRUARY 21, 1995)
1. Definitions
In this Plan, except where the context otherwise indicates, the
following definitions apply:
(a) "Agreement" means the written agreement implementing a grant
of an Option and/or Right.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee of the Board meeting the
standards of Rule 16b-3(c)(2)(i), Rule 16b-3(e)(2), and Regulation 1.162-27,
or any similar successor rules or regulations, appointed by the Board to
administer this Plan. Unless otherwise determined by the Board, the
Compensation Committee of the Board shall be the Committee.
(e) "Common Stock" means the authorized but unissued or
reacquired Common Stock, par value $5.00 per share, of the Company.
(f) "Company" means First Empire State Corporation.
(g) "Date of Exercise" means the date on which the Company
receives notice pursuant to Article 8 of the exercise of an Option or Right.
(h) "Date of Grant" means the date on which an Option or Right
is granted by the action of the Committee or such later date as may be
specified by the Committee in taking such action.
(i) "Director" means any person who is a director of the Company
or any Subsidiary.
(j) "Employee" means any person determined by the Committee to
be an employee of the Company or any Subsidiary.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value" of a share of Common Stock means the
amount equal to the closing price for a share of Common Stock on the American
Stock Exchange as reported by such source as the Committee may select, or, if
such price quotation for a share of Common Stock is not so reported, then the
fair market value of such stock as determined by the Committee pursuant to a
reasonable method adopted in good faith for such purpose, in each case subject
to adjustment under Article 10.
(m) "Grant Price" means (i) in the case of a Right that is not a
Related Right, the Fair Market Value per share on the Date of Grant of the
Right, (ii) in the case of a Right that is a Related Right to a Nonstatutory
Stock Option and not to another Right, either (A) the Option Price per share
as provided in the Related Option or (B) the Fair Market Value per share on
the Date of Grant of the Right, as designated by the Committee in the
Agreement granting the Right, (iii) in the case of a Right that is a Related
Right to an Incentive Stock Option, the Option Price per share as provided in
the Related Option, (iv) in the case of a Right that is a Related Right to
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another Right and not to an Option, either (A) the Fair Market Value per share
on the Date of Grant of the Right or (B) the Fair Market Value per share on
the Date of Grant of its Related Right, as designated by the Committee in the
Agreement granting the Right, or (v) in the case of a Right that is a Related
Right both to a Nonstatutory Stock Option and to another Right, (A) the Option
Price per share as provided in the Related Option, (B) the Fair Market Value
per share on the Date of Grant of the Right, or (C) the Fair Market Value per
share on the Date of Grant of its Related Right, as designated by the
Committee in the Agreement granting the Right.
(n) "Incentive Stock Option" means an Option granted under the
Plan that qualifies as an incentive stock option under section 422 of the Code
and that the Company designates as such in the Agreement granting the Option.
(o) "Key Employee" means (i) an Employee who is an officer of
the Company or a Subsidiary, or who is determined by the Committee to be in a
managerial, professional, or other key position of the Company or a
Subsidiary, or (ii) a former trustee or officer of The East New York Savings
Bank who, upon closing of the acquisition by the Company of The East New York
Savings Bank, was granted nonstatutory stock options under the Plan pursuant
to the terms of Section 5(i) of the Merger Agreement by and between First
Empire State Corporation, The East New York Savings Bank and the incorporators
of West Interim Savings Bank.
(p) "Limited Right" means a limited stock appreciation right
granted under the Plan.
(q) "Limited Right Period" means the period during which a
Limited Right may be exercised as provided in Paragraph 7(h) hereof.
(r) "Nonlimited Right" means a nonlimited stock appreciation
right granted under the Plan.
(s) "Nonlimited Right Period" means the period during which a
Nonlimited Right may be exercised as provided in Paragraph 7(g) hereof.
(t) "Nonstatutory Stock Option" means an Option granted under
the Plan which is not an Incentive Stock Option.
(u) "Offer" means any tender offer or exchange offer for the
Company's Common Stock made by an Offeror which might, if consummated pursuant
to its terms or pursuant to any power reserved in its terms, cause the Offeror
to become the beneficial owner of twenty percent or more of the outstanding
Common Stock. As used in this definition, "beneficial owner" shall have the
meaning ascribed to it from time to time under the rules and regulations
promulgated by the SEC under Section 13(d) of the Exchange Act, or in the
event of the repeal or alteration of such section, such meaning as may from
time to time be ascribed to "beneficial owner" under the rules and regulations
promulgated by the SEC under any similar federal law.
(v) "Offer Price per Share" with respect to the exercise of a
Limited Right means the greater of (i) the highest price per share of Common
Stock paid in any Offer which Offer is in effect at any time during the period
beginning on the ninetieth day prior to the Date of Exercise of such Limited
Right and ending on the Date of Exercise of such Limited Right or (ii) the
highest Fair Market Value per share of Common Stock during such period. Any
securities or property that is part or all of the consideration paid for
shares in the Offer shall be valued in determining the Offer Price per Share
at the higher of (A) the valuation placed on such securities or property by
the corporation, person or other entity making such Offer or (B) the valuation
placed on such securities or property by the Committee.
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(w) "Offeror" means any person, other than the Company or any of
its Subsidiaries, who makes an Offer. As used in this definition, "person"
shall include any natural person, corporation, partnership, trust,
association, business entity, or any group of persons, whose ownership of
Common Stock would be required to be reported collectively pursuant to Section
13(d) of the Exchange Act and the rules and regulations promulgated by the SEC
thereunder, as from time to time in effect, or in the event of the repeal or
alteration of such section, such reporting requirements as may from time to
time be prescribed by any similar federal law.
(x) "Option" means an Incentive Stock Option or Nonstatutory
Stock Option granted under the Plan.
(y) "Option Period" means the period during which an Option may
be exercised.
(z) "Option Price" means the price per share at which an Option
may be exercised. The Option Price shall be determined by the Committee, but
in no event shall the Option Price be less than the greater of the Fair Market
Value of the Common Stock determined as of the Date of Grant or the par value
of the Common Stock, except that in connection with grants of Options to those
Key Employees who were granted Options upon the closing of the Company's
acquisition of The East New York Savings Bank as described in Section 1(o)(ii)
hereof, the Option Price of Options granted upon closing of the acquisition
may not be less than the price at which Common Stock was sold to the public
pursuant to the underwritten offering in connection with the Company's
acquisition of The East New York Savings Bank.
(aa) "Optionee" means a Key Employee to whom an Option or Right
has been granted.
(bb) "Plan" means the First Empire State Corporation 1983 Stock
Option Plan, as amended.
(cc) "Regulation 1.162-27" shall mean proposed Regulation Section
1.162-27 promulgated by the Internal Revenue Service, as the same may be
finalized and amended from time to time.
(dd) "Related Option" means an Option in connection with which,
or by amendment to which, a specified Right is granted.
(ee) "Related Right" means a Right granted in connection with, or
by amendment to, a specified Option or other Right.
(ff) "Right" means a Limited Right or Nonlimited Right granted
under the Plan.
(gg) "Rule 16b-3" means Rule 16b-3 of the rules and regulations
as promulgated and amended from time to time by the SEC under Section 16(b) of
the Exchange Act.
(hh) "SEC" means the Securities and Exchange Commission.
(ii) "Subsidiary" means a corporation at least fifty percent of
the total combined voting power of all classes of stock of which is owned by
the Company, either directly or through one or more other Subsidiaries.
(jj) "Unused Limit Carryover" means "unused limit carryover" as
defined in section 422A of the Internal Revenue Code of 1954, as amended, as
in effect on October 21, 1986 and the regulations thereunder.
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2. Purpose
This Plan is intended to aid in maintaining and developing strong
management through encouraging the ownership of Common Stock by Key Employees
and through stimulating their efforts by giving suitable recognition, in
addition to their other remuneration, to the ability and industry which
contribute materially to the success of the Company's business interests, and
to provide an incentive to the continued service of such Key Employees.
3. Administration
This Plan shall be administered by the Committee. In addition to
any other powers granted to the Committee, it shall have the following powers,
subject to the express provisions of the Plan:
(a) subject to the provisions of Articles 4, 6 and 7, to
determine in its discretion the Key Employees to whom Options or Rights shall
be granted under the Plan, the number of shares to be subject to each Option
or Right, and the terms upon which, the times at which, and the periods within
which such Options or Rights may be acquired and exercised;
(b) to determine all other terms and provisions of each
Agreement, which need not be identical;
(c) without limiting the foregoing, to provide in its discretion
in an Agreement:
(i) for an agreement by the Optionee to render services to
the Company or a Subsidiary upon such terms and conditions as may
be specified in the Agreement, provided that the Committee shall
not have the power to commit the Company or any Subsidiary to
employ or otherwise retain any Optionee;
(ii) for restrictions on the transfer, sale or other
disposition of the Common Stock issued to the Optionee upon the
exercise of an Option or Right;
(iii) for an agreement by the Optionee to resell to the
Company, under specified conditions, stock issued upon the
exercise of an Option or Right; and
(iv) for the form of payment of the Option Price upon the
exercise of an Option, including without limitation in cash, by
delivery of shares of Common Stock valued at Fair Market Value on
the Date of Exercise of the Option, or by a combination of cash
and Common Stock;
(d) to construe and interpret the Agreements and the Plan;
(e) to require, whether or not provided for in the pertinent
Agreement, of any person exercising an Option or Right granted under the Plan,
at the time of such exercise, the making of any representations or agreements
which the Committee may deem necessary or advisable in order to comply with
the securities laws of the United States or of any state;
(f) to provide for satisfaction of an Optionee's tax liabilities
arising in connection with the Plan through, without limitation, retention by
the Company of shares of Common Stock otherwise issuable on the exercise of a
Nonstatutory Stock Option or Nonlimited Right or through delivery of shares of
Common Stock to the Company by the Optionee under such terms and conditions as
the Committee deems appropriate; and
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(g) to make all other determinations and take all other actions
necessary or advisable for the administration of the Plan.
Any determinations or actions made or taken by the Committee
pursuant to this Article shall be binding and final.
4. Eligibility
Options and Rights may be granted only to Key Employees, provided,
however, that the members of the Committee are not eligible to receive Options
or Rights under the Plan. A Key Employee who has been granted an Option or
Right may be granted additional Options and Rights.
5. Stock Subject to the Plan
(a) There is hereby reserved for issuance upon the exercise of
Options and Rights granted under this Plan an aggregate of 2,000,000 shares of
Common Stock, subject to the provisions of Article 10; provided, however,
that:
(i) no Key Employee shall be granted in any fiscal year of
the Company Options and Rights (including Rights that may be
exercised only for cash) for more than 50,000 shares, provided
that a newly-hired Key Employee who will serve as an executive
officer of the Company may receive an additional one-time grant of
Options and/or Rights covering up to 50,000 shares of the Common
Stock upon commencement of employment with the Company, and
provided further that such limits shall be subject to such
adjustment, if any, as the Committee deems appropriate to reflect
such events as stock dividends, stock splits, recapitalizations,
mergers, consolidations or reorganizations of or by the Company;
and
(ii) neither (A) the grant or exercise of a Limited Right
nor (B) the grant or exercise of a Nonlimited Right that is
exercisable only for cash shall reduce the number of shares of
Common Stock available for the grant of Options and Rights under
the Plan; and
(iii) in the case of a Nonlimited Right that may be
exercised for Common Stock and that is a Related Right to an
Option, the grant of such a Right shall not reduce the number of
shares of Common Stock available for the grant of Options and
Rights under the Plan.
The provisions of subparagraph (i) shall apply to all grants of
Options and Rights after the amendment of the Plan to add those provisions.
The provisions of subparagraphs (ii) and (iii) shall apply to all grants and
exercises of Rights both before and after the amendment of the Plan to add
those provisions.
(b) If an Option granted under the Plan expires or terminates
for any reason (other than termination by virtue of the exercise of a Related
Right) without having been exercised fully, the unpurchased shares of Common
Stock that had been subject to the Option at the time of its expiration or
termination shall become available for other Options and Rights to be granted
under the Plan.
(c) If a Nonlimited Right that may be exercised for Common Stock
and that is not a Related Right expires or terminates for any reason without
having been exercised fully, the unpurchased shares of Common Stock which had
been subject to such Nonlimited Right at the time of its expiration or
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termination shall become available for Options and other Rights to be granted
under the Plan. If a Nonlimited Right that may be exercised for Common Stock
and that is a Related Right to a Limited Right expires or terminates for any
reason (other than termination by virtue of the exercise of the Limited Right)
without having been exercised fully, the unpurchased shares of Common Stock
that had been subject to the Nonlimited Right at the time of its expiration or
termination shall become available for Options and other Rights to be granted
under the Plan.
(d) In the case of a Nonlimited Right that may be exercised for
Common Stock and that is not a Related Right, if upon the exercise of such a
Right, a number of the shares of Common Stock subject to the portion of the
Right being exercised are not issued in settling the Company's obligations
arising out of such exercise, such number of shares of Common Stock shall
become available at the time of exercise for Options and other Rights to be
granted under the Plan. In the case of a Related Right (other than a Related
Right described in the following sentence), if upon the exercise of such a
Right, a number of the shares of Common Stock subject to the portion of the
Right being exercised are not issued in settling the Company's obligations
arising out of such exercise, such number of shares of Common Stock shall
become available at the time of exercise for Options and other Rights to be
granted under the Plan. The preceding sentence shall not apply to the
exercise of (i) a Nonlimited Right exercisable only for cash that is a Related
Right to a Limited Right, or (ii) a Limited Right that is a Related Right to a
Nonlimited Right exercisable only for cash.
6. Options
(a) Pursuant to the terms of the Plan, the Committee is hereby
authorized to grant Nonstatutory Stock Options and Incentive Stock Options to
Key Employees.
(b) All Agreements granting Options shall contain a statement
that the Option is intended to be either (i) a Nonstatutory Stock Option or
(ii) an Incentive Stock Option.
(c) The Option Period shall be determined by the Committee and
specifically set forth in the Agreement, provided, however, that an Option
shall not be exercisable after ten years from the Date of Grant in the case of
an Incentive Stock Option and after ten years and one day from the Date of
Grant in the case of a Nonstatutory Stock Option.
(d) The aggregate Fair Market Value (determined as of the date
an Incentive Stock Option is granted) of the Common Stock for which an
Incentive Stock Option is granted to any one person in any calendar year
before 1987 (under all stock option plans of the person's employer corporation
and its "parent" and "subsidiary" corporations) shall not exceed $100,000 plus
any Unused Limit Carryover to such year. The aggregate Fair Market Value
(determined as of the date an Incentive Stock Option is granted) of the Common
Stock with respect to which all Incentive Stock Options granted to any one
person at any time after 1986 (under all stock option plans of the person's
employer corporation and its "parent" and "subsidiary" corporations) may first
become exercisable in any calendar year shall not exceed $100,000. For
purposes of this Paragraph (d), the terms "parent" and "subsidiary"
corporations shall have the respective meanings given to them in section 424
of the Code.
(e) All Incentive Stock Options granted under the Plan shall
comply with the provisions of the Code governing incentive stock options and
with all other applicable rules and regulations.
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(f) All other terms of Options granted under this Plan shall be
determined by the Committee in its sole discretion.
7. Rights
(a) Pursuant to the terms of the Plan, the Committee is hereby
authorized to grant Rights.
(b) A Nonlimited Right may be granted under the Plan as follows:
(i) in connection with, and at the same time as, the grant
of an Option or a Limited Right under the Plan;
(ii) by amendment of an outstanding Nonstatutory Stock
Option or Limited Right granted under the Plan; or
(iii) independently of any Option or Limited Right granted
under the Plan.
(c) A Limited Right may be granted under the Plan as follows:
(i) in connection with, and at the same time as, the grant
of an Option or a Nonlimited Right under the Plan;
(ii) by amendment of an outstanding Nonstatutory Stock
Option or Nonlimited Right granted under the Plan; or
(iii) independently of any Option or Nonlimited Right
granted under the Plan.
(d) A Related Right may apply, in the Committee's discretion, to
all or a portion of the Common Stock subject to its Related Right or Related
Option.
(e) A Nonlimited Right granted under the Plan may be exercised
in whole or in part as provided in the Agreement and, subject to the
provisions of the Agreement and Paragraph (l) of this Article, entitles its
Optionee to receive, without any payment to the Company, either cash or that
number of shares of Common Stock (up to the highest whole number of shares),
or a combination thereof, in the amount of or having a Fair Market Value
determined as of the Date of Exercise equal to the number of shares of Common
Stock subject to the portion of the Nonlimited Right exercised multiplied by
an amount equal to the excess of (i) the Fair Market Value per share on the
Date of Exercise of the Nonlimited Right over (ii) the Grant Price of the
Nonlimited Right.
(f) A Limited Right granted under the Plan may be exercised in
whole or in part as provided in the Agreement and entitles its Optionee to
receive, without any payment to the Company, cash in an amount equal to the
number of shares of Common Stock subject to the portion of the Limited Right
exercised multiplied by an amount equal to the excess of (i) in the case of a
Limited Right that is not a Related Right to an Incentive Stock Option, (A)
the Offer Price per Share over (B) the Grant Price of the Limited Right or
(ii) in the case of a Limited Right that is a Related Right to an Incentive
Stock Option, (A) the Fair Market Value per share on the Date of Exercise of
such Limited Right over (B) the Grant Price of the Limited Right.
(g) Subject to the provisions of Paragraph (i) of this Article,
the Nonlimited Right Period shall be determined by the Committee and set forth
in the Agreement.
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(h) Subject to the provisions of Paragraph (i) of this Article,
the Limited Right Period shall be the period beginning on the first day
following the date of the first purchase of shares of Common Stock pursuant to
any Offer and ending on the date ninety days thereafter.
(i) Notwithstanding any other provision of this Plan or any
provision of any Agreement, the following rules shall apply:
(i) a Right may not be exercised until the expiration of
six months from the Date of Grant of the Right, except that this
limitation shall not apply in the event the death or disability of
the Optionee occurs prior to the expiration of the six-month
period;
(ii) a Right will expire no later than the earlier of (A)
ten years from the Date of Grant or (B) in the case of a Related
Right, the expiration of its Related Right or Related Option;
(iii) a Right may be exercised only when the Fair Market
Value of a share of Common Stock on the Date of Exercise exceeds
the Grant Price of the Right;
(iv) a Right that is a Related Right to an Incentive Stock
Option may be exercised only when and to the extent the Related
Option is exercisable; and
(v) a Limited Right that is a Related Right to a
Nonstatutory Stock Option or to a Nonlimited Right may be
exercised with respect to all or any portion of the shares subject
to the Limited Right whether or not its Related Right or Related
Option is then exercisable to that extent.
(j) The Company intends that this Article shall comply with the
requirements of Rule 16b-3 during the term of this Plan. Should any provision
of this Article not be necessary to comply with the requirements of Rule 16b-3
or should any additional provisions be necessary for this Article to comply
with the requirements of Rule 16b-3, the Board or the Committee may amend this
Plan to delete, add to or modify the provisions of the Plan accordingly. The
Company intends to seek to comply with the public information and reporting
requirements of Rule 16b-3(e)(1); however, the Company's failure for any
reason whatsoever to comply with such requirements or with any other
requirements of Rule 16b-3, and any resultant unavailability of Rule 16b-3 to
Optionees shall not impose any liability on the Company to any Optionee or to
any other party.
(k) The exercise, in whole or in part, of a Related Right shall
cause a reduction in the number of shares of Common Stock subject to its
Related Right or Related Option equal to the number of shares of Common Stock
with respect to which the Right being exercised is exercised. Similarly, the
exercise, in whole or in part, of a Related Option shall cause a reduction in
the number of shares subject to the Related Right equal to the number of
shares with respect to which the Related Option is exercised.
(l) Subject to the limitations of the Agreement and this
Paragraph (l), an Optionee may (A) elect to receive cash upon exercise of a
Right and exercise such Right or (B) exercise a Right exercisable only for
cash, and upon such election and exercise or such exercise, the Company shall
settle its obligations arising out of the exercise of the Right by the payment
of cash in the amount set forth in Paragraph (e) of this Article if the Right
is a Nonlimited Right, or in the amount set forth in Paragraph (f) of this
Article if the Right is a Limited Right; provided, however, that to the extent
required to satisfy the conditions of Rule 16b-3(e) or as otherwise provided
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in the Agreement, the Committee shall have the sole discretion to consent to
or to disapprove the election of any Optionee to receive cash in full or
partial settlement of a Right; and further provided that to the extent
required to satisfy the conditions of Rule 16b-3(e) or as otherwise provided
in the Agreement, the Committee shall not consent to any such election for
settlement in cash and an Optionee shall not exercise a Right for cash unless
the following conditions are met:
(i) the Company shall have been subject to the reporting
requirements of Section 13 of the Exchange Act, as from time to
time in effect, or in the event of the repeal of such section,
such reporting requirements as may from time to time be prescribed
by any similar federal law, for at least one year prior to such
election or exercise; shall have filed all reports and statements
required to be filed pursuant to that section or other applicable
provision during the year ending upon the date of such election or
exercise; and shall have at the time of such election or exercise
the practice of releasing on a regular basis for publication
quarterly and annual statements of sales and earnings, which data
appear on a wire service, in a financial news service, in a
newspaper of general circulation, or is otherwise publicly made
available; and
(ii) the Date of Exercise of a Right must be (A) within a
period beginning on the third business day next following the date
of release of the quarterly or annual financial data specified in
subparagraph (i) and ending on the twelfth business day following
such date of release and/or (B) upon the happening (and during a
specified period thereafter) of an event fixed in advance in the
Agreement which event is outside the control of the Optionee and
which event occurs at least six months after the Date of Grant of
the Right (except in the case of the death or disability of the
Optionee).
Any election by an Optionee for settlement in cash must be made in
the notice of exercise of the Right. In cases where an election of settlement
in cash must be consented to by the Committee, the Committee may consent to,
or disapprove, such election at any time after such election, or within such
period for taking such action as is specified in the notice of exercise and
election, and failure to give such consent shall be disapproval. Such consent
may be given in whole or as to a portion of the Right surrendered by the
Optionee. If such election to receive cash is disapproved in whole or in
part, the Right shall be deemed to have been exercised for stock, or, if so
specified in the notice of exercise and election, not to have been exercised,
to the extent such election to receive cash is disapproved.
8. Exercise
An Option or Right may be exercised, subject to the provisions of
the Agreement under which it was granted, in whole or in part by the delivery
to the Company of written notice of the exercise, in such form as the
Committee may prescribe, accompanied, in the case of an Option, by full
payment for the Common Stock with respect to which the Option is exercised.
9. Nontransferability
Options and Rights granted under the Plan shall not be
transferable otherwise than by will or the laws of descent and distribution,
and an Option or Right may be exercised, during the Optionee's lifetime, only
by the Optionee or, in the event of the Optionee's legal disability, by the
Optionee's legal representative. A Related Right is transferable only when
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its Related Right or Related Option is transferable and only with its Related
Right or Related Option and under the same conditions.
10. Capital Adjustments
The number, class and Fair Market Value of shares subject to each
outstanding Option or Right, the Option Price and the aggregate number and
class of shares for which grants thereafter may be made shall be subject to
such adjustment, if any, as the Committee in its sole discretion deems
appropriate to reflect such events as stock dividends, stock splits,
recapitalizations, mergers, consolidations or reorganizations of or by the
Company.
11. Termination or Amendment
The Board shall have the power to terminate the Plan and to amend
it in any respect, provided that after the Plan has been approved by the
stockholders of the Company, the Board may not amend the Plan, without the
approval of the stockholders of the Company, if such amendment would be
required to be approved by the stockholders of the Company under the laws of
the State of New York, in order for the Plan to continue to satisfy the
conditions of Rule 16b-3, in order for Incentive Stock Options to qualify as
such under section 422 of the Code, or under the rules of any securities
exchange on which shares of Common Stock are listed. No termination or
amendment of the Plan shall affect adversely the rights or obligations of the
holder of any Option or Right granted under the Plan without the holder's
consent.
12. Modification, Extension and Renewal of Options and Rights
Subject to the terms and conditions and within the limitations of
the Plan, the Committee may modify, extend or renew outstanding Options and
Rights granted under the Plan; or may accept the surrender of outstanding
Options and Rights (to the extent not exercised theretofore) granted under the
Plan, or outstanding options and rights (to the extent not exercised
theretofore) granted under any other stock option, stock purchase, stock
appreciation rights, or other stock-related plan of the Company or of a
company which has been merged or consolidated with the Company or a Subsidiary
or which has become a Subsidiary through the acquisition by the Company or by
a Subsidiary of stock or assets of the company, and authorize the granting of
new Options and Rights pursuant to the Plan in substitution therefor (to the
extent not exercised theretofore), and the substituted Options and Rights may
specify terms different than the surrendered options and rights or have any
other provisions which are authorized by the Plan; or may assume options and
rights granted by such other company, and such options and rights shall not
reduce the number of shares of Common Stock available for the grant of Options
and Rights under this Plan, except to the extent that such options and rights
are granted under this Plan pursuant to a provision of a plan or agreement of
merger of such other company with the Company, and to the extent that such
options and rights, if granted under this Plan, would reduce the number of
shares of Common Stock available pursuant to the provisions of Article 5. The
Company may grant options and rights otherwise than under the provisions of
this Plan and may adopt other stock option plans or stock purchase, stock
appreciation rights, or other stock-related plans, and such options and rights
and the options, rights, and stock granted or issued under such plans shall
not reduce the number of shares of Common Stock available for the grant of
Options and Rights under this Plan. Neither the adoption or amendment of this
Plan nor the submission of the Plan or amendments for stockholder approval
shall be deemed to impose any limitation on the powers of the Company to grant
or assume options or rights otherwise than under this Plan or to adopt other
stock option plans or stock purchase, stock appreciation rights, or other
stock-related plans, nor shall they be deemed to impose any requirement of
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stockholder approval upon the same. Notwithstanding the foregoing, however,
no modification of an Option or Right granted under the Plan shall alter or
impair the rights or obligations of the holder of such Option or Right without
the consent of the holder.
13. Effectiveness of the Plan
The Plan and any amendments which require stockholder approval
pursuant to Article 11 are subject to approval by vote of the stockholders of
the Company within twelve months after their adoption by the Board. Subject
to such approval, the Plan and any amendments are effective on the date on
which they are adopted by the Board. Options and Rights may be granted prior
to stockholder approval of the Plan or amendments, but each such Option or
Right granted shall be subject to the approval, if required, of the Plan or
amendments by the stockholders. Except as otherwise required to satisfy the
requirements of Rule 16b-3, the day on which any Option or Right granted prior
to required stockholder approval of the Plan or amendments is granted shall be
the Date of Grant for all purposes as if the Option or Right had not been
subject to such approval. No Option or Right granted may be exercised prior
to such required stockholder approval.
14. Term of the Plan
Unless sooner terminated by the Board pursuant to Article 11, the
Plan shall terminate ten years from the date on which the Board approves the
most recent amendment to the Plan that changes either the aggregate number of
shares of Common Stock that may be issued under the Plan or the class of
persons eligible to receive Options or Rights under the Plan, and which
amendment subsequently is approved by the stockholders of the Company. No
Options or Rights may be granted after termination. Termination of the Plan
shall not affect the validity of any Option or Right outstanding on the date
of termination.
15. Indemnification of Committee
In addition to such other rights of indemnification as they may
have as Directors or as members of the Committee, the members of the Committee
shall be indemnified by the Company against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or any Option or
Right granted hereunder, and against all amounts reasonably paid by them in
settlement thereof or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, if such members acted in good faith and in a
manner which they believed to be in, and not opposed to, the best interests of
the Company.
16. General Provisions
(a) The establishment of the Plan shall not confer upon any
Employee or Key Employee any legal or equitable right against the Company, any
Subsidiary or the Committee except as expressly provided in the Plan.
(b) The Plan does not constitute inducement or consideration for
the employment of any Employee, nor is it a contract between the Company or
any Subsidiary and any Employee or Key Employee. Participation in the Plan
shall not give any Employee or Key Employee any right to be retained in the
service or employ of the Company or any Subsidiary. The Company and its
Subsidiaries retain the right to hire and discharge any Employee at any time,
with or without cause, as if the Plan never had been adopted.
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(c) The interests of any Optionee under the Plan are not subject
to the claims of creditors and may not be assigned, alienated or encumbered in
any way.
(d) The Plan shall be governed, construed and administered in
accordance with the laws of the State of New York and the intention of the
Company that Incentive Stock Options granted under the Plan qualify as such
under section 422 of the Code.