EXHIBIT 10.68
UNIROYAL TECHNOLOGY CORPORATION
2001 NON-EXECUTIVE STOCK OPTION PLAN
ADOPTED MAY 17, 2001,
AS AMENDED AND RESTATED TO JANUARY 1, 2002
UNIROYAL TECHNOLOGY CORPORATION
2001 NON-EXECUTIVE STOCK OPTION PLAN
ARTICLE I
General
1.1 Purpose
The Uniroyal Technology Corporation 2001 Non-Executive Stock Option
Plan (the "Plan") is designed to provide certain key persons, on whose
initiative and efforts the successful conduct of the business of Uniroyal
Technology Corporation (the "Company") depends, and who are not officers and
directors of the Company, with incentives to: (a) enter into and remain in the
service of the Company, a Company subsidiary or a Company joint venture, (b)
acquire a proprietary interest in the success of the Company, (c) maximize their
performance and (d) enhance the long-term performance of the Company (whether
directly or indirectly through enhancing the long-term performance of a Company
subsidiary or a Company joint venture).
1.2 Administration
(a) Administration by Committee; Constitution of Committee. The Plan
shall be administered by the Option Committee of the Board of Directors of the
Company (the "Board") or such other committee or subcommittee as the Board may
designate or as shall be formed by the abstention or recusal of a non-Qualified
Member (as defined below) of such committee (the "Committee"). The members of
the Committee shall be appointed by, and serve at the pleasure of, the Board.
Except as provided in the last sentence of this Section 1.2, at all times that
the Committee acts in connection with the Plan, the Committee shall consist
solely of Qualified Members, the number of whom shall not be less than two. A
"Qualified Member" is both a "non-employee director" within the meaning of Rule
16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of 1934 (the
"1934 Act") and an "outside director" within the meaning of section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"). Solely with respect
to the granting and administration of awards to persons who are not at the time
of the grant, and who are not expected to become, subject to the insider trading
restrictions of Section 16 of the 1934 Act or the limitation on deductible
compensation under Section 162(m) of the Code, the Committee may consist of a
single member of the Board, who need not be a Qualified Member.
(b) Committee's Authority. The Committee shall have the authority (i)
to exercise all of the powers granted to it under the Plan, (ii) to construe,
interpret and implement the Plan and any Grant Certificates given to grantees
pursuant to Section 2.1, (iii) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules governing its own operations,
(iv) to make all determinations necessary or advisable in administering the
Plan, (v) to correct any defect, supply any omission and reconcile any
inconsistency in the Plan, and (vi) to amend the Plan to reflect changes in
applicable law.
(c) Committee Action. Actions of the Committee shall be taken by the
vote of a majority of its members. Any action may be taken by a written
instrument signed by a majority of the Committee members, and action so taken
shall be fully as effective as if it had been taken by a vote at a meeting.
(d) Determinations Final. The determination of the Committee on all
matters relating to the Plan or any Grant Certificate shall be final, binding
and conclusive.
(e) Limit on Committee Members' Liability. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any award thereunder.
1.3 Persons Eligible for Awards
The persons eligible to receive awards under the Plan are those
executive, managerial, professional, technical or administrative employees of,
and consultants to, the Company, its subsidiaries and its joint ventures
(collectively, "key persons") as the Committee in its sole discretion shall
select. The Committee may from time to time in its sole discretion determine
that any key person shall be ineligible to receive awards under the Plan. No
executive officer or director of the Company shall be a key person for purposes
of the Plan.
1.4 Types of Awards Under Plan
Awards shall be made under the Plan in the form of non-qualified stock
options and dividend equivalent rights, all as more fully set forth in Article
II. The term "Award" means either of the foregoing.
1.5 Shares Available for Awards
(a) Aggregate Number Available. The total number of shares of common
stock of the Company ("Common Stock") with respect to which awards may be
granted pursuant to the Plan shall not exceed three million (3,000,000) shares.
Shares issued pursuant to the Plan may be authorized but unissued Common Stock,
authorized and issued Common Stock held in the Company's treasury or Common
Stock acquired by the Company for the purposes of the Plan.
(b) Adjustment Upon Changes in Common Stock. Upon certain changes in
Common Stock, the number of shares of Common Stock available for issuance with
respect to awards that may be granted under the Plan pursuant to Section 1.5(a)
shall be adjusted pursuant to Section 3.6(a).
(c) Certain Shares to Become Available Again. Any shares of Common
Stock that are subject to an award under the Plan and that remain unissued upon
the cancellation or termination of such award for any reason whatsoever shall
again become available for awards under the Plan.
(d) Individual Limit. Except for the limits set forth in this Section
1.5(d) and in Section 2.2(g), no provision of this Plan shall be deemed to limit
the number or value of shares with respect to which the Committee may make
awards to any eligible person. Subject to adjustment as provided in Section
3.6(a), the total number of shares of Common Stock with respect to which awards
may be granted to any one employee of the Company or a subsidiary during any one
calendar year shall not exceed one hundred thousand (100,000) shares. Stock
options granted and subsequently canceled or deemed to be canceled in a fiscal
year count against this limit even after their cancellation.
1.6 Definitions of Certain Terms
(a) The "Fair Market Value" of a share of Common Stock on any day shall
be the closing quotation at which such shares are sold on a national securities
exchange in the United States. In the event that the shares are listed on a
national securities exchange in the United States on such date but the shares
are not traded on such date, or such national securities exchange is not open
for business on such date, the fair market value per share shall be determined
as of the closest preceding date on which such exchange shall have been open for
business and the shares were traded. If the shares are listed on more than one
national securities exchange in the United States on such date, the Committee
shall determine which national securities exchange shall be used for the purpose
of determining the fair market value per share. If on such date a public market
exists for the shares but such shares are not listed on a national securities
exchange in the United States, the fair market value per share shall be the
closing price reported by the Nasdaq National Market (or its successor quotation
system). In the event that there is no closing price reported by the Nasdaq
National Market (or its successor quotation system) for shares on such date, the
fair market value per share shall be the closing price reported by the Nasdaq
National Market (or its successor quotation system) for shares on the closest
date preceding such date for which such quotations are available. If on such
date no public market exists for shares, the fair market value per share shall
be determined by such other reasonable valuation method as the Committee shall,
in its discretion, select and apply in good faith. For all purposes of this
Plan, the fair market value per share shall be determined subject to Section
422(c)(7) of the Code. In no event shall the fair market value of any share of
Common Stock be less than its par value.
(b) A grantee shall be deemed to have a "termination of employment"
upon (i) the date the grantee ceases to be employed by, or to provide consulting
services for, the Company, any Company subsidiary or Company joint venture, or
any corporation (or any of its subsidiaries) which assumes the grantee's award
in a transaction to which section 424(a) of the Code applies; (ii) the date the
grantee ceases to be a Board member; or (iii) in the case of a grantee who is,
at the time of reference, both an employee or consultant and a Board member, the
later of the dates determined pursuant to clauses (i) and (ii) above. For
purposes of clause (i) above, a grantee who continues his employment or
consulting relationship with: (A) a Company subsidiary subsequent to its sale by
the Company, or (B) a Company joint venture subsequent to the Company's sale of
its interests in such joint venture, shall have a termination of employment upon
the date of such sale. The Committee may in its discretion determine whether any
leave of absence constitutes a termination of employment for purposes of the
Plan and the impact, if any, of any such leave of absence on awards theretofore
made under the Plan. Such determinations of the Committee shall be final,
binding and conclusive. A person who changes from one company status (employee,
consultant or director) to another without interruption shall not be considered
to have had a termination of employment by reason of such change, except for
purposes of Section 2.5(e).
(c) The terms "parent corporation" and "subsidiary corporation" shall
have the meanings given them in section 424(e) and (f) of the Code,
respectively.
(d) The term "employment" shall be deemed to mean an employee's
employment with, or a consultant's provision of services to, the Company, any
Company subsidiary or any Company joint venture and each director's service as a
director.
(e) The term "cause" in connection with a termination of employment by
reason of a dismissal for cause shall mean:
(i) to the extent that there is an employment, severance or other
agreement or a benefit plan governing the relationship between the
grantee and the Company, a Company subsidiary or a Company joint
venture, which agreement or plan contains a definition of "cause,"
cause shall consist of those acts or omissions that would constitute
"cause" under such agreement or plan; and otherwise,
(ii) the grantee's termination of employment by the Company or
Company subsidiary or joint venture on account of any one or more of
the following:
(A) the willful commission by the grantee of an act that
causes or may cause substantial damage to the Company or a
Company subsidiary or joint venture;
(B) the commission by the grantee of an act of fraud in the
performance of such grantee's duties on behalf of the Company or
a subsidiary or joint venture of the Company;
(C) conviction of the grantee for commission of a felony in
connection with the performance of his duties on behalf of the
Company or a subsidiary or joint venture of the Company, or
(D) the continuing failure of grantee to perform the duties of
such grantee to the Company or a subsidiary or joint venture of
the Company after written notice thereof and a reasonable
opportunity to be heard and cure such failure are given to the
grantee by the Committee.
Any rights the Company may have hereunder in respect of the events
giving rise to cause shall be in addition to the rights the Company may have
under any other agreement with a grantee or at law or in equity. Any
determination of whether a grantee's employment is (or is deemed to have been)
terminated for cause shall be made by the Committee in its discretion, which
determination shall be final, binding and conclusive on all parties. If,
subsequent to a grantee's voluntary termination of employment or involuntary
termination of employment without cause, it is discovered that the grantee's
employment could have been terminated for cause, the Committee may deem such
grantee's employment to have been terminated for cause. A grantee's termination
of employment for cause shall be effective as of the date of the occurrence of
the event giving rise to cause, regardless of when the determination of cause is
made.
ARTICLE II
Awards Under The Plan
2.1 Certificates Evidencing Awards
Each award granted under the Plan shall be evidenced by a written
certificate ("Grant Certificate") which shall contain such provisions as the
Committee may in its sole discretion deem necessary or desirable. By accepting
an award pursuant to the Plan, a grantee thereby agrees that the award shall be
subject to all of the terms and provisions of the Plan and the applicable Grant
Certificate.
2.2 Grant of Stock Options and Dividend Equivalent Rights
(a) Stock Option Grants. The Committee may grant non-qualified stock
options ("options") to purchase shares of Common Stock from the Company, to such
key persons, and in such amounts and subject to such vesting and forfeiture
provisions and other terms and conditions, as the Committee shall determine in
its sole discretion, subject to the provisions of the Plan.
(b) Option Exercise Price. Each Grant Certificate with respect to an
option shall set forth the amount (the "option exercise price") payable by the
grantee to the Company upon exercise of the option evidenced thereby. The option
exercise price per share shall be determined by the Committee in its sole
discretion; provided, however, that in no event shall the option exercise price
be less than the par value of a share of Common Stock.
(c) Exercise Period. Each Grant Certificate with respect to an option
shall set forth the periods during which the award evidenced thereby shall be
exercisable, whether in whole or in part. Such periods shall be determined by
the Committee in its sole discretion; provided, however, that except as and to
the extent that the Committee may otherwise provide, no option shall be
exercisable prior to the first anniversary of the date of grant or more than 10
years after the date of grant.
(d) Reload Options. The Committee may in its sole discretion include in
any Grant Certificate with respect to an option (the "original option") a
provision that an additional option (the "reload option") shall be granted to
any grantee who, pursuant to Section 2.3(e)(ii), delivers shares of Common Stock
in partial or full payment of the exercise price of the original option. The
reload option shall be for a number of shares of Common Stock equal to the
number thus delivered, shall have an exercise price equal to the Fair Market
Value of a share of Common Stock on the date of exercise of the original option,
and shall have an expiration date not later than the expiration date of the
original option. In the event that a Grant Certificate provides for the grant of
a reload option, such Certificate shall also provide that the exercise price of
the original option be not less than the Fair Market Value of a share of Common
Stock on its date of grant, and that any shares that are delivered pursuant to
Section 2.3 (e) (ii) in payment of such exercise price shall have been held for
at least six months.
(e) Dividend Equivalent Rights. The Committee may in its sole
discretion include in any Grant Certificate with respect to an option a dividend
equivalent right entitling the grantee to receive amounts equal to the ordinary
dividends that would be paid, during the time such award is outstanding and
unexercised, on the shares of Common Stock covered by such award if such shares
were then outstanding. In the event such a provision is included in a Grant
Certificate, the Committee shall determine whether such payments shall be made
in cash or in shares of Common Stock, whether they shall be conditioned upon the
exercise of the award to which they relate, the time or times at which they
shall be made, and such other vesting and forfeiture provisions and other terms
and conditions as the Committee shall deem appropriate. Notwithstanding the
foregoing, no dividend equivalent rights shall be conditioned on the exercise of
any option if and to the extent that such dividend equivalent right would cause
the compensation represented by such option not to constitute performance-based
compensation under section 162(m) of the Code.
2.3 Exercise of Options
Subject to the other provisions of this Article II, including Section
2.5, each option granted under the Plan shall be exercisable as follows:
(a) Vesting Period. Unless the applicable Grant Certificate otherwise
provides, an option shall vest and become exercisable in equal installments of
20% of the shares subject to such option; one installment shall become vested
and exercisable on each successive anniversary of the date of grant.
(b) End of Exercise Period. Unless the applicable Grant Certificate
otherwise provides, once an installment becomes vested and exercisable, it shall
remain exercisable until the earlier of (i) the tenth anniversary of the date of
grant of the award or (ii) the expiration, cancellation or termination of the
award.
(c) Timing and Extent of Exercise. Unless the applicable Grant
Certificate otherwise provides, an option may be exercised from time to time as
to all or part of the shares as to which such award is then exercisable.
(d) Notice of Exercise. An option shall be exercised by the filing of a
written notice with the Company or the Company's designated exchange agent (the
"exchange agent"), on such form and in such manner as the Committee shall in its
sole discretion prescribe.
(e) Payment of Exercise Price. Any written notice of exercise of an
option shall be accompanied by payment for the shares being purchased. Such
payment shall be made: (i) by certified or official bank check (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option exercise price; or (ii) subject to rules or policies established by the
Committee or its designee, by delivery of shares of Common Stock having a Fair
Market Value (determined as of the exercise date) equal to all or part of the
option exercise price and a certified or official bank check (or the equivalent
thereof acceptable to the Company or its exchange agent) for any remaining
portion of the full option exercise price; (iii) by delivering to the Company
authorization for the immediate sale of the shares of the Common Stock that will
be purchased by exercise of the option and retention by Company of such sale or
liquidation proceeds (accompanied by all requisite authorizations as the
Committee or its designee deems necessary) with respect to such numbers of
shares having a fair market value equal to the cash exercise price applicable to
that portion of the option being exercised by the grantee, the Fair Market Value
of shares to be so purchased and sold to be determined as of the date
immediately preceding the date on which the option is exercised or (iv) at the
discretion of the Committee and to the extent permitted by law, by such other
provision as the Committee may from time to time prescribe (whether directly or
indirectly through the exchange agent).
(f) Delivery of Certificates Upon Exercise. Promptly after receiving
payment of the full option exercise price, the Company or its exchange agent
shall, subject to the provisions of Section 3.2, deliver to the grantee or to
such other person as may then have the right to exercise the award, a
certificate or certificates for the shares of Common Stock for which the award
has been exercised. If the method of payment employed upon option exercise so
requires, and if applicable law permits, an optionee may direct the Company, or
its exchange agent as the case may be, to deliver the stock certificate(s) to
the optionee's stockbroker
2.4 No Stockholder Rights.
No grantee of an option (or other person having the right to exercise
such award) shall have any of the rights of a stockholder of the Company with
respect to shares subject to such award until the issuance of a stock
certificate to such person for such shares. Except as otherwise provided in
Section 1.5(b), no adjustment shall be made for dividends, distributions or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other property) for which the record date is prior to the date such stock
certificate is issued.
2.5 Termination of Employment; Death Subsequent to a Termination
of Employment
(a) General Rule. Except to the extent otherwise provided herein or by
the terms of an Award Certificate, a grantee who incurs a termination of
employment may exercise any outstanding option on the following terms and
conditions: (i) exercise may be made only to the extent that the award was
vested (and grantee was entitled to exercise the award) on the date of
termination of employment; and (ii) exercise must occur not later than the date
of termination of employment but in no event after the original expiration date
of the award. A layoff or furlough of a grantee shall not be deemed a
termination of employment for purposes of the Plan.
(b) Dismissal or Resignation. If a grantee incurs a termination of
employment as the result of resignation or a dismissal for cause, all options
not theretofore exercised shall terminate upon the grantee's termination of
employment. If a grantee incurs a termination of employment other than for cause
or by resignation, then any outstanding option shall be exercisable on the
following terms and conditions: (i) exercise may be made only to the extent that
the award was vested (and grantee was entitled to exercise the award) on the
date of such termination of employment; and (ii) exercise must occur by three
months from the date of termination of employment.
(c) Disability. If a grantee incurs a termination of employment by
reason of a disability (as defined below), then any outstanding option shall be
exercisable on the following terms and conditions: (i) exercise may be made only
to the extent that the award was vested (and grantee was entitled to exercise
the award) on the date of such termination of employment; and (ii) exercise must
occur by the earlier of (A) the first anniversary of the grantee's termination
of employment, or (B) the original expiration date of the award. For this
purpose "disability" shall mean: except in connection with an incentive stock
option, any physical or mental condition that would qualify a grantee for a
disability benefit under the long-term disability plan maintained by the Company
or, if there is no such plan, a physical or mental condition that prevents the
grantee from performing the essential functions of the grantee's position (with
or without reasonable accommodation) for a period of six consecutive months. The
existence of a disability shall be determined by the Committee in its absolute
discretion.
(d) Death.
(i) Termination of Employment as a Result of Grantee's Death. If a
grantee incurs a termination of employment as the result of the
grantee's death, then any outstanding option shall be exercisable on
the following terms and conditions: (A) exercise may be made only to
the extent that the award was vested (and grantee was entitled to
exercise the award) on the date of such termination of employment; and
(B) exercise must occur by the earlier of (1) the first anniversary of
the grantee's termination of employment, or (2) the original
expiration date of the award.
(ii) Death Subsequent to a Termination of Employment. If a grantee
dies subsequent to incurring a termination of employment but prior to
the expiration of the exercise period with respect to a non-qualified
stock option, then the award shall remain exercisable until the
earlier to occur of (A) the first anniversary of the grantee's date of
death or (B) the original expiration date of the award.
(iii) Restrictions on Exercise Following Death. Any such exercise
of an award following a grantee's death shall be made only by the
grantee's executor or administrator or other duly appointed
representative reasonably acceptable to the Committee, unless the
grantee's will specifically disposes of such award, in which case such
exercise shall be made only by the recipient of such specific
disposition. If a grantee's personal representative or the recipient
of a specific disposition under the grantee's will shall be entitled
to exercise any award pursuant to the preceding sentence, such
representative or recipient shall be bound by all the terms and
conditions of the Plan and the applicable Grant Certificate which
would have applied to the grantee.
(e) Committee Discretion. The Committee, in the applicable Grant
Certificate, may waive or modify the application of the foregoing provisions of
this Section
2.6 Transferability of Options.
Except as otherwise provided in an applicable Grant Certificate
evidencing an option, during the lifetime of a grantee, each option granted to a
grantee shall be exercisable only by the grantee and no option shall be
assignable or transferable otherwise than by will or by the laws of descent and
distribution. The Committee may, in any applicable Grant Certificate evidencing
an option, permit a grantee to transfer all or some of the options to (A) the
grantee's spouse, children or grandchildren ("Immediate Family Members"), (B) a
trust or trusts for the exclusive benefit of such Immediate Family Members, or
(C) other parties approved by the Committee in its absolute discretion.
Following any such transfer, any transferred options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
the transfer.
ARTICLE III
Miscellaneous
3.1 Amendments and Modifications
(a) Amendment of the Plan. The Board may from time to time suspend,
discontinue, revise or amend the Plan in any respect whatsoever, except that no
such amendment shall materially impair any rights or materially increase any
obligations under any award theretofore made under the Plan without the consent
of the grantee (or, upon the grantee's death, the person having the right to
exercise the award). For purposes of this Section 3.1, any action of the Board
or the Committee that in any way alters or affects the tax treatment of any
award shall not be considered to materially impair any rights of any grantee.
(b) Modification of Awards. The Committee may cancel any award under
the Plan. The Committee also may amend any outstanding Grant Certificate,
including, without limitation, by amendment which would: (i) accelerate the time
or times at which the award becomes unrestricted or may be exercised; (ii) waive
or amend any goals, restrictions or conditions set forth in the Agreement; or
(iii) waive or amend the operation of Section 2.5 with respect to the
termination of the award upon termination of employment. However, any such
cancellation or amendment (other than an amendment pursuant to Sections 3.6 or
3.7) that materially impairs the rights or materially increases the obligations
of a grantee under an outstanding award shall be made only with the consent of
the grantee (or, upon the grantee's death, the person having the right to
exercise the award).
3.2 Consent Requirement
(a) No Plan Action without Required Consent. If the Committee shall at
any time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the granting of any award
under the Plan, the issuance or purchase of shares or other rights thereunder,
or the taking of any other action thereunder (each such action being hereinafter
referred to as a "Plan Action"), then such Plan Action shall not be taken, in
whole or in part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Committee.
(b) Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (i) any and all listings, registrations or qualifications
in respect thereof upon any securities exchange or under any federal, state or
local law, rule or regulation, (ii) any and all written agreements and
representations by the grantee with respect to the disposition of shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made and (iii) any and all consents,
clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies.
3.3 Nonassignability
Except as provided in Section 2.5(d) and Section 2.6 no award or right
granted to any person under the Plan or under any Grant Certificate shall be
assignable or transferable other than by will or by the laws of descent and
distribution, and (b) all rights granted under the Plan or any Grant Certificate
shall be exercisable during the life of the grantee only by the grantee or the
grantee's legal representative.
3.4 Restriction on Issuance of Stock Pursuant to Awards
The Company shall not permit any shares of Common Stock to be issued
pursuant to Awards granted under the Plan unless such shares of Common Stock are
fully paid and non-assessable under applicable law.
3.5 Withholding Taxes
Whenever shares of Common Stock are to be delivered pursuant to an
award under the Plan, the Company shall be entitled to require as a condition of
delivery that the grantee remit to the Company an amount sufficient in the
opinion of the Company to satisfy all federal, state and other governmental tax
withholding requirements related thereto. With the approval of the Committee,
which the Committee shall have sole discretion whether or not to give, the
grantee may satisfy the foregoing condition by electing to have the Company
withhold from delivery shares having a value equal to the amount of tax to be
withheld. Such shares shall be valued at their Fair Market Value as of the date
on which the amount of tax to be withheld is determined. Fractional share
amounts shall be settled in cash. Such a withholding election may be made with
respect to all or any portion of the shares to be delivered pursuant to an
award.
3.6 Adjustment Upon Changes in Common Stock
(a) Shares Available for Grants. In the event of any change in the
number of shares of Common Stock outstanding by reason of any stock dividend or
split, reverse stock split, recapitalization, merger, consolidation, combination
or exchange of shares or similar corporate change, the maximum number of shares
of Common Stock with respect to which the Committee may grant awards under
Article II hereof, as described in Section 1.5(a), and the individual annual
limit described in Section 1.5(d), shall be appropriately adjusted by the
Committee. In the event of any change in the number of shares of Common Stock
outstanding by reason of any other event or transaction, the Committee may, but
need not, make such adjustments in the number and class of shares of Common
Stock with respect to which awards: (i) may be granted under Article II hereof
and (ii) granted to any one employee of the Company or a subsidiary during any
one calendar year, in each case as the Committee may deem appropriate, unless
such adjustment would cause any award that would otherwise qualify as
performance based compensation with respect to a "162(m) covered employee" (as
defined in Section 3.8), to cease to so qualify.
(b) Outstanding Options and Dividend Equivalent Rights - Increase or
Decrease in Issued Shares Without Consideration. Subject to any required action
by the stockholders of the Company, in the event of any increase or decrease in
the number of issued shares of Common Stock resulting from a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend (but
only on the shares of Common Stock), or any other increase or decrease in the
number of such shares effected without receipt of consideration by the Company,
the Committee shall proportionally adjust the number of shares of Common Stock
subject to each outstanding option, and the exercise price-per-share of Common
Stock of each such option and the number of any related dividend equivalent
rights.
(c) Outstanding Options and Dividend Equivalent Rights - Certain
Mergers. Subject to any required action by the stockholders of the Company, in
the event that the Company shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the holders
of shares of Common Stock receive securities of another corporation), each
option and dividend equivalent right outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common Stock subject to such option or dividend equivalent
right would have received in such merger or consolidation.
(d) Outstanding Options and Dividend Equivalent Rights - Certain Other
Transactions. In the event of (i) a dissolution or liquidation of the Company,
(ii) a sale of all or substantially all of the Company's assets, (iii) a merger
or consolidation involving the Company in which the Company is not the surviving
corporation or (iv) a merger or consolidation involving the Company in which the
Company is the surviving corporation but the holders of shares of Common Stock
receive securities of another corporation and/or other property, including cash,
the Committee shall, in its absolute discretion, have the power to:
(A) cancel, effective immediately prior to the occurrence of such
event, each option (including each dividend equivalent right related
thereto) outstanding immediately prior to such event (whether or not
then exercisable), and, in full consideration of such cancellation,
pay to the grantee to whom such option was granted an amount in cash,
for each share of Common Stock subject to such option, respectively,
equal to the excess of (x) the value, as determined by the Committee
in its absolute discretion, of the property (including cash) received
by the holder of a share of Common Stock as a result of such event
over (y) the exercise price of such option; or
(B) provide for the exchange of each option (including any related
dividend equivalent right) outstanding immediately prior to such event
(whether or not then exercisable) for an option on and dividend
equivalent right with respect to, as appropriate, some or all of the
property which a holder of the number of shares of Common Stock
subject to such option would have received and, incident thereto, make
an equitable adjustment as determined by the Committee in its absolute
discretion in the exercise price of the option, or the number of
shares or amount of property subject to the option or dividend
equivalent right or, if appropriate, provide for a cash payment to the
grantee to whom such option was granted in partial consideration for
the exchange of the option.
(e) Outstanding Options and Dividend Equivalent Rights - Other Changes.
In the event of any change in the capitalization of the Company or a corporate
change other than those specifically referred to in Sections 3.6(b), (c) or (d)
hereof, the Committee may, in its absolute discretion, make such adjustments in
the number and class of shares subject to options and dividend equivalent rights
outstanding on the date on which such change occurs and in the per-share
exercise price of each such option as the Committee may consider appropriate to
prevent dilution or enlargement of rights. In addition, if and to the extent the
Committee determines it is appropriate, the Committee may elect to cancel each
option (including each dividend equivalent right related thereto) outstanding
immediately prior to such event (whether or not then exercisable), and, in full
consideration of such cancellation, pay to the grantee to whom such option was
granted an amount in cash, for each share of Common Stock subject to such
option, respectively, equal to the excess of (i) the Fair Market Value of Common
Stock on the date of such cancellation over (ii) the exercise price of such
option.
(f) No Other Rights. Except as expressly provided in the Plan, no
grantee shall have any rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Common Stock subject to an award or the
exercise price of any option.
3.7 Change in Control
(a) Change in Control Defined. For purposes of this Section 3.7, a
"Change in Control" shall be deemed to have occurred if (a) more than fifty
percent (50%) of the total combined voting power of all classes of stock of the
Company normally entitled to vote for the election of directors of the Company
is acquired by another person, firm or corporation or by a cooperating group of
such individuals or entities, (b) the Board approves the sale of all or
substantially all of the property or assets of the Company, or (c) the Board
approves a consolidation or merger of the Company with another corporation, the
consummation of which would result in the occurrence of an event described in
clause (a) above.
(b) Effect of a Change in Control. Upon the occurrence of a Change in
Control:
(i) notwithstanding any other provision of this Plan, any award
then outstanding shall become fully vested and immediately
exercisable; and
(ii) a grantee who incurs a termination of employment for any
reason, other than a dismissal for cause, concurrent with or within
one year following the Change in Control may exercise any outstanding
option, but only to the extent that the award was vested (and grantee
was entitled to exercise the award) on date of the termination of the
grantee's employment, whether by the terms of the award or by
operation of Section 3.7(b)(i) above, until the earlier of (A) the
original expiration date of the award and (B) the later of (x) the
date provided for under the terms of Section 2.5 without reference to
this Section 3.7(b)(ii) and (y) the first anniversary of the grantee's
termination of employment.
Notwithstanding the foregoing, the Committee, in its discretion, may
determine that, upon the occurrence of a transaction described in Section
3.7(a), each option outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive, with
respect to each share subject to such option, an amount equal to the excess of
the fair market value of such shares immediately prior to the occurrence of such
transaction over the exercise price per share of such option; such amount shall
be payable in cash, in one or more of the kinds of property payable in such
transaction, or in a combination thereof, as the Committee in its discretion
shall determine.
3.8 Limitations Imposed by Section 162(m)
Notwithstanding any other provision hereunder, prior to a Change in
Control, if and to the extent that the Committee determines the Company's
federal tax deduction in respect of an award may be limited as a result of
section 162(m) of the Code, the Committee may delay the exercise or payment, as
the case may be, in respect of options or dividend equivalent rights until a
date that is within 30 days after the earlier to occur of (i) the date that
compensation paid to the grantee no longer is subject to the deduction
limitation under section 162(m) of the Code and (ii) the occurrence of a Change
in Control. In the event that a grantee exercises an option or would receive a
payment in respect of a dividend equivalent right at a time when the grantee is
a 162(m) covered employee, and the Committee determines to delay the exercise or
payment, as the case may be, in respect of any such award, the Committee shall
credit cash or, in the case of an amount payable in Common Stock, the Fair
Market Value of the Common Stock, payable to the grantee to a book account. The
grantee shall have no rights in respect of such book account and the amount
credited thereto shall not be transferable by the grantee other than by will or
laws of descent and distribution. The Committee may credit additional amounts to
such book account as it may determine in its sole discretion. Any book account
created hereunder shall represent only an unfunded, unsecured promise by the
Company to pay the amount credited thereto to the grantee in the future. An
individual is a "162(m) covered employee" if, as of the last day of the
Company's taxable year for which the compensation related to an award would
otherwise be deductible (without regard to section 162(m)), he or she is (A) the
chief executive officer of the Company (or is acting in such capacity) or (B)
one of the four highest compensated officers of the Company other than the chief
executive officer. Whether an individual is described in either clause (A) or
(B) above shall be determined in accordance with applicable regulations under
section 162(m) of the Code.
3.9 Right of Discharge Reserved
Nothing in the Plan or in any Grant Certificate shall confer upon any
grantee the right to continue his or her employment or affect any right which
the Company may have to terminate such employment.
3.10 Nature of Payments
(a) Consideration for Services Performed. Any and all grants of awards
and issuances of shares of Common Stock under the Plan shall be in consideration
of services performed for the Company by the grantee.
(b) Not Taken into Account for Benefits. All such grants and issuances
shall constitute a special incentive payment to the grantee and shall not be
taken into account in computing the amount of salary or compensation of the
grantee for the purpose of determining any benefits under any pension,
retirement, profit-sharing, bonus, life insurance or other benefit plan of the
Company or under any agreement between the Company and the grantee, unless such
plan or agreement specifically otherwise provides.
3.11 Non-Uniform Determinations
The Committee's determinations under the Plan need not be uniform and
may be made by it selectively among persons who receive, or who are eligible to
receive, awards under the Plan (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Committee shall
be entitled, among other things, to make non-uniform and selective
determinations, and to enter into non-uniform and selective Grant Certificates,
as to (a) the persons to receive awards under the Plan, (b) the terms and
provisions of awards under the Plan, and (c) the treatment of leaves of absence
pursuant to Section 1.6(b).
3.12 Other Payments or Awards
Nothing contained in the Plan shall be deemed in any way to limit or
restrict the Company from making any award or payment to any person under any
other plan, arrangement or understanding, whether now existing or hereafter in
effect.
3.13 Headings
Any section, subsection, paragraph or other subdivision headings
contained herein are for the purpose of convenience only and are not intended to
expand, limit or otherwise define the contents of such subdivisions.
3.14 Effective Date and Term of Plan
(a) Adoption. The Plan was adopted by the Board on March 17, 2001.
(b) Termination of Plan. Unless sooner terminated by the Board, the
provisions of the Plan respecting the grant of options shall terminate on the
tenth anniversary of the adoption of the Plan by the Board, and no option awards
shall thereafter be made under the Plan. All such awards made under the Plan
prior to its termination shall remain in effect until such awards have been
satisfied or terminated in accordance with the terms and provisions of the Plan
and the applicable Grant Certificates.
3.15 Governing Law
Except to the extent preempted by any applicable federal law, the Plan
will be construed and administered in accordance with the laws of the State of
Delaware, without giving effect to principles of conflict of laws.