EXHIBIT 4.5
SECURITY CAPITAL CORPORATION
2000 LONG-TERM INCENTIVE PLAN
1. PURPOSE. The purpose of this 2000 Long-Term Incentive Plan (the
"Plan") of SECURITY CAPITAL CORPORATION, a Delaware corporation (the
"Company"), is to advance the interests of the Company and its
stockholders by providing a means to attract, retain, motivate and reward
directors, officers, employees and consultants of and service providers to
the Company and its affiliates and to enable such persons to acquire or
increase a proprietary interest in the Company, thereby promoting a closer
identity of interests between such persons and the Company's stockholders.
2. DEFINITIONS. The definitions of awards under the Plan, including
Options, SARs (including Limited SARs), Restricted Stock, Deferred Stock,
Stock granted as a bonus or in lieu of other awards, Dividend Equivalents
and Other Stock-Based Awards as are set forth in Section 6 of the Plan.
Such awards, together with any other right or interest granted to a
Participant under the Plan, are termed "Awards." For purposes of the Plan,
the following additional terms shall be defined as set forth below:
(a) "Award Agreement" means any written agreement, contract, notice
or other instrument or document evidencing an Award.
(b) "Beneficiary" shall mean the person, persons, trust or trusts
which have been designated by a Participant in his or her most recent
written beneficiary designation filed with the Committee to receive the
benefits specified under the Plan upon such Participant's death or, if
there is no designated Beneficiary or surviving designated Beneficiary,
then the person, persons, trust or trusts entitled by will or the laws of
descent and distribution to receive such benefits.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to
include regulations thereunder and successor provisions and regulations
thereto.
(e) "Committee" means the committee appointed by the Board to
administer the Plan, or if no committee is appointed, the Board.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act
shall be deemed to include rules thereunder and successor provisions and
rules thereto.
(g) "Fair Market Value" means, with respect to Stock, Awards, or
other property, the fair market value of such Stock, Awards, or other
property determined by such methods or procedures as shall be established
from time to time by the Committee, provided, however, that if the Stock
is listed on a national securities exchange or quoted in an interdealer
quotation system, the Fair Market Value of such Stock on a given date
shall be based upon the last sales price at the end of regular trading or,
if unavailable, the average of the closing bid and asked prices per share
of the Stock at the end of regular trading on such date (or, if there was
no trading or quotation in the Stock on such date, on the next preceding
date on which there was trading or quotation) as provided by one of such
organizations.
(h) "ISO" means any Option that is designated as an incentive stock
option within the meaning of Section 422 of the Code, and qualifies as
such.
(i) "Parent" means any "person" (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) that controls the Company,
either directly or indirectly through one or more intermediaries.
(j) "Participant" means a person who, at a time when eligible under
Section 5 hereof, has been granted an Award under the Plan.
(k) "Rule 16b-3" means Rule 16b-3, as from time to time in effect
and applicable to the Plan and Participants, promulgated by the Securities
and Exchange Commission under Section 16 of the Exchange Act.
(l) "Stock" means the Company's Class A Common Stock, and such other
securities as may be substituted for Stock pursuant to Section 4.
(m) "Subsidiary" means each entity that is controlled by the Company
or a Parent, either directly or indirectly through one or more
intermediaries
3. ADMINISTRATION.
(a) AUTHORITY OF THE COMMITTEE. Except as otherwise provided below,
the Plan shall be administered by the Committee. The Committee shall have
full and final authority to take the following actions, in each case
subject to and consistent with the provisions of the Plan:
(i) to select persons to whom Awards may be granted;
(ii) to determine the type or types of Awards to be granted to
each such person;
(iii) to determine the number of Awards to be granted, the
number of shares of Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not limited
to, any exercise price, grant price or purchase price, any restriction or
condition, any schedule for lapse of restrictions or conditions relating
to transferability or forfeiture, exercisability or settlement of an
Award, and waivers or accelerations thereof, performance conditions
relating to an Award (including performance conditions relating to Awards
not intended to be governed by Section 7(f) and waivers and modifications
thereof), based in each case on
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such considerations as the Committee shall determine), and all other
matters to be determined in connection with an Award;
(iv) to determine whether, to what extent and under what
circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Stock, other Awards, or other property, or an Award
may be canceled, forfeited, or surrendered;
(v) to determine whether, to what extent and under what
circumstances cash, Stock, other Awards or other property payable with
respect to an Award will be deferred either automatically at the election
of the Committee or at the election of the Participant;
(vi) to determine the restrictions, if any, to which Stock
received upon exercise or settlement of an Award shall be subject
(including lock-ups and other transfer restrictions), and to condition the
delivery of such Stock upon the execution by the Participant of any
agreement providing for such restrictions;
(vii) to prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(viii) to adopt, amend, suspend, waive and rescind such rules
and regulations and appoint such agents as the Committee may deem
necessary or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile
any inconsistency in the Plan and to construe and interpret the Plan and
any Award, rules and regulations, Award Agreement or other instrument
hereunder; and
(x) to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem
necessary or advisable for the administration of the Plan.
Other provisions of the Plan notwithstanding, the Board shall perform the
functions of the Committee for purposes of granting awards to directors
who serve on the Committee, and the Board may perform any function of the
Committee under the Plan for any other purpose, including without
limitation for the purpose of ensuring that transactions under the Plan by
Participants who are then subject to Section 16 of the Exchange Act in
respect of the Company are exempt under Rule 16b-3. In any case in which
the Board is performing a function of the Committee under the Plan, each
reference to the Committee herein shall be deemed to refer to the Board,
except where the context otherwise requires.
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Any action of the
Committee with respect to the Plan shall be final, conclusive and binding
on all persons, including the Company, its Parent and Subsidiaries,
Participants, any person claiming any rights under the Plan from or
through any Participant and stockholders, except to the extent the
Committee may subsequently modify, or take further action not consistent
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with, its prior action. If not specified in the Plan, the time at which
the Committee must or may make any determination shall be determined by
the Committee, and any such determination may thereafter be modified by
the Committee (subject to Section 8(e)). The express grant of any specific
power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the
Committee. Except as provided under Section 7(f), the Committee may
delegate to officers or managers of the Company, its Parent or
Subsidiaries the authority, subject to such terms as the Committee shall
determine, to perform such functions as the Committee may determine, to
the extent permitted under applicable law.
(c) LIMITATION OF LIABILITY; INDEMNIFICATION. Each member of the
Committee shall be entitled to, in good faith, rely or act upon any report
or other information furnished to him by any officer or other employee of
the Company, its Parent or Subsidiaries, the Company's independent
certified public accountants or any executive compensation consultant,
legal counsel or other professional retained by the Company to assist in
the administration of the Plan. No member of the Committee, or any officer
or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination or interpretation taken or
made in good faith with respect to the Plan, and all members of the
Committee and any officer or employee of the Company acting on its behalf
shall, to the extent permitted by law, be fully indemnified and protected
by the Company with respect to any such action, determination or
interpretation.
4. STOCK SUBJECT TO PLAN.
(a) AMOUNT OF STOCK RESERVED. The total number of shares of Stock
that may be subject to outstanding Awards, determined immediately after the
grant of any Award, shall not exceed 15% of the total number of shares of
the Company's Class A Common Stock outstanding at the effective time of
such grant. In no event shall the number of shares of Stock delivered upon
the exercise of ISOs exceed 15% of the total number of shares of the
Company's Class A Common Stock outstanding determined at the time the Plan
is approved by the Company's stockholders; PROVIDED, HOWEVER, that shares
subject to ISOs shall not be deemed delivered if such ISOs are forfeited,
expire or otherwise terminate without delivery of shares to the
Participant. If an Award valued by reference to Stock may only be settled
in cash, the number of shares to which such Award relates shall be deemed
to be Stock subject to such Award for purposes of this Section 4(a). Any
shares of Stock delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares acquired
in the market on a Participants behalf.
(b) ANNUAL PER-PARTICIPANT LIMITATIONS. During any calendar year, no
Participant may be granted Awards that may be settled by delivery of more
than 500,000 shares of Stock, subject to adjustment as provided in Section
4(c). In addition, with respect to Awards that may be settled in cash (in
whole or in part), no Participant may be paid during any calendar year cash
amounts relating to such Awards that exceed the greater of the Fair Market
Value of the number of shares of Stock set forth in the
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preceding sentence at the date of grant or the date of settlement of the
Award. This provision sets forth two separate limitations, so that Awards
that may be settled solely by delivery of Stock will not operate to reduce
the amount of cash-only Awards, and vice versa; nevertheless, Awards that
may be settled in Stock or cash must not exceed either limitation.
(c) ADJUSTMENTS. In the event that the Committee shall determine
that any recapitalization, forward or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or exchange of
Stock or other securities, Stock dividend or other special, large and
non-recurring dividend or distribution (whether in the form of cash,
securities or other property), liquidation, dissolution, or other similar
corporate transaction or event, affects the Stock such that an adjustment
is appropriate in order to prevent dilution or enlargement of the rights of
Participants under the Plan, then the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number and kind of shares
of Stock reserved and available for Awards under Sections 4(a) and 4(b),
including shares reserved for ISOs, (ii) the number and kind of shares of
outstanding Restricted Stock or other outstanding Awards in connection with
which shares have been issued, (iii) the number and kind of shares that may
be issued in respect of other outstanding Awards and (iv) the exercise
price, grant price or purchase price relating to any Award. (or, if deemed
appropriate, the Committee may make provision for a cash payment with
respect to any outstanding Award). In addition, the Committee is authorized
to make adjustments in the terms and conditions of, and the criteria
included in, Awards (including, without limitation, cancellation of
unexercised or outstanding Awards, or substitution of Awards using stock of
a successor or other entity) in recognition of unusual or nonrecurring
events (including, without limitation, events described in the preceding
sentence) affecting the Company, its Parent or any Subsidiary or the
financial statements of the Company, its Parent or any Subsidiary, or in
response to changes in applicable laws, regulations, or accounting
principles.
5. ELIGIBILITY. Directors, officers and employees of the Company or its
Parent or any Subsidiary, and persons who provide consulting or other
services to the Company, its Parent or any Subsidiary deemed by the
Committee to be of substantial value to the Company or its Parent and
Subsidiaries, are eligible to be granted Awards under the Plan. In
addition, persons who have been offered employment by, or agreed to become
a director of, the Company, its Parent or any Subsidiary, and persons
employed by an entity that the Committee reasonably expects to become a
Subsidiary of the Company, are eligible to be granted an Award under the
Plan.
6. SPECIFIC TERMS OF AWARDS.
(A) GENERAL. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award
or the exercise thereof such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall
determine, including terms requiring forfeiture of Awards in the event of
termination of employment or service of the Participant. Except as
expressly provided by the Committee (including for purposes of complying
with the requirements
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of the Delaware General Corporation Law relating to lawful consideration
for the issuance of shares), no consideration other than services will be
required as consideration for the grant (but not the exercise) of any
Award.
(b) OPTIONS. The Committee is authorized to grant options to purchase
Stock on the following terms and conditions ("Options"):
(i) EXERCISE PRICE. The exercise price per share of Stock
purchasable under an Option shall be determined by the Committee.
(ii) TIME AND METHOD OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in whole or
in part, the methods by which such exercise price may be paid or deemed to
be paid, the form of such payment, including, without limitation, cash,
Stock, other Awards or awards granted under other Company plans or other
property (including notes or other contractual obligations of Participants
to make payment on a deferred basis, such as through "cashless exercise"
arrangements, to the extent permitted by applicable law), and the methods
by which Stock will be delivered or deemed to be delivered to Participants.
(iii) TERMINATION OF EMPLOYMENT. The Committee shall determine
the period, if any, during which Options shall be exercisable following a
Participant's termination of his employment relationship with the Company,
its Parent or any Subsidiary. For this purpose, unless otherwise determined
by the Committee, any sale of a Subsidiary of the Company pursuant to which
it ceases to be a Subsidiary of the Company shall be deemed to be a
termination of employment by any Participant employed by such Subsidiary.
Unless otherwise determined by the Committee, (x) during any period that an
Option is exercisable following termination of employment, it shall be
exercisable only to the extent it was exercisable upon such termination of
employment, and (y) if such termination of employment is for cause, as
determined in the discretion of the Committee, all Options held by the
Participant shall immediately terminate.
(iv) SALE OF THE COMPANY. Upon the consummation of any
transaction whereby the Company (or any successor to the Company or
substantially all of its business) becomes a wholly-owned Subsidiary of any
corporation, all Options outstanding under the Plan shall terminate, unless
such other corporation shall continue or assume the Plan as it relates to
Options then outstanding (in which case such other corporation shall be
treated as the Company for all purposes hereunder, and, pursuant to Section
4(c), the Committee of such other corporation shall make appropriate
adjustment in the number and kind of shares of Stock subject thereto and
the exercise price per share thereof to reflect consummation of such
transaction). If the Plan is not to be so assumed, the Company shall notify
the Participant of consummation of such transaction at least ten days in
advance thereof.
(v) OPTIONS PROVIDING FAVORABLE TAX TREATMENT. The Committee
may grant Options that may afford a Participant with favorable treatment
under the tax laws
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applicable to such Participant, including, but not limited to ISOs. If
Stock acquired by exercise of an ISO is sold or otherwise disposed of
within two years after the date of grant of the ISO or within one year
after the transfer of such Stock to the Participant, the holder of the
Stock immediately prior to the disposition shall promptly notify the
Company in writing of the date and terms of the disposition and shall
provide such other information regarding the disposition as the Company
may reasonably require in order to secure any deduction then available
against the Company's or any other corporations taxable income. The
Company may impose such procedures as it determines may be necessary to
ensure that such notification is made. Each Option granted as an ISO shall
be designated as such in the Award Agreement relating to such Option.
(c) STOCK APPRECIATION RIGHTS. The Committee is authorized to grant
stock appreciation rights on the following terms and conditions ("SARs"):
(i) RIGHT TO PAYMENT. An SAR shall confer on the Participant
to whom it is granted a right to receive, upon exercise thereof, the
excess of (A) the Fair Market Value of one share of Stock on the date of
exercise (or, if the Committee shall so determine in the case of any such
right other than one related to an ISO, the Fair Market Value of one share
at any time during a specified period before or after the date of
exercise), over (B) the grant price of the SAR as determined by the
Committee as of the date of grant of the SAR, which, except as provided in
Section 7(a), shall be not less than the Fair Market Value of one share of
Stock on the date of grant.
(ii) OTHER TERMS. The Committee shall determine the time or
times at which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by which Stock will be delivered or deemed to be
delivered to Participants, whether or not an SAR shall be in tandem with
any other Award, and any other terms and conditions of any SAR. Limited
SARs that may only be exercised upon the occurrence of a change in control
of the Company may be granted on such terms, not inconsistent with this
Section 6(c), as the Committee may determine. Limited SARs may be either
freestanding or in tandem with other Awards.
(d) RESTRICTED STOCK. The Committee is authorized to grant Stock that
is subject to restrictions based on continued employment on the following
terms and conditions ("Restricted Stock"):
(i) GRANT AND RESTRICTIONS. Restricted Stock shall be subject
to such restrictions on transferability and other restrictions, if any, as
the Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments,
or otherwise, as the Committee may determine. Except to the extent
restricted under the terms of the Plan and any Award Agreement relating to
the Restricted Stock, a Participant granted Restricted Stock shall have
all of the rights of a stockholder including, without limitation, the
right to vote Restricted Stock or the right to receive dividends thereon.
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(ii) FORFEITURE. Except as otherwise determined by the
Committee, upon termination of employment or service (as determined under
criteria established by the Committee) during the applicable restriction
period, Restricted Stock that is at that time subject to restrictions
shall be forfeited and reacquired by the Company; PROVIDED, HOWEVER, that
the Committee may provide, by rule or regulation or in any Award
Agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock will be waived in whole
or in part in the event of termination resulting from specified causes.
(iii) CERTIFICATES FOR STOCK. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Stock are registered in the name
of the Participant, such certificates may bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, the Company may retain physical possession of the
certificate, in which case the Participant shall be required to have
delivered a stock power to the Company, endorsed in blank, relating to the
Restricted Stock.
(iv) DIVIDENDS. Dividends paid on Restricted Stock shall be
either paid at the dividend payment date in cash or in shares of
unrestricted Stock having a Fair Market Value equal to the amount of such
dividends, or the payment of such dividends shall be deferred and/or the
amount or value thereof automatically reinvested in additional Restricted
Stock, other Awards, or other investment vehicles, as the Committee shall
determine or permit the Participant to elect. Stock distributed in
connection with a Stock split or Stock dividend, and other property
distributed as a dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with respect to
which such Stock or other property has been distributed, unless otherwise
determined by the Committee.
(e) DEFERRED STOCK. The Committee is authorized to grant units
representing the right to receive Stock at a future date subject to the
following terms and conditions ("Deferred Stock"):
(i) AWARD AND DESCRIPTIONS. Delivery of Stock will occur upon
expiration of the deferral period specified for an Award of Deferred Stock
by the Committee (or, if permitted by the Committee, as elected by the
Participant). In addition, Deferred Stock shall be subject to such
restrictions as the Committee may impose, if any, which restrictions may
lapse at the expiration of the deferral period or at earlier specified
times, separately or in combination, in installments or otherwise, as the
Committee may determine.
(ii) FORFEITURE. Except as otherwise determined by the
Committee, upon termination of employment or service (as determined under
criteria established by the Committee) during the applicable deferral
period or portion thereof to which forfeiture conditions apply (as
provided in the Award Agreement evidencing the Deferred
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Stock), all Deferred Stock that is at that time subject to such forfeiture
conditions shall be forfeited; PROVIDED, HOWEVER, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine
in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock will be waived in whole or in part in the event
of termination resulting from specified causes.
(f) BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS. The
Committee is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of Company obligations to pay cash under other plans
or compensatory arrangements.
(g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant
awards entitling the Participant to receive cash, Stock, other Awards or
other property equal in value to dividends paid with respect to a
specified number of shares of Stock ("Dividend Equivalents"). Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award. The Committee may provide that Dividend Equivalents shall
be paid or distributed when accrued or shall be deemed to have been
reinvested in additional Stock, Awards or other investment vehicles, and
subject to such restrictions on transferability and risks of forfeiture,
as the Committee may specify.
(h) OTHER STOCK-BASED AWARDS. The Committee is authorized, subject
to limitations under applicable law, to grant such other Awards that may
be denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, Stock and factors that may influence
the value of Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or
exchangeable debt securities, other rights convertible or exchangeable
into Stock, purchase rights for Stock, Awards with value and payment
contingent upon performance of the Company or any other factors designated
by the Committee and Awards valued by reference to the book value of Stock
or the value of securities of or the performance of specified Subsidiaries
("Other Stock Based Awards"). The Committee shall determine the terms and
conditions of such Awards. Stock issued pursuant to an Award in the nature
of a purchase right granted under this Section 6(h) shall be purchased for
such consideration, paid for at such times, by such methods, and in such
forms, including, without limitation, cash, Stock, other Awards, or other
property, as the Committee shall determine. Cash awards, as an element of
or supplement to any other Award under the Plan, may be granted pursuant
to this Section 6(h).
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with or in substitution for any
other Award granted under the Plan or any award granted under any other
plan of the Company, its Parent or Subsidiaries or any business entity to
be acquired by the Company or a Subsidiary, or any other right of a
Participant to receive payment from the Company its Parent or
Subsidiaries. Awards granted in addition to or in tandem with other Awards
or awards
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may be granted either as of the same time as or a different time from the
grant of such other Awards or awards.
(b) TERMS OF AWARDS. The term of each Award shall be for such period
as may be determined by the Committee; PROVIDED, HOWEVER, that (i) in no
event shall the term of any ISO or an SAR granted in tandem therewith
exceed a period of ten years from the date of its grant (or such shorter
period as may be applicable under Section 422 of the Code), and (ii) the
term of any Option granted to a resident of the United Kingdom shall not
exceed a period of ten years from the date of its grant.
(c) FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Company,
its Parent or Subsidiaries upon the grant, exercise or settlement of an
Award may be made in such forms as the Committee shall determine,
including, without limitation, cash, Stock, other Awards or other
property, and may be made in a single payment or transfer, in installments
or on a deferred basis. Such payments may include, without limitation,
provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in
Stock.
(d) RULE 16B-3 COMPLIANCE.
(i) SIX MONTH HOLDING PERIOD. Unless a Participant could
otherwise dispose of equity securities, including derivative securities,
acquired under the Plan without incurring liability under Section 16(b) of
the Exchange Act, equity securities acquired under the Plan must be held
for a period of six months following the date of such acquisition,
provided that this condition shall be satisfied with respect to a
derivative security if at least six months elapse from the date of
acquisition of the derivative security to the date of disposition of the
derivative security (other than upon exercise or conversion) or its
underlying equity security.
(ii) OTHER COMPLIANCE PROVISIONS. With respect to a
Participant who is then subject to Section 16 of the Exchange Act in
respect of the Company, the Committee shall implement transactions under
the Plan and administer the Plan in a manner that will ensure that each
transaction by such a Participant is exempt from liability under Rule
16b-3, except that such a Participant may be permitted to engage in a
non-exempt transaction under the Plan if written notice has been given to
the Participant regarding the non-exempt nature of such transaction. The
Committee may authorize the Company to repurchase any Award or shares of
Stock resulting from any Award in order to prevent a Participant who is
subject to Section 16 of the Exchange Act from incurring liability under
Section 16(b). Unless otherwise specified by the Participant, equity
securities, including derivative securities, acquired under the Plan which
are disposed of by a Participant shall be deemed to be disposed of in the
order acquired by the Participant.
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(e) LOAN PROVISIONS. With the consent of the Committee, and subject
at all times to, and only to the extent, if any, permitted under and in
accordance with, laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make, guarantee or
arrange for a loan or loans to a Participant with respect to the exercise
of any Option or other payment in connection with any Award, including the
payment by a Participant of any or all federal, state or local income or
other taxes due in connection with any Award. Subject to such limitations,
the Committee shall have full authority to decide whether to make a loan
or loans hereunder and to determine the amount, terms and provisions of
any such loan or loans, including the interest rate to be charged in
respect of any such loan or loans, whether the loan or loans are to be
with or without recourse against the borrower, the terms on which the loan
is to be repaid and conditions, if any, under which the loan or loans may
be forgiven.
(f) PERFORMANCE-BASED AWARDS. The Committee may, in its discretion,
designate any Award the exercisability or settlement of which is subject
to the achievement of performance conditions as a performance-based Award
subject to this Section 7(f), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Code Section 162(m)
and regulations thereunder. The performance objectives for an Award
subject to this Section 7(f) shall consist of one or more business
criteria and a targeted level or levels of performance with respect to
such criteria, as specified by the Committee but subject to this Section
7(f). Performance objectives shall be objective and shall otherwise meet
the requirements of Section 162(m)(4)(C) of the Code. Business criteria
used by the Committee in establishing performance objectives for Awards
subject to this Section 7(f) shall be selected from among the following:
(1) Annual return on capital;
(2) Annual earnings or earnings per share;
(3) Annual cash earnings per share after taking into
account goodwill, amortization and other non-cash
charges against income;
(4) Annual cash flow provided by operations;
(5) Increase in stock price;
(6) Changes in annual revenues; and/or
(7) Strategic business criteria, consisting of one or
more objectives based on meeting specified revenue,
market penetration, geographic business expansion
goals, cost targets, market capitalization of the
Company, trading volume of the Company's shares and
goals relating to acquisitions or divestitures.
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The levels of performance required with respect to such business criteria
may be expressed in absolute or relative levels. Performance objectives
may differ for such Awards to different Participants. The Committee shall
specify the weighting to be given to each performance objective for
purposes of determining the final amount payable with respect to any such
Award. The Committee may, in its discretion, reduce the amount of a payout
otherwise to be made in connection with an Award subject to this Section
7(f), but may not exercise discretion to increase such amount, and the
Committee may consider other performance criteria in exercising such
discretion. All determinations by the Committee as to the achievement of
performance objectives shall be in writing. The Committee may not delegate
any responsibility with respect to an Award subject to this Section 7(f).
8. GENERAL PROVISIONS.
(a) COMPLIANCE WITH LAWS AND OBLIGATIONS. The Company shall not be
obligated to issue or deliver Stock in connection with any Award or take
any other action under the Plan in a transaction subject to the
requirements of any applicable securities law, any requirement under any
listing agreement between the Company and any national securities exchange
or automated quotation system or any other law, regulation or contractual
obligation of the Company until the Company is satisfied that such laws,
regulations, and other obligations of the Company have been complied with
in full. Certificates representing shares of Stock issued under the Plan
will be subject to such stop-transfer orders and other restrictions as may
be applicable under such laws, regulations and other obligations of the
Company, including any requirement that a legend or legends be placed
thereon. In addition, the Company may adopt policies that impose
restrictions on the timing of exercise of Options, SARs or other Awards
(e.g., to enforce compliance with Company-imposed black-out periods).
(b) LIMITATIONS OF TRANSFERABILITY. Awards and other rights under
the Plan will not be transferable by a Participant except by will or the
laws of descent and distribution or to a Beneficiary in the event of the
Participant"s death, shall not be pledged, mortgaged, hypothecated or
otherwise encumbered, or otherwise subject to the claims of creditors,
and, in the case of ISOs and SARs in tandem therewith, shall be
exercisable during the lifetime of a Participant only by such Participant
or his guardian or legal representative; PROVIDED, HOWEVER, that such
Awards and other rights (other than ISOs and SARs in tandem therewith) may
be transferred to one or more transferees during the lifetime of the
Participant to the extent and on such terms as then may be permitted by
the Committee.
(c) NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE. Neither the Plan
nor any action taken hereunder shall be construed as giving any employee,
director or other person the right to be retained in the employ or service
of the Company, its Parent or any Subsidiary, nor shall it interfere in
any way with the right of the Company, its Parent or any Subsidiary to
terminate any employees employment or other persons service at any time or
with the right of the Board or stockholders to remove any director.
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(d) TAXES. The Company, its Parent and Subsidiaries are authorized
to withhold from any Award granted or to be settled, any delivery of Stock
in connection with an Award, any other payment relating to an Award or any
payroll or other payment to a Participant amounts of withholding and other
taxes due or potentially payable in connection with any transaction
involving an Award, and to take such other action as the Committee may
deem advisable to enable the Company, its Parent and Subsidiaries and
Participants to satisfy obligations for the payment of withholding taxes
and other tax obligations relating to any Award. This authority shall
include authority to withhold or receive Stock or other property and to
make cash payments in respect thereof in satisfaction of a Participants
tax obligations.
(e) CHANGES TO THE PLAN AND AWARDS. The Board may amend, alter,
suspend, discontinue or terminate the Plan or the Committee's authority to
grant Awards under the Plan without the consent of stockholders or
Participants, except that any such action shall be subject to the approval
of the Company's stockholders at or before the next annual meeting of
stockholders for which the record date is after such Board action if such
stockholder approval is required by any federal or state law or regulation
or the rules of any stock exchange or automated quotation system on which
the Stock may then be listed or quoted, and the Board may otherwise, in
its discretion, determine to submit other such changes to the Plan to
stockholders for approval; PROVIDED, HOWEVER, that, without the consent of
an affected Participant, no such action may materially impair the rights
of such Participant under any Award theretofore granted to him (as such
rights are set forth in the Plan and the Award Agreement). The Committee
may waive any conditions or rights under, or amend, alter, suspend,
discontinue, or terminate, any Award theretofore granted and any Award
Agreement relating thereto; PROVIDED, HOWEVER, that, (subject to Section
4(c)) without the consent of an affected Participant, no such action may
materially impair the rights of such Participant under such Award (as such
rights are set forth in the Plan and the Award Agreement). Notwithstanding
the foregoing, the Board or the Committee may take any action (including
actions affecting or terminating outstanding Awards) to the extent
necessary for a business combination in which the Company is a party to be
accounted for under the pooling-of-interests method of accounting under
Accounting Principles Board Opinion No. 16 (or any successor thereto). The
Board or the Committee shall also have the authority to establish separate
sub-plans under the Plan with respect to Participants resident in a
particular jurisdiction (the terms of which shall not be inconsistent with
those of the Plan) if necessary or desirable to comply with the applicable
laws of such jurisdiction.
(f) NO RIGHTS TO AWARDS; NO STOCKHOLDER RIGHTS. No person shall have
any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants and employees. No
Award shall confer on any Participant any of the rights of a stockholder
of the Company unless and until Stock is duly issued or transferred and
delivered to the Participant in accordance with the terms of the Award or,
in the case of an Option, the Option is duly exercised.
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(g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a
general creditor of the Company; PROVIDED, HOWEVER, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, Stock, other Awards,
or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan
unless the Committee otherwise determines with the consent of each
affected Participant.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the Plan by
the Board nor any submission of the Plan or amendments thereto to the
stockholders of the Company for approval shall be construed as creating
any limitations on the power of the Board to adopt such other compensatory
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such
arrangements may be either applicable generally or only in specific cases.
(i) NO FRACTIONAL SHARES. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee shall
determine whether cash, other Awards, or other property shall be issued or
paid in lieu of such fractional shares or whether such fractional shares
or any rights thereto shall be forfeited or otherwise eliminated.
(j) GOVERNING LAW. The validity, construction and effect of the
Plan, any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of
Delaware, without giving effect to principles of conflicts of laws, and
applicable federal law.
(k) EFFECTIVE DATE; PLAN TERMINATION. The Plan shall become
effective as of the date of its adoption by the Board, and shall continue
in effect until terminated by the Board; PROVIDED, HOWEVER, that if
approval of such adoption by the Company's shareholders is not obtained
within 12 months of the date of such adoption, the Plan shall terminate AB
INITIO, and any Awards then outstanding shall be canceled.
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