MIM CORPORATION
1996 STOCK INCENTIVE PLAN
As Amended and Restated
Effective December 1, 1998
SECTION 1 - Purpose
This MIM CORPORATION 1996 STOCK INCENTIVE PLAN (the "Plan") is intended to
provide a means whereby MIM Corporation, a Delaware corporation (the "Company"),
and any Subsidiary or other Affiliate of the Company (as hereinafter defined)
may, through the grant of Incentive Stock Options and Non-Qualified Stock
Options (collectively "Options"), Performance Shares (as defined in Section
6(c)) and Performance Units (as defined in Section 6(d)) to Employees (as
defined in Section 3), attract and retain such Employees and motivate them to
exercise their best efforts on behalf of the Company and of any Subsidiary or
other Affiliate.
As used in the Plan, the following terms shall have the following meanings:
"Affiliate" means any corporation, limited liability company, partnership
or other entity, including Subsidiaries, which is controlled by or under common
control with the Company.
"Agreement" means the written agreement between the Company and an Awardee;
as contemplated by Section 6(d).
"Award" means an Option, Performance Shares or Performance Units.
"Awardee" means an Employee to whom an Award has been granted under the
Plan.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Effective Date" means March 1, 1999.
"Incentive Stock Options" ("ISOs") means options to acquire Common Shares
(as defined in Section 4) granted under the Plan which qualify as incentive
stock options within the meaning of section 422 of the Code at the time they are
granted and which are either designated as ISOs in the Agreements covering such
options or which are designated as ISOs by the Committee (as defined in Section
2 hereof) at the time of grant.
"Non-Qualified Stock Options" ("NQSOs") means all options to acquire Common
Shares granted under the Plan other than ISOs.
"Stock Award" means an Award which is an Option or Performance Shares.
"Subsidiary" means any corporation (whether or not in existence at the time
the Plan is adopted) which, at the time an Option is granted, is a subsidiary of
the Company under the definition of "subsidiary corporation" contained in
section 424(f) of the Code or any similar provision hereafter enacted.
SECTION 2 - Administration
The Plan shall be administered by the Company's Compensation Committee (the
"Committee"), which shall consist of not less than two (2) non-employee
directors (within the meaning of Rule 16b-3(b)(3) under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor thereto) who are also outside
directors (within the meaning of Treas. Reg. ss. 1.162-27(e)(3), or any
successor thereto) of the Company who shall be appointed by, and shall serve at
the pleasure of, the Company's Board of Directors (the "Board"). Each member of
such Committee, while serving as such, shall be deemed to be acting in his or
her capacity as a director of the Company.
The Committee shall have full and final authority in its absolute
discretion, subject to the terms of the Plan, to select the Awardees to be
granted Awards under the Plan, to grant Awards on behalf of the Company, and to
set the date of grant and the other terms of such Awards. The Committee may
correct any defect, supply any omission and reconcile any inconsistency in the
Plan and in any Award granted hereunder in the manner and to the extent it shall
deem desirable. The Committee also shall have the authority to establish such
rules and regulations, not inconsistent with the provisions of the Plan, for the
proper administration of the Plan, and to amend, modify or rescind any such
rules and regulations, and to make such determinations and interpretations
under, or in connection with, the Plan, Awards and Agreements (including,
without limitation, determinations with respect to the establishment and
satisfaction of performance objectives under Section 6), as it deems necessary
or advisable. All such rules, regulations, determinations and interpretations
shall be binding and conclusive upon the Company, its shareholders and all
officers and employees and former officers and employees, and upon their
respective legal representatives, beneficiaries, successors and assigns and upon
all other persons claiming under or through any of them. Notwithstanding the
preceding, the Committee shall not have the power or authority under this Plan
to take any action with respect to an Award granted pursuant to this Plan which
is intended to qualify as "performance-based compensation" within the meaning of
section 162(m) of the Code if the taking of such action would cause such Award
to cease to so qualify.
No member of the Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any Award granted
hereunder.
SECTION 3 - Eligibility
The class of persons who shall be eligible to receive Awards under the
Plan shall be the employees (including any directors and officers who also are
employees) of the Company and/or of a Subsidiary or other Affiliate
("Employees") who the Committee believes have the capacity to
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contribute to the success of the Company and/or a Subsidiary or other Affiliate,
provided that ISOs shall be granted only to Employees of the Company or of a
Subsidiary. More than one Award may be granted to an Employee under the Plan.
SECTION 4 - Stock
The number of shares of the Company's $.0001 par value per share Common
Stock ("Common Shares") that may be subject to Stock Awards under the Plan from
and after the Effective Date (i.e., excluding Options previously granted under
the Plan and exercised as of the Effective Date, but including Options
previously granted and not exercised as of the Effective Date, Common Shares
available for Awards under the Plan immediately prior to the Effective Date, and
an increase in the number of Common Shares so available as provided herein)
shall be 2,375,000 shares, subject to adjustment as hereinafter provided. Such
number shall be increased, to the extent authorized by the Board, by the number
(not to exceed _______) of Common Shares repurchased by the Company from time to
time in the open market or in private transactions after the Effective Date and
by the number of Common Shares delivered to or withheld by the Company in
payment of the exercise price of any Option granted under the Plan or in
satisfaction of an Awardee's tax obligations in respect of an Award granted
under the Plan. Notwithstanding the preceding, (i) no Awardee shall receive
Stock Awards in any one fiscal year of the Company (regardless of when Common
Shares are deliverable in respect of such Stock Awards) for more than 1,500,000
Common Shares, (ii) not more than __________ Common Shares may be subject to
Awards in the form of ISOs and (iii) not more than 750,000 Common Shares may be
subject to Awards in the form of Performance Shares. Shares issuable under the
Plan may be authorized but unissued shares or reacquired shares, as the Company
may determine from time to time.
Any Common Shares subject to a Stock Award which expires or otherwise
terminates for any reason whatever (including, without limitation, the surrender
thereof by the Awardee) without having been exercised shall continue to be
available for the granting of Stock Awards under the Plan; provided, however,
that (a) if a Stock Award is canceled, the Common Shares covered by the canceled
Stock Award shall be counted against the maximum number of shares specified in
Section 4 for which Stock Awards may be granted to a single Awardee, and (b) if
the exercise price of a Stock Award is reduced after the date of grant, the
transaction shall be treated as a cancellation of the original Stock Award and
the grant of a new Stock Award for purposes of counting the maximum number of
shares for which Stock Awards may be granted to a single Awardee.
SECTION 5 - Annual ISO Limit
(a) ISOs. The aggregate Fair Market Value (determined as of the date the
ISO is granted) of the Common Shares with respect to which ISOs become
exercisable for the first time by an Awardee during any calendar year (under
this Plan and any other ISO plan of the Company or any
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parent corporation (within the meaning of section 424(e) of the Code ("Parent"))
or Subsidiary) shall not exceed $100,000. The term "Fair Market Value" shall
mean the value of the Common Shares arrived at by a good faith determination of
the Committee and shall be:
(1) the mean between the highest and lowest quoted selling price, if
there is a market for the Common Shares on a registered securities exchange
or in an over the counter market, on the date specified;
(2) the weighted average of the means between the highest and lowest
sales on the nearest date before and the nearest date after the specified
date, if there are no such sales on the specified date but there are such
sales on dates within a reasonable period both before and after the
specified date;
(3) the mean between the bid and asked prices, as reported by the
National Quotation Bureau on the specified date, if actual sales are not
available during a reasonable period beginning before and ending after the
specified date; or
(4) such other method of determining Fair Market Value as shall be
authorized by the Code, or the rules or regulations thereunder, and adopted
by the Committee.
Where the Fair Market Value of Common Shares is determined under (2) above,
the average of the means between the highest and lowest sales on the nearest
date before and the nearest date after the specified date shall be weighted
inversely by the respective numbers of trading days between the dates of
reported sales and the specified date (i.e., the valuation date), in accordance
with Treas. Reg. ss. 20.2031-2(b)(1), or any successor thereto.
(b) Options Over Annual Limit. If an Option intended as an ISO is granted
to an Awardee and such Option may not be treated in whole or in part as an ISO
pursuant to the limitation in (a) above, such Option shall be treated as an ISO
to the extent it may be so treated under such limitation and as a NQSO as to the
remainder. For purposes of determining whether an ISO would cause such
limitation to be exceeded, ISOs shall be taken into account in the order
granted.
(c) NQSOs. The annual limit set forth above for ISOs shall not apply to
NQSOs.
SECTION 6 - Awards
(a) Granting of Awards. From time to time until the expiration or earlier
suspension or discontinuance of the Plan, the Committee may, on behalf of the
Company, grant to Awardees under the Plan such Awards as it determines are
warranted, subject to the limitations of the Plan; provided, however, that
grants of ISOs and NQSOs shall be separate and not in tandem. The granting of an
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Award under the Plan shall not be deemed either to entitle the Awardee receiving
the Award to, or to disqualify the Awardee from, any participation in any other
grant of Awards under the Plan. In making any determination as to whether an
Awardee shall be granted an Award and as to the number of shares to be covered
by such Award, in the case of a Stock Award, or as to the amount payable
pursuant to such Award in the case of Performance Units, the Committee shall
take into account the duties of the Awardee, the Committee's views as to his or
her present and potential contributions to the success of the Company or a
Subsidiary or other Affiliate, and such other factors as the Committee shall
deem relevant in accomplishing the purposes of the Plan. Moreover, the Committee
may determine that the applicable Agreement shall provide that said Award may be
exercised only if certain conditions, as determined by the Committee, are
fulfilled.
(b) Terms and Conditions of Options. Options granted pursuant to the Plan
shall expressly specify whether they are ISOs or NQSOs; however, if the Option
is not designated in the Agreement as an ISO or NQSO, the Option shall
constitute an ISO if it complies with the terms of section 422 of the Code, and
otherwise, it shall constitute an NQSO. In addition, the Options granted
pursuant to the Plan shall include expressly or by reference the following terms
and conditions, as well as such other provisions not inconsistent with the
provisions of this Plan as the Committee shall deem desirable, and for ISOs
granted under this Plan, the provisions of section 422(b) of the Code:
(1) Number of Shares. A statement of the number of Common Shares to
which the Option pertains (or, except in the case of an ISO, of a formula
or other method by which such number shall be then or thereafter
objectively determinable).
(2) Price. A statement of the Option exercise price (or, except in the
case of an ISO, of a formula or method by which the exercise price shall be
then or thereafter objectively determinable) which shall be determined and
fixed by the Committee in its discretion at the time of grant, provided
that, in the case of an ISO, the exercise price shall not be less than 100%
of the Fair Market Value of the optioned Common Shares on the date the ISO
is granted (or 110%, if the ISO is granted to a more than 10% shareholder
per (6) below).
(3) Term.
(A) ISOs. Subject to earlier termination as provided in
Subsection 6(e) below, the term of each ISO shall be not more than 10
years (5 years in the case of a more than 10% shareholder as provided
in (6) below) from the date of grant.
(B) NQSOs. The term of each NQSO shall be not more than 15 years
from the date of grant.
(4) Exercise.
(A) General. Options shall be exercisable in such installments
and on such dates, commencing not less than 6 months and 1 day from
the date of grant (but, in the case of ISOs, not less than 12 months
from the date of grant), as the Committee
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may specify, provided that:
(i) in the case of new Options granted to an Awardee in
replacement for options (whether granted under the Plan or
otherwise) held by the Awardee, the new Options may be made
exercisable, if so determined by the Committee, in its
discretion, at the earliest date the replaced options were
exercisable; and
(ii) the Committee may accelerate the exercise date of any
outstanding Options in its discretion, if it deems such
acceleration to be desirable.
Any Common Shares, the right to the purchase of which has accrued
under an Option, may be purchased at any time up to the expiration or
termination of the Option. Exercisable Options may be exercised, in
whole or in part, from time to time by giving written notice of
exercise to the Company at its principal office, specifying the number
of Common Shares to be purchased and accompanied by payment in full of
the aggregate Option exercise price for such shares. Only full shares
shall be issued under the Plan and, if any fractional share would
otherwise be issuable upon the exercise of an Option granted
hereunder, the number of Common Shares issuable upon such exercise
shall be rounded to the nearest whole share and the unexercised
portion of such Option adjusted accordingly provided that in no event
shall the total number of Common Shares issuable upon the full
exercise of an Option exceed the number so specified for such Option
under Section 6(b)(1) hereof.
(B) Manner of Payment. The Option price shall be payable:
(i) in cash or its equivalent;
(ii) in the case of an ISO, if the Committee in its
discretion causes the Agreement so to provide and, in the case of
a NQSO, if the Committee in its discretion so determines at or
prior to the time of exercise, in Common Shares previously
acquired by the Awardee, provided that if such shares were
acquired through the exercise of an ISO and are used to pay the
Option exercise price of an ISO, such shares have been held by
the Awardee for a period of not less than the holding period
described in section 422(a)(1) of the Code on the date of
exercise, or if such Common Shares were acquired through exercise
of an NQSO or of an option under a similar plan or through
exercise of an ISO and are used to pay the Option exercise price
of an NQSO, such shares have been held by the Awardee for a
period of more than 12 months on the date of exercise; or
(iii) in the discretion of the Committee, in any combination
of (i) and (ii) above.
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In the event such Option exercise price is paid, in whole or
in part, with Common Shares, the portion of the Option exercise
price so paid shall equal the Fair Market Value on the date of
exercise of the Option of the Common Shares surrendered in
payment of such Option exercise price.
(5) Rights as a Shareholder. An Awardee shall have no rights as a
shareholder with respect to any shares covered by his or her Option until
the issuance of a stock certificate to him or her for such shares.
(6) Ten Percent Shareholder. If an Awardee owns more than 10% of the
total combined voting power of all shares of stock of the Company or of a
Subsidiary or Parent at the time an ISO is granted to such Awardee, the
Option exercise price for the ISO shall be not less than 110% of the Fair
Market Value of the optioned Common Shares on the date the ISO is granted,
and such ISO, by its terms, shall not be exercisable after the expiration
of five years after the date the ISO is granted. The conditions set forth
in this Subsection (6) shall not apply to NQSOs.
(c) Performance Shares. The Committee may from time to time cause the
Company to grant pursuant to the Plan Awards of Common Shares to Employees,
subject to such restrictions, conditions and other terms as the Committee may
determine ("Performance Shares").
(1) Restrictions. At the time a grant of Performance Shares is made,
the Committee shall establish a period of time (the "Restricted Period")
applicable to such Performance Shares. Each grant of Performance Shares may
be subject to a different Restricted Period. The Committee may, at the time
a grant is made, prescribe restrictions in addition to the expiration of
the Restricted Period, including the performance of corporate and/or
individual performance objectives, which shall be applicable to all or any
portion of the Performance Shares. Performance objectives may be based on
achieving a certain level of total revenue, earnings, earnings per share or
return on equity of the Company and its Subsidiaries and Affiliates, or on
the extent of changes in such criteria. None of the Performance Shares may
be sold, transferred, assigned, pledged or otherwise encumbered or
transferred during the Restricted Period or prior to the satisfaction of
any other restrictions prescribed by the Committee with respect to such
Performance Shares.
(2) Certificates. The Company shall issue, in the name of each Awardee
to whom Performance Shares have been granted, certificates representing the
total number of Performance Shares granted to the Awardee, as soon as
reasonably practicable after the grant. The Company, at the direction of
the Committee, shall hold such certificates, properly endorsed for
transfer, for the recipient's benefit until such time as the Performance
Shares are forfeited to the Company or the restrictions lapse. Each such
certificate shall bear the following legend, in addition to such other
legends as counsel to the Corporation may require:
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THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO TRANSFER AND
OTHER RESTRICTIONS UNDER THE MIM CORPORATION 1996 STOCK INCENTIVE PLAN, AS
AMENDED AND RESTATED EFFECTIVE MARCH 1, 1999, AND UNDER A PERFORMANCE
SHARES AGREEMENT WITH THE CORPORATION. NO INTEREST IN THE SHARES
REPRESENTED HEREBY MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
PROVISIONS OF SUCH PLAN AND AGREEMENT.
(3) Rights of Awardee. Holders of Performance Shares shall have the
right to vote such Performance Shares and the right to receive any
distributions of regular cash dividends with respect to such shares,
provided that all distributions made with respect to Performance Shares as
a result of any split, distribution or combination of Performance Shares or
other similar transaction shall be subject to the restrictions of this
Subsection 6(c).
(4) Forfeiture. Subject to the provisions of Section 8, Performance
Shares granted pursuant to the Plan shall be forfeited to the Company if
the Awardee terminates Employment with the Company or its Subsidiaries or
Affiliates prior to the expiration or termination of the Restricted Period
and/or the satisfaction of any other conditions applicable to such
Performance Shares. Upon such forfeiture, the Performance Shares that are
forfeited shall be available for subsequent Awards under the Plan.
(5) Delivery of Performance Shares. Upon the expiration or termination
of the Restricted Period and the satisfaction of any other conditions
prescribed by the Committee, the restrictions applicable to the Performance
Shares shall lapse and a certificate for the number of Common Shares with
respect to which the restrictions have lapsed shall be delivered, free of
all such restrictions, to the Awardee.
(d) Performance Units. The Committee may from time to time grant Awards to
Employees under the Plan representing the right to receive in cash an amount
determined by reference to certain performance measurements, subject to such
restrictions, conditions and other terms as the Committee may determine
("Performance Units").
(1) Awards. The Agreement covering Performance Units shall specify
Performance Objectives (as defined in Subsection 6(d)(2), a Performance
Period (as defined in Subsection 6(d)(3)) and a value for each Performance
Unit or a formula for determining the value of each Performance Unit at the
time of payment (the "Ending Value"). Performance Units granted to an
Awardee shall be credited to an account (a "Performance Unit Account")
established and maintained for such Awardee.
(2) Performance Objectives. With respect to each Award of Performance
Units, the Committee shall specify performance objectives, including
corporate and/or individual performance objectives, which must be satisfied
in order for the Awardee to be entitled to payment with respect to such
Performance Units ("Performance Objectives"). Performance Objectives may be
based on achieving a certain level of total revenue, earnings, earnings per
share or return on equity of the Company and its Subsidiaries and
Affiliates, or on the extent
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of changes in such criteria. Different Performance Objectives may be
established for different Awards of Performance Units, and an Awardee may
be granted more than one Award of Performance Units at the same time.
(3) Performance Period. The Committee shall determine a period of time
(the "Performance Period") during which the Performance Objectives must be
satisfied in order for the Awardee to be entitled to payment of Performance
Units granted to such Awardee. Different Performance Periods may be
established for different Awards of Performance Units. Performance Periods
may run consecutively or concurrently.
(4) Payment for Performance Units. As soon as practicable following
the end of a Performance Period, the Committee shall determine whether the
Performance Objectives for the Performance Period have been achieved. As
soon as reasonably practicable after such determination, or at such later
date or in such installments as the Committee shall determine at the time
of grant, the Company shall pay to the Awardee an amount equal to the
Ending Value of each Performance Unit as to which the Performance
Objectives have been satisfied ; provided, however, that in no event shall
an Awardee receive an amount in excess of $1,000,000 in respect of
Performance Units for any given year.
(e) Termination of Employment. If an Awardee's employment as an Employee or
with the Company and Subsidiaries and, except in the case of ISOs, other
Affiliates ("Employment") is terminated for any reason, any Award granted to
such Awardee and outstanding at the date of termination shall be exercisable,
vested or payable on and after such date only to the extent and at the times
specified in the applicable Agreement, provided that, in the case of an ISO,
such Agreement shall comply with the requirements of section 422 of the Code.
(f) Agreements. Awards granted under the Plan shall be evidenced by written
documents ("Agreements") in such form as the Committee shall, from time to time,
approve, which Agreements shall contain such provisions, not inconsistent with
the provisions of the Plan and, in the case of an ISO, section 422(b) of the
Code, as the Committee shall deem advisable, and which Agreements, in the case
of any Option, shall specify whether an Option is an ISO or NQSO; provided,
however, if an Option is not designated in the Agreement as an ISO or NQSO, the
Option shall constitute an ISO if it complies with the terms of section 422 of
the Code, and otherwise, it shall constitute an NQSO. Each Awardee shall enter
into, and be bound by, the terms of the Agreement.
SECTION 7 - Capital Adjustments
The number of shares which may be issued under the Plan as stated in
Section 4 hereof, and the number of shares issuable upon exercise of outstanding
Stock Awards under the Plan (as well as the Option exercise price per share
under outstanding Options) shall, subject to the provisions of section 424(a) of
the Code, be adjusted, as may be deemed appropriate by the Committee, to reflect
any stock dividend, stock split, share combination, or similar change in the
capitalization of the Company.
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In the event of a corporate transaction as that term is described in
section 424(a) of the Code and the Treasury Regulations issued thereunder (a
"Corporate Transaction") (as, for example, a merger, consolidation, acquisition
of property or stock, separation, reorganization, or liquidation), each
outstanding Award shall be assumed by the surviving or successor corporation;
provided, however, that, in the event of a proposed Corporate Transaction, the
Committee may terminate all or a portion of the outstanding Awards if it
determines that such termination is in the best interests of the Company. If the
Committee decides to terminate outstanding Awards, the Committee shall give each
Awardee holding an Option to be terminated not less than ten days' notice prior
to any such termination by reason of such a Corporate Transaction, and any such
Option which is to be so terminated may be exercised (if and only to the extent
that it is then exercisable) up to and including the date immediately preceding
such termination. Further, as provided in Section 6(b)(4)(A)(ii) hereof, the
Committee, in its discretion, may accelerate, in whole or in part, the date on
which any or all Options become exercisable.
The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such Corporate Transaction, provided that, in
the case of ISOs, such change is excluded from the definition of a
"modification" under section 424(h) of the Code.
SECTION 8 - Change in Control
Subject to the term and other provisions of the applicable Agreement, all
of an Awardee's Awards shall become fully exercisable (in the case of Options),
vested (in the case of Performance Shares) and payable (in the case of
Performance Units, at the maximum Ending Value provided in the applicable
Agreement (subject to the limitation contained in Subsection 6(d)(4))) in the
event that (a) a Change in Control of the Company occurs after June 30, 1996 and
(b) such Awardee's Employment is terminated under circumstances specified in the
applicable Agreement within one year following such Change in Control. A "Change
in Control" shall be deemed to have taken place only upon the occurrence of one
or more of the following: (i) a "person" or "group" within the meaning of
sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 (the
"Exchange Act") other than the Executive, becomes the "beneficial owner" (within
the meaning of Rule l3d-3 under the Exchange Act) of securities of the Company
(including options, warrants, rights and convertible and exchangeable
securities) representing 30% or more of the combined voting power of the
Company's then outstanding securities in any one or more transactions unless
approved by at least two-thirds of the Board of Directors then serving at that
time; provided, however, that purchases by employee benefit plans of the Company
and by the Company or its Affiliates shall be disregarded; or (ii) any sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the operating assets of the
Company; or (iii) a merger or consolidation, or a transaction having a similar
effect, where (A) the Company is not the surviving corporation, (B) the majority
of the common stock of the Company is no longer held by the stockholders of the
Company immediately prior to the transaction, or (C) the Company's common stock
is converted into cash, securities or other property (other than the common
stock of a company into which the Company is merged), unless such merger,
consolidation or similar transaction is with a subsidiary of the Company or with
another company, a majority of whose outstanding capital stock is owned by the
same persons or entities who own a majority of the Company's common stock at
such time; or (iv) at any annual or special meeting of stockholders of the
Company at which a quorum is present (or any
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adjournments or postponements thereof), or by written consent in lieu thereof,
directors (each a "New Director" and collectively the "New Directors") then
constituting a majority of the Company's Board of Directors shall be duly
elected to serve as New Directors and such New Directors shall have been elected
by stockholders of the Company who shall be an (I) "Adverse Person(s)"; (II)
"Acquiring Person(s)"; or (III) "40% Person(s)" (as each of the terms set forth
in (I), (II), and (III) hereof are defined in that certain Rights Agreement,
dated November 24, 1998, between the Company and American Stock Transfer & Trust
Company, as Rights Agent). The Company shall give appropriate advance notice to
all Awardees of Options under the Plan of a pending Change in Control so as to
permit such Awardees the opportunity to exercise such Options prior to the
Change in Control.
SECTION 9 - Amendment or Discontinuance of the Plan
At any time and from time to time, the Board may suspend or terminate the
Plan or amend it, and the Committee may amend any outstanding Award, in any
respect whatsoever, except that the following amendments shall require the
approval by the affirmative votes of holders of at least a majority of the
shares present, or represented, and entitled to vote at a duly held meeting of
stockholders of the Company:
(a) with respect to ISOs, any amendment which would:
(1) change the class of employees eligible to participate in the Plan;
(2) except as permitted under Section 7 hereof, increase the maximum
number of Common Shares with respect to which ISOs may be granted under the
Plan; or
(3) extend the duration of the Plan under Section 10 hereof with
respect to any ISOs granted hereunder; and
(b) any amendment which would require shareholder approval pursuant to
Treas. Reg. ss. 1.162-27(e)(4), or any successor thereto.
The foregoing notwithstanding, no such suspension, discontinuance or
amendment shall materially impair the rights of any holder of an outstanding
Award without the consent of such holder.
SECTION 10 - Termination of Plan
Unless earlier terminated as provided in the Plan, the Plan and all
authority granted hereunder shall terminate absolutely at 12:00 midnight on May
22, 2006, which date is the day immediately prior to 10 years after the date the
Plan was adopted by the Board, and no Awards hereunder shall be granted
thereafter. Nothing contained in this Section 10, however, shall terminate or
affect the
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continued existence of rights created under Awards issued hereunder and
outstanding on May 22, 2006 which by their terms extend beyond such date.
SECTION 11 - Shareholder Approval
This Plan became effective on May 23, 1996.
SECTION 12 - Miscellaneous
(a) Governing Law. The Plan, and the Agreements entered into, and the
Awards granted thereunder, shall be governed by the applicable Code provisions.
Otherwise, the operation of, and the rights of Awardees under, the Plan, the
Agreements, and the Awards shall be governed by applicable federal law and
otherwise by the laws of the State of Delaware.
(b) Rights. Neither the adoption of the Plan nor any action of the Board or
the Committee shall be deemed to give any individual any right to be granted an
Award, or any other right hereunder, unless and until the Committee shall have
granted such individual an Award, and then his or her rights shall be only such
as are provided by the Plan and the Award Agreement.
Any Stock Award under the Plan shall not entitle the holder thereof to any
rights as a shareholder of the Company prior to the issuance of the shares
pursuant thereto. Further, no provision of the Plan or any Agreement with an
Awardee shall limit the Company's right, in its discretion, to retire such
person at any time pursuant to its retirement rules or otherwise to terminate
his or her Employment at any time for any reason whatsoever.
(c) No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon the Awardee to exercise such Option.
(d) Non-Transferability. No Award shall be assignable or transferable by
the Awardee otherwise than by will or by the laws of descent and distribution,
and during the lifetime of such person, any Options shall be exercisable only by
him or her or by his or her guardian or legal representative. If an Awardee is
married at the time of exercise of an Option or vesting of Performance Shares
and if the Awardee so requests at the time of exercise or vesting, the
certificate or certificates issued shall be registered in the name of the
Awardee and the Awardee's spouse, jointly, with right of survivorship.
(e) Withholding and Use of Shares to Satisfy Tax Obligations. The
obligation of the Company to deliver Common Shares or pay cash to an Awardee
pursuant to any Award under the Plan shall be subject to applicable federal,
state and local tax withholding requirements.
In connection with an Award in the form of Common Shares subject to the
withholding requirements of applicable federal tax laws, the Committee, in its
discretion (and subject to such
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withholding rules ("Withholding Rules") as shall be adopted by the Committee),
may permit the Awardee to satisfy the minimum required federal, state and local
withholding tax, in whole or in part, by electing to have the Company withhold
(or by returning to the Company) Common Shares, which shares shall be valued,
for this purpose, at their Fair Market Value on the date of exercise of the
Option or vesting of Performance Shares (or if later, the date on which the
Awardee recognizes ordinary income with respect to such exercise or vesting)
(the "Determination Date"). An election to use Common Shares to satisfy tax
withholding requirements must be made in compliance with and subject to the
Withholding Rules. The Company may not withhold shares in excess of the number
necessary to satisfy the minimum required federal, state and local income tax
withholding requirements. In the event Common Shares acquired under the exercise
of an ISO are used to satisfy such withholding requirement, such Common Shares
must have been held by the Awardee for a period of not less than the holding
period described in section 422(a)(1) of the Code on the Determination Date, or
if such Common Shares were acquired through exercise of an NQSO or of an option
under a similar plan, such option must have been granted to the Awardee at least
six months prior to the Determination Date.
(f) Listing and Registration of Shares. Each Stock Award shall be subject
to the requirement that, if at any time the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares
covered thereby upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such Award
or the purchase or vesting of shares thereunder, or that action by the Company
or by the Awardee should be taken in order to obtain an exemption from any such
requirement, no such Stock Award may be exercised, in whole or in part, unless
and until such listing, registration, qualification, consent, approval, or
action shall have been effected, obtained, or taken under conditions acceptable
to the Committee. Without limiting the generality of the foregoing, each Awardee
or his or her legal representative or beneficiary may also be required to give
satisfactory assurance that shares acquired pursuant to a Stock Award are being
purchased for investment and not with a view to distribution, and certificates
representing such shares may be legended accordingly.
***
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IN WITNESS WHEREOF, MIM Corporation has caused these presents to be duly
executed, under seal, this 1st day of December, 1998.
MIM Corporation
By: /s/ Barry A. Posner
-----------------------------------
Name: Barry A. Posner
Title: Vice President and
General Counsel
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