Exhibit 10.4
VISX, INCORPORATED
1995 DIRECTOR OPTION AND STOCK DEFERRAL PLAN
AMENDED AND RESTATED AS OF NOVEMBER 7, 2004
1. PURPOSES OF THE PLAN. The purposes of this 1995 Director Option and
Stock Deferral Plan are to attract and retain the best available personnel for
service as Outside Directors (as defined herein) of the Company, to provide
additional incentive to the Outside Directors of the Company to serve as
Directors, and to encourage their continued service on the Board.
All options granted hereunder shall be nonstatutory stock options. Outside
Directors may also elect to convert their annual retainer into deferred phantom
stock hereunder.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "BOARD" means the Board of Directors of the Company.
(b) "CODE" means the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" means the Common Stock of the Company.
(d) "COMPANY" means VISX, Incorporated, a Delaware corporation.
(e) "CONTINUOUS STATUS AS A DIRECTOR" means the absence of any
interruption or termination of service as a Director.
(f) "DEFERRED PHANTOM STOCK" means phantom units of Company Common
Stock under the Outside Director Stock Deferral Plan.
(g) "DIRECTOR" means a member of the Board.
(h) "EMPLOYEE" means any person, including officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a Director's fee by the Company shall not be sufficient in and of itself to
constitute "employment" by the Company.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
(j) "FAIR MARKET VALUE" means, as of any date, the value of Common
Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange
or a national market system, including without limitation the New York Stock
Exchange, the Fair Market Value of a Share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest volume of
trading in Common Stock) on the day of determination, as reported in THE WALL
STREET JOURNAL or such other source as the Board deems reliable;
(ii) If the Common Stock is quoted on any established stock exchange
or regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market
Value of a Share of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the day of determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable, or;
(iii) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the Board.
(k) "NEW OUTSIDE DIRECTOR" means an Outside Director who first becomes
a Director at or after the Company's 2003 annual meeting of stockholders.
(l) "OPTION" means a stock option granted pursuant to the Plan.
(m) "OPTIONED STOCK" means the Common Stock subject to an Option.
(n) "OPTIONEE" means an Outside Director who receives an Option.
(o) "OUTSIDE DIRECTOR" means a Director who is not an Employee.
(p) "OUTSIDE DIRECTOR STOCK DEFERRAL PLAN" means the Outside Director
Stock Deferral Plan attached hereto as Appendix A.
(q) "PARENT" means a "parent corporation", whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(r) "PLAN" means this VISX, Incorporated 1995 Director Option and Stock
Deferral Plan, including the Outside Director Stock Deferral Plan attached
hereto as Appendix A.
(s) "QUALIFYING RETIREMENT" means an Outside Director's termination
from the Board, including pursuant to the Outside Director's death or disability
(as defined in Section 22(e)(3) of the Code), if such termination follows (i)
five full terms of Board membership and attainment of age 62 or greater, or (ii)
ten full terms of Board membership.
(t) "SHARE" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(u) "SUBSIDIARY" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan or deferred as Deferred Phantom Stock into the Outside Director
Stock Deferral Plan is seven hundred and seventy-five thousand (775,000) Shares
(the "Pool") of Common Stock. The Shares may be authorized but unissued, or
reacquired Common Stock.
If an Option should expire or become unexercisable for any
reason without having been exercised in full, the unpurchased Shares which were
subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan; provided, however, that Shares that
have actually been issued under the Plan shall not be returned to the Plan and
shall not become available for future distribution under the Plan.
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4. ADMINISTRATION AND INITIAL AND ANNUAL GRANT OF OPTIONS UNDER THE PLAN.
(a) PROCEDURE FOR INITIAL AND ANNUAL GRANTS. Outside Directors shall
receive initial and annual grants as follows:
(i) No person shall have any discretion to select which Outside
Directors shall be granted Options or to determine the number of Shares.
(ii) Each New Outside Director shall be automatically granted an
Option to purchase Twenty-Five Thousand (25,000) Shares (a "First Option") on
the date on which such person first becomes a Director, whether through election
by the stockholders of the Company or appointment by the Board to fill a
vacancy; provided, however, that an Employee Director who ceases to be an
Employee but who remains a Director shall not receive a First Option.
(iii) Each Outside Director shall be automatically granted an Option
to purchase Ten Thousand (10,000) Shares (a "Subsequent Option") on the date
such Outside Director is re-elected to the Board commencing with the Company's
2003 annual meeting of stockholders, if on such date he or she shall have served
on the Board for at least six (6) months.
(iv) The terms of a First Option granted hereunder shall be as
follows:
(A) the term of the First Option shall be ten (10) years.
(B) the First Option shall be exercisable only while the Outside
Director remains a Director of the Company, except as set forth in Section 9
hereof.
(C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the First Option. In the event that the
date of grant of the First Option is not a trading day, the exercise price per
Share shall be the Fair Market Value on the next trading day immediately
following the date of grant of the First Option.
(D) the First Option shall vest as to 1/3 of the Shares subject
to the First Option on each anniversary of the date of grant, so as to be 100%
vested on the third anniversary of the date of grant, subject to continued
service as an Outside Director.
(v) The terms of a Subsequent Option granted hereunder shall be as
follows:
(A) the term of the Subsequent Option shall be ten (10) years.
(B) the Subsequent Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the Subsequent Option. In the event that
the date of grant of the Subsequent Option is not a trading day, the exercise
price per Share shall be the Fair Market Value on the next trading day
immediately following the date of grant of the Subsequent Option.
(D) the Subsequent Option shall be 100% vested upon the date of
grant.
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(vi) In the event that any Option granted under the Plan would cause
the number of Shares subject to outstanding Options plus the number of Shares
previously purchased under Options to exceed the Pool, then the remaining Shares
available for Option grant shall be granted under Options to the Outside
Directors on a pro rata basis. No further grants shall be made until such time,
if any, as additional Shares become available for grant under the Plan through
action of the stockholders to increase the number of Shares which may be issued
under the Plan or through cancellation or expiration of Options previously
granted hereunder.
5. ELECTION TO RECEIVE ANNUAL RETAINER IN STOCK OPTIONS OR DEFERRED
PHANTOM STOCK.
(a) IRREVOCABLE ELECTION. On the date of each annual meeting of
stockholders of the Company during the term of this Plan, commencing with the
2003 annual stockholders meeting, each Outside Director may make an election to
receive (an "Election") (i) Options in lieu of 50% or 100% of his or her annual
cash retainer for the year following the meeting or (ii) Deferred Phantom Stock
in lieu of 50% or 100% of his or her annual cash retainer for the year following
the meeting. The Election must be in writing and delivered to the Secretary of
the Company prior to the date of such annual stockholders meeting. Any Election
made by an Outside Director pursuant to this Section 5 shall be irrevocable.
(b) RETAINER OPTION GRANTS. On the date of each annual meeting of
stockholders of the Company, each Outside Director who has made an Election to
receive Stock Options in lieu of 50% or 100% of his or her annual cash retainer
shall automatically receive a Stock Option covering the number of Shares
determined by dividing (1) the product of (a) the amount of the annual cash
retainer covered by such Election, multiplied by (b) 3, by (2) the Fair Market
Value of a Share on that date, rounded to the nearest whole Share, provided that
sufficient Shares are available under the Plan for the grant of such Stock
Option (the "Retainer Option").
(i) The terms of a Retainer Option granted hereunder shall be as
follows:
(A) the term of the Retainer Option shall be ten (10) years.
(B) the Retainer Option shall be exercisable only while the
Outside Director remains a Director of the Company, except as set forth in
Section 9 hereof.
(C) the exercise price per Share shall be 100% of the Fair Market
Value per Share on the date of grant of the Retainer Option. In the event that
the date of grant of the Retainer Option is not a trading day, the exercise
price per Share shall be the Fair Market Value on the next trading day
immediately following the date of grant of the Retainer Option.
(D) the Retainer Option shall be fully vested as to 25% of the
Shares subject to the Retainer Option on the date of grant and shall vest with
respect to an additional 25% of such Shares every ninety (90) days following the
date of grant, so as to be 100% vested on the date that is 270 days following
the date of grant, subject to continued service as on Outside Director.
(c) DEFERRED PHANTOM STOCK. On the date of each annual meeting of
stockholders of the Company, Outside Directors who has made an Election to
receive Deferred Phantom Stock in lieu of 50% or 100% of their annual cash
retainer shall automatically have their account under the Outside Director Stock
Deferral Plan credited with the number of Deferred Phantom Stock units
determined by dividing (i) the amount of the annual cash retainer covered by
such Election by (ii) the Fair Market Value of a Share on that date, rounded to
the nearest whole Share, provided that sufficient Shares
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are available under the Plan for the crediting of such Deferred Phantom Stock
units. The Deferred Phantom Stock units shall be fully vested as to 25% of units
on the date of grant and shall vest with respect to an additional 25% of such
units every ninety (90) days following the date of grant, so as to be 100%
vested on the date that is 270 days following the date of grant, subject to
continued service as on Outside Director. The Deferred Phantom Stock units shall
be held subject to the terms and conditions of the Outside Director Stock
Deferral Plan and the elections made thereunder.
6. ELIGIBILITY. Options and Deferred Phantom Stock may be granted only to
Outside Directors. An Outside Director who has been granted an Option or
Deferred Phantom Stock may, if he or she is otherwise eligible, be granted
additional Options or Deferred Phantom Stock in accordance with the provisions
of the Plan.
The Plan shall not confer upon any Outside Director any right with respect
to continuation of service as a Director or nomination to serve as a Director,
nor shall it interfere in any way with any rights which the Director or the
Company may have to terminate his or her directorship at any time.
7. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board or its approval by the stockholders of the Company.
It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 11 of the Plan.
8. FORM OF CONSIDERATION. The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall
consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of
Shares acquired upon exercise of an Option, have been owned by the Optionee for
more than six (6) months on the date of surrender, and (y) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) delivery of a properly
executed exercise notice together with such other documentation as the Company
and the broker, if applicable, shall require to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds required to pay the
exercise price, or (v) any combination of the foregoing methods of payment.
9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any Option granted
hereunder shall be exercisable at such times as are set forth in Sections 4 and
5 hereof.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may consist of any consideration and method of payment
allowable under Section 8 of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
A share certificate or electronic notice covering the number of Shares so
acquired shall be issued to the Optionee as soon as practicable after exercise
of the Option. No adjustment shall be made for a dividend or other right for
which the record date is prior to the date the stock certificate or electronic
notice is issued, except as provided in Section 11 of the Plan.
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Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) RULE 16b-3. Options and Deferred Phantom Stock granted to Outside
Directors must comply with the applicable provisions of Rule 16b-3 promulgated
under the Exchange Act or any successor thereto and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
Plan transactions, and other transactions by Outside Directors that otherwise
could be matched with Plan transactions, for the maximum exemption from Section
16 of the Exchange Act.
(c) TERMINATION OF CONTINUOUS STATUS AS A DIRECTOR. In the event an
Optionee's Continuous Status as a Director terminates (other than upon the
Optionee's death or total and permanent disability (as defined in Section
22(e)(3) of the Code) or Qualifying Retirement), the Optionee may exercise his
or her Option, but only within three (3) months from the date of such
termination, and only to the extent that the Optionee was entitled to exercise
it on the date of such termination (but in no event later than the expiration of
its ten (10) year term). To the extent that the Optionee was not entitled to
exercise an Option on the date of such termination, and to the extent that the
Optionee does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.
(d) DISABILITY OF OPTIONEE. In the event Optionee's Continuous Status
as a Director terminates as a result of total and permanent disability (as
defined in Section 22(e)(3) of the Code), the Optionee may exercise his or her
Option, but only within twelve (12) months from the date of such termination,
and only to the extent that the Optionee was entitled to exercise it on the date
of such termination (but in no event later than the expiration of its ten (10)
year term). To the extent that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.
(e) DEATH OF OPTIONEE. In the event of an Optionee's death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance may exercise the Option, but only within twelve (12)
months following the date of death, and only to the extent that the Optionee was
entitled to exercise it on the date of death (but in no event later than the
expiration of its ten (10) year term). To the extent that the Optionee was not
entitled to exercise an Option on the date of death, and to the extent that the
Optionee's estate or a person who acquired the right to exercise such Option
does not exercise such Option (to the extent otherwise so entitled) within the
time specified herein, the Option shall terminate.
(f) QUALIFYING RETIREMENT OF OPTIONEE. Notwithstanding the provisions
set forth in Section 9(d) of the Plan, in the event of an Optionee's Qualifying
Retirement, the Optionee may exercise his or her Option, but only within the
lesser of (i) five years from the date of the Qualifying Retirement, or (ii) the
original ten (10) year term of the Option following the date of termination, and
only to the extent that the Optionee was entitled to exercise it on the date of
termination. To the extent that the Optionee was not entitled to exercise an
Option on the date of termination, or if he or she does not exercise such Option
(to the extent otherwise so entitled) within the time specified herein, the
Option shall terminate.
10. NON-TRANSFERABILITY OF OPTIONS. Options hereunder may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
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11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET
SALE OR CHANGE OF CONTROL.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of Shares covered by each outstanding
Option or share of Deferred Phantom Stock, the number of Shares which have been
authorized for issuance under the Plan but as to which no Options or Deferred
Phantom Stock units have yet been granted or credited or which have been
returned to the Plan upon cancellation or expiration of an Option, as well as
the price per Share covered by each such outstanding Option, and the number of
Shares issuable pursuant to the automatic grant provisions of Section 4 hereof
shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued Shares effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Except as expressly provided herein, 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 or price of Shares
subject to an Option or the number of Deferred Phantom Stock units credited to
an account.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.
(c) MERGER OR ASSET SALE. Subject to Section 11(d), in the event of a
merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option shall be
assumed or an equivalent option shall be substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation does not agree to assume the Option or to
substitute an equivalent option, each outstanding Option shall become fully
vested and exercisable, including as to Shares as to which it would not
otherwise be exercisable. If an Option becomes fully vested and exercisable in
the event of a merger or sale of assets, the Board shall notify the Optionee
that the Option shall be fully exercisable for a period of thirty (30) days from
the date of such notice, and the Option shall terminate upon the expiration of
such period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares).
(d) CHANGE OF CONTROL. In the event of a Change of Control (as defined
below), each Outside Director (i) shall fully vest in and have the right to
exercise each Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable and (ii) shall fully vest
in each Deferred Phantom Stock unit.
A "Change of Control" means the occurrence of any of the following
events:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Exchange Act, other than the Company, a subsidiary of the Company or a
Company employee benefit plan, including any trustee of such plan acting as
trustee, is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing
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twenty percent (20%) or more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election of directors;
or
(ii) a merger or consolidation of the Company or any direct or
indirect subsidiary of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve an agreement for the sale or disposition by the Company
of all or substantially all the Company's assets; or
(iii) a change in the composition of the Board, as a result of which
fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are Directors as of the date this
amendment to the Plan is approved by the Board, or (B) are elected, or nominated
for election, to the Board with the affirmative votes of at least a majority of
the Incumbent Directors AND whose election or nomination was not in connection
with any transaction described in (i) or (ii) above or in connection with an
actual or threatened proxy contest relating to the election of directors of the
Company.
12. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. Except as set forth in Section 4, the
Board may at any time amend, alter, suspend, or discontinue the Plan, but no
amendment, alteration, suspension, or discontinuation shall be made which would
impair the rights of any Optionee or Outside Director Stock Deferral Plan
participant under any grant theretofore made, without his or her consent,
provided that the Board may not amend the Plan to permit the repricing,
including by way of exchange, of any Option without stockholder approval. In
addition, to the extent necessary and desirable to comply with Rule 16b-3 under
the Exchange Act (or any other applicable law or regulation), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. Any such adverse amendment
without consent or termination of the Plan shall not affect Options or Deferred
Phantom Stock units already granted or credited and such Options and Deferred
Phantom Stock units shall remain in full force and effect as if this Plan had
not been amended or terminated.
13. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date determined in accordance with Section 4 hereof.
14. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, state securities laws, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares, if, in the
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opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
15. RESERVATION OF SHARES. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
16. OPTION AGREEMENT. Options shall be evidenced by written option
agreements in such form as the Board shall approve.
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APPENDIX A TO THE 1995 DIRECTOR PLAN
VISX, INCORPORATED
OUTSIDE DIRECTOR STOCK DEFERRAL PLAN
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS
1.1 "BOARD OF DIRECTORS"...................................................1
1.2 "COMMITTEE"............................................................1
1.3 "CREDITED INVESTMENT RETURN (LOSS)"....................................1
1.4 "DEFERRAL ACCOUNT".....................................................1
1.5 "DEFERRAL AMOUNT"......................................................1
1.6 "DEFERRAL ELECTION"....................................................1
1.7 "PARTICIPANT"..........................................................1
1.8 "PLAN".................................................................2
ARTICLE II ELIGIBILITY
2.1 ELIGIBLE PERSONS.......................................................2
2.2 COMMENCEMENT OF PARTICIPATION..........................................2
2.3 TERMINATION OF PARTICIPATION...........................................2
ARTICLE III DEFERRED PHANTOM STOCK
3.1 PHANTOM STOCK DEFERRALS................................................2
3.2 NO WITHDRAWAL..........................................................2
ARTICLE IV CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS
4.1 DEFERRAL ACCOUNT.......................................................3
4.2 CREDITED INVESTMENT RETURN (LOSS)......................................3
ARTICLE V BENEFITS
5.1 DISTRIBUTION OF BENEFITS...............................................3
5.2 CHANGE OF DISTRIBUTION ELECTION........................................3
5.3 PAYMENT TO ESTATE......................................................3
5.4 AUTOMATIC LUMP-SUM DISTRIBUTION FOR ACCOUNTS BELOW $25,000.............3
5.5 TAX WITHHOLDING........................................................4
ARTICLE VI OBLIGATION TO PAY SUPPLEMENTAL PARTICIPANT BENEFITS
6.1 BENEFITS PAID FROM GENERAL CORPORATE ASSETS; PAYMENT IN STOCK..........4
6.2 NO SECURED INTEREST....................................................4
ARTICLE VII ADMINISTRATION
7.1 ADMINISTRATION OF THE PLAN.............................................4
7.2 INDEMNIFICATION........................................................4
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ARTICLE VIII MISCELLANEOUS
8.1 NONTRANSFERABILITY.....................................................4
8.2 BINDING EFFECT.........................................................5
8.3 REIMBURSEMENT OF COSTS.................................................5
8.4 ARBITRATION............................................................5
8.5 APPLICABLE LAW.........................................................5
8.6 ENTIRE AGREEMENT.......................................................5
8.7 Termination or Amendment of Plan.......................................5
iii
VISX, INCORPORATED
OUTSIDE DIRECTOR STOCK DEFERRAL PLAN
This VISX, Incorporated Outside Director Stock Deferral Plan is
adopted effective as of the date of the Company's 2003 annual meeting of
stockholders.
ARTICLE I
DEFINITIONS
Whenever used herein, the masculine pronoun shall be deemed to
include the feminine, and the singular to include the plural, unless the context
clearly indicates otherwise, and the following definitions shall govern the Plan
(capitalized terms not defined below shall have the same defined meaning as
specified in the 1995 Director Option and Stock Deferral Plan):
1.1 "BOARD OF DIRECTORS"
or "BOARD" means the Board of Directors of VISX, Incorporated.
1.2 "COMMITTEE"
means an independent Committee appointed by the Board to administer
this Plan and to take such other actions as may be specified herein.
1.3 "CREDITED INVESTMENT RETURN (LOSS)"
means the hypothetical investment return which shall be credited to
a Participant's Deferral Account pursuant to Article IV.
1.4 "DEFERRAL ACCOUNT"
means the book entry account established under this Plan for each
Participant to which shall be credited (or debited) such Participant's Deferral
Amount and Credited Investment Return (Loss) and which shall be reduced by any
distributions made to such Participant and any charges which may be imposed on
such Deferral Account pursuant to the terms of this Plan.
1.5 "DEFERRAL AMOUNT"
means the Deferred Phantom Stock Amount which Participant elects to
contribute pursuant to Article III.
1.6 "DEFERRAL ELECTION"
means the form of Deferred Phantom Stock Election as prescribed by
the Committee, as modified from time to time.
1.7 "PARTICIPANT"
means a present or former Outside Director (or estate or
beneficiaries of an Outside Director) who has a Deferral Account under this
Plan.
1.8 "PLAN"
shall mean this VISX, Incorporated Outside Director Stock Deferral
Plan, as it may be amended from time to time.
ARTICLE II
ELIGIBILITY
2.1 ELIGIBLE PERSONS
. Eligibility for participation in this Plan shall be limited to
Outside Directors who have elected to receive Deferred Phantom Stock in lieu of
their annual retainer under the Company's 1995 Director Option and Stock
Deferral Plan and their estates and beneficiaries.
2.2 COMMENCEMENT OF PARTICIPATION
. A Participant may begin participation in this Plan immediately
following the submission of an irrevocable Deferral Election in accordance with
the terms of the 1995 Director Option and Stock Deferral Plan.
2.3 TERMINATION OF PARTICIPATION
. Active participation in this Plan shall end when a Participant's
Board service terminates for any reason. No contributions to this Plan shall be
made with respect to a Participant's Deferral Account after such termination
date. Upon termination of Board service, a Participant shall remain an inactive
Participant in the Plan until all of the benefits to which he or she is entitled
hereunder have been paid in full.
ARTICLE III
DEFERRED PHANTOM STOCK
3.1 PHANTOM STOCK DEFERRALS.
(a) Upon submitting a Deferral Election to the Company, in
lieu of his or her annual retainer, a Participant's Deferral Account under this
Plan shall be credited with a number of Deferred Phantom Stock shares determined
in accordance with Section 5(c) of the 1995 Director Option and Stock Deferral
Plan. The Participant shall satisfy the self-employment tax obligations arising
from the credit of Deferred Phantom Stock to his or her Deferral Account.
(b) A Participant's Deferral Election shall be irrevocable,
except as provided in Section 5.2 of this Plan.
3.2 NO WITHDRAWAL
. Except as provided in Section 5.3 below, Deferral Amounts may not
be withdrawn by a Participant and shall be paid only in accordance with the
provisions of this Plan.
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ARTICLE IV
CREDITED INVESTMENT RETURN (LOSS) ON DEFERRAL ACCOUNTS
4.1 DEFERRAL ACCOUNT.
(a) A Deferral Account shall be established and maintained
for each Participant.
4.2 CREDITED INVESTMENT RETURN (LOSS)
. Each Participant's Deferral Account shall be credited (or debited)
monthly with the Credited Investment Return (Loss) attributable to his or her
Deferral Account. The Credited Investment Return (Loss) is the amount which the
Participant's Deferral Account would have earned if the amounts credited to the
Deferral Account had, in fact, been invested in the Common Stock, purchased at
the closing sales price on the date of the applicable Board meeting (as
specified in Section 5(c) of the 1995 Director Option and Stock Deferral Plan),
and assuming reinvestment of all dividends back into such Common Stock at the
Common Stock closing sales price on the date of the dividend distribution.
ARTICLE V
BENEFITS
5.1 DISTRIBUTION OF BENEFITS
. Benefits shall be distributed in accordance with the elections
specified within a Participant's Deferral Election.
5.2 CHANGE OF DISTRIBUTION ELECTION
. A Participant may file an amended election to change his or her
distribution election at any time which is more than one (1) year prior to the
applicable specified fixed date at which payment of benefits would otherwise
commence. Any amended election which is filed within one (1) year of the
applicable specified date at which payment of benefits shall commence shall be
void and without effect and the most recently effective election shall control
instead.
5.3 PAYMENT TO ESTATE
. In the event a Participant dies after installment payments have
begun but before all of the installments are paid, the undistributed
installments shall be paid to his or her estate as they become due.
5.4 AUTOMATIC LUMP-SUM DISTRIBUTION FOR ACCOUNTS BELOW $25,000
. Notwithstanding any other provisions of this Plan or the
provisions of a Participant's Deferral Election, in the event that a Participant
has less than twenty-five thousand dollars ($25,000) credited to his or her
Deferral Account as of the date of his or her termination of Board service, 100%
of
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his or her Deferral Account shall be distributed to him or her in a single
lump-sum distribution within a reasonable amount of time following the date of
such termination of service.
5.5 TAX WITHHOLDING
. All distributions under this Plan shall be subject to all
applicable withholding for state and federal income tax and to any other
federal, state or local tax which may be applicable thereto.
ARTICLE VI
OBLIGATION TO PAY SUPPLEMENTAL PARTICIPANT BENEFITS
6.1 BENEFITS PAID FROM GENERAL CORPORATE ASSETS; PAYMENT IN STOCK
. All benefits payable to a Participant hereunder, shall be paid by
the Company in shares of Common Stock.
6.2 NO SECURED INTEREST
. Deferral Accounts shall be subject to the claims of creditors of
the Company. Each Participant is a general unsecured creditor of the Company
with respect to the promises of the Company made herein.
ARTICLE VII
ADMINISTRATION
7.1 ADMINISTRATION OF THE PLAN
. This Plan shall be administered by the Committee. The Committee
shall have full power and discretionary authority to administer, construe and
interpret the Plan, to establish procedures for administering this Plan, to
prescribe forms, and take any and all necessary or desirable actions in
connection with this Plan. The Committee's interpretation and construction of
this Plan shall be conclusive and binding on all persons. The Committee may
appoint a plan administrator or any other agent and delegate to them such powers
and duties in connection with the administration of this Plan as the Committee
may from time to time prescribe.
7.2 INDEMNIFICATION
. The Committee and each of its members are indemnified by the
Company against any and all liabilities incurred by reason of any action taken
in good faith pursuant to the provisions of this Plan.
ARTICLE VIII
MISCELLANEOUS
8.1 NONTRANSFERABILITY
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. The right of each Participant or any other person to the payment
of any benefits under this Plan shall not be assigned, transferred, pledged or
encumbered.
8.2 BINDING EFFECT
. This Plan shall be binding upon and inure to the benefit of the
Company, its successors and assigns and each Participant and his or her heirs,
executors, administrators and legal representatives.
8.3 REIMBURSEMENT OF COSTS
. If the Company, a Participant or a successor in interest to either
of the foregoing, brings legal action to enforce any of the provisions of this
Plan, including an action described in Section 8.4 of this Plan, the prevailing
party in such legal action shall be reimbursed by the other party for the
prevailing party's costs of such legal action including, without limitation,
reasonable fees of attorneys, accountants and similar advisors and expert
witnesses.
8.4 ARBITRATION
. Any dispute or claim relating to or arising out of this Plan shall
be fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in Santa Clara, California.
8.5 APPLICABLE LAW
. This Plan shall be construed in accordance with and governed by
the laws of the State of California.
8.6 ENTIRE AGREEMENT
. This Plan, 1995 Director Option and Stock Deferral Plan and each
applicable Deferral Election constitute the entire understanding and agreement
with respect to this Plan, and there are no agreements, understandings,
restrictions, representations or warranties among any Participant and the
Company other than those as set forth or provided for therein.
8.7 Termination or Amendment of Plan
.
(a) This Plan may be amended by the Company at any time in its
sole discretion by resolution by the Board; provided, however, that no amendment
may be made which would alter the irrevocable nature of a Deferral Election or
which would reduce the amount credited to an Participant's Deferral Account on
the date of such amendment.
(b) Notwithstanding the foregoing paragraph or any other
provision in this Plan to the contrary, the Company reserves the right to
terminate the Plan in its entirety at any time upon fifteen (15) days notice to
Outside Directors. If this Plan is terminated, all benefits shall be paid
pursuant to the provisions of Article 5 as if such Participant had voluntarily
terminated Board service on the date of Plan termination.
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IN WITNESS WHEREOF, the Company has caused this Plan to be executed
by a duly authorized officer effective as of the Effective Date.
VISX, INCORPORATED
By:
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