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Exhibit 4.9
LAM RESEARCH CORPORATION
1997 STOCK INCENTIVE PLAN
Amended and restated effective as of November 5 and December 15, 1998
SECTION 1. GENERAL PURPOSE OF PLAN; DEFINITIONS.
The name of this plan is the Lam Research Corporation 1997 Stock
Incentive Plan (the "Plan"). The Plan was adopted by the Board on May 6, 1997,
subject to the approval of the stockholders of the Company, which approval was
obtained on August 5, 1997. The purpose of the Plan is to enable the Company to
attract and retain highly qualified personnel who will contribute to the
Company's success by their ability, ingenuity and industry and to provide
incentives to the participating officers, directors, employees, consultants and
advisors that are linked directly to increases in stockholder value and will
therefore inure to the benefit of all stockholders of the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
(1) "Administrator" means the Board, or if and to the extent the
Board does not administer the Plan, the Committee in accordance with
Section 2.
(2) "Annual Non-Employee Director Stock Option" means an annual
grant of Stock Options to a non-employee director of the Company
pursuant to Section 6.
(3) "Board" means the Board of Directors of the Company.
(4) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor thereto.
(5) "Committee" means the Stock Committee of the Board or any
Committee the Board may subsequently appoint to administer the Plan. To
the extent applicable, the Committee shall be composed entirely of
individuals who meet the qualifications referred to in Section 162(m) of
the Code and Rule 16b-3 under the Securities Exchange Act of 1934, as
amended. If at any time or to any extent the Board shall not administer
the Plan, then the functions of the Board specified in the Plan shall be
exercised by the Committee.
(6) "Company" means Lam Research Corporation, a Delaware
corporation (or any successor corporation).
(7) "Deferred Stock" means an award made pursuant to Section 7
below of the right to receive Stock at the end of a specified deferral
period.
(8) "Disability" means the inability of a Participant to perform
substantially his or her duties and responsibilities to the Company by
reason of a physical or mental disability or infirmity (i) for a
continuous period of six months, or (ii) at such earlier time as the
Participant submits medical evidence satisfactory to the Administrator
that he or she has a physical or mental disability or infirmity which
will likely prevent him or her from returning to the performance of his
or her work duties for six months or longer. The date of such Disability
shall be on the last day of such six-month period or the day on which
the Participant submits such satisfactory medical evidence, as the case
may be.
(9) "Effective Date" shall mean the date set forth in Section
11.
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(10) "Eligible Recipient" means an officer, director, employee,
consultant or advisor of the Company or any Subsidiary.
(11) "Fair Market Value" means, as of any given date, with
respect to any awards granted hereunder, (A) if the Stock is publicly
traded, the closing sale price of the Stock on such date as reported in
the Western Edition of the Wall Street Journal, or the average of the
closing price of the Stock on each day on which the Stock was traded
over a period of up to twenty trading days immediately prior to such
date, (B) the fair market value of the Stock as determined in accordance
with a method prescribed in the agreement D-1 evidencing any award
hereunder, or (C) the fair market value of the Stock as otherwise
determined by the Administrator in the good faith exercise of its
discretion.
(12) "Incentive Stock Option" means any Stock Option intended to
be designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(13) "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option, including any Stock Option that provides
(as of the time such option is granted) that it will not be treated as
an Incentive Stock Option.
(14) "Parent Corporation" means any corporation (other the
Company) in an unbroken chain of corporations ending with the Company,
if each of the corporations in the chain (other than the Company) owns
stock possessing 50% or more of the combined voting power of all classes
of stock in one of the other corporations in the chain.
(15) "Participant" means any Eligible Recipient selected by the
Administrator, pursuant to the Administrator's authority in Section 2
below, to receive grants of Stock Options, Restricted Stock awards,
Deferred Stock awards, Performance Shares or any combination of the
foregoing and each non-employee director of the Company who receives an
Annual Non-Employee Director Stock Option pursuant to Section 6.
(16) "Performance Share" means an award of shares of Stock
pursuant to Section 7 that is subject to restrictions based upon the
attainment of specified performance objectives.
(17) "Restricted Stock" means an award granted pursuant to
Section 7 of shares of Stock subject to certain restrictions.
(18) "Stock" means the common stock, par value $.001 per share,
of the Company.
(19) "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 or any Annual Non-Employee Director Stock
Option granted pursuant to Section 6.
(20) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company, if each
of the corporations (other than the last corporation) in the unbroken
chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in the
chain.
SECTION 2. ADMINISTRATION.
The Plan shall be administered in accordance with the requirements of
Section 162(m) of the Code (but only to the extent necessary to maintain
qualification of the Plan under Section 162(m) of the Code) and, to the extent
applicable, Rule 16b-3 under the Securities Exchange Act of 1934, as amended
("Rule 16b-3") by the Board or by the Committee which shall be appointed by the
Board and which shall serve at the pleasure of the Board.
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Pursuant to the terms of the Plan, the Administrator shall have the
power and authority to grant to Eligible Recipients pursuant to the terms of the
Plan: (a) Stock Options, (b) Restricted Stock, (c) Deferred Stock, (d)
Performance Shares or (e) any combination of the foregoing.
In particular, the Administrator shall have the authority:
(a) to select those Eligible Recipients who shall be
Participants;
(b) to determine whether and to what extent Stock Options,
Restricted Stock, Deferred Stock, Performance Shares or a combination of
the foregoing, are to be granted hereunder to Participants;
(c) to determine the number of shares of Stock to be covered by
each such award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including, but
not limited to, (x) the restrictions applicable to Restricted or
Deferred Stock awards and the conditions under which restrictions
applicable to such Restricted or Deferred Stock shall lapse, and (y) the
performance goals and periods applicable to an award of Performance
Shares); and
(e) to determine the terms and conditions, not inconsistent with
the terms of the Plan, which shall govern all written instruments
evidencing the Stock Options, Restricted Stock, Deferred Stock,
Performance Shares or any combination of the foregoing granted hereunder
to Participants.
The Administrator shall have the authority, in its discretion, to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the Plan as it shall from time to time deem advisable; to interpret the terms
and provisions of the Plan and any award issued under the Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
the Plan.
All decisions made by the Administrator pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
the Participants.
SECTION 3. STOCK SUBJECT TO PLAN.
The total number of shares of Stock reserved and available for issuance
under the Plan shall initially be three million; provided, however, that the
number of shares so reserved shall automatically be increased at the beginning
of each calendar quarter if and to the extent that, as of such date, the
quotient determined by dividing (x) the total number of shares of Stock reserved
for issuance under all of Lam's stock-based incentive plans pursuant to
outstanding and future awards by (y) the sum of (i) the total number of shares
of Stock outstanding plus (ii) the number determined under clause (x), is less
than 20%, such that immediately following any such increase such quotient will
equal 18.5%; and provided, further, that the number of shares reserved for
issuance under the Plan shall in no event exceed five million shares, as
adjusted to take into account changes in capitalization as set forth below. Such
shares may consist, in whole or in part, of authorized and unissued shares or
treasury shares. The aggregate number of shares of Stock as to which Stock
Options, Restricted Stock, Deferred Stock and Performance Shares may be granted
to any individual during any calendar year may not, subject to adjustment as
provided in this Section 3, exceed 20% of the shares of Stock reserved for the
purposes of the Plan in accordance with the provisions of this Section 3.
Consistent with the provisions of Section 162(m) of the Code, as from
time to time applicable, to the extent that (i) a Stock Option expires or is
otherwise terminated without being exercised, or (ii) any shares of Stock
subject to any Restricted Stock, Deferred Stock or Performance Share award
granted hereunder are forfeited, such shares shall again be available for
issuance in connection with future awards under the Plan. If any shares of Stock
have been pledged as collateral for indebtedness incurred by a Participant in
connection with the exercise of a Stock
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Option and such shares are returned to the Company in satisfaction of such
indebtedness, such shares shall again be available for issuance in connection
with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend or other change in corporate structure
affecting the Stock, a substitution or adjustment shall be made in (i) the
aggregate number of shares reserved for issuance under the Plan, (ii) the kind,
number and option price of shares subject to outstanding Stock Options granted
under the Plan, and (iii) the kind, number and purchase price of shares issuable
pursuant to awards of Restricted Stock, Deferred Stock and Performance Shares,
as may be determined by the Administrator, in its sole discretion. Such other
substitutions or adjustments shall be made as may be determined by the
Administrator, in its sole discretion. In connection with any event described in
this paragraph, the Administrator may provide, in its discretion, for the
cancellation of any outstanding awards and payment in cash or other property
therefor.
SECTION 4. ELIGIBILITY.
Officers, directors and employees of the Company or any Subsidiary, and
consultants and advisors to the Company or any Subsidiary, who are responsible
for or are in a position to contribute to the management, growth and/or
profitability of the business of the Company shall be eligible to be granted
Stock Options, Restricted Stock awards, Deferred Stock awards or Performance
Shares hereunder. The Participants under the Plan shall be selected from time to
time by the Administrator, in its sole discretion, from among the Eligible
Recipients recommended by the senior management of the Company, and the
Administrator shall determine, in its sole discretion, the number of shares of
Stock covered by each award.
SECTION 5. DISCRETIONARY GRANTS OF STOCK OPTIONS.
Stock Options may be granted alone or in addition to other awards
granted under the Plan. Any Stock Option granted under the Plan shall be in such
form as the Administrator may from time to time approve, and the provisions of
Stock Option awards need not be the same with respect to each optionee.
Recipients of Stock Options shall enter into an award agreement with the
Company, in such form as the Administrator shall determine, which agreement
shall set forth, among other things, the exercise price of the option, the term
of the option and provisions regarding exercisability of the option granted
thereunder.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options.
The Administrator shall have the authority to grant any officer or
employee of the Company (including directors who are also officers of the
Company) Incentive Stock Options, Non-Qualified Stock Options, or both types of
Stock Options. Directors who are not officers of the Company, consultants and
advisors may only be granted Non-Qualified Stock Options. To the extent that any
Stock Option does not qualify as an Incentive Stock Option, it shall constitute
a separate Non-Qualified Stock Option. More than one option may be granted to
the same optionee and be outstanding concurrently hereunder.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable:
(1) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the
Administrator in its sole discretion at the time of grant but
shall not be less than 100% of the Fair Market Value of the
Stock on such date. If an employee owns or is deemed to own (by
reason of the attribution rules applicable under Section 424(d)
of the Code) more than 10% of the combined voting power of all
classes of stock of the Company or any Parent Corporation and
an Incentive Stock Option is granted to such employee, the
option price of such Incentive Stock Option (to the extent
required by the Code at the time of
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grant) shall be no less than 110% of the Fair Market Value of the Stock
on the date such Incentive Stock Option is granted.
(2) Option Term. The term of each Stock Option shall be fixed by
the Administrator, but no Stock Option shall be exercisable more than
ten years after the date such Stock Option is granted; provided,
however, that if an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the
combined voting power of all classes of stock of the Company or any
Parent Corporation and an Incentive Stock Option is granted to such
employee, the term of such Incentive Stock Option (to the extent
required by the Code at the time of grant) shall be no more than five
years from the date of grant.
(3) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Administrator at or after grant. The Administrator may
provide, in its discretion, that any Stock Option shall be exercisable
only in installments, and the Administrator may waive such installment
exercise provisions at any time in whole or in part based on such
factors as the Administrator may determine, in its sole discretion,
including but not limited to in connection with any "change in control"
of the Company, as defined in any stock option agreement or otherwise.
(4) Method of Exercise. Subject to Section 5(3) above, Stock
Options may be exercised in whole or in part at any time during the
option period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased, accompanied by payment
in full of the purchase price in cash or its equivalent as determined by
the Administrator. As determined by the Administrator, in its sole
discretion, payment in whole or in part may also be made (i) by means of
any cashless exercise procedure approved by the Administrator, (ii) in
the form of unrestricted Stock already owned by the optionee, or (iii)
in the case of the exercise of a Non-Qualified Stock Option, in the form
of Restricted Stock or Performance Shares subject to an award hereunder
(based, in each case, on the Fair Market Value of the Stock on the date
the option is exercised); provided, however, that in the case of an
Incentive Stock Option, the right to make payment in the form of already
owned shares may be authorized only at the time of grant. If payment of
the option exercise price of a Non-Qualified Stock Option is made in
whole or in part in the form of Restricted Stock or Performance Shares,
the shares received upon the exercise of such Stock Option shall be
restricted in accordance with the original terms of the Restricted Stock
or Performance Share award in question, except that the Administrator
may direct that such restrictions shall apply only to that number of
shares equal to the number of shares surrendered upon the exercise of
such option. An optionee shall generally have the rights to dividends
and any other rights of a stockholder with respect to the Stock subject
to the option only after the optionee has given written notice of
exercise, has paid in full for such shares, and, if requested, has given
the representation described in paragraph (1) of Section 10.
The Administrator may require the voluntary surrender of all or
a portion of any Stock Option granted under the Plan as a condition
precedent to the grant of a new Stock Option. Subject to the provisions
of the Plan, such new Stock Option shall be exercisable at the price,
during such period and on such other terms and conditions as are
specified by the Administrator at the time the new Stock Option is
granted. Consistent with the provisions of Section 162(m), to the extent
applicable, upon their surrender, Stock Options shall be canceled and
the shares previously subject to such canceled Stock Options shall again
be available for grants of Stock Options and other awards hereunder. Any
re-pricing of Stock Options granted under the Plan will be limited to
preclude participation by an Eligible Recipient who, at the time of any
such re-pricing, is a member of the Board, a member of the Company's
senior management (which specifically includes, but is not necessarily
limited to, all Officers of the Company, as that term is intended under
Rule 16b of the Securities Exchange Act of 1934, as amended), or a
principal stockholder of the Company.
(5) Loans. The Company may make loans available to Stock Option
holders in connection with the exercise of outstanding options granted
under the Plan, as the Administrator, in its discretion, may determine.
Such loans shall (i) be evidenced by promissory notes entered into by
the Stock Option holders in favor of the Company, (ii) be subject to the
terms and
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conditions set forth in this Section 5(5) and such other terms and
conditions, not inconsistent with the Plan, as the Administrator shall
determine, (iii) bear interest, if any, at such rate as the
Administrator shall determine, and (iv) be subject to Board approval (or
to approval by the Administrator to the extent the Board may delegate
such authority). In no event may the principal amount of any such loan
exceed the sum of (x) the exercise price less the par value (if any) of
the shares of Stock covered by the option, or portion thereof, exercised
by the holder, and (y) any Federal, state, and local income tax
attributable to such exercise. The initial term of the loan, the
schedule of payments of principal and interest under the loan, the
extent to which the loan is to be with or without recourse against the
holder with respect to principal or interest and the conditions upon
which the loan will become payable in the event of the holder's
termination of employment shall be determined by the Administrator.
Unless the Administrator determines otherwise, when a loan is made,
shares of Stock having a Fair Market Value at least equal to the
principal amount of the loan shall be pledged by the holder to the
Company as security for payment of the unpaid balance of the loan, and
such pledge shall be evidenced by a pledge agreement, the terms of which
shall be determined by the Administrator, in its discretion; provided,
however, that each loan shall comply with all applicable laws,
regulations and rules of the Board of Governors of the Federal Reserve
System and any other governmental agency having jurisdiction.
(6) Non-Transferability of Options. Unless otherwise determined
by the Administrator in accordance with Rule 16b-3, no Stock Option
shall be transferable by the optionee, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(7) Termination of Employment or Service. If an optionee's
employment with or service as a director, consultant or advisor to the
Company terminates by reason of death, Disability or for any other
reason, the Stock Option may thereafter be exercised to the extent
provided in the applicable subscription or award agreement, or as
otherwise determined by the Administrator.
(8) Annual Limit on Incentive Stock Options. To the extent that
the aggregate Fair Market Value (determined as of the date the Incentive
Stock Option is granted) of shares of Stock with respect to which
Incentive Stock Options granted to an Optionee under this Plan and all
other option plans of the Company or its Parent Corporation become
exercisable for the first time by the Optionee during any calendar year
exceeds $100,000, such Stock Options shall be treated as Non-Qualified
Stock Options.
SECTION 6. ANNUAL NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
Each non-employee director of the Company shall automatically be granted
a Non-Qualified Stock Option to purchase 6,000 shares of Stock on December 15 of
each calendar year, or if December 15 in any particular year is not a business
day on the first business day thereafter (an "Annual Non-Employee Director
Stock Option"). The terms and conditions of the Annual Non-Employee Director
Stock Options granted pursuant to this Section 6 shall be as follows:
(1) Option Term. The term of the option shall be ten (10) years
from the date of grant.
(2) Exercise Price. The exercise price per share of Stock
subject to such option shall be 100% of the Fair Market Value of the
Stock on the date of grant.
(3) Vesting and Exercisability. The option shall be 100% vested
and exercisable as of the date of grant.
(4) Non-Transferability of Options. Unless otherwise determined
by the Administrator in accordance with Rule 16b-3, the option shall not
be transferable by the optionee, and shall be exercisable, during the
optionee's lifetime, only by the optionee.
(5) Payment of Exercise Price. The exercise price of such option
shall be paid in cash or its equivalent as determined by the
Administrator.
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(6) Termination of Service. If a non-employee director ceases to
serve as a director of the Company the option shall terminate
immediately (except in the event of the Outside Director's death,
Disability or retirement, as described below):
(a) In the event a non-employee director's continuous status
as an outside director terminates as a result of his or her disability,
he or she may, but only within twelve (12) months from the date of
termination, exercise his or her options.
(b) In the event of the death of a non-employee director,
the options may be exercised at any time within twelve (12) months
following the date of death by the optionee's estate or by a person who
acquired the right to exercise the options by bequest or inheritance.
(c) In the event of the retirement of a non-employee
director, the director's length of service as a director shall determine
the time period for exercising options:
(i) for non-employee directors with less than one (1)
year of service prior to retirement, the director may exercise his or
her options at any time within three (3) months following retirement;
(ii) for non-employee directors with more than one (1)
year but less than three (3) years of service prior to retirement, the
director may exercise his or her options at any time within six (6)
months following retirement;
(iii) for non-employee directors with more than three
(3) years but less than five (5) years of service prior to retirement,
the director may exercise his or her options at any time within twelve
(12) months following retirement; and
(iv) for non-employee directors with more than five (5)
years of service prior to retirement, the director may exercise his or
her options at any time within eighteen (18) months following
retirement.
In no event shall the options be exercisable after expiration of the Option
Term. If the options are not exercised (to the extent they were entitled to be
exercised) within the time specified above, the options shall terminate.
SECTION 7. RESTRICTED STOCK, DEFERRED STOCK AND PERFORMANCE SHARES.
(1) General. Restricted Stock, Deferred Stock or Performance Share
awards may be issued either alone or in addition to other awards granted under
the Plan. The Administrator shall determine the Eligible Recipients to whom, and
the time or times at which, grants of Restricted Stock, Deferred Stock or
Performance Share awards shall be made; the number of shares to be awarded; the
price, if any, to be paid by the recipient of Restricted Stock, Deferred Stock
or Performance Share awards; the Restricted Period (as defined in paragraph (3)
hereof) applicable to Restricted Stock or Deferred Stock awards; the performance
objectives applicable to Restricted Stock, Deferred Stock or Performance Share
awards; the date or dates on which restrictions applicable to such Restricted
Stock or Deferred Stock awards shall lapse during such Restricted Period; and
all other conditions of the Restricted Stock, Deferred Stock and Performance
Share awards. The Administrator may also condition the grant of Restricted
Stock, Deferred Stock awards or Performance Shares upon the exercise of Stock
Options, or upon such other criteria as the Administrator may determine, in its
sole discretion. The provisions of Restricted Stock, Deferred Stock or
Performance Share awards need not be the same with respect to each recipient. In
the discretion of the Administrator, loans may be made to Participants in
connection with the purchase of Restricted Stock under substantially the same
terms and conditions as provided in Section 5(5) with respect to the exercise of
Stock Options.
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(2) Awards and Certificates. The prospective recipient of a Restricted
Stock, Deferred Stock or Performance Share award shall not have any rights with
respect to such award, unless and until such recipient has executed an agreement
evidencing the award (a "Restricted Stock Award Agreement," "Deferred Stock
Award Agreement" or "Performance Share Award Agreement," as appropriate) and
delivered a fully executed copy thereof to the Company, within a period of sixty
days (or such other period as the Administrator may specify) after the award
date. Except as otherwise provided below in this Section 7(2), (i) each
Participant who is awarded Restricted Stock or Performance Shares shall be
issued a stock certificate in respect of such shares of Restricted Stock or
Performance Shares; and (ii) such certificate shall be registered in the name of
the Participant, and shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such award.
The Company may require that the stock certificates evidencing
Restricted Stock or Performance Share awards hereunder be held in the custody of
the Company until the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award or Performance Share award, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Stock covered by such award.
With respect to Deferred Stock awards, at the expiration of the
Restricted Period, stock certificates in respect of such shares of Deferred
Stock shall be delivered to the Participant, or his or her legal representative,
in a number equal to the number of shares of Stock covered by the Deferred Stock
award.
(3) Restrictions and Conditions. The Restricted Stock, Deferred Stock
and Performance Share awards granted pursuant to this Section 7 shall be subject
to the following restrictions and conditions:
(a) Subject to the provisions of the Plan and the Restricted
Stock Award Agreement, Deferred Stock Award Agreement or Performance
Share Award Agreement, as appropriate, governing such award, during such
period as may be set by the Administrator commencing on the grant date
(the "Restricted Period"), the Participant shall not be permitted to
sell, transfer, pledge or assign shares of Restricted Stock, Deferred
Stock or Performance Shares awarded under the Plan; provided, however,
that the Restricted Period shall not be less than (i) three years with
respect to restrictions based solely on continued employment with the
Company and (ii) one year with respect to restrictions based on the
achievement of performance-related goals; and provided, further, that
the Administrator may, in its sole discretion, provide for the lapse of
such restrictions in installments and may accelerate or waive such
restrictions in whole or in part based on the attainment of certain
performance related goals, the Participant's termination of employment
or service, death or Disability or the occurrence of a "Change of
Control" as defined in the agreement evidencing such award or otherwise.
(b) Except as provided in paragraph (3)(a) of this Section 7,
the Participant shall generally have, with respect to the shares of
Restricted Stock or Performance Shares, all of the rights of a
stockholder with respect to such stock during the Restricted Period. The
Participant shall generally not have the rights of a stockholder with
respect to stock subject to Deferred Stock awards during the Restricted
Period; provided, however, that dividends declared during the Restricted
Period with respect to the number of shares covered by a Deferred Stock
award shall be paid to the Participant. Certificates for shares of
unrestricted Stock shall be delivered to the Participant promptly after,
and only after, the Restricted Period shall expire without forfeiture in
respect of such shares of Restricted Stock, Performance Shares or
Deferred Stock, except as the Administrator, in its sole discretion,
shall otherwise determine.
(c) The rights of holders of Restricted Stock, Deferred Stock
and Performance Share awards upon termination of employment or service
for any reason during the Restricted Period shall be set forth in the
Restricted Stock Award Agreement, Deferred Stock Award Agreement or
Performance Share Award Agreement, as appropriate, governing such
awards.
(d) With respect to awards intended to constitute "qualified
performance based compensation" for purposes of Section 162(m) of the
Code, the applicable performance goals shall be based upon earnings,
earnings per share, revenue growth or return on equity.
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SECTION 8. AMENDMENT AND TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made that would impair the rights of a
Participant under any award theretofore granted without such Participant's
consent, or that without the approval of the stockholders (as described below)
would:
(1) except as provided in Section 3, increase the total number
of shares of Stock reserved for the purpose of the Plan;
(2) change the class of directors, officers, employees,
consultants and advisors eligible to participate in the Plan;
(3) extend the maximum option period under paragraph (2) of
Section 5 of the Plan; or
(4) change the material terms of grants of Annual Non-Employee
Director Stock Options pursuant to Section 6.
Notwithstanding the foregoing, stockholder approval under this Section 8
shall only be required at such time and under such circumstances as stockholder
approval would be required under Section 162(m) of the Code or other applicable
law, rule or regulation with respect to any material amendment to any employee
benefit plan of the Company.
The Administrator may amend the terms of any award theretofore granted,
prospectively or retroactively, but, subject to Section 3 above, no such
amendment shall impair the rights of any holder without his or her consent.
SECTION 9. UNFUNDED STATUS OF PLAN.
The Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.
SECTION 10. GENERAL PROVISIONS.
(1) The Administrator may require each person purchasing shares pursuant
to a Stock Option to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof. The
certificates for such shares may include any legend which the Administrator
deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Administrator may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and the Administrator may cause a legend or legends to be placed on any
such certificates to make appropriate reference to such restrictions.
(2) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan shall
not confer upon any officer, director, employee, consultant or advisor of the
Company any right to continued employment or service with the Company, as the
case may be, nor shall it interfere in any way with the right of the Company to
terminate the employment or service of any of its officers, directors,
employees, consultants or advisors at any time.
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(3) Each Participant shall, no later than the date as of which the value
of an award first becomes includible in the gross income of the Participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to the
award. The obligations of the Company under the Plan shall be conditional on the
making of such payments or arrangements, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the Participant.
(4) No member of the Board or the Administrator, nor any officer or
employee of the Company acting on behalf of the Board or the Administrator,
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
Board or the Administrator and each and any officer or employee of the Company
acting on their behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
SECTION 11. EFFECTIVE DATE OF PLAN.
The Plan became effective (the "Effective Date") on August 5, 1997, the
date the Company's stockholders formally approved the Plan.
SECTION 12. TERM OF PLAN.
No Stock Option, Restricted Stock, Deferred Stock or Performance Share
award shall be granted pursuant to the Plan on or after the tenth anniversary of
the Effective Date, but awards theretofore granted may extend beyond that date.
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