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EXHIBIT 4.5
AMENDED AND RESTATED REMEDYTEMP, INC.
1996 STOCK INCENTIVE PLAN
(EFFECTIVE AS OF FEBRUARY 18, 1998)
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. Capitalized terms used in the Plan and not
otherwise defined shall have the meanings set forth below:
(a) "AWARD" means an Incentive Award or a Non-employee Director's
Option.
(b) "BOARD" means the Board of Directors of the Company.
(c) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time. Where the context so requires, a reference to a particular
Code section or regulation thereunder shall also be a reference to any successor
provision of the Code to such section or regulation.
(d) "COMMISSION" means the Securities and Exchange Commission.
(e) "COMMITTEE" means the committee appointed by the Board to
administer the Plan and, to the extent required to comply with Rule 16b-3 under
the Exchange Act, consisting of two or more Board members, each of whom shall be
a "Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange
Act. In addition, if Incentive Awards are to be made to persons subject to
Section 162(m) of the Code and such awards are intended to constitute
Performance-Based Compensation, then each of the Committee's members shall also
be an "outside director," as such term is defined in the regulations under
Section 162(m) of the Code.
(f) "COMMON STOCK" means the Class A Common Stock of the Company,
$0.01 par value.
(g) "DIVIDEND EQUIVALENT" means a right granted by the Company
under Section 3.07 to a holder of a Stock Option, Stock Appreciation Right, or
other Award denominated in shares of Common Stock to receive from the Company
during the Applicable Dividend Period (as defined in Section 3.07) payments
equivalent to the amount of dividends payable to holders of the number of shares
of Common Stock underlying such Stock Option, Stock Appreciation Right, or other
Award.
(h) "ELIGIBLE PERSON" shall include officers or key employees,
consultants, and advisors of the Company (as determined by the Committee) other
than Non-employee Directors.
(i) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended. Where the context so requires, a reference to a particular section of
the Exchange Act or rule thereunder shall also refer to any successor provision
to such section or rule.
(j) "FAIR MARKET VALUE" of a share of the Company's capital stock
as of a particular date shall be: (i) if the stock is listed on an established
stock exchange or exchanges
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(including, for this purpose, The Nasdaq National Market), the mean between the
highest and lowest sale prices of the stock quoted for such date in the
Transactions Index of each such exchange as averaged with such mean price as
reported on any and all other exchanges, as published in The Wall Street Journal
and determined by the Committee, or, if no sale price was quoted in any such
Index for such date, then as of the next preceding date on which such a sale
price was quoted; or (ii) if the stock is not then listed on an exchange, the
average of the closing bid and asked prices per share for the stock in the
over-the-counter market as quoted on the NASDAQ system on such date (in the case
of (i) or (ii), subject to adjustment as and if necessary and appropriate to set
an exercise price not less than 100% of the fair market value of the stock on
the date an option is granted); or (iii) if the stock is not then listed on an
exchange or quoted in the over-the-counter market, an amount determined in good
faith by the Committee; provided, however, that when appropriate, the Committee
in determining Fair Market Value of capital stock of the Company may take into
account such other factors as it may deem appropriate under the circumstances.
Notwithstanding the foregoing, the Fair Market Value of capital stock for
purposes of grants of Incentive Stock Options shall be determined in compliance
with applicable provisions of the Code. The Fair Market Value of rights or
property other than capital stock of the Company means the fair market value
thereof as determined by the Committee on the basis of such factors as it may
deem appropriate.
(k) "INCENTIVE AWARD" means any Stock Option, Restricted Stock,
Stock Appreciation Right or Dividend Equivalent granted or sold to an Eligible
Person under the Plan, but not a Non-employee Director's Option.
(l) "INCENTIVE STOCK OPTION" means a Stock Option that qualifies
as an incentive stock option under Section 422 of the Code and the regulations
thereunder.
(m) "JUST CAUSE DISMISSAL" means a termination of a Recipient's
employment for any of the following reasons: (i) the Recipient violates any
reasonable rule or regulation of the Board or the Recipient's superiors or the
Chief Executive Officer or President of the Company that results in damage to
the Company or which the Recipient fails to correct within a reasonable time
after written notice; (ii) any willful misconduct or gross negligence by the
Recipient in the discharge of the responsibilities assigned to him or her; (iii)
any willful failure to perform his or her job as required to meet Company
objectives; (iv) any wrongful conduct of a Recipient which has an adverse impact
on the Company or which constitutes a misappropriation of Company assets; (v)
the Recipient's performing services for any other person or entity which
competes with the Company while he or she is employed by the Company, without
the written approval of the Chief Executive Officer or President of the Company;
or (vi) any other conduct that the Board or Committee determines constitutes
Just Cause for Dismissal, provided, however, that if a Recipient is party to an
employment agreement with the Company providing for just cause dismissal (or
some comparable notion) of Recipient from his or her employment with the
Company, "Just Cause Dismissal" purposes of the Plan shall have the same meaning
as ascribed thereto or to such comparable notion in such employment agreement.
(n) "NON-EMPLOYEE DIRECTOR" means a director of the Company who
qualifies as a "Non-Employee Director" under Rule 16b-3 under the Exchange Act.
(o) "NON-EMPLOYEE DIRECTOR'S OPTION" means a Stock Option granted
to a Non-employee Director pursuant to Article IV of the Plan.
(p) "NON-QUALIFIED STOCK OPTION" means a Stock Option that is not
an Incentive Stock Option.
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(q) "OPTION" or "STOCK OPTION" means a right to purchase Common
Stock granted under the Plan, and can be an Incentive Stock Option or a
Non-qualified Stock Option.
(r) "PAYMENT EVENT" means the event or events giving rise to the
right to payment of a Performance Award.
(s) "PERFORMANCE AWARD" means an award granted under Section
3.03, payable in cash, Common Stock or a combination thereof, which vests and
becomes payable over a period of time upon attainment of performance criteria
established in connection with the grant of the award.
(t) "PERFORMANCE-BASED COMPENSATION" means performance-based
compensation as described in Section 162(m) of the Code and the regulations
thereunder. If the amount of compensation a Recipient will receive under any
Incentive Award is not based solely on an increase in the value of Common Stock
after the date of grant or award, the Committee, in order to qualify an
Incentive Award as performance-based compensation under Section 162(m) of the
Code and the regulations thereunder, can condition the grant, award, vesting, or
exercisability of such an award on the attainment of a preestablished, objective
performance goal. For this purpose, a preestablished, objective performance goal
may include one or more of the following performance criteria: (i) cash flow,
(ii) earnings per share (including earnings before interest, taxes, and
amortization), (iii) return on equity, (iv) total stockholder return, (v) return
on capital, (vi) return on assets or net assets, (vii) income or net income,
(viii) operating margin, (ix) return on operating revenue, and (x) any other
similar performance criteria contemplated by the regulations under Section
162(m).
(u) "PERMANENT DISABILITY" means that the Recipient becomes
physically or mentally incapacitated or disabled so that he or she is unable to
perform substantially the same services as he or she performed prior to
incurring such incapacity or disability (the Company, at its option and expense,
being entitled to retain a physician to confirm the existence of such incapacity
or disability, and the determination of such physician to be binding upon the
Company and the Recipient), and such incapacity or disability continues for a
period of three consecutive months or six months in any 12-month period or such
other period(s) as may be determined by the Committee with respect to any
Option, provided that for purposes of determining the period during which an
Incentive Stock Option may be exercised pursuant to Section 3.02(g)(ii) hereof,
Permanent Disability shall mean "permanent and total disability" as defined in
Section 22(e) of the Code.
(v) "PURCHASE PRICE" means the purchase price (if any) to be paid
by a Recipient for Restricted Stock as determined by the Committee (which price
shall be at least equal to the minimum price required under applicable laws and
regulations for the issuance of Common Stock which is nontransferable and
subject to a substantial risk of forfeiture until specific conditions are met).
(w) "RECIPIENT" means a recipient of an Award hereunder.
(x) "RESTRICTED STOCK" means Common Stock that is the subject of
an award made under Section 3.04 and which is nontransferable and subject to a
substantial risk of forfeiture until specific conditions are met as set forth in
this Plan and in any statement evidencing the grant of such Award.
(y) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
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(z) "STOCK APPRECIATION RIGHT" or "SAR" means a right granted
under Section 3.05 to receive a payment that is measured with reference to the
amount by which the Fair Market Value of a specified number of shares of Common
Stock appreciates from a specified date, such as the date of grant of the SAR,
to the date of exercise.
(aa) "STOCK PAYMENT" means a payment in shares of the Company's
Common Stock to replace all or any portion of the compensation (other than base
salary) that would otherwise become payable to a Recipient.
ARTICLE II
GENERAL
2.01 ADOPTION. The Plan has been adopted by the Board and
approved by the shareholders of the Company and is effective immediately prior
to the closing of the initial public offering of the Company's securities.
2.02 PURPOSE. The purpose of the Plan is to promote the interests
of the Company and its shareholders by using investment interests in the Company
to attract and retain key personnel, to encourage and reward their contributions
to the performance of the Company, and to align their interests with the
interests of Company's shareholders.
2.03 ADMINISTRATION OF THE PLAN. The Plan shall be administered
by the Committee, which, subject to the express provisions of the Plan, shall
have the power to construe the Plan and any agreements or memoranda defining the
rights and obligations of the Company and Recipients thereunder, to determine
all questions arising thereunder, to adopt and amend such rules and regulations
for the administration thereof as it may deem desirable, and otherwise to carry
out the terms of the Plan and such agreements and confirming memoranda. The
interpretation and construction by the Committee of any provisions of the Plan
or of any Award granted under the Plan shall be final. Any action taken by, or
inaction of, the Committee relating to the Plan or Awards shall be within the
absolute discretion of the Committee and shall be conclusive and binding upon
all persons. No member of the Committee shall be liable for any such action or
inaction except in circumstances involving bad faith of himself or herself.
Subject only to compliance with the express provisions hereof, the Committee may
act in its absolute discretion in matters related to the Plan or Awards,
provided, however, that notwithstanding anything herein to the contrary, the
Committee shall have no authority or discretion as to the selection of persons
eligible to receive Non-employee Director's Options or the timing, exercise
price, or number of shares covered by Non-employee Director's Options, which
matters are specifically governed by the Plan. Any action of the Committee with
respect to administration of the Plan shall be taken pursuant to a majority vote
or unanimous written consent of its members. Subject to the requirements of
Section 1.01(e), the Board may from time to time increase or decrease the number
of members of the Committee, remove from membership on the Committee all or any
portion of its members, and appoint such person or persons as it desires to fill
any vacancy existing on the Committee, whether caused by removal, resignation or
otherwise.
2.04 PARTICIPATION. A person shall be eligible to receive grants
of Incentive Awards under the Plan if, at the time of the Award's grant, he or
she is an Eligible Person.
2.05 SHARES OF COMMON STOCK SUBJECT TO PLAN.
(a) Plan Limit and Counting. The shares that may be issued upon
exercise of or in the form of Awards under the Plan shall be authorized and
unissued shares of Common Stock, previously issued shares of Common Stock
reacquired by the Company, and unused
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Award shares pursuant to the final sentence of this Section 2.05(a). The
aggregate number of shares that may be issued pursuant to Awards under the Plan
shall not exceed 1,225,000 shares of Common Stock, subject to adjustment in
accordance with Article V. Shares of Common Stock subject to unexercised
portions of any Award granted under the Plan that expire, terminate or are
cancelled, and shares of Common Stock issued pursuant to an Award under the Plan
that are reacquired by the Company pursuant to the terms of the Award under
which such shares were issued, will again become available for the grant of
further Awards under this Plan.
(b) Annual Limit. Notwithstanding any other provision of this
Plan, no Eligible Person shall be granted Incentive Awards with respect to more
than 100,000 shares of Common Stock in any one calendar year; provided, however,
that this limitation shall not apply if it is not required in order for the
compensation attributable to Incentive Awards hereunder to qualify as
Performance-Based Compensation. The limitation set forth in this Section 2.05(b)
shall be subject to adjustment as provided in Article V, but only to the extent
such adjustment would not affect the status of compensation attributable to
Incentive Awards hereunder as Performance-Based Compensation.
2.06 AWARDS SUBJECT TO PLAN.
(a) Terms. Each Award shall be subject to the terms and
conditions of the Plan and such other terms and conditions (whether or not
applicable to any other award) established by the Committee as are not
inconsistent with the purpose and provisions of the Plan including, without
limitation, provisions to assist the Recipient in financing the purchase of
Common Stock through the exercise of Stock Options, provisions for the
forfeiture of or restrictions on resale or other disposition of shares of Common
Stock acquired under any Award, provisions giving the Company the right to
repurchase shares of Common Stock acquired under any Award in the event the
Recipient elects to dispose of such shares, and provisions to comply with
federal and state securities laws and federal and state income tax withholding
requirements.
(b) Award Documents. Each Award granted under the Plan shall be
evidenced by an award agreement duly executed on behalf of the Company and by
the Recipient or, in the Committee's discretion, a confirming memorandum issued
by the Company to the Recipient, setting forth such terms and conditions
applicable to the Award as the Committee may in its discretion determine. Such
option agreements or confirming memoranda may but need not be identical and
shall comply with and be subject to the terms and conditions of the Plan, a copy
of which shall be provided to each Recipient and incorporated by reference into
each option agreement or confirming memorandum. Any award agreement or
confirming memorandum may contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Committee.
2.07 AMENDMENTS.
(a) Amendment and Suspension of the Plan. The Board or the
Committee may, insofar as permitted by applicable laws and regulations, from
time to time suspend or discontinue the Plan or revise or amend it in any
respect whatsoever, and the Plan as so revised or amended will govern all
options thereunder, including those granted before such revision or amendment,
except that no such amendment shall impair or diminish in any material respect
any rights or impose additional material obligations under any Award theretofore
granted under the Plan without the consent of the person to whom such Award was
granted. Amendments shall be subject to approval by the Company's shareholders
only to the extent required to comply with applicable laws or regulations.
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(b) Amendment of Incentive Awards. Subject to the requirements
set forth in the Plan for amendment of particular Incentive Awards, the
Committee may, with the consent of a Recipient, make such modifications in the
terms and conditions of an Incentive Award as it deems advisable. Without
limiting the generality of the foregoing, the Committee may, in its discretion
with the consent of the Recipient, at any time and from time to time after the
grant of any Incentive Award accelerate or extend the vesting or exercise period
of the Incentive Award in whole or part, and adjust or reduce the purchase or
exercise price of Incentive Awards held by such Recipient by cancellation of
such Incentive Awards and granting of Incentive Awards at lower purchase or
exercise prices or by modification, extension or renewal of such Incentive
Awards.
(c) Other Rights. Except as otherwise provided in this Plan or in
the applicable award agreement or confirming memorandum, no amendment,
suspension or termination of the Plan will, without the consent of the
Recipient, alter, terminate, impair or adversely affect any right or obligation
under any Award previously granted under the Plan.
2.08 TERM OF PLAN. Awards may be granted under the Plan until the
tenth anniversary of the effective date of the Plan, whereupon the Plan shall
terminate. No Awards may be granted during any suspension of the Plan or after
its termination for any reason. Notwithstanding the foregoing, each Award
properly granted under the Plan shall remain in effect until such Award has been
exercised or terminated in accordance with its terms and the terms of the Plan.
2.09 RESTRICTIONS. All Awards granted under the Plan shall be
subject to the requirement that, if at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of the shares
subject to Awards granted under the Plan upon any securities exchange or under
any state or federal law, or the consent or approval of any government or
regulatory body or authority, is necessary or desirable as a condition of, or in
connection with, the granting of such an Award or the issuance, if any, or
purchase of shares in connection therewith, such Award may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company. Unless the shares of stock covered by an Award
granted under the Plan have been effectively registered under the Securities
Act, the Company shall be under no obligation to issue such shares unless the
Recipient shall give a written representation and undertaking to the Company
satisfactory in form and scope to counsel to the Company and upon which, in the
opinion of such counsel, the Company may reasonably rely, that he or she is
acquiring such shares for his or her own account as an investment and not with a
view to, or for sale in connection with, the distribution of any such shares of
stock, and that he or she will make no transfer of the same except in compliance
with any rules and regulations in force at the time of such transfer under the
Securities Act, or any other applicable law or regulation, and that if shares of
stock are issued without such registration, a legend to this effect may be
endorsed upon the securities so issued, and the Company may order its transfer
agent to stop transfers of such shares.
2.10 NONASSIGNABILITY. No Award granted under the Plan shall be
assignable or transferable except (a) by will or by the laws of descent and
distribution, or (b) subject to the final sentence of this Section 2.10, upon
dissolution of marriage pursuant to a qualified domestic relations order or, in
the discretion of the Committee and under circumstances that would not adversely
affect the interests of the Company, pursuant to a nominal transfer that does
not result in a change in beneficial ownership. During the lifetime of a
Recipient, an Award granted to him or her shall be exercisable only by the
Recipient (or the Recipient's permitted transferee) or his or her guardian or
legal representative. Notwithstanding the foregoing, (x) no Award owned by a
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Recipient subject to Section 16 of the Exchange Act may be assigned or
transferred in any manner inconsistent with Rule 16b-3 as interpreted and
administered by the Commission and its staff, and (y) Incentive Stock Options
(or other Awards subject to transfer restrictions under the Code) may not be
assigned or transferred in violation of Section 422(b)(5) of the Code or the
Treasury Regulations thereunder, and nothing herein is intended to allow such
assignment or transfer.
2.11 WITHHOLDING TAXES. Whenever shares of stock are to be issued
upon exercise of or in connection with an Award granted under the Plan or
subsequently transferred, the Committee shall have the right to require the
Recipient to remit to the Company an amount sufficient to satisfy any federal,
state and local withholding tax requirements prior to issuance of such shares.
The Committee may, in the exercise of its discretion, allow satisfaction of tax
withholding requirements by accepting delivery of stock of the Company or by
withholding a portion of the stock otherwise issuable in connection with an
Award.
2.12 RIGHTS OF ELIGIBLE PERSONS AND RECIPIENTS. Except as
otherwise set forth herein, a Recipient or a permitted transferee of an Award
shall have no rights as a shareholder with respect to any shares issuable or
issued in connection with the Award until the date of the receipt by the Company
of all amounts payable in connection with exercise of the Award and performance
by the Recipient of all obligations thereunder. Status as an Eligible Person
shall not be construed as a commitment that any Award will be granted under this
Plan to an Eligible Person or to Eligible Persons generally. Nothing contained
in this Plan (or in award agreements or confirming memoranda or in any other
documents related to this Plan or to Awards granted hereunder) shall confer upon
any Eligible Person or Recipient any right to continue in the employ of the
Company or any of its subsidiaries or affiliates or constitute any contract or
agreement of employment or engagement, or interfere in any way with the right of
the Company or any of its subsidiaries or affiliates to reduce such person's
compensation or other benefits or to terminate the employment of such Eligible
Person or Recipient, with or without cause. No person shall have any right,
title or interest in any fund or in any specific asset (including shares of
capital stock) of the Company or any of its subsidiaries or affiliates by reason
of any Award granted hereunder. Neither this Plan (or any documents related
hereto) nor any action taken pursuant hereto shall be construed to create a
trust of any kind or a fiduciary relationship between the Company or any of its
subsidiaries or affiliates and any person. To the extent that any person
acquires a right to receive an Award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Company.
2.13 OTHER COMPENSATION PLANS. The adoption of the Plan shall not
affect any other stock option, incentive or other compensation plans in effect
for the Company, and the Plan shall not preclude the Company from establishing
any other forms of incentive or other compensation for employees, directors, or
advisors of the Company, whether or not approved by shareholders.
2.14 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon
the successors and assigns of the Company.
2.15 PARTICIPATION BY FOREIGN EMPLOYEES. Notwithstanding anything
to the contrary herein, the Committee may, consistent with the purposes of the
Plan, modify grants of Awards to confer the intended benefits of the Plan upon
Recipients who are foreign nationals or employed outside of the United States to
recognize differences in applicable law, tax policy or local custom.
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ARTICLE III
AWARDS
3.01 GRANTS OF AWARDS. Subject to the express provisions of the
Plan, the Committee may from time to time in its discretion select the Eligible
Persons to whom, and the time or times at which, Incentive Awards shall be
granted or sold, the nature of each Incentive Award, the number of shares of
Common Stock or the number of rights that make up or underlie each Incentive
Award, the period for the exercise of each Incentive Award, the performance
criteria (which need not be identical) utilized to measure the value of
Performance Awards, and such other terms and conditions applicable to each
individual Incentive Award as the Committee shall determine. The Committee may
grant at any time new Incentive Awards to an Eligible Person who has previously
received Incentive Awards or other grants (including other stock options)
whether such prior Incentive Awards or such other grants are still outstanding,
have previously been exercised in whole or in part, or are cancelled in
connection with the issuance of new Incentive Awards. The Committee may grant
Incentive Awards singly or in combination or in tandem with other Incentive
Awards as it determines in its discretion. The purchase price or initial value
and any and all other terms and conditions of the Incentive Awards may be
established by the Committee without regard to existing Incentive Awards or
other grants. Further, the Committee may amend in a manner not inconsistent with
the Plan the terms of any existing Incentive Award previously granted to such
Eligible Person, provided that the consent of the Recipient shall be required
for amendments that impair or diminish in any material respect any rights or
impose additional material obligations under the Incentive Award to be amended.
Notwithstanding the foregoing, however, members of the Committee shall not be
eligible to receive Incentive Awards.
3.02 STOCK OPTIONS.
(a) Nature of Stock Options. Stock Options may be Incentive Stock
Options or Non-qualified Stock Options; Stock Options granted as Incentive Stock
Options that fail or cease to qualify as such shall be treated as Non-qualified
Stock Options hereunder.
(b) Setting the Exercise Price. The exercise price for each
Option shall be determined by the Committee at the date such Option is granted.
The exercise price may be less than the Fair Market Value of the Common Stock
subject to the Option, provided that in no event shall the exercise price be
less than the par value of the shares of Common Stock subject to the Option, and
provided further that the exercise price of an Incentive Stock Option shall be
not less than such amount as is necessary to enable such Option to be treated as
an "incentive stock option" within the meaning of Section 422 of the Code. The
Committee, with the consent of the Recipient, and subject to compliance with
statutory or administrative requirements applicable to Incentive Stock Options,
may amend the terms of any Option (other than a Non-employee Director's Option)
to provide that the exercise price of the shares remaining subject to the Option
shall be reestablished at a price below the existing exercise price thereof or
effect a reduction in exercise price by cancellation of an existing option and
grant of a replacement option at an exercise price below the existing exercise
price thereof. If the exercise price of an Option is reduced (or such Option is
canceled for a new Option) and such Option is Performance-Based Compensation,
the reduction of the Option's price (or the cancellation and grant of a new
Option) shall be treated as the grant of a new Option and both the old and new
Option shall be taken into account for purposes of applying the stock limit of
Section 2.05(b). No modification of any other term or provision of any Option
which is amended in accordance with the foregoing shall be required, although
the Committee may, in its discretion, make such further modifications of any
such Option (other than Non-employee Director's Options) as are not inconsistent
with the Plan.
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(c) Payment of the Exercise Price. The exercise price shall be
payable upon the exercise of an Option in legal tender of the United States or
capital stock of the Company delivered in transfer to the Company by or on
behalf of the person exercising the Option and duly endorsed in blank or
accompanied by stock powers duly endorsed in blank, with signatures guaranteed
in accordance with the Exchange Act if required by the Committee, or retained by
the Company from the Stock otherwise issuable upon exercise or surrender of
vested and/or exercisable Awards or other equity incentive awards previously
granted to the Recipient and being exercised (if applicable) (in either case
valued at Fair Market Value as of the exercise date); or such other
consideration as the Committee may from time to time in the exercise of its
discretion deem acceptable in any particular instance, provided, however, that
the Committee may, in the exercise of its discretion, (i) allow exercise of an
Option in a broker-assisted or similar transaction in which the exercise price
is not received by the Company until promptly after exercise, and/or (ii) allow
the Company to loan the exercise price to the person entitled to exercise the
Option, if the exercise will be followed by a prompt sale of some or all of the
underlying shares and a portion of the sales proceeds is dedicated to full
payment of the Exercise Price and amounts required pursuant to Section 2.11.
(d) Option Period and Vesting. Options granted hereunder (other
than Non-employee Director's Options) shall vest and may be exercised as
determined by the Committee, except that exercise of such Options after
termination of the Recipient's employment shall be subject to Section 3.02(g).
Each Option granted hereunder (other than a Non-employee Director's Option) and
all rights or obligations thereunder shall expire on such date as shall be
determined by the Committee, but not later than ten years after the date the
Option is granted, or five years after the date of grant in the case of a
Recipient of an Incentive Stock Option who at the time of grant owns more than
10% of the combined voting power of the Company (after application of the
constructive ownership rules of Section 424(d) of the Code), or any Parent or
Subsidiary (as defined in Sections 424(e) and (f) of the Code, respectively),
and shall be subject to earlier termination as herein provided.
(e) Exercise of Options. Except as otherwise provided herein, an
Option may become exercisable, in whole or in part, on the date or dates
specified by the Committee (or, in the case of Non-employee Director's Options,
the Plan) and thereafter shall remain exercisable until the expiration or
earlier termination of the Option. No Option shall be exercisable except in
respect of whole shares, and fractional share interests shall be disregarded.
Not less than 100 shares of stock (or such other amount as is set forth in the
applicable option agreement or confirming memorandum) may be purchased at one
time and Options must be exercised in multiples of 100 unless the number
purchased upon exercise is the total number at the time available for purchase
under the terms of the Option. An Option shall be deemed to be exercised when
the Secretary or other designated official of the Company receives written
notice of such exercise from the Recipient, together with payment of the
exercise price and any amounts required under Section 2.11. Notwithstanding any
other provision of the Plan, the Committee may impose, by rule and in option
agreements or confirming memoranda, such conditions upon the exercise of Options
(including, without limitation, conditions limiting the time of exercise to
specified periods) as may be required to satisfy applicable regulatory
requirements, including without limitation Rule 10b-5 or Rule 16b-3 (or any
successor rule) under the Exchange Act and any applicable section of or
regulation under the Code.
(f) Limitation on Exercise of Incentive Stock Options. The
aggregate Fair Market Value (determined as of the respective date or dates of
grant) of the stock for which one or more Options granted to any Recipient under
the Plan (or any other option plan of the Company or any of its subsidiaries or
affiliates) may for the first time become exercisable as Incentive Stock Options
under the federal tax laws during any one calendar year shall not exceed
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$100,000. Any Options granted as Incentive Stock Options pursuant to the Plan in
excess of such limitation shall be treated as Non-qualified Stock Options.
(g) Termination of Employment.
(i) Termination for Cause. Except as otherwise provided
in a written agreement between the Company and the Recipient, which may be
entered into at any time before or after termination, in the event of a Just
Cause Dismissal of a Recipient all of the Recipient's unexercised Options,
whether or not vested, shall expire and become unexercisable as of the date of
such Just Cause Dismissal.
(ii) Termination other than Just Cause Dismissal.
Subject to subsection (i) above and subsection (iii) below, and except as
otherwise provided in a written agreement between the Company and the Recipient,
or a confirming memorandum issued by the Company to the Recipient with the
Recipient's consent, which may be entered into or delivered at any time before
or after termination, in the event of a Recipient's termination of employment
for:
(A) any reason other than Just Cause Dismissal,
death, or Permanent Disability, the Recipient's unexercised Options,
whether or not vested, shall expire and become unexercisable as of the
earlier of (1) the date such Options would expire in accordance with
their terms if the Recipient remained employed or (2) three calendar
months after the date of termination in the case of Incentive Stock
Options, or six months after the date of termination in the case of
Non-qualified Stock Options.
(B) death or Permanent Disability, the Recipient's
unexercised Options, whether or not vested, shall expire and become
unexercisable as of the earlier of (1) the date such Options would
expire in accordance with their terms if the Recipient remained employed
or (2) 12 months after the date of termination.
(iii) Alteration of Vesting and Exercise Periods.
Notwithstanding anything to the contrary in subsections (i) or (ii) above, the
Committee may in its discretion pursuant to Section 2.07(b) designate shorter or
longer periods to exercise Options following a Recipient's termination of
employment. Options shall be exercisable by a Recipient (or his successor in
interest) following such Recipient's termination of employment only to the
extent that installments thereof had become exercisable on or prior to the date
of such termination unless the Company has a written agreement with the
Recipient of the Option providing otherwise or the vesting period is extended
pursuant to Section 2.07(b).
3.03 PERFORMANCE AWARDS.
(a) Grant of Performance Award. The Committee shall determine the
performance criteria (which need not be identical and may be established on an
individual or group basis) governing Performance Awards, the terms thereof, and
the form and time of payment of Performance Awards.
(b) Payment of Award; Limitation. Upon satisfaction of the
conditions applicable to a Performance Award, payment will be made to the
Recipient in cash or in shares of Common Stock valued at Fair Market Value or a
combination of Common Stock and cash, as the Committee in its discretion may
determine.
(c) Annual Limit. Notwithstanding any other provision of this
Plan, no Eligible Person shall be paid a Performance Award in excess of $250,000
in any one calendar
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year; provided, however, that this limitation shall not apply to the extent it
is not required in order for the compensation attributable to the Performance
Award hereunder to qualify as Performance-Based Compensation.
(d) Expiration of Performance Award. If any Recipient's
employment with the Company is terminated for any reason other than normal
retirement, death, or Permanent Disability prior to the time a Performance Award
or any portion thereof becomes payable, all of the Recipient's rights under the
unpaid portion of the Performance Award shall expire and terminate unless
otherwise determined by the Committee. In the event of termination of employment
by reason of death, Permanent Disability or normal retirement, the Committee, in
its discretion, may determine what portions, if any, of the Performance Award
should be paid to the Recipient.
3.04 RESTRICTED STOCK.
(a) Award of Restricted Stock. The Committee shall determine the
Purchase Price (if any) applicable to Restricted Stock, the terms of payment of
the Purchase Price, the restrictions upon the Restricted Stock, and when such
restrictions shall lapse.
(b) Requirements of Restricted Stock. All shares of Restricted
Stock granted or sold pursuant to the Plan will be subject to the following
conditions:
(i) No Transfer. The shares may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, alienated or
encumbered until the restrictions are removed or expire;
(ii) Certificates. The Committee may require that the
certificates representing Restricted Stock granted or sold to a Recipient
pursuant to the Plan remain in the physical custody of an escrow holder or the
Company until all restrictions are removed or expire;
(iii) Restrictive Legends. Each certificate representing
Restricted Stock granted or sold to a Recipient pursuant to the Plan will bear
such legend or legends making reference to the restrictions imposed upon such
Restricted Stock as the Committee in its discretion deems necessary or
appropriate to enforce such restrictions; and
(iv) Other Restrictions. The Committee may impose such
other conditions on Restricted Stock as the Committee may deem advisable
including, without limitation, restrictions under the Securities Act, under the
Exchange Act, under the requirements of any stock exchange upon which such
Restricted Stock or shares of the same class are then listed and under any blue
sky or other securities laws applicable to such shares.
(c) Lapse of Restrictions. The restrictions imposed upon
Restricted Stock will lapse in accordance with such schedule or other conditions
as are determined by the Committee.
(d) Rights of Recipient. Subject to the provisions of Section
3.04(b) and any restrictions imposed upon the Restricted Stock, the Recipient
will have all rights of a shareholder with respect to the Restricted Stock
granted or sold to such Recipient under the Plan, including the right to vote
the shares and receive all dividends and other distributions paid or made with
respect thereto.
(e) Termination of Employment. Unless the Committee in its
discretion determines otherwise, upon a Recipient's termination of employment
for any reason, all of the
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Recipient's Restricted Stock remaining subject to restrictions imposed pursuant
to the Plan on the date of such termination of employment shall be repurchased
by the Company at the Purchase Price (if any) paid therefor by the Recipient.
3.05 STOCK APPRECIATION RIGHTS.
(a) Granting of Stock Appreciation Rights. The Committee may
approve the grant to Eligible Persons of Stock Appreciation Rights, related or
unrelated to Options, at any time.
(b) SARs Related to Options.
(i) A Stock Appreciation Right granted in connection
with an Option granted under this Plan will entitle the holder of the related
Option, upon exercise of the Stock Appreciation Right, to surrender such Option,
or any portion thereof to the extent unexercised, with respect to the number of
shares as to which such Stock Appreciation Right is exercised, and to receive
payment of an amount computed pursuant to Section 3.05(b)(iii). Such Option
will, to the extent surrendered, then cease to be exercisable.
(ii) A Stock Appreciation Right granted in connection
with an Option hereunder will be exercisable at such time or times, and only to
the extent that, the related Option is exercisable, and will not be transferable
except to the extent that such related Option may be transferable.
(iii) Upon the exercise of a Stock Appreciation Right
related to an Option, the Holder will be entitled to receive payment of an
amount determined by multiplying: (i) the difference obtained by subtracting the
Exercise Price of a share of Common Stock specified in the related Option from
the Fair Market Value of a share of Common Stock on the date of exercise of such
Stock Appreciation Right (or as of such other date or as of the occurrence of
such event as may have been specified in the instrument evidencing the grant of
the Stock Appreciation Right), by (ii) the number of shares as to which such
Stock Appreciation Right is exercised.
(c) SARs Unrelated to Options. The Committee may grant Stock
Appreciation Rights unrelated to Options to Eligible Persons. Section
3.05(b)(iii) shall be used to determine the amount payable at exercise under
such Stock Appreciation Right, except that in lieu of the Option Exercise Price
specified in the related Option the initial base amount specified in the Award
shall be used.
(d) Limits. Notwithstanding the foregoing, the Committee, in its
discretion, may place a dollar limitation on the maximum amount that will be
payable upon the exercise of a Stock Appreciation Right under the Plan.
(e) Payments. Payment of the amount determined under the
foregoing provisions may be made solely in whole shares of Common Stock valued
at their Fair Market Value on the date of exercise of the Stock Appreciation
Right or, alternatively, at the sole discretion of the Committee, in cash or in
a combination of cash and shares of Common Stock as the Committee deems
advisable. The Committee has full discretion to determine the form in which
payment of A Stock Appreciation Right will be made and to consent to or
disapprove the election of a Recipient to receive cash in full or partial
settlement of a Stock Appreciation Right. If the Committee decides to make full
payment in shares of Common Stock, and the amount payable results in a
fractional share, payment for the fractional share will be made in cash.
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(f) Rule 16b-3. The Committee may, at the time a Stock
Appreciation Right is granted, impose such conditions on the exercise of the
Stock Appreciation Right as may be required to satisfy the requirements of Rule
16b-3 under the Exchange Act (or any other comparable provisions in effect at
the time or times in question).
(g) Termination of Employment. Section 3.02(g) will govern the
treatment of Stock Appreciation Rights upon the termination of a Recipient's
employment with the Company.
3.06 STOCK PAYMENTS. The Committee may approve Stock Payments of
the Company's Common Stock to any Eligible Person for all or any portion of the
compensation (other than base salary) or other payment that would otherwise
become payable by the Company to the Eligible Person in cash.
3.07 DIVIDEND EQUIVALENTS. The Committee may grant Dividend
Equivalents to any Recipient who has received a Stock Option, SAR, or other
Award denominated in shares of Common Stock. Such Dividend Equivalents shall be
effective and shall entitle the recipients thereof to payments during the
"APPLICABLE DIVIDEND PERIOD," which shall be (i) the period between the date the
Dividend Equivalent is granted and the date the related Stock Option, SAR, or
other Award is exercised, terminates, or is converted to Common Stock, or (ii)
such other time as the Committee may specify in the written instrument
evidencing the grant of the Dividend Equivalent. Dividend Equivalents may be
paid in cash, Common Stock, or other Awards; the amount of Dividend Equivalents
paid other than in cash shall be determined by the Committee by application of
such formula as the Committee may deem appropriate to translate the cash value
of dividends paid to the alternative form of payment of the Dividend Equivalent.
Dividend Equivalents shall be computed as of each dividend record date and shall
be payable to recipients thereof at such time as the Committee may determine.
Notwithstanding the foregoing, if it is intended that an Incentive Award qualify
as Performance-Based Compensation and the amount of the compensation the
Eligible Person could receive under the award is based solely on an increase in
value of the underlying stock after the date of grant or award (i.e., the grant,
vesting, or exercisability of the award is not conditioned upon the attainment
of a preestablished, objective performance goal described in Section 1.01(t)),
then the payment of any Dividend Equivalents related to the award shall not be
made contingent on the exercise of the award.
ARTICLE IV
NON-EMPLOYEE DIRECTOR'S OPTIONS
4.01 GRANTS OF ORIGINAL AND INITIAL OPTIONS.
(a) Original Options. Persons serving as Non-employee Directors
as of the closing of the initial public offering of the Company's securities
shall, upon such closing, receive a one-time grant of an option to purchase up
to 10,000 shares (or 15,000 shares if such person has served as a director of
the Company for at least two years) of the Company's Common Stock at an exercise
price per share equal to the price to the public in such initial public
offering, subject to adjustment as set forth in Article V. Options granted under
this Section 4.01(a) are "ORIGINAL OPTIONS" for purposes hereof.
(b) Initial Options. Each Non-employee Director who joins the
Board after the consummation of the initial public offering of the Company's
securities shall, upon first becoming a Non-employee Director ("Eligible
Director"), receive a one-time grant of an option to purchase up to 10,000
shares of the Company's Common Stock at an exercise price per share equal to the
Fair Market Value of the Company's Common Stock on the date of grant, subject to
(a) vesting as
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set forth in Section 4.03, and (b) adjustment as set forth in Article V. Options
granted under this Section 4.01(b) are "INITIAL OPTIONS" for purposes hereof.
4.02 GRANTS OF ADDITIONAL OPTIONS. Immediately following the
annual meeting of shareholders of the Company next following an Eligible
Director's becoming an Eligible Director, and immediately following each
subsequent annual meeting of shareholders of the Company, in each case if the
Eligible Director has served as a director since his or her election or
appointment and has been re-elected as a director at such annual meeting or is
continuing as a director without being re-elected due to the classification of
the board, such Eligible Director shall automatically receive an option to
purchase up to 5,000 shares of the Company's Common Stock (an "ADDITIONAL
OPTION"). In addition to the Additional Options described above, an individual
who was previously an Eligible Director and received an initial grant of stock
options under the Plan or pursuant to a prior option plan for the Company's
directors, who then ceased to be a director for any reason, and who then again
becomes an Eligible Director, shall upon again becoming an Eligible Director
automatically receive an Additional Option. The exercise price per share for all
Additional Options shall be equal to the fair market value of the Company's
Common Stock on the date of grant, subject to (a) vesting as set forth in
Section 4.03, and (b) adjustment as set forth in Article V. No individual may
receive Additional Options to purchase more than an aggregate of 20,000 shares
of the Company's Common Stock, less the number of additional options received
under any other option plan for the Company's directors.
4.03 VESTING. Original Options shall vest and become exercisable
with respect to all underlying shares upon grant. Initial Options shall vest and
become exercisable with respect to 50% of the underlying shares upon the date of
grant and 50% of the underlying shares immediately prior to the next annual
shareholders' meeting following the date of grant (or, if an annual meeting of
shareholders occurs within six months after the grant date, then immediately
prior to the second annual shareholders' meeting after the date of grant), if
the Recipient has remained a director from the grant date to such vesting time.
Additional Options shall vest and become exercisable with respect to all
underlying shares upon the earlier of (y) the first anniversary the grant date
or (z) immediately prior to the annual meeting of shareholders of the Company
next following the grant date, if the optionee has served as a director from the
grant date to such earlier date. Notwithstanding the foregoing, however, Initial
Options and Additional Options that have not vested and become exercisable at
the time the optionee ceases to be a director shall terminate.
4.04 EXERCISE. The exercise price for Non-employee Directors'
Options shall be payable as set forth in Section 3.02(c). Non-employee
Directors' Options shall be exercised in the manner provided in Section 3.02(e).
4.05 TERM OF OPTIONS AND EFFECT OF TERMINATION. Notwithstanding
any other provision of the Plan, no Non-employee Director's Option granted under
the Plan shall be exercisable after the expiration of ten years from the
effective date of its grant. In the event that the recipient of any Non-employee
Directors' Options granted under the Plan shall cease to be a director of the
Company, (a) all Original Options and Initial Options granted under this plan to
such recipient shall be exercisable, to the extent already exercisable at the
date such recipient ceases to be a director and regardless of the reason the
recipient ceases to be a director, for a period of 365 days after that date (or,
if sooner, until the expiration of the option according to its terms), and shall
then terminate; and (b) all Additional Options granted under this Plan to such
recipient shall be exercisable, to the extent already exercisable at the date
such recipient ceases to be a director, for a period of 365 days after that date
(or, if sooner, until the expiration of the option according to its terms) if he
or she ceases to be a director because of death or permanent disability, or for
a period of 90 days after that date (or, if sooner, until the expiration of the
option
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according to its terms) if he or she ceases to be a director for any other
reason, and shall then terminate. In the event of the death of an optionee while
such optionee is a director of the Company or within the period after
termination of such status during which he or she is permitted to exercise an
option, such option may be exercised by any person or persons designated by the
optionee on a beneficiary designation form adopted by the Plan administrator for
such purpose or, if there is no effective beneficiary designation form on file
with the Company, by the executors or administrators of the optionee's estate or
by any person or persons who shall have acquired the option directly from the
optionee by his or her will or the applicable laws of descent and distribution.
ARTICLE V
CORPORATE TRANSACTIONS
5.01 ANTI-DILUTION ADJUSTMENTS. The number of shares of Common
Stock available for issuance upon exercise of Awards granted under the Plan, the
number of shares for which each Award can be exercised, and the exercise price
per share of Awards shall be appropriately and proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or consolidation of shares or the payment of
a stock dividend or any other increase or decrease in the number of issued and
outstanding shares of capital stock of the Company effected without receipt of
consideration by the Company. No fractional interests will be issued under the
Plan resulting from any such adjustments. The preceding sentence shall not
result in an adjustment to the terms of an Incentive Stock Option unless such
adjustment either (a) would not cause the Option to lose its status as an
Incentive Stock Option or (b) is agreed to in writing by the Committee and the
Recipient.
5.02 REORGANIZATIONS; MERGERS; CHANGES IN CONTROL. Subject to the
other provisions of this Section 5.02, if the Company shall consummate any
reorganization or merger or consolidation in which holders of shares of the
Company's Common Stock are entitled to receive in respect of such shares any
other consideration (including, without limitation, a different number of such
shares), each Award outstanding under the Plan exercisable for Common Stock
shall thereafter be exercisable, in accordance with the Plan, only for the kind
and amount of securities, cash and/or other property receivable upon such
reorganization or merger or consolidation by a holder of the same number of
shares of Common Stock as are subject to that Award immediately prior to such
reorganization or merger or consolidation, and any appropriate adjustments will
be made to the exercise price thereof. In addition, if a Change in Control (as
defined below) occurs and in connection with such Change in Control any
Recipient's employment with the Company is terminated, then subject to the terms
of any written employment agreement between the Company and the Recipient and
the specific terms of any Award, such Recipient shall have the right to exercise
or receive the full benefit of his or her Awards granted under the Plan in whole
or in part during the applicable time period provided in Section 3.02(g) without
regard to any vesting or performance requirements or other milestones. For
purposes hereof, but without limitation, a Recipient's employment with the
Company will be deemed to have been terminated in connection with a Change of
Control if (i) the Recipient is removed from his or her employment with the
Company by or resigns his or her employment with the Company upon request of a
Person (as defined in paragraph (a) below) exercising practical voting control
over the Company following the Change in Control or a person acting upon
authority or at the instruction of such Person, or (ii) the Recipient's position
is eliminated as a result of a reduction in force within 150 days after the
consummation of the Change in Control. In addition, if a Change in Control
occurs and in connection with such Change in Control any recipient of a
Non-employee Director's Option granted under the Plan ceases to be a director of
the Company or its successor, then such recipient shall have the right to
exercise his or her Non-Employee Director's Options granted under the Plan in
whole or in part during the applicable time period provided in Section 4.05
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without regard to any vesting requirements. For purposes hereof, but without
limitation, a director will be deemed to have ceased to be a director of the
Company or its successor in connection with a Change in Control if such director
(i) is removed by or resigns upon request of a Person (as defined in paragraph
(a) below) exercising practical voting control over the Company following the
Change in Control or a person acting upon authority or at the instruction of
such Person, or (ii) is willing and able to continue as a director of the
Company or its successor but is not re-elected to or retained on the Company's
board of directors by the Company's shareholders through the shareholder vote or
consent action for election of directors that precedes and is taken in
connection with, or next follows, the Change in Control, and is not elected or
appointed to the board of directors of the successor. For purposes hereof, a
"CHANGE IN CONTROL" means the following and shall be deemed to occur if any of
the following events occur:
(a) Any person, entity or group, within the meaning of Section
13(d) or 14(d) of the Exchange Act, but excluding the Company, its subsidiaries,
any employee benefit or stock ownership plan of the Company or its subsidiaries,
and any shareholder of the Company who, together with such shareholder's
Affiliates, owned at least 25% of the Common Stock prior to the effective date
of the Plan ("affiliate" being defined for such purpose as an entity controlled
by or under common control with such shareholder), and also excluding an
underwriter or underwriting syndicate that has acquired the Company's securities
solely in connection with a public offering thereof (such person, entity or
group being referred to herein as a "Person"), becomes the beneficial owner
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either the then outstanding shares of Common Stock or the combined
voting power of the Company's then outstanding securities entitled to vote
generally in the election of directors; or
(b) Individuals who, as of the effective date hereof, constitute
the Board of Directors of the Company (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors of the
Company, provided that any individual who becomes a director after the effective
date hereof whose election, or nomination for election by the Company's
shareholders, is approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered to be a member of the
Incumbent Board; or
(c) Consummation by the Company of the sale or other disposition
by the Company of all or substantially all of the Company's assets or a
reorganization or merger or consolidation of the Company with any other person,
entity or corporation, other than
(i) a reorganization or merger or consolidation that
would result in the voting securities of the Company outstanding immediately
prior thereto (or, in the case of a reorganization or merger or consolidation
that is preceded or accomplished by an acquisition or series of related
acquisitions by any Person, by tender or exchange offer or otherwise, of voting
securities representing 5% or more of the combined voting power of all
securities of the Company, immediately prior to such acquisition or the first
acquisition in such series of acquisitions) continuing to represent, either by
remaining outstanding or by being converted into voting securities of another
entity, more than 50% of the combined voting power of the voting securities of
the Company or such other entity outstanding immediately after such
reorganization or merger or consolidation (or series of related transactions
involving such a reorganization or merger or consolidation), or
(ii) a reorganization or merger or consolidation
effected to implement a recapitalization or reincorporation of the Company (or
similar transaction) that does not result in a material change in beneficial
ownership of the voting securities of the Company or its successor; or
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(d) Approval by the shareholders of the Company or an order by a
court of competent jurisdiction of a plan of liquidation of the Company.
5.03 DETERMINATION BY THE COMMITTEE. To the extent that the foregoing
adjustments relate to stock or securities of the Company, such adjustments shall
be made by the Committee, whose determination in that respect shall be final,
binding and conclusive. The grant of an Award pursuant to the Plan shall not
affect in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or to consolidate or to dissolve, liquidate or sell, or
transfer all of any part of its business or assets.
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