EXHIBIT 10(a)
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LANDAUER, INC.
1996 EQUITY PLAN
(As Amended and Restated through November 8, 2001)
I. INTRODUCTION
1.1 PURPOSES. The purposes of the 1996 Equity Plan, as Amended and
Restated through November 8, 2001 (this "Plan"), of Landauer, Inc. (the
"Company") and its subsidiaries from time to time (individually a
"Subsidiary" and collectively the Subsidiaries") are (i) to align the
interests of the Company's stockholders and the recipients of awards under
this Plan by increasing the proprietary interest of such recipients in the
Company's growth and success, (ii) to advance the interests of the Company
by attracting and retaining officers and other key employees and (iii) to
motivate such employees to act in the long-term best interests of the
Company's stockholders. For purposes of this Plan, references to
employment by the Company shall also mean employment by a Subsidiary.
1.2 CERTAIN DEFINITIONS.
"Agreement" shall mean the written agreement evidencing an award
hereunder between the Company and the recipient of such award.
"Board" shall mean the Board of Directors of the Company.
"Bonus Stock" shall mean shares of Common Stock which are not subject
to a Restriction Period or Performance Measures.
"Bonus Stock Award" shall mean an award of Bonus Stock under this
Plan.
"Cause" shall mean any willful act of dishonesty, conviction of a
felony, significant activities harmful to the reputation or business of the
Company, refusal to perform or substantial disregard of duties properly
assigned or significant violation of any statutory or common law duty of
loyalty to the Company, in each case as determined by not less than
two-thirds of the members of the Committee.
"Change in Control" shall have the meaning set forth in Section 5.8.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Committee designated by the Board,
consisting of two or more members of the Board, each of whom shall be (i) a
"Non-Employee Director" within the meaning of Rule 16b-3 under the Exchange
Act and (ii) an "outside director" within the meaning of Section 162(m) of
the Code.
"Common Stock" shall mean the common stock, par value $.10 per share,
of the Company.
"Company" shall have the meaning set forth in Section 1.1.
"Disability" shall mean the inability of the holder of an award to
perform substantially such holder's duties and responsibilities for a
continuous period of at least six months, as determined solely by the
Committee.
"Employment Termination Date" shall mean, in the case of the
termination by the Company of an employee's employment, the date that the
Company notifies such employee of such termination of employment and, in
the case of the termination by an employee of employment with the Company,
the date on which the Company shall first receive notification from such
employee of such termination of employment.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the average of the high and low
transaction prices of a share of Common Stock as reported on the American
Stock Exchange on the date as of which such value is being determined, or,
if the Common Stock is not listed on the American Stock Exchange, the
average of the high and low transaction prices of a share of Common Stock
on the principal national stock exchange on which the Common Stock is
traded on the date as of which such value is being determined, or, if there
shall be no reported transactions for such date, on the next preceding date
for which transactions were reported; PROVIDED, HOWEVER, that if Fair
Market Value for any date cannot be so determined, Fair Market Value shall
be determined by the Committee by whatever means or method as the
Committee, in the good faith exercise of its discretion, shall at such time
deem appropriate.
"Free-Standing SAR" shall mean an SAR which is not issued in tandem
with, or by reference to, an option, which entitles the holder thereof to
receive, upon exercise, shares of Common Stock (which may be Restricted
Stock), cash or a combination thereof with an aggregate value equal to the
excess of the Fair Market Value of one share of Common Stock on the date of
exercise over the base price of such SAR, multiplied by the number of such
SARs which are exercised.
"Incentive Stock Option" shall mean an option to purchase shares of
Common Stock that meets the requirements of Section 422 of the Code, or any
successor provision, which is intended by the Committee to constitute an
Incentive Stock Option.
"Non-Statutory Stock Option" shall mean a stock option which is not
an Incentive Stock Option.
"Performance Measures" shall mean the criteria and objectives,
established by the Committee, which shall be satisfied or met (i) as a
condition to the exercisability of all or a portion of an option or SAR or
(ii) during the applicable Restriction Period or Performance Period as a
condition to the holder's receipt, in the case of a Restricted Stock Award,
of the shares of Common Stock subject to such award, or, in the case of a
Performance Share Award, of payment with respect to such award. Such
criteria and objectives may include, but are not limited to, the attainment
by a share of Common Stock of a specified Fair Market Value for a specified
period of time, earnings per share, return on equity, earnings of the
Company, revenues, market share, cash flows or cost reduction goals, or any
combination of the foregoing and any other criteria and objectives
established by the Committee. In the sole discretion of the Committee, the
Committee may amend or adjust the Performance Measures or other terms and
conditions of an outstanding award in recognition of unusual or
nonrecurring events affecting the Company or its financial statements or
changes in law or accounting principles.
"Performance Option" shall mean an Incentive Stock Option or
Non-Statutory Stock Option, the exercisability of all or a portion of which
is contingent upon the attainment of specified Performance Measures within
a specified Performance Period.
"Performance Period" shall mean any period designated by the
Committee during which the Performance Measures applicable to a Performance
Share Award or Performance Option shall be measured.
"Performance Share" shall mean a right, contingent upon the
attainment of specified Performance Measures within a specified Performance
Period, to receive one share of Common Stock, which may be Restricted
Stock, or in lieu thereof, the Fair Market Value of such Performance Share
in cash.
"Performance Share Award" shall mean an award of Performance Shares
under this Plan.
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"Permanent and Total Disability" shall have the meaning set forth in
Section 22(e)(3) of the Code or any successor thereto.
"Restricted Stock" shall mean shares of Common Stock which are
subject to a Restriction Period.
"Restricted Stock Award" shall mean an award of Restricted Stock
under this Plan.
"Restriction Period" shall mean any period designated by the
Committee during which the Common Stock subject to a Restricted Stock Award
may not be sold, transferred, assigned, pledged, hypothecated or otherwise
encumbered or disposed of, except as provided in this Plan or the Agreement
relating to such award.
"SAR" shall mean a stock appreciation right which may be a
Free-Standing SAR or a Tandem SAR.
"Stock Award" shall mean a Restricted Stock Award or a Bonus Stock
Award.
"Tandem SAR" shall mean an SAR which is granted in tandem with, or by
reference to, an option (including a Non-Statutory Stock Option granted
prior to the date of grant of the SAR), which entitles the holder thereof
to receive, upon exercise of such SAR and surrender for cancellation of all
or a portion of such option, shares of Common Stock (which may be
Restricted Stock), cash or a combination thereof with an aggregate value
equal to the excess of the Fair Market Value of one share of Common Stock
on the date of exercise over the base price of such SAR, multiplied by the
number of shares of Common Stock subject to such option, or portion
thereof, which is surrendered.
"Tax Date" shall have the meaning set forth in Section 5.5.
"Ten Percent Holder" shall have the meaning set forth in Section
2.1(a).
1.3 ADMINISTRATION. This Plan shall be administered by the
Committee. Any one or a combination of the following awards may be made
under this Plan to eligible officers and other key employees of the Company
and its Subsidiaries: (i) options to purchase shares of Common Stock in the
form of Incentive Stock Options or Non-Statutory Stock Options (which may
include Performance Options), (ii) SARs in the form of Tandem SARs or
Free-Standing SARs, (iii) Stock Awards in the form of Restricted Stock or
Bonus Stock and (iv) Performance Shares. The Committee shall, subject to
the terms of this Plan, select eligible officers and other key employees
for participation in this Plan and determine the form, amount and timing of
each award to such persons and, if applicable, the number of shares of
Common Stock, the number of SARs and the number of Performance Shares
subject to such an award, the exercise price or base price associated with
the award, the time and conditions of exercise or settlement of the award
and all other terms and conditions of the award, including, without
limitation, the form of the Agreement evidencing the award. The Committee
shall, subject to the terms of this Plan, interpret this Plan and the
application thereof, establish rules and regulations it deems necessary or
desirable for the administration of this Plan and may impose, incidental to
the grant of an award, conditions with respect to the award, such as
limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be conclusive and
binding on all parties.
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To the extent permitted by applicable law, the Committee may delegate
some or all of its power and authority hereunder to the President and Chief
Executive Officer or other executive officer of the Company as the
Committee deems appropriate; provided, however, that the Committee may not
delegate its power and authority with regard to (i) the grant of an award
under this Plan to any person who is a "covered employee" within the
meaning of Section 162(m) of the Code or who, in the Committee's judgment,
is likely to be a covered employee at any time during the period an award
hereunder to such employee would be outstanding or (ii) the selection for
participation in this Plan of an officer or other person subject to
Section 16 of the Exchange Act or decisions concerning the timing, pricing
or amount of an award to such an officer or other person.
No member of the Board of Directors or Committee, and neither the
President and Chief Executive Officer nor any other executive officer to
whom the Committee delegates any of its power and authority hereunder,
shall be liable for any act, omission, interpretation, construction or
determination made in connection with this Plan in good faith, and the
members of the Board of Directors and the Committee and the President and
Chief Executive Officer or other executive officer shall be entitled to
indemnification and reimbursement by the Company in respect of any claim,
loss, damage or expense (including attorneys' fees) arising therefrom to
the full extent permitted by law (except as otherwise may be provided in
the Company's Certificate of Incorporation and/or By-laws) and under any
directors' and officers' liability insurance that may be in effect from
time to time.
A majority of the Committee shall constitute a quorum. Except as
otherwise required by the definition of the term "Cause" in Section 1.2,
the acts of the Committee shall be either (i) acts of a majority of the
members of the Committee present at any meeting at which a quorum is
present or (ii) acts approved in writing by a majority of the members of
the Committee without a meeting.
1.4 ELIGIBILITY. Participants in this Plan shall consist of such
officers or other key employees of the Company and its Subsidiaries as the
Committee in its sole discretion may select from time to time. The
Committee's selection of a person to participate in this Plan at any time
shall not require the Committee to select such person to participate in
this Plan at any other time.
1.5 SHARES AVAILABLE. Subject to adjustment as provided in Section
5.7, 760,000 shares of Common Stock shall be available under this Plan,
reduced by the sum of the aggregate number of shares of Common Stock (i)
that are issued upon the grant of a Stock Award and (ii) which become
subject to outstanding options, outstanding Free-Standing SARs and
outstanding Performance Shares. To the extent that shares of Common Stock
subject to an outstanding option (other than in connection with the
exercise of a Tandem SAR), Free-Standing SAR, Stock Award or Performance
Share are not issued or delivered by reason of the expiration, termination,
cancellation or forfeiture of such award or by reason of the delivery of
shares of Common Stock to pay all or a portion of the exercise price of an
award, if any, or the delivery or withholding of shares to satisfy all or a
portion of the tax withholding obligations and other taxes referred to in
Section 5.5 relating to an award, then such shares of Common Stock shall
again be available under this Plan.
Shares of Common Stock to be delivered under this Plan shall be made
available from authorized and unissued shares of Common Stock, or
authorized and issued shares of Common Stock reacquired and held as
treasury shares or otherwise or a combination thereof.
To the extent required by Section 162(m) of the Code and the rules
and regulations thereunder, the maximum number of shares of Common Stock
with respect to which options or SARs or a combination thereof may be
granted during any fiscal year of the Company to any person shall be
75,000, subject to adjustment as provided in Section 5.7.
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II. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
2.1 STOCK OPTIONS. The Committee may, in its discretion, grant
options to purchase shares of Common Stock to such eligible persons as may
be selected by the Committee. Each option, or portion thereof, that is not
an Incentive Stock Option, shall be a Non-Statutory Stock Option. Each
Incentive Stock Option shall be granted within ten years of the effective
date of this Plan. To the extent that the aggregate Fair Market Value
(determined as of the date of grant) of shares of Common Stock with respect
to which options designated as Incentive Stock Options are exercisable for
the first time by a participant during any calendar year (under this Plan
or any other plan of the Company, or any parent or Subsidiary) exceeds the
amount (currently $100,000) established by the Code, such options shall
constitute Non-Statutory Stock Options.
Options shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with
the terms of this Plan, as the Committee shall deem advisable:
(a) NUMBER OF SHARES AND PURCHASE PRICE. The number of shares of
Common Stock subject to an option and the purchase price per share of
Common Stock purchasable upon exercise of the option shall be determined by
the Committee; PROVIDED, HOWEVER, that the purchase price per share of
Common Stock purchasable upon exercise of a Non-Statutory Stock Option or
an Incentive Stock Option shall not be less than 100% of the Fair Market
Value of a share of Common Stock on the date of grant of such option;
PROVIDED FURTHER, that if an Incentive Stock Option shall be granted to any
person who, at the time such option is granted, owns capital stock
possessing more than ten percent of the total combined voting power of all
classes of capital stock of the Company (or of any parent or Subsidiary) (a
"Ten Percent Holder"), the purchase price per share of Common Stock shall
be the price (currently 110% of Fair Market Value) required by the Code in
order to constitute an Incentive Stock Option.
(b) OPTION PERIOD AND EXERCISABILITY. The period during which an
option may be exercised shall be determined by the Committee; PROVIDED,
HOWEVER, that no Incentive Stock Option shall be exercised later than ten
years after its date of grant; PROVIDED FURTHER, that if an Incentive Stock
Option shall be granted to a Ten Percent Holder, such option shall not be
exercised later than five years after its date of grant. The Committee
may, in its discretion, determine that an option is to be granted as a
Performance Option and may establish an applicable Performance Period and
Performance Measures which shall be satisfied or met as a condition to the
grant of such option or to the exercisability of all or a portion of such
option. The Committee shall determine whether an option shall become
exercisable in cumulative or non-cumulative installments and in part or in
full at any time. An exercisable option, or portion thereof, may be
exercised only with respect to whole shares of Common Stock.
(c) METHOD OF EXERCISE. An option may be exercised (i) by giving
written notice to the Company specifying the number of whole shares of
Common Stock to be purchased and accompanying such notice with payment
therefor in full (or arrangement made for such payment to the Company's
satisfaction) either (A) in cash, (B) by delivery (either actual delivery
or by attestation procedures established by the Company) of previously
owned whole shares of Common Stock (which the optionee has held for at
least six months prior to delivery of such shares and for which the
optionee has good title, free and clear of all liens and encumbrances)
having a Fair Market Value, determined as of the date of exercise, equal to
the aggregate purchase price payable by reason of such exercise, (C) in
cash by a broker-dealer acceptable to the Company to whom the optionee has
submitted an irrevocable notice of exercise or (D) a combination of (A) and
(B), in each case to the extent set forth in the Agreement relating to the
option, (ii) if applicable, by surrendering to the Company any Tandem SARs
which are cancelled by reason of the exercise of the option and (iii) by
executing such documents as the Company may reasonably request.
Notwithstanding the foregoing, the Committee shall have the discretion to
permit payment to be made, in whole or in part, by a full-recourse note or
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in installments at such times and upon such terms as the Committee may
approve; PROVIDED, HOWEVER, that, in the case of payment by any such note
or installments, certificates for any shares of Common Stock issued in
respect thereof shall contain such legend, if any, as may be required by,
and shall otherwise be subject to the provisions of, the laws of the state
of incorporation of the Company relating to the issuance of shares on such
terms. Any fraction of a share of Common Stock which would be required to
pay such purchase price shall be disregarded and the remaining amount due
shall be paid in cash by the optionee. No certificate representing Common
Stock shall be delivered until the full purchase price therefor has been
paid.
2.2 STOCK APPRECIATION RIGHTS. The Committee may, in its
discretion, grant SARs to such eligible persons as may be selected by the
Committee. The Agreement relating to an SAR shall specify whether the SAR
is a Tandem SAR or a Free-Standing SAR.
SARs shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Committee shall deem advisable:
(a) NUMBER OF SARS AND BASE PRICE. The number of SARs subject to
an award shall be determined by the Committee. Any Tandem SAR related to
an Incentive Stock Option shall be granted at the same time that such
Incentive Stock Option is granted. The base price of a Tandem SAR shall be
the purchase price per share of Common Stock of the related option. The
base price of a Free-Standing SAR shall be determined by the Committee;
PROVIDED, HOWEVER, that such base price shall not be less than 100% of the
Fair Market Value of a share of Common Stock on the date of grant of such
SAR.
(b) EXERCISE PERIOD AND EXERCISABILITY. The Agreement relating to
an award of SARs shall specify whether such award may be settled in shares
of Common Stock (including shares of Restricted Stock) or cash or a
combination thereof. The period for the exercise of an SAR shall be
determined by the Committee; PROVIDED, HOWEVER, that no Tandem SAR shall be
exercised later than the expiration, cancellation, forfeiture or other
termination of the related option. The Committee may, in its discretion,
establish Performance Measures which shall be satisfied or met as a
condition to the exercisability of an SAR. The Committee shall determine
whether an SAR may be exercised in cumulative or non-cumulative
installments and in part or in full at any time. An exercisable SAR, or
portion thereof, may be exercised, in the case of a Tandem SAR, only with
respect to whole shares of Common Stock and, in the case of a Free-Standing
SAR, only with respect to a whole number of SARs. If an SAR is exercised
for shares of Restricted Stock, a certificate or certificates representing
such Restricted Stock shall be issued in accordance with Section 3.2(c) and
the holder of such Restricted Stock shall have such rights of a stockholder
of the Company as determined pursuant to Section 3.2(d). Prior to the
exercise of an SAR for shares of Common Stock, including Restricted Stock,
the holder of such SAR shall have no rights as a stockholder of the Company
with respect to the shares of Common Stock subject to such SAR and shall
have rights as a stockholder of the Company in accordance with Section
5.10.
(c) METHOD OF EXERCISE. A Tandem SAR may be exercised (i) by
giving written notice to the Company specifying the number of whole SARs
which are being exercised, (ii) by surrendering to the Company any options
which are cancelled by reason of the exercise of the Tandem SAR and (iii)
by executing such documents as the Company may reasonably request. A Free-
Standing SAR may be exercised (i) by giving written notice to the Company
specifying the whole number of SARs which are being exercised and (ii) by
executing such documents as the Company may reasonably request.
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2.3 TERMINATION OF EMPLOYMENT.
(a) DISABILITY. Subject to paragraph (f) below and unless otherwise
specified in the Agreement relating to an option or SAR, as the case may
be, if the employment with the Company of the holder of an option or SAR
terminates by reason of Disability, each option and SAR held by such holder
shall be fully exercisable and may thereafter be exercised by such holder
(or such holder's legal representative or similar person) until and
including the earlier to occur of (i) the date which is one year (or such
other period as set forth in the Agreement relating to such option or SAR)
after such holder's Employment Termination Date and (ii) the expiration
date of the term of such option or SAR.
(b) RETIREMENT. Subject to paragraph (f) below and unless
otherwise specified in the Agreement relating to an option or SAR, as the
case may be, if the employment with the Company of the holder of an option
or SAR terminates by reason of retirement on or after age 65 (or prior to
age 65 with the consent of the Committee) each option and SAR held by such
holder shall be fully exercisable and may thereafter be exercised by such
holder (or such holder's legal representative or similar person) until and
including the earlier to occur of (i) the date which is one year (or such
other period as set forth in the Agreement relating to such option or SAR)
after such holder's Employment Termination Date and (ii) the expiration
date of the term of such option or SAR.
(c) DEATH. Subject to paragraph (f) below and unless otherwise
specified in the Agreement relating to an option or SAR, as the case may
be, if the employment with the Company of the holder of an option or SAR
terminates by reason of death, each option and SAR held by such holder
shall be fully exercisable and may thereafter be exercised by such holder's
executor, administrator, legal representative, beneficiary or similar
person, as the case may be, until and including the earlier to occur of (i)
the date which is one year (or such other period as set forth in the
Agreement relating to such option or SAR) after the date of death and (ii)
the expiration date of the term of such option or SAR; provided, however,
that, in the event that the date of death is less than six months prior to
such expiration date, such holder's executor, administrator, legal
representative, beneficiary or similar person, as the case may be, shall
have not less than six months from the date of death to so exercise such
option or SAR (except that, in the event that such option is an Incentive
Stock Option, such period of exercise shall not under any circumstance
extend beyond the tenth anniversary of the date of grant of such Incentive
Stock Option).
(d) OTHER TERMINATION. If the employment with the Company of the
holder of an option or SAR is terminated by the Company for Cause, each
option and SAR held by such holder shall terminate automatically on such
holder's Employment Termination Date.
Subject to paragraph (f) below and unless specified in the
Agreement relating to an option or SAR, as the case may be, if the
employment with the Company of the holder of an option or SAR terminates
for any reason other than Disability, retirement on or after age 65 (or
prior to age 65 with the consent of the Committee) or death, or Cause, each
option and SAR held by such holder shall be exercisable only to the extent
that such option or SAR is exercisable on such holder's Employment
Termination Date and may thereafter be exercised by such holder (or such
holder's legal representative or similar person) until and including the
earlier to occur of (i) the date which is three months (or such other
period as set forth in the Agreement relating to such option or SAR) after
such holder's Employment Termination Date and (ii) the expiration date of
the term of such option or SAR.
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(e) DEATH FOLLOWING TERMINATION OF EMPLOYMENT. Subject to
paragraph (f) below and unless otherwise specified in the Agreement
relating to an option or SAR, as the case may be, if the holder of an
option or SAR dies during the period set forth in Section 2.3(a) following
termination of employment by reason of Disability, or if the holder of an
option or SAR dies during the period set forth in Section 2.3(b) following
termination of employment by reason of retirement on or after age 65 (or
prior to age 65 with the consent of the Committee), or if the holder of an
option or SAR dies during the period set forth in Section 2.3(d) following
termination of employment for any reason other than Disability or
retirement on or after age 65 (or prior to age 65 with the consent of the
Committee) (or, in each case, such other period as set forth in the
Agreement relating to such option or SAR), each option and SAR held by such
holder shall be exercisable only to the extent that such option or SAR, as
the case may be, is exercisable on the date of such holder's death and may
thereafter be exercised by the holder's executor, administrator, legal
representative, beneficiary or similar person, as the case may be, until
and including the earlier to occur of (i) the date which is one year (or
such other period as set forth in the Agreement relating to such option or
SAR) after the date of death and (ii) the expiration date of the term of
such option or SAR; PROVIDED, HOWEVER, that, in the event that the date of
death is less than six months prior to such expiration date, such holder's
executor, administrator, legal representative, beneficiary or similar
person, as the case may be, shall have not less than six months from the
date of death to so exercise such option or SAR (except that, in the event
that such option is an Incentive Stock Option, such period of exercise
shall not under any circumstance extend beyond the tenth anniversary of the
date of grant of such Incentive Stock Option).
(f) TERMINATION OF EMPLOYMENT - INCENTIVE STOCK OPTIONS. Unless
otherwise specified in the Agreement relating to the option, if the
employment with the Company of a holder of an Incentive Stock Option
terminates by reason of Permanent and Total Disability, each Incentive
Stock Option held by such optionee shall become fully exercisable and may
thereafter be exercised by such optionee (or such optionee's legal
representative or similar person) until and including the earlier to occur
of (i) the date which is one year (or such shorter period as set forth in
the Agreement relating to such option) after such optionee's Employment
Termination Date by reason of Permanent and Total Disability and (ii) the
expiration date of the term of such option.
Unless otherwise specified in the Agreement relating to the
option, if the employment with the Company of a holder of an Incentive
Stock Option terminates by reason of death, each Incentive Stock Option
held by such optionee shall become fully exercisable and may thereafter be
exercised by such optionee's executor, administrator, legal representative,
beneficiary or similar person until and including the earliest to occur of
(i) the date which is one year (or such shorter period as set forth in the
Agreement relating to such option) after the date of death and (ii) the
expiration date of the term of such option.
If the employment with the Company of the optionee of an
Incentive Stock Option is terminated by the Company for Cause, each
Incentive Stock Option held by such optionee shall terminate automatically
on the effective date of such optionee's termination of employment. If the
employment with the Company of a holder of an Incentive Stock Option
terminates for any reason other than Permanent and Total Disability or
death or Cause, each Incentive Stock Option held by such optionee shall be
exercisable only to the extent such option is exercisable on the effective
date of such optionee's termination of employment and may thereafter be
exercised by such holder (or such holder's legal representative or similar
person) until and including the earlier to occur of (i) the date which is
three months after such optionee's Employment Termination Date and (ii)
the expiration date of the term of such option.
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If the holder of an Incentive Stock Option dies during the
period set forth in the first paragraph of the Section 2.3(f) following
termination of employment by reason of Permanent and Total Disability (or
such shorter period as set forth in the Agreement relating to such option),
or if the holder of an Incentive Stock Option dies during the period set
forth in the third paragraph of this Section 2.3(f) following termination
of employment for any reason other than Permanent and Total Disability or
death or Cause, each Incentive Stock Option held by such optionee shall be
exercisable only to the extent such option is exercisable on the date of
the optionee's death and may thereafter be exercised by the optionee's
executor, administrator, legal representative, beneficiary or similar
person until and including the earlier to occur of (i) the date which is
one year (or such shorter period as set forth in the Agreement relating to
such option) after the date of death and (ii) the expiration date of the
term of such option.
III. STOCK AWARDS
3.1 STOCK AWARDS. The Committee may, in its discretion, grant
Stock Awards to such eligible persons as may be selected by the Committee.
The Agreement relating to a Stock Award shall specify whether the Stock
Award is a Restricted Stock Award or Bonus Stock Award.
3.2 TERMS OF STOCK AWARDS. Stock Awards shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem advisable.
(a) NUMBER OF SHARES AND OTHER TERMS. The number of shares of
Common Stock subject to a Restricted Stock Award or Bonus Stock Award and
the Performance Measures (if any) and Restriction Period applicable to a
Restricted Stock Award shall be determined by the Committee.
(b) VESTING AND FORFEITURE. The Agreement relating to a Restricted
Stock Award shall provide, in the manner determined by the Committee, in
its discretion, and subject to the provisions of this Plan, for the vesting
of the shares of Common Stock subject to such award (i) if specified
Performance Measures are satisfied or met during the specified Restriction
Period or (ii) if the holder of such award remains continuously in the
employment of the Company during the specified Restricted Period and for
the forfeiture of the shares of Common Stock subject to such award (x) if
specified Performance Measures are not satisfied or met during the
specified Restriction Period or (y) if the holder of such award does not
remain continuously in the employment of the Company during the specified
Restriction Period.
Bonus Stock Awards shall not be subject to any Performance Measures
or Restriction Periods.
(c) SHARE CERTIFICATES. During the Restriction Period, a
certificate or certificates representing a Restricted Stock Award shall be
registered in the holder's name and may bear a legend, in addition to any
legend which may be required pursuant to Section 5.6, indicating that the
ownership of the shares of Common Stock represented by such certificate is
subject to the restrictions, terms and conditions of this Plan and the
Agreement relating to the Restricted Stock Award. All such certificates
shall be deposited with the Company, together with stock powers or other
instruments of assignment (including a power of attorney), each endorsed in
blank with a guarantee of signature if deemed necessary or appropriate,
which would permit transfer to the Company of all or a portion of the
shares of Common Stock subject to the Restricted Stock Award in the event
such award is forfeited in whole or in part. Upon termination of any
applicable Restriction Period (and the satisfaction or attainment of
applicable Performance Measures), or upon the grant of a Bonus Stock Award,
in each case subject to the Company's right to require payment of any taxes
in accordance with Section 5.5, a certificate or certificates evidencing
ownership of the requisite number of shares of Common Stock shall be
delivered to the holder of such award.
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(d) RIGHTS WITH RESPECT TO RESTRICTED STOCK AWARDS. Unless
otherwise set forth in the Agreement relating to a Restricted Stock Award,
and subject to the terms and conditions of a Restricted Stock Award, the
holder of such award shall have all rights as a stockholder of the Company,
including, but not limited to, voting rights, the right to receive
dividends and the right to participate in any capital adjustment applicable
to all holders of Common Stock; PROVIDED, HOWEVER, that a distribution with
respect to shares of Common Stock, other than a regular cash dividend,
shall be deposited with the Company and shall be subject to the same
restrictions as the shares of Common Stock with respect to which such
distribution was made.
3.3 TERMINATION OF EMPLOYMENT.
(a) DISABILITY, RETIREMENT AND DEATH. Unless otherwise set forth in
the Agreement relating to a Restricted Stock Award, if the employment with
the Company of the holder of such award terminates by reason of Disability,
retirement on or after age 65 (or prior to age 65 with the consent of the
Committee) or death, the Restriction Period shall terminate as of such
holder's Employment Termination Date and all Performance Measures, if any,
applicable to such award shall be deemed to have been satisfied at the
maximum level.
(b) OTHER TERMINATION. Unless otherwise set forth in the Agreement
relating to a Restricted Stock Award, if the employment with the Company of
the holder of a Restricted Stock Award terminates for any reason other than
Disability, retirement on or after age 65 (or prior to age 65 with the
consent of the Committee) or death, the portion of such award which is
subject to a Restriction Period on such holder's Employment Termination
Date shall be forfeited and such portion shall be cancelled by the Company.
IV. PERFORMANCE SHARE AWARDS
4.1 PERFORMANCE SHARE AWARDS. The Committee may, in its
discretion, grant Performance Share Awards to such eligible persons as may
be selected by the Committee.
4.2 TERMS OF PERFORMANCE SHARE AWARDS. Performance Share Awards
shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem advisable.
(a) NUMBER OF PERFORMANCE SHARES AND PERFORMANCE MEASURES. The
number of Performance Shares subject to any award and the Performance
Measures and Performance Period applicable to such award shall be
determined by the Committee.
(b) VESTING AND FORFEITURE. The Agreement relating to a
Performance Share Award shall provide, in the manner determined by the
Committee, in its discretion, and subject to the provisions of this Plan,
for the vesting of such award, if specified Performance Measures are
satisfied or met during the specified Performance Period, and for the
forfeiture of such award, if specified Performance Measures are not
satisfied or met during the specified Performance Period.
(c) SETTLEMENT OF VESTED PERFORMANCE SHARE AWARDS. The Agreement
relating to a Performance Share Award (i) shall specify whether such award
may be settled in shares of Common Stock (including shares of Restricted
Stock) or cash or a combination thereof and (ii) may specify whether the
holder thereof shall be entitled to receive, on a current or deferred
basis, dividend equivalents, and, if determined by the Committee, interest
on any deferred dividend equivalents, with respect to the number of shares
of Common Stock subject to such award. If a Performance Share Award is
settled in shares of Restricted Stock, a certificate or certificates
representing such Restricted Stock shall be issued in accordance with
Section 3.2(c) and the holder of such Restricted Stock shall have such
rights of a stockholder of the Company as determined pursuant to Section
3.2(d). Prior to the settlement of a Performance Share Award in shares of
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Common Stock, including Restricted Stock, the holder of such award shall
have no rights as a stockholder of the Company with respect to the shares
of Common Stock subject to such award.
4.3 TERMINATION OF EMPLOYMENT.
(a) DISABILITY, RETIREMENT AND DEATH. Unless otherwise set forth in
the Agreement relating to a Performance Share Award, if the employment with
the Company of the holder of such award terminates by reason of Disability,
retirement on or after age 65 (or prior to age 65 with the consent of the
Committee) or death, all Performance Measures applicable to such award
shall be deemed to have been satisfied at the maximum level (if none of the
Performance Measures are required to be satisfied prior to the date of such
termination of employment) or a level proportionate with the actual
performance, determined on a weighted average basis during the portion of
the Performance Period that shall have expired prior to such termination of
employment (if any of the Performance Measures are required to be satisfied
prior to the date of such termination of employment), and the Performance
Period applicable to such award shall thereupon terminate.
(b) OTHER TERMINATION. Unless otherwise set forth in the Agreement
relating to a Performance Share Award, if the employment with the Company
of the holder of a Performance Share Award terminates for any reason other
than Disability, retirement on or after age 65 or death, the portion of
such award which is subject to a Performance Period on such holder's
Employment Termination Date shall be forfeited and such portion shall be
cancelled by the Company.
V. GENERAL
5.1 EFFECTIVE DATE AND TERM OF PLAN. This Plan shall be submitted
to the stockholders of the Company for approval and, if approved by the
affirmative vote of a majority of the shares of Common Stock present in
person or represented by proxy at the 2002 annual meeting of stockholders,
shall become effective on the date of such approval. This Plan shall
terminate on February 3, 2009, unless terminated earlier by the Board.
Termination of this Plan shall not affect the terms or conditions of any
award granted prior to termination.
Awards hereunder may be made at any time prior to the termination of
this Plan, provided that no award may be made later than 10 years after the
effective date of this Plan. In the event that this Plan is not approved
by the stockholders of the Company, this Plan and any awards hereunder
shall be void and of no force or effect.
5.2 AMENDMENTS. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval required by
applicable law, rule or regulation including Rule 16b-3 under the Exchange
Act and Section 162(m) of the Code; PROVIDED, HOWEVER, that no amendment
shall be made without stockholder approval if such amendment would (a)
increase the maximum number of shares of Common Stock available for
issuance under this Plan (subject to Section 5.7), (b) reduce the minimum
purchase price in the case of an option or the base price in the case of an
SAR, (c) effect any change inconsistent with Section 422 of the Code or (d)
extend the term of this Plan. No amendment may impair the rights of a
holder of an outstanding award without the consent of such holder.
5.3 AGREEMENT. Each award under this Plan shall be evidenced by an
Agreement setting forth the terms and conditions applicable to such award.
No award shall be valid until an Agreement is executed by the Company and
the recipient of such award and, upon execution by each party and delivery
of the Agreement to the Company, such award shall be effective as of the
effective date set forth in the Agreement.
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5.4 NON-TRANSFERABILITY OF STOCK OPTIONS, SARS AND PERFORMANCE
SHARES. Unless otherwise specified in the Agreement relating to an option,
SAR or Performance Share, no option, SAR or Performance Share shall be
transferable other than by will, the laws of descent and distribution or
pursuant to beneficiary designation procedures approved by the Company.
Each option, SAR or Performance Share may be exercised or settled during
the holder's lifetime only by the holder or the holder's legal
representative or similar person. Except as permitted by the second
preceding sentence, no option, SAR or Performance Share may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise
disposed of (whether by operation of law or otherwise) or be subject to
execution, attachment or similar process. Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any
option, SAR or Performance Share, such award and all rights thereunder
shall immediately become null and void.
5.5 TAX WITHHOLDING AND OTHER SETTLEMENTS IN LIEU OF TAXES. The
Company shall have the right to require, prior to the issuance or delivery
of any shares of Common Stock or the payment of any cash pursuant to an
award made hereunder, payment by the holder of such award of any Federal,
state, local or other taxes which may be required to be withheld or paid in
connection with such award. An Agreement may provide that (i) the Company
shall withhold whole shares of Common Stock which would otherwise be
delivered to a holder, having an aggregate Fair Market Value determined as
of the date the obligation to withhold or pay taxes arises in connection
with an award (the "Tax Date"), or withhold an amount of cash which would
otherwise be payable to a holder, in the amount necessary to satisfy any
such obligation or (ii) the holder may satisfy any such obligation by any
of the following means: (A) a cash payment to the Company, (B) delivery
(either actual delivery or by attestation procedures established by the
Company) to the Company of previously owned whole shares of Common Stock
having an aggregate Fair Market Value, determined as of the Tax Date, equal
to the amount necessary to satisfy any such obligation, (C) authorizing the
Company to withhold whole shares of Common Stock which would otherwise be
delivered having an aggregate Fair Market Value, determined as of the Tax
Date, or withhold an amount of cash which would otherwise be payable to a
holder, equal to the amount necessary to satisfy any such obligation, (D)
in the case of the exercise of an option, a cash payment by a broker-dealer
acceptable to the Company to whom the optionee has submitted an irrevocable
notice of exercise or (E) any combination of (A), (B) and (C), in each case
to the extent set forth in the Agreement relating to the award. Shares of
Common Stock to be delivered or withheld may not have an aggregate Fair
Market Value in excess of the amount determined by applying the minimum
statutory withholding rate. Any fraction of a share of Common Stock which
would be required to satisfy such an obligation shall be disregarded and
the remaining amount due shall be paid in cash by the holder.
5.6 RESTRICTIONS ON SHARES. Each award made hereunder shall be
subject to the requirement that if at any time the Company determines that
the listing, registration or qualification of the shares of Common Stock
subject to such award upon any securities exchange or under any law, or the
consent or approval of any governmental body, or the taking of any other
action is necessary or desirable as a condition of, or in connection with,
the delivery of shares thereunder, such shares shall not be delivered
unless such listing, registration, qualification, consent, approval or
other action shall have been effected or obtained, free of any conditions
not acceptable to the Company. The Company may require that certificates
evidencing shares of Common Stock delivered pursuant to any award made
hereunder bear a legend indicating that the sale, transfer or other
disposition thereof by the holder is prohibited except in compliance with
the Securities Act of 1933, as amended, and the rules and regulations
thereunder.
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5.7 ADJUSTMENT. In the event of any stock split, stock dividend,
recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock
other than a regular cash dividend, the number and class of securities
available under this Plan, the number and class of securities subject to
each outstanding option and the purchase price per security, the terms of
each outstanding SAR, the number and class of securities subject to each
outstanding Stock Award, and the terms of each outstanding Performance
Share shall be appropriately adjusted by the Committee, such adjustments to
be made in the case of outstanding options and SARs without an increase in
the aggregate purchase price or base price. The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive. If
any such adjustment would result in a fractional security being (i)
available under this Plan, such fractional security shall be disregarded,
or (ii) subject to an award under this Plan, the Company shall pay the
holder of such award, in connection with the first vesting, exercise or
settlement of such award, in whole or in part, occurring after such
adjustment, an amount in cash determined by multiplying (i) the fraction of
such security (rounded to the nearest hundredth) by (ii) the excess, if
any, of (A) the Fair Market Value on the vesting, exercise or settlement
date over (B) the exercise or base price, if any, of such award.
5.8 CHANGE IN CONTROL.
(a) (1) Notwithstanding any provision in this Plan or any
Agreement, in the event of a Change in Control pursuant to Section (b)(3)
or (4) below in connection with which the holders of Common Stock receive
shares of common stock that are registered under Section 12 of the Exchange
Act, (i) all outstanding options and SARs shall immediately become
exercisable in full, (ii) the Restriction Period applicable to any
outstanding Restricted Stock Award shall lapse, (iii) the Performance
Period applicable to any outstanding Performance Share shall lapse, (iv)
the Performance Measures applicable to any outstanding award shall be
deemed to be satisfied at the maximum level and (v) there shall be
substituted for each share of Common Stock available under this Plan,
whether or not then subject to an outstanding award, the number and class
of shares into which each outstanding share of Common Stock shall be
converted pursuant to such Change in Control. In the event of any such
substitution, the purchase price per share in the case of an option and the
base price in the case of an SAR shall be appropriately adjusted by the
Committee (whose determination shall be final, binding and conclusive),
such adjustments to be made in the case of outstanding options and SARs
without an increase in the aggregate purchase price or base price.
(2) Notwithstanding any provision in this Plan or any Agreement, in
the event of a Change in Control pursuant to Section (b)(1) or (2) below,
or in the event of a Change in Control pursuant to Section (b)(3) or (4)
below in connection with which the holders of Common Stock receive
consideration other than shares of common stock that are registered under
Section 12 of the Exchange Act, each outstanding award shall be surrendered
to the Company by the holder thereof, and each such award shall immediately
be canceled by the Company, and the holder shall receive, within ten days
of the occurrence of a Change in Control, a cash payment from the Company
in an amount equal to (i) in the case of an option, the number of shares of
Common Stock then subject to such option, multiplied by the excess, if any,
of the greater of (A) the highest per share price offered to stockholders
of the Company in any transaction whereby the Change in Control takes place
or (B) the Fair Market Value of a share of Common Stock on the date of
occurrence of the Change in Control, over the purchase price per share of
Common Stock subject to the option, (ii) in the case of a Free-Standing
SAR, the number of shares of Common Stock then subject to such SAR,
multiplied by the excess, if any, of the greater of (A) the highest per
share price offered to stockholders of the Company in any transaction
whereby the Change in Control takes place or (B) the Fair Market Value of a
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share of Common Stock on the date of occurrence of the Change in Control,
over the base price of the SAR, (iii) in the case of a Restricted Stock
Award or Performance Share Award, the number of shares of Common Stock or
the number of Performance Shares, as the case may be, then subject to such
award, multiplied by the greater of (A) the highest per share price offered
to stockholders of the Company in any transaction whereby the Change in
Control takes place or (B) the Fair Market Value of a share of Common Stock
on the date of occurrence of the Change in Control. In the event of a
Change in Control, each Tandem SAR shall be surrendered by the holder
thereof and shall be canceled simultaneously with the cancellation of the
related option.
(b) "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either
(i) the then outstanding shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); excluding,
however, the following: (A) any acquisition directly from the Company
(excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company), (B) any
acquisition by the Company, (C) any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i), (ii)
and (iii) of subsection (3) of this Section 5.8(b); PROVIDED FURTHER, that
for purposes of clause (B), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company) shall become the
beneficial owner of 30% or more of the Outstanding Common Stock or 30% or
more of the Outstanding Voting Securities by reason of an acquisition by
the Company, and such Person shall, after such acquisition by the Company,
become the beneficial owner of any additional shares of the Outstanding
Common Stock or any additional Outstanding Voting Securities and such
beneficial ownership is publicly announced, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of such Board; provided that any individual who becomes a director
of the Company subsequent to the date hereof whose election, or nomination
for election by the Company's stockholders, was approved by the vote of at
least a majority of the directors then comprising the Incumbent Board shall
be deemed a member of the Incumbent Board; and provided further, that any
individual who was initially elected as a director of the Company as a
result of an actual or threatened solicitation by a Person other than the
Board for the purpose of opposing a solicitation by any other Person with
respect to the election or removal of directors, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall not be deemed a member of the Incumbent
Board;
(3) the consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of
the Company (a "Corporate Transaction"); excluding, however, a Corporate
Transaction pursuant to which (i) all or substantially all of the
individuals or entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of
common stock, and the combined voting power of the outstanding securities
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entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same proportions
relative to each other as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Common Stock and the Outstanding
Voting Securities, as the case may be, (ii) no Person (other than: the
Company; any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; the
corporation resulting from such Corporate Transaction; and any Person which
beneficially owned, immediately prior to such Corporate Transaction,
directly or indirectly, 30% or more of the Outstanding Common Stock or the
Outstanding Voting Securities, as the case may be) will beneficially own,
directly or indirectly, 30% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding securities of
such corporation entitled to vote generally in the election of directors
and (iii) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of directors of
the corporation resulting from such Corporate Transaction; or
(4) the consummation of a plan of complete liquidation or
dissolution of the Company.
5.9 NO RIGHT OF PARTICIPATION OR EMPLOYMENT. No person shall have
any right to participate in this Plan. Neither this Plan nor any award
made hereunder shall confer upon any person any right to continued
employment by the Company, any Subsidiary or any affiliate of the Company
or affect in any manner the right of the Company, any Subsidiary or any
affiliate of the Company to terminate the employment of any person at any
time without liability hereunder.
5.10 RIGHTS AS STOCKHOLDER. No person shall have any right as a
stockholder of the Company with respect to any shares of Common Stock or
other equity security of the Company which is subject to an award hereunder
unless and until such person becomes a stockholder of record with respect
to such shares of Common Stock or equity security.
5.11 DESIGNATION OF BENEFICIARY. A holder of an award may file with
the Committee a written designation of one or more persons as such holder's
beneficiary or beneficiaries (both primary and contingent) in the event of
the holder's death. To the extent an outstanding option or SAR granted
hereunder is exercisable, such beneficiary or beneficiaries shall be
entitled to exercise such option or SAR.
Each beneficiary designation shall become effective only when filed
in writing with the Committee during the holder's lifetime on a form
prescribed by the Committee. The spouse of a married holder domiciled in a
community property jurisdiction shall join in any designation of a
beneficiary other than such spouse. The filing with the Committee of a new
beneficiary designation shall cancel all previously filed beneficiary
designations.
If a holder fails to designate a beneficiary, or if all designated
beneficiaries of a holder predecease the holder, then each outstanding
option and SAR hereunder held by such holder, to the extent exercisable,
may be exercised by such holder's executor, administrator, legal
representative or similar person.
5.12 GOVERNING LAW. This Plan, each award hereunder and the related
Agreement, and all determinations made and actions taken pursuant thereto,
to the extent not otherwise governed by the Code or the laws of the United
States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles of
conflicts of laws.
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