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Exhibit 4.2
AMERIQUEST TECHNOLOGIES, INC.
1998 EQUITY COMPENSATION PLAN
The purpose of the AmeriQuest Technologies, Inc. 1998 Equity
Compensation Plan (the "Plan") is to provide (i) designated employees of
AmeriQuest Technologies, Inc. (the "Company") and its subsidiaries, (ii)
certain consultants and advisors who perform services for the Company or its
subsidiaries and (iii) non-employee members of the Board of Directors of the
Company (the "Board") with the opportunity to receive grants of incentive
stock options, nonqualified stock options and stock of the Company. The
Company believes that the Plan will encourage the participants to contribute
materially to the growth of the Company, thereby benefiting the Company's
shareholders, and will align the economic interests of the participants with
those of the shareholders.
1. Administration
(a) Committee. The Plan shall be administered and
interpreted by a committee appointed by the Board (the "Committee"), which may
consist of "outside directors" as defined under section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), and related Treasury
regulations and "non-employee directors" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) Committee Authority. The Committee shall have the
sole authority to (i) determine the individuals to whom grants shall be made
under the Plan, (ii) determine the type, size and terms of the grants to be
made to each such individual, (iii) determine the time when the grants will be
made and the duration of any applicable exercise or restriction period,
including the criteria for exercisability and the acceleration of
exercisability and (iv) deal with any other matters arising under the Plan.
(c) Committee Determinations. The Committee shall have
full power and authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as
it deems necessary or advisable, in its sole discretion. The Committee's
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding
on all persons having any interest in the Plan or in any awards granted
hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to
similarly situated individuals.
2. Grants
Awards under the Plan may consist of grants of incentive
stock options ("Incentive Stock Options") and nonqualified stock options
("Nonqualified Stock Options") as described in Section 5 (Incentive Stock
Options and Nonqualified Stock Options are collectively referred to as
"Options") and stock grants as described in Section 6 ("Stock Grants")
(Options and Stock Grants are hereinafter collectively referred to as
"Grants"). All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions consistent with this Plan as the
Committee deems appropriate and as are specified in writing by the Committee
to the individual in a grant instrument or an amendment to the grant
instrument (the "Grant Instrument"). The Committee shall approve the form and
provisions of each Grant Instrument. Grants under a particular Section of the
Plan need not be uniform as among the grantees.
3. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as
described below, the aggregate number of shares of common stock of the Company
("Company Stock") that may be issued or transferred under the Plan are
4,700,000 shares. After a Public Offering, the maximum aggregate number of
shares of Company Stock that shall
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be subject to Grants made under the Plan to any individual during any calendar
year shall be 800,000 shares, subject to adjustment as described below. The
shares may be authorized but unissued shares of Company Stock or reacquired
shares of Company Stock, including shares purchased by the Company on the open
market for purposes of the Plan. If and to the extent Options granted under
the Plan terminate, expire, or are canceled, forfeited, exchanged or
surrendered without having been exercised or if any shares subject to a Stock
Grant are forfeited, the shares subject to such Grants shall again be
available for purposes of the Plan.
(b) Adjustments. If there is any change in the number
or kind of shares of Company Stock outstanding (i) by reason of a stock
dividend, spin-off, recapitalization, stock split, or combination or exchange
of shares, (ii) by reason of a merger, reorganization or consolidation in
which the Company is the surviving corporation, (iii) by reason of a
reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Company Stock as a
class without the Company's receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a
spin-off or the Company's payment of an extraordinary dividend or
distribution, the maximum number of shares of Company Stock available for
Grants, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Grants, the kind of shares issued under the Plan, and
the price per share of such Grants may be appropriately adjusted by the
Committee to reflect any increase or decrease in the number of, or change in
the kind or value of, issued shares of Company Stock to preclude, to the
extent practicable, the enlargement or dilution of rights and benefits under
such Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. Any adjustments determined by the Committee
shall be final, binding and conclusive.
4. Eligibility for Participation
(a) Eligible Persons. All employees of the Company and
its subsidiaries ("Employees"), including Employees who are officers or
members of the Board, and members of the Board who are not Employees
("Non-Employee Directors") shall be eligible to participate in the Plan.
Consultants and advisors who perform services for the Company or any of its
subsidiaries ("Key Advisors") shall be eligible to participate in the Plan if
the Key Advisors render bona fide services and such services are not in
connection with the offer or sale of securities in a capital-raising
transaction.
(b). Selection of Grantees. The Committee shall select
the Employees, Non-Employee Directors and Key Advisors to receive Grants and
shall determine the number of shares of Company Stock subject to a particular
Grant in such manner as the Committee determines. Employees, Key Advisors and
Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as "Grantees".
5. Granting of Options
(a) Number of Shares. The Committee shall determine the
number of shares of Company Stock that will be subject to each Grant of
Options to Employees, Non-Employee Directors and Key Advisors.
(b) Type of Option and Price.
(i) The Committee may grant Incentive Stock
Options that are intended to qualify as "incentive stock options" within the
meaning of section 422 of the Code or Nonqualified Stock Options that are not
intended so to qualify or any combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions
set forth herein. Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options may be granted to Employees, Non-Employee Directors
and Key Advisors.
(ii) The purchase price (the "Exercise Price")
of Company Stock subject to an Option shall be determined by the Committee and
may be equal to, greater than, or less than the Fair Market Value (as defined
below) of a share of Company Stock on the date the Option is granted;
provided, however, that (x) the Exercise Price of an Incentive Stock Option
shall be equal to, or greater than, the Fair Market Value of a share of
Company Stock on the date the Incentive Stock Option is granted and (y) an
Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than 10% of the total combined voting
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power of all classes of stock of the Company or any parent or subsidiary of the
Company, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of Company Stock on the date of grant.
(iii) If the Company Stock is publicly traded,
then the Fair Market Value per share shall be determined as follows: (x) if
the principal trading market for the Company Stock is a national securities
exchange or the Nasdaq National Market, the last reported sale price thereof
on the relevant date or (if there were no trades on that date) the latest
preceding date upon which a sale was reported, or (y) if the Company Stock is
not principally traded on such exchange or market, the mean between the last
reported "bid" and "asked" prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the National Daily
Quotation Bureau, Inc. or as reported in a customary financial reporting
service, as applicable and as the Committee determines. If the Company Stock
is not publicly traded or, if publicly traded, is not subject to reported
transactions or "bid" or "asked" quotations as set forth above, the Fair
Market Value per share shall be as determined by the Committee.
(c) Option Term. The Committee shall determine the term of
each Option. The term of any Option shall not exceed ten years from the date of
grant. However, an Incentive Stock Option that is granted to an Employee who, at
the time of grant, owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or any parent or subsidiary
of the Company, may not have a term that exceeds five years from the date of
grant.
(d) Exercisability of Options. Options shall become
exercisable in accordance with such terms and conditions, consistent with the
Plan, as may be determined by the Committee and specified in the Grant
Instrument. The Committee may accelerate the exercisability of any or all
outstanding Options at any time for any reason.
(e) Termination of Employment, Disability or Death.
(i) Except as provided below, an Option may
only be exercised while the Grantee is employed by, or providing service to,
the Company as an Employee, Key Advisor or member of the Board. In the event
that a Grantee ceases to be employed by, or provide service to, the Company
for any reason other than a "disability", death, or termination for "cause",
any Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within 90 days after the date on which the Grantee ceases to
be employed by, or provide service to, the Company (or within such other
period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or
provide service to, the Company shall terminate as of such date.
(ii) In the event the Grantee ceases to be
employed by, or provide service to, the Company on account of a termination
for "cause" by the Company, any Option held by the Grantee shall terminate as
of the date the Grantee ceases to be employed by, or provide service to, the
Company. In addition, notwithstanding any other provisions of this Section 5,
if the Committee determines that the Grantee has engaged in conduct that
constitutes "cause" at any time while the Grantee is employed by, or providing
service to, the Company or after the Grantee's termination of employment or
service, any Option held by the Grantee shall immediately terminate, and the
Grantee shall automatically forfeit all shares underlying any exercised
portion of an Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the Exercise Price paid by the
Grantee for such shares.
(iii) In the event the Grantee ceases to be
employed by, or provide service to, the Company because the Grantee is
"disabled", any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee
ceases to be employed by, or provide service to, the Company (or within such
other period of time as may be specified by the Committee), but in any event
no later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee's Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be
employed by, or provide service to, the Company shall terminate as of such
date.
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(iv) If the Grantee dies while employed by, or
providing service to, the Company or within 90 days after the date on which
the Grantee ceases to be employed or provide service on account of a
termination specified in Section 5(e)(i) above (or within such other period of
time as may be specified by the Committee), any Option that is otherwise
exercisable by the Grantee shall terminate unless exercised within one year
after the date on which the Grantee ceases to be employed by, or provide
service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of
expiration of the Option term. Except as otherwise provided by the Committee,
any of the Grantee's Options that are not otherwise exercisable as of the date
on which the Grantee ceases to be employed by, or provide service to, the
Company shall terminate as of such date.
(v) For purposes of this Section 5(e) and
Section 6:
(A) The term "Company" shall mean the Company
and its parent and subsidiary corporations.
(B) "Employed by, or provide service to, the
Company" shall mean employment or service as an Employee,
Key Advisor or member of the Board (so that, for purposes of
exercising Options and satisfying conditions with respect to
Stock Grants, a Grantee shall not be considered to have
terminated employment or service until the Grantee ceases to
be an Employee, Key Advisor and member of the Board), unless
the Committee determines otherwise.
(C) "Disability" shall mean a Grantee's
becoming disabled within the meaning of section 22(e)(3) of
the Code.
(D) "Cause" shall mean, except to the extent
specified otherwise by the Committee, a finding by the
Committee that the Grantee (i) has breached his or her
employment or service contract with the Company, (ii) has
been engaged in disloyalty to the Company, including,
without limitation, fraud, embezzlement, theft, commission
of a felony or proven dishonesty in the course of his or her
employment or service, (iii) has disclosed trade secrets or
confidential information of the Company to persons not
entitled to receive such information, or (iv) has engaged in
such other conduct detrimental to the interests of the
Company as the Committee considers to be "cause."
(f) Exercise of Options. A Grantee may exercise an
Option that has become exercisable, in whole or in part, by delivering a
notice of exercise to the Company with payment of the Exercise Price. The
Grantee shall pay the Exercise Price for an Option as specified by the
Committee (x) in cash, (y) with the approval of the Committee, by delivering
shares of Company Stock owned by the Grantee (including Company Stock acquired
in connection with the exercise of an Option, subject to such restrictions as
the Committee deems appropriate) and having a Fair Market Value on the date of
exercise equal to the Exercise Price or (z) by such other method as the
Committee may approve, including payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board. Shares of
Company Stock used to exercise an Option shall have been held by the Grantee
for the requisite period of time to avoid adverse accounting consequences to
the Company with respect to the Option. The Grantee shall pay the Exercise
Price and the amount of any withholding tax due (pursuant to Section 7) at the
time of exercise.
(g) Limits on Incentive Stock Options. Each Incentive
Stock Option shall provide that, if the aggregate Fair Market Value of the
stock on the date of the grant with respect to which Incentive Stock Options
are exercisable for the first time by a Grantee during any calendar year,
under the Plan or any other stock option plan of the Company or a parent or
subsidiary, exceeds $100,000, then the Option, as to the excess, shall be
treated as a Nonqualified Stock Option. An Incentive Stock Option shall not be
granted to any person who is not an Employee of the Company or a parent or
subsidiary (within the meaning of section 424(f) of the Code).
6. Stock Grants
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The Committee may issue or transfer shares of Company Stock
to an Employee, Non-Employee Director or Key Advisor under a Stock Grant of
restricted or unrestricted stock, upon such terms as the Committee deems
appropriate. The following provisions are applicable to Stock Grants:
(a) General Requirements. Shares of Company Stock
issued or transferred pursuant to Stock Grants may be issued or transferred
for consideration or for no consideration, such as pursuant to a bonus
program, as determined by the Committee. The Committee may establish
conditions under which restrictions on shares of Company Stock shall lapse
over a period of time or according to such performance or other criteria as
the Committee deems appropriate. The period of time during which the Company
Stock will remain subject to restrictions will be designated in the Grant
Instrument as the "Restriction Period."
(b) Number of Shares. The Committee shall determine the
number of shares of Company Stock to be issued or transferred pursuant to a
Stock Grant and any restrictions applicable to such shares.
(c) Requirement of Employment or Service. If the
Grantee ceases to be employed by, or provide service to, the Company (as
defined in Section 5(e)) during a period designated in the Grant Instrument as
the Restriction Period, or if other specified conditions are not met, the
Stock Grant shall terminate as to all shares covered by the Grant as to which
the restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.
(d) Restrictions on Transfer and Legend on Stock
Certificate. During the Restriction Period, a Grantee may not sell, assign,
transfer, pledge or otherwise dispose of the shares of restricted stock
covered by the Stock Grant except to a Successor Grantee under Section 8(a).
Each certificate for a share of restricted Company Stock shall contain a
legend giving appropriate notice of the restrictions in the Grant. The Grantee
shall be entitled to have the legend removed from the stock certificate
covering the shares subject to restrictions when all restrictions on such
shares have lapsed. The Committee may determine that the Company will not
issue certificates for shares of restricted Company Stock until all
restrictions on such shares have lapsed, or that the Company will retain
possession of certificates for such shares until all restrictions on such
shares have lapsed.
(e) Right to Vote and to Receive Dividends. Unless the
Committee determines otherwise, during the Restriction Period, the Grantee
shall have the right to vote shares of restricted Company Stock and to receive
any dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee.
(f) Lapse of Restrictions. All restrictions imposed on
restricted Company Stock shall lapse upon the expiration of the applicable
Restriction Period and the satisfaction of all conditions imposed by the
Committee. The Committee may determine, as to any or all restricted Stock
Grants, that the restrictions shall lapse without regard to any Restriction
Period.
7. Withholding of Taxes
(a) Required Withholding. All Grants under the Plan
shall be subject to applicable federal (including FICA), state and local tax
withholding requirements. The Company may require that the Grantee or other
person receiving or exercising Grants pay to the Company the amount of any
federal, state or local taxes that the Company is required to withhold with
respect to such Grants, or the Company may deduct from other wages paid by the
Company the amount of any withholding taxes due with respect to such Grants.
(b) Election to Withhold Shares. If the Committee so
permits, a Grantee may elect to satisfy the Company's income tax withholding
obligation with respect to a Grant by having shares withheld up to an amount
that does not exceed the Grantee's minimum applicable withholding tax rate for
federal (including FICA), state and local tax liabilities. The election must
be in a form and manner prescribed by the Committee and shall be subject to
the prior approval of the Committee.
8. Transferability of Grants
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(a) Nontransferability of Grants. Except as provided
below, only the Grantee may exercise rights under a Grant during the Grantee's
lifetime. A Grantee may not transfer those rights except by will or by the
laws of descent and distribution or, with respect to Grants other than
Incentive Stock Options, if permitted in any specific case by the Committee,
pursuant to a domestic relations order (as defined under the Code or Title I
of the Employee Retirement Income Security Act of 1974, as amended, or the
regulations thereunder). When a Grantee dies, the personal representative or
other person entitled to succeed to the rights of the Grantee ("Successor
Grantee") may exercise such rights. A Successor Grantee must furnish proof
satisfactory to the Company of his or her right to receive the Grant under the
Grantee's will or under the applicable laws of descent and distribution.
(b) Transfer of Nonqualified Stock Options.
Notwithstanding the foregoing, the Committee may provide, in a Grant
Instrument, that a Grantee may transfer Nonqualified Stock Options to family
members, one or more trusts for the benefit of family members, or one or more
partnerships of which family members are the only partners, according to such
terms as the Committee may determine; provided that the Grantee receives no
consideration for the transfer of an Option and the transferred Option shall
continue to be subject to the same terms and conditions as were applicable to
the Option immediately before the transfer.
9. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to
have occurred if:
(a) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes a "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing more than 50% of the voting power of the then
outstanding securities of the Company (other than pursuant to a merger or
consolidation of the Company where the shareholders of the Company,
immediately prior to the merger or consolidation, will beneficially own,
immediately after the merger or consolidation, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the
surviving corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote);
(b) The shareholders of the Company approve (or, if
shareholder approval is not required, the Committee approves) an agreement
providing for (i) the merger or consolidation of the Company with another
corporation where the shareholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such shareholders to more than 50%
of all votes to which all shareholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote), (ii) the sale
or other disposition of all or substantially all of the assets of the Company,
or (iii) a liquidation or dissolution of the Company;
(c) Any person has commenced a tender offer or exchange
offer for 30% or more of the voting power of the then outstanding shares of
the Company; or
(d) After the date this Plan is approved by the
shareholders of the Company, directors are elected such that a majority of the
members of the Board shall have been members of the Board for less than two
years, unless the election or nomination for election of each new director who
was not a director at the beginning of such two-year period was approved by a
vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period.
10. Consequences of a Change of Control
(a) Notice and Acceleration. Upon a Change of Control,
unless the Committee determines otherwise, (i) the Company shall provide each
Grantee with outstanding Grants written notice of such Change of Control, (ii)
all outstanding Options shall automatically accelerate and become fully
exercisable and (iii) the restrictions and conditions on all outstanding Stock
Grants shall immediately lapse.
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(b) Assumption of Grants. Upon a Change of Control
where the Company is not the surviving corporation (or survives only as a
subsidiary of another corporation), unless the Committee determines otherwise,
all outstanding Options that are not exercised shall be assumed by, or
replaced with comparable options by, the surviving corporation.
(c) Other Alternatives. Notwithstanding the foregoing,
subject to subsection (d) below, in the event of a Change of Control, the
Committee may take one or both of the following actions: the Committee may (i)
require that Grantees surrender their outstanding Options in exchange for a
payment by the Company, in cash or Company Stock as determined by the
Committee, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee's unexercised
Options exceeds the Exercise Price of the Options, or (ii) after giving
Grantees an opportunity to exercise their outstanding Options, terminate any
or all unexercised Options at such time as the Committee deems appropriate.
Such surrender or termination shall take place as of the date of the Change of
Control or such other date as the Committee may specify.
(d) Limitations. Notwithstanding anything in the Plan
to the contrary, in the event of a Change of Control, the Committee shall not
have the right to take any actions described in the Plan (including without
limitation actions described in Subsection (c) above) that would make the
Change of Control ineligible for pooling of interests accounting treatment or
that would make the Change of Control ineligible for desired tax treatment if,
in the absence of such right, the Change of Control would qualify for such
treatment and the Company intends to use such treatment with respect to the
Change of Control.
11. Requirements for Issuance or Transfer of Shares. No
Company Stock shall be issued or transferred in connection with any Grant
hereunder unless and until all legal requirements applicable to the issuance
or transfer of such Company Stock have been complied with to the satisfaction
of the Committee. The Committee shall have the right to condition any Grant
made to any Grantee hereunder on such Grantee's undertaking in writing to
comply with such restrictions on his or her subsequent disposition of such
shares of Company Stock as the Committee shall deem necessary or advisable as
a result of any applicable law, regulation or official interpretation thereof,
and certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or
transferred under the Plan will be subject to such stop-transfer orders and
other restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a legend be placed thereon.
12. Amendment and Termination of the Plan
(a) Amendment. The Committee may amend or terminate the
Plan at any time; provided, however, that the Committee shall not amend the
Plan without shareholder approval if such approval is required in order for
Incentive Stock Options granted or to be granted under the Plan to meet the
requirements of section 422 of the Code or such approval is required in order
to exempt compensation under the Plan from the deduction limit under section
162(m) of the Code.
(b) Termination of Plan. The Plan shall terminate on
the day immediately preceding the tenth anniversary of its effective date,
unless the Plan is terminated earlier by the Committee or is extended by the
Committee with the approval of the shareholders.
(c) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made shall
not materially impair the rights of a Grantee unless the Grantee consents or
unless the Committee acts under Section 18(b). The termination of the Plan
shall not impair the power and authority of the Committee with respect to an
outstanding Grant. Whether or not the Plan has terminated, an outstanding
Grant may be terminated or amended under Section 18(b) or may be amended by
agreement of the Company and the Grantee consistent with the Plan.
(d) Governing Document. The Plan shall be the
controlling document. No other statements, representations, explanatory
materials or examples, oral or written, may amend the Plan in any manner. The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.
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(e) Funding of the Plan
This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Grants under this Plan. In
no event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants.
14. Rights of Participants
Nothing in this Plan shall entitle any Employee, Key
Advisor, Non-Employee Director or other person to any claim or right to be
granted a Grant under this Plan. Neither this Plan nor any action taken
hereunder shall be construed as giving any individual any rights to be
retained by or in the employ of the Company or any other employment rights.
15. No Fractional Shares
No fractional shares of Company Stock shall be issued or
delivered pursuant to the Plan or any Grant. The Committee shall determine
whether cash, other awards or other property shall be issued or paid in lieu
of such fractional shares or whether such fractional shares or any rights
thereto shall be forfeited or otherwise eliminated.
16. Headings
Section headings are for reference only. In the event of a
conflict between a title and the content of a Section, the content of the
Section shall control.
17. Effective Date of the Plan. Subject to approval by
the Company's shareholders, the Plan shall be effective on January 28, 1999.
18. Miscellaneous
(a) Grants in Connection with Corporate Transactions
and Otherwise. Nothing contained in this Plan shall be construed to (i) limit
the right of the Committee to make Grants under this Plan in connection with
the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business or assets of any corporation, firm or association, including
Grants to employees thereof who become Employees of the Company, or for other
proper corporate purposes, or (ii) limit the right of the Company to grant
stock options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee of another
corporation who becomes an Employee by reason of a corporate merger,
consolidation, acquisition of stock or property, reorganization or liquidation
involving the Company or any of its subsidiaries in substitution for a stock
option or restricted stock grant made by such corporation. The terms and
conditions of the substitute grants may vary from the terms and conditions
required by the Plan and from those of the substituted stock incentives. The
Committee shall prescribe the provisions of the substitute grants.
(b) Compliance with Law. The Plan, the exercise of
Options and the obligations of the Company to issue or transfer shares of
Company Stock under Grants shall be subject to all applicable laws and to
approvals by any governmental or regulatory agency as may be required. With
respect to persons subject to section 16 of the Exchange Act, it is the intent
of the Company that the Plan and all transactions under the Plan comply with
all applicable provisions of Rule 16b-3 or its successors under the Exchange
Act. In addition, it is the intent of the Company that the Plan and applicable
Grants under the Plan comply with the applicable provisions of section 162(m)
of the Code and section 422 of the Code. To the extent that any legal
requirement of section 16 of the Exchange Act or section 162(m) or 422 of the
Code as set forth in the Plan ceases to be required under section 16 of the
Exchange Act or section 162(m) or 422 of the Code, that Plan provision shall
cease to apply. The Committee may revoke any Grant if it is contrary to law or
modify a Grant to bring it into compliance with any valid and mandatory
government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole
discretion, agree to limit its authority under this Section.
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(c) Governing Law. The validity, construction,
interpretation and effect of the Plan and Grant Instruments issued under the
Plan shall be governed and construed by and determined in accordance with the
laws of the State of Delaware, without giving effect to the conflict of laws
provisions thereof.
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