EXHIBIT 10.11
RADIAN GROUP INC.
1992 STOCK OPTION PLAN
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ARTICLE I
Purposes
1.1 Purposes of Plan. The purpose of this Radian Group Inc. 1992
Stock Option Plan (the "Plan") is to provide incentives to selected Key
Employees of the Company and/or its Affiliates who contribute, and are expected
to contribute, materially to the success of the Company and its Affiliates, to
provide a means of rewarding outstanding performance and to enhance the interest
of such Key Employees in the Company's continued success and progress by
providing them a proprietary interest in the Company. In addition, this Plan is
intended to provide incentives to non-employee members of the Board of Directors
to continue to provide services to the Company or its Affiliates. Further, this
Plan is designed to enhance the Company's ability to maintain a competitive
position in attracting and retaining the qualified key personnel and directors
necessary for the continued success and progress of the Company.
ARTICLE II
Definitions
2.1 Certain terms used herein shall have the meaning below stated,
subject to the provisions of Section 7.1.
"Affiliate" means a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, the Company, except that
when used in connection with an Incentive Stock Option, "Affiliate" means a
Subsidiary.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
"Chairman" means the Chairman of the Board of the Company.
"Change of Control" shall be deemed to have taken place if (i) any
Person (except for the Employee or his family, the Company or any employee
benefit plan of the Company or of any Affiliate, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such employee benefit plan), together will all Affiliates and Associates
of such Person shall become the Beneficial Owner in the aggregate of 20% or more
of the shares of the Company then outstanding and entitled to vote for directors
generally, (ii) any Person (except the Employee and his family), together with
all Affiliates and Associates of such Person purchases substantially all of the
assets of the Company, or (iii) during any twenty-four
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(24) month period, individuals who at the beginning of such period constituted
the Board cease for any reason to constitute a majority thereof, unless the
election, or the nomination for election by the Company's stockholders, of at
least seventy-five percent (75%) of the directors who were not directors at the
beginning of such period was approved by a vote of at least seventy-five percent
(75%) of the directors in office at the time of such election or nomination who
were directors at the beginning of such period. For purposes of this definition,
"Affiliate" and "Associate" shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act;
"Person" shall mean any individual, firm, corporation, partnership or other
entity; and "Beneficial Owner" shall mean:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including without
limitation, pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this subsection (ii)
as a result of an oral or written agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy given in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable successor report); or
(iii) where voting securities are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy described in the proviso to subsection (ii) above) or
disposing of any voting securities of the Company; provided, however, that
nothing in this definition shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a firm
commitment underwriting until expiration of forty (40) days after the date
of such acquisition.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Committee" means the Stock Option and Compensation Committee
appointed by the Board to administer the Plan pursuant to Article VII.
"Common Stock" means, subject to the provisions of Section 10.2, the
presently authorized common stock of the Company, par value $.001 per share.
"Company" means CMAC Investment Corporation.
"Disability" means (subject to Section 6.2) a physical or mental
impairment of sufficient severity such that an Employee is both eligible for and
in receipt of benefits under the long-term disability program maintained by the
Company.
"Eligible Director" means a person who is an incumbent, non-employee
member of the Board, including those who are members of the Committee, at the
time the Plan is initially approved by the stockholders or who is elected as a
non-employee member of the Board subsequent to that date.
"Employee" means an employee (including an officer) of the Company
or of an Affiliate except that when used in connection with an Incentive Stock
Option, "Employee" means an employee (including an officer) of the Company or of
a Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" means the closing price at which the Common
Stock shall have been sold regular way on the New York Stock Exchange on the
date as of which such value is being determined or, if no sales occurred on such
day, then on the next preceding day on which there were such sales, or, if at
any time the Common Stock shall not be listed on the New York Stock Exchange,
the fair market value as determined by the Committee on the basis of available
prices for such Common Stock or in such manner as may be authorized by
applicable regulations under the Code.
"Incentive Stock Option" means an option to purchase Common Stock
granted by the Company to a Key Employee pursuant to Section 5.1 which is
intended to meet the requirements of Section 422 of the Code and which is
labeled an Incentive Stock Option.
"Key Employee" means an Employee selected to participate in the Plan
pursuant to the terms hereof.
"1933 Act" means the Securities Act of 1933, as amended.
"Non-Statutory Option" means an option to purchase Common Stock,
granted by the Company to a Key Employee or an Eligible Director pursuant to
Section 4.2 or 5.1, which is not an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Statutory Option.
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"Plan" means the CMAC Investment Corporation 1992 Stock Option Plan,
as set forth herein and as amended from time to time.
"Stock Appreciation Right" means a right granted by the Company to a
Key Employee pursuant to Section 5.4 to earn additional compensation for
services rendered based upon the appreciation of the Fair Market Value of Common
Stock.
"Subsidiary" means a subsidiary or parent corporation, as defined in
Sections 424(e) and (f) of the Code, with respect to the Company.
ARTICLE III
Stockholder Approval; Reservation of Shares
3.1 Stockholder Approval. This Plan, provided that it has been
approved by the holders of a majority of the Company's Common Stock entitled to
vote, shall become effective upon the date that the Registration Statement
relating to an initial public offering by the Company as described in Section
4.2 hereof shall be declared effective by the Securities and Exchange
Commission.
3.2 Shares Reserved Under Plan. Subject to adjustment under the
provisions of Section 10.2 hereof, the maximum number of shares of Common Stock
which may be issued and sold under this Plan is 1,800,000 shares. The maximum
number of shares of Common Stock for which any Key Employee may be granted
Options under the Plan is limited to 75,000 per year. Such shares may be either
authorized and unissued shares or shares issued and thereafter acquired by the
Company. Shares issued pursuant to this Plan shall be subject to all applicable
provisions of the Certificate of Incorporation and By-Laws of the Company in
existence at the time of issuance of such shares and at all times thereafter. If
Options (and any related Stock Appreciation Rights) granted under this Plan
shall terminate or cease to be exercisable by reason of expiration, surrender
for cancellation or otherwise without having been wholly exercised, new Options
(and any related Stock Appreciation Rights) may be granted under this Plan
covering the number of shares to which such termination or cessation relates.
ARTICLE IV
Participation in Plan
4.1 General Eligibility to Receive Options and Stock Appreciation
Rights. Options and Stock Appreciation Rights under this Plan may be granted to
officers and other Key Employees of the Company or an Affiliate.
4.2 Option Grants to Eligible Directors. Notwithstanding any other
provision of this Plan (other than Section 3.2 hereof limiting the number of
shares issuable hereunder), an Eligible Director shall receive a Non-Statutory
Option to purchase 4,500 shares of Common Stock on the date he or she first
becomes a member of the Board. Thereafter, upon the completion of each three
year period of service on the Board, each Eligible Director will receive
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an additional Non-Statutory Option to purchase 4,500 shares of Common Stock.
Options granted pursuant to this Section 4.2 shall have a per share exercise
price equal to the Fair Market Value of a share of Common Stock on the date of
grant; provided, however, that with respect to the Options initially granted
under this Plan in connection with the Company's initial public offering of
Common Stock (the "IPO"), the purchase price per share will be the price per
share at which Common Stock is first offered to the public pursuant to the IPO
(the "IPO Price"). Options granted pursuant to this Section 4.2 shall become
vested and exercisable with respect to one-third of the shares of Common Stock
underlying the Option on each anniversary following the date of grant, provided
the optionee remains a director of the Company. Options granted pursuant to this
Section 4.2 shall be exercisable for ten years after the date of grant, provided
that (subject to Section 6.4) the optionee remains a director of the Company.
Notwithstanding any other provision of the Plan, this Section 4.2 may not be
amended more than once every six months, except for amendments necessary to
conform the Plan to changes in the provisions of, or the regulations relating
to, the Code.
4.3 Participation Not Guarantee of Employment. Nothing in this Plan
or in the instrument evidencing the grant of an Option or Stock Appreciation
Right shall in any manner be construed to limit in any way the right of the
Company or an Affiliate to terminate a Key Employee's employment at any time,
without regard to the effect of such termination on any rights such Key Employee
would otherwise have under this Plan, or give any right to such a Key Employee
to remain employed by the Company or an Affiliate in any particular position or
at any particular rate of compensation.
ARTICLE V
Options and Stock Appreciation Rights
5.1 Grants of Options.
(a) Grant. The Committee may grant Incentive Stock Options
and/or Non-Statutory Options to Key Employees. Eligible Directors of the Company
may only be granted Non-Statutory Options. All Options under this Plan shall be
granted within ten years of the date on which this Plan is adopted or the date
the Plan is approved by the stockholders of the Company, whichever is earlier.
(b) Option Price. The purchase price per share of Common Stock
under an Incentive Stock Option shall be not less than 100 percent of the Fair
Market Value per share of such Common Stock on the date the Option is granted.
The purchase price per share of Common Stock under each Non-Statutory Option
shall be determined by the Committee, but shall be not less than 90% of the Fair
Market Value per share of such Common Stock on the date such Non-Statutory
Option is granted; provided, however, that with respect to the Options initially
granted under this Plan in connection with the IPO, the purchase price per share
will be the IPO Price. The Option price may be subject to adjustment in
accordance with the provisions of Section 10.2 hereof.
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(c) Option Agreements. Options and any Stock Appreciation
Rights attached to such Options shall be evidenced by Option Agreements in such
form and containing such terms and conditions as the Committee shall approve,
which terms and conditions need not be the same for all Options.
(d) Options Nontransferable. Options shall not be transferable
except in accordance with Section 5.1(d)(1) below or by will or the laws of
descent and distribution (or to a designated beneficiary in the event of an
optionee's death) or, in the case of a nonstatutory stock option, if permitted
in any specific case by the Committee in their sole discretion, pursuant to a
qualified domestic relations order as defined under the Code or Title I of
ERISA, or the rules thereunder. Except as provided above, Options will be
exercisable during the lifetime of an optionee only by such optionee or his or
her guardian or legal representative. Nothing contained herein shall be deemed
inconsistent with the provisions herein set forth pertaining to the exercise of
an option by the estate of a deceased holder.
(e) Transferability of Nonstatutory Stock Options.
Notwithstanding the foregoing, the Committee may provide that a Grantee may
transfer Nonstatutory 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.
(f) Substitution and Cancellation. The Committee, in its sole
discretion, may grant to a Key Employee or an Eligible Director who has been
granted an Option under this Plan, in exchange for the surrender and
cancellation of such Option, a new Option having a purchase price lower (or
higher) than the purchase price provided in the Option so surrendered and
canceled and containing such other terms as the Committee may deem appropriate,
subject to such limitations or restrictions with respect to Incentive Stock
Options as may be imposed by the Code.
5.2 Exercise of Options.
(a) Term of Options; Vesting. The term of an Option and any
related Stock Appreciation Right granted under this Plan to a Key Employee shall
be ten (10) years from the date of grant. An Option shall become 100% vested at
the earliest of the following times if the optionee is an Employee at such time:
(i) the Employee's normal retirement date, (ii) the Employee's death or
Disability, (iii) five years from the date of grant or (iv) the occurrence of a
Change of Control. Each Option shall vest and become exercisable in cumulative
installments to the extent of 25% of the number of shares originally covered
thereby on and after the second, third, fourth and fifth anniversaries of the
grant of the Option, if the optionee is an Employee on such anniversary. In its
sole discretion, the Committee may prescribe shorter installments or accelerate
the exercisability of any Option at any time. In addition, any option granted to
an Eligible Director shall become 100% vested upon a Change of Control.
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(b) Payment on Exercise. No shares of Common Stock shall be
issued on the exercise of an Option unless paid for in full at the time of
purchase. Payment for shares of Common Stock purchased upon the exercise of an
Option shall be made in cash or, with the consent of the Committee, in whole or
in part in such shares of Common Stock held for at least six months valued at
the then Fair Market Value thereof. Stock certificates for the shares of Common
Stock so paid will be issued and delivered to the person entitled thereto only
at the Company's office in Philadelphia, PA. No person shall have any rights as
a stockholder with respect to any share of Common Stock covered by an Option
unless and until such person shall have become the holder of record of such
share, and, except as otherwise permitted in Section 10.2 hereof, no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property or distributions or other rights) in respect of
such share for which the record date is prior to the date on which such person
shall have become the holder of record thereof.
(c) Exercise upon Dissolution, Liquidation or Winding Up. If
at any time after an Option or Stock Appreciation Right has become exercisable
and prior to its exercise and expiration, a voluntary dissolution, liquidation
(other than a liquidation into another corporation which agrees to continue this
Plan) or winding up of the affairs of the Company shall be proposed, the Company
shall cause notice in writing to be mailed to each person holding an Option or
Stock Appreciation Right under this Plan, which notice shall be mailed not less
than twenty days prior to the closing of the transfer books of the Company or
the record date for determination of the holders of Common Stock of the Company
entitled to participate in such dissolution, liquidation or winding up, as the
case may be, to the end that during such notice period the holder of any Option
or Stock Appreciation Right, to the extent that the same is then exercisable by
such holder, may, subject to the terms of Article V hereof, either (i) purchase
Common Stock in accordance with the terms of the Option and be entitled, in
respect of the number of shares so purchased, with respect to such proposed
dissolution, liquidation or winding up of the affairs of the Company, or (ii)
exercise such Stock Appreciation Right(s) and be paid in cash, or to the extent
paid in shares of Common Stock, be entitled to all of the rights of other
holders of Common Stock with respect to such proposed dissolution, liquidation
or winding up of the affairs of the Company. Each Option and Stock Appreciation
Right at the time outstanding and all rights thereunder shall terminate at the
close of business on the twentieth day after mailing of such notice to the
holder of such Option or Stock Appreciation Right or on the record date for
determination of holders of Common Stock entitled to participate in such
dissolution, liquidation or winding up, whichever is later.
(d) Notice. If an optionee desires to exercise all of part of
such optionee's currently exercisable Options or Stock Appreciation Rights, such
optionee shall notify the Secretary of the Company, in writing or by telephone,
as designated in the Options or Stock Appreciation Rights which the optionee
wishes to exercise. The date of such notice shall be referred to herein as the
"Notice Date". Within three days after the Notice Date (the "Election Date"),
the Secretary of the Company will inform the optionee of the Committee's
determination regarding exercisability of the Options.
(e) Receipt. In the event that the optionee exercises Stock
Appreciation Rights, the optionee will receive an amount determined pursuant to
the provisions of Section 5.4
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(less applicable withholding taxes) within five days of the Election Date. In
the event that an optionee exercises Options, the optionee shall comply with all
requirements set forth in the Option Agreement in connection with the purchase
of shares of Common Stock under this Plan.
5.3 Incentive Stock Options.
(a) Annual Limitation. Any other provision of this Plan
notwithstanding, but subject to the limitation of Section 3.2 relating to the
aggregate number of shares subject to this Plan, the aggregate Fair Market Value
(determined as of the time the Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
any Employee during any calendar year (under this Plan and any other plans of
the Company and its Subsidiaries) shall not exceed $100,000. The limitation set
forth herein shall apply as and to the extent required to enable Incentive Stock
Options to qualify under Section 422 of the Code and, if such Section 422 is
amended, the Committee shall have the power to make corresponding changes in the
limitation set forth herein.
(b) Incentive Stock Options Granted to Ten Percent
Stockholders. No Incentive Stock Option shall be granted to any Key Employee who
owns, directly or indirectly pursuant to Section 424(d) of the Code, stock
possessing more than ten (10) percent of the total combined voting power of all
classes of stock of the Company or any Subsidiary, unless at the time such
Incentive Stock Option is granted, the price of the Incentive Stock Option is at
least 110 percent of the Fair Market Value of the Common Stock subject to the
Incentive Stock Option and such Incentive Stock Option, by its terms, is not
exercisable after the expiration of five (5) years from the date such Incentive
Stock Option is granted.
(c) Notice. Each Key Employee shall give prompt notice to the
Company of any disposition of shares acquired upon exercise of an Incentive
Stock Option if such disposition occurs within either two years after the date
of grant or one year after the date of transfer of such shares to the Key
Employee upon the exercise of such Incentive Stock Option.
(d) Consent. To the extent appropriate to avoid a
"modification" or other event described in Section 424(h) of the Code, a Key
Employee's rights under an Incentive Stock Option (including the rights to pay
the exercise price in Common Stock, to exercise a related Stock Appreciation
Right and to receive cash, shares, or a combination upon exercise of a related
Stock Appreciation Right) shall be set forth in the Option Agreement at the date
of grant, so as to preclude any requirement that further Committee consent be
given after the date of grant.
5.4 Stock Appreciation Rights Attached to Options.
(a) Award. The Committee may award a Stock Appreciation Right
with respect to any shares of Common Stock covered by any Option granted under
this Plan to a Key Employee and such Stock Appreciation Right shall be granted
as of the time of the grant of the related Option.
(b) Terms and Conditions. Each Stock Appreciation Right shall
be subject to the same terms and conditions as the related Option with respect
to the date of
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expiration, limitations on transferability and eligibility to exercise. A Stock
Appreciation Right granted in connection with an Incentive Stock Option may be
exercised only when the Fair Market Value of the shares of Common Stock subject
to such Incentive Stock Option exceeds the exercise price of such Incentive
Stock Option. No Stock Appreciation Right may be exercised after the related
Option becomes nonexercisable. Stock Appreciation Rights shall be payable, at
the election of the Committee, in the form of cash, Common Stock or a
combination thereof.
(c) Amount of Compensation. The amount of compensation which
shall be payable pursuant to the exercise of a Stock Appreciation Right shall be
equal to the excess of the Fair Market Value of one share of Common Stock on the
date the Secretary of the Company receives notice of the exercise of such Stock
Appreciation Right over the purchase price per share under the related Option as
determined under Section 5.1(b) hereof, multiplied by the number of Option
shares with respect to which the Stock Appreciation Right is exercised.
(d) Termination of Option. Upon the exercise of a Stock
Appreciation Right, the related Option shall cease to be exercisable as to the
number of shares of Common Stock with respect to which such Stock Appreciation
Right was exercised.
ARTICLE VI
Termination of Relationship with the Company
6.1 Termination of Employment. Unless earlier terminated in
accordance with its terms, an Option or Stock Appreciation Right shall terminate
90 days after any of the following:
(a) voluntary termination of employment by the Key Employee,
with or without consent of the Company,
(b) termination of employment of the Key Employee by the
Company or any of its Affiliates, with or without cause, or
(c) termination of employment of the Key Employee for any
other reason (except as set forth in Section 6.2 below) including retirement
under a retirement plan maintained by the Company, or because the Affiliate
employing such Key Employee ceases to be an Affiliate of the Company and such
Employee does not, prior thereto or contemporaneously therewith, become a Key
Employee of the Company or of another Affiliate.
6.2 Death or Disability. If a Key Employee's employment is
terminated as a result of Disability or death, such Employee, or such Employee's
legal representatives in the event of death, shall be entitled to exercise the
Option or Stock Appreciation Right in whole or in part at any time within one
year following the Disability (defined in accordance with Section 422(c)(6) of
the Code in the case of an Incentive Stock Option) or death of such Key
Employee.
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6.3 Employment. For all purposes of this Plan, and any Option or
Stock Appreciation Right granted hereunder, "employment" shall be defined in
accordance with the provisions of Section 1.421-7(h) of the Income Tax
Regulations (or any successor regulations).
6.4 Eligible Director. Upon an Eligible Director ceasing to be an
Eligible Director of the Company for any reason (except as a result of becoming
an Employee of the Company or an Affiliate or as a result of his retirement,
Disability or death), such non-employee director's Options shall terminate after
90 days. In the event of an Eligible Director's death or Disability, any
outstanding Options shall remain exercisable for one year from the date of death
or Disability, but in no event shall such period extend beyond the original term
of the Option.
ARTICLE VII
Administration Plan
7.1 The Committee. The Plan shall be administered and interpreted by
a committee of the Board (the "Committee"); provided, however, that grant
decisions made hereunder shall be made by at least two persons, each of whom may
be (i) "outside directors" as defined under Section 162(m) of the Internal
Revenue Code, and (ii) "non-employee directors" as defined under Rule 16b-3 of
the Securities Exchange Act of 1934 or any successor provisions and shall
satisfy the requirements of Section 12 hereof. The Board may appoint a
subcommittee for this purpose, in which case references herein to the
"Committee": shall mean the subcommittee as appropriate. A majority of the
Committee shall constitute a quorum thereof and the actions of a majority of the
Committee at a meeting at which a quorum is present, or actions unanimously
approved in writing by all members of the Committee, shall be the actions of the
Committee. Vacancies occurring on the Committee shall be filled by the Board.
The Committee shall have the full and final authority to interpret this Plan and
the agreements evidencing Options and Stock Appreciation Rights granted
hereunder (which agreements need not be identical), to prescribe, amend and
rescind rules and regulations, if any, relating to this Plan and to make all
determinations necessary or advisable for the administration of this Plan. The
Committee's determination in all matters referred to herein shall be conclusive
and binding for all purposes and upon all persons including, but without
limitation, the Company, the stockholders of the Company, the Committee and each
of the members thereof, and Employees of the Company, and their respective
successors in interest.
7.2 Liability of Committee. No member of the Committee shall be
liable for anything done or omitted to be done by such member or by any other
member of the Committee in connection with this Plan, except for the willful
misconduct or gross negligence of such member. The Committee shall have the
power to engage outside consultants, auditors or other professional help to
assist in the fulfillment of the Committee's duties under this Plan at the
Company's expense.
7.3 Determinations of the Committee. In making its determinations
concerning the Key Employees who shall receive Options and Stock Appreciation
Rights, as well as the number of shares to be covered thereby and time or times
at which they shall be granted, the Committee shall take into account the nature
of the services rendered by the respective Key
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Employees, their past, present and potential contribution to the Company's
success and such other factors as the Committee may deem relevant. The Committee
shall also determine the form of Option Agreements to be issued under this Plan
and the terms and conditions to be included therein, provided such terms and
conditions are not inconsistent with the terms of this Plan. The Committee may,
in its discretion or in accordance with a direction from the Board, waive any
provisions of any Option Agreement, provided such waiver is not inconsistent
with the terms of this Plan as then in effect.
ARTICLE VIII
Amendment and Termination of Plan
8.1 Amendment of Plan.
(a) Generally. This Plan may be amended at any time and from
time to time by the Board of Directors of the Company but no amendment which (1)
decreases the minimum Option price provided in this Plan, (2) extends the period
during which Options and Stock Appreciation Rights may be granted under this
Plan, or (3) changes the class of Key Employees eligible to receive Options and
Stock Appreciation Rights shall be effective unless and until the same is
approved by the affirmative vote, in person or proxy, of the holders of a
majority of the shares of Common Stock of the Company present and entitled to
vote at a meeting held to take such action at which a quorum is present. No
termination or amendment of this Plan, without the consent of the holder of any
Option or Stock Appreciation Right then existing, may terminate such holder's
Option or Stock Appreciation Right or materially and adversely affect such
holder's rights thereunder.
(b) Amendments Relating to Incentive Stock Options. To the
extent applicable, this Plan is intended to permit the issuance of Incentive
Stock Options in accordance with the provisions of Section 422 of the Code. The
Plan may be modified or amended at any time, both prospectively and
retroactively, and in such manner as to affect Incentive Stock Options
previously granted (after taking account of Section 424(h) of the Code, relating
to "modifications", etc.), if such amendment or modification is necessary for
this Plan and the Incentive Stock Options granted hereunder to qualify under
said provisions of the Code.
8.2 Termination. The Board may at any time terminate this Plan as of
any date specified in a resolution adopted by the Board. If not earlier
terminated, this Plan shall terminate on the tenth anniversary of the effective
date of the Plan. No Options or Stock Appreciation Rights may be granted after
this Plan has terminated. After this Plan shall terminate, the function of the
Committee will be limited to supervising the administration of Options and Stock
Appreciation Rights previously granted.
ARTICLE IX
Exchange Act Compliance
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9.1 Additional Restrictions Under Rule 16b-3. Unless an optionee
could otherwise transfer option shares issued hereunder without incurring
liability under Section 16(b) of the Exchange Act, at least six months must
elapse from the date of acquisition of an Option to the date of disposition of
the shares issued upon exercise of the Option.
9.2 Compliance with Rule 16b-3. It is the intent of the Company that
this Plan comply in all respects with applicable provisions of Rule 16b-3 under
the Exchange Act in connection with any grant of Options to or other transaction
by an optionee who is subject to Section 16 of the Exchange Act. Accordingly, if
any provision of this Plan or any agreement relating to an Option does not
comply with the requirements of Rule 16b-3 as then applicable to any such
optionee, such provision will be construed or deemed amended to the extent
necessary to conform to such requirements with respect to such person. In
addition, the Committee shall have no authority to make any amendment,
alteration, suspension, discontinuation, or termination of the Plan or any
agreement hereunder or take other action if such authority would cause an
optionee's transactions under the Plan not to be exempt under Rule 16b-3 under
the Exchange Act.
ARTICLE X
Miscellaneous Provisions
10.1 Restrictions Upon Resale of Unregistered Stock. If the shares
of Common Stock that have been transferred to a Key Employee or Eligible
Director pursuant to the terms of this Plan are not registered under the 1933
Act, pursuant to an effective registration statement, such Key Employee or
Eligible Director, if the Committee shall deem it advisable, may be required to
represent and agree in writing (i) that any shares of Common Stock acquired by
such Key Employee or Eligible Director pursuant to this Plan will not be sold
except pursuant to an effective registration statement under the 1933 Act, or
pursuant to an exemption from registration under the 1933 Act and (ii) that such
Key Employee or Eligible Director is acquiring such shares of Common Stock for
his or her own account and not with a view to the distribution thereof.
10.2 Adjustment. In the event of any change (through
recapitalization, merger, consolidation, stock dividend, split up, combination
or exchange of shares or otherwise) in the character or amount of the Company
capital stock (or any other transaction described in Section 424(a) of the Code)
after any Option or Stock Appreciation Right is granted hereunder and prior to
the exercise thereof, (i) the Option, to the extent that it has not been
exercised, shall entitle the holder to such number and kind of securities as
such holder would have been entitled to had such holder actually owned the stock
subject to the Option at the time of the occurrence of such change and (ii) any
outstanding Stock Appreciation Rights shall be similarly adjusted. If any other
event shall occur, prior to the exercise of an Option granted hereunder, which
shall increase or decrease the amount of capital stock outstanding and which the
Committee, in its sole discretion, shall determine equitably requires an
adjustment in the number of shares which the holder should be permitted to
acquire or the number of Stock Appreciation Rights such holder should be
entitled to exercise, such adjustment as the Committee shall determine may be
made, and when so made shall be effective and binding for all purposes of this
Plan.
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10.3 Withholding of Taxes. Each Key Employee who exercises an Option
to purchase Common Stock or Stock Appreciation Rights shall agree to pay to the
Company, or make arrangements satisfactory to the Committee regarding payment
of, any taxes of any kind required by law to be withheld with respect to the
transfer to such Employee of such shares of Common Stock.
10.4 Use of Proceeds. The proceeds from the sale of Common Stock
pursuant to Options granted under this Plan shall constitute general funds of
the Company and may be used for such corporate purposes as the Company may
determine.
10.5 Other Grants. Options and Stock Appreciation Rights may be
granted under this Plan from time to time in substitution for stock options
and/or stock appreciation rights held by employees of other corporations who are
or are about to become employees of the Company as the result of a merger or
consolidation of the employing corporation with the Company, or the acquisition
by the Company of the assets of the employing corporation, or the acquisition by
the Company of stock of the employing corporation as the result of which it
becomes an Affiliate of the Company. Further, Stock Appreciation Rights may be
granted under the Plan from time to time in connection with stock options
assumed by the Company as part of any such merger, consolidation or acquisition.
The terms and conditions of the substituted Options or related Stock
Appreciation Rights so granted may vary from the terms and conditions set forth
herein to such extent as the Committee may deem appropriate to conform, in whole
or in part, to the provisions of the substituted stock incentives.
10.6 Other Benefits. Nothing contained herein shall prevent the
Company from establishing other incentive plans in which Key Employees and
Eligible Directors in the Plan may also participate. No award under this Plan
shall be considered as compensation in calculating any insurance, pension or
other benefit for which the recipient is eligible unless any such insurance,
pension or other benefit is granted under a plan which expressly provides that
compensation under this Plan (and specifying the type of such compensation)
shall be considered as compensation under such plan.
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