EXHIBIT 10.16
ST. JUDE MEDICAL, INC.
2000 STOCK PLAN
SECTION CONTENTS PAGE
- ------- -------- ----
1. General Purpose of Plan; Definitions .................. 1
2. Administration ........................................ 3
3. Stock Subject to Plan ................................. 4
4. Eligibility ........................................... 4
5. Stock Options ......................................... 5
6. Transfer, Leave of Absence, etc. ...................... 9
7. Restricted Stock ...................................... 9
8. Amendments and Termination ............................ 11
9. Unfunded Status of Plan ............................... 11
10. General Provisions .................................... 12
11. Effective Date of Plan ................................ 13
ST. JUDE MEDICAL, INC.
2000 STOCK PLAN
SECTION 1. General Purpose of Plan; Definitions.
The name of this plan is the St. Jude Medical, Inc. 2000 Stock Plan
(the "Plan"). The purpose of the Plan is to enable St. Jude Medical, Inc. and
its Subsidiaries (hereinafter, the "Company") to retain and attract executives
and other key employees, non-employee directors and consultants who contribute
to the Company's success by their ability, ingenuity and industry, and to enable
such individuals to participate in the long-term success and growth of the
Company by giving them a proprietary interest in the Company.
For purposes of the Plan, the following terms shall be defined as set
forth below:
a. "Board" means the Board of Directors of the Company as it may be
comprised from time to time.
b. "Cause" means a felony conviction of a participant or the failure of
a participant to contest prosecution for a felony, willful misconduct,
dishonesty or intentional violation of a statute, rule or regulation, any of
which, in the judgment of the Company, is harmful to the business or reputation
of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute.
d. "Committee" means the Committee referred to in Section 2 of the
Plan. If at any time no Committee shall be in office, then the functions of the
Committee specified in the Plan shall be exercised by the Board, unless the Plan
specifically states otherwise.
e. "Consultant" means any person, including an advisor, engaged by the
Company, the Parent Corporation or a Subsidiary of the Company to render
services and who is compensated for such services and who is not an employee of
the Company, the Parent Corporation or any Subsidiary of the Company. A
Non-Employee Director may serve as a Consultant.
f. "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any other
leave of absence approved by the Administrator, provided that such leave of
absence is for a period of 90 days or less, unless reemployment after such leave
of absence is guaranteed by contract or statute.
g. "Company" means St. Jude Medical, Inc., a corporation organized
under the laws of the State of Minnesota (or any successor corporation).
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h. "Disability" means permanent and total disability as determined by
the Committee.
i. "Early Retirement" means retirement, with consent of the Committee
at the time of retirement, from active employment with the Company and any
Subsidiary or Parent Corporation of the Company.
j. "Fair Market Value" of Stock on any given date shall be determined
by the Committee as follows: (a) if the Stock is listed for trading, on the New
York Stock Exchange or one of more national securities exchanges, the last
reported sales price on the New York Stock Exchange or such principal exchange
on the date in question, or if such Stock shall not have been traded on such
principal exchange on such date, the last reported sales price on the New York
Stock Exchange or such principal exchange on the first day prior thereto on
which such Stock was so traded; or (b) if (a) is not applicable, by any means
fair and reasonable by the Committee, which determination shall be final and
binding on all parties.
k. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
l. "Non-Employee Director" means a "Non-Employee Director" within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of 1934.
m. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option, and is intended to be and is designated as a
"Non-Qualified Stock Option" or an Incentive Stock Option that ceases to so
qualify due to an amendment to such Stock Option.
n. "Normal Retirement" means retirement from active employment with the
Company and any Subsidiary or Parent Corporation of the Company on or after age
65.
o. "Outside Director" means a Director who: (a) is not a current
employee of the Company or any member of an affiliated group which includes the
Company; (b) is not a former employee of the Company who receives compensation
for prior services (other than benefits under a tax-qualified retirement plan)
during the taxable year; (c) has not been an officer of the Company; (d) does
not receive remuneration from the Company, either directly or indirectly, in any
capacity other than as a director, except as otherwise permitted under Code
Section 162(m) and regulations thereunder. For this purpose, remuneration
includes any payment in exchange for good or services. This definition shall be
further governed by the provisions of Code Section 162(m) and regulations
promulgated thereunder.
p. "Parent Corporation" means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if each of the
corporations (other than the Company) owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
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q. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 7 below.
r. "Retirement" means Normal Retirement or Early Retirement.
s. "Stock" means the Common Stock of the Company.
t. "Stock Option" means any option to purchase shares of Stock granted
pursuant to Section 5 below.
u. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.
SECTION 2. Administration.
The Plan shall be administered by the Board of Directors or by a
Committee appointed by the Board of Directors of the Company consisting of at
least two Directors, all of whom shall be Outside Directors and Non-Employee
Directors, who shall serve at the pleasure of the Board.
The Committee shall have the power and authority to grant to eligible
employees or Consultants, pursuant to the terms of the Plan: (i) Incentive Stock
Options, (ii) Non-Qualified Stock Options, and (iii) Restricted Stock.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the
Company and its Subsidiaries and other eligible persons to whom Stock
Options or Restricted Stock may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock
Options, Non-Qualified Stock Options or Restricted Stock or a
combination of each, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each
such award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including,
but not limited to, any restriction on any Stock Option or other award
and/or the shares of Stock relating thereto), which authority shall be
exclusively vested in the Committee (and not the Board); provided,
however, that in the event of a merger or asset sale, the applicable
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provisions of Sections 5(c) of the Plan shall govern the acceleration
of the vesting of any Stock Option;
(v) to determine whether, to what extent and under what
circumstances Stock and other amounts payable with respect to an award
under this Plan shall be deferred either automatically or at the
election of the participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate to the President and/or Chief Executive Officer of the Company the
authority to exercise the powers specified in (i), (ii), (iii), (iv) and (v)
above with respect to persons who are not either the chief executive officer of
the Company or the four highest paid officers of the Company other than the
chief executive officer.
All decisions made by the Committee pursuant to the provisions of the
Plan shall be final and binding on all persons, including the Company and Plan
participants.
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for
distribution under the Plan shall be 5,000,000. Such shares may consist, in
whole or in part, of authorized and unissued shares. If any shares that have
been optioned cease to be subject to Stock Options, or if any shares that have
been optioned are forfeited, such shares shall again be available for
distribution in connection with future awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, and in the number and option price of
shares subject to outstanding options granted under the Plan as may be
determined to be appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a whole number.
SECTION 4. Eligibility.
Officers, other key employees of the Company or any Parent Corporation
or Subsidiary, members of the Board of Directors, and Consultants who are
responsible for or contribute to the management, growth and profitability of the
business of the Company and its Subsidiaries are eligible to be granted Stock
Options under the Plan. The optionees and participants under the Plan shall be
selected from time to time by the Committee, in its sole discretion, from among
those eligible, and the Committee shall determine, in its sole discretion, the
number of shares covered by each award.
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Notwithstanding the foregoing, no person shall receive grants of Stock
Options under this Plan which exceed 500,000 shares during any fiscal year of
the Company.
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i)
Incentive Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock
Options shall be granted under the Plan after March 7, 2010.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options. To the
extent that any option does not qualify as an Incentive Stock Option, it shall
constitute a separate Non-Qualified Stock Option.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be so
exercised, so as to disqualify either the Plan or any Incentive Stock Option
under Section 422 of the Code. The preceding sentence shall not preclude any
modification or amendment to an outstanding Incentive Stock Option, whether or
not such modification or amendment results in disqualification of such Stock
Option as an Incentive Stock Option, provided the optionee consents in writing
to the modification or amendment.
Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Stock purchasable under
a Stock Option shall be no less than 100% of Fair Market Value on the date the
option is granted. If an employee owns or is deemed to own (by reason of the
attribution rules applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such
employee, the option price shall be no less than 110% of Fair Market Value of
the Stock on the date the option is granted. The Committee may not reprice
options without shareholder approval.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than eight years after
the date the option is granted. If an employee owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or any Parent
Corporation or Subsidiary and an Incentive Stock Option is granted to such
employee, the term of such option shall be no more than five years from the date
of grant.
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(c) Exercisability. Stock Options shall be exercisable at such time or
times as determined by the Committee at or after grant, subject to the
restrictions stated in Section 5(b) above. If the Committee provides, in its
discretion, that any option is exercisable only in installments, the Committee
may waive such installment exercise provisions at any time. Notwithstanding
anything contained in the Plan to the contrary, the Committee may, in its
discretion, extend or vary the term of any Stock Option or any installment
thereof, whether or not the optionee is then employed by the Company, if such
action is deemed to be in the best interests of the Company; provided, however,
that in the event of a merger or sale of assets, the provisions of this Section
5(c) shall govern vesting acceleration. Notwithstanding the foregoing, unless
the Stock Option provides otherwise, any Stock Option granted under this Plan
shall be exercisable in full, without regard to any installment exercise
provisions, for a period specified by the Committee, but not to exceed sixty
(60) days, prior to the occurrence of any of the following events: (i)
dissolution or liquidation of the Company other than in conjunction with a
bankruptcy of the Company or any similar occurrence, (ii) any merger,
consolidation, acquisition, separation, reorganization, or similar occurrence,
where the Company will not be the surviving entity or (iii) the transfer of
substantially all of the assets of the Company or 50% or more of the outstanding
Stock of the Company.
The grant of an option pursuant to the Plan shall not limit in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
exchange or consolidate or to dissolve, liquidate, sell or transfer all or any
part of its business or assets.
(d) Method of Exercise. Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either by check,
or by any other form of legal consideration deemed sufficient by the Committee
and consistent with the Plan's purpose and applicable law, including promissory
notes or a properly executed exercise notice together with irrevocable
instructions to a broker acceptable to the Company to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price. As
determined by the Committee at the time of grant or exercise, in its sole
discretion, payment in full or in part may also be made in the form of Stock
already owned by the optionee (which in the case of Stock acquired upon exercise
of an option have been owned for more than six months on the date of surrender)
or, in the case of the exercise of a Non-Qualified Stock Option (based, in each
case, on Fair Market Value of the Stock on the date the option is exercised, as
determined by the Committee), provided, however, that, in the case of an
Incentive Stock Option, the right to make a payment in the form of already owned
shares may be authorized only at the time the option is granted, and provided
further that in the event payment is made in the form of shares of restricted
stock under another plan of the Company, the optionee will receive a portion of
the option shares in the form of, and in an amount equal to, the restricted
stock tendered as payment by the optionee. If the terms of an option so permit,
an optionee may elect to pay all or part of the option exercise price by having
the Company withhold from the shares of Stock that would otherwise be issued
upon exercise that number of shares of Stock having a Fair Market Value
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equal to the aggregate option exercise price for the shares with respect to
which such election is made. No shares of Stock shall be issued until full
payment therefor has been made. An optionee shall generally have the rights to
dividends and other rights of a shareholder with respect to shares subject to
the option when the optionee has given written notice of exercise, has paid in
full for such shares, and, if requested, has given the representation described
in paragraph (a) of Section 9.
(e) Non-transferability of Options. No Incentive Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and all such Incentive Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee. Non-Qualified Stock
Options may be transferred by gift, without consideration, by the optionee under
a written instrument acceptable to the Committee, to a member of the optionee's
family, as defined in Section 267 of the Code, or to a trust or similar entity
whose sole beneficiaries are the optionee and/or members of the optionee's
family; provided, however, that such transfer and the exercise thereof shall not
violate any federal or state securities laws. Upon the transfer, the donee shall
have all rights of the optionee and shall be subject to all the terms and
conditions imposed on such Options.
(f) Termination by Death. If an optionee's employment by the Company and
any Subsidiary or Parent Corporation terminates by reason of death, any Stock
Option may thereafter be exercised, to the extent then exercisable, by the legal
representative of the estate or by the legatee of the optionee under the will of
the optionee, but may not be exercised after twelve months from the date of such
death or the expiration of the stated term of the option, whichever period is
shorter. In the event of termination of employment by reason of death, if,
pursuant to its terms, any Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option.
(g) Termination by Reason of Disability. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability,
but may not be exercised after twelve months from the date of such termination
of employment or the expiration of the stated term of the option, whichever
period is the shorter. In the event of termination of employment by reason of
Disability, if, pursuant to its terms, any Incentive Stock Option is exercised
after the expiration of the exercise periods that apply for purposes of Section
422 of the Code, the option will thereafter be treated as a Non-Qualified Stock
Option.
(h) Termination by Reason of Retirement. If an optionee's employment by
the Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Retirement,
but may not be exercised after thirty-six months from the date of such
termination of employment or the expiration of the stated term of the option,
whichever period is the shorter. In the event of termination of employment by
reason of Retirement, if, pursuant to its terms, any Incentive Stock Option is
exercised after the
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expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option.
(i) Other Termination. If an optionee's Continuous Status as an Employee
or Consultant terminates (other than upon the optionee's death, Disability or
Retirement), any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such termination, but may not be
exercised after 90 days after such termination, or the expiration of the stated
term of the option, whichever period is the shorter. In the event of termination
of employment by reason other than death, Disability or Retirement and if
pursuant to its terms any Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of Section 422 of the
Code, the option will thereafter be treated as a Non-Qualified Stock Option. In
the event an Optionee's employment with the Company is terminated for Cause, all
unexercised Options granted to such Optionee shall immediately terminate.
(j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of the Common
Stock with respect to which an Incentive Stock Option under this Plan or any
other plan of the Company and any Subsidiary or Parent Corporation is
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000.
(k) Grants of Stock Options to Non-Employee Directors. Each
Non-Employee Director who, after March 8, 2000 is (i) elected, re-elected or
serving an unexpired term as a Director of the Company at any annual meeting of
holders of the common Stock of the Company; or (ii) elected as a Director of the
Company at any special meeting of holders of common Stock of the Company, shall,
as of the date of such election, re-election or annual or special meeting,
automatically be granted a Stock Option to purchase 3,000 shares of Stock at an
option price per share equal to 100% of Fair Market Value of the Company's Stock
on such date. In the case of a special meeting, the action of the holders of
shares in electing a Non-Employee Director shall constitute the granting of the
Stock Option to such Director and, in the case of an annual meeting, the action
of the holders of shares in electing or re-electing a Non-Employee Director
shall constitute the granting of the Stock Option to such Director and to any
other Non-Employee Director who shall be designated as serving an unexpired term
as a Director of the Company in the notice or proxy materials for the meeting;
and the date when the holders of shares shall take such action shall be the date
of grant of the Stock Option. All such Options shall be designated as
Non-Qualified Stock Options and shall be subject to the same terms and
provisions as are then in effect with respect to the grant of Non-Qualified
Stock Options to officers and key employees of the Company, except that (1) the
term of each such Option shall be equal to eight years, which term,
notwithstanding the provisions in Section 5(i), shall not expire upon the
termination of service as a Director; and (2) the Option shall become
exercisable beginning six months after the date the Option is granted. Upon
termination of such Director's service as a Director of the Company, the
unvested portion of an Option held by such Director shall not thereafter be
exercisable. Subject to the foregoing, all provisions of this Plan not
inconsistent with the foregoing shall apply to Options granted pursuant to this
Section 5(k), except that any Options granted to a Non-Employee Director shall
be administered in
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accordance with the terms of this Plan solely by the Board of Directors and not
by the Committee. Options issued under this Section 5(k) shall be in lieu of and
in substitution for any new awards of Options in accordance with the St. Jude
Medical, Inc. 1997 Stock Option Plan from and after March 8, 2000. Nothing
herein shall limit the right of the Board of Directors to issue Stock Options to
any Non-Employee Director under the terms of this Plan in addition to those
provided for under this Section 5(k), provided that no Non-Employee Director
shall be granted Stock Options under this Plan, including the Options awarded
under this Section 5(k), in excess of 5,000 shares in any calendar year.
SECTION 6. Transfer, Leave of Absence, etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent Corporation
or Subsidiary, or from a Parent Corporation or Subsidiary to the Company, or
from one Subsidiary to another;
(b) a leave of absence, approved in writing by the Committee, for
military service or sickness, or for any other purpose approved by the Company
if the period of such leave does not exceed ninety (90) days (or such longer
period as the Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved in
writing by the Committee, but only if the employee's right to reemployment is
guaranteed either by a statute or by contract, and provided that, in the case of
any leave of absence, the employee returns to work within 30 days after the end
of such leave.
SECTION 7. Restricted Stock.
(a) Administration. Up to 50,000 shares of Restricted Stock may be
issued either alone or in addition to other awards granted under the Plan. The
Committee shall determine the officers and key employees of the Company and
Subsidiaries to whom, and the time or times at which, grants of Restricted Stock
will be made, the number of shares to be awarded, the time or times within which
such awards may be subject to forfeiture, and all other conditions of the
awards. The Committee may also condition the grant of Restricted Stock upon the
attainment of specified performance goals. The provisions of Restricted Stock
awards need not be the same with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.
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(i) Each participant shall be issued a stock certificate in
respect of shares of Restricted Stock awarded under the Plan. Such
certificate shall be registered in the name of the participant, and
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially in the
following form:
"The transferability of the certificate and the
shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of
the St. Jude Medical, Inc. 2000 Stock Plan and an
Agreement entered into between the registered owner
and the Company."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock
power endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the
date of such award (the "Restriction Period"), the participant shall
not be permitted to sell, transfer, pledge or assign shares of
Restricted Stock awarded under the Plan. Within these limits, the
Committee may provide for the lapse of such restrictions in
installments where deemed appropriate.
(ii) Except as provided in paragraph (c) (i) of this Section
7, the participant shall have, with respect to the shares of Restricted
Stock, all of the rights of a shareholder of the Company, including the
right to vote the shares and the right to receive any cash dividends.
The Committee, in its sole discretion, may permit or require the
payment of cash dividends to be deferred and, if the Committee so
determines, reinvested in additional shares of Restricted Stock to the
extent shares are available under Section 3. Certificates for shares of
unrestricted Stock shall be delivered to the grantee promptly after,
and only after, the period of forfeiture shall have expired without
forfeiture in respect of such shares of Restricted Stock.
(iii) Subject to the provisions of the award agreement and
paragraph (c) (iv) of this Section 7, upon termination of employment
for any reason during the Restriction Period, all shares still subject
to restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other that for Cause),
including death, Disability or Retirement, or in the event of an
unforeseeable emergency of a participant still in
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service, the Committee may, in its sole discretion, when it finds that
a waiver would be in the best interest of the Company, waive in whole
or in part any or all remaining restrictions with respect to such
participant's shares of Restricted Stock.
(v) Notwithstanding the foregoing, all restrictions with
respect to any participant's shares of Restricted Stock shall lapse, on
the date determined by the Committee, prior to, but in no event more
that sixty (60) days prior to, the occurrence of any of the following
events: (i) dissolution or liquidation of the Company, other than in
conjunction with a bankruptcy of the Company or any similar occurrence,
(ii) any merger, consolidation, acquisition, separation,
reorganization, or similar occurrence, where the Company will not be
the surviving entity or (iii) the transfer of substantially all of the
assets of the Company or 50% or more of the outstanding Stock of the
Company.
SECTION 8. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option theretofore granted, without
the optionee's or participant's consent, or (ii) which without the approval of
the shareholders of the Company would cause the Plan to no longer comply with
Rule 16b-3 under the Securities Exchange Act of 1934, Section 422 of the Code or
any other regulatory requirements.
The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively to the extent such amendment is
consistent with the terms of this Plan, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. However, the Committee may not reprice options, either by
lowering the exercise price of outstanding options or canceling outstanding
options and granting replacement options with lower exercise prices, without
shareholder approval.
SECTION 9. Unfunded Status Of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
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SECTION 10. General Provisions.
(a) The Committee may require each person purchasing shares pursuant to
a Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Nothing contained in this Plan shall prevent the Board of Directors
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption
of the Plan shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company, Parent
Corporation or a Subsidiary to terminate the employment of any of its employees
at any time.
(c) Each participant shall, no later than the date as of which any part
of the value of an award first becomes includible as compensation in the gross
income of the participant for Federal income tax purposes, pay to the Company,
or make arrangements satisfactory to the Committee regarding payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company, Parent Corporation
and a Subsidiary shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the participant.
With respect to any award under the Plan, if the terms of such award so permit,
a participant may elect by written notice to the Company to satisfy part or all
of the withholding tax requirements associated with the award by (i) authorizing
the Company to retain from the number of shares of Stock that would otherwise be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock already owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
participant under this Section 9(c). Any such election shall be in accordance
with, and subject to, applicable tax and securities laws, regulations and
rulings.
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SECTION 11. Effective Date of Plan
The Plan shall be effective on March 8, 2000 (the date of approval by
the Board of Directors), subject to the approval by shareholders of the Company.
If the Plan is not so approved by the shareholders on or before one year after
this Plan's adoption by the Board of Directors, this Plan shall not come into
effect. The offering of the shares hereunder shall be also subject to the
effecting by the Company of any registration or qualification of the shares
under any federal or state law or the obtaining of the consent or approval of
any governmental regulatory body which the Company shall determine, in its sole
discretion, is necessary or desirable as a condition to or in connection with,
the offering or the issue or purchase of the shares covered thereby. The Company
shall make every reasonable effort to effect such registration or qualification
or to obtain such consent or approval.
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