EXHIBIT 10.1
AMERICAN LOCKER GROUP INCORPORATED
1999 STOCK INCENTIVE PLAN
ARTICLE I
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the American Locker Group Incorporated 1999
Stock Incentive Plan (hereinafter referred to as the "Plan") is to assist in
attracting and retaining highly competent key employees and consultants and to
act as an incentive in motivating selected key employees and consultants of
American Locker Group Incorporated and its Subsidiaries (as defined below) to
achieve long-term corporate objectives.
1.02 ADOPTION AND TERM. The Plan was approved by the Board of Directors
(hereinafter referred to as the "Board") of American Locker Group Incorporated
(hereinafter referred to as the "Company") effective as of March 3, 1999 (the
"Effective Date"), subject to the approval of the stockholders of the Company.
The Plan shall remain in effect until terminated by action of the Board;
provided, however, that no Incentive Stock Option (as defined below) may be
granted hereunder after the tenth anniversary of the Effective Date.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the following
meanings:
2.01 AWARD means any grant to a Participant of one or a combination of
Non-Qualified Stock Options, Incentive Stock Options and/or Stock Appreciation
Rights described in Article VI.
2.02 AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
2.03 BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and an Award Agreement upon the Participant's death.
2.04 BOARD means the Board of Directors of the Company.
2.05 CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
(a) the acquisition by any person (including any syndicate or
group deemed to be a "person" under Section 13(d)(3) or 14(d)(2) of the
Exchange Act of "beneficial ownership" (as determined in accordance with
Rule 13d-3 promulgated under the Exchange Act, except that a person shall
be deemed to be a "beneficial owner" of all securities that such person
has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
shares of capital stock of the Company entitling such person to exercise
30% or more of the total voting power of the Company Voting Securities;
(b) during any year or any period of two consecutive years
(not including any period prior to the Effective Date), individuals who at
the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this definition) whose election by the Board or
nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute at least a majority thereof;
(c) any consolidation or merger of the Company with or into
any other person, or any sale or transfer of all or substantially all of
the assets of the Company to another person, other than any such
transaction immediately following which more than 70% of, respectively,
the then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and the Company Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of
the Outstanding Common Stock and Company Voting Securities, as the case
may be; or
(d) the stockholders of the Company approve a plan of complete
liquidation of the Company.
Notwithstanding the foregoing, unless otherwise determined by the Board, no
change in control of the Company shall be deemed to have occurred for purposes
of determining a Participant's rights under this Plan if (x) the Participant is
a member of a group that first announces a proposal which, if successful, would
result in a Change of Control, which proposal (including any modifications
thereof) is ultimately successful, or (y) the Participant acquires a two percent
or more equity interest in the entity that ultimately acquires the Company
pursuant to the transaction described in (x) of this paragraph. For purposes of
this definition, transfers by the Estate of Harold J. Ruttenberg to members of
Mr. Harold J. Ruttenberg's family or trusts for the benefit of Mr. Harold J.
Ruttenberg's family shall not be considered in determining if a Change in
Control has occurred.
2.06 CODE means the Internal Revenue Code of 1986, as amended. References
to a section of the Code include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes said
section.
2.07 COMMITTEE means the committee established in accordance with Section
3.01.
2.08 COMPANY means American Locker Group Incorporated, a Delaware
corporation, and its successors and assigns.
2.09 COMPANY VOTING SECURITIES means the outstanding shares of any class
or classes (however designated) of capital stock of the Company entitled to vote
generally in the election of the Board.
2.10 COMMON STOCK means Common Stock of the Company, par value $ 1.00 per
share.
2.11 DATE OF GRANT means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.12 EFFECTIVE DATE shall have the meaning given to such term in Section
1.02.
2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.14 EXERCISE PRICE means, with respect to a Stock Appreciation Right, the
amount established by the Committee in the related Award Agreement as the amount
to be subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).
2.15 FAIR MARKET VALUE means, as of any applicable date: (i) if the Common
Stock is listed on a national securities exchange or is authorized for quotation
on The Nasdaq National Market System ("NMS"), the mean of the high and low
prices of the Common Stock on such exchange or NMS, as the case may be, on such
date or if no sale of the Common Stock shall have occurred on such date, the
highest asked price for the Common Stock on such date; or (ii) if the Common
Stock is not listed for trading on a national securities exchange or authorized
for quotation on NMS, the closing bid price as reported by The Nasdaq SmallCap
Market on such date, or if no such price shall have been reported for such date,
on the next preceding date for which such price was so reported; or (iii) if the
Common Stock is not listed for trading on a national securities exchange or
authorized for quotation on NMS or The Nasdaq SmallCap Market (if applicable),
the mean between the bid and ask prices published in the "pink sheets" or
displayed on the National Association of Securities Dealers, Inc. ("NASD")
Electronic Bulletin Board, as the case may be; or (iv) if the Common Stock is
not listed for trading on a national securities exchange, is not authorized for
quotation on NMS or The Nasdaq SmallCap Market and is not published in the "pink
sheets" or displayed on the NASD Electronic Bulletin Board, the fair market
value of the Common Stock as determined by the Committee based upon such
evidence as it may think necessary or desirable.
2.16 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.17 MERGER means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
2.18 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.19 OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under Section 6.01(a) of the Plan.
2.20 OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.21 PARTICIPANT means a person designated to receive an Award under the
Plan in accordance with Section 5.01.
2.22 PLAN means the American Locker Group Incorporated 1999 Stock
Incentive Plan as described herein, as the same may be amended from time to
time.
2.23 PURCHASE PRICE, with respect to Options, shall have the meaning set
forth in Section 6.01(b).
2.24 RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.
2.25 STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Section 6.02(a).
2.26 SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
2.27 TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion. In the case of a consultant who is not an employee of the
Company or a Subsidiary, Termination of Employment shall mean voluntary or
involuntary termination of the consulting relationship for any reason.
ARTICLE III
ADMINISTRATION
3.01 COMMITTEE. The Plan shall be administered by a committee of the Board
(the "Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
Committee may, subject to compliance with applicable legal requirements, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
Board may exercise any of the authority conferred upon the Committee hereunder.
In the event of any such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may be.
ARTICLE IV
SHARES
4.01 NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan shall be 150,000 shares of Common Stock.
The number of shares available for issuance under the Plan shall be subject to
adjustment in accordance with Section 7.07. The shares to be offered under the
Plan shall be authorized and unissued shares of Common Stock, or issued shares
of Common Stock which will have been reacquired by the Company.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Common Stock covered
by any unexercised portions of terminated Options (including canceled Options)
granted under Article VI and shares of Common Stock subject to any Award that
are otherwise surrendered by a Participant may be subject to new Awards under
the Plan. Shares of Common Stock subject to Options, or portions thereof, that
have been surrendered in connection with the exercise of Stock Appreciation
Rights shall not be available for subsequent Awards under the Plan, but shares
of Common Stock issued in payment of such Stock Appreciation Rights shall not be
charged against the number of shares of Common Stock available for the grant of
Awards hereunder.
ARTICLE V
PARTICIPATION
5.01 ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such key
employees and consultants of the Company and its Subsidiaries, whether or not
members of the Board, as the Committee, in its sole discretion, may designate
from time to time. The Committee's designation of a Participant in any year
shall not require the Committee to designate such person to receive Awards in
any other year. The designation of a Participant to receive an Award under one
portion of the Plan does not require the Committee to include such Participant
under other portions of the Plan. The Committee shall consider such factors as
it deems pertinent in selecting Participants and in determining the types and
amounts of their respective Awards. Subject to adjustment in accordance with
Section 7.07, during any calendar year no Participant shall be granted Awards in
respect of more than 15,000 shares of Common Stock (whether through grants of
Options or Stock Appreciation Rights or other rights with respect thereto).
ARTICLE VI
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.01 OPTION AWARDS.
(A) GRANT OF OPTIONS. The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participants to purchase shares of
Common Stock from the Company in such numbers, at such prices, and on such terms
and subject to such conditions, not inconsistent with the terms of the Plan, as
may be established by the Committee. The terms of any Option granted under the
Plan shall be set forth in an Award Agreement.
(B) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of Common
Stock which may be purchased upon exercise of any Option granted under the Plan
shall be determined by the Committee; provided, however, that the Purchase Price
shall in all cases be equal to or greater than the Fair Market Value on the Date
of Grant.
(C) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in the
Plan, the Committee may designate, at the time of the grant of an Option, such
Option as an Incentive Stock Option or a Non-Qualified Stock Option; provided,
however, that an Option may be designated as an Incentive Stock Option only if
the applicable Participant is an employee of the Company or a Subsidiary on the
Date of Grant.
(D) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) that would result in Incentive Stock Options to purchase
shares of Common Stock with an aggregate Fair Market Value (measured on the Date
of Grant) of more than $100,000 first becoming exercisable by such Participant
in any one calendar year.
(E) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an Option
pursuant to Section 7.04 shall have no rights as a stockholder with respect to
the shares of Common Stock covered by an Option until that Participant or
transferee shall have become the holder of record
of any such shares, and no adjustment shall be made with respect to any such
shares of Common Stock for dividends in cash or other property or distributions
of other rights on the Common Stock for which the record date is prior to the
date on which that Participant or transferee shall have become the holder of
record of any shares covered by such Option; provided, however, that
Participants are entitled to share adjustments to reflect capital changes under
Section 7.07.
6.02 STOCK APPRECIATION RIGHTS.
(A) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to grant
to any Participant one or more Stock Appreciation Rights. Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Options; provided, however, that: (i) any Option covering any share of
Common Stock shall expire and not be exercisable upon the exercise of any Stock
Appreciation Right with respect to the same share, (ii) any Stock Appreciation
Right covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any Option with respect to the same share, and (iii) an
Option and a Stock Appreciation Right covering the same share of Common Stock
may not be exercised simultaneously. Upon exercise of a Stock Appreciation Right
with respect to a share of Common Stock, the Participant shall be entitled to
receive an amount equal to the excess, if any, of (A) the Fair Market Value of a
share of Common Stock on the date of exercise over (B) the Exercise Price of
such Stock Appreciation Right established in the Award Agreement, which amount
shall be payable as provided in Section 6.02(c).
(B) EXERCISE PRICE. The Exercise Price established for any Stock
Appreciation Right granted under this Plan shall be determined by the Committee,
but in the case of Stock Appreciation Rights granted in tandem with Options
shall not be less than the Purchase Price of the related Options. Upon exercise
of Stock Appreciation Rights, the number of shares issuable upon exercise under
any related Options shall automatically be reduced by the number of shares of
Common Stock represented by such Options which are surrendered as a result of
the exercise of such Stock Appreciation Rights.
(C) PAYMENT OF INCREMENTAL VALUE. Any payment that may become due from the
Company by reason of a Participant's exercise of a Stock Appreciation Right may
be paid to the Participant as determined by the Committee (i) all in cash, (ii)
all in Common Stock, or (iii) in any combination of cash and Common Stock. In
the event that all or a portion of the payment is to be made in Common Stock,
the number of shares of Common Stock to be delivered in satisfaction of such
payment shall be determined by dividing the amount of such payment or portion
thereof by the Fair Market Value on the date of exercise . No fractional share
of Common Stock shall be issued to make any payment in respect of Stock
Appreciation Rights; if any fractional share would otherwise be issuable, the
combination of cash and Common Stock payable to a Participant shall be adjusted
as directed by the Committee to avoid the issuance of any fractional share.
6.03 TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(A) CONDITIONS ON EXERCISE. An Award Agreement with respect to Options
and/or Stock Appreciation Rights may contain such waiting periods, exercise
dates and restrictions on exercise (including, but not limited to, periodic
installments) as may be determined by the Committee at the time of grant.
(B) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and Stock
Appreciation Rights shall terminate after the first to occur of the following
events:
(i) Expiration of the Option or Stock Appreciation Right as provided
in the related Award Agreement; or
(ii) Termination of the Award as provided in Section 6.03(e),
following the applicable Participant's Termination of Employment; or
(iii) In the case of an Incentive Stock Option, ten years from the
Date of Grant; or
(iv) Solely in the case of a Stock Appreciation Right granted in
tandem with an Option, upon the expiration of the related Option.
(C) ACCELERATION OF EXERCISE TIME. The Committee, in its sole discretion,
shall have the right (but shall not in any case be obligated), exercisable at
any time after the Date of Grant, to permit the exercise of any Option or Stock
Appreciation Right prior to the time such Option or Stock Appreciation Right
would otherwise become exercisable under the terms of the related Award
Agreement.
(D) EXTENSION OF EXERCISE TIME. In addition to the extensions permitted
under Section 6.03(e) in the event of Termination of Employment, the Committee,
in its sole discretion, shall have the right (but shall not in any case be
obligated), exercisable on or at any time after the Date of Grant, to permit the
exercise of any Option or Stock Appreciation Right after its expiration date
described in Section 6.03(e), subject, however, to the limitations described in
Sections 6.03(b)(i), (iii) and (iv).
(E) EXERCISE OF OPTIONS OR STOCK APPRECIATION RIGHTS UPON TERMINATION OF
EMPLOYMENT.
(I) TERMINATION OF VESTED OPTIONS AND STOCK APPRECIATION RIGHTS UPON
TERMINATION OF EMPLOYMENT. The following provisions shall apply to all Options
and Stock Appreciation Rights unless the applicable Award Agreement shall
provide otherwise:
(A) TERMINATION. In the event of Termination of Employment of
a Participant other than by reason of death, disability or
Retirement, the right of the Participant to exercise any Option or
Stock Appreciation Right shall terminate on the date of such
Termination of Employment, unless the exercise period is extended by
the Committee in accordance with Section 6.03(d).
(B) DISABILITY. In the event of a Participant's Termination of
Employment by reason of disability, the right of the Participant to
exercise any Option or Stock Appreciation Right which he or she was
entitled to exercise upon Termination of Employment (or which became
exercisable at a later date pursuant to Section 6.03(e)(ii)) shall
terminate twelve months after the date of such Termination of
Employment, unless the exercise period is extended by the Committee
in accordance with Section 6.03(d). Notwithstanding the foregoing,
if, upon the disability of the Participant, the Participant's age
plus years of continuous service with the Company and its affiliates
and predecessors (as combined and rounded to the nearest month)
equal 65 or more, then all of his Options and Stock Appreciation
Rights shall be exercisable on the date of such disability, for the
exercise period stated above. In no event, however, may any Option
or Stock Appreciation Right be exercised later than the date of
expiration of the Option determined pursuant to Section 6.03(b)(i),
(iii) or (iv).
(C) RETIREMENT. In the event of a Participant's Termination of
Employment by reason of Retirement, the right of the Participant to
exercise any Option or Stock Appreciation Right which he or she was
entitled to exercise
upon Termination of Employment (or which became exercisable at a
later date pursuant to Section 6.03(e)(ii)) shall terminate three
months after the date of such Termination of Employment, unless the
exercise period is extended by the Committee in accordance with
Section 6.03(d). Notwithstanding the foregoing, if, upon the
retirement of the Participant, the Participant's age plus years of
continuous service with the Company and its affiliates and
predecessors (as combined and rounded to the nearest month) equal
65 or more, then all of his Options and Stock Appreciation Rights
shall be exercisable on the date of such retirement, for the
exercise period stated above. In no event, however, may any Option
or Stock Appreciation Right be exercised later than the date of
expiration of the Option determined pursuant to Section 6.03(b)
(i), (iii) or (iv).
(D) DEATH. In the event of the death of a Participant while
employed by the Company or a Subsidiary or within any additional
period of time from the date of the Participant's Termination of
Employment and prior to the expiration of any Option or Stock
Appreciation Right as provided pursuant to Section 6.03(e)(i)(B) or
(C) or Section 6.03(d) above, to the extent the right to exercise
the Option or Stock Appreciation Right was accrued as of the date of
such Termination of Employment and had not expired during such
additional period, the right of the Participant's Beneficiary to
exercise the Option or Stock Appreciation Right shall terminate
twelve months after the date of the Participant's death, unless the
exercise period is extended by the Committee in accordance with
Section 6.03(d). In no event, however, may any Option or Stock
Appreciation Right be exercised later than the date of expiration of
the Option determined pursuant to Section 6.03(b)(i), (iii) or (iv).
(II) TERMINATION OF UNVESTED OPTIONS OR STOCK APPRECIATION RIGHTS
UPON TERMINATION OF EMPLOYMENT. Subject to Section 6.03(c), and except as
otherwise expressly provided pursuant to Section 6.03(e)(1)(B) or (C), to
the extent the right to exercise an Option or a Stock Appreciation Right,
or any portion thereof, has not accrued as of the date of Termination of
Employment, such right shall expire at the date of such Termination of
Employment.
6.04 EXERCISE PROCEDURES. Each Option and Stock Appreciation Right
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer or employee of the Company designated in the
Award Agreement at or before the close of business on the expiration date of the
Award. The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the
Award Agreement; provided, however, that the Committee may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a)
shares of Common Stock (which may include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Common Stock
or (c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by a Participant, shares of
Common Stock may be issued directly to the Participant's broker or dealer upon
receipt of an irrevocable written notice of exercise from the Participant). In
the event that any shares of Common Stock shall be transferred to the Company to
satisfy all or any part of the Purchase Price, the part of the Purchase Price
deemed to have been satisfied by such transfer of shares of Common Stock shall
be equal to the product derived by multiplying the Fair Market Value as of the
date of exercise times the number of shares of Common Stock transferred to the
Company. The Participant may not transfer to the Company in satisfaction of the
Purchase Price any fractional share of Common Stock. Any part of the Purchase
Price paid in cash upon the exercise of any Option shall be added to the general
funds of the Company and may be used for any
proper corporate purpose. Unless the Committee shall otherwise determine, any
shares of Common Stock transferred to the Company as payment of all or part of
the Purchase Price upon the exercise of any Option shall be held as treasury
shares.
6.05 CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options and
Stock Appreciation Rights outstanding on the date of such Change in Control
shall become immediately and fully exercisable. The provisions of this Section
6.05 shall not be applicable to any Options or Stock Appreciation Rights granted
to a Participant if any Change in Control results from such Participant's
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of Common Stock or Company Voting Securities.
ARTICLE VII
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
7.01 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan the terms of which are contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 7.03
and Section 7.07, the terms of any Award granted under the Plan may not be
changed after the Date of Grant of such Award so as to materially decrease the
value of the Award without the express written approval of the holder.
7.02 AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have received and acknowledged notice of the
Award authorized by the Committee expressly granting the Award to such person
and containing provisions setting forth the terms of the Award.
7.03 MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan to
a Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
7.04 LIMITATION ON TRANSFER. A Participant's rights and interest under the
Plan may not be assigned or transferred other than by will or the laws of
descent and distribution and, during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Committee may
grant Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members or such other parties as the Committee may
approve (as evidenced by the applicable Award Agreement or an amendment
thereto), and the Committee may also amend outstanding Non-Qualified Stock
Options to provide for such transferability.
7.05 TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award or with
respect to any income recognized upon a disqualifying disposition of shares
received pursuant to the exercise of an Incentive Stock Option, and the Company
may defer payment of cash or issuance of shares upon exercise or vesting of an
Award unless indemnified to its satisfaction against any liability for any such
tax. The amount of such withholding or tax payment shall be determined by the
Committee and shall be payable by the Participant in cash at such time as the
Committee determines; provided, however, that with the approval of the
Committee, the Participant may elect to meet his or her withholding requirement
by delivering (actually or by attestation) to the Company that number of
previously acquired shares of Common Stock, or by having withheld from such
Award at the appropriate time that number of shares of Common Stock, rounded up
to the next whole share, the Fair Market Value of which is equal to the amount
of withholding taxes due.
7.06 SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the Participant approve.
7.07 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(A) RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares,
the number and kind of shares available for Awards subsequently granted
under the Plan and the maximum number of shares in respect of which Awards
can be made to any Participant in any calendar year shall be appropriately
adjusted to reflect any stock dividend, stock split, combination or
exchange of shares, merger, consolidation or other change in
capitalization with a similar substantive effect upon the Plan or the
Awards granted under the Plan. The Committee shall have the power and sole
discretion to determine the amount of the adjustment to be made in each
case.
(B) MERGER. In the event of a Merger in which the Company is not the
surviving corporation or pursuant to which a majority of the shares which
are of the same class as the shares that are subject to outstanding Awards
are exchanged for, or converted into, or otherwise become shares of
another corporation or other consideration, the Committee shall have the
sole discretion to determine that (i) the surviving, continuing, successor
or purchasing corporation, as the case may be (the "Acquiring
Corporation"), will either assume the Company's rights and obligations
under outstanding Award Agreements or substitute awards in respect of the
Acquiring Corporation's stock for outstanding Awards or (ii) the
outstanding Awards shall be cancelled in exchange for such consideration
as the Committee shall approve (based on the value of the consideration
received in the Merger by holders of the same class of shares that are
subject to outstanding Awards).
(C) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After
any merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the
provisions of the Plan, pursuant to Section 424 of the Code, replacing old
options granted under a plan of another party to the merger whose shares
of stock subject to the old options may no longer be issued following the
merger. The manner of application of the foregoing provisions to such
options and any appropriate adjustments shall be determined by the
Committee in its sole discretion. Any such adjustments may provide for the
elimination of any fractional shares which might otherwise become subject
to any Options.
7.08 LEGAL COMPLIANCE. Shares of Common Stock shall not be issued
hereunder unless the issuance and delivery of such shares shall comply with
applicable laws and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
7.09 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
7.10 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
7.11 GOVERNING LAW. All determinations made and actions taken pursuant to
the Plan shall be governed by the laws of the State of Delaware and construed in
accordance therewith.
7.12 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
7.13 CAPTIONS. The captions (i.e., all Section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions had been
used in the Plan.
7.14 SEVERABILITY. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted under the Plan shall be held to be prohibited
by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (b) all other provisions of the Plan,
such Award and every other Award at any time granted under the Plan shall remain
in full force and effect.
7.15 AMENDMENT AND TERMINATION.
(A) AMENDMENT. The Board shall have complete power and authority to
amend the Plan at any time. No termination or amendment of the Plan may,
without the consent of the Participant to whom any Award shall theretofore
have been granted under the Plan, materially adversely affect the right of
such individual under such Award.
(B) TERMINATION. The Board shall have the right and the power to
terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall
not have any other effect and any Award outstanding at the time of the
termination of the Plan may be exercised after termination of the Plan at
any time prior to the expiration date of such Award to the same extent
such Award would have been exercisable had the Plan not been terminated.