EXHIBIT 10.24
ATLANTIC COAST AIRLINES HOLDINGS, INC.
1995 STOCK INCENTIVE PLAN
(AS AMENDED AS OF MAY 5, 1998, AND ADJUSTED TO
REFLECT MAY 15, 1998 STOCK SPLIT)
SECTION 1. Purpose of the Plan. The purpose of this
1995 Stock Incentive Plan effective October 18, 1995
("Plan") is to encourage ownership of common stock, $.01 par
value ("Common Stock"), of Atlantic Coast Airlines Holdings,
Inc., a Delaware corporation (the "Company"), by eligible
key employees and directors of the Company and its
Affiliates (as defined below) and to provide increased
incentive for such employees and directors to render
services and to exert maximum effort for the business
success of the Company through grants of options and other
stock-based awards. In addition, the Company expects that
the Plan will further strengthen the identification of
employees and directors with the stockholders. Options
granted under this Plan may be intended to qualify as
Incentive Stock Options ("ISOs") pursuant to Section 422 of
the Internal Revenue Code of 1986, as amended ("Code"), or
may be options which are not intended to qualify as ISOs
("Nonqualified Options"), either or both as provided in the
agreements evidencing the options as provided in Section 6
hereof. As used in this Plan, the term "Affiliates" means
any "parent corporation" of the Company and any "subsidiary
corporation" of the Company within the meaning of Code
Sections 424(e) and (f), respectively.
SECTION 2. Administration of the Plan.
(a) Composition of Committee. The Plan shall be
administered by one or more committees of the Board
(any such committee, the "Committee"). If no persons
are designated by the Board to serve on the Committee,
the Plan shall be administered by the Board and all
references herein to the Committee shall refer to the
Board. The Board shall have the discretion to appoint,
add, remove or replace members of the Committee, and
shall have the sole authority to fill vacancies on the
Committee. Unless otherwise provided by the Board:
(i) with respect to any Award (as defined in Section 7)
for which such is necessary and desired for such Award
to be exempted by Rule 16b-3 of the Exchange Act, the
Committee shall consist of two or more directors, each
of whom is a "disinterested person" (as such term is
defined in Rule 16b-3 promulgated under the Exchange
Act, as such Rule may be amended from time to time),
(ii) with respect to any Award that is intended to
qualify as "performance based compensation" under
Section 162(m) of the Code, the Committee shall consist
of two or more directors, each of whom is an "outside
director" (as such term is defined under Section 162(m)
of the Code), and (iii) with respect to any other
Award, the Committee shall consist of one or more
directors (any of whom also may be a Participant (as
defined in Section 4) who has been granted or is
eligible to be granted Awards under the Plan).
(b) Committee Action. The Committee shall hold
its meetings at such times and places as it may
determine. A majority of its members shall constitute
a quorum, and all determinations of the Committee shall
be made by not less than a majority of its members.
Any decision or determination reduced to writing and
signed by a majority of the members shall be fully as
effective as if it had been made by a majority vote of
its members at a meeting duly called and held. The
Committee may designate the Secretary of the Company or
other Company employees to assist the Committee in the
administration of the Plan, and may grant authority to
such persons to execute Award agreements or other
documents on behalf of the Committee and the Company.
(c) Committee Expenses. All expenses and
liabilities incurred by the Committee in the
administration of the Plan shall be borne by the
Company. The Committee may employ attorneys,
consultants, accountants or other persons.
(d) Powers of the Committee. Subject to the
express provisions of this Plan, the Committee shall be
authorized and empowered to do all things necessary or
desirable in connection with the administration of this
Plan with respect to the Awards over which such
Committee has authority, including, without limitation,
the following:
(i) prescribe, amend and rescind rules
and regulations relating to this Plan;
(ii) determine which persons are
Participants and to which of such Participants,
if any, and when options and/or other Awards
shall be granted hereunder;
(iii) to prescribe and amend the terms of
the Award agreements (which need not be
identical);
(iv) to make all other determinations
deemed necessary or advisable for the
administration of the Plan;
(v) determine whether, and the extent to
which adjustments are required pursuant to
Section 7(e) hereof; and
(vi) interpret and construe this Plan, any
rules and regulations under the Plan and the
terms and conditions of any Award granted
hereunder.
SECTION 3. Stock Reserved for the Plan. Subject to
adjustment as provided in Section 7(e) hereof, the aggregate
number of shares of Common Stock that may be issued and
issuable pursuant to all Awards (including Incentive Stock
Options) granted under the Plan is 2,500,000 and such number
of shares shall be and is hereby reserved for sale for such
purpose. The aggregate number of Shares subject to Awards
granted during any calendar year to any one Participant
(including the number of shares involved in Awards having a
value derived from the value of Shares) shall not exceed
750,000. The shares subject to the Plan shall consist of
authorized but unissued shares of Common Stock or previously
issued and reacquired shares of Common Stock. Any of such
shares which may remain unsold and which are not subject to
outstanding options at the termination of the Plan shall
cease to be reserved for the purpose of the Plan, but until
termination of the Plan or the termination of the last of
the options granted under the Plan, whichever last occurs,
the Company shall at all times reserve a sufficient number
of shares to meet the requirements of the Plan. The
aggregate number of Shares issued under this Plan at any
time shall equal only the number of shares actually issued
upon exercise or settlement of an Award and not returned to
the Company upon forfeiture of an Award or in payment or
satisfaction of the purchase price, exercise price or tax
withholding obligation of an Award.
SECTION 4. Eligibility. The persons eligible to
participate in the Plan as a recipient of Awards
("Participant") shall include only key employees and
directors of the Company or its Affiliates at the time the
Award is granted; provided, however, the members of the
Committee shall not be eligible to be granted Awards if the
Company is governed by Rule 16b-3 as in effect on April 31,
1994. An employee who has been granted an option hereunder
may be granted an additional option or options, if the
Committee shall so determine.
SECTION 5. Grant of Options.
(a) Committee Discretion. The Committee shall
have sole and absolute discretionary authority (i) to
determine, authorize, and designate those key employees
and directors of the Company or its Affiliates who are
to receive options under the Plan (each, an
"Optionee"), (ii) to determine the number of shares of
Common Stock to be covered by such options and the
terms thereof, and (iii) to determine the type of
option granted: ISO, Nonqualified Option or a
combination of ISO and Nonqualified Options; provided
that a non-employee director may not receive any ISOs.
The Committee shall thereupon grant options in
accordance with such determinations as evidenced by a
written option agreement.
(b) Limitation on Incentive Stock Options.
Except as described in Section 6(i), the aggregate fair
market value (determined in accordance with
Section 6(b) of this Plan at the time the option is
granted) of the Common Stock with respect to which
options intended to qualify as ISOs may be exercisable
for the first time by any Optionee during any calendar
year under all such plans of the Company and its
Affiliates shall not exceed $100,000.
SECTION 6. Terms and Conditions. Each option granted
under the Plan shall be evidenced by an agreement, in a form
approved by the Committee, which shall be subject to the
following express terms and conditions and to such other
terms and conditions as the Committee may deem appropriate.
(a) Option Period. The Committee shall promptly
notify the Optionee of the option grant and a written
agreement shall promptly be executed and delivered by
and on behalf of the Company and the Optionee, provided
that the option grant shall expire if a written
agreement is not signed by said Optionee (or his agent
or attorney) and returned to the Company within 60 days
from date of receipt by the Optionee of such agreement.
Each option agreement shall specify the period for
which the option thereunder is granted (which in no
event shall exceed ten years from the date of grant)
and shall provide that the option shall expire at the
end of such period. If the original term of an option
is less than ten years from the date of grant, the
option may be amended prior to its expiration, with the
approval of the Committee and the Optionee, to extend
the term so that the term as amended is not more than
ten years from the date of grant. However, in the case
of an ISO granted to an individual who, at the time of
grant, owns stock possessing more than 10 percent of
the total combined voting power of all classes of stock
of the Company or its Affiliate ("Ten Percent
Stockholder"), such period shall not exceed five years
from the date of grant.
(b) Option Price. The purchase price of each
share of Common stock subject to each option granted
pursuant to the Plan shall be determined by the
Committee at the time the option is granted and, in the
case of options intended to qualify as ISOs or as
"performance based compensation" for purposes of
Section 162(m) of the Code, shall not be less than 100%
of the fair market value of a share of Common Stock on
the date the option is granted, as determined by the
Committee. In the case of an ISO granted to a Ten
Percent Stockholder, the option price shall not be less
than 110% of the fair market value of a share of Common
Stock on the date the option is granted. The purchase
price of each share of Common Stock subject to a
Nonqualified Option under this Plan shall be determined
by the Committee prior to granting the option. The
Committee shall set the purchase price for each share
subject to a Nonqualified Option at either the fair
market value of each share on the date the option is
granted, or at such other price as the Committee in its
sole discretion shall determine.
For all purposes under the Plan, the fair market
value of a share of Common Stock on a particular date
shall be determined by such manner as shall be approved
by the Committee. In the event the Common Stock is not
publicly traded at the time a determination of its
value is required to be made hereunder, the
determination of its fair market value shall be made by
the Committee in such manner as it deems appropriate.
(c) Exercise Period. The Committee may provide
in the option agreement that an option may be exercised
in whole, immediately, or is to be exercisable in
increments. However, no portion of any option may be
exercisable by an Optionee prior to the approval of the
Plan by the stockholders of the Company.
(d) Procedure for Exercise. Options shall be
exercised by the delivery of written notice to the
Secretary of the Company setting forth the number of
shares with respect to which the option is being
exercised. Such notice shall be accompanied by payment
of the exercise price for such number of shares, which
may be paid in the form of cash, previously owned
shares of capital stock of the Company, other property
deemed acceptable by the Committee, a reduction in the
amount of Common Stock or other property otherwise
issuable pursuant to such option, or a promissory note
of the Optionee or of a third party, the terms and
conditions of which shall be determined by the
Committee. The notice shall specify the address to
which the certificates for such shares are to be sent.
Subject to satisfaction of any tax obligations pursuant
to Section 11, an Optionee shall be deemed to be a
stockholder with respect to shares covered by an option
on the date the Company receives such written notice
and such option payment.
As promptly as practicable after receipt of such
written notification and payment, the Company shall
deliver to the Optionee certificates for the number of
shares with respect to which such option has been so
exercised; provided, however, that such delivery shall
be deemed effected for all purposes when a stock
transfer agent of the Company shall have deposited such
certificates in the United States mail, addressed to
the Optionee at the address specified pursuant to this
Section 6(d).
(e) Termination of Employment. In the event an
employee to whom an option is granted ceases to be
employed by the Company for any reason other than death
or disability or if a director to whom an option is
granted ceases to serve on the Board for any reason
other than death or disability, any option previously
granted to him may be exercised (to the extent he would
have been entitled to do so at the date the employee
ceases to be employed by the Company or a director
ceases to serve on the Board) at any time and from time
to time, within a thirty (30) day period after such
date the employee ceases employment with the Company or
the director ceases to serve on the Board; provided,
however, the Committee, in its sole discretion, may
(i) allow a longer period for exercise than thirty (30)
days as stated in this paragraph or (ii) allow for the
exercise of all or a part of those options not
exercisable by the employee on account of his
termination of employment or by the director on account
of his cessation from service on the Board.
(f) Disability or Death of Optionee. In the
event of the determination of disability or the death
of an Optionee under the Plan while he is employed by
the Company or while he serves on the Board, the
options previously granted to him may be exercised (to
the extent he would have been entitled to do so at the
date of the determination of disability or of death) at
any time and from time to time, within a one year
period after such determination of disability or death,
by the former employee or director, the guardian of his
estate, the executor or administrator of his estate or
by the person or persons to whom his rights under the
option shall pass by will or the laws of descent and
distribution, but in no event may the option be
exercised after its expiration under the terms of the
option agreement. An Optionee shall be deemed to be
disabled if, in the opinion of a physician selected by
the Committee, he is incapable of performing services
for the Company of the kind he was performing at the
time the disability occurred by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or to be of long, continued
and indefinite duration. The date of determination of
disability for purposes hereof shall be the date of
such determination by such physician. The Committee,
in its sole discretion, may (i) allow a longer period
for exercise than the one year period as stated in this
paragraph or (ii) allow for the exercise of all or a
part of those options not exercisable by the employee
on account of his death or disability.
(g) Incentive Stock Options. Each option
agreement may contain such terms and provisions as the
Committee may determine to be necessary or desirable in
order to qualify an option designated as an ISO.
(h) No Rights as Stockholder. No Optionee shall
have any rights as a stockholder with respect to shares
covered by an option until the option is exercised by
the written notice, accompanied by payment as provided
in clause (d) above, and any tax obligations are
satisfied pursuant to Section 11.
(i) Extraordinary Corporate Transactions. If the
Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its
assets or dissolves (each of the foregoing a
"Fundamental Change"), then thereafter upon any
exercise of an option theretofore granted, the Optionee
shall be entitled to purchase under such option, in
lieu of the number of shares of Common Stock as to
which such option shall then be exercisable, the number
and class of shares of stock and securities to which
the Optionee would have been entitled pursuant to the
terms of the Fundamental Change if, immediately prior
to such Fundamental Change, the Optionee had been the
holder of record of the number of shares of Common
Stock as to which such option is then exercisable. For
purposes of the Plan and Options granted under the
Plan, the term "Corporate Change" shall mean (i) any
merger or consolidation in which the Company shall not
be the surviving entity (or survives only as a
subsidiary of another entity whose shareholders did not
own all or substantially all of the Company's Common
Stock immediately prior to such transaction), (ii) the
sale of all or substantially all of the Company's
assets to any other person or entity (other than a
wholly-owned subsidiary), (iii) the acquisition of
beneficial ownership or control of (including, without
limitation, power to vote) more than 50% of the
outstanding shares of Common Stock by any person or
entity (including a "group" as defined by or under
Section 13(d)(3) of the Exchange Act), (iv) the
dissolution or liquidation of the Company, (v) a
contested election of directors, as a result of which
or in connection with which the persons who were
directors of the Company before such election or their
nominees cease to constitute a majority of the Board,
or (vi) any other event specified by the Committee,
regardless of whether at the time an Option is granted
or thereafter. The Committee may provide, either at
the time an Option is granted or thereafter, that a
Corporate Change shall have such effect as specified by
the Committee, or no effect, as the Committee in its
sole discretion may provide. Without limiting the
foregoing, the Committee may but need not provide,
either at the time an Option is granted or thereafter,
that if a Corporate Change occurs, then effective as of
a date selected by the Committee, the Committee (which
for purposes of the Corporate Changes described in
(iii) and (v) above shall be the Committee as
constituted prior to the occurrence of such Corporate
Change) acting in its sole discretion without the
consent or approval of any Optionee, will effect one or
more of the following alternatives or combination of
alternatives with respect to all outstanding options
(which alternatives may be conditional on the
occurrence of such of the Corporate Change specified in
clause (i) through (v) above which gives rise to the
Corporate Change and which may vary among individual
Optionees): (1) in the case of a Corporate Change
specified in clauses (i), (ii) or (iv), accelerate the
time at which options then outstanding may be exercised
in full for a limited period of time on or before a
specified date (which will permit the Optionee to
participate with the Common Stock received upon
exercise of such option in the event of a Corporate
Change specified in clauses (i), (ii) or (iv), as the
case may be) fixed by the Committee, after which
specified date all unexercised options and all rights
of Optionees thereunder shall terminate, (2) accelerate
the time at which options then outstanding may be
exercised so that such options may be exercised in full
for their then remaining term, or (3) require the
mandatory surrender to the Company of outstanding
options held by such Optionee (irrespective of whether
such options are then exercisable under the provisions
of the Plan) as of a date, before or not later than
sixty days after such Corporate Change, specified by
the Committee, and in such event the Committee shall
thereupon cancel such options and the Company shall pay
to each Optionee an amount of cash equal to the excess
of the fair market value of the aggregate shares
subject to such option over the aggregate option price
of such shares; provided, however, the Committee shall
not select an alternative (unless consented to by the
Optionee) that, if the Optionee exercised his
accelerated options pursuant to alternative 1 or 2 and
participated in the transaction specified in clause
(i), (ii) or (iv) or received cash pursuant to
alternative 3, would result in the Optionee's owing any
money by virtue of operation of Section 16(b) of the
Exchange Act. If all such alternatives have such a
result, the Committee shall take such action, which is
hereby authorized, to put such Optionee in as close to
the same position as such Optionee would have been in
had alternative 1, 2 or 3 been selected but without
resulting in any payment by such Optionee pursuant to
Section 16(b) of the Exchange Act. Notwithstanding the
foregoing, with the consent of the Optionee, the
Committee may in lieu of the foregoing make such
provision with respect of any Corporate Change as it
deems appropriate.
(j) Acceleration of Options. Except as herein
expressly provided, (i) the issuance by the Company of
shares of stock of any class of securities convertible
into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise
of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company
convertible into such shares or other securities,
(ii) the payment of a dividend in property other than
Common Stock, or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair
value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of
shares of Common Stock subject to options theretofore
granted or the purchase price per share, unless the
Committee shall determine in its sole discretion that
an adjustment is necessary to provide equitable
treatment to Optionee. Notwithstanding anything to the
contrary contained in this Plan, the Committee may in
its sole discretion accelerate the time at which any
option may be exercised, including, but not limited to,
upon the occurrence of the events specified in this
Section 6, and is authorized at any time (with the
consent of the Optionee) to purchase options from an
Optionee.
(k) Stockholders Agreement. The Committee shall
provide in the option agreement that prior to receiving
any shares of Common Stock or other securities on the
exercise of the option, the Optionee (or the Optionee's
representative upon the Optionee's death) shall be
required to execute the Company's Stockholders
Agreement.
SECTION 7. Other Provisions of Options and Other
Awards.
(a) Awards. The terms upon which an award under
this Plan (an "Award") is granted shall be evidenced by
a written agreement executed by the Company and the
Participant to whom such Award is granted. Awards that
are granted under this Plan are not restricted to any
specified form or structure and may include, without
limitation, stock options as provided in Sections 5 and
6, sales or bonuses of stock, restricted stock, reload
stock options, stock purchase warrants, other rights to
acquire stock, securities convertible into or
redeemable for stock, stock appreciation rights,
limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance
shares, or any other arrangement that involves or might
involve the issuance of Common Stock or a right or
interest with a value based on the value of the Common
Stock, and an Award may consist of one such security or
benefit, or consist of or be amended to include two or
more of them in tandem or in the alternative.
(b) Powers of the Committee. Subject to the
provisions of this Plan, the Committee shall have sole
and absolute discretionary authority (i) to determine,
authorize and designate those Participants who are to
receive Awards under the Plan, (ii) to determine the
number of shares of Common Stock subject to any such
Award, and (iii) at any time to cancel an Award with
the consent of the holder and grant a new Award to such
holder in lieu thereof, which new Award may be for a
greater or lesser number of Shares and may have a
higher or lower exercise or settlement price.
(c) Terms of Awards. Subject to the provisions
of this Plan, the Committee, in its sole and absolute
discretion, shall determine all of the terms and
conditions of each Award granted under this Plan, which
terms and conditions may include, among other things:
(i) provisions permitting the Committee
to allow or require the recipient of such
Award, or permitting any such recipient the
right, to pay the purchase price of the shares
or other property issuable pursuant to such
Award, in whole or in part, by any one or more
of the means permitted for the payment of the
exercise price of options under Section 6(d);
(ii) provisions specifying the purchase,
exercise or settlement price for any Award, or
specifying the method by which such price is
determined, provided that the exercise or
settlement price of any stock appreciation
right or similar Award that is intended to
qualify as "performance based compensation" for
purposes of Section 162(m) of the Code shall be
not less than the fair market value of a share
of Common Stock on the date such Award is
granted;
(iii) provisions relating to the
exercisability and/or vesting of Awards, lapse
and non-lapse restrictions upon the shares
obtained or obtainable under Awards or under
the Plan and the termination, expiration and/or
forfeiture of Awards, which provisions may but
need not be conditioned upon the passage of
time, continued employment or service on the
Board, the satisfaction of performance
criteria, the occurrence of certain events
(including events which the Board or the
Committee determine constitute a change of
control), or other factors; and/or
(iv) provisions conditioning or
accelerating the grant of an Award or the
receipt of benefits pursuant to such Award,
either automatically or in the discretion of
the Committee, upon the occurrence of specified
events, including, without limitation, the
achievement of performance goals, the exercise
or settlement of a previous Award, the
satisfaction of an event or condition within
the control of the recipient of the Award or
within the control of others, a change of
control of the Company, an acquisition of a
specified percentage of the voting power of the
Company, the dissolution or liquidation of the
Company, a sale of substantially all of the
property and assets of the Company or an event
of the type described in Section 6(i) hereof.
(d) Assignability. Unless otherwise provided by
the Committee, (i) an Award (including an option) shall
not be assignable or otherwise transferable except by
will or by the laws of descent and distribution or
pursuant to a domestic relations order, and (ii) during
the lifetime of a Participant, an Award (including an
option) shall be exercisable only by him.
(e) Changes in Company's Capital Structure. The
existence of outstanding Awards (including any options)
shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company's capital
structure or its business, or any merger or
consolidation of the Company, or any issuance of Common
Stock or other securities or subscription rights
thereto, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or
affecting the Common Stock or the rights thereof, or
the dissolution or liquidation of the Company, or any
sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding,
whether of a similar character or otherwise. However,
if the outstanding shares of Common Stock or other
securities of the Company, or both, for which the Award
is then exercisable or as to which the Award is to be
settled shall at any time be changed or exchanged by
declaration of a stock dividend, stock split,
combination of shares, recapitalization, or
reorganization, the number and kind of shares of Common
Stock or other securities which are subject to the Plan
or subject to any Awards theretofore granted, and the
exercise or settlement prices, shall be appropriately
and equitably adjusted so as to maintain the
proportionate number of shares or other securities
without changing the aggregate exercise or settlement
price, provided, however, that such adjustment shall be
made only to the extent that such will not affect the
status of any Award intended to qualify as an ISO or as
"performance based compensation" under Section 162(m)
of the Code.
SECTION 8. Amendments or Termination. The Board may
amend, alter or discontinue the Plan, but no amendment or
alteration shall be made which would impair the rights of
any Award holder, without his consent, under any Award
theretofore granted. Notwithstanding the foregoing, if an
amendment to the Plan would affect the ability of Awards
granted under the Plan to comply with Rule 16b-3 under the
Exchange Act or Section 422 or 162(m) or other applicable
provisions of the Code, the amendment shall be approved by
the Company's stockholders to the extent required to comply
with Rule 16b-3 under the Exchange Act, Section 422 or
Section 162(m) of the Code, or other applicable provisions
of or rules under the Code.
SECTION 9. Compliance With Other Laws and Regulations.
The Plan, the grant and exercise of Awards thereunder, and
the obligation of the Company to sell, issue or deliver
shares under such Awards, shall be subject to all applicable
federal and state laws, rules and regulations and to such
approvals by any governmental or regulatory agency as may be
required. The Company shall not be required to issue or
deliver any certificates for shares of Common Stock prior to
the completion of any registration or qualification of such
shares under any federal or state law or issuance of any
ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be
necessary or advisable. Any adjustments provided for in
Section 6(i), Section (6)(j) and Section 7(e) shall be
subject to any shareholder action required by Delaware
corporate law. This Plan is intended to constitute an
unfunded arrangement for a select group of management or
other key employees.
SECTION 10. Purchase for Investment. Unless the
Awards and shares of Common Stock covered by this Plan have
been registered under the Securities Act of 1933, as
amended, or the Company has determined that such
registration is unnecessary, each person exercising an
option or other Award or receiving Common Stock pursuant to
any Award under this Plan may be required by the Company to
give a representation in writing that he is acquiring such
shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of
any part thereof.
SECTION 11. Taxes.
(a) The Company may make such provisions or
impose such conditions as it may deem appropriate for
the withholding or payment by the Participant of any
taxes which it determines are required in connection
with any Awards granted under this Plan.
(b) Notwithstanding the terms of Paragraph 11(a),
any Optionee or other Participant may pay all or any
portion of the taxes required to be withheld by the
Company or paid by him in connection with the exercise
of a Nonqualified Option or the exercise, vesting or
settlement of any other Award by electing to have the
Company withhold shares of Common Stock, or by
delivering previously owned shares of Common Stock,
having a fair market value, determined in accordance
with Paragraph 6(b), equal to the amount required to be
withheld or paid. Any such elections are subject to
such conditions or procedures as may be established by
the Committee and may be subject to disapproval by the
Committee.
SECTION 12. Replacement of Options. The Committee
from time to time may permit an Optionee under the Plan to
surrender for cancellation any unexercised outstanding
option and receive from the Company in exchange an option
for such number of shares of Common Stock as may be
designated by the Committee. The Committee may, with the
consent of the person entitled to exercise any outstanding
option, amend such option, including reducing the exercise
price of any option to not less than the fair market value
of the Common Stock at the time of the amendment and
extending the term thereof.
SECTION 13. No Right to Company Employment. Nothing
in this Plan or as a result of any Award granted pursuant to
this Plan shall confer on any individual any right to
continue in the employ of the Company or interfere in any
way with the right of the Company to terminate an
individual's employment at any time. The Award agreements
may contain such provisions as the Committee may approve
with reference to the effect of approved leaves of absence.
SECTION 14. Liability of Company. The Company and any
Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Optionee
or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance
or sale of shares as to which the Company has been
unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale
of any shares hereunder; and
(b) Tax Consequences. Any tax consequence
expected, but not realized, by any Participant,
Optionee or other person due to the receipt, exercise
or settlement of any option or other Award granted
hereunder.
SECTION 15. Effectiveness and Expiration of Plan. The
Plan shall be effective on the date the Board adopts the
Plan. All Awards, including any options, granted under this
Plan are subject to, and may not be exercised before, the
approval of this Plan by the stockholders prior to the first
anniversary date of the effective date of the Plan, by the
affirmative vote of the holders of a majority of the
outstanding shares of the Company present, or represented by
proxy, and entitled to vote thereat or by written consent in
accordance with the laws of the State of Delaware; provided
that if such approval by the stockholders of the Company is
not forthcoming, all options or other Awards previously
granted under this Plan shall be void. If the stockholders
of the Company fail to approve the Plan within twelve months
of the date the Board approved the Plan, the Plan shall
terminate and all options and other Awards previously
granted under the Plan shall become void and of no effect.
No option or other Award granted under this Plan shall have
a term of more than ten years from the date it is granted.
The Plan shall expire ten years after the effective date of
the Plan and thereafter no Awards shall be granted pursuant
to the Plan.
SECTION 16. Non-Exclusivity of the Plan. Neither the
adoption of the Plan by the Board nor the submission of the
Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may
deem desirable, including without limitation, the granting
of restricted stock or stock options otherwise than under
the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
SECTION l7. Governing Law. This Plan and any
agreements hereunder shall be interpreted and construed in
accordance with the laws of the State of Delaware and
applicable federal law.