Exhibit 10.2
AMENDED AND RESTATED
CBL & ASSOCIATES PROPERTIES, INC.
STOCK INCENTIVE PLAN
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AMENDED AND RESTATED
CBL & ASSOCIATES PROPERTIES, INC.
STOCK INCENTIVE PLAN
WHEREAS, the CBL & Associates Properties, Inc. 1993 Stock Incentive Plan
was adopted by the Company on October 27, 1993 (the "Initial Plan");
WHEREAS, the Initial Plan has been amended by Amendment No. 1 on May 1,
1996, Amendment No. 2 on May 3, 2000 and by Amendment No. 3 on May 7, 2002;
WHEREAS, the Initial Plan, as amended, is scheduled to terminate on October
27, 2003;
WHEREAS, the Awards granted under the Initial Plan, as amended, and the
status of the Initial Plan, as amended, were, as follows as of March 10, 2003
(the record date for stockholders voting on the adoption of the Plan, as defined
below):
Stock Awards (fully vested on grant or fully vested as of March 10, 2003) 301,336
Deferred Stock Awards (subject to vesting/issuance following March 10, 2003) 205,534
Outstanding Employee Stock Options (vested and non-vested unexercised
stock options granted to employees prior to March 10, 2003) 2,510,377
Non-Employee Directors Shares 3,000
Outstanding Non-Employee Directors Stock Options 20,000
Shares Available For Awards 1,109,461
WHEREAS, the Board of Directors of the Company has recommended to the
Company's stockholders that the Initial Plan, as amended, be amended and
restated on the terms set forth herein as the Amended and Restated CBL &
Associates Properties, Inc. Stock Incentive Plan (herein, the "Plan"), and has
submitted such recommendation to the Company's stockholders for vote of the
stockholders on May 5, 2003.
Pursuant to the recommendation of the Board of Directors of the Company and
subject to the approval of the Company's stockholders on May 5, 2003, the
Initial Plan, as amended, is hereby amended and restated in its entirety on the
terms and provisions set forth below. Notwithstanding the preceding sentence,
the terms and provisions of Pre-Amendment Awards, as defined below, shall
continue in force as such terms and provisions existed on the date such
Pre-Amendment Awards were made.
Effective Date - provided the Company's stockholders have approved this Plan,
the effective date of this Plan shall be May 5, 2003, the date the Plan was
submitted to the Company's stockholders for vote.
Expiration Date - the expiration date of this Plan, after which no Awards may be
granted hereunder, shall be May 5, 2013; provided, however, that the
administration of the Plan shall continue in effect until all matters relating
to the payment of Awards previously granted have been settled.
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SECTION 1. Purpose; Definitions.
Purpose. The purpose of the Plan is to give the Company a significant advantage
in attracting, retaining and motivating officers, employees and directors of the
Company and to provide the Company and is Subsidiaries with the ability to
provide incentives more directly linked to the long term profitability of the
Company's businesses and increases in stockholder value thereby strengthening
the commitment of the Company's officers, employees and directors to the welfare
of the Company and promoting an identity of interest between stockholders and
the Company's officers, employees and directors.
Definitions. For purposes of the Plan, the following terms are defined as set
forth below:
"Affiliate" means CBL & Associates Management, Inc., and any other
corporation or other entity in which the Company has a substantial direct or
indirect ownership interest, and designated by the Compensation Committee as
such.
"Award" means awards/grants of Stock Option(s), unrestricted Stock,
Restricted Stock, Non-Employee Director Share(s), Non-Employee Director Stock
Option(s) and/or any other stock based awards described in Section 7 below that
is made pursuant to the terms of this Plan.
"Board" means the Board of Directors of the Company.
"Cause" has the meaning set forth in Section 5(a)(ix) below.
"Change in Control" shall mean the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common Stock of the Company (the "Outstanding
Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities"); excluding, however, the following: (I) any acquisition
directly from the Company, other than an acquisition by virtue of the
exercise of a conversion privilege unless the security being so
converted was itself acquired directly from the Company, (II) any
acquisition by the Company, or members of the Company's management, or
any combination thereof, (III) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (IV) any acquisition by any
Person pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this definition; or
(ii) A change in the composition of the Board such that the individuals
who, as of the effective date of the Plan, constitute the Board (such
Board shall be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, for the purposes of this definition, that any
individual who becomes a member of the Board subsequent to such
effective date, whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority
of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this
provision) shall be considered as though such individual were a member
of the Incumbent Board; but, provided further, that any such
individual whose initial assumption of office occurs as a result of
either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board shall not be so
considered as a member of the Incumbent Board; or 40
(iii)The approval by the stockholders of the Company of a Corporate Event
as defined in Section 8(a) below; excluding, however, such a Corporate
Event pursuant to which
(A) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities immediately prior to such
Corporate Event will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from
such Corporate Event (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets
either directly or through one or more Subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Corporate Event, of the Outstanding
Common Stock and Outstanding Voting Securities, as the case may
be;
(B) no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or such corporation
resulting from such Corporate Event) will beneficially own,
directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting
from such Corporate Event or the combined voting power of the
outstanding voting securities of such corporation entitled to
vote generally in the election of directors except to the extent
that such ownership existed with respect to the Company prior to
the Corporate Event; and
(C) individuals who were members of the Incumbent Board will
constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate Event;
or
(iv) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Commission" means the Securities and Exchange Commission or any successor
agency.
"Common Stock" means common stock, par value $0.01 per share, of the
Company.
"Company" means CBL & Associates Properties, Inc., Delaware corporation.
"Compensation Committee" means the Compensation Committee referred to in
Section 2 below.
"Corporate Event" shall have the meaning ascribed to that term in Section
8(a) below.
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"Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be set forth in such authorization.
"Disability" means permanent and total disability as determined under
procedures established by the Compensation Committee for purposes of the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
"FairMarket Value" means, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or on NASDAQ. If there
is no regular public trading market for such Common Stock the Fair Market Value
of the Common Stock shall be determined by the Compensation Committee in good
faith.
"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.
"Mature Stock" shall have the meaning ascribed to that term in Section
5(a)(iv) below.
"Non-Employee Director Share" means a share of Common Stock granted to
Non-Employee Directors as set forth in Section 13 below.
"Non-Employee Director Stock Option" means a Stock Option granted to
Non-Employee Directors as set forth in Section 13 below.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Participant" shall mean any recipient of an Award under this Plan.
"Plan" means the Amended and Restated CBL & Associates Properties, Inc.
Stock Incentive Plan, as set forth herein and as hereinafter amended from time
to time.
"Pre-Amendment Awards" means collectively the Deferred Stock Awards set
forth in the 4th Whereas clause above, the Outstanding Employee Stock Options
set forth in the 4th Whereas clause above, the Non-Employee Director Shares set
forth in the 4th Whereas clause above and the Outstanding Non-Employee Director
Stock Options set forth in the 4th Whereas clause above.
"Restricted Stock" means an Award granted under Section 6 below.
"Retirement" means retirement from active employment under a pension plan
of the Company, any Subsidiary or Affiliate, or under an employment contract
with any of them, or termination of employment at or after age 65 under
circumstances which the Compensation Committee, in its sole discretion, deems
equivalent to retirement.
"Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
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"Stock Award(s)" means any award of Common Stock of the Company, whether
such award is in the form of Restricted Stock or Stock that is unrestricted.
"Stock Option" or "Option" means an option granted under Section 5(a)
below.
"Subsidiary" means a "subsidiary corporation" within the meaning of Section
424(f) of the Code.
"Termination of Employment" means the termination of the Participant's
employment with the Company or any Subsidiary or Affiliate. A Participant
employed by a Subsidiary or an Affiliate shall also be deemed to incur a
Termination of Employment if the Subsidiary or Affiliate ceases to be such a
Subsidiary or Affiliate, as the case may be, and the Participant does not
immediately thereafter become an employee of the Company or another Subsidiary
or Affiliate.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2. Administration.
The Plan shall be administered by the Compensation Committee of the Board
as such is presently situated on the Effective Date and as it shall be
constituted after the Effective Date throughout the term of this Plan (the
"Compensation Committee"). The Compensation Committee is required to be
comprised of Independent Directors, as defined by the Board and/or applicable
law. If at any time no Compensation Committee shall be in office, the functions
of the Compensation Committee specified in the Plan shall be exercised by the
Board or by such other committee of the Board; provided any such other committee
that shall be charged with the responsibility of exercising the functions of the
Compensation Committee hereunder in the absence of the Compensation Committee
shall be comprised of not less than two Persons who shall meet the definition of
"Independent Director" as set forth above.
Subject to Section 14 hereof, the Compensation Committee shall have primary
authority to grant Awards pursuant to the terms of the Plan to officers,
employees and directors of the Company and its Subsidiaries and Affiliates.
Among other things, the Compensation Committee shall have the authority,
subject to the terms of the Plan:
(a) to select the officers, employees and directors to whom Awards may from
time to time be granted; provided that awards to non-employee directors shall be
made only in accordance with Section 13 below;
(b) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options and Restricted Stock or any combination thereof are
to be granted hereunder;
(c) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
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(d) to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, subject to Section 5(a) below, the option price,
any vesting restriction or limitation and any vesting acceleration or forfeiture
waiver regarding any Award and the shares of Common Stock relating thereto,
based on such factors as the Compensation Committee shall determine);
(e) to modify, amend or adjust the terms and conditions of any Award, at
any time or from time to time, including, but not limited to, with respect to
performance goals and measurements applicable to performance-based Awards
pursuant to the terms of the Plan;
(f) to determine to what extent and under what circumstances Common Stock
and other amounts payable with respect to an Award shall be deferred; and
(g) to determine under what circumstances a Stock Option may be settled in
cash or Common Stock under Section 5(a)(iv) below.
The Compensation 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 agreement
relating thereto) and to otherwise supervise the administration of the Plan.
The Compensation Committee may act with respect to the Plan only by a
majority of its members then in office, except that the members thereof may
authorize any one or more of their number or any officer of the Company to
execute and deliver documents on behalf of the Compensation Committee.
Any determination made by the Compensation Committee or pursuant to
delegated authority pursuant to the provisions of the Plan with respect to any
Award shall be made in the sole discretion of the Compensation Committee or such
delegate at the time of the grant of the Award or, unless in contravention of
any express term of the Plan, at any time thereafter. All decisions made by the
Compensation Committee or any appropriately delegated officer pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Plan Participants subject to Plan provisions, including but not
limited to Section 14 below.
SECTION 3. Common Stock Subject to Plan.
(a) Number of Shares of Common Stock Available. Subject to adjustment as
provided herein, the total number of shares of Common Stock available for
distribution pursuant to Awards under the Plan shall be 5,200,000 shares of
Common Stock, and the maximum number of shares of Common Stock with respect to
which Options may be granted to any Plan Participant during any calendar year
shall not exceed 100,000. Shares subject to an Award under the Plan may be
authorized and unissued shares or may be treasury shares.
(b) Adjustments. Awards granted under the Plan and any agreements
evidencing such Awards, the maximum number of shares of Stock subject to all
Awards under the Plan, the number of shares of Stock subject to outstanding
Awards and the maximum number of shares of Stock with respect to which any one
person may be granted Options or stock appreciation rights during any year may
be subject to adjustment or substitution, as determined by the Company or the
Compensation Committee, as to the number, price or kind of a share of Stock or
other consideration subject to such Awards or as otherwise determined by the
Company or the Compensation Committee to be equitable:
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(i) in the event of changes in the outstanding Stock or in the capital
structure of the Company by reason of stock dividends, stock splits, reverse
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the Date of Grant of any such Award; or
(ii) in the event of any change in applicable laws or any change in
circumstances which results in or would result in any substantial dilution or
enlargement of the rights granted to, or available for, Participants in the
Plan; or
(iii) for any other reason which the Company or the Compensation Committee
determines otherwise warrants equitable adjustment because it interferes with
the intended operation of the Plan.
Any adjustment to Incentive Stock Options under this Section 3(b) shall
take into account that adjustments which constitute a "modification" within the
meaning of Section 424(h)(3) of the Code may have an adverse tax impact on such
Incentive Stock Options and the Compensation Committee may, in its sole
discretion, provide for a different adjustment or no adjustment in order to
preserve the tax effects of Incentive Stock Options. Unless otherwise determined
by the Company or the Compensation Committee, any adjustments or substitutions
under this Section 3(b) shall be made in a manner which does not adversely
affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act and
any such adjustments or substitutions shall be subject to the provisions of this
Plan including, but not limited to Section 9 and Section 14 below. Further, with
respect to Awards intended to qualify as "performance-based compensation" under
Section 162(m) of the Code, such adjustments or substitutions shall, unless
otherwise determined by the Company or the Compensation Committee, be made only
to the extent that the Company or the Compensation Committee determines that
such adjustments or substitutions may be made without a loss of deductibility
for such Awards under Section 162(m) of the Code. The Company shall give each
Participant notice of an adjustment hereunder and, upon notice, such adjustment
shall be conclusive and binding for all purposes.
SECTION 4. Eligibility.
Officers, employees and directors of the Company, its Subsidiaries and
Affiliates who are responsible for or contribute to the management, growth and
profitability of the business of the Company, its Subsidiaries and Affiliates
are eligible to be granted Awards under the Plan. Except as expressly authorized
by Section 13 of the Plan, however, no grant shall be made to a director who is
not an officer or a salaried employee of the Company, its Subsidiaries and/or
Affiliates.
SECTION 5. Stock Options; Stock Awards.
(a) Stock Options. Stock Options may be granted alone or in addition to
other Awards granted under the Plan and may be of two types: Incentive Stock
Options and Non-Qualified Stock Options. Any Stock Option granted under the Plan
shall be in such form as the Compensation Committee may from time to time
approve.
The Compensation Committee shall have the authority to grant any optionee
Incentive Stock Options, Non-Qualified Stock Options or both types of Stock
Options. Incentive Stock Options may be granted only to employees of the Company
and its Subsidiaries and Affiliates. To the extent that any Stock Option is not
designated as an Incentive Stock Option or even if so designated does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
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Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its face
whether it is intended to be an agreement for an Incentive Stock Option or a
Non-Qualified Stock Option. The grant of a Stock Option shall occur on the date
the Compensation Committee by resolution selects an individual to be a
Participant in any grant of a Stock Option, determines the number of shares of
Stock to be subject to such Stock Option to be granted to such individual and
specifies the terms and provisions of the Stock Option. The Company shall notify
a Participant of any grant of a Stock Option, and a written option agreement or
agreements shall be duly executed and delivered by the Company to the
Participant. Such agreement or agreements shall become effective upon execution
by the Participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered nor
shall any discretion or authority granted under the Plan be exercised so as to
disqualify the Plan under Section 422 of the Code or, without the consent of the
optionee affected, to disqualify any Incentive Stock Option under such Section
422 of the Code.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Compensation Committee shall deem desirable:
(i) Option Price. The option price per share of Common Stock purchasable
under a Stock Option (A) shall be determined by the Compensation Committee and
set forth in the option agreement, (B) shall not be less than the Fair Market
Value of the Common Stock subject to the Stock Option on the Date of Grant and
(C) in the case of an Incentive Stock Option granted to an optionee who owns
stock representing more than 10% of the voting power of all classes of stock of
the Company or any subsidiary of the Company, shall not be less than 110% of the
Fair Market Value of the Common Stock subject to the Incentive Stock Option on
the Date of Grant.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Compensation Committee, but (A) no Stock Option shall be exercisable more than
10 years after the date the Stock Option is granted and (B) no Incentive Stock
Option granted to an optionee who owns stock representing more than 10% of the
voting power of all classes of stock of the Company or any Subsidiary shall be
exercisable more than five years after the date the Stock Option is granted.
(iii) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Compensation Committee. If the
Compensation Committee provides that any Stock Option is exercisable only in
installments, the Compensation Committee may at any time waive such installment
exercise provisions, in whole or in part, based on such factors as the
Compensation Committee may determine. In addition, the Compensation Committee
may at any time, in whole or in part, accelerate the exercisability of any Stock
Option.
Notwithstanding any other provision hereof, the aggregate Fair Market
Value, determined on the date of award, of Common Stock with respect to which
Incentive Stock Options are exercisable by an optionee for the first time during
any calendar year under all stock option plans of the Company and any Subsidiary
of the Company shall not exceed $100,000.
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(iv) Method of Exercise. Subject to the provisions of this Section 5(a),
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Company specifying the
number of shares of Common Stock subject to the Stock Option to be purchased.
The option price of Common Stock to be purchased upon exercise of any
Option shall be paid in full in cash (by certified or bank check, or such other
instrument as the Company may accept) or, if and to the extent set forth in the
option agreement, may also be paid by one or more of the following: (A) in the
case of the exercise of a Non-Qualified Stock Option, in the form of
unrestricted Common Stock already owned by the optionee that meets the
definition of "Mature Stock", as defined below, based in any such instance on
the Fair Market Value of the Common Stock on the date the Stock Option is
exercised; provided, however, that, in the case of an Incentive Stock Option,
the right to make a payment in the form of already owned shares of Common Stock
may be authorized only at the time the Stock Option is granted; (B) by
requesting the Company to withhold from the number of shares of Common Stock
otherwise issuable upon exercise of the Stock Option that number of shares
having an aggregate Fair Market Value on the date of exercise equal to the
exercise price for all of the shares of Common Stock subject to such exercise;
or (C) by a combination thereof, in each case in the manner provided in the
option agreement.
As noted above, the option price may be paid in shares of Common Stock
owned by the optionee upon the exercise of a Stock Option provided the shares of
Common Stock so utilized meet the definition of "Mature Stock". For purposes
hereof, the term "Mature Stock" shall mean (I) shares of unrestricted Common
Stock that have been owned by the optionee for at least six (6) consecutive
months prior to the date of the exercise of the Stock Option wherein such shares
at to be utilized to pay all or a portion of the Option Price; or (II) shares of
unrestricted Common Stock that were purchased by the optionee in an open-market
transaction prior to the exercise of the Stock Options wherein such shares are
to be utilized to pay all or a portion of the Option Price.
In the discretion of the Compensation Committee and to the extent allowed
under applicable law, payment for any shares subject to a Stock Option may also
be made by delivering a properly executed exercise notice to the Company,
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of funds to pay the purchase price.
(v) Transferability of Stock Options. No Stock Option shall be transferable
by the optionee other than (A) by will or by the laws of descent and
distribution or (B) pursuant to a qualified domestic relations order (as defined
in the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder) or (C) by a gift to a "family member", as
herein defined. All Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee or by the guardian or legal representative of the
optionee or by an alternate payee pursuant to such qualified domestic relations
order or by the "family member" who is the donee of a gift, it being understood
that the terms "holder" and "optionee" include the guardian, legal
representative or family member donee of the optionee named in the option
agreement and any person to whom an option is transferred by will or the laws of
descent and distribution, pursuant to a qualified domestic relations order or
pursuant to a gift to a "family member". For purposes of this Plan, the term
"family member" as relates to the optionee means any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
including adoptive relationships, any person sharing the optionee's household
(other than a tenant or employee), a trust in which these persons (or the
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optionee) control the management of the assets and any other entity in which
these persons (or the optionee) own more than fifty percent of the voting
interests. No Stock Option may be transferred for value except for (I) transfers
under a qualified domestic relations order in settlement of marital property
rights; and (II) a transfer to an entity in which more than fifty percent of the
voting interests are owned by "family members" (or the optionee) in exchange for
an interest in that entity. Notwithstanding the above definition of "family
member" and prohibitions on transfers and exceptions thereto, the definition of
"family member" and the prohibitions and exceptions to transfers shall be
subject to the definitions thereof and restrictions set forth on Form S-8
Registration Statement Under the Securities Act of 1933 as such definitions and
restrictions shall be revised, amended or replaced from time to time.
(vi) Termination by Death. If an optionee's employment terminates by reason
of death, any Stock Option held by such optionee may thereafter be exercised, to
the extent then exercisable, or on such accelerated basis as the Compensation
Committee may determine, for a period of one year (or such other period as the
Compensation Committee may specify in the option agreement) from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. In the event of termination of employment due
to death, if an Incentive Stock option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a Non-Qualified Stock Option.
(vii) Termination by Reason of Disability. If an optionee's employment
terminates by reason of Disability, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination, or on such accelerated basis as the Compensation Committee
may determine, for a period of three years (or such shorter period as the
Compensation Committee may specify in the option agreement) from the date of
such termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter; provided, however, that if
the optionee dies within such three-year period (or such shorter period), any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such three-year (or such shorter) period, continue to be
exercisable to the extent to which it was exercisable at the time of death for a
period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In the event
of termination of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(viii) Termination by Reason of Retirement. If an optionee's employment
terminates by reason of Retirement, any Non-Qualified Stock Option held by such
optionee may thereafter be exercised by the optionee, to the extent it was
exercisable at the time of such Retirement or on such accelerated basis as the
Compensation Committee may determine, for a period of three years (or such
shorter period as the Compensation Committee may specify in the option
agreement) from the date of such termination of employment or until the
expiration of the stated term of such Non-Qualified Stock Option, whichever
period is the shorter; provided, however, that if the optionee dies within such
three-year (or such shorter) period, any unexercised Non-Qualified Stock Option
held by such optionee shall, notwithstanding the expiration of such three-year
(or such shorter) period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of one year-from the date of
such death or until the expiration of the stated term of such Non-Qualified
Stock Option, whichever period is the shorter. In the event of termination of
employment by reason of Retirement, an Incentive Stock Option may be exercised
by the optionee to the extent it was exercisable at the time of such Retirement
or on such accelerated basis as the Compensation Committee may determine, only
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within a period of three months thereafter or prior to the expiration of the
stated term of such Incentive Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such three-month period, any
unexercised Incentive Stock Option held by such optionee shall, notwithstanding
the expiration of such three-month period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of one year
from the date of such death or until the expiration of the stated term of such
Incentive Stock Option, whichever period is the shorter.
(ix) Other Termination. Unless otherwise determined by the Compensation
Committee, if there occurs a Termination of Employment for any reason other than
death, Disability, Retirement or Cause, any Stock Option held by such optionee
shall thereupon terminate, except that such Stock Option, to the extent then
exercisable, or on such accelerated basis as the Compensation Committee may
determine, may, if such Termination of Employment is without Cause, be exercised
for the lesser of (A) in the case of a Non-Qualified Stock Option, one year from
the date of such Termination of Employment or the balance of such Stock Option's
term and (B) in the case of an Incentive Stock Option, three months from the
date of such Termination of Employment or the balance of such Stock Option's
term; provided, however, that if the optionee dies within such one-year or
three-month period, any unexercised Stock Option held by such optionee shall
notwithstanding the expiration of such one-year or three-month period, continue
to be exercisable to the extent to which it was exercisable at the time of death
for a period of one year from the date of such death or until the expiration of
the stated term of such Stock Option, whichever period is the shorter. In the
event of Termination of Employment for Cause, any unexercised Stock Option held
by such optionee shall expire immediately upon the giving to the optionee of
notice of such Termination of Employment. Unless otherwise determined by the
Compensation Committee, for the purposes of the Plan, "Cause" shall mean (I) the
conviction of the optionee for a felony under Federal law or the law of the
state in action occurred, (II) dishonesty in the course of the optionee's
employment duties or (III) willful and failure on the part of the optionee to
perform his duties in any material respect.
(x) Cashing Out of Stock Option. On receipt of written notice of exercise
and subject to confirmation of applicable accounting implications, the
Compensation Committee may elect to cash out all or any part of the shares of
Common Stock for which a Stock Option is being exercised by paying the optionee
an amount, in cash or Common Stock, equal to the excess of the Fair Market Value
of the Common Stock over the option price times the number of shares of Common
Stock for which the Stock Option is being exercised on the effective date of
such cash out.
(xi) Corporate Event Cash Out. The provisions of Section 8 below shall be
applicable in the event of a Corporate Event as defined therein.
(b) Stock Awards. Subject to the terms of this Plan, the Compensation
Committee may grant Awards to individuals in the form of shares of Common Stock
of the Company and may place restrictions on such Awards as set forth in Section
6 below or may grant such shares of Common Stock without restrictions.
SECTION 6. Restricted Stock.
(a) Administration. Restricted Stock may be awarded either alone, in
addition to or in tandem with other Awards granted under the Plan. The
Compensation Committee shall determine the eligible persons to whom and the time
or times at which Restricted Stock shall be awarded, the number of shares of
Restricted Stock to be awarded, the number of shares of Restricted Stock to be
awarded to any person, the duration of the period (the "Restrictions Period")
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during which, and the conditions under which receipt of the Common Stock will be
Restricted, and the other terms and conditions of the Award in addition to those
set forth in Section 6(b).
The Compensation Committee may condition the grant of Restricted Stock upon
the attainment of specified performance goals or such other factors or criteria
as the Compensation Committee shall determine, in its sole discretion.
The provisions of Restricted Stock awards need not be the same with respect
to each recipient.
(b) Terms and Conditions. The shares of Restricted Stock awarded pursuant
to this Section 6 may, in the sole discretion of the Compensation Committee, be
subject to any of the following terms and conditions:
(i) Subject to the provisions of this Plan and the Award agreement referred
to in Section 6(b)(v) below, Restricted Stock Awards may not be sold, assigned,
transferred, pledged or otherwise encumbered during the Restrictions Period and
a legend evidencing such restrictions shall, at the request of the Company or
the Compensation Committee and upon such language as the Company or the
Compensation Committee shall require, be inserted on any stock certificate
evidencing shares received under a Restricted Stock Award. At the expiration of
the Restrictions Period if such Participant has previously received stock
certificates with the above-referenced legend thereon with respect to the
referenced Restricted Stock Award, certificates for shares of Common Stock
without such legend shall, within a reasonable time following the request of the
Participant or his or her legal representative, be delivered to the Participant
or his or her legal representative, by the Company's transfer agent in a number
equal to the shares represented by the stock certificates previously received by
such Participant with respect to the referenced Restricted Stock Award. If the
Participant has not received certificates representing his or her Restricted
Stock Award by the end of the Restrictions Period, the Company shall, within a
reasonable time following the request of the Participant or his or her legal
representative, cause the Company's transfer agent to deliver to the Participant
or his or her legal representative stock certificates, without the
above-referenced legend appearing thereon, in a number equal to the number of
shares with respect to the referenced Restricted Stock Award.
(ii) Unless otherwise determined by the Compensation Committee at grant,
amounts equal to any dividends declared during the Restrictions Period with
respect to the number of shares covered by a Restricted Stock Award will be paid
to the Participant currently, or deferred and deemed to be reinvested in
additional Restricted Stock, or otherwise reinvested, all as determined at or
after the time of the Award by the Compensation Committee or, if the
Compensation Committee determines to allow the Participant to make the election,
at the election of the Participant.
(iii) Subject to the provisions of the Award agreement and this Section 6,
upon termination of a Participant's employment with the Company and any
Subsidiary or Affiliate for any reason during the Restrictions Period for a
given Award, the Restricted Stock in question will vest, or be forfeited, in
accordance with the terms and conditions established by the Compensation
Committee at grant.
(iv) The Compensation Committee may, at or after grant, accelerate the
vesting of all or any part of any Restricted Stock Award and/or waive the
deferral limitations for all or any part of such Award.
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(v) Each Restricted Stock Award shall be confirmed by, and subject to the
terms of, a Restricted Stock agreement executed by the Company and the
Participant.
(c) Limitations and Additional Restrictions Applicable to Restricted Stock
Awards. Notwithstanding the provisions of this Section 6, any awards of
Restricted Stock under this Plan shall be subject to the provisions of Section
14 below.
SECTION 7. Other Stock-Based Awards
Subject to all other applicable provisions of this Plan, including but not
limited to the provisions of Section 9 and Section 14 below, the Compensation
Committee may grant any other cash, stock or stock-related Awards to any
eligible individual under this Plan that the Compensation Committee deems
appropriate, including, but not limited to, stock appreciation rights, limited
stock appreciation rights, phantom stock Awards, the bargain purchase of Stock
and Stock bonuses. Any such benefits and any related agreements shall contain
such terms and conditions as the Compensation Committee deems appropriate
including, but not limited to the right to settle any stock appreciation right
by use of Common Stock. Such Awards and agreements need not be identical. The
Compensation Committee may provide a stock option deferral program or similar
types of plans designed to provide further deferral of taxable income to
Participants including the use of unfunded deferred compensation arrangements
that may provide for future payments to Participants in the form of Common Stock
or cash provided such programs or plans do not include re-pricing of Stock
Options, and such programs or plans shall be subject to the provisions of this
Plan, including but not limited to the provisions of Section 9 and Section 14
below. With respect to any benefit under which shares of Stock are or may in the
future be issued for consideration other than prior services, the amount of such
consideration shall not be less than the amount (such as the par value of such
shares) required to be received by the Company in order to comply with
applicable state law.
SECTION 8. Changes in Company's Capital Structure.
(a) Corporate Events. Notwithstanding the above, in the event of any of the
following:
(i) The Company is merged or consolidated with another
corporation or entity;
(ii) All or substantially all of the assets of the Company or
the Common Stock are acquired by another person or entity;
(iii) The reorganization or liquidation of the Company; or
(iv) The Company shall enter into a written agreement to
undergo an event described in clauses (i), (ii) or (iii) above,
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(each (i), (ii), (iii) and (iv) above, a "Corporate Event") then, the Company
shall require the successor corporation or parent thereof to assume such
outstanding Awards; provided, however, the Company or the Compensation Committee
may, in lieu of requiring such assumption, provide that all outstanding Awards
shall terminate as of the consummation of such Corporate Event, and (x)
accelerate the exercisability of, or cause all vesting restrictions to lapse on,
all outstanding Awards to a date at least ten days prior to the date of such
Corporate Event and/or (y) provide that holders of Awards will receive a cash
payment in respect of cancellation of their Awards based on the amount (if any)
by which the per share consideration being paid for the Stock in connection with
such Corporate Event exceeds the applicable exercise price.
For purposes of this Section 8, an Award shall be considered assumed,
without limitation, if, at the time of issuance of the stock or other
consideration upon a Corporate Event, each holder of an Award would be entitled
to receive upon exercise of the award the same number and kind of shares of
stock or the same amount of property, cash or securities as such holder would
have been entitled to receive upon the occurrence of the transaction if the
holder had been, immediately prior to such transaction, the holder of the number
of shares of Stock covered by the Award at such time; provided, that if such
consideration received in the transaction is not solely equity securities of the
successor entity, the Company or the Compensation Committee may, with the
consent of the successor entity, provide for the consideration to be received
upon exercise of the Award to be solely equity securities of the successor
entity equal to the Fair Market Value of the per share consideration received by
holders of Stock in the Corporate Event.
(b) Effect of Change in Control. Except to the extent reflected in a
particular Award agreement or as determined by the Company or the Compensation
Committee, in the event of a Change in Control, notwithstanding any vesting
schedule with respect to an Award of Options or Restricted Stock, such Option
shall become immediately exercisable with respect to 100% of the shares subject
to such Option, and the Restrictions Period shall expire immediately with
respect to 100% of such shares of Restricted Stock. In the event of a Change in
Control, all other Awards shall become fully vested and or payable to the
fullest extent of any Award or portion thereof that has not then expired and any
restrictions with respect thereto shall expire. The Company and the Compensation
Committee shall have full authority and discretion to interpret this Section
8(b) and to implement any course of action with respect to any Award so as to
satisfy the intent of this provision. The obligations of the Company under the
Plan shall be binding upon any successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Company, or upon
any successor corporation or organization succeeding to substantially all of the
assets and business of the Company.
SECTION 9. Term, Amendment and Termination.
The Plan will terminate on May 5, 2013. Under the Plan, Awards outstanding
as of May 5, 2013 shall not be affected or impaired by the termination of the
Plan.
The Board may not amend, alter or discontinue the Plan or an Award in such
manner so as to impair the rights of an optionee under a Stock Option or a
recipient of a Restricted Stock Award theretofore granted without the optionee's
or recipient's consent except such an amendment made to cause the Award to
qualify for the exemption provided by Rule 16b-3. If any proposed amendment to
the Plan would (i) materially increase the benefits accruing to Participants
under the Plan, (ii) materially increase the aggregate number of securities that
may be issued under the Plan or (iii) materially reduce the requirements as to
52
eligibility for participation in the Plan, then to the extent required by
applicable law or deemed necessary or advisable by the Compensation Committee,
such amendment shall be presented to the Company's stockholders for approval.
Notwithstanding the foregoing, however, the requirement that any such amendments
to the Plan be presented to the Company's stockholders for approval shall not
apply to such amendments as required by applicable law or to cause the Plan to
comply with generally accepted accounting principles.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules, as
well as other developments and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval. Notwithstanding the
above provisions, any changes or adjustments as described in Section 3(b) above
may be made without stockholder approval.
SECTION 10. Unfunded Status of Plan.
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Compensation Committee may authorize
the creation of trusts or other arrangements to meet the obligations created
under the Plan to deliver Common Stock or make payments; provided, however,
that, unless the Compensation Committee otherwise determines, the existence of
such trusts or other arrangements is consistent with the "unfunded" status of
the Plan. No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Holders shall have no rights
under the Plan other than as unsecured general creditors of the Company, except
that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
SECTION 11. General Provisions.
(a) Additional Provisions of an Award. The Compensation Committee may
require each person purchasing or receiving shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to the distribution thereof. The certificates for such
shares may include any legend which the Compensation Committee deems appropriate
to reflect any restrictions on transfer. All certificates for shares of Common
Stock or other securities delivered under the Plan shall be subject to such
stock transfer orders and other restrictions as the Compensation Committee may
deem advisable under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed and
any applicable Federal or state securities law, and the Compensation Committee
may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Privileges of Stock Ownership. Except as otherwise provided in this
Plan, no person shall be entitled to the privileges of stock ownership in
respect of shares of Common Stock which are subject to Awards hereunder until
such shares shall have been issued to such person.
(c) Government and Other Regulations. The obligation of the Company to make
payment of Awards in Stock or otherwise shall be subject to all applicable laws,
rules and regulations, and to such approvals by governmental agencies as may be
required. Notwithstanding any terms or conditions of any Award to the contrary,
53
the Company shall be under no obligation to offer to sell or to sell and shall
be prohibited from offering to sell or selling any shares of Stock pursuant to
an Award unless such shares have been properly registered for sale pursuant to
the Securities Act with the Securities and Exchange Commission or unless the
Company has received an opinion of counsel, satisfactory to the Company, that
such shares may be offered or sold without such registration pursuant to an
available exemption therefrom and the terms and conditions of such exemption
have been fully complied with. The Company shall be under no obligation to
register for sale under the Securities Act any of the shares of Stock to be
offered or sold under the Plan. If the shares of Stock offered for sale or sold
under the Plan are offered or sold pursuant to an exemption from registration
under the Securities Act, the Company may restrict the transfer of such shares
and may legend the Stock certificates representing such shares in such manner as
it deems advisable to ensure the availability of any such exemption.
(d) No Restriction on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting
other or additional compensation arrangements for its employees.
(e) No Employment Right or Claim. The adoption of the Plan shall not confer
upon any employee any right to continued employment nor shall it interfere in
any way with the right of the Company or any Subsidiary or Affiliate to
terminate the employment of any employee at any time. No individual shall have
any claim or right to be granted an Award under the Plan, or, having been
selected for the grant of an Award, to be selected for the grant of any other
Award.
(f) Tax Withholding. No later than the date as of which an amount first
becomes subject to being included in the gross income of the Participant for
Federal income tax purposes with respect to any Award under the Plan, the
Participant shall pay to the Company, or make arrangements satisfactory to the
Company regarding the payment of, any Federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount. If so
determined by the Compensation Committee, withholding obligations may be settled
with Common Stock, including Common Stock that is part of the Award that gives
rise to the withholding requirement. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements, and the Company, its
Subsidiaries and its Affiliates shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participant. The Compensation Committee may establish such procedures as it
deems appropriate, including the making of irrevocable elections, for the
settlement of withholding obligations with Common Stock.
(g) Payments to Persons Other Than Participants. If any person to whom any
amount is payable under the Plan is unable to care for his affairs because of
illness or accident, or is a minor, or has died, then any payment due to such
person or his estate (unless a prior claim therefor has been made by a duly
appointed legal representative) may, if the Compensation Committee so directs
the Company, be paid to his spouse, child, relative, an institution maintaining
or having custody of such person, or any other person deemed by the Compensation
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Company therefor.
(h) No Liability of Compensation Committee Members. No member of the
Compensation Committee shall be personally liable by reason of any contract or
other instrument executed by such member or on his behalf in his capacity as a
member of the Compensation Committee nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the
54
Compensation Committee and each other employee, officer or director of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person's own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them harmless.
(i) Reliance on Reports. Each member of the Compensation Committee and each
member of the Board shall be fully justified in relying, acting or failing to
act, and shall not be liable for having so relied, acted or failed to act in
good faith, upon any report made by the independent public accountant of the
Company and its Subsidiaries and upon any other information furnished in
connection with the Plan by any person or persons other than himself.
(j) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary except as otherwise specifically provided in such other plan.
(k) Expenses. The expenses of administering the Plan shall be borne by the
Company and its Subsidiaries.
(l) Pronouns. Masculine pronouns and other words of masculine gender shall
refer to both men and women.
(m) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings, shall control.
(n) Termination of Employment. For all purposes herein, a person who
transfers from employment or service with the Company to employment or service
with a Subsidiary or vice versa shall not be deemed to have terminated
employment or service with the Company or a Subsidiary.
(o) Other Procedures.The Compensation Committee shall establish such
procedures as it deems appropriate for a Participant to designate a beneficiary
to whom any amounts payable in the event of the Participant's death are to be
paid.
(p) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws of the
State of Delaware.
SECTION 12. Effective Date of Plan.
Provided the Plan is approved by the Company's stockholders, the Plan shall
be effective on May 5, 2003, the date the Plan was submitted to the Company's
stockholders for vote.
SECTION 13. Non-Employee Director Stock Options and Non-Employee Director
Shares.
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(a) Each director of the Company who is not otherwise an employee of the
Company or any Subsidiary or Affiliate from and after the effective date of the
Plan (a "Non-Employee Director") shall, on each December 31 during such
Non-Employee Director's term, automatically be granted Non-Qualified Stock
Options to purchase 500 shares of Common Stock having an exercise price per
share equal to 100% of the Fair Market value of the Common Stock at the Date of
Grant of such Non-Qualified Stock Option. Each such Non-Employee Director, upon
joining the Board, shall also be awarded 500 shares of Common Stock
("Non-Employee Director Shares"). Non-Employee Director Shares shall be fully
vested upon grant, but may not be sold, pledged, or otherwise transferred in any
manner during a Non-Employee Director's term and for one year thereafter. The
Compensation Committee may require that such shares- bear an appropriate legend
evidencing such transfer restrictions.
(b) An automatic Non-Employee Director Stock Option shall be granted
hereunder only if as of each Date of Grant (or, in the case of any initial
grant, from and after the effective date of the Plan) the Non-Employee Director
(i) is not otherwise an employee of the Company or any Subsidiary or Affiliate,
(ii) has not been an employee of the Company or any Subsidiary or Affiliate for
any part of the preceding fiscal year and (iii) has served on the Board
continuously since the commencement of his term.
(c) Each holder of a Stock Option granted pursuant to this Section 13 shall
also have the rights specified in Section 5(a).
(d) In the event that the number of shares of Common Stock available for
future grant under the Plan is insufficient to make all automatic grants
required to be made on such date, then all Non-Employee Directors entitled to a
grant on such date shall share ratably in the number of options on shares
available for grant under the Plan.
(e) Except as expressly provided in this Section 13, any Stock Option
granted hereunder shall be subject to the terms and conditions of the Plan as if
the grant were made pursuant to Section 5(a) hereof.
(f) Awards granted under this Section 13 shall be subject to any applicable
restrictions set forth in Section 14(a) below.
SECTION 14. Award Limitations.
(a) General Restriction. Any provision of this Plan to the contrary
notwithstanding, in no event shall any Awards or Award of Non-Employee Director
Shares be made, and in no event shall any option be granted or exercised, if the
grant or exercise of such Award or Option, would result in a violation of the
Common Stock ownership limits or any other requirements necessary for
qualification of the Company as a "real estate investment trust" for federal
income tax purposes. For purposes of the Plan, in determining whether such
limits would be violated, Participants shall be deemed to own beneficially any
shares of Common Stock subject to unexercised Options, whether or not vested.
Any such Award or grant or exercise of Options, if made, shall be null and void
and shall have no legal effect. In addition, the Plan and any Awards or Options
granted hereunder shall be subject in all events to, and shall in no event
violate (i) the "Ownership Limit" as set forth in the Company's Amended and
Restated Certificate of Incorporation, (ii) the provisions of any applicable
rule or regulation of the Securities and Exchange Commission, the New York Stock
Exchange and/or such other exchange upon which the Company's stock may be traded
or (iii) any provision of any federal or state law, rule or regulation.
56
(b) Restrictions on Stock Awards. Stock Awards
granted from the Plan must be
subject to the following guidelines:
(i) Stock Awards may be granted from the Plan in lieu of cash
compensation; and
(ii) Except for Stock Awards falling within the 5% Authorization
(defined below), Stock Awards that are granted from the Plan
other than in lieu of cash compensation (A) pursuant to a stock
award program or (B) independently, must provide for a vesting
period of a minimum of three (3) years or may provide for a
vesting period of less than three (3) years but at least one (1)
year if the restrictions period placed upon the Stock Award is
performance based.
Up to a maximum of Stock Awards equivalent to 5% of the total shares available
for grant under the Plan as set forth in the first sentence of Section 3(a)
above (the "5% Authorization"), Stock Awards may be granted to officers and
employees of the Company other than in lieu of cash compensation and without the
necessity of compliance with the vesting or performance based criteria set forth
directly above.
57