EXHIBIT 10.1
EGGROCK PARTNERS, INC.
1999 Stock Option and Grant Plan
SECTION 1 GENERAL PURPOSE OF THE PLAN; DEFINITIONS
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The name of the plan is the Eggrock Partners, Inc. 1999 Stock Option and
Grant Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, employees, directors, consultants and other key persons of Eggrock
Partners, Inc., a Delaware corporation (the "Company") and its Subsidiaries, if
any, upon whose judgment, initiative and efforts the Company largely depends for
the successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"ACT" means the Securities Exchange Act of 1934, as amended.
"AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, Unrestricted Stock Awards, or any combination
of the foregoing.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means and shall be limited (i) a willful act of dishonesty by
the optionee with respect to any matter involving the Company, any Subsidiary or
any successor entity, as applicable; (ii) conviction of the optionee of a crime
involving moral turpitude; or (iii) the deliberate or willful failure by the
optionee (other than by reason of the optionee's physical or mental illness,
incapacity or disability) to substantially perform the optionee's duties with
the Company, any Subsidiary or any successor entity, as applicable, and the
continuation of such failure for a period of 30 days after delivery by the
Company, any Subsidiary or any successor entity, as applicable, to the optionee
of written notice specifying the scope and nature of such failure and their
intention to terminate the optionee for Cause. For purposes of clauses (i) and
(iii), no act, or failure to act, on the optionee's part shall be deemed
"willful" unless done, or omitted to be done, by the optionee without reasonable
belief that the optionee's act, or failure to act, was in the best interest of
the Company, any Subsidiary or any successor entity, as applicable.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" has the meaning specified in Section 2.
"COMMON STOCK" means the Company's Voting Common Stock, par value $.01
per share.
"EFFECTIVE DATE" means the date on which the Plan is approved by
stockholders as set forth at the end of this Plan.
"FAIR MARKET VALUE" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Committee; PROVIDED, HOWEVER,
that (i) if the Stock is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), the Fair Market Value
on any
given date shall not be less than the average of the highest bid and lowest
asked prices of the Stock reported for such date or, if no bid and asked prices
were reported for such date, for the last day preceding such date for which such
prices were reported, or (ii) if the Stock is admitted to trading on a national
securities exchange or the NASDAQ National Market System, the Fair Market Value
on any date shall not be less than the last reported closing price for the Stock
on such exchange or system; PROVIDED FURTHER, HOWEVER, that if the date for
which Fair Market Value is determined is the first day when trading prices for
the Stock are reported on NASDAQ or trading on a national securities exchange,
the Fair Market Value shall be the "Price to the Public" (or equivalent) set
forth on the cover page for the final prospectus relating to the Company's
Initial Public Offering.
"GOOD REASON" means a termination by the optionee of his employment with
Company, any Subsidiary or any successor entity, as applicable, within 30 days
after and as a result of (i) a substantial adverse change, not consented to by
the optionee, in the nature or scope of the optionee's responsibilities,
authorities, title, powers, functions, or duties from the responsibilities,
authorities, powers, functions, or duties exercised by the optionee immediately
prior to a Sale Event; (ii) a reduction in the optionee's annual base salary as
in effect immediately prior to the Sale Event except for across-the-board salary
reductions similarly affecting all or substantially all employees similarly
situated to the optionee; or (iii) a change, without the optionee's consent, in
the optionee's principal place of employment with the Company, any Subsidiary or
any successor entity, as applicable, to a location that is greater than fifty
(50) miles from the optionee's principal place of employment with the Company or
any Subsidiary, as applicable, immediately prior to a Sale Event.
"INCENTIVE STOCK OPTION" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
"INITIAL PUBLIC OFFERING" means the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, other than
on Forms S-4 or S-8 or their then equivalents, covering the offer and sale by
the Company of its Common Stock or such other event as a result of which or
following which the Common Stock shall be publicly held.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
"OUTSIDE DIRECTOR" means a member of the Board who is not also an
employee or officer of the Company or any Subsidiary.
"RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 6.
"STOCK" means the Non-Voting Common Stock, par value $0.01 per share, of
the Company and/or the Common Stock of the Company, as applicable, and in each
case subject to adjustments pursuant to Section 3.
"SUBSIDIARY" means any corporation or other entity (other than the
Company) in any unbroken chain of corporations or other entities beginning with
the Company if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50 percent or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"UNRESTRICTED STOCK AWARD" means any Award granted pursuant to Section 7.
SECTION 2 ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS AND
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DETERMINE AWARDS
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(a) ADMINISTRATION OF PLAN. The Plan shall be administered by the Board,
or at the discretion of the Board, by a committee or committees of the Board,
comprised, except as contemplated by Section 2(c), of not less than two
Directors. All references herein to the Committee shall be deemed to refer to
the group then responsible for administration of the Plan at the relevant time
(i.e., either the Board of Directors or a committee or committees of the Board,
as applicable).
(b) POWERS OF COMMITTEE. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees, directors, consultants,
and key persons of the Company and its Subsidiaries to whom Awards may from time
to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, Unrestricted Stock Awards, or any combination of the foregoing, granted
to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by
any Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of written instruments
evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award;
(vi) to impose any limitations on Awards granted under the Plan,
including limitations on transfers, repurchase provisions and the like and to
exercise repurchase rights or obligations;
(vii) subject to the provisions of Section 5(a)(ii), to extend at
any time the period in which Stock Options may be exercised;
(viii) to determine at any time whether, to what extent, and
under what circumstances distribution or the receipt of Stock and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the participant and whether and to what extent the Company shall
pay or credit amounts constituting interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and
(ix) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
(c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Committee's authority and duties with respect to the granting of
Awards at Fair Market Value to individuals who are not subject to the reporting
and other provisions of Section 16 of the Act or "covered employees" within the
meaning of Section 162(m) of the Code. Any such delegation by the Committee
shall include a limitation as to the amount of Awards that may be granted during
the period of the delegation and shall contain guidelines as to the
determination of the exercise price of any Option, the conversion ratio or price
of other Awards and the vesting criteria. The Committee may revoke or amend the
terms of a delegation at any time but such action shall not invalidate any prior
actions of the Committee's delegate or delegates that were consistent with the
terms of the Plan.
SECTION 3 STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) STOCK ISSUABLE. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 3,047,113 shares of Stock
(including for this purpose Non-Voting Common Stock and Common Stock,
collectively), subject to adjustment as provided in Section 3(b). For purposes
of this limitation, the shares of Stock underlying any Awards which are
forfeited, canceled, reacquired by the Company, satisfied without the issuance
of Stock or otherwise terminated (other than by exercise) shall be added back to
the shares of Stock available for issuance under the Plan. Subject to such
overall limitation, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Stock Options
with respect to no more than 100,000 shares of Stock may be granted to any one
individual participant during any one calendar year period. The shares available
for issuance under the Plan may be authorized but unissued shares of Stock or
shares of Stock reacquired by the Company and held in its treasury.
(b) CHANGES IN STOCK. Subject to Section 3(c) hereof, if, as a result
of any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, the Committee shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, (ii) the number of Stock Options that can be granted to
any one individual participant, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, and (iv) the
exercise price and/or exchange price for each share subject to any then
outstanding Stock Options under the Plan, without changing the aggregate
exercise price (i.e., the exercise price multiplied by the number of Stock
Options ) as to which such Stock Options remain exercisable. The adjustment by
the Committee shall be final, binding and conclusive. No fractional shares of
Stock shall be issued under the Plan resulting from any such adjustment, but the
Committee in its discretion may make a cash payment in lieu of fractional
shares.
The Committee may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan, PROVIDED THAT no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.
(c) MERGERS AND OTHER SALE EVENTS. In the case of and subject to the
consummation of (i) the dissolution or liquidation of the Company, (ii) the sale
of all or substantially all of the assets of the Company on a consolidated basis
to an unrelated person or entity, (iii) a merger, reorganization or
consolidation in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a
majority of the outstanding voting power of the surviving or resulting entity
immediately upon completion of such transaction, (iv) the sale of all of the
Stock of the Company (including for this purpose both Non-Voting Common Stock
and Common Stock) to an unrelated person or entity or (v) any other transaction
in which the owners of the Company's outstanding voting power prior to such
transaction do not own at least a majority of the outstanding voting power of
the relevant entity after the transaction (in each case, regardless of the form
thereof, a "Sale Event"), all unvested Restricted Stock Awards as of the
effective date of the Sale Event shall become vested as of such date. The Plan
and the Awards issued hereunder shall terminate upon the effectiveness of any
such Sale Event, unless provision is made in connection with such transaction in
the sole discretion of the parties to such Sale Event for the assumption of
Awards theretofore granted (after taking into account any acceleration
hereunder), or the substitution for such Awards of new Awards of the successor
entity or a parent or subsidiary thereof, with such adjustment as to the number
and kind of shares and the per share exercise prices as such parties shall agree
(after taking into account any acceleration hereunder). In the event of such
termination, each participant shall be permitted to exercise for a period of at
least 15 days prior to the date of such termination all outstanding Awards held
by such participant which are then exercisable or will become exercisable upon
the effectiveness of the Sale Event, provided however that such exercise of
unvested stock options shall be subject to the effectiveness of the Sale Event.
Notwithstanding anything herein to the contrary, in the event that
provision is made in connection with the Sale Event for the assumption or
continuation of Awards, or the substitution of such Awards with new Awards of
the successor entity or parent thereof, then, except as the Committee may
otherwise determine with respect to particular Awards, any Award so assumed or
continued or substituted therefor shall be deemed vested and exercisable in full
upon the date on which the grantee's employment or service relationship with the
Company, its Subsidiaries or the successor entity, as the case may be,
terminates if such termination occurs (i) within eighteen (18) months after such
Sale Event and (ii) such termination is by the Company or its Subsidiaries or
successor entity without Cause or by the grantee for Good Reason.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other option holders of another corporation in connection with a merger or
consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation. The Committee may direct that the substitute awards be
granted on such terms and conditions as the Committee considers appropriate in
the circumstances. Any substitute Awards granted under the Plan shall not count
against the share limitation set forth in Section 3(a).
SECTION 4 ELIGIBILITY
Participants in the Plan will be such full or part-time officers,
employees, directors, consultants and other key persons of the Company and its
Subsidiaries who are responsible for, or contribute to, the management, growth
or profitability of the Company and its Subsidiaries as are selected from time
to time by the Committee in its sole discretion.
SECTION 5 STOCK OPTIONS
Any Stock Option granted under the Plan shall be pursuant to a Stock
Option Agreement which shall be in such form as the Committee may from time to
time approve. Option Agreements need not be identical.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Company or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall be
deemed a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after the
date which is 10 years from the date the Plan is approved by the Board.
(a) TERMS OF STOCK OPTIONS. Stock Options granted under the Plan shall
be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable. If the Committee so determines, Stock
Options may be granted in lieu of cash compensation at the participant's
election, subject to such terms and conditions as the Committee may establish,
as well as in addition to other compensation.
(i) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option shall be determined by the Committee at the time of
grant but shall not be less than 100 percent of the Fair Market Value on the
date of grant in the case of Incentive Stock Options. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the Code)
more than 10 percent of the combined voting power of all classes of stock of the
Company or any parent or subsidiary corporation and an Incentive Stock Option is
granted to such employee, the option price of such Incentive Stock Option shall
be not less than 110 percent of the Fair Market Value on the grant date.
(ii) OPTION TERM. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more than ten years
after the date the option is granted. If an employee owns or is deemed to own
(by reason of the attribution rules of Section 424(d) of the Code) more than 10
percent of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five years from the
date of grant.
(iii) EXERCISABILITY; RIGHTS OF A STOCKHOLDER. Stock Options
shall become exercisable at such time or times, whether or not in installments,
as shall be determined by the Committee at or after the grant date. The
Committee may at any time accelerate the exercisability of all or any portion of
any Stock Option. An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to unexercised
Stock Options.
(iv) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part, by giving written notice of exercise to the Company,
specifying the number of shares to be purchased. Payment of the purchase price
may be made by one or more of the following methods to the extent provided in
the Award agreement:
(A) In cash, by certified or bank check, or other
instrument acceptable to the Committee in U.S. funds payable to the order of the
Company in an amount equal to the purchase price of the shares to be purchased;
(B) By the optionee delivering to the Company a
promissory note if the Board has expressly authorized the loan of funds to the
optionee for the purpose of enabling or assisting the optionee to effect the
exercise of his or her Stock Option; provided that at least so much of the
exercise price as represents the par value of the Stock shall be paid other than
with a promissory note;
(C) If permitted by the Committee, through the
delivery (or attestation to the ownership) of shares of Stock that have been
purchased by the optionee on the open market or have been beneficially owned by
the optionee for at least six months and are not then subject to restrictions
under any Company plan. Such surrendered shares shall be valued at Fair Market
Value on the exercise date; or
(D) If permitted by the Committee, by the optionee
delivering to the Company a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company cash or
a check payable and acceptable to the Company to pay the purchase price;
PROVIDED that in the event the optionee chooses to pay the purchase price as so
provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the Committee
shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection. No
certificates for Stock so purchased will be issued to optionee until the Company
has completed all steps required by law to be taken in connection with the
issuance and sale of the shares, including without limitation (i) receipt of a
representation from the optionee at the time of exercise of the Option that the
optionee is purchasing the Stock for the optionee's own account and not with a
view to any sale or distribution thereof, (ii) the legending of any certificate
representing the shares to evidence the foregoing representations and
restrictions, and (iii) obtaining from optionee payment or provision for all
withholding taxes due as a result of the exercise of the Option. The delivery of
certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his or her stead in accordance with the provisions of the
Stock Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Stock Option or
applicable provisions of laws. In the event an optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation
method, the shares of Stock transferred to the optionee upon the exercise of the
Stock Option shall be net of the number of shares attested to.
(b) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the shares of Stock
with respect to which Incentive Stock Options granted under this Plan and any
other plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000. To the extent that any Stock Option exceeds this limit, it
shall constitute a Non-Qualified Stock Option.
(c) RELOAD OPTIONS. At the discretion of the Committee, Options granted
under the Plan may include a "reload" feature pursuant to which an optionee
exercising an Option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with such other terms as
the Committee may provide) to purchase that number of shares of Stock equal to
the sum of (i) the number delivered to exercise the original Option and (ii) the
number withheld to satisfy any tax liabilities.
(d) NON-TRANSFERABILITY OF OPTIONS. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, or by the optionee's legal
representative or guardian in the event of the optionee's incapacity.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
provide in the Award agreement regarding a given Option that the optionee may
transfer, without consideration for the transfer, his Non-Qualified Stock
Options to members of his immediate family, to trusts for the benefit of such
family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be
bound by all of the terms and conditions of this Plan and the applicable Option.
(e) TERMINATION. Unless otherwise provided in the option agreement or
determined by the Committee, upon the optionee's termination of employment (or
other business relationship) with the Company and its Subsidiaries, the
optionee's rights in his or her Stock Options shall automatically terminate.
SECTION 6 RESTRICTED STOCK AWARDS
(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an
Award pursuant to which the Company may, in its sole discretion, grant or sell,
at par value or such other higher purchase price determined by the Committee, in
its sole discretion, shares of Stock subject to such restrictions and conditions
as the Committee may determine at the time of grant ("Restricted Stock"), which
purchase price shall be payable in cash or by promissory note (recourse, partial
recourse, or nonrecourse) acceptable to the Committee. Conditions may be based
on continuing employment (or other business relationship) and/or achievement of
pre-established performance goals and objectives. The grant of a Restricted
Stock Award is contingent on the participant executing the Restricted Stock
Award agreement. The terms and conditions of each such agreement shall be
determined by the Committee, and such terms and conditions may differ among
individual Awards and participants.
(b) RIGHTS AS A STOCKHOLDER. Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any applicable purchase
price, a participant shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the Committee
shall otherwise determine, certificates evidencing the Restricted Stock shall
remain in the possession of the Company until such Restricted Stock is vested as
provided in subsection (d) below of this Section, and the participant shall be
required, as a condition of the grant, to deliver to the Company a stock power
endorsed in blank.
(c) RESTRICTIONS. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the Restricted Stock Award agreement. If a
participant's employment (or other business relationship) with the Company and
its Subsidiaries terminates under the conditions specified in the relevant
instrument relating to the Award, or upon such other event or events as may be
stated in the instrument evidencing the Award, the Company or its assigns shall
have the right or shall agree, as may be specified in the relevant instrument,
to repurchase some or all of the shares of Stock subject to the Award at such
purchase price as is set forth in such instrument.
(d) VESTING OF RESTRICTED STOCK. The Committee at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which Restricted Stock
shall become vested, subject to such further rights of the Company or its
assigns as may be specified in the instrument evidencing the Restricted Stock
Award.
(e) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The Restricted
Stock Award agreement may require or permit the immediate payment, waiver,
deferral or investment of dividends paid on the Restricted Stock.
SECTION 7 UNRESTRICTED STOCK AWARDS
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Committee) an Unrestricted Stock Award to any participant, pursuant to
which such participant may receive shares of Stock free of any vesting
restrictions ("Unrestricted Stock") under the Plan. Unrestricted Stock Awards
may be granted or sold as described in the
preceding sentence in respect of past services or other valid consideration, or
in lieu of any cash compensation due to such individual.
(b) ELECTIONS TO RECEIVE UNRESTRICTED STOCK IN LIEU OF COMPENSATION.
Upon the request of a participant and with the consent of the Committee, each
such participant may, pursuant to an advance written
election delivered to the Company no later than the date specified by the
Committee, receive a portion of the cash compensation otherwise due to such
participant in the form of shares of Unrestricted Stock either currently or on a
deferred basis.
(c) RESTRICTIONS ON TRANSFERS. The right to receive shares of
Unrestricted Stock on a deferred basis may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent and
distribution.
SECTION 8 TAX WITHHOLDING
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the
date as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of, any federal, state, or local
taxes of any kind required by law to be withheld with respect to such income.
The Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
participant.
(b) PAYMENT IN STOCK. Subject to approval by the Committee, a
participant may elect to have the minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the participant with an aggregate Fair Market Value (as
of the date the withholding is effected) that would satisfy the withholding
amount due.
SECTION 9 TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 10 AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Committee may, at any time, amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price in a manner not inconsistent with the terms of the
Plan), but such price, if any, must satisfy the requirements which would apply
to the substitute or amended Award if it were then initially granted under this
Plan for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's consent. If and to the extent determined by the
Committee to be required by the Code to ensure that Incentive Stock Options
granted under the Plan are qualified under Section 422 of the Code, Plan
amendments shall be subject to approval by the Company's stockholders who are
eligible to vote at a meeting of stockholders.
Nothing in this Section 10 shall limit the Board's or Committee's authority to
take any action permitted pursuant to Section 3(c).
SECTION 11 STATUS OF PLAN
With respect to the portion of any Award that has not been exercised
and any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
PROVIDED that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 12 GENERAL PROVISIONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee
may require each person acquiring Stock 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 distribution thereof. No shares of Stock shall be issued
pursuant to an Award until all applicable securities law and other legal and
stock exchange or similar requirements have been satisfied. The Committee may
require the placing of such stop-orders and restrictive legends on certificates
for Stock and Awards as it deems appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Stock certificates to participants
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the participant, at the participant's last
known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(d) TRADING POLICY RESTRICTIONS. Option exercises and other Awards
under the Plan shall be subject to such Company's insider trading policy, as in
effect from time to time.
(e) LOANS TO AWARD RECIPIENTS. The Company shall have the authority to
make loans to recipients of Awards hereunder (including to facilitate the
purchase of shares) and shall further have the authority to issue shares for
promissory notes hereunder.
SECTION 13 EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a
majority of the votes cast at a meeting of stockholders at which a quorum is
present or by written consent in accordance with applicable law. Subject to
such approval by the stockholders and to the requirement that no Stock may be
issued hereunder prior to such approval, Stock Options and other Awards may
be granted hereunder on and after adoption of this Plan by the Board.
SECTION 14 GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed
by Delaware law, applied without regard to conflict of law principles.
ADOPTED BY BOARD OF DIRECTORS: September 27, 1999
APPROVED BY STOCKHOLDERS: September 27, 1999