EXHIBIT 10.15
LITTLE SWITZERLAND, INC.
2000 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Little Switzerland, Inc. 2000 Stock Option
and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and
enable the officers, employees, Independent Directors and other key persons
(including consultants) of Little Switzerland, Inc., a Delaware corporation (the
"Company"), and its Subsidiaries 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 Act of 1933, as amended, and the rules and
regulations thereunder.
"AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Performance Share Awards and Dividend
Equivalent Rights.
"BOARD" means the Board of Directors of the Company.
"CHANGE OF CONTROL" is defined in Section 16.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" or "OPTION COMMITTEE" means the Committee of the Board
referred to in Section 2.
"COVERED EMPLOYEE" means an employee who is a "Covered Employee" within
the meaning of Section 162(m) of the Code.
"DEFERRED STOCK AWARD" means Awards granted pursuant to Section 8.
"DISABILITY" means a permanent and total disability with the meaning of
Section 22(e)(3) of the Code. Disability shall only be deemed to occur at the
time of the determination by the Option Committee of the Disability.
"DIVIDEND EQUIVALENT RIGHTS" means the rights described in Section
2(b)(vii).
"EFFECTIVE DATE" means the date on which the Plan is adopted by the Board
subject to approval by the Company's stockholders as set forth in Section 18.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"FAIR MARKET VALUE" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Option Committee; provided,
however, that if the Stock is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ National
System, or a national securities exchange, the determination shall be made by
reference to market quotations. If there are no market quotations for such date,
the determination shall be made by reference to the last date preceding such
date for which there are market quotations. If sale prices are not available or
if the principal market for the Stock is not a national securities exchange and
the Stock is not quoted on the NASDAQ stock market, the average between the
highest bid and lowest asked prices for the Stock on such day as reported on the
NASDAQ OTC Bulletin Board Service or by the National Quotation Bureau,
Incorporated, or a comparable service.
"INCENTIVE STOCK OPTION" means any Stock Option designated and qualified
as an "incentive stock option" as defined in Section 422 of the Code.
"INDEPENDENT DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary.
"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.
"PERFORMANCE SHARE AWARD" means Awards granted pursuant to Section 10.
"PERFORMANCE CYCLE" means one or more periods of time, which may be of
varying and overlapping durations, as the Option Committee may select, over
which the attainment of one or more performance criteria will be measured for
the purpose of determining a grantee's right to and the payment of a Performance
Share Award, Restricted Stock Award or Deferred Stock Award.
"RESTRICTED STOCK AWARD" means Awards granted pursuant to Section 7.
"STOCK" means the common stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
"STOCK APPRECIATION RIGHT" means any Award granted pursuant to Section 6.
"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 9.
SECTION 2. ADMINISTRATION OF PLAN; OPTION COMMITTEE AUTHORITY TO
SELECT GRANTEES AND DETERMINE AWARDS
(a) COMMITTEE. Subject to the provisions of Section 5(c) with respect to
Awards made to Independent Directors, the Plan shall be administered by either
the Board or a committee of not less than two Independent Directors (the "Option
Committee").
(b) POWERS OF OPTION COMMITTEE. The Option 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 persons, including entities, to whom Awards
may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, that Incentive Stock Options, Non-Qualified Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, Deferred Stock Awards,
Unrestricted Stock Awards, Performance Share Awards and Dividend
Equivalent Rights, or any combination of the foregoing, may be granted to
any one or more grantees;
(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 grantees, and to approve the form of written instruments
evidencing the Awards;
(v) to accelerate at any time the exercisability of vesting
of all or any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend
at any time the period in which Stock Options may be exercised;
(vii) 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 grantee and whether and to what extent the Company
shall pay or credit amounts constituting interest (at rates determined by
the Option Committee) or dividends or deemed dividends on such deferrals
(hereinafter, "Dividend Equivalent Rights"); and
(viii) 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 Option Committee shall be
binding on all persons, including the Company and Plan grantees.
(c) DELEGATION OF AUTHORITY TO GRANT AWARDS. The Option Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Option 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 Exchange Act or "Covered
Employees" within the meaning of Section 162(m) of the Code. Any such delegation
by the Option 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 Stock Option or
Stock Appreciation Right, the conversion ratio or price of other Awards and the
vesting criteria. The Option Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of
the Option Committee's delegate or delegates that were consistent with the terms
of the Plan.
(d) INDEMNIFICATION. Neither the Board nor the Option Committee, nor any
member of either or any delegatee thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the Option Committee
(and any delegatee thereof) shall be entitled in all cases to indemnification
and reimbursement by the Company in respect of any claim, loss, damage or
expense (including, without limitation, reasonable attorneys' fees) arising or
resulting therefrom to the fullest extent permitted by law and/or under any
directors' and officers' liability insurance coverage which may be in effect
from time to time.
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 1,700,000 shares, subject to
adjustment as provided in Section 3(b); provided that not more than 200,000
shares shall be issued in the form of Unrestricted Stock Awards, Restricted
Stock Awards, or Performance Share Awards except to the extent such Awards are
granted in lieu of cash compensation or fees. 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 or Stock Appreciation
Rights with respect to no more than 500,000 shares of Stock may be granted to
any one individual grantee 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, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for a different
number or kind of securities of the Company or any successor entity (or a parent
or subsidiary thereof), the Option Committee shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, including the maximum number of shares that may be
issued in the form of Unrestricted Stock Awards, Restricted Stock Awards or
Performance Share Awards, (ii) the number of Stock Options or Stock Appreciation
Rights that can be granted to any one individual grantee and the maximum number
of shares that may be granted to any one individual grantee and the maximum
number of shares that may be granted under a Performance-based Award, (iii) the
number and kind of shares or other securities subject to any then outstanding
Awards under the Plan, (iv) the repurchase price per share subject to each
outstanding Restricted Stock Award, and (v) the price for each share subject to
any then outstanding Stock Options and Stock Appreciation Rights under the Plan,
without changing the aggregate exercise price (I.E., the exercise price
multiplied by the number of Stock Options and Stock Appreciation Rights) as to
which such Stock Options and Stock Appreciation Rights remain exercisable. The
adjustment by the Option 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 Option Committee in its discretion may make a cash
payment in lieu of fractional shares.
The Option 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 Option 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 grantee, 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 TRANSACTIONS. In the case of the (i) dissolution or
liquidation of the Company, (ii) a merger, reorganization or consolidation in
which the Company is acquired by another person or in which the Company is not
the surviving corporation, or (iii) the sale of all or substantially all of the
assets of the Company to another corporation, the Plan and Awards issued
thereunder shall terminate on the effective date of such dissolution,
liquidation, merger, reorganization, consolidation or sale, unless provision is
made in such transaction for the assumption of Awards theretofore granted under
the Plan or the substitution for such Awards of comparable awards of the
successor corporation or a parent or subsidiary thereof, with appropriate
adjustment as to the number and kind of shares and, if applicable, the per share
exercise price, as provided in Section 7 of the Plan. In the event of any
transaction which will trigger such termination, the Company shall give written
notice thereof to the Award holders at least twenty days prior to the effective
date of such transaction or the record date on which shareholders of the Company
entitled to participate in such transaction shall be determined, whichever comes
first. In the event of such termination, any unexercised portion of outstanding
Awards, which is vested and exercisable at that time, shall be exercisable for
at least 15 days prior to the date of such termination; provided, however, that
in no event shall Awards be exercisable after the applicable expiration date for
such Award.
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other
employees, Independent Directors and key persons (including consultants and
prospective employees) of the Company and its Subsidiaries as are selected from
time to time by the Option Committee in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Option Committee may from time to time approve.
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 July 17,
2010.
(a) STOCK OPTIONS GRANTED TO EMPLOYEES AND KEY PERSONS. The Option
Committee in its discretion may grant Stock Options to eligible employees and
key persons of the Company or any Subsidiary. Stock Options granted pursuant to
this Section 5(a) shall be subject to the following terms and conditions and
shall contain such additional terms and conditions, not inconsistent with terms
of the Plan, as the Option Committee shall deem desirable. If the Option
Committee so determines, Stock Options may be granted in lieu of cash
compensation at the optionee's election, subject to such terms and conditions as
the Option Committee may establish.
(i) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall be
determined by the Option 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, or 85 percent of the Fair Market Value on
the date of grant, in the case of Non-Qualified Stock Options (other than
options granted in lieu of cash compensation). 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 Option Committee, but no Stock Option shall be exercisable more than
10 years after the date the Stock 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 Stock 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 Option Committee at or after the grant date.
The Option 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
Option Award agreement:
(A) In cash, by certified or bank check or other
instrument acceptable to the Option Committee;
(B) Through the delivery (or attestation to the ownership) of
shares of Stock that have been purchased by the optionee on the open
market or that 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;
(C) 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 for 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 Option Committee shall prescribe as a condition of
such payment procedure; or
(D) 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 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 if otherwise required by state law.
Payment instruments will be received subject to collection. 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 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 Option Award agreement 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
number of shares of Stock transferred to the optionee upon the exercise of
the Stock Option shall be net of the number of shares attested to.
(v) 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.
(b) RELOAD OPTIONS. At the discretion of the Option 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 Option 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 tax liabilities, with an Option term equal
to the remainder of the original Option term unless the Option Committee
otherwise determines in the Award agreement for the original Option grant.
(c) STOCK OPTIONS GRANTED TO INDEPENDENT DIRECTORS.
(i) AUTOMATIC GRANT OF OPTIONS.
(A) Each person who is serving as an Independent Director on
the last day of each fiscal year of the Company, beginning with the
fiscal year ended on May 26, 2001 Company's 2000 fiscal year, shall
automatically be granted on such day a Non-Qualified Stock Option to
acquire 5,000 shares of Stock. Notwithstanding the foregoing, each
person who is first elected as an Independent Director after the
effective date of this Plan, shall, in lieu of the automatic grant
provided in the preceding sentence for such fiscal year, be
automatically granted on the fifth business day after such election
a Non-Qualified Stock Option to acquire 5,000 shares of Stock. In no
event shall an Independent Director receive more than one
automatic grant pursuant to this Section 5(c)(i) in any one fiscal
year of the Company.
(B) The exercise price per share for the Stock covered by a
Stock Option granted under this Section 5(c) shall be equal to the
Fair Market Value of the Stock on the date the Stock Option is
granted.
(C) The Option Committee, in its discretion, may grant
additional Non-Qualified Stock Options to Independent Directors. Any
such grant may vary among individual Independent Directors. For
purposes of Awards granted pursuant to this Section 5(c), the Option
Committee shall be comprised of the full Board.
(ii) EXERCISE; TERMINATION.
(A) Unless otherwise determined by the Option Committee, an
Option granted under Section 5(c) shall be exercisable in full as of
the grant date. An Option issued under this Section 5(c) shall not
be exercisable after the expiration of ten years from the date of
grant.
(B) Options granted under this Section 5(c) may be exercised
only by written notice to the Company specifying the number of
shares to be purchased. Payment of the full purchase price of the
shares to be purchased may be made by one or more of the methods
specified in Section 5(a)(iv). 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.
(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 Option Committee, in its sole discretion, may provide in the
Award agreement regarding a given Option that the optionee may 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.
SECTION 6. STOCK APPRECIATION RIGHTS.
(a) NATURE OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right is an
Award entitling the recipient to receive an amount in cash or shares of Stock or
a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise over the exercise price of the Stock
Appreciation Right, which price shall not be less than 100 percent of the Fair
Market Value of the Stock on the date of grant (or more than the option exercise
price per share, if the Stock Appreciation Right was granted in tandem with a
Stock Option that shall
have been exercised) with the Option Committee having the right to determine the
form of payment.
(b) GRANT AND EXERCISE OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights may be granted by the Option Committee in tandem with, or independently
of, any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in
tandem with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.
(c) TERM AND CONDITIONS OF STOCK APPRECIATION RIGHTS. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Option Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options shall
be exercisable at such time and to the extent that the related Stock
Options shall be exercisable.
(ii) All Stock Appreciation Rights shall be exercisable during the
grantee's lifetime only by the grantee or the grantee's legal
representative.
SECTION 7. RESTRICTED STOCK AWARDS.
(a) NATURE OF RESTRICTED STOCK AWARDS. A Restricted Stock Award is an
Award entitling the recipient to acquire, at such purchase price as determined
by the Option Committee, shares of Stock subject to such restrictions and
conditions as the Option Committee may determine at the time of grant
("Restricted Stock"). Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Stock Award is contingent on the
grantee executing the Restricted Stock Award agreement. The terms and conditions
of each such agreement shall be determined by the Option Committee, and such
terms and conditions may differ among individual Awards and grantees.
(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 grantee 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 Option
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 Section 7(d) below, and the grantee 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
grantee's employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, the Company shall have the right to
repurchase Restricted Stock that has not vested at the time of termination at
its original purchase price from the grantee or the grantee's legal
representative.
(d) VESTING OF RESTRICTED STOCK. The Option 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 the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Option Committee either in the Award agreement or, subject to
Section 14 below, in writing after the Award agreement is issued, a grantee's
rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the grantee's termination of employment (or other
service relationship) with the Company and its Subsidiaries and such shares
shall be subject to the Company's right of repurchase as provided in Section
7(c) above.
(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 8. DEFERRED STOCK AWARDS
(a) NATURE OF DEFERRED STOCK AWARDS. A Deferred Stock Award is an Award
of phantom stock units to a grantee, subject to restrictions and conditions as
the Option Committee may determine at the time of grant. Conditions may be based
on continuing employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives. The grant of a Deferred Stock
Award is contingent on the grantee executing the Deferred Stock Award agreement.
The terms and conditions of each such agreement shall be determined by the
Option Committee, and such terms and conditions may differ among individual
Awards and grantees. At the end of the deferral period, the Deferred Stock
Award, to the extent vested, shall be paid to the grantee in the form of shares
of Stock.
(b) ELECTION TO RECEIVE DEFERRED STOCK AWARDS IN LIEU OF Compensation.
The Option Committee may, in its sole discretion, permit a grantee to elect to
receive a portion of the cash compensation or Restricted Stock Award otherwise
due to such grantee in the form of a Deferred Stock Award. Any such election
shall be made in writing and shall be delivered to the Company no later than the
date specified by the Option Committee and in accordance with rules and
procedures established by the Option Committee. The Option Committee shall have
the sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Option Committee deems appropriate.
(c) RIGHTS AS A STOCKHOLDER. During the deferral period, a grantee shall
have no rights as a stockholder; provided, however, that the grantee may be
credited with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Option Committee may determine.
(d) RESTRICTIONS. A Deferred Stock Award may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of during the deferral
period.
(e) TERMINATION. Except as may otherwise be provided by the Option
Committee either in the Award agreement or, subject to Section 14 below, in
writing after the Award agreement is issued, a grantee's right in all Deferred
Stock Awards that have not vested shall automatically terminate upon the
grantee's termination of employment (or cessation of service relationship) with
the Company and its Subsidiaries for any reason.
SECTION 9. UNRESTRICTED STOCK AWARDS
GRANT OR SALE OF UNRESTRICTED STOCK. The Option Committee may, in its
sole discretion, grant (or sell at par value or such higher purchase price
determined by the Option Committee) an Unrestricted Stock Award to any grantee
pursuant to which such grantee may receive shares of Stock free of any
restrictions ("Unrestricted Stock") under the Plan. Unrestricted Stock Awards
may be granted in respect of past services or other valid consideration, or in
lieu of cash compensation due to such grantee.
SECTION 10. PERFORMANCE SHARE AWARDS
(a) NATURE OF PERFORMANCE SHARE AWARDS. A Performance Share Award is an
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Option Committee may make Performance Share
Awards independent of or in connection with the granting of any other Award
under the Plan. The Option Committee in its sole discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals, the periods during which performance is to be measured, and all other
limitations and conditions.
(b) RIGHTS AS A STOCKHOLDER. A grantee receiving a Performance Share
Award shall have the rights of a stockholder only as to shares actually received
by the grantee under the Plan and not with respect to shares subject to the
Award but not actually received by the grantee. A grantee shall be entitled to
receive a stock certificate evidencing the acquisition of shares of Stock under
a Performance Share Award only upon satisfaction of all conditions specified in
the Performance Share Award agreement (or in a performance plan adopted by the
Option Committee).
(c) TERMINATION. Except as may otherwise be provided by the Option
Committee either in the Award agreement or, subject to Section 14 below, in
writing after the Award agreement is issued, a grantee's rights in all
Performance Share Awards shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.
(d) ACCELERATION, WAIVER, ETC. At any time prior to the grantee's
termination of employment (or other service relationship) by the Company and its
Subsidiaries, the Option Committee may in its sole discretion accelerate, waive
or, subject to Section 14, amend any or all of the goals, restrictions or
conditions applicable to a Performance Share Award.
SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award, Deferred Stock Award or Performance Share Award granted
to a Covered Employee is intended to qualify as "Performance-based Compensation"
under Section 162(m) of the Code and the regulations promulgated thereunder (a
"Performance-based Award"), such Award shall comply with the provisions set for
the below:
(a) PERFORMANCE CRITERIA. The performance criteria used in performance
goals governing Performance-based Awards granted to Covered Employees may
include any or all of the following: (i) the Company's return on equity, assets,
capital or investment, (ii) pre-tax or after-tax profit levels of the Company or
any Subsidiary, a division, an operating unit or a business segment of the
Company, or any combination of the foregoing; (iii) cash flow, funds from
operations or similar measure; (iv) total shareholder return; (v) changes in the
market price of the Stock; (vi) sales or market share; or (vii) earnings per
share.
(b) GRANT OF PERFORMANCE-BASED AWARDS. With respect to each
Performance-based Award granted to a Covered Employee, the Option Committee
shall select, within the first 90 days of a Performance Cycle (or, if shorter,
within the maximum period allowed under Section 162(m) of the Code) the
performance criteria for such grant, and the achievement targets with respect to
each performance criterion (including a threshold level of performance below
which no amount will become payable with respect to such Award). Each
Performance-based Award will specify the amount payable, or the formula for
determining the amount payable, upon achievement of the various applicable
performance targets. The performance criteria established by the Committee may
be (but need not be) different for each Performance Cycle and different goals
may be applicable to Performance-based Awards to different Covered Employees.
(c) PAYMENT OF PERFORMANCE-BASED AWARDS. Following the completion of a
Performance Cycle, the Option Committee shall meet to review and certify in
writing whether, and to what extent, the performance criteria for the
Performance Cycle have been achieved and, if so, to also calculate and certify
in writing the amount of the Performance-based Awards earned for the Performance
Cycle. The Option Committee shall then determine the actual size of each Covered
Employee's Performance-based Award, and, in doing so, may reduce or eliminate
the amount of the Performance-based Award for a Covered Employee if, in its sole
judgment, such reduction or elimination is appropriate.
SECTION 12. TAX WITHHOLDING
(a) PAYMENT BY GRANTEE. Each grantee 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 grantee for Federal income
tax purposes, pay to the Company, or make
arrangements satisfactory to the Option 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 grantee. The Company's obligation to deliver stock
certificates to any grantee is subject to and conditioned on tax obligations
being satisfied by the grantee.
(b) PAYMENT IN STOCK. Subject to approval by the Option Committee, a
grantee 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 grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the withholding amount
due.
SECTION 13. TRANSER, LEAVE OF ABSENCE, ETC.
For the 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 Option
Committee otherwise so provides in writing.
SECTION 14. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Option
Committee may, at any time, amend or cancel any outstanding Award 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 Option 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 or to ensure that compensation
earned under Awards qualifies as "Performance-based Compensation" under Section
162(m) of the Code, if and to the extent intended to so qualify, Plan amendments
shall be subject to approval by the Company stockholders entitled to vote at a
meeting of stockholders. Nothing in this Section 14 shall limit the Option
Committee's authority to take any action permitted pursuant to Section 3(c).
SECTION 15. 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 grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Option Committee shall otherwise
expressly determine in connection with any Award or Awards. In its sole
discretion, the Option 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 arrangement is consistent with the foregoing sentence.
SECTION 16. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of Change of Control as defined in this Section 16:
(a) Except as otherwise provided in the applicable Award agreement, each
outstanding Stock Option and Stock Appreciation Right shall automatically become
fully exercisable.
(b) Except as otherwise provided in the applicable Award Agreement,
conditions and restrictions on each outstanding Restricted Stock Award, Deferred
Stock Award and Performance Share Award which relate solely to the passage of
time and continued employment will be removed. Performance or other conditions
(other than conditions and restrictions relating solely to the passage of time
and continued employment) will continue to apply unless otherwise provided in
the applicable Award agreement.
(c) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "Person," as such term is used in Sections 13(d) and 14(d)
of the Act (other than the Company, any of its Subsidiaries, or any
trustee, fiduciary or other person or entity holding securities under any
employee benefit plan or trust of the Company or any of its Subsidiaries),
together with all "affiliates" and "associates" (as such terms are defined
in Rule 12b-2 under the Act) of such person, shall become the "beneficial
owner" (as such term is defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 50 percent or more
of the combined voting power of the Company's then outstanding securities
having the right to vote in an election of the Company's Board of
Directors ("Voting Securities") (in such case other than as a result of an
acquisition of securities directly from the Company); or
(ii) persons who, as of the Effective Date, constitute the
Company's Board of Directors (the "Incumbent Directors") cease for any
reason, including, without limitation, as a result of a tender offer,
proxy contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of the
Company subsequent to the Effective Date shall be considered an Incumbent
Director if such person's election was approved by or such person was
nominated for election by either (A) a vote of at least a majority of the
Incumbent Directors or (B) a vote of at least a majority of the Incumbent
Directors who are members of a nominating committee comprised, in the
majority, of Incumbent Directors; but provided further, that any such
person whose initial assumption of office is in connection with an actual
or threatened election contest relating to the election of members of the
Board of Directors or other actual or threatened solicitation of proxies
of
consents by or on behalf of a Person other than the Board, including by
reason of agreement intended to avoid or settle any such actual or
threatened contest or solicitation, shall not be considered an Incumbent
Director; or
(iii) the approval by the stockholders of the Company of a
consolidation, merger or sale or other disposition of all or substantially
all of the assets of the Company (a "Corporate Transaction") or if
consummation of such Corporate Transaction is subject, at the time of such
approval by stockholders, to the consent of any government or governmental
agency, obtaining of such consent (either explicitly or implicitly by
consummation); excluding, however, a Corporate Transaction in which the
stockholders of the Company immediately prior to the Corporate
Transaction, would, immediately after the Corporate Transaction,
beneficially own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate more than 50
percent of the voting shares of the corporation issuing cash or securities
in the Corporate Transaction (or of its ultimate parent corporation, if
any); or
(iv) the approval by the stockholders of any plan or proposal
for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed
to have occurred for purposes of the foregoing clause (i) solely as the result
of an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities beneficially owned by any person to 50 percent or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly form the
Company) and immediately thereafter beneficially owns 50 percent or more of the
combined voting power of all then outstanding Voting Securities, then a "Change
of Control" shall be deemed to have occurred for purposes of the foregoing
clause (i).
SECTION 17. GENERAL PROVISONS
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Option
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 Option 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 grantees 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 grantee, at the
grantee'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, if
any, as in effect from time to time.
(e) LOANS TO GRANTEES. The Company shall have the authority to make loans
to grantees of Awards hereunder (including to facilitate the purchase of shares)
and shall further have the authority to issue shares for promissory notes
hereunder.
(f) DESIGNATION OF BENEFICIARY. Each grantee to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death. Any such designation shall be on a form provided for that purpose by the
Option Committee and shall not be effective until received by the Option
Committee. If no beneficiary has been designated by a deceased grantee, or if
the designated beneficiaries have predeceased the grantee, the beneficiary shall
be the grantee's estate.
SECTION 18. 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. 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 19. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed
by, and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflicts of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: July 17, 2000.
DATE APPROVED BY STOCKHOLDERS: March 15, 2001.