ADVANSTAR HOLDINGS CORP.
2000 MANAGEMENT INCENTIVE PLAN
SECTION 1. PURPOSE. The purpose of the Advanstar Holdings Corp. 2000
Management Incentive Plan (the "PLAN") is to promote the interests of Advanstar
Holdings Corp. (formerly known as Jetman Acquisition Corp.), a Delaware
corporation (the "COMPANY"), and its stockholders by (i) attracting and
retaining exceptional key employees of the Company, its Subsidiaries and its
Affiliates (as defined below) and others; (ii) motivating such individuals by
means of performance-related incentives to achieve longer-range performance
goals; and (iii) enabling such individuals to participate in the long-term
growth and financial success of the Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall
have the meanings set forth below:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person; PROVIDED that no stockholder of the Company shall be deemed an
Affiliate of any other stockholder of the Company solely by reason of any
investment in the Company. For purposes of this definition, the term "CONTROL"
(including with correlative meanings, the terms "CONTROLLING", "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), when used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"AWARD AGREEMENT" means any written agreement, contract or other
instrument or document evidencing any Option, which may, but need not, be
executed or acknowledged by a Participant.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means, with respect to any Participant, "cause" as defined in
such Participant's Employment Agreement or Award Agreement, or if not so
defined:
(i) such Participant's willful failure to perform his or her
material duties (other than as a result of total or partial incapacity
due to physical or mental illness) which such Participant shall not
have cured within 30 days of receiving notice of such failure;
(ii) such Participant's conviction of a felony arising from, or
any act of, fraud, embezzlement or willful dishonesty by such
Participant in
relation to the business or affairs of the Company and any Subsidiary
or Affiliate thereof, or any other felonious conduct on the part of
such Participant that is detrimental to the best interests of the
Company or any Subsidiary or Affiliate thereof;
(iii) such Participant's being repeatedly under the influence of
illegal drugs or alcohol while performing his duties; or
(iv) any other willful misconduct or gross negligence of such
Participant which is demonstrably injurious to the financial condition
or business reputation of the Company or any Subsidiary or Affiliate
thereof, including such Participant's breach of the provisions of any
noncompetition, nonsolicitation or confidentiality covenant (whether
or not contained in this Agreement) in favor of the Company or any
Subsidiary or Affiliate thereof binding upon such Participant.
"CHANGE OF CONTROL" means:
(i) any "person" (as such term is used in Section 3(a)(9) and
13(d)(3) of the Exchange Act) other than (A) the DLJ Funds and/or
their respective Permitted Transferees (as defined in the
Shareholders' Agreement) or (B) any "group" (within the meaning of
such Section 13(d)(3)) of which any of the DLJ Funds is a part,
acquires, directly or indirectly, by virtue of the consummation of any
purchase, merger or other combination, securities of the Company (or
its successor) representing more than 51% of the combined voting power
of the Company's (or its successor's) then outstanding voting
securities with respect to matters submitted to a vote of the
stockholders generally; or
(ii) a sale or transfer by the Company or any of its Subsidiaries
of substantially all of the stock or consolidated assets of the
Company and its Subsidiaries to an entity which is not an Affiliate of
the Company prior to such sale or transfer.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPENSATION COMMITTEE" means a committee of the Board designated by
the Board to administer the Plan.
"CONTRIBUTION" shall mean revenue less direct expenses (including,
without limitation, staff costs), as generally calculated by the Company in its
internal management reporting.
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"CREDIT AGREEMENT" means the Credit Agreement dated as of October 11,
2000 among Advanstar Communications, Inc., Various Financial Institutions,
Fleet National Bank and DLJ Capital Funding, Inc. as Syndication Agent and
Documentation Agent for the Lenders.
"DISABILITY" means, with respect to any Participant, "disability" as
defined in such Participant's Employment Agreement or Award Agreement, or if not
so defined:
(i) any permanent physical or mental incapacity or disability
rendering such Participant unable or unfit to perform effectively the
duties and obligations of his employment or to participate effectively
and actively in the management of the Company (or, if applicable, any
Subsidiary or Affiliate thereof); or
(ii) any illness, accident, injury, physical or mental incapacity
or other disability, where such condition has rendered such
Participant unable or unfit to perform effectively the duties and
obligations of his or her employment or to participate effectively and
actively in the management of the Company (or, if applicable, any
Subsidiary or Affiliate thereof) for a period of at least 6
consecutive months or 12 months in any 24-month period (in either
case, as determined in the good faith judgment of the Compensation
Committee).
"DLJ FUNDS" shall have the meaning assigned to it in the Shareholders'
Agreement.
"EMPLOYEE" means an employee of the Company or any Subsidiary or
Affiliate thereof.
"EMPLOYMENT AGREEMENT" means an employment, severance, consulting or
similar agreement between the Company or any Subsidiary or Affiliate thereof and
a Participant.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means:
(i) with respect to a Share:
(A) as of the date of the closing of the transactions
contemplated by the Merger Agreement (the "CLOSING DATE"),
$10.00.
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(B) on any date after the Closing Date, if the Shares are
traded on an exchange or market, as of any given date, the
average reported closing price of a Share on such exchange or
market as is the principal trading market for such Shares for the
three trading days immediately preceding such date; or
(C) on any date after the Closing Date, if the Shares are
not traded on an exchange or market on the applicable date, as
determined by the Compensation Committee in good faith taking
into account as appropriate recent sales of the Shares, recent
valuations of the Shares and such other factors as the
Compensation Committee shall in its discretion deem relevant or
appropriate (excluding a minority discount but taking into
account an Initial Public Offering Discount).
(ii) with respect to an Option, for each Share underlying such
Option, the Fair Market Value per Share as determined under clause (i)
less the exercise price per Share.
"GOOD REASON" means, with respect to any Participant, "good reason" as
defined in such Participant's Award Agreement or Employment Agreement, or if not
so defined:
(i) any failure by the Company to comply with any of the
provisions of this Plan or such Participant's Award Agreement or
Employment Agreement, other than an insubstantial or inadvertent
failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by such
Participant; or
(ii) the material diminution of such Participant's duties as in
effect during the effectiveness of such Participant's Award Agreement,
excluding an insubstantial or inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of
notice thereof given by such Participant.
"INITIAL PUBLIC OFFERING DISCOUNT" means a discount to Fair Market
Value, as otherwise determined, of the magnitude that would be necessary, in
accordance with usual and customary underwriting market practice, to effect a
successful Initial Public Offering (as defined in the Shareholders' Agreement).
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"LOANS" shall have the meaning ascribed to it in the Advanstar Holding
Corp. Direct Investment Program.
"MERGER AGREEMENT" means the Agreement and Plan of Merger dated as
of August 14, 2000, among the Company, Junior Jetman Corp., Advanstar Inc.
and AHI Advanstar LLC.
"OPTION" means a right to purchase Shares from the Company that is
granted under Section 6 of the Plan.
"PARTICIPANT" means any Employee, non-employee director of the Company
of any Subsidiary or Affiliate thereof or consultant to the Company or any
Subsidiary or Affiliate thereof selected by the Compensation Committee to
receive an Option under the Plan (and, to the extent applicable, any heirs or
legal representatives thereof).
"PERMITTED TRANSFEREE" shall have the meaning assigned to it in the
Shareholders' Agreement.
"PERSON" means any individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
"RULE 16B-3" means Rule 16b-3 as promulgated and interpreted by the SEC
under the Exchange Act, or any successor rule or regulation thereto as in effect
from time to time.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SECTION 162(M)" means Section 162(m) of the Code, or any successor
section thereto as in effect from time to time.
"SHAREHOLDERS' AGREEMENT" means the Shareholders' Agreement dated as of
October 11, 2000 among the Company, DLJ Merchant Banking Partners III, L.P. and
other DLJ Funds party thereto, the Existing Shareholders party thereto and the
Management Shareholders party thereto.
"SHARES" means (i) shares of common stock, par value $0.01 per share,
of the Company and any stock into which its common stock may thereafter be
converted or changed and/or (ii) such other securities as may be designated by
the Compensation Committee from time to time.
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"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which:
(i) if a corporation, a majority of the total voting power of
shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors thereof is at the
time owned or controlled, directly or indirectly, by that Person or
one or more of the Subsidiaries of that Person or a combination
thereof; or
(ii) if a limited liability company, partnership, association or
other business entity, a majority of the partnership or other similar
ownership interests thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of
that Person or a combination thereof.
"SUBSTITUTE OPTIONS" means Options granted in assumption of, or in
substitution for, outstanding options previously granted by a company acquired
by the Company or with which the Company combines.
"SUPER PERFORMANCE VESTING OPTIONS" means Options granted pursuant to
the form of Award Agreement set forth in Appendix A hereto.
SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMPENSATION COMMITTEE. The Plan shall be administered
by the Compensation Committee or by the Board as a whole, if no Compensation
Committee has been constituted. All references to the powers and
responsibilities of the Compensation Committee set forth in this Plan shall be
deemed to be references to the Board if no Compensation Committee has been
constituted. Subject to the terms of the Plan, applicable law and contractual
restrictions (including, to the extent applicable, any Award Agreements and
Employment Agreements) affecting the Company, and in addition to other express
powers and authorizations conferred on the Compensation Committee by the Plan,
the Compensation Committee shall have full power and authority to:
(i) designate Participants;
(ii) determine the type or types of Options to be granted to a
Participant;
(iii) determine the number of Shares to be covered by, or with
respect to which payments, rights or other matters are to be
calculated in connection with, Options;
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(iv) determine the terms and conditions of any Option and Award
Agreement;
(v) determine whether, to what extent and under what
circumstances Options may be settled or exercised in cash, Shares,
other securities, other Options or other property, or canceled,
forfeited, or suspended and the method or methods by which Options may
be settled, exercised, canceled, forfeited or suspended;
(vi) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Options, other
property and other amounts payable with respect to an Option shall be
deferred either automatically or at the election of the holder thereof
or of the Compensation Committee;
(vii) determine whether, to what extent and under what
circumstances cash, Shares, other securities, other Options, other
property and other amounts issued or payable with respect to an Option
shall be subject to restrictions on transfer, assignment, pledge or
other disposition or alienation, and the nature of such restrictions;
(viii) interpret and administer the Plan and any instrument or
agreement relating to, or Option made under, the Plan;
(ix) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and
(x) make any other determination and take any other action that
the Compensation Committee deems necessary or desirable for the
administration of the Plan.
(b) COMPENSATION COMMITTEE DISCRETION BINDING. Unless otherwise
expressly provided in the Plan or any applicable Award Agreements, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan or any Option shall be within the sole discretion of the
Compensation Committee, may be made at any time and shall be final, conclusive
and binding upon all Persons (including the Company or any Subsidiary or
Affiliate thereof, any Participant, any holder or beneficiary of any Option, any
stockholder and any Employee).
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SECTION 4. SHARES AVAILABLE FOR OPTIONS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Options may be granted under
the Plan shall be the sum of (i) 3,422,789, plus (ii) the amount by which 39,363
exceeds the total number of Shares purchased with Loans during the period after
the closing of the transactions contemplated by the Merger Agreement through
December 31, 2000. Super Performance Vesting Options may not be granted to
purchase Shares in excess of the number set forth in clause (ii) of the
preceding sentence, and Options other than Super Performance Vesting Options may
not be granted to purchase Shares in excess of the number set forth in clause
(i) of the preceding sentence. If, after the effective date of the Plan, any
Shares covered by an Option granted under the Plan (other than a Substitute
Option) or to which such an Option relates are forfeited, or if such an Option
otherwise terminates or is canceled without the delivery of Shares, then the
Shares covered by such Option, or to which such Option relates, or the number of
Shares otherwise counted against the aggregate number of Shares with respect to
which Options may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again become Shares with respect to which
Options may be granted under clause (i) or (ii) above, depending on whether the
forfeited, terminated or canceled Option was a Super Performance Vesting Option.
Notwithstanding the foregoing and subject to adjustment as provided in Section
4(b), no Participant may receive Options in any calendar year that relate to
more than 900,000 Shares (subject to adjustment as provided in Section 4(b)).
(b) ADJUSTMENTS. In the event that the Compensation Committee
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, reclassification, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company or other similar corporate transaction
or event affects the Shares such that an adjustment is determined by the
Compensation Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Compensation Committee shall, in such manner as it may
deem equitable, adjust any or all of:
(i) the number of Shares of the Company (or number and kind of
other securities or property) with respect to which Options may
thereafter be granted;
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(ii) the number of Shares or other securities of the Company (or
number and kind of other securities or property) subject to
outstanding Options; and
(iii) the grant or exercise price with respect to any Option, or,
if deemed appropriate, make provision for a cash payment to the holder
of an outstanding Option.
(c) SUBSTITUTE OPTIONS. Any Shares underlying Substitute Options shall
not be counted against the Shares available for Options under the Plan.
(d) SOURCES OF SHARES DELIVERABLE UNDER OPTIONS. Any Shares delivered
pursuant to an Option may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, non-employee director of the
Company or any Subsidiary or Affiliate thereof or consultant to the Company or
any Subsidiary or Affiliate thereof shall be eligible to be designated a
Participant. Holders of options granted by a company that is acquired by the
Company or with which the Company combines are eligible for grants of Substitute
Options hereunder in connection with such acquisition or combination
transaction.
SECTION 6. STOCK OPTIONS.
(a) GRANT. Subject to the provisions of the Plan and contractual
restrictions (including, to the extent applicable, any Award Agreements or
Employment Agreements) affecting the Company, the Compensation Committee shall
have sole and complete authority to determine the Participants to whom Options
shall be granted, the number of Shares to be covered by each Option, the
exercise price therefor and the conditions and limitations applicable to the
exercise of the Option.
(b) EXERCISE PRICE. The Compensation Committee shall, in its sole
discretion, establish the exercise price at the time each Option is granted.
(c) EXERCISE. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Compensation Committee may, in its
sole discretion, specify in the applicable Award Agreement or thereafter. The
Compensation Committee may impose such conditions with respect to the exercise
of Options, including without limitation, any relating to the application of
federal or state securities laws, as it may deem necessary or advisable.
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(d) PAYMENT. No Shares shall be delivered pursuant to any exercise of
an Option until payment in full of the exercise price, or adequate provision
therefor, is received by the Company. Such payment may be made: (i) in cash;
(ii) in Shares owned by the Participant (the value of such Shares shall be their
Fair Market Value on the date of exercise); (iii) by a combination of cash and
Shares; (iv) if approved by the Compensation Committee, in accordance with a
cashless exercise program; or (v) in such other manner as permitted by the
Compensation Committee at the time of grant or thereafter.
SECTION 7. VESTING; TERMINATION OF EMPLOYMENT. Each Award Agreement
shall contain such terms as the Compensation Committee may in its sole
discretion determine concerning vesting, forfeiture, the Company's rights of
repurchase of Shares acquired upon exercise of an Option, and/or the effects of
termination or suspension of a Participant's employment upon the exercisability
of any Option granted thereunder.
SECTION 8. ACCELERATED VESTING. The Compensation Committee may, in its
sole discretion, provide in an Award Agreement or at any other time for the
accelerated vesting of an Option.
SECTION 9. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or any portion thereof at any time; PROVIDED
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
qualify for or comply with any tax or regulatory status or requirement
(including any approval requirement which is a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act or Section 162(m) of the Code) for which
or with which the Board deems it necessary or desirable to qualify or comply;
PROVIDED FURTHER, that any such amendment, alteration, suspension,
discontinuance or termination that would adversely affect the rights of the
Participant or any holder or beneficiary of any Option theretofore granted shall
not to the extent be effective without the consent of such affected Participant,
holder or beneficiary. Notwithstanding anything to the contrary herein, the
Compensation Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.
(b) AMENDMENTS TO OPTIONS. Subject to the terms of the Plan, the
applicable Award Agreement and applicable law, the Compensation Committee may
waive any conditions or rights under, amend any terms of, or alter, suspend,
discontinue, cancel or terminate, any Option theretofore granted, prospectively
or
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retroactively; PROVIDED that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would adversely affect the
rights of a Participant or any holder or beneficiary of any Option theretofore
granted shall not to that extent be effective without the consent of such
affected Participant, holder or beneficiary.
(c) CANCELLATION. Any provision of this Plan or any Award Agreement to
the contrary notwithstanding, in the event of a Change of Control or an offer to
Participants generally relating to the acquisition of Shares, including through
purchase, merger or otherwise, the Compensation Committee may cause any Option
granted hereunder to be canceled and, in consideration of such canceled option,
pay the holder (i) a cash payment equal to the difference between the aggregate
value of the Shares (based upon the Change of Control or other acquisition
offer) subject to the Option and the aggregate exercise price of such Option
(the "INTRINSIC VALUE") or (ii) a substitute option (preserving the Intrinsic
Value of the canceled Option).
SECTION 10. TREATMENT OF UNGRANTED OPTIONS UPON OCCURRENCE OF A
LIQUIDITY EVENT. Immediately prior to the occurrence of a Liquidity Event (as
defined in Annex A hereto), the Board shall award Options, at an exercise price
of $10.00 per Share (as adjusted to reflect any of the events contemplated by
Section 4(b)), to purchase that portion of the Shares on which Options are
authorized to be granted under Section 4(a)(i) of the Plan as to which Options
have not, as of such date, previously been granted. For the avoidance of doubt,
Options which have been granted and subsequently canceled, forfeited, terminated
or repurchased shall be treated as having been previously granted, pursuant to
the preceding sentence. The Options granted under this Section 10 shall be
allocated among persons eligible for an award under Section 5 hereof, in the
sole discretion of the Board.
SECTION 11. GENERAL PROVISIONS.
(a) DIVIDEND EQUIVALENTS. In the sole and complete discretion of the
Compensation Committee, an Option may provide the Participant with dividends or
dividend equivalents, payable in cash, Shares, other securities or other
property on a current or deferred basis.
(b) NON-TRANSFERABILITY OF OPTIONS. Except to the extent otherwise
provided in a Participant's Award Agreement, no Option shall be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
such Participant, except by will or the laws of descent and distribution.
(c) NO RIGHTS TO OPTIONS. No Employee, Participant or other Person
shall have any claim to be granted any Option, and there is no obligation for
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uniformity of treatment of Employees, Participants or holders or beneficiaries
of Options. The terms and conditions of Options need not be the same with
respect to each recipient.
(d) STOCK CERTIFICATES. Certificates, if any, issued in respect of
Shares shall, unless the Compensation Committee otherwise determines, be
registered in the name of the Participant or his or her Permitted Transferees
and, so long as a Participant continues to be governed by any forfeiture
provisions relating to the Shares, shall be deposited by such Participant or
Permitted Transferee, together with a stock power endorsed in blank, with the
Company. When such forfeiture conditions lapse, the Company shall deliver such
certificates to the Participant upon request. Such stock certificate shall carry
such appropriate legends, and such written instructions shall be given to the
Company's transfer agent, as may be deemed necessary or advisable by counsel to
the Company in order to comply with the requirements of (i) the Securities Act
of 1933, as amended, any state securities laws or any other applicable laws and
(ii) the Shareholders' Agreement. Subject to the provisions of the Shareholders'
Agreement, all certificates for Shares or other securities of the Company or any
Subsidiary delivered under the Plan pursuant to any Option or the exercise
thereof shall be subject to such stop transfer orders and other restrictions as
the Compensation Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the SEC or any exchange or market upon
which such Shares or other securities of the Company are then listed and any
applicable laws or rules or regulations, and the Compensation Committee may
cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
(e) WITHHOLDING. A Participant may be required to pay to the Company or
any Subsidiary, and the Company or any Subsidiary shall have the right and is
hereby authorized to withhold from any Option, from any payment due or transfer
made under any Option or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Options or other property) of any applicable withholding taxes in respect of an
Option, its exercise or any payment or transfer under an Option or under the
Plan, and to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for the payment of such taxes. The
Compensation Committee may provide for additional cash payments to holders of
Options to defray or offset any tax arising from any such grant, lapse, vesting
or exercise of any Option.
(f) AWARD AGREEMENTS. Each Option hereunder shall be evidenced by an
Award Agreement which shall be delivered to the Participant and shall specify
the terms and conditions of the Option and any rules applicable thereto.
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(g) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. This Plan is not
intended to be the exclusive authority for the grant of options, stock or stock-
based awards, and nothing contained in this Plan shall prevent the Company or
any Subsidiary or Affiliate thereof from adopting or continuing in effect other
compensation arrangements, which may, but need not, provide for the grant of
options, restricted stock, Shares and other types of awards provided for
hereunder (subject to stockholder approval if such approval is required by
applicable law). Any such arrangements may be either generally applicable or
applicable only in specific cases.
(h) NO RIGHT TO EMPLOYMENT. The grant of an Option shall not be
construed as giving a Participant the right to be retained in the employment or
service of the Company or any Subsidiary or Affiliate thereof. Further, the
Company or any Subsidiary may at any time dismiss a Participant from employment
or service, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement.
(i) RIGHTS AS A STOCKHOLDER. Subject to the provisions of the
applicable Option, no Participant or holder or beneficiary of any Option shall
have any rights as a stockholder with respect to any Shares to be issued under
the Plan until he or she has become the holder of such Shares.
(j) GOVERNING LAW. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Delaware.
(k) SEVERABILITY. If any provision of the Plan or any Option is or
becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Option, or would disqualify the Plan or any
Option under any law deemed applicable by the Compensation Committee, such
provision shall be construed or deemed amended to conform to the applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Compensation Committee, materially altering the intent of
the Plan or the Option, such provision shall be stricken as to such
jurisdiction, Person or Option, and the remainder of the Plan and any such
Option shall remain in full force and effect.
(l) OTHER LAWS. The Compensation Committee may refuse to issue or
transfer any Shares or other consideration under an Option if, acting in its
sole discretion, it determines that the issuance or transfer of such Shares or
such other consideration might violate any applicable law or regulation or
entitle the Company to recover the same under Section 16(b) of the Exchange Act,
and any payment tendered to the Company by a Participant in connection therewith
shall be promptly refunded to the relevant Participant, holder or beneficiary.
Without
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limiting the generality of the foregoing, no Option granted hereunder shall be
construed as an offer to sell securities of the Company, and no such offer shall
be outstanding, unless and until the Compensation Committee in its sole
discretion has determined that any such offer, if made, would be in compliance
with all applicable requirements of the federal and state securities laws and
any other laws to which such offer, if made, would be subject.
(m) NO TRUST OR FUND CREATED. Neither the Plan nor any Option shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Subsidiary and a Participant
or any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Subsidiary or Affiliate thereof pursuant to an
Option, such right shall be no greater than the right of such unsecured general
creditor of the Company or such Subsidiary or Affiliate thereof.
(n) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Option, and the Compensation Committee
shall determine whether cash or other securities or other property shall be paid
or transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be canceled, terminated or otherwise
eliminated.
(o) SHAREHOLDERS' AGREEMENT TRANSFER RESTRICTIONS. A Participant shall,
as a condition precedent to the exercise or settlement of an Option, execute an
instrument agreeing to be bound by the terms of the Shareholders' Agreement or,
at the election of the Company, a counterpart of the Shareholders' Agreement. In
any event, any Shares acquired upon exercise or settlement shall be subject to
the provisions in the Shareholders' Agreement regarding restrictions on transfer
and the Company's rights to compel sales and repurchase Shares.
(p) HEADINGS. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
SECTION 12. TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of October 11, 2000
subject to approval by the stockholders of the Company. Options may be granted
hereunder prior to such stockholder approval, subject in all cases, however, to
such approval.
(b) EXPIRATION DATE. Unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, any Option granted hereunder may, and the
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authority of the Board or the Compensation Committee to amend, alter, adjust,
suspend, discontinue or terminate any such Option or to waive any conditions or
rights under any such Option shall, continue after the authority for grant of
new Options hereunder has been exhausted.
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