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Exhibit 10.7
CROSS COUNTRY, INC.
AMENDED AND RESTATED
1999 STOCK OPTION PLAN
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TABLE OF CONTENTS
PAGE
ARTICLE I PURPOSE.....................................................1
ARTICLE II DEFINITIONS.................................................1
ARTICLE III ADMINISTRATION..............................................5
ARTICLE IV SHARE AND OTHER LIMITATIONS.................................8
ARTICLE V ELIGIBILITY.................................................9
ARTICLE VI STOCK OPTIONS..............................................10
ARTICLE VII NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY.....................................12
ARTICLE VIII CHANGE IN CONTROL PROVISIONS...............................13
ARTICLE IX TERMINATION OR AMENDMENT OF PLAN...........................15
ARTICLE X COMPANY CALL RIGHTS........................................16
ARTICLE XI UNFUNDED PLAN..............................................17
ARTICLE XII GENERAL PROVISIONS.........................................17
ARTICLE XIII EFFECTIVE DATE OF PLAN.....................................20
ARTICLE XIV TERM OF PLAN...............................................20
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CROSS COUNTRY, INC.
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AMENDED AND RESTATED
1999 STOCK OPTION PLAN
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ARTICLE I
PURPOSE
The purpose of this Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan is to enhance the profitability and value of the Company for the
benefit of its stockholders by enabling the Company to offer employees of and
Consultants to the Company and its Affiliates stock-based incentives in the
Company, thereby creating a means to raise the level of stock ownership by
employees and Consultants in order to attract, retain and reward such
individuals and strengthen the mutuality of interests between such individuals
and the Company's stockholders.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" means each of the following: (i) any
Subsidiary; (ii) any Parent; (iii) any corporation, trade or business
(including, without limitation, a partnership or limited liability
company) which is directly or indirectly controlled 50% or more
(whether by ownership of stock, assets or an equivalent ownership
interest or voting interest) by the Company or one of its Affiliates;
and (iv) any other entity in which the Company or any of its Affiliates
has a material equity interest and which is designated as an
"Affiliate" by resolution of the Committee.
2.2 "Award" means any award under this Plan of a Stock Option.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Cause" means, with respect to a Participant's
Termination: (i) in the case where there is no employment agreement,
consulting agreement, change in control agreement or similar agreement
in effect between the Company or an Affiliate and the Participant at
the
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time of the grant of the Award (or where there is such an agreement but
it does not define "cause" (or words of like import)), termination due
to a Participant's insubordination, dishonesty, fraud, incompetence,
moral turpitude, misconduct, refusal to perform his or her duties or
responsibilities for any reason other than illness or incapacity or
materially unsatisfactory performance of his or her duties for the
Company or an Affiliate as determined by the Committee in its sole
discretion; or (ii) in the case where there is an employment agreement,
consulting agreement, change in control agreement or similar agreement
in effect between the Company or an Affiliate and the Participant at
the time of the grant of the Award that defines "cause" (or words of
like import), "cause" as defined under such agreement; provided,
however, that with regard to any agreement that conditions "cause" on
occurrence of a change in control, such definition of "cause" shall not
apply until a change in control actually takes place and then only with
regard to a termination thereafter. Notwithstanding the foregoing, a
Participant shall be deemed to be terminated for "cause" if the
Participant: (i) breaches the terms of any agreement between the
Company and the Participant including, without limitation, an
employment agreement or non-competition agreement or (ii) discloses to
anyone outside the Company or its Affiliates, or uses in other than the
Company's or its Affiliate's business, without written authorization
from the Company, any confidential information or proprietary
information, relating to the business of the Company or its Affiliates,
acquired by the Participant prior to the Participant's Termination.
2.5 "CEP" means Charterhouse Equity Partners III, L.P., and
its successors.
2.6 "Change in Control" has the meaning set forth in Article
VIII.
2.7 "Code" means the Internal Revenue Code of 1986, as
amended. Any reference to any section of the Code shall also be a
reference to any successor provision.
2.8 "Committee" means a committee or subcommittee of the Board
appointed from time to time by the Board, which committee or
subcommittee shall consist of 2 or more non-employee directors;
provided, however, that if and to the extent that no Committee exists
which has the authority to administer this Plan, the functions of the
Committee shall be exercised by the Board and all references herein to
the Committee shall be deemed to be references to the Board.
2.9 "Common Stock" means the Common Stock, $.0001 par value
per share, of the Company.
2.10 "Company" means Cross Country, Inc., a Delaware
corporation, and its successors.
2.11 "Consultant" means any advisor or consultant to the
Company or its Affiliates.
2.12 "Disability" means a disability which would qualify as
such under the Company's long-term disability plan. A Disability shall
only be deemed to occur at the time of the determination by the
Committee of the Disability.
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2.13 "Effective Date" means the effective date of this Plan as
defined in Article XIII.
2.14 "Eligible Employee" means each employee of the Company or
an Affiliate.
2.15 "Exchange Act" means the Securities Exchange Act of 1934,
as amended. Any references to any section of the Exchange Act shall
also be a reference to any successor provision.
2.16 "Fair Market Value" means, for purposes of this Plan,
unless otherwise required by any applicable provision of the Code or
any regulations issued thereunder, as of any date, the price for Common
Stock, as determined in good faith by the Committee and, prior to the
initial public offering of the Common Stock of the Company, as agreed
to by CEP and MSDWCP.
2.17 "Incentive Stock Option" means any Stock Option awarded
to an Eligible Employee under this Plan intended to be and designated
as an "Incentive Stock Option" within the meaning of Section 422 of the
Code.
2.18 "MSDWCP" means a representative of Morgan Stanley Dean
Witter Capital Partners IV, L.P. and its affiliated funds, and their
respective successors.
2.19 "Non-Qualified Stock Option" means any Stock Option
awarded under this Plan that is not an Incentive Stock Option.
2.20 "Parent" means any parent corporation of the Company
within the meaning of Section 424(e) of the Code.
2.21 "Participant" means any Eligible Employee or Consultant
to whom a Stock Option has been awarded under this Plan.
2.22 "Plan" means this Cross Country, Inc. Amended and
Restated 1999 Stock Option Plan, as amended from time to time.
2.23 "Retirement" means a Termination without Cause by a
Participant at or after age 65 or such earlier date after age 50 as may
be approved by the Committee with regard to such Participant.
2.24 "Securities Act" means the Securities Act of 1933, as
amended. Any reference to any section of the Securities Act shall also
be a reference to any successor provision.
2.25 "Stock Option" or "Option" means any option to purchase
shares of Common Stock granted to Eligible Employees or Consultants
under Article VI.
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2.26 "Subsidiary" means any subsidiary corporation of the
Company within the meaning of Section 424(f) of the Code.
2.27 "Substitute Options" means Stock Options issued in
assumption of or substitution for stock options issued by a company
acquired by the Company or with which the Company combines.
2.28 "Ten Percent Stockholder" means a person owning stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company, its Subsidiaries or its Parent.
2.29 "Termination" means a Termination of Consultancy or
Termination of Employment, as the case may be.
2.30 "Termination of Consultancy" means (i) that the
Consultant is no longer acting as a consultant to the Company or an
Affiliate; or (ii) when an entity which is retaining a Participant as a
Consultant ceases to be an Affiliate, unless the Participant otherwise
is, or thereupon becomes, a Consultant to the Company or another
Affiliate. In the event that a Consultant becomes an Eligible Employee
upon the termination of his consultancy, the Committee, in its sole and
absolute discretion, may determine that no Termination of Consultancy
shall be deemed to occur until such time as such Consultant is no
longer a Consultant or an Eligible Employee. The Committee may
otherwise define Termination of Consultancy in the Award agreement or,
if no rights of a Participant are reduced, may otherwise define
Termination of Consultancy thereafter.
2.31 "Termination of Employment" means: (i) a termination of
employment (for reasons other than a military or personal leave of
absence granted by the Company) of a Participant from the Company and
its Affiliates; or (ii) when an entity which is employing a Participant
ceases to be an Affiliate, unless the Participant otherwise is, or
thereupon becomes, employed by the Company or another Affiliate. In the
event that an Eligible Employee becomes a Consultant upon the
termination of his employment, the Committee, in its sole and absolute
discretion, may determine that no Termination of Employment shall be
deemed to occur until such time as such Eligible Employee is no longer
an Eligible Employee or a Consultant. The Committee may otherwise
define Termination of Employment in the Award agreement or, if no
rights of a Participant are reduced, may otherwise define Termination
of Employment thereafter.
2.32 "Transfer" means anticipate, alienate, attach, sell,
assign, pledge, encumber, charge, hypothecate or otherwise transfer and
"Transferred" has a correlative meaning.
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ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered and
interpreted by the Committee.
3.2 GRANTS OF AWARDS. The Committee shall have full authority
to grant Stock Options to Eligible Employees and Consultants pursuant
to the terms of this Plan. All Stock Options shall be granted by,
confirmed by, and subject to the terms of, a written agreement executed
by the Company and the Participant. In particular, the Committee shall
have the authority:
(a) to select from among those persons recommended by
the President of the Company the Eligible Employees and
Consultants to whom Stock Options may from time to time be
granted hereunder;
(b) to determine whether and to what extent Stock
Options are to be granted hereunder to one or more Eligible
Employees or Consultants after receipt of a recommendation by
the President of the Company;
(c) to determine, in accordance with the terms of
this Plan, the number of shares of Common Stock to be covered
by each Stock Option granted hereunder;
(d) to determine the terms and conditions, not
inconsistent with the terms of this Plan, of any Stock Option
granted hereunder (including, but not limited to, the exercise
or purchase price (if any), any restriction or limitation, any
vesting schedule or acceleration thereof and any forfeiture
restrictions or waiver thereof, regarding any Stock Option and
the shares of Common Stock relating thereto, based on such
factors, if any, as the Committee shall determine, in its sole
discretion);
(e) to determine whether and under what circumstances
a Stock Option may be settled in cash, Common Stock and/or
restricted stock under Section 6.3(d);
(f) to determine whether, to what extent and under
what circumstances to provide loans to Eligible Employees and
Consultants in order to exercise Stock Options under this
Plan;
(g) to determine whether a Stock Option is an
Incentive Stock Option or Non-Qualified Stock Option;
(h) to determine whether to require an Eligible
Employee or Consultant, as a condition of the granting of any
Stock Option, not to sell or otherwise dispose of shares of
Common Stock acquired pursuant to the exercise of an Option
for a period of time as determined by the Committee, in its
sole discretion, following the date of the acquisition of such
Option or Award; and
(i) to modify, extend or renew an Award, subject to
Article IX herein, provided, however, that if an Award is
modified, extended or renewed and thereby
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deemed to be the issuance of a new Award under the Code or the
applicable accounting rules, the exercise price of a Stock
Option may continue to be the original exercise price even if
less than the Fair Market Value of the Common Stock at the
time of such modification, extension or renewal.
3.3 GUIDELINES. Subject to Article IX hereof, the Committee
shall have the authority to adopt, alter and repeal such administrative
rules, guidelines and practices governing this Plan and perform all
acts, including the delegation of its administrative responsibilities,
as it shall, from time to time, deem advisable; to construe and
interpret the terms and provisions of this Plan and any Stock Option
issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administration of this Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency
in this Plan or in any agreement relating thereto in the manner and to
the extent it shall deem necessary to effectuate the purpose and intent
of this Plan. The Committee may adopt special guidelines and provisions
for persons who are residing in or employed in, or subject to, the
taxes of, foreign jurisdictions to comply with applicable tax and
securities laws and may impose any limitations and restrictions that it
deems necessary to comply with the applicable tax and securities laws
of such foreign jurisdictions.
3.4 DECISIONS FINAL. Any decision, interpretation or other
action made or taken in good faith by or at the direction of the
Company, the Board or the Committee (or any of its members) arising out
of or in connection with this Plan shall be within the absolute
discretion of all and each of them, as the case may be, and shall be
final, binding and conclusive on the Company and all employees and
Participants and their respective heirs, executors, administrators,
successors and assigns.
3.5 PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the
Committee shall hold meetings, subject to the By-Laws of the Company,
at such times and places as it shall deem advisable, including, without
limitation, by telephone conference or by written consent to the extent
permitted by applicable law. A majority of the Committee members shall
constitute a quorum. All determinations of the Committee shall be made
by a majority of its members. Any decision or determination reduced to
writing and signed by all the Committee members in accordance with the
By-Laws of the Company, shall be fully as effective as if it had been
made by a vote at a meeting duly called and held. The Committee shall
keep minutes of its meetings and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
3.6 DESIGNATION OF CONSULTANTS/LIABILITY.
(a) The Committee may designate employees of the
Company and professional advisors to assist the Committee in
the administration of this Plan and may grant authority to
officers to execute agreements or other documents on behalf of
the Committee.
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(b) The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the
administration of this Plan and may rely upon any opinion
received from any such counsel or consultant and any
computation received from any such consultant or agent.
Expenses incurred by the Committee or Board in the engagement
of any such counsel, consultant or agent shall be paid by the
Company. The Committee, its members and any person designated
pursuant to paragraph (a) above shall not be liable for any
action or determination made in good faith with respect to
this Plan. To the maximum extent permitted by applicable law,
no officer of the Company or member or former member of the
Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or
any Stock Option granted under it. To the maximum extent
permitted by applicable law or the Certificate of
Incorporation or By-Laws of the Company and to the extent not
covered by insurance directly insuring such person, each
officer and member or former member of the Committee or the
Board shall be indemnified and held harmless by the Company
against any cost or expense (including reasonable fees of
counsel reasonably acceptable to the Company) or liability
(including any sum paid in settlement of a claim with the
approval of the Company), and advanced amounts necessary to
pay the foregoing at the earliest time and to the fullest
extent permitted, arising out of any act or omission to act in
connection with the administration of this Plan, except to the
extent arising out of such officer's, member's or former
member's own fraud or bad faith. Such indemnification shall be
in addition to any rights of indemnification the employees,
officers, directors or members or former officers, directors
or members may have under applicable law or under the
Certificate of Incorporation or By-Laws of the Company or any
Affiliate. Notwithstanding anything else herein, this
indemnification will not apply to the actions or
determinations made by an individual with regard to Stock
Option granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 SHARES.
The aggregate number of shares of Common Stock which
may be issued or used for reference purposes under this Plan
or with respect to which Stock Options may be granted shall
not exceed 2,145,515* shares of Common Stock (subject to any
increase or decrease pursuant to Section 4.2) which may be
either authorized and unissued Common Stock or Common Stock
held in or acquired for the treasury of the Company or both.
If any Stock Option granted under this Plan other than a
Substitute Option expires, terminates or is forfeited for any
reason other than by reason of its exercise, the number of
shares of Common Stock underlying such unexercised or
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(*) Note, this number reflects the stock split that occurred on August 23, 2001.
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forfeited Stock Option shall again be available for the
purposes of Awards under this Plan.
In the event Substitute Options are granted pursuant
to Section 5.4, the Committee may increase the aggregate
number of shares of Common Stock available under the Plan for
Non-Qualified Stock Options by the number of shares of Common
Stock subject to such Substitute Options. The maximum number
of shares of Common Stock which may be issued under this Plan
with respect to Incentive Stock Options shall not be increased
(subject to any increase or decrease pursuant to Section 4.2).
4.2 CHANGES.
(a) The existence of this Plan and the Stock Options
granted hereunder shall not affect in any way the right or
power of the Board or the stockholders of the Company to make
or authorize (i) any adjustment, recapitalization,
reorganization or other change in the Company's capital
structure or its business, (ii) any merger or consolidation of
the Company or any Affiliate, (iii) any issuance of bonds,
debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, (iv) the dissolution or
liquidation of the Company or any Affiliate, (v) any sale or
transfer of all or part of the assets or business of the
Company or any Affiliate, or (vi) any other corporate act or
proceeding.
(b) In the event of any change in the capital
structure or business of the Company by reason of any stock
split, reverse stock split, stock dividend, combination or
reclassification of shares, recapitalization, or other change
in the capital structure of the Company, merger,
consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase any
Common Stock or securities convertible into Common Stock, or
any other corporate transaction or event having an effect
similar to any of the foregoing, then the Committee may take
such action, if any, with respect to the Plan and outstanding
Stock Options, as it may deem equitable to prevent substantial
dilution or enlargement of the rights granted to, or available
for, Participants under this Plan, including, without
limitation, adjustment of the aggregate number and kind of
shares which thereafter may be issued under this Plan, the
number and kind of shares or other property (including cash)
to be issued upon exercise of an outstanding Stock Option
granted under this Plan and the purchase price thereof. Any
such action or adjustment determined by the Committee in good
faith shall be final, binding and conclusive on the Company
and all Participants and employees and their respective heirs,
executors, administrators, successors and assigns. Except as
provided in this Section 4.2, a Participant shall have no
rights by reason of any issuance by the Company of any class
or securities convertible into stock of any class of the
Company, any subdivision or consolidation of shares of stock
of any class of the Company, the payment of any stock
dividend, any other increase or decrease in the number of
shares of stock of any class of the Company, any sale or
transfer of all or
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part of the Company's assets or business or any other change
affecting the Company's capital structure or business.
(c) Fractional shares of Common Stock resulting from
any adjustment in Options pursuant to Section 4.2(a) or (b)
shall be aggregated until, and eliminated at, the time of
exercise by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half.
No cash settlements shall be made with respect to fractional
shares eliminated by rounding. Notice of any adjustment shall
be given by the Committee to each Participant whose Option has
been adjusted and such adjustment (whether or not such notice
is given) shall be effective and binding for all purposes of
this Plan.
4.3 MINIMUM PURCHASE PRICE. Notwithstanding any provision of
this Plan to the contrary, if authorized but previously unissued shares
of Common Stock are issued under this Plan, such shares shall not be
issued for a consideration which is less than as permitted under
applicable law.
ARTICLE V
ELIGIBILITY
5.1 NON-QUALIFIED STOCK OPTIONS. All Eligible Employees and
Consultants and prospective employees of and Consultants to the Company
and its Affiliates are eligible to be granted Non-Qualified Stock
Options. Eligibility for the grant of a Non-Qualified Stock Option and
actual participation in this Plan shall be determined by the Committee
in its sole discretion.
5.2 INCENTIVE STOCK OPTIONS. All Eligible Employees of the
Company, its Subsidiaries and its Parent (if any) are eligible to be
granted Incentive Stock Options under this Plan. Eligibility for the
grant of an Incentive Stock Option and actual participation in this
Plan shall be determined by the Committee in its sole discretion.
5.3 GENERAL REQUIREMENT. The vesting and exercise of Options
granted to a prospective employee or Consultant are conditioned upon
such individual actually becoming an Eligible Employee or Consultant.
5.4 SUBSTITUTE OPTIONS. Substitute Options may be granted by
the Committee in its sole discretion to holders of stock options issued
by a company acquired by the Company or with which the Company
combines.
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ARTICLE VI
STOCK OPTIONS
6.1 STOCK OPTIONS. Each Stock Option granted hereunder shall
be one of two types: (i) an Incentive Stock Option intended to satisfy
the requirements of Section 422 of the Code; or (ii) a Non-Qualified
Stock Option.
6.2 GRANTS. Subject to the provisions of Article V, the
Committee shall have the authority to grant to any Eligible Employee
one or more Incentive Stock Options, Non- Qualified Stock Options or
both types of Stock Options. To the extent that any Stock Option does
not qualify as an Incentive Stock Option (whether because of its
provisions or the time or manner of its exercise or otherwise), such
Stock Option or the portion thereof which does not qualify, shall
constitute a separate Non-Qualified Stock Option. The Committee shall
have the authority to grant any Consultant one or more Non-Qualified
Stock Options. Notwithstanding any other provision of this Plan to the
contrary or any provision in an agreement evidencing the grant of a
Stock Option to the contrary, any Stock Option granted to an Eligible
Employee of an Affiliate (other than an Affiliate which is a Parent or
a Subsidiary) shall be a Non-Qualified Stock Option.
6.3 TERMS OF STOCK OPTIONS. Stock Options granted under this
Plan shall be subject to the following terms and conditions, and shall
be in such form and contain such additional terms and conditions, not
inconsistent with the terms of this Plan, as the Committee shall deem
desirable:
(a) EXERCISE PRICE. The exercise price per share of
Common Stock shall be determined by the Committee, but, except
in the case of Substitute Options, shall not be less than 100%
of the Fair Market Value of the Common Stock at the time of
grant; provided, however, that if an Incentive Stock Option is
granted to a Ten Percent Stockholder, the exercise price shall
be no less than 110% of the Fair Market Value of the Common
Stock.
(b) STOCK OPTION TERM. The term of each Stock Option
shall be fixed by the Committee; provided, however, that no
Stock Option shall be exercisable more than 10 years after the
date such Stock Option is granted; and further provided that
the term of an Incentive Stock Option granted to a Ten Percent
Stockholder shall not exceed 5 years.
(c) EXERCISABILITY. Stock Options shall be
exercisable at such time or times and subject to such terms
and conditions as shall be determined by the Committee at
grant. If the Committee provides, in its discretion, that any
Stock Option is exercisable subject to certain limitations
(including, without limitation, that such Stock Option is
exercisable only in installments or within certain time
periods), the Committee may waive such limitations on the
exercisability at any time at or after
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grant in whole or in part (including, without limitation,
waiver of the installment exercise provisions or acceleration
of the time at which such Stock Option may be exercised),
based on such factors, if any, as the Committee shall
determine, in its sole discretion. Any decision by the
Committee to waive such limitations must be first approved by
each of CEP and MSDWCP.
(d) METHOD OF EXERCISE. Subject to whatever
installment exercise and waiting period provisions apply under
subsection (c) above, Stock Options may be exercised in whole
or in part at any time and from time to time during the Stock
Option term by giving written notice of exercise to the
Committee specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price as follows: (i) in cash or by check, bank draft
or money order payable to the order of the Company; (ii) if
the Common Stock is traded on a national securities exchange,
The Nasdaq Stock Market, Inc. or quoted on a national
quotation system sponsored by the National Association of
Securities Dealers, through a "cashless exercise" procedure
whereby the Participant delivers irrevocable instructions to a
broker approved by the Committee to deliver promptly to the
Company an amount equal to the purchase price; or (iii) on
such other terms and conditions as may be acceptable to the
Committee (including, without limitation, the relinquishment
of Stock Options or by payment in full or in part in the form
of Common Stock owned by the Participant for a period of at
least 6 months (and for which the Participant has good title
free and clear of any liens and encumbrances) based on the
Fair Market Value of the Common Stock on the payment date). No
shares of Common Stock shall be issued until payment therefor,
as provided herein, has been made or provided for.
(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent
that the aggregate Fair Market Value (determined as of the
time of grant) of the Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by
an Eligible Employee during any calendar year under this Plan
and/or any other stock option plan of the Company, any
Subsidiary or any Parent exceeds $100,000, such Options shall
be treated as Non-Qualified Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any
Subsidiary or any Parent at all times from the time an
Incentive Stock Option is granted until 3 months prior to the
date of exercise thereof (or such other period as required by
applicable law), such Stock Option shall be treated as a
Non-Qualified Stock Option. Should any provision of this Plan
not be necessary in order for the Stock Options to qualify as
Incentive Stock Options, or should any additional provisions
be required, the Committee may amend this Plan accordingly,
without the necessity of obtaining the approval of the
stockholders of the Company.
(f) FORM, MODIFICATION, EXTENSION AND RENEWAL OF
STOCK OPTIONS. Subject to the terms and conditions and within
the limitations of this Plan, Stock Options shall be evidenced
by such form of agreement or grant as is approved by the
Committee, and the Committee may (i) modify, extend or renew
outstanding Stock
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Options granted under this Plan (provided that the rights of a
Participant are not reduced without his consent), and (ii)
accept the surrender of outstanding Stock Options (up to the
extent not theretofore exercised) and authorize the granting
of new Stock Options in substitution therefor (to the extent
not theretofore exercised).
(g) DEFERRED DELIVERY OF COMMON SHARES. The Committee
may in its discretion permit Participants to defer delivery of
Common Stock acquired pursuant to a Participant's exercise of
an Option in accordance with the terms and conditions
established by the Committee.
ARTICLE VII
NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY
7.1 NON-TRANSFERABILITY. No Stock Option shall be Transferable
by the Participant otherwise than by will or by the laws of descent and
distribution. All Stock Options shall be exercisable, during the
Participant's lifetime, only by the Participant. No Stock Option shall,
except as otherwise specifically provided by law or herein, be
Transferable in any manner, and any attempt to Transfer any such Stock
Option shall be void, and no such Stock Option shall in any manner be
liable for or subject to the debts, contracts, liabilities, engagements
or torts of any person who shall be entitled to such Stock Option, nor
shall it be subject to attachment or legal process for or against such
person.
7.2 TERMINATION OF EMPLOYMENT AND TERMINATION OF CONSULTANCY.
The following rules apply with regard to the Termination of a
Participant. Unless otherwise determined by the Committee at grant or,
if no rights of the Participant are reduced, thereafter:
(a) TERMINATION BY REASON OF DEATH, DISABILITY OR
RETIREMENT. If a Participant's Termination is by reason of
death, Disability or Retirement, all Stock Options held by
such Participant which are exercisable at the time of the
Participant's Termination may be exercised by the Participant
(or, in the case of death, by the legal representative of the
Participant's estate) at any time within a period of one year
from the date of such Termination, but in no event beyond the
expiration of the stated terms of such Stock Options;
provided, however, that, in the case of Retirement, if the
Participant dies within such exercise period, all unexercised
Stock Options held by such Participant shall thereafter be
exercisable, to the extent to which they were exercisable at
the time of death, for a period of one year from the date of
such death, but in no event beyond the expiration of the
stated term of such Stock Options.
(b) INVOLUNTARY TERMINATION WITHOUT CAUSE. If a
Participant's Termination is by involuntary termination
without Cause, all Stock Options held by such Participant
which are exercisable at the time of such Termination, may be
exercised by the Participant at any time within a period of 90
days from the date of
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such Termination, but in no event beyond the expiration of the
stated term of such Stock Options.
(c) VOLUNTARY TERMINATION. If a Participant's
Termination is voluntary (other than a voluntary termination
described in Section 7.2(d)(ii) below), all Stock Options held
by such Participant which are exercisable at the time of such
Termination, may be exercised by the Participant at any time
within a period of 30 days from the date of such Termination,
but in no event beyond the expiration of the stated terms of
such Stock Options.
(d) TERMINATION FOR CAUSE. If a Participant's
Termination (i) is for Cause or (ii) is a voluntary
termination (as provided in subsection (c) above) at any time
after an event which would be grounds for a Termination for
Cause, all Stock Options held by such Participant shall
thereupon terminate and expire as of the date of such
Termination.
ARTICLE VIII
CHANGE IN CONTROL PROVISIONS
8.1 BENEFITS. In the event of a Change in Control of the
Company, except as otherwise provided by the Committee upon the grant
of a Stock Option, the Participant shall be entitled to the following
benefits:
(a) Except to the extent provided in the applicable
Stock Option agreement, the Participant's employment agreement
with the Company or an Affiliate, as approved by the
Committee, or other written agreement approved by the
Committee (as such agreement may be amended from time to
time), Stock Options granted and not previously exercisable
shall become exercisable upon a Change in Control, subject to
subsection 8.1(b).
(b) Notwithstanding anything to the contrary herein,
unless the Committee provides otherwise at the time a Stock
Option is granted hereunder or thereafter, no acceleration of
exercisability shall occur with respect to such Stock Options
if the Committee reasonably determines in good faith, that the
Stock Options shall be honored or assumed, or new rights
substituted therefor (each such honored, assumed or
substituted stock option hereinafter called an "Alternative
Option"), by a Participant's employer (or the parent or a
subsidiary of such employer) immediately following the Change
in Control, provided that any such Alternative Option must
meet the following criteria:
(i) the Alternative Option must provide such
Participant with rights and entitlements
substantially equivalent to or better than the
rights, terms and conditions applicable under such
Stock Option, including, but not limited to, an
identical or better exercise schedule; and
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(ii) the Alternative Option must
substantially comply and in the case of an Incentive
Stock Option, must comply with the requirements of
Treasury Regulation ss. 1.425-1 (and any amendments
thereto), except that the Alternative Option need not
be an Incentive Stock Option.
(c) If the Company and the other party to a
transaction constituting a Change in Control agree that such
transaction shall be treated as a "pooling of interests" for
financial reporting purposes, and if the transaction is in
fact so treated, then the acceleration of exercisability,
vesting or lapse of the applicable Restriction Period shall
not occur to the extent that the Company's independent public
accountants determine in good faith that such acceleration
would preclude "pooling of interests" accounting.
8.2 CHANGE IN CONTROL. A "Change in Control" shall be deemed
to have occurred:
(a) upon any "person" as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than CEP,
MSDWCP, the Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or
any company owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportions as their
ownership of Common Stock of the Company), becoming the
beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of 2 consecutive years,
individuals who at the beginning of such period constitute the
Board, and any new director (other than a director designated
by a person who has entered into an agreement with the Company
to effect a transaction described in paragraph (a), (c), or
(d) of this Section or a director whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such term is used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or
on behalf of a person other than the Board) whose election by
the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors
at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for
any reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company or a
Subsidiary with any other corporation, other than a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more
than 35% of the combined voting power of the voting securities
of the Company or such surviving entity or such surviving
entity's parent outstanding immediately after such merger or
consolidation; or
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(d) upon the approval by the stockholders of the
Company of a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets other than the sale
or disposition of all or substantially all of the assets of
the Company to a person or persons who beneficially own,
directly or indirectly, at least 50% or more of the combined
voting power of the outstanding voting securities of the
Company at the time of the sale.
8.3 INITIAL PUBLIC OFFERING NOT A CHANGE IN CONTROL. For
purposes of the Plan, an initial public offering of the Common Stock of
the Company shall not be deemed to be a Change in Control.
ARTICLE IX
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or
the Committee may at any time, and from time to time, amend, in whole
or in part, any or all of the provisions of this Plan (including any
amendment deemed necessary to ensure that the Company may comply with
any regulatory requirement referred to in Article XII), or suspend or
terminate it entirely, retroactively or otherwise; provided, however,
that, unless otherwise required by law or specifically provided herein,
the rights of a Participant with respect to Awards granted prior to
such amendment, suspension or termination, may not be impaired without
the consent of such Participant. In no event may this Plan be amended
without the approval of the stockholders of the Company in accordance
with the applicable laws of the State of Delaware to increase the
aggregate number of shares of Common Stock that may be issued under
this Plan, decrease the minimum exercise price of any Stock Option, or
to make any other amendment that would require stockholder approval
under the rules of any exchange or system on which the Company's
securities are listed or traded.
The Committee may amend the terms of any Stock Option
theretofore granted, prospectively or retroactively, but, subject to
Article IV above or as otherwise specifically provided herein, no such
amendment or other action by the Committee shall impair the rights of
any holder without the holder's consent.
ARTICLE X
COMPANY CALL RIGHTS
10.1 COMPANY CALL RIGHTS. (a) In the event of Termination for
Cause, the Company may repurchase from the Participant any shares of
Common Stock previously acquired by the Participant through the
exercise of a Stock Option granted under this Plan at a repurchase
price equal to the lesser of (i) the original purchase price or
exercise price (as applicable), if any, or (ii) Fair Market Value as of
the date of termination.
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(b) In the event of a Termination for any reason other than
for Cause (including termination due to Retirement, death, Disability,
involuntary termination without Cause or resignation), the Company may
at any time within 270 days after the date of such Termination: (i)
repurchase from the Participant each outstanding vested Stock Option
based on the greater of (A) the difference between the exercise price
of a share of Common Stock relating to such Stock Option and the Fair
Market Value of a share of Common Stock on the date of termination and
(B) $.01 and (ii) repurchase from the Participant any shares of Common
Stock previously acquired by the Participant through the exercise of a
Stock Option under this Plan at a repurchase price equal to Fair Market
Value as of the date of termination, but in no event less than the
exercise price of a share of Common Stock relating to such Stock
Option. In addition, the Company may at any time within 270 days after
a Participant acquires shares of Common Stock upon the exercise of a
Stock Option after the date of the event of Termination for any reason
other than Cause, repurchase from the Participant any shares of Common
Stock previously acquired by the Participant through the exercise of a
Stock Option under this Plan at a repurchase price equal to Fair Market
Value as of the date of termination, but in no event less than the
exercise price of a share of Common Stock relating to such Stock
Option.
10.2 EFFECT OF IPO. Notwithstanding the foregoing, the Company
shall cease to have rights pursuant to this Article X following an
initial public offering of the Common Stock of the Company.
ARTICLE XI
UNFUNDED PLAN
11.1 UNFUNDED STATUS OF PLAN. This Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation.
With respect to any payments as to which a Participant has a fixed and
vested interest but which are not yet made to a Participant by the
Company, nothing contained herein shall give any such Participant any
rights that are greater than those of a general unsecured creditor of
the Company.
ARTICLE XII
GENERAL PROVISIONS
12.1 LEGEND. The Committee may require each person receiving
shares pursuant to an Award under this Plan to represent to and agree
with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any
legend required by this Plan, the certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on Transfer.
All certificates for shares of Common Stock delivered under
this Plan shall be subject to such stock transfer orders and other
restrictions as the Committee may deem
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advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed or any national securities association
system upon whose system the Common Stock is then quoted, any
applicable Federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be
put on any such certificates to make appropriate reference to such
restrictions.
12.2 OTHER PLANS. Nothing contained in this Plan shall prevent
the Board from adopting other or additional compensation arrangements,
subject to stockholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in
specific cases.
12.3 NO RIGHT TO EMPLOYMENT/CONSULTANCY. Neither this Plan nor
the grant of any Award hereunder shall give any Participant or other
employee or Consultant any right with respect to continuance of
employment or consultancy by the Company or any Affiliate, nor shall
they be a limitation in any way on the right of the Company or any
Affiliate by which an employee is employed or a Consultant is retained
to terminate his employment or consultancy at any time.
12.4 WITHHOLDING OF TAXES. The Company shall have the right to
deduct from any payment to be made to a Participant, or to otherwise
require, prior to the issuance or delivery of any shares of Common
Stock or the payment of any cash hereunder, payment by the Participant
of, any Federal, state or local taxes required by law to be withheld.
Any statutorily required withholding obligation with regard to
any Eligible Employee may be satisfied, subject to the consent of the
Committee, by reducing the number of shares of Common Stock otherwise
deliverable or by delivering shares of Common Stock already owned. Any
fraction of a share of Common Stock required to satisfy such tax
obligations shall be disregarded and the amount due shall be paid
instead in cash by the Participant.
12.5 LISTING AND OTHER CONDITIONS.
(a) Unless otherwise determined by the Committee, as
long as the Common Stock is listed on a national securities
exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant
to a Stock Option shall be conditioned upon such shares being
listed on such exchange or system. The Company shall have no
obligation to issue such shares unless and until such shares
are so listed, and the right to exercise any Stock Option with
respect to such shares shall be suspended until such listing
has been effected.
(b) If at any time counsel to the Company shall be of
the opinion that any sale or delivery of shares of Common
Stock pursuant to a Stock Option is or may in the
circumstances be unlawful or result in the imposition of
excise taxes
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on the Company under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation
to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration
under the Securities Act or otherwise with respect to shares
of Common Stock or Stock Option, and the right to exercise any
Stock Option shall be suspended until, in the opinion of said
counsel, such sale or delivery shall be lawful or will not
result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension
under this Section 12.5, a Stock Option affected by such
suspension which shall not then have expired or terminated
shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become
available during the period of such suspension, but no such
suspension shall extend the term of any Stock Option.
(d) A Participant shall be required to supply the
Company with any certificates, representations and information
that the Company requests and otherwise cooperate with the
Company in obtaining any listing, registration, qualification,
exemption, consent or approval the Company deems necessary or
appropriate.
12.6 STOCKHOLDERS AGREEMENT. As a condition to the receipt of
shares of Common Stock pursuant to a Stock Option under this Plan, to
the extent required by the Committee, the Participant shall execute and
deliver a stockholder's agreement or such other documentation which
shall set forth certain restrictions on transferability of the shares
of Common Stock acquired upon exercise or purchase, a right of first
refusal of the Company with respect to shares, the right of the Company
to purchase Common Stock in accordance with this Plan and such other
terms as the Board or Committee shall from time to time establish. Such
stockholder's agreement shall apply to all Common Stock acquired under
the Plan.
12.7 GOVERNING LAW. This Plan shall be governed and construed
in accordance with the laws of the State of Delaware (regardless of the
law that might otherwise govern under applicable Delaware principles of
conflict of laws).
12.8 CONSTRUCTION. Wherever any words are used in this Plan in
the masculine gender they shall be construed as though they were also
used in the feminine gender in all cases where they would so apply, and
wherever any words are used herein in the singular form they shall be
construed as though they were also used in the plural form in all cases
where they would so apply.
12.9 OTHER BENEFITS. No Award payment under this Plan shall be
deemed compensation for purposes of computing benefits under any
retirement plan of the Company or its subsidiaries nor affect any
benefits under any other benefit plan now or
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subsequently in effect under which the availability or amount of
benefits is related to the level of compensation.
12.10 COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock
pursuant to any Awards hereunder.
12.11 NO RIGHT TO SAME BENEFITS. The provisions of Stock
Options need not be the same with respect to each Participant, and such
Stock Options to individual Participants need not be the same in
subsequent years.
12.12 DEATH/DISABILITY. The Committee may in its discretion
require the transferee of a Participant to supply it with written
notice of the Participant's death or Disability and to supply it with a
copy of the will (in the case of the Participant's death) or such other
evidence as the Committee deems necessary to establish the validity of
the transfer of an Award. The Committee may also require that the
agreement of the transferee to be bound by all of the terms and
conditions of this Plan.
12.13 SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and permitted assigns of a Participant, including, without
limitation, the estate of such Participant and the executor,
administrator or trustee of such estate.
12.14 SEVERABILITY OF PROVISIONS. If any provision of this
Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provisions had not been
included.
12.15 HEADINGS AND CAPTIONS. The headings and captions herein
are provided for reference and convenience only, shall not be
considered part of this Plan, and shall not be employed in the
construction of this Plan.
ARTICLE XIII
EFFECTIVE DATE OF PLAN
13.1 The Plan shall become effective upon adoption by the
Board, subject to the approval of this Plan by the stockholders of the
Company in accordance with the requirements of the laws of the State of
Delaware, or such later date as provided in the adopting resolution.
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ARTICLE XIV
TERM OF PLAN
14.1 No Stock Option shall be granted pursuant to this Plan on
or after the tenth anniversary of the earlier of the date this Plan is
adopted or the date of stockholder approval, but Stock Options granted
prior to such tenth anniversary may, and the Committee's authority to
administer the terms of such Options shall, extend beyond that date.
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