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EXHIBIT 10.13
AMERICAN ACHIEVEMENT CORPORATION 2000 STOCK OPTION PLAN (f/k/a
COMMEMORATIVE BRANDS HOLDING CORP. 2000 STOCK OPTION PLAN)
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COMMEMORATIVE BRANDS HOLDING CORP.
2000 STOCK OPTION PLAN
1. PURPOSE. The purpose of the Commemorative Brands Holding Corp.
2000 Stock Option Plan (the "Plan") is to motivate and retain key employees and
directors who are responsible for the attainment of the primary long-term
performance goals of Commemorative Brands Holding Corp. (the "Corporation"). The
Plan is designed to increase the ability of the Corporation and its Subsidiaries
to attract and retain individuals of exceptional ability and to give them a
proprietary interest in the success of the Corporation and such Subsidiaries.
This Plan is subject to approval by the Corporation's stockholders.
2. DEFINITIONS. When used herein, the following terms shall have the
following meanings:
"Administrator" means the Board or any other duly established
committee or subcommittee of the Board
"Affiliate" means, as to the Corporation or any other specified
Person, (i) any Person directly or indirectly controlling, controlled by or
under direct or indirect common control with the Corporation (or other specified
Person), or employed by the Corporation (or other specified Person), and (ii)
any Person, directly or indirectly, beneficially owning at least 10% of any
class of outstanding capital stock or other evidence of beneficial interest of
the Corporation or such other Person; PROVIDED, HOWEVER, that no individual
stockholder shall by reason of holding such securities be an Affiliate of the
Corporation or any of its Subsidiaries for purposes of this Plan.
"Board" means the Board of Directors of the Corporation.
"Cause" means, with respect to a Participant, a finding by the
Administrator based upon reasonable evidence presented in writing to the
Participant that the Participant engaged in: (a) a criminal act involving moral
turpitude, or any criminal act or willful misconduct which in either case is
inconsistent with such Participant's employment responsibilities or contractual
relationship with the Corporation or any Subsidiary thereof, (b) continued
nonperformance of such Participant's duties, (c) repeated acts of
insubordination, (d) acts of dishonesty resulting or intending to result in
personal gain or enrichment at the expense of the Corporation or any Subsidiary
thereof, or (e) conduct not conforming to standards of good citizenship or good
moral character or which is potentially detrimental to the Corporation's or its
Subsidiaries' business, reputation, character or standing; PROVIDED, that if
such Participant is subject to an employment agreement with the Corporation or
any Subsidiary thereof which provides for a definition of cause or substantial
cause or the like, then "Cause" shall have the meaning set forth in such
employment agreement.
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"Change in Control" means, at any time prior to the consummation of an
Initial Public Offering: (i) the sale of all or substantially all of the
business and/or assets of the Corporation or any Subsidiary with whom a
Participant is employed at the time in question to a Person or entity that is
not a Subsidiary or other Affiliate of the Corporation or CHP, or (ii) the
merger or consolidation or other reorganization of the Corporation or any
Subsidiary with whom a Participant is employed at the time in question with or
into one or more entities that are not Subsidiaries or other Affiliates of the
Corporation or CHP, respectively, which results in less than 50% of the
outstanding equity interests of the surviving or resulting entity immediately
after the reorganization being owned, directly or indirectly, by the holders (or
Affiliates of the holders) of equity interests of the Corporation or such
Subsidiary immediately before such reorganization or (iii) approval by the
stockholders of the Corporation of the dissolution or liquidation of the
Corporation; provided, however, that the occurrence of one of the foregoing
events shall not constitute a Change in Control if, following such event, CHP
maintains the ability, directly or indirectly, to elect a majority of the Board
of Directors of the Corporation or Subsidiary, as the case may be.
"CHP" means Castle Harlan Partners III, L.P., Castle Harlan Partners
II, L.P., and their Affiliates, including Castle Harlan, Inc. ("CHI") and
related accounts or funds managed by CHI or an Affiliate of CHI.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Common Stock" means the Common Stock, par value $0.01 per share, of
the Corporation.
"Corporation" means Commemorative Brands Holding Corp., a Delaware
corporation.
"Disability" has the meaning set forth in Section 22(e)(3) of the
Code, as determined by the Administrator.
"EBITDA" means, for any period, the amount equal to: (a) the net
income (or net loss) of the Corporation and its Subsidiaries during such period
after deduction of all expenses, taxes and other charges, determined in
accordance with generally accepted accounting principles, after eliminating
therefrom all extraordinary items of income and expense PLUS (b) any provision
for (or less any benefit from) income or franchise taxes included in the
determination of (a) above; PLUS (c) depreciation, depletion and amortization;
PLUS (d) the expenses of the Corporation and its Subsidiaries charged to income
for interest on indebtedness (including the current portion thereof), determined
in accordance with generally accepted accounting principles.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Fair Market Value" means, on any day, with respect to Common Stock
which is (a) listed on a United States securities exchange, the last sales price
of such stock on such day on
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the largest United States securities exchange on which such stock shall have
traded on such day, or if such day is not a day on which a United States
securities exchange is open for trading, on the immediately preceding day on
which such securities exchange was open; (b) not listed on a United States
securities exchange but is included in The NASDAQ Stock Market System (including
the NASDAQ National Market), the last sales price on such system of such stock
on such day, or if such day is not a trading day, on the immediately preceding
trading day; or (c) neither listed on a United States securities exchange nor
included in The NASDAQ Stock Market System, the fair market value of such stock
as determined from time to time by the Administrator in good faith in its sole
discretion.
"Fully-Diluted Shares of Common Stock" shall mean giving effect,
without duplication, to (i) all shares of Common Stock outstanding at the time
of determination plus (ii) all shares of Common Stock issuable upon conversion
of any convertible securities or the exercise of any option, warrant or similar
right outstanding at the time of determination, whether or not then presently
exercisable.
"Good Reason" means, with respect to a Participant, (a) a reduction in
base salary, bonus or any agreed upon benefit provided under any employment
agreement with the Participant without the Participant's consent; PROVIDED, that
the Corporation (or any Subsidiary with whom the Participant is employed) may at
any time or from time to time amend, modify, suspend or terminate any bonus,
incentive compensation or other benefit plans or programs provided to the
Participant for any reason and without the Participant's consent if such
modification, suspension or termination is consistent for similarly situated
employees; or (b) a material adverse change in the Participant's
responsibilities or position or the duties, resources, personnel, reporting
responsibilities, or support assigned to the Participant without such
Participant's prior consent; PROVIDED, that if such Participant is subject to an
employment agreement with the Corporation or any Subsidiary thereof which
provides for a definition of good reason, then "Good Reason" shall have the
meaning set forth in such employment agreement.
"Incentive Stock Option" means an Option that is designated by the
Administrator as an incentive stock option and qualifies as such within the
meaning of Section 422 of the Code and is granted by the Administrator to a
Participant.
"Initial Public Offering" means a public offering of Common Stock
pursuant to a registration statement filed with, and declared effective by, the
Securities and Exchange Commission other than on Forms S-4 or S-8 (or successors
thereto), upon the consummation of which the shares so registered are listed on
a United States securities exchange or included in The NASDAQ Stock Market
System.
"Key Employee" means an employee who owns more than 10% of the total
combined voting power of all classes of stock of the Corporation, determined at
the time an Option is granted.
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"Multiplier" means the number, determined in accordance with the
provisions of Section 12 hereof, which is multiplied by EBITDA for the
applicable calendar year in order to calculate Purchase Price for purposes of
Section 12 hereof.
"Non-qualified Stock Option" means an Option, which is not an
Incentive Stock Option, granted by the Administrator to a Participant.
"Option" means a right granted under the Plan to a Participant to
purchase a stated number of shares of Common Stock as an Incentive Stock Option
or Non-qualified Stock Option.
"Participant" means an employee or director of the Corporation or any
Subsidiary thereof who is selected to participate in the Plan in accordance with
Section 4.
"Person" means any individual, partnership, firm, trust, corporation
or other similar entity. When two or more Persons act as a partnership, limited
partnership, syndicate or other group for the purpose of acquiring, holding or
disposing of securities of the Corporation, such partnership, limited
partnership, syndicate or group shall be deemed a "Person."
"Plan" means the Commemorative Brands Holding Corp. 2000 Stock Option
Plan.
"Purchase Price" means an amount equal to (i) EBITDA for the
immediately preceding calendar year, times the applicable Multiplier, minus the
sum of (x) the amount of the Corporation's consolidated debt (determined in
accordance with generally accepted accounting principles as set forth on the
Corporation's most recently prepared internal financial statements) and accrued
interest, and (y) the liquidation preference plus accrued and unpaid dividends
on the Corporation's and any of its Subsidiaries' preferred stock, divided by
(ii) the number of Fully-Diluted Shares of Common Stock
"Subsidiary" means a corporation or other entity of which the
Corporation possesses, directly or indirectly, the power to (i) vote fifty
percent (50%) or more of the securities having ordinary voting power for the
election of directors of such corporation or other entity, or (ii) direct or
cause the direction of the management and policies of such corporation or other
entity, whether through the ownership of voting securities, by contract or
otherwise.
3. ADMINISTRATION. The Plan shall be administered by the
Administrator. Subject to the provisions of the Plan, the
Administrator shall have the authority to:
(a) select the Participants;
(b) determine the number of shares of Common Stock covered by any
Option granted to a Participant; PROVIDED, HOWEVER, that no
Option shall be granted after the expiration of the period of ten
(10) years from the effective date of this Plan, as specified in
Section 21 hereof;
(c) determine whether each Option shall be an Incentive Stock Option
or a Non-qualified Stock Option; and
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(d) establish from time to time regulations for the administration of
the Plan, interpret the Plan, delegate in writing administrative
matters to committees of the Board or to other persons, and make
such other determinations and take such other action, as it deems
necessary or advisable for the administration of the Plan.
All decisions, actions and interpretations of the Administrator shall
be final, conclusive and binding upon all parties.
4. PARTICIPATION. Participants in the Plan shall be limited to those
employees and directors of the Corporation or any Subsidiary thereof who have
been notified in writing by the Administrator that they have been selected to
participate in the Plan. A member of the Board who is not an employee of the
Corporation shall not be eligible for the grant of an Incentive Stock Option.
5. SHARES SUBJECT TO THE PLAN. Options may be granted by the
Administrator to Participants from time to time to purchase not more than an
aggregate of 122,985 shares of Common Stock (subject to adjustment as provided
in Section 7(i)) (the "Maximum Amount"), all of which shares of Common Stock
shall be reserved for Options granted under the Plan. The shares issued upon the
exercise of Options granted under the Plan may be authorized and unissued
shares, shares held in the treasury of the Corporation, or, if applicable,
shares purchased on the open market by the Corporation (at such time or times
and in such manner as it may determine). The Corporation shall be under no
obligation to acquire Common Stock for distribution to Participants before
payment in shares of Common Stock is due. If any Option granted under the Plan
shall be canceled or shall expire without the shares covered by such Option
being purchased by the applicable Participant thereunder, new Options may
thereafter be granted covering such shares.
6. GRANTING OPTIONS. The Administrator may grant Options under the
Plan to any Participant, exercisable for such number of shares of Common Stock
as the Administrator shall designate, subject to the provisions of Section 7.
7. TERMS AND CONDITIONS OF OPTIONS. Each Option granted under the
Plan shall be evidenced by a written agreement, in form approved by the
Administrator and executed by the President or Chief Financial Officer of the
Corporation, which shall be subject to the following express terms and
conditions and to such other terms and conditions as the Administrator may deem
appropriate:
(a) OPTION PERIOD. Each Option agreement shall specify that the
Option thereunder is granted for a period of ten years, or such
shorter period as the Administrator may determine, from the date
of grant and shall provide that the Option shall expire on such
ten year anniversary, or shorter period, as the case may be
(unless earlier exercised or terminated pursuant to its terms);
PROVIDED, HOWEVER, that any Incentive Stock Option granted to a
Key Employee shall specify that the Incentive Stock Option is
granted for a
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period of five (5) years from the date of grant and shall expire
on such five (5) year anniversary.
(b) OPTION PRICE. The Option price per share shall be the Fair Market
Value at the time the Option is granted or, with respect to a
Non-qualified Stock Option, such lower price as the Administrator
shall determine; PROVIDED, HOWEVER, that the Option price per
share for any Incentive Stock Option granted to a Key Employee
shall equal 110% of the Fair Market Value at the time the
Incentive Stock Option is granted.
(c) EXERCISE OF OPTION. Subject to Sections 7(f) and 8,
(i) Options granted hereunder shall become exercisable such that
on the first anniversary of the date of grant the amount
exercisable shall be 25% and on each of the second, third
and fourth anniversaries of the date of grant the amount
exercisable shall cumulatively increase by 25%, as set forth
in the following schedule:
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Years from Amount
Date of Grant Exercisable
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One...............................................25%
Two...............................................50%
Three.............................................75%
Four.............................................100%
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(ii) Notwithstanding the foregoing schedule, the Administrator
may grant Options that become exercisable in accordance with
such other vesting schedule and upon such terms and
conditions as the Administrator shall determine, as set
forth in the Option agreement between the Corporation and
the Participant, and all Options are subject to the
Administrator's authority to accelerate such vesting
schedule.
(d) LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS GRANTED. To the
extent that the aggregate Fair Market Value of stock with respect
to which Incentive Stock Options are exercisable for the first
time by any Participant during any calendar year (whether under
the terms of the Plan or any other stock option plan of the
Corporation or of its parent or any Subsidiary corporation)
exceeds $100,000, such Options shall be treated as Non-qualified
Stock Options. Fair Market Value shall be determined as of the
time the Option with respect to such stock is granted.
(e) PAYMENT OF OPTION PRICE UPON EXERCISE. The option price of the
shares as to which an Option shall be exercised shall be paid to
the Corporation at the time of exercise at the option of the
Participant either (a) in cash or by
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check, bank draft or money order payment to the Corporation, (b)
by delivering Common Stock of the Corporation already owned by
the Participant and having a total Fair Market Value on the date
of such delivery equal to the option price, (c) to the extent
authorized by the Administrator, through the written election of
the Participant to have shares of Common Stock withheld by the
Corporation from the shares otherwise to be received, with such
withheld shares having an aggregate Fair Market Value on the date
of exercise equal to the option price, or (d) by any combination
of the above methods of payment.
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(f) TERMINATION OF EMPLOYMENT.
(i) If the employment of a Participant terminates on account of
death or Disability, the Options granted to such Participant that
are exercisable as of the date of termination of employment may
be so exercised within six months after termination of
employment, or such longer period as the Administrator may
determine, and shall then terminate; PROVIDED, HOWEVER, that any
Incentive Stock Options shall no longer be treated as Incentive
Stock Options unless exercised within three months of the
Participant's termination of employment for a reason other than
Disability or death or 12 months of the Participant's termination
of employment on account of Disability.
(ii) If the employment of a Participant is terminated for Cause
or without Good Reason, all Options that have been granted to
such Participant shall terminate and be forfeited as of the date
of termination of employment.
(iii) If the employment of a Participant terminates for any other
reason, the Options granted to such Participant that are
exercisable as of the date of termination of employment may be so
exercised within three months after termination of employment, or
such longer period as the Administrator may determine, and shall
then terminate.
(iv) In no event may such Options be exercised after the
expiration date of such Options as established in accordance with
Section 7(a).
(v) All Options that have been granted to a Participant which
are not exercisable as of the date of the Participant's
termination of employment shall terminate as of such date.
(g) TRANSFERABILITY OF OPTIONS. No Option granted under the Plan and
no right arising under such Option shall be transferable other
than by will or by the laws of descent and distribution. During
the lifetime of the Participant an Option shall be exercisable
only by such Participant. Any Option exercisable at the date of
the Participant's death and transferred by will or by the laws of
descent and distribution shall be exercisable in accordance with
the terms of such Option by the executor or administrator, as the
case may be, of the Participant's estate for a period of six
months after the date of the Participant's death, or such longer
period as the Administrator may determine, and shall then
terminate; PROVIDED, HOWEVER, that in no event may such Options
be exercised after the expiration date of such Options as
established in accordance with Section 7(a). All Options not
exercisable at the date of the Participant's death shall
terminate as of such date.
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(h) INVESTMENT REPRESENTATION. Each Option agreement may contain an
undertaking that, upon demand by the Administrator for such a
representation, the Participant (or any person acting under
Section 7(g)) shall deliver to the Administrator at the time of
any exercise of an Option a written representation that the
shares of Common Stock to be acquired upon such exercise are to
be acquired for such Participant's own account and not with a
view to, or for resale in connection with, any distribution. Upon
such demand, delivery of such representation prior to the
delivery of any shares issued upon exercise of an Option shall be
a condition precedent to the right of the Participant or such
other Person to purchase any shares.
(i) ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event of
any change in the Common Stock by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, or of any similar
change affecting the Common Stock, the number and kind of shares
which thereafter may be optioned and sold under the Plan and the
number and kind of shares subject to Option in outstanding Option
agreements and the purchase price per share thereof shall be
appropriately adjusted consistent with such change in such manner
as the Board may deem equitable to prevent substantial dilution
or enlargement of the rights granted to, or available for,
participants in the Plan. Without limiting the generality of the
foregoing, if the Common Stock is recapitalized into multiple
classes of common stock, the kind of shares subject to Option
shall be those common shares intended for broad general ownership
rather than any class of special super-voting or other control
stock.
(j) PARTICIPANTS TO HAVE NO RIGHTS AS STOCKHOLDERS. No Participant
shall have any rights as a stockholder with respect to any shares
subject to such Participant's Option prior to the date on which
such Participant is recorded as the holder of such shares on the
records of the Corporation.
(k) PLAN AND OPTION NOT TO CONFER RIGHTS WITH RESPECT TO CONTINUANCE
OF EMPLOYMENT. Neither the Plan nor any action taken thereunder
shall be construed as giving any employee the right to be
retained in the employ of the Corporation or any Subsidiary
thereof, nor shall it interfere in any way with the right of the
Corporation or any such Subsidiary to terminate any Participant's
employment at any time with or without Cause.
(l) OTHER OPTION PROVISIONS. The form of option agreement authorized
by the Plan may contain such other provisions, consistent with
this Plan, as the Administrator may, from time to time,
determine.
(m) NOTIFICATION OF SALES OF COMMON STOCK. Any Participant who
disposes of shares of Common Stock acquired upon the exercise of
an Incentive Stock Option either (a) within two years from the
date of the grant of the Incentive
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Stock Option under which the Common Stock was acquired or (b)
within one year after the transfer of such shares of Common Stock
to the Participant, shall notify the Corporation of such
disposition and of the amount realized upon such disposition.
8. EFFECT OF CHANGE IN CONTROL. Notwithstanding the provisions of
Section 7, if there should be a Change in Control:
(a) the Corporation shall give each Participant written notice of
such Change in Control as promptly as practicable prior to the
effective date thereof; and
(b) all of the Options granted to a Participant not currently
exercisable shall become exercisable immediately prior to the
effective date of such Change in Control; PROVIDED, that all or a
portion of such Options shall not be exercisable to the extent
that the exercise would cause the Participant to be subject to
taxes under Section 4999 of the Code.
9. NO CLAIM OR RIGHT UNDER THE PLAN. No employee shall at any time
have the right to be selected as a Participant in the Plan nor, having been
selected as a Participant and granted an Option, to be granted any additional
Options.
10. LISTING AND QUALIFICATION OF SHARES. The Plan, the grant and
exercise of Options thereunder, and the obligation of the Corporation to sell
and deliver shares under such Options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. The Corporation may require
any Participant, beneficiary or legal representative to make such
representations and furnish such information as it may consider appropriate in
connection with the issuance or delivery of the shares in compliance with
applicable laws, rules and regulations. Certificates representing shares of
Common Stock acquired by the exercise of an Option may bear such legend as the
Corporation may consider appropriate under the circumstances.
11. STOCKHOLDERS' AGREEMENT. At the request of the Administrator,
upon the grant of any Option hereunder, the Participant shall be deemed to have
accepted, and the Option granted hereunder and the Common Stock deliverable upon
exercise of the Option shall be subject to, the provisions of any Stockholders'
Agreement of the Corporation then in effect (the "Stockholders' Agreement"). In
addition, the Corporation may, in its discretion as a condition precedent to the
grant or exercise of any Option hereunder, require that a Participant become a
party to the provisions of any such Stockholders' Agreement. Notwithstanding
anything herein to the contrary, to the extent any provision of the Plan is
inconsistent with such Stockholders' Agreement, the Stockholders' Agreement
shall govern with respect to any Participant who is or becomes a party thereto.
12. DISPOSITION OF SHARES. At any time prior to the consummation of
an Initial Public Offering, each share of Common Stock acquired by an exercise
of an Option granted under the Plan may be transferred, other than by will or
the laws of descent and distribution, only to the Corporation and only in
accordance with the following provisions of this Section 12. Each
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certificate representing shares of Common Stock acquired by the exercise of an
Option shall bear a legend to such effect.
(a) CALL BY CORPORATION. The Corporation shall have the right to
purchase from a Participant, within six (6) months following the
termination of such employee Participant's employment by the
Corporation or any of its Subsidiaries without Cause, the Common
Stock acquired by the exercise of Options by such Participant for
an amount equal to the Purchase Price where the Multiplier is
5.5. The Corporation shall have the right to purchase from a
Participant within six (6) months following the termination of
such employee Participant's employment by the Corporation or any
of its Subsidiaries for Cause, or the resignation by the
Participant, the Common Stock acquired by such Participant, for
an amount equal to the Purchase Price where the Multiplier is
4.5.
(b) The purchase of Common Stock by the Corporation pursuant to the
foregoing provisions of this Section 12 may, at the discretion of
the Administrator, be paid for either (i) in cash or (ii) up to
forty percent (40%) in cash with the balance payable under a note
issued by the Corporation with principal payments made in four
(4) equal annual installments and bearing interest, payable
annually, at the rate of the greater of (A) seven percent (7%)
per annum and (B) the lowest interest rate required to avoid
imputed interest; provided, however, that in the event the
foregoing provisions of this Section 12(b) conflict with any
agreement to which the Corporation is a party, the purchase of
Common Stock by the Corporation may be paid in such other form as
determined in the sole discretion of the Administrator,
including, but not limited to, through the issuance of a
subordinated note with comparable terms as those provided in
subsection (ii) above.
13. DRAG ALONG RIGHTS. Notwithstanding anything herein to the
contrary:
(a) CHP shall have the right in connection with a bona fide offer (a
"Compelled Sale Offer") by a Person not constituted within CHP (a
"Compelled Sale Purchaser") to purchase at least 80% of the
shares of Common Stock, preferred stock and any other equity
securities (including, without limitation, warrants, options, and
preferred stock) of the Corporation held by CHP (for either cash,
securities of a class registered under Section 12 of the Exchange
Act (or convertible into such a class of securities) or any
combination thereof) to require each (but not less than each) of
the Participants to sell the same percentage or all of the Common
Stock then held by such Participants, to the Compelled Sale
Purchaser, for the equivalent consideration per share of Common
Stock (a "Compelled Sale Offer Price(s)") and otherwise on the
same terms and conditions upon which CHP sells its Common Stock.
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(b) If CHP elects to exercise its right to compel sale pursuant to
this Section 13, CHP shall deliver a written notice (a "Compelled
FFF Sale Notice") of the Compelled Sale Offer to each Participant
and the Corporation at least 10 days prior to the consummation of
any such sale, setting forth the Compelled Sale Offer Price(s),
the identity of the Compelled Sale Purchaser and the other terms
and conditions thereof. Each Participant shall deliver to CHP in
trust, not less than five business days before the proposed date
of consummation of the Compelled Sale Offer, the duly endorsed
certificate or certificates representing the requisite number of
shares of Common Stock owned by such Participant, together with a
limited power-of-attorney authorizing CHP to transfer such Common
Stock to the Compelled Sale Purchaser pursuant to the terms of
the Compelled Sale Offer at the Compelled Sale Offer Price(s),
and in accordance with the provisions hereof.
(c) CHP shall have 90 days from the date the Compelled Sale Notice is
received by the Participants (the "Compelled Sale Notice Date")
to sell, and to cause the other Persons constituted within CHP to
sell, to the Compelled Sale Purchaser at the Compelled Sale Offer
Price(s) all of the Common Stock subject to the Compelled Sale
Offer. Immediately after completion of any such sale pursuant to
this Section 13, CHP shall notify the Corporation and each
Participant of such completion and shall furnish such evidence of
such sale (including time of completion) and the terms thereof as
the Corporation or any Participant may reasonably request. CHP
shall substantially concurrently with such closing also remit to
each Participant the proceeds of such sale attributable to the
sale of such Participant's Common Stock immediately upon receipt
thereof. If any sale to a Compelled Sale Purchaser is not
completed by the expiration of the 90-day period referred to in
this Section 13(c), then, without prejudice to CHP's right to
seek to compel a sale under this Section 13 in the future, CHP
shall return to each Participant all certificates representing
the shares of Common Stock of such Participant.
(d) No Participant required to sell Common Stock pursuant to a
Compelled Sale Offer shall be required to make any representation
or warranty in connection with such Compelled Sale Offer other
than as to such Participant's ownership and authority to
transfer, free of liens, claims and encumbrances, the Common
Stock proposed to be sold by it.
14. TAXES. The Administrator may make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all
federal, state, local and other taxes required by law to be withheld by the
Corporation with respect to Options under the Plan including, but not limited to
(a) reducing the number of shares of Common Stock otherwise deliverable, based
upon their Fair Market Value on the date of exercise, to permit deduction of the
amount of any such withholding taxes from the amount otherwise payable under the
Plan, (b)
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deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to a Participant, or (c) requiring a Participant, beneficiary
or legal representative to pay to the Corporation the amount required to be
withheld or to execute such documents as the Administrator deems necessary or
desirable to enable the Corporation to satisfy its withholding obligations as a
condition of releasing the Common Stock.
15. NO LIABILITY OF BOARD MEMBERS. No member of the Board shall be
personally liable by reason of any contract or other instrument executed by such
member or on such member's behalf in such member's capacity as a member of the
Board or the Administrator nor for any mistake of judgment made in good faith,
and the Corporation shall indemnify and hold harmless each employee, officer or
director of the Corporation to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim with the approval of the Board) arising out of
any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith.
16. AMENDMENT OR TERMINATION. The Administrator may, with prospective
effect, amend, suspend, or terminate the Plan or any portion thereof; PROVIDED,
HOWEVER, that no amendment, suspension or termination of the Plan shall deprive
any Participant of any right with respect to any Option granted under the Plan
without such Participant's written consent; and PROVIDED, FURTHER, that unless
duly approved by the holders of stock entitled to vote thereon at a meeting
(which may be the annual meeting) duly called and held for such purpose, except
as provided in Section 7(i), no amendment or change shall be made to the Plan
(a) increasing the total number of shares which may be issued or transferred
under the Plan, (b) changing the exercise price specified for the shares subject
to the Options, (c) changing the maximum periods during which Options may be
exercised, (d) extending the period during which Options may be granted under
the Plan, (e) materially changing the designation of persons eligible to receive
Options under the Plan, or (f) materially increasing in any other way the
benefits accruing to Participants under the Plan.
17. CAPTIONS. The captions preceding the sections of the Plan have
been inserted solely as a matter of convenience and shall not in any manner
define or limit the scope or intent of any provisions of the Plan.
18. GOVERNING LAW. The Plan and all rights thereunder shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
19. NON-UNIFORM DETERMINATIONS. The Administrator's determinations
under the Plan (including, without limitation, determinations of the persons to
receive Options, the form, term, provisions, amount and the timing of the grant
of such Options and of the Agreements evidencing the same) need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, Options under the Plan, whether or not such persons are similarly
situated.
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20. SEVERABILITY. In the event that any provision of the Plan shall
be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
21. EFFECTIVE DATE. The Plan shall become effective as of July 27,
2000.
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