EXHIBIT 4.3
ODETICS, INC.
1994 LONG-TERM INCENTIVE EQUITY PLAN
1. Purpose. This 1994 Long-Term Incentive Equity Plan (the "Plan")
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is intended to promote the long-term success of Odetics, Inc. (the "Company") by
providing its officers and other employees with incentives to create excellent
performance and to continue in the employ of the Company, its subsidiaries and
affiliates. By encouraging Plan participants to become shareholders of the
Company and by providing actual ownership through Plan awards, it is also
intended that participants will view the Company from an ownership prospective.
2. Term. The Plan shall terminate at the close of business on the
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fifth anniversary of its approval by the Company's shareholders. After
termination of the Plan no future awards may be granted but previously granted
awards shall remain outstanding in accordance with their applicable terms and
conditions and the terms and conditions of the Plan.
3. Plan Administration. A Committee (the "Committee") appointed by
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the Board shall be responsible for administering the Plan. The Committee shall
be comprised of two or more "disinterested directors" of the Board (as defined
in Rule 16b-3 (or any successor rule) promulgated under the Securities and
Exchange Act of 1934 (the "1934 Act") who are non-employee members of the Board
and who shall also qualify to administer the Plan as contemplated by Section
162(m) of the Internal
1.
Revenue Code of 1986, as amended (the "Code"). The Committee shall have full
and exclusive power to interpret the Plan and to adopt such rules, regulations
and guidelines for carrying out the Plan as it may deem necessary or proper, all
of which power shall be executed in the best interests of the Company and in
keeping with the objectives of the Plan. This power includes,but is not limited
to, selecting award recipients, establishing all award terms and conditions and
adopting modifications, amendments and procedures, including those contemplated
by Section 15 of the Plan, as well as rules and regulations governing awards
under the Plan, and to make all other determinations necessary or advisable for
the administration of the Plan.
4. Eligibility. Any employee of the Company shall be eligible to
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receive one or more awards under the Plan. "Employee" shall also include any
former employee of the Company eligible to receive an assumed or replacement
award as contemplated in Section 5 and 8, and "Company" includes any entity that
is directly or indirectly controlled by the Company or any entity in which the
Company has a significant equity interest, as determined by the Committee.
5. Shares of Common Stock Subject to the Plan. Subject to the
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provisions of Section 6 of the Plan, the aggregate number of shares of Class A
Common Stock ($.10 par value) of
2.
the Company ("shares") which may be transferred to participants under the Plan
shall be 350,000, plus any shares available for grants under the Prior Plans
(defined below) on the date the Plan is approved by the Company's shareholders,
and any shares which subsequently become available to the extent that
outstanding stock options are terminated or canceled under the Company's 1992
Stock Incentive Plan, 1982 Nonstatutory Stock Option Plan, and 1981 Incentive
Stock Option Plan (the "Prior Plans"). The aggregate number of shares that may
be issued under awards pursuant to Section 8(c) of the Plan and the aggregate
number of shares that may be covered by awards granted to any single individual
under the Plan shall not exceed 185,000 shares. The aggregate number of shares
that may be subject to incentive stock options ("ISOs") intended to comply with
Section 422 of the Code shall not exceed 550,000.
Shares subject to awards under the Plan, which expire, terminate or
are canceled without exercise or vesting shall thereafter be available for the
granting of other awards. Any shares tendered, either actually or by
attestation, by a person as full or partial payment made to the Company, on or
after the effective date of the Plan in connection with any exercise of a stock
option or receipt of shares under the Plan or Prior Plans shall again be
available for grants under the Plan. Further, in instances where a stock
appreciation right ("SAR") or other award is settled in cash, the shares covered
3.
by such award shall remain available for issuance under the Plan. Likewise, the
payment of cash dividends and dividend equivalents paid in cash in conjunction
with outstanding awards shall not be counted against the shares available for
issuance. Any shares that are issued by the Company, and any awards that are
granted through the assumption, or in substitution for, outstanding awards
previously granted by an acquired entity shall not be counted against the shares
available for issuance under the Plan.
Any shares issued under the Plan may consist in whole or in part of
authorized and unissued shares or of treasury shares, and no fractional shares
shall be issued under the Plan. Cash may be paid in lieu of any fractional
shares in settlements of awards under the Plan.
6. Adjustments and Reorganizations. In the event of any stock
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dividend, stock split, combination or exchange of shares, merger, consolidation,
spin-off, recapitalization or other distribution (other than normal cash
dividends) of Company assets to shareholders, or any other change affecting
shares or share price, such proportionate adjustments, if any, as the Committee
in its discretion may deem appropriate to reflect such change shall be made with
respect to (a) the aggregate number of shares that may be issued under the Plan,
(b) each outstanding award made under the Plan, and (c) the
4.
exercise price per share for any outstanding stock options, SARs or similar
awards under the Plan.
In the event that the Company undergoes a change in control (as
defined by the Committee), or is liquidated or reorganized, or is not the
surviving Company in a merger or consolidation with another Company, and in the
absence of the surviving company's assumption of outstanding awards made under
the Plan, the Committee may provide for appropriate adjustments, including the
acceleration of vesting, and settlements of such awards either as of the time of
award or at a subsequent date.
7. Fair Market Value. Fair Market Value for all purposes under the
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Plan shall mean either (a) the average of the closing bid and asked prices of
Class A Common Stock as quoted in the Over-the-Counter Market Summary or the
closing price (or if there was no sale on the date in question, the highest
asked price per share of Class A Common Stock on such date) on the Nasdaq
National Market System or on any exchange on which common stock may be listed as
published in the Western Edition of the Wall Street Journal, or (b) if there is
no listing or trading of Class A Common Stock either over-the-counter or on the
National Market System, a price to be established by the Committee in its
discretion.
5.
8. Awards. The Committee shall determine the type or types of
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award(s) to be made to each participant. Awards may be granted singly, in
combination or in tandem. Awards also may be made in combination or in tandem
with, in replacement of, as alternatives to, or as the payment form for grants
or rights under any other employee or compensation plan of the Company including
the plan of any acquired entity. The types of awards that may be granted under
the Plan are:
(a) Stock Options. This is a grant of a right to purchase a specified
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number of shares during a specified period as determined by the Committee. The
purchase price per share for each stock option shall be not less than 100% of
Fair Market Value on the date of grant, provided, however, that with respect to
an ISO granted to an individual then owning (within the meaning of Section
422(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or its Parent or Subsidiaries (as defined in
Section 424(f) of the Code), the purchase price shall be not less than 110% of
Fair Market Value on the date of grant. If a stock option is granted
retroactively in tandem with or as a substitution for an SAR, the exercise price
may be no lower than the Fair Market Value of a share on the date the SAR was
granted. A stock option may be in the form of an ISO which, in addition to
being subject to applicable terms, conditions and limitations established by the
Committee, complies with Section 422 of the Code. The price at which
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shares may be purchased under a stock option shall be paid in full by the
optionee at the time of the exercise in cash or such other method permitted by
the Committee, including (i) tendering (either actually or by attestation)
shares, (ii) surrendering a stock award valued at Fair Market Value on the date
of surrender, (iii) authorizing a third party to sell the shares (or a
sufficient portion thereof) acquired upon exercise of a stock option and
assigning the delivery to the Company of a sufficient amount of the sale
proceeds to pay for all the shares acquired through such exercise, (iv)
delivering an interest-bearing full recourse promissory note (subject to any
limitations of applicable state incorporation law), or (v) any combination of
the above.
The Committee may grant stock options that provide for the award of a
new stock option when the exercise price has been paid for by tendering shares
to the Company. Such a stock option shall be limited to the number of shares
tendered, with the stock option purchase price set at the then-current Fair
Market Value, and shall not extend beyond the remaining term of the originally
exercised option.
(b) SARs. This is a right to receive a payment, in cash and/or
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shares, equal to the excess of the Fair Market Value of a specified number of
shares on the date the SAR is exercised over the Fair Market Value on the date
the SAR was granted as set forth in the applicable award agreement.
7.
Except if an SAR is granted retroactively in tandem with or in substitution for
a stock option, the designated Fair Market Value in the applicable award
agreement for the date of grant shall be no lower than the actual Fair Market
Value of a share on such date of grant.
(c) Stock Awards. This is an award made or denominated in shares or
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units equivalent in value to shares. All or part of any stock award may be
subject to conditions and restrictions established by the Committee, and set
forth in the award agreement, which may include but are not limited to
continuous service with the Company, achievement of specific business objectives
and other measurements of individual, business unit or Company performance.
9. Dividends and Dividend Equivalents. The Committee may provide
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that any awards under the Plan earn dividends or dividend equivalents. Such
dividends or dividend equivalents may be paid currently or may be credited to a
participant's account. Any crediting of dividends or dividend equivalents may
be subject to such restrictions and conditions as the Committee may establish,
including reinvestment in additional shares or share equivalents.
10. Deferrals and Settlements. Payment of awards may be in the form
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of cash, stock, other awards or combinations thereof as the Committee shall
determine, and with such
8.
restrictions as it may impose. The Committee also may require or permit
participants to elect to defer the issuance of shares or the settlement of
awards in cash under such rules and procedures as it may establish under the
Plan. It also may provide that deferred settlements include the payment or
crediting of interest in the deferral amounts, or the payment or crediting of
dividend equivalents where the deferral amounts are denominated in shares.
11. Transferability and Exercisability. Awards granted under the
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Plan shall not be transferable or assignable other than by will or the laws of
descent and distribution, except that the Committee may provide for the
transferability of particular awards: (a) by gift or other transfer of an award
to (i) any trust or estate in which the original award recipient or such
participant's spouse or other immediate relative has a substantial benefit
interest or (ii) a spouse or other immediate relative; (b) pursuant to a
qualified domestic relations order (as defined by the Code); and (c) as gifts to
immediate family members of the recipient. However, any award so transferred
shall continue to be subject to all the terms and conditions contained in the
instrument evidencing such award.
In the event that a participant terminates employment with the Company
to assume a position with a governmental, charitable, educational or other non-
profit institution, the
9.
Committee may subsequently authorize a third party, including but not limited to
a "blind" trust, to act on behalf of and for the benefit of such participant
regarding any outstanding awards held by the participant subsequent to such
termination of employment. If so permitted by the Committee, a participant may
designate a beneficiary or beneficiaries to exercise the rights of the
participant and receive any distribution under the Plan upon the date of the
participant.
Subject to the overall limitations of Section 5 hereof (relating to
the aggregate shares subject to the Plan), the aggregate fair market value
(determined as of the time the option is granted) of shares of stock with
respect to which ISOs are exercisable for the first time by the optionee during
any calendar year (under the Plan and all other incentive stock option plans of
the Company) shall not exceed $100,000.
Upon the retirement of an officer, director or employee or the
cessation of services provided by a nonemployee (either pursuant to a Company
retirement plan, if any, or pursuant to the approval of the Committee), an
option or SAR may be exercised (to the extent exercisable at the date of such
termination or cessation) by him within such period after the date of his
retirement or cessation of services (not to exceed three (3) months) as the
Committee shall prescribe in his award agreement.
10.
In the event an officer, director or employee ceases to serve as an
officer or director or leaves the employ of the Company or a nonemployee ceases
to provide services to the Company for any reason other than as set forth above,
any option or SAR which he holds shall terminate at (i) the earlier of 30 days
after the date (A) his employment terminates, or (B) he ceases providing
services to the Company or the date he receives written notice that his
employment or rendering of services is or will be terminated, or (ii) such later
date an determined by the Committee not to exceed the maximum period under the
preceding paragraph hereof with respect to ISOs. The foregoing shall not extend
any options or SAR beyond the term specified therein and such option SAR shall
be exercisable only to the extent exercisable at date of termination of
employment or cessation of services.
12. Award Agreements. Awards under the Plan shall be evidenced by
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agreements that set forth the terms, conditions and limitations for each award
which may include in the term of an award (except that in no event shall the
term of any ISO exceed a period of ten years from the date of its grant or five
years with respect to an ISO granted to an individual then owning more than 10%
of the total combined voting power of all classes of stock of the Company. Such
term shall not exceed five years), the provisions applicable in the event the
participant's employment terminates, and the Company's authority to unilaterally
or bilaterally amend, modify,
11.
suspend, cancel or rescind any award. The Committee need not require the
execution of any such agreement, in which case acceptance of the award by the
participant shall constitute agreement to the terms of the award.
13. Foreign Participation. In order to assure the viability of
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awards granted to participants employed in foreign countries, the Committee may
provide for such special terms as it may consider necessary or appropriate to
accommodate differences in local law, tax policy, or custom. Moreover, the
Committee may approve such supplements to, or amendments, restatements or
alternative versions of the Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of the Plan as in effect for
any other purposes; provided, however, that no such supplements, amendments,
restatements or alternative versions shall increase the share limitations
contained in Section 5 of the Plan.
14. Plan Amendments. The Plan only may be amended by the Committee
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as it deems necessary or appropriate to better achieve the purposes of the Plan,
except that no such amendment would increase the number of shares available for
issuance (other than in accordance with Sections 5 and 6 of the Plan) or cause
the Plan not to comply with Rule 16b-3 (or any successor rule) under the 1934
Act or Section 162(m) of
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the Code shall be made without the approval of the Company's shareholders.
15. Tax Withholding. The Company shall have the right to deduct from
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any settlement of an award made under the Plan, including the delivery or
vesting of shares, a sufficient amount to cover withholding of any federal,
state or local taxes required by law, or to take such other action as may be
necessary to satisfy any such withholding obligations. The Committee may permit
shares to be used to satisfy required tax withholding and such shares shall be
valued at the Fair Market value as of the settlement date of the applicable
award.
16. Other Benefit and Compensation Programs. Unless otherwise
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specifically determined by the Committee, settlements of awards received by
participants under the Plan shall not be deemed a part of a participant's
regular, recurring compensation for purposes of calculating payments or benefits
from any Company benefit plan, severance program or severance pay law of any
country. Further, the Company may adopt other compensation programs, plans or
arrangements as it deems appropriate or necessary.
17. Unfunded Plan. Unless otherwise determined by the Committee, the
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Plan shall be unfunded and shall not create (or be construed to create) a trust
or a separate fund or funds. The Plan shall not establish any fiduciary
relationship
13.
between the Company and any participant or other person. To the extent any
person holds any rights by virtue of a grant awarded under the Plan, such rights
(unless otherwise determined by the Committee) shall be no greater than the
rights of an unsecured general creditor of the Company.
18. Use of Proceeds. The cash proceeds received by the Company from
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the issuance of shares pursuant to awards under the Plan shall constitute
general funds of the Company.
19. Regulatory Approval. The implementation of the Plan, the
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granting of any award under the Plan, and the issuance of shares upon the
exercise or settlement of any award shall be subject to the Company's
procurement of all approvals and permits required by regulatory authorities
having jurisdiction over the Plan, the awards granted under it or the shares
issued pursuant to it.
20. Future Rights. No person shall have any claim or rights to be
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granted an award under the Plan, and nothing in this Plan or in any award
granted hereunder shall confer upon any recipient the right to continue to be
retained in the employ of the Company.
14.
21. Governing Law. The validity, construction and effect of the Plan
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and any actions taken or relating to the Plan shall be determined in accordance
with the laws of the State of California and applicable federal law.
22. Successors and Assigns. The Plan shall be binding on all
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successors and assigns of a participant, including, without limitation, the
estate of such participant and the executor, administrator or trustee of such
estate, or any receiver or trustee in bankruptcy or representative of the
participant's creditors.
15.