Exhibit 10.36
RAMSAY MANAGED CARE, INC.
1996 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Ramsay Managed Care, Inc.
1996 Long Term Incentive Plan (the "Plan") are to encourage selected employees,
officers, directors and consultants of, and other individuals providing services
to, Ramsay Health Care, Inc. (together with any successor thereto, the
"Company") and its Affiliates (as defined below) to acquire a proprietary
interest in the growth and performance of the Company, to generate an increased
incentive to contribute to the Company's future success and prosperity thus
enhancing the value of the Company for the benefit of its stockholders, and to
enhance the ability of the Company and its Affiliates to attract and retain
exceptionally qualified individuals upon whom, in large measure, the sustained
progress, growth and profitability of the Company depend.
SECTION 2. Definitions. As used in the Plan, the following terms
shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or through one or
more intermediaries, is controlled by the Company and (ii) any entity in which
the Company has a significant equity interest, as determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Security, Performance Award, or Other Stock-Based Award granted under the Plan.
"Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award granted under the Plan.
"Board" shall mean the Board of Directors of the Company.
"Cause", as used in connection with the termination of a Participant's
employment, shall mean (i) with respect to any Participant employed under a
written employment agreement with the Company or an Affiliate of the Company
which agreement includes a definition of "cause," "cause" as defined in such
agreement or, if such agreement contains no such definition, a material breach
by the Participant of such agreement, or (ii) with respect to any other
Participant, the failure to perform adequately in carrying out such
Participant's employment responsibilities, including any directives from the
Board, or engaging in such behavior in his personal or business life as to lead
the Committee in its reasonable judgment to determine that it is in the best
interests of the Company to terminate his employment.
"Common Stock" shall mean the common stock of the Company, $.01 par
value.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"Committee" shall mean the Compensation and Conflict of Interest
Committee or any other committee of the Board designated by the Board to
administer the Plan and composed of not less than three outside directors, as
described in Section 162(m) of the Code, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "disinterested person" within the
meaning of Rule 16b-3 as in effect at April 30, 1991.
"Common Shares" shall mean any or all, as applicable, of the Common
Stock and such other securities or property as may become the subject of Awards,
or become subject to Awards, pursuant to an adjustment made under Section 4(b)
of the Plan and any other securities of the Company or any Affiliate or any
successor that may be so designated by the Committee.
"Employee" shall mean any employee of the Company or of any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean (A) with respect to any property other
than the Common Shares, the fair market value of such property determined by
such methods or procedures as shall be established from time to time by the
Committee; and (B) with respect to the Common Shares, the last sale price
regular way on the date of reference, or, in case no sale takes place on such
date, the average of the high bid and low asked prices, in either case on the
principal national securities exchange on which the Common Shares are listed or
admitted to trading, or if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last sale price reported on the
National Market System of the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") on such date, or the average of the
closing high bid and low asked prices in the over-the-counter market reported on
NASDAQ on such date, whichever is applicable, or if there are no such prices
reported on NASDAQ on such date, as furnished to the Committee by any New York
Stock Exchange member selected from time to time by the Committee for such
purpose. If there is no bid or asked price reported on any such date, the Fair
Market Value shall be determined by the Committee in accordance with the
regulations promulgated under Section 2031 of the Code, or by any other
appropriate method selected by the Committee.
"Good Reason", as used in connection with the termination of a
Participant's employment, shall mean (i) with respect to any Participant
employed under a written employment agreement with the Company or an Affiliate
of the Company, "good reason" as defined in such written agreement or, if such
agreement contains no such definition, a material breach by the Company of such
agreement, or (ii) with respect to any other Participant, a failure by the
Company to pay such Participant any amount otherwise vested and due and a
continuation of such failure for 30 business days following notice to the
Company thereof.
"Incentive Stock Option" shall mean an option granted under Section
6(a) of the Plan that is intended to meet the requirements of Section 422 of the
Code or any successor provision thereto.
"Non-Qualified Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is not intended to be an Incentive Stock Option.
Any stock option granted by the Committee which is not designated an Incentive
Stock Option shall be deemed a Non-Qualified Stock Option.
"Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
"Other Stock-Based Award" shall mean any right granted under Section
6(e) of the Plan.
"Participant" shall mean any individual granted an Award under the
Plan.
"Performance Award" shall mean any right granted under Section 6(d) of
the Plan.
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"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
"Released Securities" shall mean securities that were Restricted
Securities but with respect to which all applicable restrictions have expired,
lapsed or been waived in accordance with the terms of the Plan or the applicable
Award Agreement.
"Restricted Securities" shall mean any Common Shares granted under
Section 6(c) of the Plan, any right granted under Section 6(c) of the Plan that
is denominated in Common Shares or any other Award under which issued and
outstanding Common Shares are held subject to certain restrictions.
"Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, or any successor rule or regulation
thereto as in effect from time to time.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock Appreciation Right" shall mean any right granted under Section
6(b) of the Plan.
SECTION 3. Administration. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee or other individual under the Plan; (iii) determine the number
and classification of Common Shares to be covered by (or with respect to which
payments, rights or other matters are to be calculated in connection with)
Awards; (iv) determine the terms and conditions of any Award; (v) determine
whether, to what extent, and under what circumstances Awards may be settled or
exercised in cash, Common Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended, and the method or methods by
which Awards may be settled, exercised, canceled, forfeited or suspended; (vi)
determine requirements for the vesting of Awards or performance criteria to be
achieved in order for Awards to vest; (vii) determine whether, to what extent
and under what circumstances cash, Common Shares, other securities, other
Awards, other property and other amounts payable with respect to an Award under
the Plan shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (viii) interpret and administer the Plan and any
instrument or agreement relating to, or Award made under, the Plan; (ix)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (x) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan or any Award shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder or beneficiary
of any Award, any shareholder and any Employee. Notwithstanding the foregoing,
the maximum number of Awards which may be granted to any one Participant under
this Plan shall not exceed 150,000 Common Shares, subject to the adjustments
provided in Section 4(b) hereof and no Awards under this Plan shall be granted
after December 31, 2004.
SECTION 4. Common Shares Available for Awards.
(a) Common Shares Available. Subject to adjustment as provided in
Section 4(b):
(i) Calculation of Number of Common Shares Available. The
number of Common Shares available for granting Awards under the Plan shall
be 500,000, any or all of which may be or may be based on Common Stock, any
other security which becomes the subject of Awards, or any combination
thereof. Initially 500,000 shares of Common Stock shall be reserved for
Awards hereunder. Further, if, after the effective date of the Plan, any
Common Shares covered by an Award granted under the Plan or to which such
an Award relates, are forfeited, or if an Award otherwise terminates or is
canceled without the delivery of Shares or of other consideration, then the
Common Shares covered by such Award or to which such Award relates, or the
number of Common Shares otherwise counted against the aggregate number of
Common Shares available under the Plan with respect to such Award, to the
extent of any such forfeiture, termination or cancellation, shall again be,
or shall become, available for granting Awards under the Plan.
(ii) Accounting for Awards. For purposes of this Section 4,
(A) if an Award is denominated in or based upon Common Shares,
the number of Common Shares covered by such Award or to which such
Award relates shall be counted on the date of grant of such Award
against the aggregate number of Common Shares available for granting
Awards under the Plan and against the maximum number of Awards
available to any Participant; and
(B) Awards not denominated in Common Shares may be counted
against the aggregate number of Common Shares available for granting
Awards under the Plan and against the maximum number of Awards
available to any participant in such amount and at such time as the
Committee shall determine under procedures adopted by the Committee
consistent with the purposes of the Plan;
provided, however, that Awards that operate in tandem with (whether granted
simultaneously with or at a different time from), or that are substituted
for, other Awards may be counted or not counted under procedures adopted by
the Committee in order to avoid double counting. Any Common Shares that
are delivered by the Company, and any Awards that are granted by, or become
obligations of, the Company, through the assumption by the Company or an
Affiliate of, or in substitution for, outstanding awards previously granted
by an acquired company shall, in the case of Awards granted to Participants
who are officers or directors of the Company for purposes of Section 16 of
the Exchange Act, be counted against the Common Shares available for
granting Awards under the Plan.
(iii) Sources of Common Shares Deliverable Under Awards. Any
Common Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Common Shares or of treasury Common
Shares.
(b) Adjustments. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Common
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Shares or other securities of the
Company, issuance of warrants or other rights to purchase Common Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Common Shares such that an adjustment is determined by the Committee
to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of Common Shares (or
other securities or property) which thereafter may be made the subject of
Awards, (ii) the number and kind of Common Shares (or other securities or
property) subject to outstanding Awards, and (iii) the grant or exercise price
with respect to any Award or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, however, that the
number of Common Shares subject to any Award denominated in Common Shares shall
always be a whole number.
In connection with any merger or consolidation in which the Company is
not the surviving corporation and which results in the holders of the
outstanding voting securities of the Company (determined immediately prior to
such merger or consolidation) owning less than a majority of the outstanding
voting securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a majority
of the then outstanding voting securities of the Company, all outstanding
Options under the Plan shall become exercisable in full, notwithstanding any
other provision of the Plan or of any outstanding options granted thereunder, on
and after (i) the fifteenth day prior to the effective date of such merger,
consolidation, sale, transfer or acquisition or (ii) the date of commencement of
such tender offer or exchange offer, as the case may be. The provisions of the
foregoing sentence shall apply to any outstanding Options which are Incentive
Stock Options to the extent permitted by Section 422(d) of the Code and such
outstanding Options in excess thereof shall, immediately upon the occurrence of
the event described in clause (i) or (ii) of the foregoing sentence, be treated
for all purposes of the Plan as Non-Qualified Stock Options and shall be
immediately exercisable as such as provided in the foregoing sentence.
SECTION 5. Eligibility. Any Employee, including any officer or
employee-director of the Company or of any Affiliate, and any consultant of, or
other individual providing services to, the Company or any Affiliate shall be
eligible to be designated a Participant. A non-employee director shall be
eligible to receive Non-Qualified Stock Options under the Plan.
SECTION 6. Awards.
(a) Options. The Committee is hereby authorized to grant to
eligible individuals options to purchase Common Shares (each, an "Option") which
shall contain the following terms and conditions and with such additional terms
and conditions, in either case not inconsistent with the provisions of the Plan,
as the Committee shall determine:
(i) Exercise Price. The purchase price per Common Share
purchasable under an Option shall be determined by the Committee; provided,
however, that such purchase price shall not be less than one hundred
percent (100%) of the Fair Market Value of a Common Share on the date of
grant of such Option, or such other price as required under Subsection
6(a)(iv) hereof.
(ii) Time and Method of Exercise. Subject to the terms of
Section 6(a)(iii), the Committee shall determine the time or times at which
an Option may be exercised in whole or in part, and the method or methods
by which, and the form or forms (including, without limitation, cash,
Common Shares, outstanding Awards, or other property, or any combination
thereof, having a Fair Market Value on the exercise date equal to the
relevant exercise price) in which, payment of the exercise price with
respect thereto may be made or deemed to have been made.
(iii) Exercisability Upon Death, Retirement and Termination of
Employment. Subject to the condition that no Option may be exercised in whole or
in part after the expiration of the Option period specified in the applicable
Award Agreement:
(A) Subject to the terms of paragraph (D) below, upon the death of a
Participant while employed or within 3 months of retirement or disability
as defined in paragraph (B) below, the person or persons to whom such
Participant's rights with respect to any Option held by such Participant
are transferred by will or the laws of descent and distribution may, prior
to the expiration of the earlier of: (1) the outside exercise date
determined by the Committee at the time of granting the Option, or (2) nine
months after such Participant's death, purchase any or all of the Common
Shares with respect to which such Participant was entitled to exercise such
Option immediately prior to such Participant's death, and any Options not
so exercisable will lapse on the date of such Participant's death;
(B) Subject to the terms of paragraph (D) below, upon termination of
a Participant's employment with the Company (x) as a result of retirement
pursuant to a retirement plan of the Company or an Affiliate or disability
(as determined by the Committee) of such Participant, (y) by the Company
other than for Cause, or (z) by the Participant with Good Reason, such
Participant may, prior to the expiration of the earlier of: (1) the outside
exercise date determined by the Committee at the time of granting the
Option, or (2) three months after the date of such termination, purchase
any or all of the Common Shares with respect to which such Participant was
entitled to exercise any Options immediately prior to such termination, and
any Options not so exercisable will lapse on such date of termination;
(C) Subject to the terms of paragraph (D) below, upon termination of
a Participant's employment with the Company under any circumstances not
described in paragraphs (A) or (B) above, such Participant's Options shall
be canceled to the extent not theretofore exercised;
(D) Upon (i) the death of the Participant, or (ii) termination of
the Participant's employment with the Company (x) by the Company other than
for Cause (y) by the Participant with Good Reason or (z) as a result of
retirement or disability as defined in paragraph (B) above, the Company
shall have the right to cancel all of the Options such Participant was
entitled to exercise at the time of such death or termination (subject to
the terms of paragraphs (A) or (B) above) for a payment in cash equal to
the excess, if any, of the Fair Market Value of one Common Share on the
date of death or termination over the exercise price of such Option for one
Common Share times the number of Common Shares subject to the Option and
exercisable at the time of such death or termination; and
(E) Upon expiration of the respective periods set forth in each of
paragraphs (A) through (C) above, the Options of a Participant who has died
or whose employment has been terminated shall be canceled to the extent not
theretofore canceled or exercised.
(F) For purposes of paragraphs (A) through (D) above, the period of
service of an individual as a director or consultant of the Company or an
Affiliate shall be deemed the period of employment.
(iv) Incentive Stock Options. The following provisions shall
apply only to Incentive Stock Options granted under the Plan:
(A) No Incentive Stock Option shall be granted to any eligible
Employee who, at the time such Option is granted, owns securities
possessing more than ten percent (10%) of the total combined voting power
of all classes of securities of the Company or of any Affiliate, except
that such an Option may be granted to such an Employee if at the time the
Option is granted the option price is at least one hundred ten percent
(110%) of the Fair Market Value of the Common Shares (determined in
accordance with Section 2) subject to the Option, and the Option by its
terms is not exercisable after the expiration of five (5) years from the
date the Option is granted; and
(B) To the extent that the aggregate Fair Market Value of the
Common Shares with respect to which Incentive Stock Options (without regard
to this subsection) are exercisable for the first time by any individual
during any calendar year (under all plans of the Company and its
Affiliates) exceeds $100,000, such Options shall be treated as Non-
Qualified Stock Options. This subsection shall be applied by taking Options
into account in the order in which they were granted. If some but not all
Options granted on any one day are subject to this subsection, then such
Options shall be apportioned between Incentive Stock Option and Non-
Qualified Stock Option treatment in such manner as the Committee shall
determine. For purposes of this subsection, the Fair Market Value of any
Common Shares shall be determined, in accordance with Section 2, as of the
date the Option with respect to such Common Shares is granted.
(v) Terms and Conditions of Options Granted to Directors.
Notwithstanding any provision contained in the Plan to the contrary, during any
period when any member of the Committee shall not be a "disinterested person" as
defined in Rule 16b-3, as such Rule was in effect at April 30, 1991, then, the
terms and conditions of Options granted under the Plan to any director of the
Company during such period shall be as follows:
(1) The price at which each Common Share subject to an
option may be purchased shall, subject to any adjustments which may be made
pursuant to Section 4, in no event be less than the Fair Market Value of a
Common Share on the date of grant, and provided further that in the event
the option is intended to be an Incentive Stock Option and the optionee
owns on the date of grant securities possessing more than ten percent (10%)
of the total combined voting power of all classes of securities of the
Company or of any Affiliate, the price per share shall not be less than one
hundred ten percent (110%) of the Fair Market Value per Common Share on the
date of grant.
(2) The Option may be exercised to purchase Common Shares
covered by the Option not sooner than six (6) months following the date of
grant. The Option shall terminate and no Common Shares may be purchased
thereunder more than ten (10) years after the date of grant, provided that
if the Option is intended to be an Incentive Stock Option and the Optionee
owns on the date of grant securities possessing more than ten percent (10%)
of the total combined voting power of all classes of securities of the
Company or of any Affiliate, the Option shall terminate and no Common
Shares may be purchased thereunder more than five (5) years after the date
of grant.
(3) The maximum number of Common Shares which may be subject
to options granted to all directors pursuant to this Section 5(j)
shall be 500,000 shares in the aggregate. The maximum number of Common
Shares which may be subject to options granted to any director of the
Company shall be 150,000 shares.
(b) Stock Appreciation Rights. The Committee is hereby authorized
to grant to eligible Employees "Stock Appreciation Rights." Each Stock
Appreciation Right shall consist of a right to receive the excess of (i) the
Fair Market Value of one Common Share on the date of exercise or, if the
Committee shall so determine in the case of any such right other than one
related to any Incentive Stock Option, at any time during a specified period
before or after the date of exercise over (ii) the grant price of the right as
specified by the Committee, which shall not be less than one hundred percent
(100%) of the Fair Market Value of one Common Share on the date of grant of the
Stock Appreciation Right (or, if the Committee so determines, in the case of any
Stock Appreciation Right retroactively granted in tandem with or in substitution
for another Award, on the date of grant of such other Award). Subject to the
terms of the Plan and any applicable Award Agreement, the grant price, term,
methods of exercise, methods of settlement, and any other terms and conditions
of any Stock Appreciation Right granted under the Plan shall be as determined by
the Committee. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it may deem appropriate.
(c) Restricted Securities.
(i) Issuance. The Committee is hereby authorized to grant to
eligible Employees "Restricted Securities" which shall consist of the right
to receive, by purchase or otherwise, Common Shares which are subject to
such restrictions as the Committee may impose (including, without
limitation, any limitation on the right to vote such Common Shares or the
right to receive any dividend or other right or property), which
restrictions may lapse separately or in combination at such time or times,
in such installments or otherwise, as the Committee may deem appropriate.
(ii) Registration. Restricted Securities granted under the
Plan may be evidenced in such manner as the Committee may deem appropriate,
including, without limitation, book-entry registration or issuance of a
stock certificates or certificates. In the event any stock certificate is
issued in respect of Restricted Securities granted under the Plan, such
certificate shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Securities.
(iii) Forfeiture. Except as otherwise determined by the
Committee, upon termination of a Participant's employment for any reason
during the applicable restriction period, all of such Participant's
Restricted Securities which had not become Released Securities by the date
of termination of employment shall be forfeited and reacquired by the
Company; provided, however, that the Committee may, when it finds that a
waiver would be in the best interests of the Company, waive in whole or in
part any or all remaining restrictions with respect to such Participant's
Restricted Securities. Unrestricted Common Shares, evidenced in such
manner as the Committee shall deem appropriate, shall be issued to the
holder of Restricted Securities promptly after such Restricted Securities
become Released Securities.
(d) Performance Awards. The Committee is hereby authorized to
grant to eligible Employees "Performance Awards." Each Performance Award shall
consist of a right, (i) denominated or payable in cash, Common Shares, other
securities or other property (including, without limitation, Restricted
Securities), and (ii) which shall confer on the holder thereof rights valued as
determined by the Committee and payable to, or exercisable by, the holder of the
Performance Award, in whole or in part, upon the achievement of such performance
goals during such performance periods as the Committee shall establish. Subject
to the terms of the Plan and any applicable Award Agreement, the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award granted, the termination
of a Participant's employment and the amount of any payment or transfer to be
made pursuant to any Performance Award shall be determined by the Committee and
by the other terms and conditions of any Performance Award. The Committee shall
issue performance goals prior to the commencement of the performance period to
which such performance goals pertain.
(e) Other Stock-Based Awards. The Committee is hereby authorized to
grant to eligible Employees "Other Stock Based Awards." Each Other Stock-Based
Award shall consist of a right (i) which is other than an Award or right
described in Section 6(a), (b), (c) or (d) above and (ii) which is denominated
or payable in, valued in whole or in part by reference to, or otherwise based on
or related to, Common Shares (including, without limitation, securities
convertible into Common Shares) as are deemed by the Committee to be consistent
with the purposes of the Plan; provided, however, that such right shall comply,
to the extent deemed desirable by the Committee, with Rule 16b-3 and applicable
law. Subject to the terms of the Plan and any applicable Award Agreement, the
Committee shall determine the terms and conditions of Other Stock-Based Awards.
Common Shares or other securities delivered pursuant to a purchase right granted
under this Section 6(e) shall be purchased for such consideration, which may be
paid by such method or methods and in such form or forms, including, without
limitation, cash, Common Shares, other securities, other Awards, other property,
or any combination thereof, as the Committee shall determine.
(f) General.
(i) No Cash Consideration for Awards. Awards may be granted
for no cash consideration or for such minimal cash consideration as may be
required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards
may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for any other Award, except
that in no event shall an Incentive Stock Option be granted together with a
Non-Qualified Stock Option in such a manner that the exercise of one Option
affects the right to exercise the other. Awards granted in addition to or
in tandem with other Awards may be granted either at the same time as or at
a different time from the grant of such other awards.
(iii) Forms of Payment Under Awards. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be
made by the Company or an Affiliate upon the grant, exercise or payment of
an Award may be made in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards, or other property, or any combination thereof,
and may be made in a single payment or transfer, in installments, or on a
deferred basis, in each case in accordance with rules and procedures
established by the Committee. Such rules and procedures may include,
without limitation, provisions for the payment or crediting of reasonable
interest on installment or deferred payments. In accordance with the
above, the Committee may elect (i) to pay a Participant (or such
Participant's permitted transferee) upon the exercise of an Option in whole
or in part, in lieu of the exercise thereof and the delivery of Common
Shares thereunder, an amount of cash equal to the excess, if any, of the
Fair Market Value of one Common Share on the date of such exercise over the
exercise price of such
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Option for one Common Share times the number of Common Shares subject to the
Option or portion thereof so exercised or (ii) to settle other stock denominated
Awards in cash.
(iv) Limits on Transfer of Awards.
(A) No award (other than Released Securities), and no right
under any such Award, may be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a Participant otherwise than by
will or by the laws of descent and distribution (or, in the case of
Restricted Securities, to the Company) and any such purported assignment,
alienation, pledge, attachment, sale or other transfer or encumbrance shall
be void and unenforceable against the Company or any Affiliate.
(B) Each award, and each right under any Award, shall be
exercisable, during the Participant's lifetime only by the Participant or
if permissible under applicable law, by the Participant's guardian or legal
representative.
(v) Terms of Awards. The term of each Award shall be for
such period as may be determined by the Committee; provided, however, that
in no event shall the term of any Option exceed a period of ten years from
the date of its grant.
(vi) Rule 16b-3 Six-Month Limitations. To the extent
required in order to maintain the exemption provided under Rule 16b-3 only,
any equity security offered pursuant to the Plan must be held for at least
six months after the date of grant, and with respect to any derivative
security issued pursuant to the Plan, at least six months must elapse from
the date of acquisition of such derivative security to the date of
disposition of the derivative security (other than upon exercise or
conversion) or its underlying equity security. Terms used in the preceding
sentence shall, for the purposes of such sentence only, have the meanings,
if any, assigned or attributed to them under Rule 16b-3.
(vii) Common Share Certificates. All certificates for Common
Shares delivered under the Plan pursuant to any Award of the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Common Shares are then
listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
(viii) Delivery of Common Shares or Other Securities and
Payment by Participant of Consideration. No Common Shares or other
securities shall be delivered pursuant to any Award until payment in full
of any amount required to be paid pursuant to the Plan or the applicable
Award Agreement is received by the Company. Such payment may be made by
such method or methods and in such form or forms as the Committee shall
determine, including, without limitation, cash, Common Shares, other
securities, other Awards or other property, or any combination thereof;
provided that the combined value, as determined by the Committee, of all
cash and cash equivalents and the Fair Market Value of any such Common
Shares or other property so tendered to the Company, as of the date of such
tender, is at least equal to the full amount required to be paid pursuant
to the Plan or the applicable Award Agreement to the Company.
SECTION 7. Amendments; Adjustments and Termination. Except to the
extent prohibited by applicable law and unless otherwise expressly provided in
an Award Agreement or in the Plan:
(a) Amendments to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of any stockholder,
Participant, other holder or beneficiary of an Award, or other Person; provided,
however, that, subject to the Company's rights to adjust Awards under Sections
7(c) and (d), any amendment, alteration, suspension, discontinuation, or
termination that would impair the rights of any Participant, or any other holder
or beneficiary of any Award theretofore granted, shall not to that extent be
effective without the consent of such Participant, other holder or beneficiary
of an Award, as the case may be; and provided further, however, that
notwithstanding any other provision of the Plan or any Award Agreement, without
the approval of the stockholders of the Company no such amendment, alteration,
suspension, discontinuation, or termination shall be made that would:
(i) increase the total number of Common Shares available for
Awards under the Plan, except as provided in Section 4 hereof; or
(ii) otherwise cause the Plan to cease to comply with any tax
or regulatory requirement, including for these purposes any approval or
other requirement which is or would be a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act.
(b) Amendments to Awards. The Committee may waive any conditions
or rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided, however, that, subject to the Company's rights to adjust Awards under
Sections 7(c) and (d), any amendment, alteration, suspension, discontinuation,
cancellation or termination that would impair the rights of any Participant or
holder or beneficiary of any Award theretofore granted, shall not to that extent
be effective without the consent of such Participant or holder or beneficiary of
an Award, as the case may be.
(c) Adjustment of Awards Upon Certain Acquisitions. In the event
the Company or any Affiliate shall assume outstanding employee awards or the
right or obligation to make future such awards in connection with the
acquisition of another business or another corporation or business entity, the
Committee may make such adjustments, not inconsistent with the terms of the
Plan, in the terms of Awards as it shall deem appropriate in order to achieve
reasonable comparability or other equitable relationship between the assumed
awards and the Awards granted under the Plan as so adjusted.
(d) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Non-recurring Events. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or non recurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
SECTION 8. General Provisions.
(a) No Rights to Awards. No Employee or other Person shall have
any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of
Employees, or holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to each recipient.
(b) Delegation. Subject to the terms of the Plan and applicable
law, the Committee may delegate to one or more officers or managers of the
Company or any Affiliate, or to a committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify, waive rights with respect
to, alter, discontinue, suspend, or terminate Awards; provided, however, that,
no such delegation shall be permitted with respect to Awards held by Employees
who are officers or directors of the Company for purposes of Section 16 of the
Exchange Act, or any successor section thereto or who are otherwise subject to
such Section.
(c) Correction of Defects, Omissions, and Inconsistencies. The
Committee may correct any defect, supply any omission, or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry the Plan into effect.
(d) Withholding. The Company or any Affiliate shall be authorized
to withhold from any Award granted, from any payment due or transfer made under
any Award or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Common Shares, other securities, other Awards,
or other property) of withholding taxes due in respect of an Award, its
exercise, or any payment or transfer under such Award or under the Plan and to
take such other action as may be necessary in the opinion of the Company or
Affiliate to satisfy all obligations for the payment of such taxes.
(e) No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company or any Affiliate from adopting or
continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(f) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability, or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(g) Governing Law. The validity, construction, and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Delaware and applicable Federal law.
(h) Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or as to any Person or Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan or
the Award, such provision shall be stricken as to such jurisdiction, Person or
Award and the remainder of the Plan and any such Award shall remain in full
force and effect.
(i) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such
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right shall be no greater than the right of any unsecured general creditor of
the Company or any Affiliate.
(j) No Fractional Common Shares. No fractional Common Shares shall
be issued or delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Common Shares or whether such
fractional Common Shares or any rights thereto shall be canceled, terminated, or
otherwise eliminated.
(k) Headings. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. Adoption, Approval and Effective Date of the Plan. The
Plan shall be considered adopted and shall become effective on the date the Plan
is approved by the Board.