Exhibit 10.33
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
1998 RESTRICTED STOCK PLAN
TABLE OF CONTENTS
Page
1. PURPOSE...................................................1
2. DEFINITIONS...............................................1
3. ADMINISTRATION OF THE PLAN................................3
3.1. Board................................................3
3.2. Committee............................................4
3.3. Grants...............................................4
3.4. No Liability.........................................5
4. STOCK SUBJECT TO THE PLAN.................................5
4.1. Aggregate Limitation.................................5
4.2. Payment Shares.......................................6
4.3. Per-Holder Limitation................................6
5. EFFECTIVE DATE AND TERM OF THE PLAN.......................6
5.1. Effective Date.......................................6
5.2. Term.................................................6
6. PERMISSIBLE HOLDERS.......................................6
6.1. Employees and Service Providers......................6
6.2. Successive Grants....................................7
7. AWARD AGREEMENT...........................................7
8. RESTRICTED STOCK..........................................7
8.1. Grant of Restricted Stock............................7
8.2. Restrictions.........................................7
8.3. Restricted Stock Certificates........................8
8.4. Rights of Holders of Restricted Stock................8
8.5. Termination of Employment or Other Relationship
for a Reason Other than Death or Disability.........8
8.6. Rights in the Event of Death.........................9
8.7. Rights in the Event of Disability....................9
8.8. Delivery of Shares and Payment Therefor..............9
9. PARACHUTE LIMITATIONS.....................................9
10. REQUIREMENTS OF LAW.......................................10
11. AMENDMENT AND TERMINATION OF THE PLAN.....................11
12. EFFECT OF CHANGES IN CAPITALIZATION.......................11
12.1. Changes in Stock....................................11
12.2. Reorganization, Sale of Assets or Sale of Stock.....12
12.3. Adjustments.........................................12
12.4. No Limitations on Company...........................12
13. DISCLAIMER OF RIGHTS......................................13
14. NONEXCLUSIVITY OF THE PLAN................................13
15. WITHHOLDING TAXES.........................................13
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16. CAPTIONS.................................................14
17. OTHER PROVISIONS.........................................14
18. NUMBER AND GENDER........................................14
19. SEVERABILITY.............................................14
20. POOLING..................................................14
21. GOVERNING LAW............................................15
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PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
1998 RESTRICTED STOCK PLAN
Primus Telecommunications Group, Incorporated, a Delaware corporation (the
"Company"), sets forth herein the terms of its 1998 Restricted Stock Plan (the
"Plan") as follows:
1. PURPOSE
The Plan is intended to enhance the Company's ability to attract and retain
highly qualified officers, key employees and other persons, and to motivate such
officers, key employees and other persons to serve the Company and its
affiliates (as defined herein) and to expend maximum effort to improve the
business results and earnings of the Company, by providing to such officers, key
employees and other persons an opportunity to acquire or increase a direct
proprietary interest in the operations and future success of the Company. To
this end, the Plan provides for the grant of Restricted Stock in accordance with
the terms hereof.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:
2.1 "affiliate" of, or person "affiliated" with, a person means any company
or other trade or business that controls, is controlled by or is under common
control with such person within the meaning of Rule 405 of Regulation C under
the Securities Act.
2.2 "Award Agreement" means the restricted stock agreement between the
Company and a Holder that evidences and sets out the terms and conditions of a
Grant.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Code" means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended.
2.5 "Committee" means a committee of, and designated from time to time by
resolution of, the Board.
2.6 "Company" means Primus Telecommunications Group, Incorporated
2.7 "Effective Date" means the date designated by the Board in its
resolution adopting the Plan.
2.8 "Exchange Act" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended.
2.9 "Fair Market Value" means the value of each share of Stock subject to
the Plan determined as follows: if on the Grant Date or other determination
date the shares of Stock are listed on an established national or regional stock
exchange, are admitted to quotation on the National Association of Securities
Dealers Automated Quotation System, or are publicly traded on an established
securities market, the Fair Market Value of the shares of Stock shall be the
closing price of the shares of Stock on such exchange or in such market (the
highest such closing price if there is more than one such exchange or market) on
the trading day immediately preceding the Grant Date (or on the Grant Date, if
so specified by the Committee or the Board) or such other determination date (or
if there is no such reported closing price, the Fair Market Value shall be the
mean between the highest bid and lowest asked prices or between the high and low
sale prices on such trading day) or, if no sale of the shares of Stock is
reported for such trading day, on the next preceding day on which any sale shall
have been reported. If the shares of Stock are not listed on such an exchange,
quoted on such System or traded on such a market, Fair Market Value shall be
determined by the Board in good faith.
2.10 "Grant" means an award of Restricted Stock under the Plan.
2.11 "Grant Date" means, as determined by the Board or authorized
Committee, (i) the date as of which the Board or such Committee approves a
Grant, (ii) the date on which the recipient of a Grant first becomes eligible to
receive a Grant under Section 6 hereof or (iii) such other date as may be
specified by the Board or such Committee.
2.12 "Holder" means a person who holds Restricted Stock under the Plan.
2.13 "Outside Director" means a member of the Board who is not an officer
or employee of the Company or any Subsidiary.
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2.14 "Plan" means this Primus Telecommunications Group, Incorporated 1998
Restricted Stock Plan, as amended from time to time.
2.15 "Reporting Person" means a person who is required to file reports
under Section 16(a) of the Exchange Act.
2.16 "Restricted Period" means the period during which Restricted Stock is
subject to restrictions or conditions pursuant to Section 8.2 hereof.
2.17 "Restricted Stock" means shares of Stock, awarded to a Holder
pursuant to Section 8 hereof, that are subject to restrictions and to a risk of
forfeiture.
2.18 "Securities Act" means the Securities Act of 1933, as now in effect
or as hereafter amended.
2.19 "Service Provider" means a consultant, agent or adviser to the
Company, a manager of the Company's properties or affairs, or other similar
service provider or affiliate of the Company, and employees of any of the
foregoing, as such persons may be designated from time to time by the Board
pursuant to Section 6 hereof.
2.20 "Stock" means the common stock, par value $0.01 per share, of the
Company.
2.21 "Subsidiary" means any "subsidiary corporation" of the Company within
the meaning of Section 424(f) of the Code.
3. ADMINISTRATION OF THE PLAN
3.1. Board.
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the Company's certificate of
incorporation, bylaws and applicable law. The Board shall have full power and
authority to take all actions and to make all determinations required or
provided for under the Plan, any Grant or any Award Agreement, and shall have
full power and authority to take all such other actions and make all such other
determinations not inconsistent with the specific terms and provisions of the
Plan that the Board deems to be necessary or appropriate to the administration
of the Plan, any Grant or any Award Agreement. All such actions and
determinations shall be by the affirmative vote of a majority of the members of
the Board present at a meeting or by unanimous consent of the Board executed in
writing in accordance with the Company's certificate of
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incorporation, bylaws and applicable law. The interpretation and construction by
the Board of any provision of the Plan, any Grant or any Award Agreement shall
be final and conclusive. As permitted by law, the Board may delegate its
authority under the Plan to a member of the Board or an executive officer of the
Company; provided, however, that, unless otherwise provided resolution by the
Board, only the Board or the Committee may make a Grant to an executive officer
of the Company and establish the number of shares of Stock that can be subject
to Grants with respect to any fiscal period.
3.2. Committee.
The Board from time to time may delegate to a Committee such powers
and authorities related to the administration and implementation of the Plan, as
set forth in Section 3.1 hereof and in other applicable provisions, as the Board
shall determine, consistent with the Company's certificate of incorporation,
bylaws and applicable law. In the event that the Plan, any Grant or any Award
Agreement provides for any action to be taken or determination to be made by the
Board, such action may be taken by or such determination may be made by the
Committee if the power and authority to do so has been delegated to the
Committee by the Board as provided for in this Section 3.2. Unless otherwise
expressly determined by the Board, any such action or determination by the
Committee shall be final, binding and conclusive. As permitted by law, the
Committee may delegate the authority delegated to it under the Plan to a member
of the Board of Directors or an executive officer of the Company; provided,
however, that, unless otherwise provided by the Board, only the Board or the
Committee may make a Grant to an executive officer of the Company and establish
the number of shares of Stock that can be subject to Grants during any fiscal
period.
3.3. Grants.
Subject to the other terms and conditions of the Plan, the Board shall have
full and final authority (i) to designate Holders, (ii) to determine the types
of Grants to be made to a Holder, (iii) to determine the number of shares of
Stock to be subject to a Grant, (iv) to establish the terms and conditions of
each Grant, including, but not limited to, the nature and duration of any
restriction or condition (or provision for lapse thereof including lapse
relating to a change in control of the Company) relating to the vesting,
transfer or forfeiture of a Grant or the shares of Stock subject thereto; (v) to
prescribe the form of each Award Agreement evidencing a Grant, (vi) to make
Grants alone, in addition to, in tandem with, or in substitution or exchange for
any other Grant or any other award granted under another plan of the Company or
a Subsidiary, and (vii) to amend, modify or supplement the terms of any
outstanding Grant. Such authority specifically includes the authority, in order
to effectuate the purposes of the Plan but without amending the Plan, to modify
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Grants to eligible individuals who are foreign nationals or are individuals who
are employed outside the United States to recognize differences in local law,
tax policy, or custom. As a condition to any subsequent Grant, the Board shall
have the right, at its discretion, to require Holders to return to the Company
any Grants previously awarded under the Plan. Subject to the terms and
conditions of the Plan, any such subsequent Grant shall be upon such terms and
conditions as are specified by the Board at the time the subsequent Grant is
made. The Company may retain the right in an Award Agreement to cause a
forfeiture of the gain realized by a Holder on account of actions taken by the
Holder in violation or breach of or in conflict with any non-competition
agreement, any agreement prohibiting solicitation of employees or clients of the
Company or any affiliate thereof or any confidentiality obligation with respect
to the Company or any affiliate thereof or otherwise in competition with the
Company, to the extent specified in such Award Agreement applicable to the
Holder. Furthermore, the Company may annul a Grant if the Holder is an employee
of the Company or an affiliate thereof and is terminated for "cause" and may
retain the right in an Award Agreement to annul a Grant if Holder's service
relationship with the Company is terminated pursuant to the terms of the
Holder's sales agent agreement. The Board may permit or require the deferral of
any award payment, subject to such rules and procedures as it may establish,
which may include provisions for the payment or crediting of interest, or
dividend equivalents, including converting such credits into deferred Stock
equivalents.
3.4. No Liability.
No member of the Board or of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Grant or
Award Agreement.
4. STOCK SUBJECT TO THE PLAN
4.1. Aggregate Limitation.
Subject to adjustment as provided in Section 12 hereof, the aggregate
number of shares of Stock available for issuance under the Plan pursuant to
Grants shall be equal to seven hundred fifty thousand (750,000). Any shares of
Stock granted under the Plan which are forfeited to the Company because of the
failure to meet an award contingency or condition shall again be available for
delivery pursuant to new awards granted under the Plan. Any share of Stock
covered by an award (or portion of an award) granted under the Plan which is
forfeited or canceled, expires or is settled in cash, shall be deemed not to
have been delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan. Shares of Stock issued
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under the Plan through the settlement, assumption or substitution of outstanding
awards or obligations to grant future awards resulting from the acquisition of
another entity shall not reduce the maximum number of shares available for
delivery under the Plan.
4.2. Payment Shares.
Subject to the overall limitation on the number of shares of Stock that may
be delivered under the Plan, the Board may use available shares of Stock as the
form of payment for compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Company, including the plan of any
entity acquired by the Company.
4.3. Per-Holder Limitation.
During any time when the Company has a class of equity security registered
under Section 12 of the Exchange Act, the maximum number of shares of Restricted
Stock that may be awarded under the Plan to any person eligible for a Grant
under Section 6 hereof is two hundred thousand (200,000) in a calendar year
(subject to adjustment as provided in Section 12 hereof); and
5. EFFECTIVE DATE AND TERM OF THE PLAN
5.1. Effective Date.
The Plan shall be effective as of the Effective Date.
5.2. Term.
The Plan has no termination date.
6. PERMISSIBLE HOLDERS
6.1. Employees and Service Providers.
Grants may be made under the Plan to any employee of the Company or any
Subsidiary, to a Service Provider or employee of a Service Provider providing,
or who has provided, services to the Company or any Subsidiary, and to any other
individual whose participation in the Plan is determined by the Board to be in
the best interests of the Company, as the Board shall determine and designate
from time to time; provided, however, that grants shall not be made under the
Plan to Reporting Persons.
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6.2. Successive Grants.
An eligible person may receive more than one Grant, subject to such
restrictions as are provided herein.
7. AWARD AGREEMENT
Each Grant pursuant to the Plan shall be evidenced by an Award Agreement,
in such form or forms as the Board shall from time to time determine. Award
Agreements granted from time to time or at the same time need not contain
similar provisions but shall be consistent with the terms of the Plan.
8. RESTRICTED STOCK
8.1. Grant of Restricted Stock.
The Board from time to time may grant Restricted Stock to persons eligible
to receive Grants under Section 6 hereof, subject to such restrictions,
conditions and other terms as the Board may determine.
8.2. Restrictions.
At the time a Grant of Restricted Stock is made, the Board shall establish
a period of time (the "Restricted Period") applicable to such Restricted Stock.
Unless otherwise determined by the Board or unless the Grant is being made under
another plan, the Restricted Period will be a minimum of one year. Each Grant
of Restricted Stock may be subject to a different Restricted Period. At the
time a Grant of Restricted Stock is made, the Board may, in its sole discretion,
prescribe restrictions in addition to or other than the expiration of the
Restricted Period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any portion of the
Restricted Stock. Such performance objectives shall be established in writing
by the Board by not later than the 90th day of the period of service to which
such performance objectives relate and while the outcome is substantially
uncertain. Performance objectives may be stated either on an absolute or
relative basis and may be based on any of the following criteria: earnings per
share, total stockholder return, operating earnings, growth in assets, return on
equity, return on capital, market share, stock price, net income, cash flow,
sales growth (in general, by type of product and by type of customer), retained
earnings, completion of acquisitions, completion of divestitures and asset
sales, cost or expense reductions, introduction or conversion of products or
services and achievement of specified management information systems objectives.
Performance objectives may include positive results, maintaining the status quo
or limiting economic losses. Subject to the fifth sentence of this Section 8.2,
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the Board also may, in its sole discretion, shorten or terminate the Restricted
Period or waive any other restrictions applicable to all or a portion of the
Restricted Stock. Restricted Stock may not be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the Restricted Period or
prior to the satisfaction of any other restrictions prescribed by the Board with
respect to such Restricted Stock.
8.3. Restricted Stock Certificates.
The Company shall issue, in the name of each Holder to whom Restricted
Stock has been granted, Stock certificates representing the total number of
shares of Restricted Stock granted to the Holder, as soon as reasonably
practicable after the Grant Date. The Secretary of the Company shall hold such
certificates for the Holder's benefit until such time as the shares of
Restricted Stock are forfeited to the Company, or the restrictions lapse.
8.4. Rights of Holders of Restricted Stock.
Unless the Board otherwise provides in an Award Agreement, holders of
Restricted Stock shall have the right to vote such shares of Stock and the right
to receive any dividends declared or paid with respect to such shares of Stock.
The Board may provide that any dividends paid on Restricted Stock must be
reinvested in shares of Stock, which may or may not be subject to the same
vesting conditions and restrictions applicable to such Restricted Stock. All
distributions, if any, received by a Holder with respect to Restricted Stock as
a result of any stock split, stock dividend, combination of shares or other
similar transaction shall be subject to the restrictions applicable to the
original Grant.
8.5. Termination of Employment or Other Relationship for a Reason Other
than Death or Disability.
Unless otherwise provided by the Board, upon the termination of a Holder's
employment or other relationship with the Company and its Subsidiaries, in
either case other than, in the case of individuals, by reason of death or
"permanent and total disability" (within the meaning of Section 22(e)(3) of the
Code), any Restricted Stock held by such Holder that have not vested, or with
respect to which all applicable restrictions and conditions have not lapsed,
shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock, the
Holder shall have no further rights with respect to such Grant, including but
not limited to any right to vote Restricted Stock or any right to receive
dividends with respect to Restricted Stock. Whether a leave of absence or leave
on military or government service shall constitute a termination of employment
or other relationship for purposes of the Plan shall be determined by the Board,
whose determination shall be final and conclusive. For purposes of the Plan, a
termination of employment, service or other relationship shall not be deemed to
occur if the Holder is immediately thereafter employed with the Company or any
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other Service Provider, or is engaged as a Service Provider or an Outside
Director. Whether a termination of a Holder's employment or other relationship
with the Company and its Subsidiaries shall have occurred shall be determined by
the Board, whose determination shall be final and conclusive.
8.6. Rights in the Event of Death.
Unless otherwise provided by the Board, if a Holder dies while employed by
the Company or a Service Provider, or while serving as a Service Provider, all
Restricted Stock granted to such Holder shall fully vest on the date of death
unless the Board provided otherwise in the Award Agreement relating to such
Restricted Stock. Upon such vesting, the shares of Stock represented thereby
shall be deliverable in accordance with the terms of the Plan to the executors,
administrators, legatees or distributees of the Holder's estate.
8.7. Rights in the Event of Disability.
Unless otherwise provided by the Board, if a Holder's employment or other
relationship with the Company or a Service Provider, or service as a Service
Provider, is terminated by reason of the "permanent and total disability"
(within the meaning of Section 22(e)(3) of the Code) of such Holder, such
Holder's then unvested Restricted Stock shall be fully vested. Whether a
termination of employment, service or other relationship is to be considered by
reason of "permanent and total disability" for purposes of the Plan shall be
determined by the Board, whose determination shall be final and conclusive.
8.8. Delivery of Shares and Payment Therefor.
Upon the expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the Board, the restrictions
applicable to Restricted Stock shall lapse, and, upon payment by the Holder to
the Company, in cash or by check, of the greater of (i) the aggregate par value
of the shares of Stock represented by such Restricted Stock or (ii) the purchase
price, if any, specified in the Award Agreement relating to such Restricted
Stock, a certificate for such shares shall be delivered, free of all such
restrictions, to the Holder or the Holder's beneficiary or estate, as the case
may be.
9. PARACHUTE LIMITATIONS
If the Holder is a "disqualified individual" (as defined in Section 280G(c)
of the Code), any Restricted Stock and any other right to receive any payment or
benefit under the Plan shall not vest (i) to the extent that the right to any
payment or benefit, taking into account all other rights, payments or benefits
to or for the Holder, would cause any payment or benefit to the Holder under the
Plan to be considered a "parachute payment" within the meaning of
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Section 280G(b)(2) of the Code as then in effect (a "Parachute Payment") and
(ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax
amounts received by the Holder from the Company under any Award Agreements, the
Plan, and all other rights, payments or benefits to or for the Holder would be
less than the maximum after-tax amount that could be received by the Holder
without causing the payment or benefit to be considered a Parachute Payment. In
the event that, but for the provisions of this Section 9, the Holder would be
considered to have received a Parachute Payment under any Award Agreements that
would have the effect of decreasing the after-tax amount received by the Holder
as described in clause (ii) of the preceding sentence, then the Holder shall
have the right, in the Holder's sole discretion, to designate any rights,
payments or benefits under any Award Agreements, the Plan, any other agreements
and any benefit arrangements to be reduced or eliminated so as to avoid having
the payment or benefit to the Holder under any Award Agreements be deemed to be
a Parachute Payment.
10. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares of Stock
under any Grant if the sale or issuance of such shares of Stock would constitute
a violation by the Holder, any other person exercising a right emanating from
such Grant, or the Company of any provision of any law or regulation of any
governmental authority, including without limitation any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares of
Stock subject to a Grant upon any securities exchange or under any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the issuance or purchase of shares of Stock hereunder, no shares of Stock
may be issued or sold to the Holder or any other person exercising a right
emanating from such Grant unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions
not acceptable to the Company, and any delay caused thereby shall in no way
affect the date of termination of the Grant. Without limiting the generality of
the foregoing, upon the delivery of any Restricted Stock, unless a registration
statement under the Securities Act is in effect with respect to the shares of
Stock covered by such Grant, the Company shall not be required to sell or issue
such shares of Stock unless the Board has received evidence satisfactory to it
that the Holder or any other person exercising a right emanating from such Grant
may acquire such shares of Stock pursuant to an exemption from registration
under the Securities Act. Any such determination by the Board shall be final,
binding, and conclusive. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Securities Act. The
Company shall not be obligated to take
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any affirmative action in order to cause the issuance of shares of Stock
pursuant to the Plan to comply with any law or regulation of any governmental
authority.
11. AMENDMENT AND TERMINATION OF THE PLAN
The Board may, at any time and from time to time, amend, suspend or
terminate the Plan as to any shares of Stock as to which Grants have not been
made. Except as permitted under this Section 11 or Section 12 hereof, no
amendment, suspension or termination of the Plan shall, without the consent of
the Holder, alter or impair rights or obligations under any Grant theretofore
awarded under the Plan.
12. EFFECT OF CHANGES IN CAPITALIZATION
12.1. Changes in Stock.
Subject to Section 12.2 hereof, in the event of any merger, reorganization,
consolidation, recapitalization, separation, liquidation, stock dividend, spin-
off, split-up, share combination or other change in the corporate structure of
the Company affecting the shares of Stock, (a) such adjustment may be made in
the number and class of shares which may be delivered under Section 4 hereof and
the Grant limits under Section 4 hereof, and in the number and class of or price
of shares subject to outstanding Grants as may be determined to be appropriate
and equitable by the Board, in its sole discretion, to prevent dilution or
enlargement of existing rights; and (b) the Board, or, if another legal entity
assumes the obligations of the Company hereunder, the board of directors,
compensation committee or similar body of such other legal entity, shall either
(i) make appropriate provision for the protection of outstanding Grants by the
substitution on an equitable basis of appropriate equity interests or awards
similar to the Grants, provided that the substitution neither enlarges nor
diminishes the value and rights under the Grants, or (ii) upon written notice to
the Holders provide that Grants shall be distributed, canceled or exchanged for
value pursuant to such terms and conditions (including the waiver of any
existing terms or conditions) as shall be specified in the notice. The
conversion of any convertible securities of the Company shall not be treated as
change in the corporate structure of the Company affecting the shares of Stock.
Subject to any contrary language in an Award Agreement evidencing a Grant of
Restricted Stock, any restrictions applicable to such Restricted Stock shall
apply as well to any replacement shares received by the Holder as a result of
the merger, reorganization or other transaction referred to in this Section
12.1.
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12.2. Reorganization, Sale of Assets or Sale of Stock.
Upon the dissolution or liquidation of the Company or upon a merger,
consolidation or reorganization of the Company with one or more other entities
in which the Company is not the surviving entity, or upon a sale of
substantially all of the assets of the Company to another entity, or upon any
transaction (including, without limitation, a merger or reorganization in which
the Company is the surviving entity) approved by the Board that results in any
person or entity (or person or entities acting as a group or otherwise in
concert), owning eighty percent (80%) or more of the combined voting power of
all classes of securities of the Company, all restrictions and conditions
applicable to Restricted Stock shall be deemed to have lapsed, immediately prior
to the occurrence of such transaction. This Section 12.2 shall not apply to any
transaction to the extent that (A) provision is made in writing in connection
with such transaction for the continuation of the Plan or the assumption of the
Restricted Stock theretofore granted, or for the substitution for such
Restricted Stock of new restricted stock covering the stock of a successor
entity, or a parent or subsidiary thereof, with appropriate adjustments as to
the number and kinds of shares, in which event the Plan and Restricted Stock
theretofore granted shall continue in the manner and under the terms so provided
or (B) a majority of the full Board determines that such transaction shall not
trigger application of the provisions of this Section 12.2 subject to Section 20
hereof and limited by any "change in control" provision in any employment
agreement, sales agent agreement or Award Agreement applicable to the Holder.
Upon consummation of any such transaction, the Plan shall terminate, except to
the extent provision is made in writing in connection with such transaction for
the continuation of the Plan.
12.3. Adjustments.
Adjustments under this Section 12 related to shares of Stock or securities
of the Company shall be made by the Board, whose determination in that respect
shall be final and conclusive. No fractional shares or other securities shall
be issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share.
12.4. No Limitations on Company.
The making of Grants pursuant to the Plan shall not affect or limit in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
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13. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Grant or Award Agreement shall be
construed to confer upon any individual the right to remain in the employ or
service of the Company or any affiliate thereof, or to interfere in any way with
any contractual or other right or authority of the Company or Service Provider
either to increase or decrease the compensation or other payments to any
individual at any time, or to terminate any employment or other relationship
between any individual and the Company or any affiliate thereof. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, employment agreement, or sales agent
agreement no Grant awarded under the Plan shall be affected by any change of
duties or position of the Holder, so long as such Holder continues to be a
director, officer, consultant, agent or employee of the Company. The obligation
of the Company to pay any benefits pursuant to the Plan shall be interpreted as
a contractual obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
participant or beneficiary under the terms of the Plan.
14. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of individuals or specifically to a particular
individual or particular individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of Stock options
otherwise than under the Plan.
15. WITHHOLDING TAXES
The Company or a Subsidiary, as the case may be, shall have the right to
deduct from payments of any kind otherwise due to a Holder any federal, state,
or local taxes of any kind required by law to be withheld with respect to the
lapse of restrictions applicable to Restricted Stock. At the time of such
lapse, the Holder shall pay to the Company or the Subsidiary, as the case may
be, any amount that the Company or the Subsidiary may reasonably determine to be
necessary to satisfy such withholding obligation. Subject to the prior approval
of the Company or the Subsidiary, which may be withheld by the Company or the
Subsidiary, as the case may be, in its sole discretion, the
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Holder may elect to satisfy such obligations, in whole or in part, (i) by
causing the Company or the Subsidiary to withhold shares of Stock otherwise
issuable to the Holder or (ii) by delivering to the Company or the Subsidiary
shares of Stock already owned by the Holder. The shares of Stock so delivered or
withheld shall have an aggregate Fair Market Value equal to such withholding
obligations. The Fair Market Value of the shares of Stock used to satisfy such
withholding obligation shall be determined by the Company or the Subsidiary as
of the date that the amount of tax to be withheld is to be determined. A Holder
who has made an election pursuant to this Section 15 may satisfy such Holder's
withholding obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, or other similar requirement.
16. CAPTIONS
The use of captions in the Plan or any Award Agreement is for convenience
of reference only and shall not affect the meaning of any provision of the Plan
or such Award Agreement.
17. OTHER PROVISIONS
Each Grant awarded under the Plan may contain such other terms and
conditions not inconsistent with the Plan as may be determined by the Board, in
its sole discretion.
18. NUMBER AND GENDER
With respect to words used in this Plan, the singular form shall include
the plural form, the masculine gender shall include the feminine gender, as the
context requires.
19. SEVERABILITY
If any provision of the Plan or any Award Agreement shall be finally
determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining provisions hereof and thereof shall be severable and
enforceable in accordance with their terms, and all provisions shall remain
enforceable in any other jurisdiction.
20. POOLING
Notwithstanding anything in the Plan to the contrary, if any right under or
feature of the Plan would cause a transaction to be ineligible for pooling of
interests accounting that would, but for the right or feature hereunder, be
eligible for such accounting treatment, the Board may modify or adjust the right
or feature so that the transaction will be eligible for pooling of interests
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accounting. Such modification or adjustment may include payment of cash or
issuance to a Holder of shares of Stock having a Fair Market Value equal to the
cash value of such right or feature.
21. GOVERNING LAW
The validity and construction of this Plan and the instruments evidencing
the Grants awarded hereunder shall be governed by the laws of the Commonwealth
of Virginia (without giving effect to the choice of law provisions thereof).
* * *
The Plan was duly adopted and approved by the Board of Directors of the
Company as of the 16th day of December, 1998.
/S/
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