THE 1993 INCENTIVE PLAN OF FUEL-TECH N.V.
(As amended through August 3, 1999)
1. Purpose and Effective Date
The purpose of this 1993 Incentive Plan of Fuel-Tech N.V., a Netherlands
Antilles corporation ("the Corporation") is to further the interests of the
Corporation and its shareholders by providing incentives in the form of awards
to such directors, officers, employees, consultants or advisors to the
Corporation or any of its Subsidiaries as the directors shall determine are key
to the continued success and profitability of the Corporation. The Plan is
intended to retain Participants with significant training, experience and
ability; to attract new Participants whose services are considered valuable; and
to encourage such Participants to acquire a proprietary interest in the
Corporation. So that the maximum incentive can be provided each Participant in
the Plan by granting to such participant an Award best suited to the
circumstances, the Plan provides for granting, Non-Qualified Stock Options,
Incentive Stock Options, Stock Appreciation Rights, Restricted Shares,
Performance Awards, Bonuses, Other Awards, or any combination of the foregoing.
This Plan, as amended, shall become effective upon its adoption by the
Board, subject to approval within one (1) year of such adoption by the
Corporation's shareholders, and shall remain effective until terminated by
resolution of the Board.
2. Definitions
As used in this Plan:
(1) "Award" means the grant hereunder of any form of Option, Stock
Appreciation Right, Restricted Share, Performance Award, Other Award, Bonus, or
any other form of Share based or non-Share based Award.
(2) "Award Agreement" means a written agreement between the Corporation and
a Participant that sets forth the terms, conditions and limitations applicable
to an Award.
(3) "Beneficiary" means, where a Participant is with respect to any Award
not forfeitable by its terms on the death of the Participant entitled to any
unpaid portion thereof, such person or persons entitled thereto under the
Participant's will or under the laws of descent and distribution.
(4) "Board" means the Board of Directors of the Corporation.
(5) "Bonus" means any payment under Section 6.5.
(6) "Change in Control" has the meaning set forth in Section 8.
(7) "Code" means the United States Internal Revenue Code of 1986, as
amended and in effect from time to time, or any successor statute.
(8) "Committee" means the Committee of the Board or any successor committee
as described in Section 3.1, or, if there shall be no such Committee, the Board.
(9) "Corporation" means Fuel-Tech N.V., a Netherlands Antilles corporation.
(10) "Director Option" means an Option granted pursuant to Section 6.1(i).
(11) "Employee" means any individual who is a salaried employee on the
payroll of the Corporation or any of its Subsidiaries.
(12) "Exchange Act" means the Securities Exchange Act of 1934, as amended
and in effect from time to time, or any successor statute.
(13) "Fair Market Value Per Share" in reference to the common stock of the
Corporation means on any date the average of the high and low sales prices of
the Shares on such date on the principal national securities exchange on which
such Shares are listed or admitted to trading, or, if such Shares are not so
listed or admitted to trading, the average of the per Share closing bid price
and per Share closing asked price on such date as quoted on the National
Association of Securities Dealers Automated Quotation System or such other
market in which such prices are regularly quoted, or, if there have been no
published bid or asked quotations with respect to Shares on such date, the Fair
Market Value Per Share shall be the value established by the Board or Committee
in good faith and, in the case of an Incentive Stock Option, in accordance with
Section 422 of the Code.
(14) "Incentive Stock Option" means a stock option satisfying the
requirements of Section 422 of the Code and designated by the Committee as an
Incentive Stock Option.
(15) "Nonemployee Director" means a director of the Corporation or of Fuel
Tech, Inc.who is a "nonemployee director" within the meaning of Rule 16b-3.
(16) "Non-Qualified Stock Option" means a stock option which is not an
Incentive Stock Option within the meaning of Section 422 of the Code.
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(17) "Option" means an Award to purchase Shares granted pursuant to Section
6.1.
(18) "Participant" means any director, officer, employee, consultant or
advisor of the Corporation or any of its Subsidiaries who is granted an Award
under this Plan. Except that consultants and advisors shall not include those
rendering services in connection with the offer or sale of the Corporation's
securities in a capital raising transaction.
(19) "Performance Award" has the meaning described in Section 6.4.
(20) "Plan" means this 1993 Incentive Plan of Fuel-Tech N.V., as amended
from time to time.
(21) "Restricted Shares" means Shares which have certain restrictions
attached to the ownership thereof, which may be issued under Section 6.3.
(22) "Retirement" or "Retires" means termination of a Participant's
employment with the Corporation and its Subsidiaries by retirement under the
normal, mandatory, early and applicable age plus service or other provision of
the applicable retirement plan of the Corporation or a Subsidiary, or, if there
shall be no such plan or plans, then under such procedures as the Corporation or
its Subsidiaries may from time to time establish.
(23) "Rule 16b-3" means such rule as promulgated by the Securities and
Exchange Commission under the Exchange Act as now in force or as such regulation
or successor regulation shall be hereafter amended.
(24) "Shares" mean shares of common stock of the Corporation.
(25) "Share Unit" means the right to receive a payment equivalent in value
to one Share on the date of payment.
(26) "Stock Appreciation Right" means a right which may be issued under
Section 6.2, the value of which is determined relative to the appreciation in
value of Shares.
(27) "Subsidiary" means any entity, incorporated or otherwise, of which the
Corporation owns directly or indirectly at least fifty percent (50%) of the
stock or interests therein.
(28) "Ten-Percent Stockholder" means a Participant, who, at the time an
Incentive Stock Option is to be granted to him or her, owns (within the meaning
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of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of the stock of the
Corporation.
(29) "Totally Disabled" means a condition of a Participant found by a
qualified physician selected by the Corporation to be that as described in
Section 22(e)(3) of the Code or as such Section or successor section shall be
hereafter amended.
3. Administration
3.1 Committee
(a) The Plan shall be administered by either the Board or by a
Committee, which shall consist of at least two (2) directors of the
Corporation; provided, however, that in the case of a Committee of less than
the entire Board, each member shall be a Nonemployee Director. The Board may
remove members from or add members to the Committee. Vacancies on the
Committee shall be filled by the Board.
(b) To the extent permitted by Section 13.3 and subject to Section
6.1(i), the Board or Committee is authorized to (i) determine the persons
who shall be Participants in the Plan and which Awards shall be granted to
Participants, (ii) establish, amend and rescind rules, regulations and
guidelines relating to the Plan as it deems appropriate, (iii) interpret and
administer the Plan, Awards and Award Agreements, (iv) establish, modify and
terminate terms and conditions of Award Agreements, (v) grant waivers and
accelerations of Plan, Award and Award Agreement restrictions and (vi) take
any other action necessary for the proper administration and operation of
the Plan.
(c) The Board or Committee may designate persons and entities other
than its members, including but not limited to, any successor committee, the
Chief Executive officer, and the Corporate Secretary, to carry out any of
its responsibilities under and described in this Plan, under such conditions
or limitations as the Board or Committee may establish, other than its
authority with regard to participants who are subject to Section 16 of the
Exchange Act.
3.2 Effect of Determinations
Determinations of the Board or Committee and its designees shall be final,
binding and conclusive on the Corporation, its stockholders, Employees and
Participants. No member of the Board or Committee or any of its designees shall
be personally liable for any action or determination made in good faith with
respect to this Plan, any award, or any Award Agreement.
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4. Eligibility
Persons eligible for Awards under this Plan shall consist of key, managerial
and other directors, officers, employees, consultants or agents of the
Corporation or its Subsidiaries who possess valuable experience and skills and
have contributed, or can be expected to contribute, materially to the success
and profitability of the Corporation. The Board or Committee shall determine
which persons shall be Participants, the types of Awards to be made to
Participants and the terms, conditions and limitations applicable to the Awards.
5. Shares Subject to This Plan
5.1 Maximum Number of Shares
The maximum number of Shares available for Awards under this Plan at any
time shall be twelve and one-half percent (12.5%) of the total number of then
issued and outstanding Shares, less the sum of that number of Shares as shall
then be subject to outstanding Awards by the Corporation hereunder or under
other plans or arrangements of the Corporation or of Fuel Tech, Inc. Any and all
such Shares may be issued in respect of any of the types of Awards. The maximum
number of Shares that may be the subject of Incentive Stock Options granted
under the Plan may not exceed one million (1,000,000) Shares. Upon a change in
capitalization, the maximum number of Shares referred to in this Section 5.1
shall be adjusted in number and kind pursuant to Section 7. The Corporation
shall reserve for the purposes of the Plan, out of its authorized but unissued
Shares or out of Shares held in the Corporation's treasury, or partly out of
each, such number of Shares as shall be determined by the Board.
5.2 Share Accounting
Shares related to Awards that are forfeited, terminate, expire unexercised,
exchanged, settled in cash in lieu of Shares or settled in such other manner so
that a portion or all of the Shares included in an Award are not issued to a
Participant shall be available for other Awards. Any Shares not so used shall be
available for further Awards. Shares issued under this Plan shall be authorized
and unissued Shares or Shares reacquired by the Corporation, as determined by
the Committee. No fractional Shares shall be issued under this Plan.
6. Awards
Awards may include, but are not limited to, those described in this Section
6. Awards may be granted singly, in combination, or in tandem with other
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Awards. Subject to the other provisions of this Plan, Awards may also be made in
combination or in tandem with, in replacement of, or as alternatives to, grants
or rights under this Plan and any other plan of the Corporation, including any
plan of any acquired entity and for the benefit of any present or former
director, officer, consultant or agent of such acquired entity. Subject to the
terms of the Awards described in this Section 6 and the related Award Agreement,
the form of payment for Awards may be in cash, in Shares, in Share Units, or
such other form as determined by the Board or the Committee, and may be made
partly in one form and partly in one or more other forms, all as determined by
the Committee. Except as otherwise provided in this Plan, Awards shall be
evidenced by Award Agreements, the terms of which other than a Director Option
may be amended or accelerated by the Board or Committee following the grant of
any Award and need not be uniform among Participants. Except as otherwise
provided in this Plan, Awards shall be granted for such minimum consideration as
is required by applicable law, rules and regulations, including without
limitation, the then applicable Rule 16b-3, and such additional consideration,
if any, as may be determined by the Committee.
6.1 Options
Non-Qualified and Incentive Stock Options may be granted under this Plan
from time to time. Director Options shall be granted under this Plan only at
such times as provided below. Subject to Sections 6.1(h) and 6.1(i), Options
shall be granted upon the following terms and conditions with such additional
terms and conditions, not inconsistent with the provisions of this Plan, as the
Board or Committee in its discretion shall deem desirable:
(a) No Option shall be exercisable after the expiration of ten (10)
years from the date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder).
(b) The option price per Share for all Options shall be not less than
one hundred per cent (100%) of the Fair Market Value Per Share on the date
the Option is granted (one hundred ten percent (110%) in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder).
(c) Award Agreements for Options shall conform to the requirements of
this Plan, and other than with respect to Director Options may contain such
other provisions as the Committee shall deem advisable.
(d) Award Agreements for Options shall specify when an Option may be
exercisable. An Option may be exercised, in whole or in part, by giving
written notice of exercise to the Corporation specifying the
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number of Shares to be purchased. Shares purchased upon exercise of an
Option shall be paid for in full at the time the Option is exercised in cash
or in Shares. Payment may also be made in any other manner or form approved
by the Board or Committee, consistent with applicable law, regulations and
rules.
(e) A holder of an Option shall have no rights as a stockholder with
respect to any Shares covered by such Option unless and until the date of
the issuance of the stock certificate for such Shares.
(f) (i) If, after completion of any required period of continuous
employment in order to exercise an Option as provided in an Award Agreement,
a Participant dies while employed by the Corporation or its Subsidiaries,
such Option shall be exercisable by the Beneficiary thereof, but after the
date of death of the Participant only within the period specified in the
Award Agreement which shall not be later than the expiration date of the
Option.
(ii) Following the death of a Participant, the Board or Committee
may at its discretion, upon the request of such Participant's Beneficiary
who holds an exercisable Option and in consideration of the surrender of
such Option, pay the amount by which the Fair Market Value Per Share on the
date of such request shall exceed the Option price per Share multiplied by
the number of Shares as to which the request was made.
(g) If, after completion of any required period of continuous
employment in order to exercise an Option as provided in an Award Agreement,
a Participant is Totally Disabled or Retires, such Option shall be
exercisable by the Participant, but only within the period specified in the
Award Agreement.
(h) Incentive Stock Options.
(i) Each Incentive Stock Option shall not have an aggregate Fair
Market Value Per Share (determined for each Incentive Stock Option at its
grant date) of Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year
(under the Plan and any other employee stock option plan of the Corporation
or any of its Subsidiaries ("Other Plans")), determined in accordance with
the provisions of Section 422 of the Code, which exceeds $100,000;
(ii) To the extent that the aggregate Fair Market Value Per Share
of stock with respect to which Incentive Stock Options granted
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under the Plan and any Other Plans are exercisable by a Participant for the
first time during any calendar year exceeds $100,000, such Incentive Stock
Options shall be treated as Non-Qualified Stock Options to the extent
necessary so that such aggregate Fair Market Value Per Share of stock does
not exceed $100,000. For purposes of the foregoing sentence, Incentive Stock
Options shall be treated as Non-Qualified Stock Options according to the
order in which they were granted such that the most recently granted
Incentive Stock Options are first treated as Non-Qualified Stock Options.
(iii) Each Incentive Stock Option shall require the Participant to
notify the Board or Committee of any disposition of any Shares issued
pursuant to the exercise of the Incentive Stock Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), within ten (10) days of such disposition.
(i) Director Options. The following provisions shall apply to each
Director Option granted under the Plan:
(i) Each individual who is a director of the Corporation and who is
not an employee of the Corporation or any of its Subsidiaries shall be
granted a Director Option in respect of 10,000 Shares on the first business
day after the annual meeting of the stockholders of the Corporation in each
year that the Plan is in effect, provided that the individual is a director
of the Corporation on such date.
(ii) Each Director Option shall become fully vested and exercisable
with respect to one hundred percent (100%) of the Shares subject thereto
upon grant.
(iii) Subject to Section 8.2, each Director Option shall terminate
on the date which is the tenth anniversary of the date of grant, unless
terminated earlier as follows:
(A) If a Participant's service as a director terminates for
any reason other than death or being Totally Disabled, the Participant may
for a period of three (3) months after such termination exercise his or her
Option to the extent, and only to the extent, that such Option or portion
thereof was vested and exercisable as of the date the Participant's service
as a director terminated, after which time the Option shall automatically
terminate in full.
(B) If a Participant's service as a director terminates by
reason of the Participant being Totally Disabled, the Participant
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may, for a period of one (1) year after such termination, exercise his or
her Option to the extent, and only to the extent, that such Option or
portion thereof was vested and exercisable, as of the date the Participant's
service as director terminated, after which time the Option shall
automatically terminate in full.
(C) If a Participant dies while a director or within three
(3) months after termination of service as a director as described in clause
(A) of this Section 6.1(i)(iii) or within twelve (12) months after
termination of service as a director as described in clause (B) of this
Section 6.1(i)(iii), the Option granted to the Participant may be exercised
at any time within twelve (12) months after the Participant's death by the
Participant's Beneficiary, after which time the Option shall terminate in
full; provided, however, that an Option may be exercised to the extent, and
only to the extent, that the Option or portion thereof was exercisable on
the date of death or earlier termination of the Participant`s services as a
director.
6.2 Stock Appreciation Rights
Stock Appreciation Rights may be granted under this Plan from time to time.
If Stock Appreciation Rights are granted they shall be upon the following terms
and conditions, and such additional terms and conditions, not inconsistent with
the provisions of this Plan, as the Board or Committee in its discretion shall
deem desirable:
(a) A Stock Appreciation Right may be granted in tandem with part or
all of, in addition to, or completely independent of, an Option or any other
Award under this Plan. A Stock Appreciation Right issued in tandem with an
Option may be granted at the time of grant of the related Option or at any
time thereafter during the term of the Option.
(b) Award Agreements for Stock Appreciation Rights shall conform to the
requirements of this Plan and may contain such other provisions (including
but not limited to, the permitted form of payment for the exercise of the
Stock Appreciation Right, the requirement of employment for designated
periods of time prior to exercise and the ability of the Board or Committee
to revoke Stock Appreciation Rights which are issued in tandem with Options
without compensation to the Participant) as the Board or Committee shall
deem advisable.
(c) Stock Appreciation Rights issued in tandem with Options shall be
subject to the following:
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(i) Stock Appreciation Rights shall be exercisable at such time or
times and to the extent, but only to the extent, that the Option to which
they relate shall be exercisable.
(ii) Upon exercise of Stock Appreciation Rights the holder thereof
shall be entitled to receive a number of Shares equal in aggregate value to
the amount by which the Fair Market Value Per Share on the date of such
exercise shall exceed the Option price per Share of the related Option,
multiplied by the number of Shares in respect of which the Stock
Appreciation Rights shall have been exercised.
(iii) All or any part of the obligation arising out of an exercise
of Stock Appreciation Rights may, at the discretion of the Board or
Committee, be settled by the payment of cash equal to the aggregate value of
the Shares (or a fraction of a Share) that would otherwise be delivered
under Section 6.2(c)(ii).
(iv) Upon exercise of Stock Appreciation Rights the unexercised
tandem Options of the Participant shall automatically terminate upon the
exercise of such Stock Appreciation Rights.
(v) Stock Appreciation Rights issued in tandem with Options shall
automatically terminate upon the exercise of such Options.
6.3 Restricted Shares
Awards of Restricted Shares may be granted under this Plan from time to
time. If Awards of Restricted Shares are granted they shall be upon the
following terms and conditions and such additional terms and conditions, not
inconsistent with the express provisions of this Plan, as the Committee in its
discretion shall deem desirable:
(a) Restricted Shares are Shares which are subject to such terms,
conditions and restrictions as the Board or Committee deems appropriate,
which may include restrictions upon the sale, assignment, transfer or other
disposition of the Restricted Shares and the requirement of forfeiture of
the Restricted Shares upon termination of employment under certain specified
conditions. The Board or Committee may condition the lapsing of restrictions
on part or all of an Award of Restricted Shares upon the attainment of
specific performance goals or such other factors as the Board or Committee
may determine. Awards of Restricted Shares may be granted for no cash
consideration or for such minimum consideration as may be required by
applicable law.
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(b) Award Agreements for Restricted Shares shall conform to the
requirements of this Plan, and may contain such other terms and conditions
(including but not limited to, a description of a period during which the
Participant may not transfer the Restricted Shares and limits on encumbering
the Restricted Shares during such period) as the Board or Committee shall
deem desirable. To the extent permitted by Section 13.3 hereof, the Board or
Committee may provide for the lapse of any such term or condition in
installments and may accelerate or waive any such term or condition in whole
or in part, based on service, performance and/or such other factors or
criteria as the Board or Committee may determine.
(c) Award Agreements for Restricted Shares shall provide that the stock
certificates representing Restricted Shares shall be legended, that the
stock certificates shall be held by a custodian, or that there be other
mechanisms for maintaining control by the Corporation of the Restricted
Shares until the restrictions thereon are no longer in effect. After the
lapse, waiver or release of the restrictions imposed pursuant to the Award
Agreement on any Restricted Shares, the Corporation shall cause to be issued
in the Participant's name a stock certificate evidencing the Restricted
Shares with respect to which the restrictions have lapsed or been waived or
released, free of any legend, and shall cause such stock certificate to be
delivered to the Participant.
(d) Except as otherwise provided in this Plan or in the Award
Agreement, the Participant shall have, with respect to Awards of Restricted
Shares, all of the rights of a shareholder of the Corporation, including the
right to vote the Restricted Shares and the right to receive any cash or
stock dividends on such Restricted Shares. The Board or Committee may
provide that the payment of cash dividends shall or may be deferred. Any
reinvestment of deferred cash dividends shall be as determined by the Board
or Committee. Stock dividends issued with respect to Restricted Shares shall
be Restricted Shares and shall be subject to the same terms, conditions and
restrictions that apply to the Restricted Shares with respect to which such
dividends are issued. Any additional Shares issued with respect to cash or
stock dividends shall not be counted against the maximum number of Shares
for which Awards may be granted under this Plan as set forth in Section 5.
(e) If the employment of a Participant is terminated prior to the lapse
of restrictions on Restricted Shares because the Participant dies or becomes
Totally Disabled, the restrictions on all Restricted Shares awarded to a
Participant shall lapse on the date of such termination.
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6.4 Performance Awards
Performance Awards may be granted under this Plan from time to time. If
Performance Awards are granted they shall be upon the following terms and
conditions and such additional terms and conditions, not inconsistent with the
express provisions of this Plan, as the Board or Committee in its discretion
shall deem advisable:
(a) Performance Awards are Awards which are based upon the long-term
performance of all or a portion of the Corporation or which are based upon
the long-term individual performance of a Participant. Performance Awards
may be in the form of performance units, performance shares and such other
forms of Performance Awards which the Board or Committee shall determine to
be desirable. Performance Awards are Awards which are granted to
participants contingent upon (i) the future performance of all or a portion
of the Corporation which may include, without limitation, performance
relative to a group of companies in the same or related industries,
achievement of specific business objectives, growth rates or profitability
or earnings goals (in respect of, for example, Share price, return on equity
or return on assets) and such other measurements as the Board or Committee
determines to be appropriate, (ii) the future performance of a Participant,
which may include, without limitation, attainment of specified goals and
objectives and such other measurements as the Board or Committee determines
to be appropriate, (iii) the future performance of a combination of all or a
portion of the Corporation and a Participant, or (iv) such other
measurements and criteria as may be considered appropriate by the Board or
Committee. Performance Awards may contain multiple performance measurements.
(b) Award Agreements for Performance Awards shall conform to the
requirements of this Plan and may contain such other terms and conditions as
the Board or Committee shall deem desirable, including but not limited to,
applicable performance measurements, a description of whether performance
measurements are to be used singly or in combination, a description of
whether different performance measurements may be used for different
performance periods, the length of performance periods, the ability of the
Board or Committee to amend and adjust measurements, payouts and performance
periods of performance Awards and any requirements of employment during
performance periods.
(c) Award Agreements for Performance Awards shall provide for a
required minimum period of continuous employment during a performance period
of a Performance Award. If such minimum period of continuous employment
shall have elapsed, the Award Agreement may provide, or the
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Board or Committee may determine, the portion of the payment of the
Performance Award which Participant or the Participant's beneficiary, as
applicable, is to receive at the end of the performance period.
6.5 Bonuses
Bonuses may be granted under this Plan from time to time on an annual or
one-time basis. The amount of Bonuses which may be awarded shall be as
determined by the Board or Committee. The Board or Committee may establish a
basis upon which aggregate Bonus expenditures for any year shall be determined,
which may include measurements of financial performance of the Corporation or of
a unit or department thereof, relative performance of the Corporation or of a
department thereof within the same or related industries, competitive
compensation considerations and other measurements and criteria.
(a) Each Bonus may be made at the discretion of the Board or Committee
either in cash, in Shares, in Share Units, or in another form as determined
by the Board or Committee and may be made partly in one form and partly in
one or more other forms. In the case of an Award of a Bonus in Shares or
Share Units, the number shall be determined by using the Fair Market Value
Per Share on the date of the Award of the Bonus.
(b) The payment of any Bonus shall be subject to such obligations or
conditions as the Board or Committee may specify in making or recommending
the Award of the Bonus, but Bonuses need not be evidenced by Award
Agreements.
(c) When payment of all or part of a Bonus is deferred in the form of
Shares or Share Units, the account of the Participant to whom the Bonus was
made will be credited with an amount per Share equal to the dividends
payable on each issued and outstanding Share ("dividend equivalents").
Amounts thus credited shall, in the discretion of the Board or Committee,
either:
(i) be paid in cash as and when each such credit shall be made, or
(ii) be credited in Shares or Share Units, with the number
determined by using the Fair Market Value Per Share on the date of the
dividend payment and delivered in such form and at such time or times as may
be determined by the Committee.
(d) When payment of all or part of a Bonus is deferred in cash, the
Committee may provide that the account of the Participant to whom the Bonus
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was made shall be credited with amounts equivalent to interest ("interest
equivalents"). Amounts thus credited shall be at the rate determined by the
Committee.
(e) Any Bonus payable in Shares may, in the discretion of the Board or
Committee, be paid in cash, on each date on which payment in Shares would
otherwise have been made, in an amount equal to the Fair Market Value Per
Share on each such date, multiplied by the number of Shares which would
otherwise have been paid on such date.
(f) Bonuses may be awarded in Share Units in accordance with the
following terms and conditions and such other terms and conditions as the
Board or Committee may impose:
(i) The number of Share Units awarded with respect to any Bonus
shall be the number determined by using the Fair Market Value Per Share on
the date of the Award of the Bonus.
(ii) Any Bonus made in Share Units may, in the discretion or on the
recommendation of the Board or Committee, be paid in Shares on each date on
which payment in cash would otherwise be made.
(g) In lieu of the foregoing forms of payment of Bonuses, the Board or
Committee may specify or recommend any other form of payment which it
determines to be of substantially equivalent economic value to the cash
value of the Bonus including, without limitation, forms involving payments
to a trust or trusts for the benefit of one or more Participants.
(h) Each payment of a Bonus that is to be made in cash shall be from
the general funds of the Corporation or its respective subsidiary or
affiliate, as the case may be.
(i) In the event of the death of a Participant to whom a Bonus is to be
or shall have been made, the Bonus or any portion thereof remaining unpaid
shall be paid to such Participant's Beneficiary under the Participant's will
or pursuant to the relevant laws of descent and distribution.
6.6 Other Awards
(a) The Board or Committee may grant other Share based Awards under
this Plan, including without limitation, those Awards pursuant to which
Shares are or may in the future be acquired, Awards denominated in Share
Units, securities convertible into Shares and dividend equivalents. The
Board or Committee shall determine the terms and conditions of such other
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Share based Awards. Shares issued in connection with such other Share based
Awards shall be issued for such minimum consideration as shall be required
by applicable law, rules and regulations, including the then applicable Rule
16b-3, and such additional consideration, if any, as may be determined by
the Board or Committee.
(b) The Board or Committee may also grant other non-Share based Awards
under this Plan and shall determine the terms and conditions of such other
non-Share based Awards in tandem or combination with other Awards or each
other, in exchange of other Awards, or in tandem or combination with, or as
alternatives to grants or rights under any other employee plan of the
Corporation, including any plan of any acquired entity. The Board or
Committee shall have the authority to determine the Participants for such
Awards and all other terms and conditions of such other Awards. No amendment
of this Plan is required for the creation of another type of Award.
7. Adjustments Upon Changes in Capitalization
(a) Subject to any required action by the Corporation's stockholders,
in the event of a reorganization, recapitalization, stock split, stock
dividend, exchange of Shares, combination of Shares, merger, consolidation
or any other change in corporate structure of the Corporation affecting the
Shares, or in the event of a sale by the Corporation of all or a significant
part of its assets, or any distribution to its shareholders other than a
normal cash dividend, the Board or Committee may make appropriate adjustment
in the number, kind, price and value of Shares authorized by this Plan and
any adjustments to outstanding Awards as it determines appropriate so as to
prevent dilution or enlargement of rights.
(b) The existence of an Award under this Plan shall not affect in any
way the right or power of the Corporation or its shareholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the Corporation's capital structure or its business, or any
merger or consolidation of the Corporation, or any issue of bonds,
debentures, preferred or prior preference stocks, or loan notes ahead of or
affecting the Stock or rights thereunder or convertible thereto, or the
dissolution or liquidation of the Corporation, or any sale or transfer of
all or any part of its assets or business or any other corporate act or
proceeding, whether of a similar character or otherwise.
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8. Change in Control
8.1 Definition of Change in Control
A "Change in Control" shall be deemed to have occurred if any one or
more of the events described in paragraphs (a), (b) or (c) below occurs.
(a) Any "person," as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (including any group of persons with which any person or
its affiliates or associates, as such terms are defined in Rule 12b-2 under
the Exchange Act has any agreement, arrangement or understanding, oral or
written, regarding the acquiring, holding, voting or disposing of any of the
Corporation's securities, but excluding a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation) (i) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing fifty
one percent (51%) or more of the combined voting power of the Corporation's
then outstanding securities (hereinafter referred to as an "Acquiring
Person"); or
(b) In any two (2) year period persons being a majority of the Board
shall cease to be so unless the nomination of the new directors during such
period was approved by at least a majority of the directors then still in
office who were directors at the beginning of the period; or
(c) A consolidation or merger or "Business Combination," as that term
is defined as of the effective date of this Plan in Section 203(c)(3) of The
General Corporation Law of Delaware, of the Corporation shall occur (with
the term "interested shareholder" as used in that Section being deemed to
refer to an Acquiring Person) in which the Corporation is not the surviving
Corporation and pursuant to which the Corporation's Shares are converted to
cash, securities or other property but not a consolidation or merger or
Business Combination where shareholders of the Corporation prior to the
Business Combination have substantially the same proportionate ownership in
a business entity after the consolidation or merger or Business Combination;
or
(d) The shareholders of the Corporation shall approve any plan for
liquidation or dissolution of the Corporation not otherwise involving a
transaction where shareholders of the Corporation prior to the transaction
have substantially the same proportionate ownership of a business entity
after the transaction.
(e) In no event, however, shall a Change in Control be deemed to have
occurred with respect to a Participant, if that Participant is part of an
Acquiring Person which consummates the Change in Control transaction. A
Participant shall be deemed "part of an Acquiring Person" for purposes of
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the preceding sentence if the Participant is an equity participant or has
agreed to become an equity participant in the Acquiring Person (except for
(i) passive ownership of less than three percent (3%) of the securities of
the Acquiring Person; or (ii) ownership of equity participation in the
Acquiring Person which is otherwise not deemed to be significant, as
determined prior to the Change in Control by a majority of the disinterested
"Continuing Directors"). For purposes of this Section 8.1, "Continuing
Directors" means those directors (x) who were directors of the Board
immediately prior to the Change in Control transaction ("Incumbent
Directors") and (y) whose election, or nomination for election by the
Corporation's stockholders, was approved by a vote of at least a majority of
the Incumbent Directors.
8.2 Effect of Change in Control
Upon the occurrence of an event of Change in Control, unless otherwise with
respect to any Award specifically prohibited by the terms of the second
paragraph of Section 6:
(a) Any and all Options and Stock Appreciation Rights shall become
immediately exercisable.
(b) Any restriction periods and restrictions imposed on Restricted
Shares (except such as may be required by relevant securities laws) shall
lapse, and within ten (10) business days after the occurrence of a Change in
Control, the stock certificates representing Restricted Shares, without any
restrictions or legend thereon (except a legend as may be required by
relevant securities laws), shall be delivered to the applicable
Participants;
(c) The goal, objective, target value or the like, attainable under all
Performance Awards shall be deemed to have been fully earned for the entire
performance period as of the effective date of the Change in Control, except
that all Performance Awards which shall have been outstanding less than six
(6) months on the effective date of the Change in Control shall not be
deemed to have earned the goal, objective, target value, or the like; and
(d) Subject to Section 14.3 hereof, all such other actions and
modifications to the Awards as determined by the Board or Committee to be
appropriate before the Change in Control of the Corporation shall become
effective.
9. Relationship of the Plan to Benefit Plans
The amount of Bonuses to any Participant under this Plan shall be eligible
for inclusion in the Participant's earnings base for the purpose of determining
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the benefits to which the Participant is entitled under retirement, pension,
excess benefit, thrift, savings, profit-sharing, insurance, long-term disability
and other benefit plans, if any, of the Corporation or its Subsidiaries as
determined by the Board or Committee. No other income of a Participant
attributable to this Plan shall be included in the Participant's earnings for
purposes of any benefit plan in which the Participant may be eligible to
participate.
10. Effect of the Plan On Right to Continued Employment and Interest in
Particular Property
(a) None of the existence of this Plan, any Awards granted pursuant
hereto or any Award Agreement shall create any right to continued employment
of any Participant by the Corporation or its Subsidiaries. No Participant
shall have, under any circumstances, any interest whatsoever, vested or
contingent, in any particular property or asset of the Corporation or in any
particular Share or Shares of the Corporation that may be held by the
Corporation (other than Restricted Shares held by a custodian) by virtue of
any Award. A Participant may be granted additional Awards under this Plan
under such circumstances and at such times as the Board or Committee may
determine; provided, however, that no participant shall be entitled to any
Award in the absence of a specific grant by the Board or Committee of an
Award, notwithstanding the prior grant of an Award to such Participant.
(b) This Plan shall not be deemed a substitute for, and shall not
preclude the establishment or continuation of any other plan, practice or
arrangement that may now or hereafter be provided for the payment of
compensation, special awards or benefits to directors, officer, employees,
consultant and agents of the Corporation and its Subsidiaries generally, or
to any class or group of employees, including without limitation, any
retirement, pension, excess benefit, thrift, savings, profit-sharing,
insurance, long-term disability, health care plans or other employee benefit
plans. Any such arrangements may be authorized by the Corporation and
payment thereunder made independently of this Plan.
11. Withholding Taxes and Deferrals
11.1 Cash Withholding
The Corporation and its participating subsidiaries shall have the right
to deduct from any cash payment made under Awards under this Plan any federal,
state, provincial or local income, or other taxes required by law to be withheld
with respect to such payment or to take such other action as may be necessary in
the opinion of the Corporation to satisfy all obligations for the payment of
such taxes.
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11.2 Share Withholding
Any Share based Award may provide by the grant thereof that the
recipient of such Award may elect, in accordance with any applicable laws, rules
and regulations, to pay a portion or all of the amount of such minimum required
withholding taxes in Shares. In such event, the Participant shall authorize the
Corporation to withhold, or shall agree to deliver to the Corporation, Shares
owned by such Participant or a portion of the Shares that otherwise would be
distributed to such Participant, having a Fair Market Value equal to the amount
of withholding tax liability.
11.3 Deferrals
The Board or Committee may require or permit a Participant to defer
such Participant's receipt of the payment of cash or the delivery of Shares that
would otherwise be due to such Participant by virtue of the exercise, the
satisfaction of any requirements or goals or lapse or waiver of restrictions of
an Award made under this Plan. If any such deferment election is required or
permitted, the Board or Committee shall establish rules and procedures for such
payment deferrals.
12. Compliance With Applicable Legal Requirements
No certificate for Shares distributable pursuant to this Plan shall be
issued and delivered unless the issuance of such certificate complies with all
applicable legal requirements including, without limitation, compliance with the
provisions of applicable state securities laws, the Securities Act of 1933, as
amended from time to time or any successor statute, the Exchange Act and the
requirements of the exchanges on which Shares may, at the time, be listed, and
the provisions of any foreign securities laws or the rules of foreign securities
exchanges, where applicable.
13. Amendments
13.1 Plan Amendments
The Board may, insofar as permitted by law, from time to time, with
respect to any Shares at the time not subject to Awards, suspend or discontinue
this Plan or revise or amend it in any respect whatsoever, provided, however,
unless the Committee or the Board, as appropriate, specifically otherwise
provides, any revision or amendment that would cause this Plan to fail to comply
with any requirement of applicable law, regulation or rule if such amendment
were not approved by the stockholders of the Corporation shall not be effective
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unless and until the approval of the stockholders of the Corporation is
obtained.
13.2 Award Amendments
Subject to the terms and conditions and within the limitations of this
Plan, the Board or Committee may amend, cancel, modify, or extend outstanding
Awards granted under this Plan.
13.3 Rights of Participants
No amendment, suspension or termination of this Plan nor any amendment,
cancellation or modification of any outstanding Award or Award Agreement that
would adversely affect the right of any Participant with respect to an Award
previously granted under this Plan will be effective without the written consent
of the affected Participant. Such written consent may be obtained simultaneously
with the grant of any Award.
13.4 Rule 16b-3
This Plan is intended to comply with Rule 16b-3 with respect to
Participants, if any, who are subject to Section 16 of the Exchange Act. Should
the requirements of Rule 16b-3 change, the Board or the Committee, as
appropriate, may amend the Plan to comply with the requirements of the amended
Rule 16b-3 or its successor provision or provisions.
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14. Miscellaneous Provisions
14.1 Awards in Various Countries
The Board or Committee shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of various countries in which the Corporation
or its Subsidiaries may operate to assure the viability of the benefits of
Awards made to Participants employed in such countries and to meet the
objectives of this Plan.
14.2 Transferability
Awards may not be pledged or assigned and may otherwise be transferred
only to the extent provided herein or in an Award Agreement not inconsistent
herewith, provided, however, that an Option or Stock Appreciation Right or any
other benefit or Award hereunder deemed to be a derivative security shall not be
transferable other than by will or the laws of descent and distribution and
shall be exercisable during a Participant's lifetime only by him or by his
guardian or legal representative or pursuant to a "qualified domestic relations
order" as defined by the Code, or such order under the laws of other
jurisdictions as shall be similar in effect to a qualified domestic relations
order.
14.4 Cancellation of Awards
Except as otherwise provided in this Plan or in applicable Award
Agreements, the terms of which need not be uniform among Participants, if a
Participant to whom an Award is granted ceases to be employed by the Corporation
all of such Participant's unexercised Awards and Awards on which there are
restrictions shall be immediately canceled.
14.5 Arbitration; Governing Law
(a) The Shares are registered in the United States under the Exchange
Act and are listed for trading on the United States stock exchange known as The
NASDAQ Stock Market. Any and all disputes whatsoever between a Participant and
the Corporation concerning the administration of this Plan, the interpretation
and effect of an Award Agreement or of this Plan or the rights of a Participant
under an Award Agreement shall be finally determined before one neutral
arbitrator in the City of New York, New York U.S.A. under the rules of
commercial arbitration of the American Arbitration Association then in effect
and judgment upon any award by such arbitrator may be entered in any Court
having jurisdiction or application may be made to such court for a judicial
acceptance of the award and an order of enforcement, as the case may be.
(b) This Plan, its administration and all Awards granted hereunder, the
terms and provisions of any related Award Agreements and the rights of all
Participants shall be governed and interpreted in accordance with the laws of
New York, New York U.S.A.
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