ATLAS AMERICA, INC.
STOCK INCENTIVE PLAN
SECTION 1 BACKGROUND AND PURPOSE
1.1 Background. The Plan permits the grant of Nonqualified Stock
Options, Incentive Stock Options, SARs, Restricted Stock and Deferred Units.
1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and
retain (a) employees of the Company and its Affiliates, (b) consultants who
provide significant services to the Company and its Affiliates, and (c)
directors of the Company who are employees of neither the Company nor any
Affiliate. The Plan also is designed to encourage stock ownership by
Participants, thereby aligning their interests with those of the Company's
stockholders.
SECTION 2 DEFINITIONS
The following words and phrases shall have the following meanings
unless a different meaning is plainly required by the context:
2.1 "1933 Act" means the Securities Act of 1933, as amended. Reference
to a specific section of the 1933 Act or regulation thereunder shall include
such section or regulation, any valid regulation promulgated under such section,
and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.
2.2 "1934 Act" means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.3 "Affiliate" means any corporation or any other entity (including,
but not limited to, partnerships and joint ventures) controlling, controlled by,
or under common control with the Company.
2.4 "Affiliated SAR" means an SAR that is granted in connection with a
related Option, and which automatically will be deemed to be exercised at the
same time that the related Option is exercised.
2.5 "Award" means, individually or collectively, a grant under the Plan
of Nonqualified Stock Options, Incentive Stock Options, SARs or Restricted
Stock.
2.6 "Award Agreement" means the written agreement setting forth the
terms and provisions applicable to each Award granted under the Plan.
2.7 "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.8 "Change in Control" means the occurrence of any of the following
events:
(i) any "person" as defined in Section 3(a)(9) of the Securities
1934 Act and as used in Sections 13(d) and 14(d) thereof, including a "group" as
defined in Section 13(d) of the 1934 Act but excluding the Company and any
Subsidiary thereof and any employee benefit plan sponsored or maintained by the
Company or any Subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the 1934 Act), of securities of the Company representing 20
percent or more of the combined voting power of the Company's then outstanding
securities;
(ii) during any period of 24 consecutive months the individuals
who, at the beginning of such period, constitute the Board (the "Incumbent
Directors") cease for any reason other than death to constitute at least a
majority thereof, provided that a Director who was not a Director at the
beginning of such 24-month period shall be deemed to have satisfied such
24-month requirement (and be an Incumbent Director) if such Director was
selected by, or on the recommendation of or with the approval of, at least
two-thirds of the Directors who then qualified as Incumbent Directors either
actually (because they were directors at the beginning of such 24-month period)
or by prior operation of this clause (ii); or
(iii) a transaction requiring stockholder approval for the
acquisition of the Company by an entity other than the Company or a Subsidiary
through purchase of assets, by merger, or otherwise; provided, however, that
neither the Company's initial public offering nor the proposed spin-off by
Parent of the Company's stock shall constitute a change of control.
2.9 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.10 Committee" means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.
2.11 "Company" means Atlas America, Inc., a Delaware corporation, or
any successor thereto.
2.12 "Consultant" means any consultant, independent contractor, joint
venture partner or other person who provides significant services to the Company
or its Affiliates, but who is neither an Employee nor a Director.
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2.13 "Deferred Unit" means a contractual obligation of the Company to
deliver a Share pursuant to Section 8, subject to availability pursuant to
Section 4.1.
2.14 "Director" means any individual who is a member of the Board of
Directors.
2.15 "Disability" means a permanent and total disability within the
meaning of Section 22(e)(3) of the Code, provided that in the case of Awards
other than Incentive Stock Options, the Committee in its discretion may
determine whether a permanent and total disability exists in accordance with
uniform and non-discriminatory standards adopted by the Committee from time to
time.
2.16 "Employee" means any employee of the Company or of an Affiliate,
whether such employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.
2.17 "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option.
2.18 "Fair Market Value" means the closing sales price of a Share on
the applicable date (or if there is no trading in the Shares on such date, the
closing sales price on the last date Shares were traded). In the event Shares
are not publicly traded at the time a determination of fair market value is
required to be made hereunder, the determination of fair market value shall be
made in good faith by the Committee.
2.19 "First Permissible Vesting Date" means the date the distribution,
as defined in the Company's registration statement on Form S-1 (File No.
333-112653), is completed or the date the Company receives written notice from
Resource America, Inc. that Resource America, Inc. has determined not to
complete the distribution.
2.20 "Freestanding SAR" means a SAR that is granted independently of
any Option.
2.21 "Grant Date" means, with respect to an Award, the date that the
Award was granted.
2.22 "Incentive Stock Option" means an Option to purchase Shares which
is designated as an Incentive Stock Option and is intended to meet the
requirements of Section 422 of the Code.
2.23 "Nonemployee Director" means a Director who is an employee of
neither the Company nor of any Affiliate.
2.24 "Nonqualified Stock Option" means an option to purchase Shares
which is not intended to be an Incentive Stock Option.
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2.25 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
2.26 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if each of the
corporations other than the Company owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
2.27 "Participant" means an Employee, Consultant, or Nonemployee
Director who has an outstanding Award.
2.28 "Period of Restriction" means the period during which the transfer
of Shares of Restricted Stock are subject to restrictions and, therefore, the
Shares are subject to a substantial risk of forfeiture.
2.29 "Plan" means the Atlas America, Inc. Stock Incentive Plan, as set
forth in this instrument and as hereafter amended from time to time.
2.30 "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.
2.31 "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act, and
any future regulation amending, supplementing or superseding such regulation.
2.32 "Section 16 Person" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.
2.33 "Shares" means the shares of common stock of the Company.
2.34 "Stock Appreciation Right" or "SAR" means an Award, granted alone
or in connection with a related Option, that pursuant to Section 6 is designated
as an SAR.
2.35 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
2.36 "Tandem SAR" means an SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).
2.37 "Termination of Service" means (a) in the case of an Employee, a
cessation of the employee-employer relationship between the Employee and the
Company or an Affiliate for any reason; (b) in the case of a Consultant, a
cessation of the service relationship between the Consultant and the Company or
an Affiliate for any reason, but excluding any such termination where there is a
simultaneous re-engagement of the consultant by the Company or an Affiliate; and
(c) in the case of a Nonemployee Director, a cessation of the Director's service
on the Board for any reason.
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SECTION 3 ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors who shall be
appointed from time to time by the Board of Directors. The Committee shall be
comprised solely of Directors who both are (a) "non-employee directors" under
Rule 16b-3, and (b) "outside directors" under Section 162(m) of the Code.
3.2 Authority of the Committee. It shall be the duty of the Committee
to administer the Plan in accordance with the Plan's provisions. 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 Participants; (iii) determine the terms
and conditions of any Award; provided, however, that no Option shall be
exerciseable, nor any Restricted Stock awarded, nor any Share issued upon
exercise of an SAR or vesting of a Deferred Unit before the First Permissible
Vesting Date; (iv) determine whether, to what extent, and under what
circumstances Awards may be settled, exercised, canceled, or forfeited; (v)
interpret and administer the Plan and any instrument or agreement relating to an
Award made under the Plan; (vi) 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 (vii) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan.
3.3 Delegation by the Committee. The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its authority and powers under the Plan to one or more Directors or officers
of the Company; provided, however, that the Committee may not delegate its
authority and powers (a) with respect to Section 16 Persons, or (b) in any way
which would jeopardize the Plan's qualification under Section 162(m) of the Code
or Rule 16b-3.
3.4 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
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SECTION 4 SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for Award under the Plan shall not exceed
1,333,333. The maximum number of Shares for which Awards may be granted to any
single individual under the Plan shall be 333,333. Shares granted under the Plan
may be either authorized but unissued Shares or treasury Shares.
4.2 Lapsed Awards. If an Award is settled in cash, or is cancelled,
terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available to be the subject of
an Award.
4.3 Adjustments in Awards and Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan and
the number, class, and price of Shares subject to outstanding Awards in such
manner as the Committee (in its sole discretion) shall determine to be
appropriate to prevent the dilution or diminution of such Awards.
Notwithstanding the preceding, the number of Shares subject to any Award always
shall be a whole number.
SECTION 5 STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to Employees and Consultants at any time and from time to
time as determined by the Committee in its sole discretion. The Committee, in
its sole discretion, shall determine the number of Shares subject to each
Option. The Committee may grant Incentive Stock Options, Nonqualified Stock
Options, or a combination thereof.
5.2 Award Agreement. Each Option shall be evidenced by an Award
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to
exercise of the Option, and such other terms and conditions as the Committee, in
its discretion, shall determine. The Award Agreement shall also specify whether
the Option is intended to be an Incentive Stock Option or a Nonqualified Stock
Option.
5.3 Exercise Price. Subject to the provisions of this Section 5.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.
5.3.1 Nonqualified Stock Options. In the case of a Nonqualified
Stock Option, the Exercise Price shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date.
5.3.2 Incentive Stock Options. In the case of an Incentive Stock
Option, the Exercise Price shall be not less than one hundred percent
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(100%) of the Fair Market Value of a Share on the Grant Date; provided,
however, that if on the Grant Date, the Employee (together with persons
whose stock ownership is attributed to the Employee pursuant to Section
424(d) of the Code) owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any of
its Subsidiaries, the Exercise Price shall be not less than one hundred
and ten percent (110%) of the Fair Market Value of a Share on the Grant
Date.
5.3.3 Substitute Options. Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code
(e.g., the acquisition of property or stock from an unrelated
corporation), persons who become Employees or Consultants on account of
such transaction may be granted Options in substitution for options
granted by their former employer. If such substitute Options are
granted, the Committee, in its sole discretion and consistent with
Section 424(a) of the Code, may determine that such substitute Options
shall have an exercise price less than one hundred percent (100%) of
the Fair Market Value of the Shares on the Grant Date.
5.4 Expiration of Options. The Committee, in its sole discretion, (a)
shall provide in each Award Agreement when each Option expires and becomes
unexercisable, and (b) may, after an Option is granted, extend the maximum term
of the Option (subject to Section 5.8.4 regarding Incentive Stock Options);
provided, however, no Award Agreement shall provide for the exercise of any
Option after the expiration of the ten (10) year period immediately following
the Grant Date.
5.5 Exercisability of Options. Subject to Section 3.2(iii), Options
granted under the Plan shall be exercisable at such times and be subject to such
restrictions and conditions as the Committee shall determine in its sole
discretion. Subject to Section 3.2(iii), after an Option is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the
Option.
5.6 Payment. Options shall be exercised by the Participant's delivery
of a written notice of exercise to the Secretary of the Company (or its
designee), setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares. Upon the
exercise of any Option, the Exercise Price shall be payable to the Company in
full in cash or its equivalent. The Committee, in its sole discretion, also may
permit exercise (a) by tendering previously acquired Shares having an aggregate
Fair Market Value at the time of exercise equal to the total Exercise Price, or
(b) by any other means which the Committee, in its sole discretion, determines
to both provide legal consideration for the Shares and to be consistent with the
purposes of the Plan. As soon as practicable after receipt of a written
notification of exercise and full payment for the Shares purchased, the Company
shall deliver to the Participant (or the Participant's designated broker), Share
certificates (which may be in book entry form) representing such Shares.
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5.7 Restrictions on Share Transferability. The Committee may impose
such restrictions on any Shares acquired pursuant to the exercise of an Option
as it may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.
5.8 Certain Additional Provisions for Incentive Stock Options.
5.8.1 Exercisability. The aggregate Fair Market Value (determined
on the Grant Date(s)) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by any Employee during
any calendar year (under all plans of the Company and its Affiliates)
shall not exceed $100,000.
5.8.2 Termination of Service. No Incentive Stock Option may be
exercised more than three (3) months after the Participant's
Termination of Service for any reason other than Disability or death,
unless (a) the Participant dies during such three-month period, and (b)
the Award Agreement or the Committee permits later exercise. No
Incentive Stock Option may be exercised more than one (1) year after
the Participant's Termination of Service on account of Disability,
unless (a) the Participant dies during such one-year period, and (b)
the Award Agreement or the Committee permit later exercise.
5.8.3 Company, Parent and Subsidiaries Only. Incentive Stock
Options may be granted only to persons who are employees of the Company
or a Parent or Subsidiary on the Grant Date.
5.8.4 Expiration. No Incentive Stock Option may be exercised after
the expiration of ten (10) years from the Grant Date; provided,
however, that if the Option is granted to an Employee who, together
with persons whose stock ownership is attributed to the Employee
pursuant to Section 424(d) of the Code, owns stock possessing more than
10% of the total combined voting power of all classes of the stock of
the Company or any of its Subsidiaries, the Option may not be exercised
after the expiration of five (5) years from the Grant Date.
SECTION 6 STOCK APPRECIATION RIGHTS
6.1 Grant of SARs. Subject to the terms and conditions of the Plan, an
SAR may be granted to Employees and Consultants at any time and from time to
time as shall be determined by the Committee, in its sole discretion. The
Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof.
6.1.1 Number of Shares. The Committee shall have complete
discretion to determine the number of SARs granted to any Participant.
6.1.2 Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the
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terms and conditions of SARs granted under the Plan. However, the
exercise price of a Freestanding SAR shall be not less than one hundred
percent (100%) of the Fair Market Value of a Share on the Grant Date.
The exercise price of Tandem or Affiliated SARs shall equal the
Exercise Price of the related Option.
6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option upon the surrender of the right
to exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the Tandem SAR shall be for no more than one hundred percent
(100%) of the difference between the Exercise Price of the underlying Incentive
Stock Option and the Fair Market Value of the Shares subject to the underlying
Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the
Tandem SAR shall be exercisable only when the Fair Market Value of the Shares
subject to the Incentive Stock Option exceeds the Exercise Price of the
Incentive Stock Option.
6.3 Exercise of Affiliated SARs. An Affiliated SAR shall be deemed to
be exercised upon the exercise of the related Option. The deemed exercise of an
Affiliated SAR shall not necessitate a reduction in the number of Shares subject
to the related Option.
6.4 Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Committee, in its sole
discretion, shall determine.
6.5 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Committee, in
its sole discretion, shall determine.
6.6 Expiration of SARs. An SAR granted under the Plan shall expire upon
the date determined by the Committee, in its sole discretion, and set forth in
the Award Agreement.
6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying (a) the difference between the Fair Market Value of a Share on the
date of exercise over the exercise price; times (b) the number of Shares with
respect to which the SAR is exercised. At the discretion of the Committee, the
payment upon SAR exercise may be in cash, in Shares of equivalent value, or in
some combination thereof; provided, however, that no Shares may be issued before
the First Permissible Vesting Date.
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SECTION 7 RESTRICTED STOCK
7.1 Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Employees and Consultants in such amounts as the Committee,
in its sole discretion, shall determine. The Committee, in its sole discretion,
shall determine the number of Shares to be granted to each Participant.
7.2 Restricted Stock Agreement. Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine. Unless the Committee
determines otherwise, Shares of Restricted Stock shall be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.
7.3 Transferability. Except as provided in this Section 7, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.
7.4 Other Restrictions. The Committee, in its sole discretion, may
impose such other restrictions on Shares of Restricted Stock as it may deem
advisable or appropriate.
7.5 Removal of Restrictions. Except as otherwise provided in this
Section 7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall be released from escrow as soon as practicable after
the last day of the Period of Restriction. The Committee, in its discretion, may
accelerate the time at which any restrictions shall lapse or be removed. After
the restrictions have lapsed, the Participant shall be entitled to have any
legend removed from his or her Share certificate, and the Shares shall be freely
transferable by the Participant.
7.6 Voting Rights. During the Period of Restriction, Participants
holding Shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those Shares, unless the Committee determines otherwise.
7.7 Dividends and Other Distributions. During the Period of
Restriction, Participants holding Shares of Restricted Stock shall be entitled
to receive all dividends and other distributions paid with respect to such
Shares unless otherwise provided in the Award Agreement. If any such dividends
or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
7.8 Return of Restricted Stock to Company. On the date set forth in the
Award Agreement, the Restricted Stock for which restrictions have not lapsed
shall revert to the Company and again shall become available for grant under the
Plan.
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SECTION 8 NONEMPLOYEE DIRECTOR AWARDS
The provisions of this Section 8 are applicable only to Awards granted
to Nonemployee Directors.
8.1 Grants of Deferred Units. Each Nonemployee Director who is first
elected or appointed to the Board on or before the completion of the Company's
initial public offering (the "IPO") shall be awarded, on the date of completion
of the IPO, Deferred Units for Shares having a Fair Market Value of $15,000.00,
based on the IPO price, on the Grant Date. Each Nonemployee Director who is
first elected or appointed to the Board on or after the completion of the IPO
shall be awarded, on the date of first election or appointment, Deferred Units
for Shares having a Fair Market Value of $15,000.00 on the Grant Date.
Thereafter, on each anniversary of the date on which a Nonemployee Director is
first awarded Deferred Units during the term of this Plan, the Nonemployee
Director shall be awarded Deferred Units for Shares having a Fair Market Value
of $15,000.00. This Plan shall not impose any obligations on the Company to
retain any Nonemployee Director as a Director nor shall it impose any obligation
on the part of any Nonemployee Director to remain as a Director of the Company.
8.2 Terms of Awards.
8.2.1 Award Agreement. Each Award granted pursuant to this Section
8 shall be evidenced by a written Award Agreement between the
Participant and the Company.
8.2.2 Vesting. Each Award granted pursuant to this Section 8 shall
vest in accordance with the following schedule
Second anniversary of Grant Date 33 1/3%
Third anniversary of Grant Date 33 1/3%
Fourth anniversary of Grant Date 33 1/3%
; provided, however, that no Award shall vest before the First
Permissible Vesting Date. Notwithstanding the foregoing, and except as
provided herein, if the reason for the Termination of Service is the
Nonemployee Director's death or Disability prior to the completion of
the period of service required to be performed to fully vest in any
Award, all Deferred Units that are the subject of such Award shall be
delivered to such Nonemployee Director (or the Nonemployee Director's
beneficiary or estate); provided, however, that no Award shall vest
before the First Permissible Vesting Date. Upon the occurrence of a
Change in Control, each Nonemployee Director's right and interest in
Deferred Units which have not previously vested shall become vested and
nonforfeitable regardless of the period of the Nonemployee Director's
service since the date such Deferred Units were awarded; provided,
however, that no Award shall vest before the First Permissible Vesting
Date.
8.2.3 Other Terms. All provisions of the Plan not inconsistent with
this Section 8 shall apply to Awards granted to Nonemployee Directors.
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SECTION 9 MISCELLANEOUS
9.1 Deferrals. The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.
9.2 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and its Affiliates
is on an at-will basis only.
9.3 Participation. No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.
9.4 Indemnification. Each person who is or shall have been a member of
the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
certificate of incorporation or bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
9.5 Successors. All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business or assets of the Company.
9.6 Beneficiary Designations. If permitted by the Committee, a
Participant under the Plan may name a beneficiary or beneficiaries to whom any
vested but unpaid Award shall be paid in the event of the Participant's death.
Each such designation shall revoke all prior designations by the Participant and
shall be effective only if given in a form and manner acceptable to the
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Committee. In the absence of any such designation, any vested benefits remaining
unpaid at the Participant's death shall be paid to the Participant's estate and,
subject to the terms of the Plan and of the applicable Award Agreement, any
unexercised vested Award may be exercised by the administrator or executor of
the Participant's estate.
9.7 Limited Transferability of Awards. No Award granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will, by the laws of descent and distribution, or to
the limited extent provided in Section 9.6. All rights with respect to an Award
granted to a Participant shall be available during his or her lifetime only to
the Participant. Notwithstanding the foregoing, the Participant may, in a manner
specified by the Committee, (a) transfer a Nonqualified Stock Option to a
Participant's spouse, former spouse or dependent pursuant to a court-approved
domestic relations order which relates to the provision of child support,
alimony payments or marital property rights, and (b) transfer a Nonqualified
Stock Option by bona fide gift and not for any consideration to (i) a member or
members of the Participant's immediate family, (ii) a trust established for the
exclusive benefit of the Participant and/or member(s) of the Participant's
immediate family, (iii) a partnership, limited liability company of other entity
whose only partners or members are the Participant and/or member(s) of the
Participant's immediate family, or (iv) a foundation in which the Participant
an/or member(s) of the Participant's immediate family control the management of
the foundation's assets.
9.8 No Rights as Stockholder. Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the
rights or privileges of a stockholder of the Company with respect to any Shares
issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary).
9.9. Status of Original Issue Shares. The Company intends, but shall
not be obligated, to register for sale under the 1933 Act the Shares acquirable
pursuant to Awards, and to keep such registration effective throughout the
period any Awards are in effect. In the absence of such effective registration
or an available exemption from registration under the 1933 Act, delivery of
Shares acquirable pursuant to Awards shall be delayed until registration of such
Shares is effective or an exemption from registration under the 1933 Act is
available. In the event exemption from registration under the 1933 Act is
available, a Participant (or a Participant's estate or personal representative
in the event of the Participant's death or incapacity), if requested by the
Company to do so, will execute and deliver to the Company in writing an
agreement containing such provisions as the Company may require to assure
compliance with applicable securities laws. No sale or disposition of Shares
acquired pursuant to an Award by a Participant shall be made in the absence of
an effective registration statement under the 1933 Act with respect to such
Shares unless an opinion of counsel satisfactory to the Company that such sale
or disposition will not constitute a violation of the 1933 Act or any other
applicable securities laws is first obtained.
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9.10 Delivery of Shares; Payment by Participant of Consideration.
Notwithstanding anything in the Plan or any Award Agreement to the contrary,
delivery of Shares pursuant to the exercise of an Award may be deferred for any
period during which, in the good faith determination of the Committee, the
Company is not reasonably able to obtain or issue Shares pursuant to such Award
without violating the rules or regulations of any applicable law or securities
exchange. No Shares 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 (including, without limitation, any exercise price or tax
withholding) is received by the Company.
SECTION 10 AMENDMENT, TERMINATION, AND DURATION
10.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend, suspend or terminate the Plan, or any part thereof, at
any time and for any reason. The amendment, suspension, or termination of the
Plan shall not, without the consent of the Participant, alter or impair any
rights or obligations under any Award theretofore granted to such Participant.
No Award may be granted during any period of suspension or after termination of
the Plan.
10.2 Duration of the Plan. The amended and restated Plan shall be
effective as of April 20, 2004, and subject to Section 10.1 (regarding the
Board's right to amend or terminate the Plan), shall remain in effect
thereafter. However, without further stockholder approval, no Incentive Stock
Option may be granted under the Plan after the ten year anniversary of the Plan.
SECTION 11 TAX WITHHOLDING
11.1 Withholding Requirements. Prior to the delivery of any Shares or
cash pursuant to an Award (or exercise thereof), the Company shall have the
power and the right to deduct or withhold, or require a Participant to remit to
the Company, an amount sufficient to satisfy federal, state, and local taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).
11.2 Withholding Arrangements. The Committee, in its sole discretion
and pursuant to such procedures as it may specify from time to time, may permit
a Participant to satisfy such tax withholding obligation, in whole or in part by
(a) electing to have the Company withhold otherwise deliverable Shares, or (b)
delivering to the Company already-owned Shares having a Fair Market Value equal
to the amount required to be withheld. The amount of the withholding requirement
shall be deemed to include any amount which the Committee agrees may be withheld
at the time the election is made, not to exceed the amount determined by using
the maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date that the amount of tax to be
withheld is to be determined. The Fair Market Value of the Shares to be withheld
or delivered shall be determined as of the date that the taxes are required to
be withheld.
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SECTION 12
LEGAL CONSTRUCTION
12.1 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
12.2 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
12.3 Securities Law Compliance. With respect to Section 16 Persons,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
12.4 Governing Law. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.
12.5 Captions. Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.
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