EXHIBIT 99.1
NATIONAL HEALTH PARTNERS, INC.
2006 STOCK INCENTIVE PLAN
1. Purpose.
The purpose of the 2006 Stock Incentive Plan (the "Plan") of National
Health Partners, Inc., an Indiana corporation (the "Company"), is to promote and
closely align the interests of employees of the Company and its shareholders by
providing employees with stock-based compensation and other performance-based
compensation. The Plan is intended to strengthen the Company's ability to reward
employee performance that enhances long-term shareholder value, increase
employee stock ownership through performance-based compensation plans, and
strengthen the Company's ability to attract and retain outstanding employees.
Except where the context otherwise requires or as specifically provided
herein, the term "Company" shall include any of the Company's present or future
parent or subsidiary corporations as defined in Section 424 of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder
(the "Code"), and any other business venture or affiliate in which the Company
has a controlling interest.
2. Administration.
(a) Administration by Board. The Plan will be administered by the board
of directors of the Company (the "Board"). The Board will have full and final
authority to operate, manage and administer the Plan on behalf of the Company.
To the extent required for transactions under the Plan to qualify for the
exemptions available under Rule 16b-3 promulgated under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), all actions relating to
Awards (as defined below) to persons subject to Section 16 of the Exchange Act
may be taken by the Board or a Committee (as defined below) composed of two or
more members, each of whom is a "non-employee director" within the meaning of
Rule 16b-3 under the Exchange Act. To the extent required for compensation
realized from Awards under the Plan to be deductible by the Company pursuant to
Section 162(m) of the Code ("Section 162(m)"), such Awards may be granted by the
Board or a Committee composed of two or more members, each of whom is an
"outside director" within the meaning of Section 162(m).
(b) Authority of Board. Except as provided in the Plan, the Board shall
be authorized and empowered to take all actions necessary or desirable, in its
sole discretion, in connection with the administration of the Plan, including,
without limitation, the following:
(1) to prescribe, amend and rescind rules and regulations relating
to the Plan and any Awards and to define terms not otherwise defined herein;
(2) to determine which persons are Participants (as defined
below), to which of such Participants, if any, Awards shall be granted
hereunder, and the timing of any such Awards;
(3) to grant Awards to Participants and determine the terms and
conditions thereof, including the number of shares of Common Stock subject to
Awards and the circumstances under which Awards become exercisable or vested or
are forfeited or expire;
(4) to establish, verify the extent of satisfaction of, adjust,
reduce or waive any performance goals or other conditions applicable to the
grant, issuance, exercisability, vesting and/or ability to retain any Award;
(5) to prescribe and amend the terms and conditions of the
agreements or other documents evidencing Awards made under this Plan, which
terms and conditions may differ among individual Awards and Participants;
(6) to interpret and construe this Plan, any rules and regulations
under this Plan, and the terms and conditions of any Award granted hereunder,
and to make exceptions to any such provisions in good faith and for the benefit
of the Company; and
(7) to make all other determinations deemed necessary or advisable
for the administration of the Plan.
All decisions and interpretations by the Board shall be made in the
Board's sole discretion and shall be final, binding and conclusive on all
persons having or claiming any interest in the Plan or in any Award. No member
or former member of the Board acting pursuant to the authority delegated by the
Board shall be liable for any action or determination made in good faith with
respect to the Plan.
(c) Appointment of Committees. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). Action of a
Committee may be taken by the vote of a majority of its members or by the
written consent of a majority of its members. All decisions by a Committee shall
be made in the Committee's sole discretion and shall be final, binding and
conclusive on all persons having or claiming any interest in the Plan or in any
Award. A Committee may allocate among its members and delegate to any director
of the Company who is not a member of the Committee any of its administrative
responsibilities. All references in the Plan to the "Board" shall mean the Board
or one or more Committees to the extent the Board has delegated any of its
powers or authority under the Plan to such Committee.
3. Individuals Eligible for Awards.
Awards under the Plan may be made to the following individuals: (i)
employees, officers or directors of the Company, and (ii) consultants or
advisors to the Company. Each individual who is eligible to participate in the
Plan or has been granted an Award under the Plan shall be deemed a
"Participant."
4. Awards Available Under the Plan.
Awards may be made under the Plan in the form of: (i) options, (ii)
warrants, (iii) stock appreciation rights, (iv) restricted stock, (v) restricted
stock units, (vi) unrestricted stock, and (vii) other equity-based or
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equity-related awards that the Board determines to be consistent with the
purpose of the Plan and the interests of the Company (each award together with
the written agreement containing the terms and conditions of the award, an
"Award").
5. Stock Available for Awards.
(a) Number of Shares. Awards may be made under the Plan for up to
4,500,000 shares of common stock, $.001 par value per share, of the Company (the
"Common Stock"). If: (i) any Award expires or is terminated, surrendered or
canceled without having been fully exercised or is forfeited in whole or in part
(including as the result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right), (ii) any Award results in any Common Stock not
being issued (including, without limitation, when an Award is settled for cash),
(iii) shares of Common Stock are surrendered or withheld from any Award to
satisfy a Participant's income tax or other withholding obligation, or (iv)
shares of Common Stock owned by a Participant are tendered to pay the exercise
price of any Award granted under the Plan, then in each such case the shares of
Common Stock covered by such forfeited, terminated or canceled Award or that are
equal to the number of shares surrendered, withheld or tendered shall again
become available for issuance pursuant to Awards granted or to be granted under
the Plan, subject, however, in the case of Incentive Stock Options (as
hereinafter defined), to any limitations under the Code. Shares issued under the
Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.
(b) Limitations on Awards. Except as provided under the Plan and under
the terms of any Award: (i) there shall be no limit on the number or the value
of shares of Common Stock that may be subject to Awards to any individual under
the Plan, and (ii) there shall be no limit on the amount of cash, securities
(other than shares of Common Stock as provided herein) or other property that
may be delivered pursuant to any Award. The limitations on Awards described in
this Section 5(b) shall be construed and applied consistently with Section
162(m) of the Code ("Section 162(m)") to the extent any Awards are intended to
qualify as "performance-based compensation" under Section 162(m).
(c) Substitute Awards. The Board may grant Awards in tandem with or in
substitution for any other Award granted under this Plan or any award granted
under any other plan of the Company. The Board may grant Awards under the Plan
in substitution for stock and stock-based awards held by employees of another
corporation who concurrently become employees of the Company as a result of a
merger or consolidation of the employing corporation with the Company or the
acquisition by the Company of property or stock of the employing corporation.
The Board may direct that the substitute Awards be granted on such terms and
conditions as the Board considers appropriate in the circumstances.
6. Stock Options.
(a) General. The Board may grant options to purchase Common Stock
(each, an "Option") and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option, and the conditions
and limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option that is not intended to be an Incentive Stock
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Option (as defined below) or that is intended to be an Incentive Stock Option
but fails to so qualify, whether at the time of grant or thereafter, shall be
designated a "Nonstatutory Stock Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company, any of the
Company's present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Code and any other entities the employees of which
are eligible to receive Incentive Stock Options under the Code, and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. To the extent required for "incentive stock option" treatment
under Section 422 of the Code, the aggregate fair market value as determined by,
or in a manner approved by, the Board in good faith ("Fair Market Value"),
determined as of the time of grant, of the shares of Common Stock with respect
to which Incentive Stock Options granted under the Plan and any other plan of
the Company become exercisable for the first time by a Participant during any
calendar year shall not exceed $100,000. The Company shall have no liability to
a Participant, or any other party, if an Option, or any part thereof, that is
intended to be an Incentive Stock Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price of an
Option at the time each Option is granted and specify it in the applicable
Award; provided, however, that if the Option granted is an Incentive Stock
Option, the exercise price shall be not less than 100% of the fair market value
of the Common Stock, as determined by the Board, at the time the Incentive Stock
Option is granted. If an employee owns or is deemed to own, by reason of the
attribution rules applicable under Section 424(d) of the Code, more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company and an Incentive Stock Option is granted to such employee, the exercise
price shall be no less than 110% of the fair market value of the Common Stock,
as determined by the Board, at the time the Option is granted.
(d) Duration. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
Award; provided, however, that no Option will be granted for a term in excess of
10 years. If an employee owns or is deemed to own, by reason of the attribution
rules applicable under Section 424(d) of the Code, more than ten percent (10%)
of the combined voting power of all classes of stock of the Company and an
Incentive Stock Option is granted to such employee, the term of such Option
shall be no more than five (5) years from the date of grant.
(e) Exercisability; Rights of Stockholder. Options shall become vested
and exercisable at such time or times, whether or not in installments, as shall
be determined by the Board. In the alternative, the Board may specify that an
Option shall become vested and exercisable upon the achievement of such
performance goals, objectives and other conditions as it may establish at the
time of grant. A Participant shall have the rights of a stockholder only as to
shares of Common Stock acquired upon the exercise of an Option and not as to
shares of Common Stock underlying unexercised Options.
(f) Restrictions. The Board shall determine, with respect to each
Option to be granted, the nature and extent of the restrictions, if any, to be
imposed on the shares of Common Stock that may be purchased thereunder. Without
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limiting the generality of the foregoing, the Board may impose conditions
restricting absolutely or conditionally the transferability of shares of Common
Stock acquired through the exercise of Options for such periods, and subject to
such conditions, including continued employment of the Participant by the
Company, as the Board may determine.
(g) Method of Exercise. Options may be exercised in whole or in part by
delivering written notice of exercise to the Company specifying the number of
shares to be purchased and signed by the proper person, or by any other form of
notice, including electronic notice, approved by the Board, together with
payment in full of the aggregate exercise price for the number of shares for
which the Option is exercised.
(h) Methods of Payment. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as specified in the applicable
Award; provided, however, that if no such method of payment is specified in the
Award, the Common Stock purchased upon the exercise of the Option may be paid
for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) if the shares of Common Stock underlying the Option are
registered under the Securities Act, except as the Board may, in its sole
discretion, otherwise provide in an Award, by: (i) delivery of an irrevocable
and unconditional undertaking by a creditworthy broker to deliver promptly to
the Company sufficient funds to pay the exercise price and any required tax
withholding, or (ii) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company the exercise price and any required tax withholding;
(3) if the shares of Common Stock underlying the Option are
registered under the Securities Act, by delivery of such shares of Common Stock
owned by the Participant valued at their Fair Market Value, provided: (i) such
method of payment is then permitted under applicable law, (ii) such shares of
Common Stock were owned by the Participant at least six months prior to such
delivery, and (iii) such shares of Common Stock are not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements or
restrictions (any such shares satisfying all of the requirements set forth in
subsections (i), (ii) and (iii), "Mature Shares");
(4) by reducing the number of shares of Common Stock otherwise
issuable under the Option to the Participant upon the exercise of the Option by
a number of shares of Common Stock having a Fair Market Value equal to such
aggregated exercise price; provided, however, that such method of payment is
then permitted under applicable law;
(5) to the extent permitted by applicable law and by the Board, in
its sole discretion, by: (i) delivery of a promissory note of the Participant to
the Company on terms determined by the Board, or (ii) payment of such other
lawful consideration as the Board may determine; or
(6) by any combination of the above permitted forms of payment.
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The delivery of certificates representing the shares of Common Stock to
be purchased pursuant to the exercise of an Option will be contingent upon
receipt from the Participant (or a purchaser acting in his stead in accordance
with the provisions of the Option) by the Company of the full purchase price for
the shares and the fulfillment of any other requirements contained in the Option
or imposed by applicable law.
7. Warrants.
(a) General. The Board may grant warrants to purchase Common Stock
(each, a "Warrant") and determine the number of shares of Common Stock to be
covered by each Warrant, the exercise price of each Warrant, and the conditions
and limitations applicable to the exercise of each Warrant, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.
(b) Exercise Price. The Board shall establish the exercise price of a
Warrant at the time each Warrant is granted and specify it in the applicable
Award.
(c) Exercisability; Rights of Stockholder. Warrants shall become vested
and exercisable at such time or times, whether or not in installments, as shall
be determined by the Board. In the alternative, the Board may specify that a
Warrant shall become vested and exercisable upon the achievement of such
performance goals, objectives and other conditions as it may establish at the
time of grant. A Participant shall have the rights of a stockholder only as to
shares of Common Stock acquired upon the exercise of a Warrant and not as to
shares of Common Stock underlying unexercised Warrants.
(d) Restrictions. The Board shall determine, with respect to each
Warrant to be granted, the nature and extent of the restrictions, if any, to be
imposed on the shares of Common Stock that may be purchased thereunder. Without
limiting the generality of the foregoing, the Board may impose conditions
restricting absolutely or conditionally the transferability of shares of Common
Stock acquired through the exercise of Warrants for such periods, and subject to
such conditions, including continued employment of the Participant by the
Company, as the Board may determine.
(e) Method of Exercise. Warrants may be exercised in whole or in part
by delivering written notice of exercise to the Company specifying the number of
shares to be purchased and signed by the proper person, or by any other form of
notice, including electronic notice, approved by the Board, together with
payment in full of the aggregate exercise price for the number of shares for
which the Warrant is exercised.
(f) Methods of Payment. Common Stock purchased upon the exercise of a
Warrant granted under the Plan shall be paid for as specified in the applicable
Award; provided, however, that if no such method of payment is specified in the
Award, the Common Stock purchased upon the exercise of the Warrant may be paid
for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) if the shares of Common Stock underlying the Warrant are
registered under the Securities Act, except as the Board may, in its sole
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discretion, otherwise provide in an Award, by: (i) delivery of an irrevocable
and unconditional undertaking by a creditworthy broker to deliver promptly to
the Company sufficient funds to pay the exercise price and any required tax
withholding, or (ii) delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company the exercise price and any required tax withholding;
(3) if the shares of Common Stock underlying the Warrant are
registered under the Securities Act, by delivery of such shares of Common Stock
owned by the Participant valued at their Fair Market Value, provided: (i) such
method of payment is then permitted under applicable law, (ii) such shares of
Common Stock were owned by the Participant at least six months prior to such
delivery, and (iii) such shares of Common Stock are not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements or
restrictions (any such shares satisfying all of the requirements set forth in
subsections (i), (ii) and (iii), "Mature Shares");
(4) by reducing the number of shares of Common Stock otherwise
issuable under the Warrant to the Participant upon the exercise of the Warrant
by a number of shares of Common Stock having a Fair Market Value equal to such
aggregated exercise price; provided, however, that such method of payment is
then permitted under applicable law;
(5) to the extent permitted by applicable law and by the Board, in
its sole discretion, by: (i) delivery of a promissory note of the Participant to
the Company on terms determined by the Board, or (ii) payment of such other
lawful consideration as the Board may determine; or
(6) by any combination of the above permitted forms of payment.
The delivery of certificates representing the shares of Common Stock to
be purchased pursuant to the exercise of a Warrant will be contingent upon
receipt from the Participant (or a purchaser acting in his stead in accordance
with the provisions of the Warrant) by the Company of the full purchase price
for the shares and the fulfillment of any other requirements contained in the
Warrant or imposed by applicable law.
8. Stock Appreciation Rights.
(a) General. The Board may grant Awards entitling the holder on
exercise thereof to acquire: (i) a number of shares of Common Stock, (ii) an
equivalent amount of cash, or (iii) a combination of Common Stock and cash, as
determined by the Board in its sole discretion, determined in whole or in part
by reference to the appreciation, from and after the date of grant, in the Fair
Market Value of a share of Common Stock (each, a "SAR"), with such rights and
subject to such restrictions and conditions as the Board may determine at the
time of grant.
(b) Exercise Price. The Board shall establish the exercise price at the
time each SAR is granted and specify it in the applicable Award.
(c) Calculation of Appreciation. Upon exercise, the Participant shall
receive a number of shares of Common Stock, an amount of cash, or a combination
of Common Stock and cash, having an aggregate Fair Market Value equal to the
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product of: (i) the sum of: (x) the Fair Market Value of a share of Common Stock
on the date of the Participant's request, less (y) the exercise price per share
of Common Stock specified in such SAR, multiplied by (ii) the number of shares
of Common Stock for which such SAR shall be exercised.
(d) Exercisability; Rights of Stockholder. SARs shall become vested and
exercisable at such time or times, whether or not in installments, as shall be
determined by the Board. In the alternative, the Board may specify that a SAR
shall become vested and exercisable upon the achievement of such performance
goals, objectives and other conditions as it may establish at the time of grant.
A Participant shall have the rights of a stockholder only as to shares of Common
Stock acquired upon the exercise of a SAR and not as to shares of Common Stock
underlying unexercised SARs.
(e) Restrictions. The Board shall determine, with respect to each SAR
to be granted, the nature and extent of the restrictions, if any, to be imposed
on any shares of Common Stock that may be purchased thereunder. Without limiting
the generality of the foregoing, the Board may impose conditions restricting
absolutely or conditionally the transferability of shares of Common Stock
acquired through the exercise of SARs for such periods, and subject to such
conditions, including continued employment of the Participant by the Company, as
the Board may determine.
(f) Method of Exercise. SARs may be exercised in whole or in part by
delivering written notice of exercise to the Company specifying the number of
shares to be purchased and signed by the proper person, or by any other form of
notice, including electronic notice, approved by the Board.
9. Restricted Stock.
(a) General. The Board may grant Awards entitling recipients to
acquire, for such purchase price, if any, as may be determined by the Board,
shares of Common Stock ("Restricted Stock") with such rights and subject to such
restrictions and conditions as the Board may determine at the time of grant.
(b) Acceptance of Award. A Participant who is granted Restricted Stock
shall have no rights with respect to such Award unless the Participant shall
have accepted the Award within 90 days (or such longer or shorter period of time
as the Board may specify in the Award) following the date of the Award by
making payment to the Company of the specified purchase price, if any, of the
shares covered by the Award and by executing and delivering to the Company a
written instrument in such form as the Board shall determine that sets forth
the terms and conditions applicable to the Restricted Stock.
(c) Vesting of Restricted Stock. Shares of Restricted Stock shall
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Board. In the alternative, the Board
may specify that the shares of Restricted Stock shall become vested and
exercisable upon the achievement of such performance goals, objectives and other
conditions as it may establish at the time of grant. Subsequent to such date or
dates and/or the attainment of such pre-established performance goals,
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objectives and other conditions, the shares on which all restrictions have
lapsed shall no longer be Restricted Stock and shall be deemed "vested."
(d) Rights as a Stockholder. Upon complying with the provisions of this
Section 9, a Participant shall have all the rights of a stockholder with respect
to the Restricted Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in the Plan and subject to such other conditions contained in the
Award. Unless the Board shall otherwise determine, certificates evidencing
shares of Restricted Stock shall remain in the possession of the Company until
such shares are vested as provided in Section 9(c) above.
(e) Restrictions. In the event of termination of employment by the
Company for any reason, including death, Disability, Retirement and for Cause
(each as defined below), the Company shall have the right, at the discretion of
the Board, to repurchase shares of Restricted Stock that have not then vested at
their purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from the Participant or the Participant's legal
representative or legatee. Unless otherwise specified in the Award, the company
must exercise such right of repurchase or forfeiture within 90 days following
such termination of employment.
(f) Waiver, Deferral and Reinvestment of Dividends. The written
instrument evidencing the Award may require or permit the immediate payment,
waiver, deferral or investment of dividends paid on the Restricted Stock.
10. Restricted Units.
(a) General. The Board may grant Awards entitling recipients to acquire
in the future: (i) shares of Common Stock, (ii) an equivalent amount of cash, or
(iii) a combination of shares of Common Stock and cash, as determined by the
Board in its sole discretion, with such rights and subject to such restrictions
and conditions as the Board may determine at the time of grant, (each, a
"Restricted Unit"; together with Restricted Stock, a "Restricted Award").
(b) Vesting of Restricted Units. Restricted Units shall become vested
and exercisable at such time or times, whether or not in installments, as shall
be determined by the Board. In the alternative, the Board may specify that a
Restricted Unit shall become vested and exercisable upon the achievement of such
performance goals, objectives and other conditions as it may establish at the
time of grant.
(c) No Rights as Stockholder. A Participant holding Restricted Units
shall not have the rights of a stockholder with respect to the shares of Common
Stock, if any, issuable under such Restricted Units, unless and until such
shares are issued to the Participant pursuant to the provisions of the
Restricted Units and this Plan.
11. Unrestricted Stock.
The Board may grant Awards entitling recipients to acquire, for such
purchase price, if any, as may be determined by the Board, shares of Common
Stock free of any vesting restrictions or conditions under the Plan
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("Unrestricted Stock"). Shares of Unrestricted Stock may be granted or sold in
respect of past services or other valid consideration.
12. Other Stock-Based Awards.
The Board may grant other types of equity-based or equity-related
Awards in such amounts and subject to such terms and conditions as the Board may
determine. Such Awards may entail the transfer of actual shares of Common Stock
to Participants or payment in cash or otherwise of amounts based on the value of
shares of Common Stock, and may include, without limitation, Awards designed to
comply with or take advantage of the applicable local laws of jurisdictions
other than the United States.
13. Adjustments for Changes in Common Stock and Certain Other Events.
Awards shall be adjusted by the Company to address changes in
capitalization, liquidation or dissolution events, reorganization and change in
control events, and other similar events in the manner specified in the
applicable Award; provided, however, that if no such methods of adjustment are
provided in the Award, the Award shall be adjusted as follows:
(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of shares of Common Stock other than an
ordinary cash dividend: (i) the number and class of securities available under
this Plan, (ii) the limitations on Awards set forth in Section 5(b), (iii) the
number and class of securities and exercise price per share subject to each
Option, Warrant and SAR then outstanding, (iv) the repurchase price per share of
Common Stock subject to each Restricted Award then outstanding, and (v) the
terms of each other stock-based Award then outstanding, shall be adjusted
appropriately by the Company, or substituted Awards may be made, if applicable,
to the extent the Board shall determine, in good faith, that such an adjustment
or substitution is necessary or appropriate. Any adjustment under this Section
13(a) shall become effective at the close of business on the date the
subdivision or combination becomes effective, or as of the record date of such
dividend, or in the event that no record date is fixed, upon the making of such
dividend. If this Section 13(a) applies and Section 13(c) also applies to any
event, Section 13(c) shall be applicable to such event, and this Section 13(a)
shall not be applicable.
(b) Liquidation or Dissolution. In the event the shareholders of the
Company approve a plan of complete liquidation or dissolution of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of the Company's assets, the Board shall provide that: (i) except to the
extent specifically provided to the contrary in any Award, all then unexercised
Options, Warrants and SARs outstanding will: (A) become exercisable in full as
of a specified time at least 10 business days prior to the effective date of
such liquidation, dissolution, sale or disposition, and (B) terminate effective
upon such liquidation, dissolution, sale or disposition, except to the extent
exercised before such effective date, and (ii) except to the extent specifically
provided to any Restricted Award, all restrictions and conditions on all
Restricted Awards then outstanding shall automatically be deemed terminated or
satisfied.
(c) Reorganization and Change in Control Events.
(1) Definitions.
(a) A "Reorganization Event" shall mean:
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(i) any merger or consolidation of the Company with or
into another entity as a result of which all of the outstanding shares of Common
Stock are converted into or exchanged for the right to receive cash, securities
or other property; or
(ii) any exchange of all of the outstanding shares of
Common Stock for cash, securities or other property pursuant to a share exchange
transaction.
(b) A "Change in Control Event" shall mean:
(i) the acquisition by an individual, entity or group
within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (each, a
"Person") of beneficial ownership of any capital stock of the Company if, after
such acquisition, such Person beneficially owns (within the meaning of Rule
13d-3 promulgated under the Exchange Act) 30% or more of either (x) the
then-outstanding shares of common stock of the Company (the "Outstanding Common
Stock") or (y) the combined voting power of the then-outstanding securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change in
Control Event: (A) any acquisition directly from the Company (excluding an
acquisition pursuant to the exercise, conversion or exchange of any security
exercisable for, convertible into or exchangeable for common stock or voting
securities of the Company, unless the Person exercising, converting or
exchanging such security acquired such security directly from the Company or an
underwriter or agent of the Company), (B) any acquisition by any employee
benefit plan or related trust sponsored or maintained by the Company or any
corporation controlled by the Company, or (C) any acquisition by any corporation
pursuant to a Business Combination (as defined in Section 13(c)(1)(b)(iii)
below) that complies with clauses (x) and (y) of subsection (iii) of this
definition;
(ii) an event that results in the Continuing Directors
(as defined below) not constituting a majority of the Board (or, if applicable,
the board of directors of a successor corporation to the Company). "Continuing
Director" means, at any date, a member of the Board: (x) who was a member of the
Board on the date of the initial adoption of this Plan by the Board, or (y) who
was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election or whose election to the Board was recommended or endorsed by at least
a majority of the directors who were Continuing Directors at the time of such
nomination or election; provided, however, that there shall be excluded from
this clause (y) any individual whose initial assumption of office occurred as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents, by or on behalf of a person other than the Board; or
(iii) the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or
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substantially all of the individuals and entities who were the beneficial owners
of the Outstanding Common Stock and Outstanding Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then-outstanding shares of common stock and the combined
voting power of the then-outstanding securities entitled to vote generally in
the election of directors, respectively, of the resulting or acquiring
corporation in such Business Combination, which shall include, without
limitation, a corporation that as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries (such resulting or acquiring corporation is referred to
herein as the "Acquiring Corporation") in substantially the same proportions as
their ownership of the Outstanding Common Stock and Outstanding Voting
Securities, respectively, immediately prior to such Business Combination, and
(y) no Person (excluding the Acquiring Corporation or any employee benefit plan
or related trust maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 30% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination).
(2) Effect on Options, Warrants and SARs.
(a) Reorganization Event. Upon the occurrence of a
Reorganization Event (regardless of whether such event also constitutes a Change
in Control Event), or the execution by the Company of any agreement with respect
to a Reorganization Event (regardless of whether such event will result in a
Change in Control Event), the Board shall provide that all outstanding Options,
Warrants and SARs shall be assumed, or equivalent options, warrants and stock
appreciation rights shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof); provided, however, that if such
Reorganization Event also constitutes a Change in Control Event, except to the
extent specifically provided to the contrary in the instrument evidencing any
Option, Warrant or SAR or any other agreement between a Participant and the
Company, such assumed or substituted options, warrants and stock appreciation
rights shall be immediately exercisable in full upon the occurrence of such
Reorganization Event. For purposes hereof, an Option, Warrant or SAR shall be
considered to be assumed if, following consummation of the Reorganization Event,
the Option, Warrant or SAR confers the right to purchase, for each share of
Common Stock subject to the Option, Warrant or SAR immediately prior to the
consummation of the Reorganization Event, the consideration (whether cash,
securities or other property) received as a result of the Reorganization Event
by holders of Common Stock for each share of Common Stock held immediately prior
to the consummation of the Reorganization Event (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding shares of Common Stock); provided, however, that if
the consideration received as a result of the Reorganization Event is not solely
common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation (or an affiliate thereof), provide for the consideration to be
received upon the exercise of Options, Warrants and SARs to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.
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Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or substitute
for, such Options, Warrants and SARs, then the Board shall, upon written notice
to the Participants, provide that all then unexercised Options, Warrants and
SARs will become exercisable in full as of a specified time at least 10 business
days prior to the effective date of the Reorganization Event and will terminate
immediately prior to the consummation of such Reorganization Event, except to
the extent exercised by the Participants before the consummation of such
Reorganization Event; provided, however, that in the event of a Reorganization
Event under the terms of which holders of Common Stock will receive upon
consummation thereof a cash payment for each share of Common Stock surrendered
pursuant to such Reorganization Event (the "Acquisition Price"), then the Board
may instead provide that all outstanding Options, Warrants and SARs shall
terminate upon consummation of such Reorganization Event and that each
Participant shall receive, in exchange therefor, a cash payment equal to the
amount (if any) by which: (A) the Acquisition Price multiplied by the number of
shares of Common Stock subject to such outstanding Options, Warrants and SARs
(whether or not then exercisable), exceeds (B) the aggregate exercise price of
such Options, Warrants and SARs. To the extent all or any portion of an Option,
Warrant or SAR becomes exercisable solely as a result of the first sentence of
this paragraph, upon exercise of such Option, Warrant or SAR the Participant
shall receive shares subject to a right of repurchase by the Company or its
successor at the exercise price of the Option, Warrant or SAR. Such repurchase
right: (X) shall lapse at the same rate as the Option, Warrant or SAR would have
become exercisable under its terms, and (Y) shall not apply to any shares
subject to the Option, Warrant or SAR that was exercisable under its terms
without regard to the first sentence of this paragraph.
(b) Change in Control Event that is not a Reorganization
Event. Upon the occurrence of a Change in Control Event that does not also
constitute a Reorganization Event, except to the extent specifically provided to
the contrary in any Option, Warrant or SAR Award, all Options, Warrants and SARs
then outstanding shall automatically become immediately exercisable in full.
(3) Effect on Restricted Awards and Awards of Unrestricted Stock.
(a) Reorganization Event that is not a Change in Control
Event. Upon the occurrence of a Reorganization Event that is not a Change in
Control Event, the repurchase and other rights of the Company under each
outstanding Restricted Award shall inure to the benefit of the Company's
successor and shall apply to the cash, securities or other property that the
Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Award.
(b) Change in Control Event. Upon the occurrence of a Change
in Control Event (regardless of whether such event also constitutes a
Reorganization Event), except to the extent specifically provided to the
contrary in the Restricted Award, all restrictions and conditions on all
Restricted Awards then outstanding shall automatically be deemed terminated or
satisfied.
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(d) Notice of Adjustment. When any adjustment is required to be made
under this Section 13, the Company shall promptly notify the Participant of
such event and of the number of shares of Common Stock or other securities or
property thereafter owned or that may be acquired under an Award.
(e) No Impairment. The Company and the Participant will not, by any
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company or the
Participant, respectively, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 13 and in the taking of all
such action as may be necessary or appropriate in order to protect the rights or
the Company and the Participant against impairment.
14. Termination of Awards.
Awards shall terminate in the manner specified in the applicable
Award; provided, however, that if no such methods of termination are specified
in the Award, the Award shall terminate as follows:
(a) Termination by Death. If any Participant's employment by, or other
relationship with, the Company terminates by reason of death: (i) any Options,
Warrants or SARs then owned by such Participant may thereafter be exercised, to
the extent exercisable at the date of death by the legal representative or
legatee of the Participant, until the earlier of the date that is 90 days (or
such longer period as the Board shall specify at any time) after the date of
death or until the date of expiration of the stated term of the Options,
Warrants or SARs, if earlier, and (ii) any restrictions and conditions on any
Restricted Awards then owned by the Participant shall automatically be deemed
terminated or satisfied on the date of death, and the legal representative or
legatee of the Participant shall have the right to acquire any shares of Common
Stock underlying the Restricted Awards until the earlier of the date that is 90
days (or such longer period as the Board shall specify at any time) after the
date of death or until the expiration of the stated term of the Restricted
Award.
(b) Termination by Reason of Disability or Retirement.
(1) If a Participant's employment by, or other relationship with,
the Company terminates by reason of disability as set forth in Section 22(e)(3)
of the Code ("Disability"): (i) any Options, Warrants or SARs then owned by such
Participant may thereafter be exercised, to the extent they were exercisable at
the time of such termination of employment, until the earlier of the date that
is 90 days (or such longer period as the Board shall specify at any time) after
the date of such termination of employment or the date of expiration of the
stated term of the Options, Warrants or SARs, and (ii) any restrictions and
conditions on any Restricted Awards then owned by the Participant shall
automatically be deemed terminated or satisfied on the date of such termination
of employment, and the legal representative or guardian of the Participant shall
have the right to acquire any shares of Common Stock underlying the Restricted
Awards until the earlier of the date that is 90 days (or such longer period as
the Board shall specify at any time) after the date of such termination of
employment or the date of expiration of the stated term of the Restricted Award.
(2) If a Participant retires in good standing from active
employment or service with the Company in accordance with the retirement
policies of the Company then in effect ("Retirement"), (i) any Options, Warrants
and SARs then held by the Participant may thereafter be exercised, to the extent
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they were exercisable at the time of such termination, until the earlier of the
date that is 90 days (or such longer period as the Board shall specify at any
time) after the date of such Retirement or until the date of expiration of the
stated term of the Options, Warrants or SARs, and (ii) any restrictions and
conditions on any Restricted Awards then owned by the Participant shall
automatically be deemed terminated or satisfied on the date of such Retirement
and the Participant shall have the right to acquire any shares of Common Stock
underlying the Restricted Awards until the earlier of the date that is 90 days
(or such longer period as the Board shall specify at any time) after the date of
such Retirement or the date of expiration of the stated term of the Restricted
Award.
(3) The Board shall have sole authority and discretion to
determine whether a Participant's employment or services has been terminated by
reason of Disability or Retirement.
(c) Termination for Cause. If a Participant's employment by, or other
relationship with, the Company terminates for "Cause," any Options, Warrants,
SARs and Restricted Awards held by such Participant shall immediately terminate
and be of no further force and effect; provided, however, that the Board may, in
its sole discretion, provide that any such Options, Warrants, SARs and
Restricted Awards may be exercised until the earlier of the date that is 90 days
after the date of such termination of employment or the date of expiration of
the stated term of the Options, Warrants, SARs or Restricted Awards.
"Cause" shall have the meaning ascribed to such term in any employment,
consulting, advisory or other agreement between the applicable Participant and
the Company; provided, however, that if no such agreement exists or, if such
agreement exists but no such term is provided or defined therein, "Cause" shall
mean a determination by the Company (including the Board) that the Participant's
employment or other relationship with the Company should be terminated as a
result of: (i) a material breach by the Participant of any agreement to which
the Participant and the Company are parties, (ii) any act, other than
Retirement, or omission to act by the Participant that may have a material and
adverse effect on the business of the Company or on the Participant's ability to
perform services for the Company, including, without limitation, the proven or
admitted commission of any crime (other than an ordinary traffic violation), or
(iii) any material misconduct or material neglect of duties by the Participant
in connection with the business or affairs of the Company.
(d) Other Termination. Unless otherwise determined by the Board, if a
Participant's employment by, or other relationship with, the Company terminates
for any reason other than death, Disability, Retirement or for Cause: (i) any
Options, Warrants and SARs held by such Participant may thereafter be exercised,
to the extent they are exercisable on the date of termination of employment,
until the earlier of the date that is 90 days (or such longer period as the
Board shall specify at any time) after the date of such termination of
employment or the date of expiration of the stated term of the Options, Warrants
and SARs, and (ii) any restrictions and conditions on any Restricted Awards then
owned by the Participant shall automatically be deemed terminated or satisfied
on the date of such Retirement and the Participant shall have the right to
acquire any shares of Common Stock underlying the Restricted Awards until the
earlier of the date that is 90 days (or such longer period as the Board shall
specify at any time) after the date of such termination of employment or the
date of expiration of the stated term of the Restricted Award.
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(e) Transfer and Leave of Absence. For purposes of this Plan, the
following events shall not be deemed a termination of employment: (i) a transfer
of employment between any of the Company, a parent, a subsidiary or any other
affiliate of the Company, and (ii) an approved leave of absence for military
service or sickness, or for any other purpose approved by the Board, if the
employee's right to re-employment is guaranteed by a statute, by contract or
under the policy pursuant to which the leave of absence was granted, or if the
Board otherwise so provides in writing.
15. Withholding.
(a) Payment by Participant. Each Participant shall pay to the Company,
or make arrangements satisfactory to the Board regarding payment of, any
federal, state, local and/or payroll taxes of any kind required by law to be
withheld with respect to such income. The Company may, to the extent permitted
by law, deduct any such taxes from any payment of any kind otherwise due to a
Participant whether or not pursuant to the Plan.
(b) Payment in Shares. A Participant may elect, with the consent of the
Board, to have such tax withholding obligation satisfied, in whole or in part,
by (i) authorizing the Company to withhold from shares of Common Stock to be
issued pursuant to an Award a number of shares of Common Stock having an
aggregate Fair Market Value that would satisfy the minimum withholding amount
due with respect to such Award, or (ii) delivering to the Company a number of
Mature Shares with an aggregate Fair Market Value that would satisfy the minimum
withholding amount due. The Company may require that any fractional share amount
be settled in cash. For the purposes of this Section 15(b), Fair Market Value
shall be determined as of the date on which the amount of tax to be withheld is
determined.
(c) Notice of Disqualifying Disposition. If any Participant shall make
any disposition of shares of Common Stock delivered pursuant to the exercise of
an Incentive Stock Option under the circumstances described in Section 421(b) of
the Code (relating to certain disqualifying dispositions), such Participant
shall notify the Company of such disposition within 10 days thereof.
16. Status of Participant. With respect to the portion of any Award that has not
been exercised and any payments in cash, shares of Common Stock or other
consideration not received by a Participant, a Participant shall have no rights
greater than those of a general unsecured creditor of the Company unless the
Board shall otherwise expressly determine in connection with an Award. The Board
may, in its sole discretion, authorize the creation of trusts or other
arrangements to meet the Company's obligations to deliver shares of Common Stock
or make payments with respect to Awards hereunder, provided that the existence
of such trusts or other arrangements is consistent with the provision of the
preceding sentence.
17. General Provisions Applicable to Awards.
(a) Transferability of Awards. Except as the Board may otherwise
determine or provide in an Award or as otherwise provided in the Plan, no Award
or any right or obligation thereunder may be sold, exchanged, transferred,
assigned, pledged, hypothecated or otherwise encumbered or disposed of, whether
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voluntarily or involuntarily, by the person to whom they are granted, except by
will or the laws of descent and distribution. Awards shall be exercisable only
during the life of the Participant to whom an Award was granted and only by the
Participant or the Participant's legal representative. References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees. Notwithstanding the immediately proceeding three (3)
sentences, the Board may permit a Participant to transfer any Award to any
person or entity that the Board so determines under such terms and conditions
that it deems appropriate in its sole discretion. Any assignment in violation of
the provisions of this Section 17(a) shall be void. All of the terms and
conditions of this Plan and any Awards shall be binding upon any such permitted
successors and assigns of the Participant.
(b) Agreements Evidencing Awards. Each Award granted under the Plan
shall be evidenced by a written document that shall contain such provisions and
conditions as the Board deems appropriate. By accepting an Award, a Participant
thereby agrees that the Award shall be subject to all of the terms and
provisions of the Plan and the applicable Award.
(c) Non-Uniform Determinations. Except as otherwise provided by the
Plan, each Award may be made alone or in addition to or in relation to any other
Award. The terms of each Award need not be identical, and the Board need not
treat Participants uniformly, regardless of whether such persons are similarly
situated. Without limiting the generality of the foregoing, the Board shall be
entitled, among other things, to make non-uniform and selective determinations
when issuing Awards, and to grant non-uniform and selective Awards as to: (i)
the persons to receive Awards, (ii) the terms and provisions of Awards, and
(iii) whether a Participant's employment has been terminated for purposes of the
Plan.
(d) Acceleration. The Board may at any time provide that any Award
shall become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
(e) Delivery of Shares. The Company will not be obligated to deliver
any shares of Common Stock pursuant to the Plan or to remove restrictions from
shares previously delivered under the Plan until: (i) all conditions of the
Award have been met or removed to the satisfaction of the Company, (ii) in the
opinion of the Company's counsel, all other legal matters in connection with the
issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market
rules and regulations, and (iii) the Participant has executed and delivered to
the Company such representations or agreements as the Company may consider
appropriate to satisfy the requirements of any applicable laws, rules or
regulations.
(f) Stock Certificates. Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company or the Company's
designee. At the expiration of the applicable restriction periods, the Company
or such designee shall deliver the certificates no longer subject to such
restrictions to the Participant or if the Participant has died, to the
Participant's legal representative or legatee. Delivery of stock certificates to
Participants under this Plan shall be deemed effected for all purposes when the
Company or a stock transfer agent of the Company shall have delivered such
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certificates in the United States mail, addressed to the Participant, at the
Participant's last known address on file with the Company.
18. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any
claim or right to be granted an Award. The adoption of the Plan and grant of an
Award shall not be construed as giving a Participant the right to continued
employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan
or any Award.
(b) Nature of Payments. Any and all grants of Awards and deliveries of
shares of Common Stock, cash, securities or other property under the Plan shall
be in consideration of services performed or to be performed for the Company by
the Participant. Awards under the Plan may, in the discretion of the Board, be
made in substitution in whole or in part for cash or other compensation
otherwise payable to a Participant. All such grants and deliveries shall
constitute a special discretionary incentive payment to the Participant and
shall not be required to be taken into account in computing the amount of salary
or compensation of the Participant for the purpose of determining any
contributions to or any benefits under any pension, retirement, profit-sharing,
bonus, life insurance, severance or other benefit plan of the Company or under
any agreement with the Participant, unless the Company specifically provides
otherwise.
(c) No Rights As Stockholder. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until delivery of the shares to the Participant or the
Participant's legal representative or legatee. Notwithstanding the foregoing, in
the event the Company effects a split of the Common Stock by means of a stock
dividend and the exercise price of and the number of shares subject to an
Option, Warrant or SAR are adjusted as of the date of the distribution of the
dividend (rather than as of the record date for such dividend), a Participant
who exercises such Option, Warrant or SAR between the record date and the
distribution date for such stock dividend shall be entitled to receive, on the
distribution date, the stock dividend with respect to the shares of Common Stock
acquired upon such Option, Warrant or SAR exercise, notwithstanding the fact
that such shares were not outstanding as of the close of business on the record
date for such stock dividend.
(d) Effective Date of Plan. The Plan shall become effective on the date
on which it is adopted by the Board; provided, however, that: (i) no Award
granted to a Participant shall become effective until any shareholder approval
of the Company to issue the underlying securities necessary under applicable
legal, regulatory or listing requirements shall be obtained, and (ii) no Award
granted to a Participant that is intended to comply with Section 162(m) shall
become exercisable, vested or realizable, as applicable to such Award, unless
and until the Plan has been approved by the Company's stockholders to the extent
stockholder approval is required by Section 162(m) in the manner required under
Section 162(m).
(e) Entire Agreement. This Plan and any Award contain the entire
agreement between the parties with respect to the subject matter hereof and
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supercede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof, and no party
shall be liable or bound to any other party in any manner by any warranties,
representations, guarantees or covenants except as specifically set forth in the
Plan and any Award. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
(f) Amendment of Plan or Award. The Board may at any time amend or
discontinue the Plan and amend or cancel any outstanding Award, including in any
manner that adversely affects the rights, duties or obligations of any
Participant, and including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, converting an Incentive Stock Option to a Nonstatutory Stock
Option, and converting an Option into a SAR, for the purpose of satisfying
changes in law or for any other lawful purpose. Unless otherwise determined by
the Board, shareholder approval of any suspension, discontinuance, revision or
amendment shall be obtained only to the extend necessary to comply with any
applicable law, rule or regulation. To the extent required by Section 162(m), no
Award granted to a Participant that is intended to comply with Section 162(m)
after the date of such amendment shall become exercisable, realizable or vested,
as applicable to such Award, unless and until such amendment shall have been
approved by the Company's stockholders if required by Section 162(m) (including
the vote required under Section 162(m)). No Award shall be made that is
conditioned upon stockholder approval of any amendment to the Plan.
(g) Severability. If any provision of the Plan or any Award or the
application thereof to any person or circumstance is held to be invalid or
unenforceable to any extent, the remainder of the Plan or any Award shall remain
in full force and effect and shall be reformed to render the Agreement valid and
enforceable while reflecting to the greatest extent permissible the intent of
the parties.
(h) Successors and Assigns. The terms and conditions of the Plan and
any Award shall be binding upon and inure to the benefit of the Company and its
successors and assigns.
(i) Termination of Plan. The Plan shall terminate upon the tenth
anniversary of its effective date. The Board may terminate the Plan at any time
prior to such date. No Award may be granted under the Plan after the Plan has
been terminated. No Award granted while this Plan is in effect shall be altered
or impaired by termination of the Plan, except upon the consent of the holder of
such Award. The power of the Board to construe and interpret this Plan and the
Awards granted prior to the termination of the Plan shall continue after such
termination.
(j) Other Compensatory Arrangements. Neither the adoption of the Plan
by the Board nor the submission of the Plan to the shareholders of the Company
for approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable, and
such arrangements may be either generally applicable or applicable only in
specific cases.
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(k) Consents and Legal Requirements. If the Board shall at any time
determine that any Consent (as defined below) is necessary or desirable as a
condition of, or in connection with, the granting of any Award, the delivery of
shares of Common Stock, or the delivery of any cash, securities or other
property under the Plan, or the taking of any other action thereunder (each such
action being hereinafter referred to as a "Plan Action"), then such Plan Action
shall not be taken, in whole or in part, unless and until such Consent shall
have been effected or obtained to the full satisfaction of the Board. The Board
may require each person acquiring shares of Common Stock pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares for investment purposes only and without a view to distribution
thereof. The Board may also direct that any certificate evidencing shares
delivered pursuant to the Plan shall bear a legend setting forth such
restrictions on transferability as the Board may determine to be necessary or
desirable, and may advise the transfer agent to place a stop order against any
legended shares.
"Consent" as use herein with respect to any Plan Action includes: (i)
any and all listings, registrations or qualifications in respect thereof upon
any securities exchange or under any federal, state or local law, or law, rule
or regulation of a jurisdiction outside the United States, (ii) any and all
written agreements and representations by the Participant with respect to the
disposition of shares, or with respect to any other matter, which the Committee
may deem necessary or desirable to comply with the terms of any such listing,
registration or qualification, or to obtain an exemption from the requirement
that any such listing, registration or qualification be made, (iii) any and all
other consents, clearances and approvals in respect of a plan action by any
governmental or other regulatory body or any stock exchange or self-regulatory
agency, and (iv) any and all consents or authorizations required to comply with,
or required to be obtained under, applicable local law or otherwise required by
the Board. Nothing herein shall require the Company to list, register or qualify
the shares of Common Stock on any securities exchange.
(l) Section 83(b) Election. No election under Section 83(b) of the Code
(relating to the inclusion of gross income in the year of transfer the amounts
specified in such Code section) or under a similar provision of the law of a
jurisdiction outside the United States may be made unless expressly permitted by
the terms of the Award or by action of the Board in writing prior to the making
of such election. If a Participant, in connection with the acquisition of shares
of Common Stock under the Plan or otherwise, is expressly permitted under the
terms of the Award or by such Board action to make any such election and the
Participant makes the election, the Participant shall notify the Board of such
election within 10 days of filing notice of the election with the Internal
Revenue Service or other governmental authority, in addition to any filing or
notification required pursuant to the regulations issued under Section 83(b) of
the Code or other applicable provision.
(m) Absence of Third-Party Beneficiary Rights. Unless expressly
provided in the Plan or any Award, no provision of the Plan or any Award is
intended, nor will be interpreted, to provide or create any third-party
beneficiary rights or any other rights of any kind in any client, customer,
affiliate, officer, director, shareholder, employee, partner of any party hereto
or any other person or entity, and, except as so provided, all provisions hereof
and thereof will be solely between the parties to the Plan and any Award.
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(n) Provisions for Foreign Participants. The Board may modify the terms
and conditions of Awards granted to Participants who are foreign nationals or
employed outside the United States, establish sub-plans under the Plan, or adopt
such modifications or procedures as the Board may determine to be necessary or
advisable, to recognize differences in laws, rules, regulations or customs of
such foreign jurisdictions with respect to tax, securities, currency, employee
benefit, accounting or other matters.
(o) Liability of the Company. The Company and any affiliate that is in
existence or hereafter comes into existence shall not be liable to a Participant
or other persons as to: (i) the non-issuance or sale of shares of Common Stock
as to which the Company has been unable to obtain approval from any regulatory
body having jurisdiction deemed by the Company's counsel to be necessary to the
lawful issuance and sale of any shares of Common Stock hereunder, and (ii) any
tax consequence expected, but not realized, by any Participant or other person
due to the receipt, exercise or settlement of any Option, Warrant, SAR or other
Award granted hereunder.
(p) Governing Law. This Plan and any Award shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
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