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EXHIBIT 10.9
GENERAL SEMICONDUCTOR, INC.
AMENDED AND RESTATED
1998 LONG-TERM INCENTIVE PLAN
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GENERAL SEMICONDUCTOR, INC.
AMENDED AND RESTATED
1998 LONG-TERM INCENTIVE PLAN
1. Purpose.
The purpose of this Plan is based on the premise that the achievements of
the Company result from the efforts of employees working toward common goals and
objectives. This Plan is designed to attract, retain and motivate highly
qualified employees, reinforce the alignment of employee and stockholder
interests and reward its employees, officers, consultants, advisors and
directors based on the Company's performance. It is intended that this purpose
be achieved by extending to employees, officers, consultants, advisors and
directors of the Company and its Subsidiaries an added long-term incentive
through the grant of Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights, Dividend Equivalent Rights, Performance Awards, Share
Awards, Director Shares, Phantom Stock and Restricted Stock (as each term is
herein defined).
2. Definitions.
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a Change of
Control, the greater of (a) the highest price per Share paid to holders of the
Shares in any transaction (or series of transactions) constituting or resulting
in a Change of Control or (b) the highest Fair Market Value of a Share during
the ninety (90) day period ending on the date of a Change of Control.
2.2 "Affiliate" means any entity, directly or indirectly, controlled by,
controlling or under common control with the Company or any corporation or other
entity acquiring, directly or indirectly, all or substantially all the assets
and business of the Company, whether by operation of law or otherwise.
2.3 "Agreement" means the written agreement between the Company and an
Optionee or Grantee evidencing the grant of an Option or Award and setting forth
the terms and conditions thereof.
2.4 "Award" means a grant of Restricted Stock, Phantom Stock, a Stock
Appreciation Right, a Performance Award, a Dividend Equivalent Right, a Share
Award, Director Shares or any or all of them.
2.5 "Board" means the Board of Directors of the Company.
2.6 "Cause" means unless otherwise set forth in an Agreement, (i)
intentional failure to perform reasonably assigned duties, (ii) dishonesty or
willful misconduct in the performance of duties, (iii) involvement in a
transaction in connection with the performance of
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duties to the Company or any of its Subsidiaries which transaction is adverse to
the interests of the Company or any of its Subsidiaries and which is engaged in
for personal profit or (iv) willful violation of any law, rule or regulation in
connection with the performance of duties (other than traffic violations or
similar offenses).
2.7 "Change in Capitalization" means any increase or reduction in the
number of Shares, or any change (including, but not limited to, in the case of a
spin-off, dividend or other distribution in respect of Shares, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of a
reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, change in corporate
structure or otherwise.
2.8 "Change of Control" means the occurrence of any of the following:
(a) An acquisition (other than directly from the Company) of any
voting securities of the Company (the "Voting Securities") by any Person,
immediately after which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-three
percent (33%) or more of the then outstanding Shares or the combined voting
power of the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred pursuant
to this Section 2.8(a), Shares or Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or
a trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a "Related
Entity"), (ii) the Company or any Related Entity, or (iii) any Person in
connection with a "Non-Control Transaction" (as hereinafter defined);
(b) The individuals who, as of February 7, 2001, are members of the
Board (the "Incumbent Board"), cease, for any reason, to constitute at least
two-thirds (2/3) of the members of the Board or, following a Merger (as defined
below) which results in a Parent Corporation (as defined in paragraph (c)(i)(A)
below), the board of directors of the ultimate Parent Corporation; provided,
however, that if the election, or nomination for election by the Company's
common stockholders, of any new director was approved by a vote of at least
two-thirds (2/3) of the Incumbent Board, such new director shall, for purposes
of this Plan, be considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered a member of the
Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened "Election Contest" (as described in Rule 14a-11
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board
(a "Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
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(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued (a "Merger"),
unless such Merger is a "Non-Control Transaction." A "Non-Control
Transaction" shall mean a Merger where:
(A) the stockholders of the Company, immediately before the
Merger own directly or indirectly immediately following the
Merger, at least a majority of the combined voting power of the
outstanding voting securities of the corporation resulting from
the Merger (the "Surviving Corporation") if fifty percent (50%)
or more of the combined voting power of the then outstanding
Voting Securities of the Surviving Corporation is not
Beneficially Owned directly or indirectly by another Person (a
"Parent Corporation") or if there are one or more Parent
Corporations, the ultimate Parent Corporation, and
(B) the individuals, who were members of the Incumbent
Board immediately prior to the execution of the agreement
providing for the Merger, constitute at least a majority of the
members of the board of directors of the Surviving Corporation if
there is no Parent Corporation, or (y) if there are one or more
Parent Corporations, the ultimate Parent Corporation, and
(C) no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust forming a
part thereof) that, immediately prior to the Merger, was
maintained by the Company or any Related Entity, or (4) any
Person who, immediately prior to the Merger, had Beneficial
Ownership of thirty-three percent (33%) or more of the then
outstanding Voting Securities or Shares, has Beneficial Ownership
of thirty-three percent (33%) or more of the combined voting
power of the then outstanding voting securities or common stock
of (x) the Surviving Corporation if there is no Parent
Corporation, or (y) if there are one or more Parent Corporations,
the ultimate Parent Corporation (a Business Combination
satisfying the conditions of clauses (1), (2) and (3) of this
subparagraph (A) shall be referred to as a "Non-Control
Transaction").
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a Related
Entity or the distribution to the Company's stockholders of the stock of a
Related Entity or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Shares or Voting
Securities as a result of the acquisition of Shares or Voting Securities by the
Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of shares Beneficially Owned by
the Subject Persons, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Shares or Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
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2.9 "Code" means the Internal Revenue Code of 1986, as amended.
2.10 "Committee" means a committee, as described in Section 3.1, appointed
by the Board from time to time to administer the Plan and to perform the
functions set forth herein.
2.11 "Company" means General Semiconductor, Inc.
2.12 "Director" means a director of the Company.
2.13 "Director Option" means an Option granted pursuant to Section 6.
2.14 "Director Share" means a Share issued or transferred pursuant to
Section 12.3.
2.15 "Disability" means a mental or physical condition which, in the
opinion of the Committee, renders a Grantee unable or incompetent to carry out
the job responsibilities which such Grantee held or the duties to which such
Grantee was assigned at the time the disability was incurred, and which is
expected to be permanent or for an indefinite duration.
2.16 "Division" means any of the operating units or divisions of the
Company designated as a Division by the Committee.
2.17 "Dividend Equivalent Right" means a right to receive all or some
portion of the cash dividends that are or would be payable with respect to
Shares.
2.18 "Eligible Director" means a director of the Company who is not an
employee of the Company or any Subsidiary.
2.19 "Eligible Individual" means any of the following individuals who is
designated by the Committee as eligible to receive Options or Awards subject to
the conditions set forth herein:
(a) director, officer or employee of the Company or a Subsidiary,
(b) any consultant or advisor of the Company or a Subsidiary, or
(c) any individual to whom the Company or a Subsidiary has extended a
formal, written offer of employment.
2.20 "Employee Option" means an Option granted pursuant to Section 5.
2.21 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.22 "Fair Market Value" of any security of the Company or any other issuer
means, as of any applicable date:
(a) if the security is listed for trading on the New York Stock
Exchange, the closing price, regular way, of the security as reported on
the New York
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Stock Exchange Composite Tape, or if no such reported sale of the security
shall have occurred on such date, on the next preceding date on which there
was such a reported sale, or
(b) if the security is not so listed, but is listed on another
national securities exchange or authorized for quotation on the National
Association of Securities Dealers, Inc.'s NASDAQ National Market System
("NASDAQ/NMS"), the closing price, regular way, of the security on such
exchange or NASDAQ/NMS, as the case may be, or if no such reported sale of
the security shall have occurred on such date, on the next preceding date
on which there was such a reported sale, or
(c) if the security is not listed for trading on a national securities
exchange or authorized for quotation on NASDAQ/NMS, the average of the
closing bid and asked prices as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or, if no such
prices shall have been so reported for such date, on the next preceding
date for which such prices were so reported, or
(d) if the security is not listed for trading on a national securities
exchange or is not authorized for quotation on NASDAQ/NMS or NASDAQ, the
fair market value of the security as determined in good faith by the
Committee and, in the case of an Incentive Stock Option, in accordance with
Section 422 of the Code.
2.23 "Grantee" means a person to whom an Award has been granted under the
Plan.
2.24 "Incentive Stock Option" means an Option satisfying the requirements
of Section 422 of the Code and designated by the Committee as an Incentive Stock
Option.
2.25 "Nonemployee Director" means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.
2.26 "Nonqualified Stock Option" means an Option which is not an Incentive
Stock Option.
2.27 "Option" means a Nonqualified Stock Option, an Incentive Stock Option,
a Director Option, or any or all of them.
2.28 "Optionee" means a person to whom an Option has been granted under the
Plan.
2.29 "Outside Director" means a director of the Company who is an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.
2.30 "Parent" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.
2.31 "Performance Awards" means Performance Units, Performance Shares or
either or both of them.
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2.32 "Performance-Based Compensation" means any Option or Award that is
intended to constitute "performance based compensation" within the meaning of
Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.
2.33 "Performance Cycle" means the time period specified by the Committee
at the time Performance Awards are granted during which the performance of the
Company, a Subsidiary or a Division will be measured.
2.34 "Performance Objectives" has the meaning set forth in Section 11.
2.35 "Performance Shares" means Shares issued or transferred to an Eligible
Individual under Section 11.
2.36 "Performance Units" means Performance Units granted to an Eligible
Individual under Section 11.
2.37 "Person" shall mean a person within the meaning of Sections 13(d) and
14(d) of the Exchange Act.
2.38 "Phantom Stock" means a right granted to an Eligible Individual under
Section 12 representing a number of hypothetical Shares.
2.39 "Plan" means the General Semiconductor, Inc. Amended and Restated 1998
Long-Term Incentive Plan, as amended from time to time.
2.40 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of interests" under
generally accepted accounting principles.
2.41 "Restricted Stock" means Shares issued or transferred to an Eligible
Individual pursuant to Section 10.
2.42 "Section 16 Grantee" means a person subject to potential liability
with respect to equity securities of the Company under Section 16(b) of the
Exchange Act.
2.43 "Share Award" means an Award of Shares granted pursuant to Section 12.
2.44 "Shares" means the common stock, par value $.01 per share, of the
Company.
2.45 "Stock Appreciation Right" means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 8
hereof.
2.46 "Subsidiary" means (i) except as provided in subsection (ii) below,
any corporation which is a subsidiary corporation within the meaning of Section
424(f) of the Code with respect to the Company, and (ii) in relation to the
eligibility to receive Options or Awards other than Incentive Stock Options and
continued employment for purposes of Options and Awards (unless the Committee
determines otherwise), any entity, whether or not incorporated, in
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which the Company directly or indirectly owns 50% or more of the outstanding
equity or other ownership interests.
2.47 "Successor Corporation" means a corporation, or a parent or subsidiary
thereof within the meaning of Section 424(a) of the Code, which issues or
assumes a stock option in a transaction to which Section 424(a) of the Code
applies.
2.48 "Ten-Percent Stockholder" means an Eligible Individual, who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
or of a Parent or a Subsidiary.
3. Administration.
3.1 Committee Administration. The Plan shall be administered by the
Committee, which shall hold meetings at such times as may be necessary for the
proper administration of the Plan. The Committee shall keep minutes of its
meetings. A quorum shall consist of not fewer than two members of the Committee
and a majority of a quorum may authorize any action. Any decision or
determination reduced to writing and signed by a majority of all of the members
of the Committee shall be as fully effective as if made by a majority vote at a
meeting duly called and held. The Committee shall consist of at least two (2)
Directors and may consist of the entire Board; provided, however, that (A) if
the Committee consists of less than the entire Board then with respect to any
Option or Award to an Eligible Individual who is subject to Section 16 of the
Exchange Act, the Committee shall consist of at least two (2) Directors, each of
whom shall be a Nonemployee Director and (B) to the extent necessary for any
Option or Award intended to qualify as Performance-Based Compensation to so
qualify, the Committee shall consist of at least two (2) Directors, each of whom
shall be an Outside Director. For purposes of the preceding sentence, if one or
more members of the Committee is not a Nonemployee Director and an Outside
Director but recuses himself or herself or abstains from voting with respect to
a particular action taken by the Committee, then the Committee, with respect to
that action, shall be deemed to consist only of the members of the Committee who
have not recused themselves or abstained from voting. Subject to applicable law,
the Committee may delegate its authority under the Plan to any other person or
persons.
3.2 No member of the Committee shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to this
Plan or any transaction hereunder, except for liability arising from his or her
own willful misfeasance, gross negligence or reckless disregard of his or her
duties. The Company hereby agrees to indemnify each member of the Committee for
all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.3 Board Reservation and Delegation. The Board may, in its discretion,
reserve to itself or exercise any or all of the authority and responsibility of
the Committee hereunder. It may also delegate to another committee of the Board
any or all of the authority and responsibility of the Committee with respect to
Awards to Optionees or Grantees, as the case
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may be, who are not Section 16 Grantees at the time any such delegated authority
or responsibility is exercised. Such other committee may consist of one or more
directors who may, but need not be, officers or employees of the Company or of
any of its Subsidiaries. To the extent that the Board has reserved to itself, or
exercised the authority and responsibility of the Committee, or delegated the
authority and responsibility of the Committee to such other committee, all
references to the Committee in the Plan shall be to the Board or to such other
committee.
3.4 Committee Authority. Subject to the express terms and conditions set
forth herein, the Committee shall have the power from time to time to:
(a) determine those Eligible Individuals to whom Employee Options
shall be granted under the Plan and the number of such Employee Options to
be granted and to prescribe the terms and conditions (which need not be
identical) of each such Employee Option, including the exercise price per
Share subject to each Employee Option, and make any amendment or
modification to any Option Agreement consistent with the terms of the Plan;
(b) select those Eligible Individuals to whom Awards shall be granted
under the Plan and to determine the number of Shares, Stock Appreciation
Rights, Performance Awards, Shares of Phantom Stock, Shares of Restricted
Stock and/or Dividend Equivalent Rights to be granted pursuant to each
Award, the terms and conditions (which need not be identical) of each such
Award, and make any amendment or modification to any Award Agreement
consistent with the terms of the Plan;
(c) construe and interpret the Plan and the Options and Awards
granted hereunder and to establish, amend and revoke rules and regulations
for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the
extent it shall deem necessary or advisable, including so that the Plan
complies with Rule 16b-3 under the Exchange Act, the Code to the extent
applicable and other applicable law, and otherwise to make the Plan fully
effective. All decisions and determinations by the Committee in the
exercise of this power shall be final, binding and conclusive upon the
Company, its Subsidiaries, the Optionees and Grantees, and all other
persons having any interest therein;
(d) determine the duration and purposes for leaves of absence which
may be granted to an Optionee or Grantee on an individual basis without
constituting a termination of employment or service for purposes of the
Plan;
(e) exercise its discretion with respect to the powers and rights
granted to it as set forth in the Plan; and
(f) generally, to exercise such powers and to perform such acts as
are deemed necessary or advisable to promote the best interests of the
Company with respect to the Plan.
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4. Stock Subject to the Plan; Grant Limitations.
4.1 The maximum number of Shares that may be made the subject of Options
and Awards granted under the Plan is 4.9 million plus the number of Shares
available for grant pursuant to the Company's Amended and Restated 1993
Long-Term Incentive Plan as of the date the stockholders approve this Plan;
provided, however, that in the aggregate, not more than 250,000 of allotted
Shares may be made the subject of Awards other than Options and Stock
Appreciation Right. The maximum number of Shares that may be the subject of
Options and Awards granted to an Eligible Individual in any three (3) calendar
year period may not exceed 750,000 Shares. The maximum dollar amount of cash or
the Fair Market Value of Shares that any Eligible Individual may receive in any
calendar year in respect of Performance Units denominated in dollars may not
exceed $1,000,000. Upon a Change in Capitalization, the maximum number of Shares
referred to in the first two sentences of this Section 4.1 shall be adjusted in
number and kind pursuant to Section 14. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of Shares
held in the Company's treasury, or partly out of each, such number of Shares as
shall be determined by the Board.
4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards shall
be reduced as follows:
(a) In connection with the granting of an Option or an Award (other
than the granting of a Performance Unit denominated in dollars), the number
of Shares shall be reduced by the number of Shares in respect of which the
Option or Award is granted or denominated; provided, however, that if any
Option, and any option granted or issued pursuant to the Company's Amended
and Restated 1993 Long-Term Incentive Plan is exercised by tendering
Shares, either actually or by attestation, to the Company as full or
partial payment of the exercise price, the maximum number of Shares
available under Section 4.1 shall be increased by the number of Shares so
tendered.
(b) In connection with the granting of a Performance Unit denominated
in dollars, the number of Shares shall be reduced by an amount equal to the
quotient of (i) the dollar amount in which the Performance Unit is
denominated, divided by (ii) the Fair Market Value of a Share on the date
the Performance Unit is granted.
4.3 Whenever any outstanding Option or Award or portion thereof, and any
option or award or portion thereof granted or issued pursuant to the Company's
Amended and Restated 1993 Long-Term Incentive Plan expires, is canceled, is
settled in cash (including the settlement of tax withholding obligations using
Shares) or is otherwise terminated for any reason without having been exercised
or payment having been made in respect of the entire Option or Award, the Shares
allocable to the expired, canceled, settled or otherwise terminated portion of
the Option or Award may again be the subject of Options or Awards granted
hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Employee Options, and the terms and conditions of
the grant to such Eligible Individuals shall be
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set forth in an Agreement. Incentive Stock Options may be granted only to
Eligible Individuals who are employees of the Company or any Subsidiary.
5.2 Exercise Price. The exercise price or the manner in which the exercise
price is to be determined for Shares under each Employee Option shall be
determined by the Committee and set forth in the Agreement; provided, however,
that the exercise price per Share under each Employee Option shall not be less
than 100% of the Fair Market Value of a Share on the date the Employee Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
5.3 Maximum Duration. Employee Options granted hereunder shall be for such
term as the Committee shall determine, provided that an Incentive Stock Option
shall not be exercisable after the expiration of ten (10) years from the date it
is granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is granted;
provided, however, that upon the death of the Optionee, Options (other than an
Incentive Stock Options) may be exercised for up to one (1) year following the
date of the Optionee's death even if such period extends beyond ten (10) years
from the date the Option is granted. The Committee may, subsequent to the
granting of any Employee Option, extend the term thereof, but in no event shall
the term as so extended exceed the maximum term provided for in the preceding
sentence.
5.4 Vesting. Subject to Section 7.4, each Employee Option shall become
exercisable in such installments (which need not be equal) and at such times as
may be designated by the Committee and set forth in the Agreement. To the extent
not exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Employee Option expires. The Committee may accelerate the exercisability of any
Employee Option or portion thereof at any time.
5.5 Deferred Delivery of Option Shares. The Committee may, in its
discretion permit Optionees to elect to defer the issuance of Shares upon the
exercise of one or more Nonqualified Stock Options granted pursuant to the Plan.
The terms and conditions of such deferral shall be determined at the time of the
grant of the Option or thereafter and shall be set forth in the Agreement
evidencing the grant.
5.6 Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined as of the date of the grant) of Shares
with respect to which Incentive Stock Options granted under the Plan and
"incentive stock options" (within the meaning of Section 422 of the Code)
granted under all other plans of the Company or its Subsidiaries (in either case
determined without regard to this Section 5.6) are exercisable by an Optionee
for the first time during any calendar year exceeds $100,000, such Incentive
Stock Options shall be treated as Nonqualified Stock Options. For purposes of
the foregoing sentence, Incentive Stock Options shall be treated as Nonqualified
Stock Options according to the order in which they were granted such that the
most recently granted Incentive Stock Options are first treated as Nonqualified
Stock Options.
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5.7 Limitations on the Granting of Options.
The Committee may not re-price or cancel and subsequently re-grant any
Option for the purpose of having a
6. Option Grants for Eligible Directors.
Director Options with respect to 10,000 Shares shall be granted to each
Eligible Director of the Company upon his or her initial election to the Board.
Additionally, each year as of the date upon which the Company holds its October
meeting of the Board (each an "October Board Meeting") or October 31, if the
Company does not hold an October Board Meeting, Director Options with respect to
7,000 Shares shall also be granted to each Eligible Director; provided however,
that any Eligible Director who received a grant of Director Options with respect
to 20,000 Shares on July 21, 1999 shall not be eligible to receive a subsequent
grant of Director Options until the October Board Meeting held in 2001 or
October 31, 2001 if the Company does not hold an October Board meeting, and any
Eligible Director who received a grant of Director Options with respect to
20,000 Shares on August 1, 2000, shall not be eligible to receive a subsequent
grant of Director Options until the October Board Meeting held in 2002 or
October 31, 2002 if the Company does not hold an October Board meeting. Director
Options shall be granted at an exercise price per Share equal to 100% of the
Fair Market Value of a Share on the date the Director Option is granted. Each
Director Option granted to an Eligible Director will become exercisable with
respect to 100% of the underlying Shares on the first anniversary of the date
the Director Option is granted, and will have a term of ten (10) years; provided
however, that a Director Option may, upon the death of the Eligible Director
while still serving as a Director, be exercised at any time within one (1) year
following the date of the Eligible Director's death, even if such period extends
beyond ten (10) years from the date the Director Option is granted, by the
person or persons to whom such rights under the Director Option shall pass by
will, or by the laws of descent or distribution, after which time the Director
Option shall terminate in full. If an Eligible Director ceases to serve as a
Director for any reason, any Director Option granted to such Eligible Director
shall be exercisable during its remaining term, to the extent that such Director
Option was exercisable on the date such Eligible Director ceased to be a
Director."
7. Terms and Conditions Applicable to All Options.
7.1 Non-Transferability. No Option shall be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution or, in the
case of an Option other than an Incentive Stock Option, pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act), and such Option shall be exercisable during the lifetime of an
Optionee only by the Optionee or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may set forth in the Agreement
evidencing an Option (other than an Incentive Stock Option) at the time of grant
or thereafter, that the Option may be transferred to members of the Optionee's
immediate family, to trusts solely for the benefit of such immediate family
members and to partnerships in which such family members and/or trusts are the
only partners, and for purposes of this Plan, a transferee of an Option shall be
deemed to be the Optionee. For this purpose, immediate family means the
Optionee's spouse, parents, children, stepchildren and grandchildren and the
spouses of such parents, children,
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stepchildren and grandchildren. The terms of an Option shall be final, binding
and conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
7.2 Method of Exercise. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company at
the Company's principal executive office, specifying the number of Shares to be
exercised and, to the extent applicable, accompanied by payment therefor and
otherwise in accordance with the Agreement pursuant to which the Option was
granted; provided, however, that Options may not be exercised by an Optionee
for twelve months following a hardship distribution to the Optionee,
to the extent such exercise is prohibited under Treasury Regulation
ss.1.401(k)-1(d)(2)(iv)(B)(4). The exercise price for any Shares purchased
pursuant to the exercise of an Option shall be paid, as determined by the
Committee in its discretion, in either of the following forms (or any
combination thereof): (a) cash or (b) the transfer, either actually or by
attestation, to the Company of Shares that have been held by the Optionee for at
least six (6) months (or such lesser period as may be permitted by the
Committee), prior to the exercise of the Option, such transfer to be upon such
terms and conditions as determined by the Committee. In addition, an Option may
be exercised through a registered broker-dealer pursuant to such cashless
exercise procedures which are, from time to time, deemed acceptable by the
Committee. Any Shares transferred to the Company as payment of the exercise
price under an Option shall be valued at their Fair Market Value on the day
preceding the date of exercise of such Option. If requested by the Committee,
the Optionee shall deliver the Agreement evidencing the Option to the Secretary
of the Company who shall endorse thereon a notation of such exercise and return
such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof)
shall be issued upon exercise of an Option and the number of Shares that may be
purchased upon exercise shall be rounded to the nearest number of whole Shares.
7.3 Rights of Optionees. No Optionee shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered Shares to the Optionee, and (c) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such Shares, subject to such terms and conditions as may
be set forth in the applicable Agreement.
7.4 Effect of Change in Control. In the event of a Change in Control,
all Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable. In addition, to the extent set forth in an
Agreement evidencing the grant of an Option, an Optionee will be permitted to
surrender to the Company for cancellation within sixty (60) days after such
Change in Control any Option or portion of an Option to the extent not yet
exercised and the Optionee will be entitled to receive a cash payment in an
amount equal to the excess, if any, of (a) (i) in the case of a Nonqualified
Stock Option, the greater of (A) the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered or (B) the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered or (ii) in the case of an Incentive Stock
Option, the Fair Market Value, on the date preceding the date of surrender, of
the Shares subject to the Option or portion thereof surrendered, over (b) the
aggregate exercise price for such Shares under the Option or portion thereof
surrendered. In the event an Optionee's employment with, or service
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as a Director of, the Company and its Subsidiaries terminates following a Change
in Control, each Option held by the Optionee that was exercisable as of the date
of termination of the Optionee's employment or service shall, notwithstanding
any shorter period set forth in the Agreement evidencing the Option, remain
exercisable for a period ending not before the earlier of (x) the first
anniversary of the termination of the Optionee's employment or service or (y)
the expiration of the stated term of the Option.
8. Stock Appreciation Rights.
The Committee may in its discretion, either alone or in connection with the
grant of an Employee Option, grant to any Eligible Individual Stock Appreciation
Right in accordance with the Plan, the terms and conditions of which shall be
set forth in an Agreement. If granted in connection with an Option, a Stock
Appreciation Right shall cover the same Shares covered by the Option (or such
lesser number of Shares as the Committee may determine) and shall, except as
provided in this Section 8, be subject to the same terms and conditions as the
related Option.
8.1 Time of Grant. A Stock Appreciation Right may be granted (a) at any
time if unrelated to an Option, or (b) if related to an Option, either at the
time of grant, or at any time thereafter during the term of the Option.
8.2 Stock Appreciation Right Related to an Option.
(a) Exercise. A Stock Appreciation Right granted in connection with
an Option shall be exercisable at such time or times and only to the extent
that the related Options are exercisable, and will not be transferable
except to the extent the related Option may be transferable. A Stock
Appreciation Right granted in connection with an Incentive Stock Option
shall be exercisable only if the Fair Market Value of a Share on the date
of exercise exceeds the exercise price specified in the related Incentive
Stock Option Agreement.
(b) Amount Payable. Upon the exercise of a Stock Appreciation Right
related to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (i) the excess of the Fair Market Value of a
Share on the date preceding the date of exercise of such Stock Appreciation
Right over the per Share exercise price under the related Option, by (ii)
the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation
Right at the time it is granted.
(c) Treatment of Related Options and Stock Appreciation Rights Upon
Exercise. Upon the exercise of a Stock Appreciation Right granted in
connection with an Option, the Option shall be canceled to the extent of
the number of Shares as to which the Stock Appreciation Right is exercised,
and upon the exercise of an Option granted in connection with a Stock
Appreciation Right, the Stock Appreciation Right shall be canceled to the
extent of the number of Shares as to which the Option is exercised or
surrendered.
8.3 Stock Appreciation Right Unrelated to an Option. The Committee may
grant to Eligible Individuals Stock Appreciation Rights unrelated to Options.
Stock Appreciation
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Rights unrelated to Options shall contain such terms and conditions as to
exercisability (subject to Section 8.7), vesting and duration as the Committee
shall determine, but in no event shall they have a term of greater than ten (10)
years; provided, however, that upon the death of the Grantee, Stock Appreciation
Rights may be exercised for up to one (1) year following the date of the
Grantee's death even if such period extends beyond ten (10) years from the date
the Stock Appreciation Right is granted. Upon exercise of a Stock Appreciation
Right unrelated to an Option, the Grantee shall be entitled to receive an amount
determined by multiplying (a) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
the Fair Market Value of a Share on the date the Stock Appreciation Right was
granted, by (b) the number of Shares as to which the Stock Appreciation Right is
being exercised. Notwithstanding the foregoing, the Committee may limit in any
manner the amount payable with respect to any Stock Appreciation Right by
including such a limit in the Agreement evidencing the Stock Appreciation Right
at the time it is granted.
8.4 Non-Transferability. No Stock Appreciation Right shall be transferable
by the Grantee otherwise than by will or by the laws of descent and distribution
or pursuant to a domestic relations order (within the meaning of Rule 16a-12
promulgated under the Exchange Act), and such Stock Appreciation Right shall be
exercisable during the lifetime of such Grantee only by the Grantee or his or
her guardian or legal representative. The terms of such Stock Appreciation Right
shall be final, binding and conclusive upon the beneficiaries, executors,
administrators, heirs and successors of the Grantee.
8.5 Method of Exercise. Stock Appreciation Rights shall be exercised by a
Grantee only by a written notice delivered in person or by mail to the Secretary
of the Company at the Company's principal executive office, specifying the
number of Shares with respect to which the Stock Appreciation Right is being
exercised. If requested by the Committee, the Grantee shall deliver the
Agreement evidencing the Stock Appreciation Right being exercised and the
Agreement evidencing any related Option to the Secretary of the Company who
shall endorse thereon a notation of such exercise and return such Agreement to
the Grantee.
8.6 Form of Payment. Payment of the amount determined under Sections
8.2(b) or 8.3 may be made in the discretion of the Committee solely in whole
Shares in a number determined at their Fair Market Value on the date preceding
the date of exercise of the Stock Appreciation Right, or solely in cash, or in a
combination of cash and Shares. If the Committee decides to make full payment in
Shares and the amount payable results in a fractional Share, payment for the
fractional Share will be made in cash.
8.7 Effect of Change in Control. In the event of a Change in Control, all
Stock Appreciation Rights shall become immediately and fully exercisable. In
addition, to the extent set forth in an Agreement evidencing the grant of a
Stock Appreciation Right unrelated to an Option, a Grantee will be entitled to
receive a payment from the Company in cash or stock, in either case, with a
value equal to the excess, if any, of (a) the greater of (i) the Fair Market
Value, on the date preceding the date of exercise, of the underlying Shares
subject to the Stock Appreciation Right or portion thereof exercised and (ii)
the Adjusted Fair Market Value, on the date preceding the date of exercise, of
the Shares over (b) the aggregate Fair Market Value, on the date the Stock
Appreciation Right was granted, of the Shares subject to the Stock Appreciation
Right or portion thereof exercised. In the event a Grantee's employment with the
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Company terminates following a Change in Control, each Stock Appreciation Right
held by the Grantee that was exercisable as of the date of termination of the
Grantee's employment shall, notwithstanding any shorter period set forth in the
Agreement evidencing the Stock Appreciation Right, remain exercisable for a
period ending not before the earlier of the first anniversary of (x) the
termination of the Grantee's employment or (y) the expiration of the stated term
of the Stock Appreciation Right.
9. Dividend Equivalent Rights.
Dividend Equivalent Rights may be granted to Eligible Individuals in tandem
with an Option or Award or as a separate Award. The terms and conditions
applicable to each Dividend Equivalent Right shall be specified in the Agreement
under which the Dividend Equivalent Right is granted. Amounts payable in respect
of Dividend Equivalent Rights may be payable currently or deferred until the
lapsing of restrictions on such Dividend Equivalent Rights or until the vesting,
exercise, payment, settlement or other lapse of restrictions on the Option or
Award to which the Dividend Equivalent Rights relate. In the event that the
amount payable in respect of Dividend Equivalent Rights are to be deferred, the
Committee shall determine whether such amounts are to be held in cash or
reinvested in Shares or deemed (notionally) to be reinvested in Shares. If
amounts payable in respect of Dividend Equivalent Rights are to be held in cash,
there may be credited at the end of each year (or portion thereof) interest on
the amount of the account at the beginning of the year at a rate per annum as
the Committee, in its discretion, may determine. Dividend Equivalent Rights may
be settled in cash or Shares or a combination thereof, in a single installment
or multiple installments.
10. Restricted Stock.
10.1 Grant. The Committee may grant Awards to Eligible Individuals of
Restricted Stock, which shall be evidenced by an Agreement between the Company
and the Grantee. Each Agreement shall contain such restrictions, terms and
conditions as the Committee may, in its discretion, determine and (without
limiting the generality of the foregoing) such Agreements may require that an
appropriate legend be placed on Share certificates. Awards of Restricted Stock
shall be subject to the terms and provisions set forth below in this Section 10.
10.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to an
Award hereunder shall be issued in the name of the Grantee as soon as reasonably
practicable after the Award is granted provided that the Grantee has executed
such documents which the Committee may require as a condition to the issuance of
such Shares. If a Grantee shall fail to execute the Agreement evidencing a
Restricted Stock Award, or any documents which the Committee may require within
the time period prescribed by the Committee at the time the Award is granted,
the Award shall be null and void. At the discretion of the Committee, Shares
issued in connection with a Restricted Stock Award shall be deposited together
with the stock powers with an escrow agent (which may be the Company) designated
by the Committee. Unless the Committee determines otherwise and as set forth in
the Agreement, upon delivery of the Shares to the escrow agent, the Grantee
shall have all of the rights of a stockholder with respect to such Shares,
including the right to vote the Shares and to receive all dividends or other
distributions paid or made with respect to the Shares.
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10.3 Non-transferability. Until all restrictions upon the Shares of
Restricted Stock awarded to a Grantee shall have lapsed in the manner set forth
in Section 10.4, such Shares shall not be sold, transferred or otherwise
disposed of and shall not be pledged or otherwise hypothecated.
10.4 Lapse of Restrictions.
(a) Generally. Restrictions upon Shares of Restricted Stock awarded
hereunder shall lapse at such time or times and on such terms and
conditions as the Committee may determine; provided, however, that except
in the case of Shares of Restricted Stock issued in full or partial
settlement of another Award or other earned compensation, or in the event
of the Grantee's termination of employment, as determined by the Committee
and set forth in the Agreement evidencing the Award, such restrictions
shall not fully lapse prior to the third anniversary of the date on which
such Shares of Restricted Stock were granted. The Agreement evidencing the
Award shall set forth any such restrictions.
(b) Effect of Change in Control. Unless the Committee shall determine
otherwise at the time of the grant of an Award of Restricted Stock, the
restrictions upon Shares of Restricted Stock shall lapse upon a Change in
Control. The Agreement evidencing the Award shall set forth any such
provisions.
10.5 Treatment of Dividends. At the time an Award of Shares of Restricted
Stock is granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof, declared or
paid on such Shares by the Company shall be (a) deferred until the lapsing of
the restrictions imposed upon such Shares and (b) held by the Company for the
account of the Grantee until such time. In the event that dividends are to be
deferred, the Committee shall determine whether such dividends are to be
reinvested in Shares (which shall be held as additional Shares of Restricted
Stock) or held in cash. If deferred dividends are to be held in cash, there may
be credited at the end of each year (or portion thereof) interest on the amount
of the account at the beginning of the year at a rate per annum as the
Committee, in its discretion, may determine. Payment of deferred dividends in
respect of Shares of Restricted Stock (whether held in cash or as additional
Shares of Restricted Stock), together with interest accrued thereon, if any,
shall be made upon the lapsing of restrictions imposed on the Shares in respect
of which the deferred dividends were paid, and any dividends deferred (together
with any interest accrued thereon) in respect of any Shares of Restricted Stock
shall be forfeited upon the forfeiture of such Shares.
10.6 Delivery of Shares. Upon the lapse of the restrictions on Shares of
Restricted Stock, the Committee shall cause a stock certificate to be delivered
to the Grantee with respect to such Shares, free of all restrictions hereunder.
11. Performance Awards.
11.1 Performance Units. The Committee, in its discretion, may grant
Performance Units to Eligible Individuals, the terms and conditions of which
shall be set forth in an Agreement between the Company and the Grantee.
Performance Units may be denominated in Shares or a specified dollar amount and,
contingent upon the attainment of specified Performance Objectives within the
Performance Cycle, represent the right to receive payment as
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provided in Section 11.3(c) of (i) in the case of Share-denominated Performance
Units, the Fair Market Value of a Share on the date the Performance Unit was
granted, the date the Performance Unit became vested or any other date specified
by the Committee, (ii) in the case of dollar-denominated Performance Units, the
specified dollar amount or (iii) a percentage (which may be more than 100%) of
the amount described in clause (i) or (ii) depending on the level of Performance
Objective attainment; provided, however, that, the Committee may at the time a
Performance Unit is granted specify a maximum amount payable in respect of a
vested Performance Unit. Each Agreement shall specify the number of Performance
Units to which it relates, the Performance Objectives which must be satisfied in
order for the Performance Units to vest and the Performance Cycle within which
such Performance Objectives must be satisfied.
(a) Vesting. Subject to Sections 11.3(c) and 11.4, Performance Units
awarded hereunder shall become vested at such time or times and on such
terms as the Committee may in its discretion determine at the time the
Award is granted, including, without limitation, the satisfaction of
Performance Objectives for the Performance Cycle.
(b) Payment of Awards. Subject to Section 11.3(c), payment to
Grantees in respect of vested Performance Units shall be made as soon as
practicable after the last day of the Performance Cycle to which such Award
relates unless the Agreement evidencing the Award provides for the deferral
of payment, in which event the terms and conditions of the deferral shall
be set forth in the Agreement. Subject to Section 11.4, such payments may
be made entirely in Shares valued at their Fair Market Value as of the day
preceding the date of payment or such other date specified by the
Committee, entirely in cash, or in such combination of Shares and cash as
the Committee in its discretion shall determine at any time prior to such
payment; provided, however, that if the Committee in its discretion
determines to make such payment entirely or partially in Shares of
Restricted Stock, the Committee must determine the extent to which such
payment will be in Shares of Restricted Stock and the terms of such
Restricted Stock at the time the Award is granted.
11.2 Performance Shares. The Committee, in its discretion, may grant
Performance Shares to Eligible Individuals, the terms and conditions of which
shall be set forth in an Agreement between the Company and the Grantee. Each
Agreement may require that an appropriate legend be placed on Share
certificates. Awards of Performance Shares shall be subject to the following
terms and provisions:
(a) Rights of Grantee. The Committee shall provide at the time an
Award of Performance Shares is made the time or times at which the actual
Shares represented by such Award shall be issued in the name of the
Grantee; provided, however, that no Performance Shares shall be issued
until the Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the discretion of the Committee, an
escrow agreement and any other documents which the Committee may require as
a condition to the issuance of such Performance Shares. If a Grantee shall
fail to execute the Agreement evidencing an Award of Performance Shares,
the appropriate blank stock powers and, in the discretion of the Committee,
an escrow agreement and any other documents which the Committee may require
within the time period prescribed by the Committee at the time the Award is
granted, the Award shall be null and void. At the discretion of the
Committee, Shares issued in connection with an Award of Performance Shares
shall be deposited together with the
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stock powers with an escrow agent (which may be the Company) designated by
the Committee. Except as restricted by the terms of the Agreement, upon
delivery of the Shares to the escrow agent, the Grantee shall have, in the
discretion of the Committee, all of the rights of a stockholder with
respect to such Shares, including the right to vote the Shares and to
receive all dividends or other distributions paid or made with respect to
the Shares.
(b) Vesting. Subject to Sections 11.3(c) and 11.4, restrictions upon
Performance Shares awarded hereunder shall lapse and such Performance
Shares shall become vested at such time or times and on such terms as the
Committee may in its discretion determine at the time the Award is granted,
including, without limitation, the satisfaction of Performance Objectives
for the Performance Cycle.
(c) Treatment of Dividends. At the time the Award of Performance
Shares is granted, the Committee may, in its discretion, determine that the
payment to the Grantee of dividends, or a specified portion thereof,
declared or paid on Shares represented by such Award which have been issued
by the Company to the Grantee shall be (i) deferred until the lapsing of
the restrictions imposed upon such Performance Shares and (ii) held by the
Company for the account of the Grantee until such time. In the event that
dividends are to be deferred, the Committee shall determine whether such
dividends are to be reinvested in Shares (which shall be held as additional
Performance Shares) or held in cash. If deferred dividends are to be held
in cash, there may be credited at the end of each year (or portion thereof)
interest on the amount of the account at the beginning of the year at a
rate per annum as the Committee, in its discretion, may determine. Payment
of deferred dividends in respect of Performance Shares (whether held in
cash or in additional Performance Shares), together with interest accrued
thereon, if any, shall be made upon the lapsing of restrictions imposed on
the Performance Shares in respect of which the deferred dividends were
paid, and any dividends deferred (together with any interest accrued
thereon) in respect of any Performance Shares shall be forfeited upon the
forfeiture of such Performance Shares.
(d) Delivery of Shares. Upon the lapse of the restrictions on
Performance Shares awarded hereunder, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares,
free of all restrictions hereunder.
11.3 Performance Objectives
(a) Establishment. Performance Objectives for Performance Awards may
be expressed in terms of (i) earnings per Share, (ii) Share price, (iii)
pre-tax profits, (iv) net earnings, (v) return on equity or assets, (vi)
revenues, (vii) EBITDA, (viii) market share or market penetration, (ix) any
combination of the foregoing. Performance Objectives may be in respect of
the performance of the Company, any of its Subsidiaries, any of its
Divisions or any combination thereof. Performance Objectives may be
absolute or relative (to prior performance or to the performance of one or
more other entities or external indices) and may be expressed in terms of a
progression within a specified range. The Performance Objectives with
respect to a Performance Cycle shall be established in writing by the
Committee by the earlier of (x) the date on which a quarter of the
Performance Cycle has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Cycle, and in any event while the
performance relating to the Performance Objectives remain substantially
uncertain.
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(b) Effect of Certain Events. At the time of the granting of a
Performance Award, or at any time thereafter, in either case to the extent
permitted under Section 162(m) of the Code and the regulations thereunder
without adversely affecting the treatment of the Performance Award as
Performance-Based Compensation, the Committee may provide for the manner in
which performance will be measured against the Performance Objectives (or
may adjust the Performance Objectives) to reflect the impact of specified
corporate transactions, special charges, foreign currency effects,
accounting or tax law changes and other extraordinary or nonrecurring
events.
(c) Determination of Performance. Prior to the vesting, payment,
settlement or lapsing of any restrictions with respect to any Performance
Award that is intended to constitute Performance-Based Compensation made to
a Grantee who is subject to Section 162(m) of the Code, the Committee shall
certify in writing that the applicable Performance Objectives have been
satisfied to the extent necessary for such Award to qualify as Performance
Based Compensation.
11.4 Effect of Change in Control. In the event of a Change in Control:
(a) With respect to Performance Units, the Grantee shall (i) become
vested in all or a portion of the Performance Units as determined by the
Committee at the time of the Award of such Performance Units and as set
forth in the Agreement and (ii) be entitled to receive in respect of all
Performance Units which become vested as a result of a Change in Control a
cash payment within ten (10) days after such Change in Control in an amount
as determined by the Committee at the time of the Award of such Performance
Unit and as set forth in the Agreement.
(b) With respect to Performance Shares, all or a portion of any
unissued Performance Shares shall be issued and restrictions shall lapse
immediately on all or a portion of the Performance Shares in each case as
determined by the Committee at the time of the Award of such Performance
Shares and as set forth in the Agreement.
(c) The Agreements evidencing Performance Shares and Performance
Units shall provide for the treatment of such Awards (or portions thereof)
which do not become vested as the result of a Change in Control, including,
but not limited to, provisions for the adjustment of applicable Performance
Objectives.
11.5 Non-transferability. Until the vesting of Performance Units or the
lapsing of any restrictions on Performance Shares, as the case may be, such
Performance Units or Performance Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated.
12. Other Share Based Awards.
12.1 Share Awards. The Committee may grant a Share Award to any Eligible
Individual on such terms and conditions as the Committee may determine in its
sole discretion. Share Awards may be made as additional compensation for
services rendered by the Eligible Individual or may be in lieu of cash or other
compensation to which the Eligible Individual is entitled from the Company.
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12.2 Phantom Stock Awards.
(a) Grant. The Committee may, in its discretion, grant shares of
Phantom Stock to any Eligible Individuals. Such Phantom Stock shall be
subject to the terms and conditions established by the Committee and set
forth in the applicable Agreement.
(b) Payment of Awards. Upon the vesting of a Phantom Stock Award, the
Grantee shall be entitled to receive a cash payment in respect of each
share of Phantom Stock which shall be equal to the Fair Market Value of a
Share as of the date the Phantom Stock Award was granted, or such other
date as determined by the Committee at the time the Phantom Stock Award was
granted. The Committee may, at the time a Phantom Stock Award is granted,
provide a limitation on the amount payable in respect of each share of
Phantom Stock. In lieu of a cash payment, the Committee may settle Phantom
Stock Awards with Shares having a Fair Market Value equal to the cash
payment to which the Grantee has become entitled.
12.3 Director Shares. Each Eligible Director shall be granted 1,000
Director's Shares upon his or her initial election to the Board. Director's
Shares shall be fully vested and transferable upon issuance.
13. Effect of a Termination of Employment.
The Agreement evidencing the grant of each Option and each Award shall set
forth the terms and conditions applicable to such Option or Award upon a
termination, retirement or other change in the status of the employment of the
Optionee or Grantee by the Company, a Subsidiary or a Division (including a
termination or change by reason of the sale of a Subsidiary or a Division),
which, except for Director Options, shall be as the Committee may, in its
discretion, determine at the time the Option or Award is granted or thereafter.
14. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the
maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) the
maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted to any Eligible
Individual in any three (3) calendar year period, (iii) the number and
class of Shares or other stock or securities which are subject to
outstanding Options or Awards granted under the Plan and the exercise price
therefor, if applicable, (iv) the number and class of Shares or other
securities in respect of which Director Options are to be granted under
Section 6, (v) the number and class of Shares or other stock or securities
with respect to which Director Shares are to be granted under Section 12.3,
and (vi) the Performance Objectives.
(b) Any such adjustment in the Shares or other stock or securities
(i) subject to outstanding Incentive Stock Options (including any
adjustments in the exercise price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and
only to the extent otherwise permitted by Sections 422 and 424 of the Code,
or (ii) subject to outstanding Options or Awards that are intended to
qualify as
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Performance-Based Compensation shall be made in such a manner as not to
adversely affect the treatment of the Options or Awards as
Performance-Based Compensation.
(c) If, by reason of a Change in Capitalization, a Grantee of an
Award shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities of the Company or any other corporation, such new, additional or
different shares shall thereupon be subject to all of the conditions,
restrictions and performance criteria which were applicable to the Shares
subject to the Award or Option, as the case may be, prior to such Change in
Capitalization.
15. Effect of Certain Transactions.
Subject to Sections 7.4, 8.7, 10.4(b) and 11.4 or as otherwise provided in
an Agreement, in the event of (a) the liquidation or dissolution of the Company
or (b) a merger or consolidation of the Company (a "Transaction"), the Plan and
the Options and Awards issued hereunder shall continue in effect in accordance
with their respective terms, except that following a Transaction either (i) each
outstanding Option or Award shall be treated as provided for in the agreement
entered into in connection with the Transaction or (ii) if not so provided in
such agreement, each Optionee and Grantee shall be entitled to receive in
respect of each Share subject to any outstanding Options or Awards, as the case
may be, upon exercise of any Option or payment or transfer in respect of any
Award, the same number and kind of stock, securities, cash, property or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were applicable
to the Options and Awards prior to such Transaction. The treatment of any Option
or Award as provided in this Section 15 shall be conclusively presumed to be
appropriate for purposes of Section 14.
16. Interpretation.
(a) The Plan is intended to comply with Rule 16b-3 promulgated under
the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith.
Any provisions inconsistent with such Rule shall be inoperative and shall
not affect the validity of the Plan.
(b) Unless otherwise expressly stated in the relevant Agreement, each
Option, Stock Appreciation Right and Performance Award granted under the
Plan is intended to be Performance-Based Compensation. The Committee shall
not be entitled to exercise any discretion otherwise authorized hereunder
with respect to such Options or Awards if the ability to exercise such
discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options or Awards to fail to qualify as
Performance-Based Compensation.
17. Pooling Transactions.
Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event of a Change in Control which is also intended to
constitute a Pooling Transaction, the Committee shall make such equitable
adjustments to outstanding Options and Awards, if any, as are specifically
recommended by an independent accounting firm retained by
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the Company to the extent reasonably necessary in order to assure that the
Pooling Transaction will qualify as such, including but not limited to (a)
deferring the vesting, exercise, payment, settlement or lapsing of restrictions
with respect to any Option or Award, (b) providing that the payment or
settlement in respect of any Option or Award be made in the form of cash, Shares
or securities of a successor or acquirer of the Company, or a combination of the
foregoing, and (c) providing for the extension of the term of any Option or
Award to the extent necessary to accommodate the foregoing, but not beyond the
maximum term permitted for any Option or Award.
18. Termination and Amendment of the Plan or Modification of Options and
Awards.
18.1 Plan Amendment or Termination. The Plan shall terminate on the day
preceding the tenth anniversary of the date of its adoption by the Board and no
Option or Award may be granted thereafter. The Board may sooner terminate the
Plan and the Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:
(a) no such amendment, modification, suspension or termination shall
impair or adversely alter any Options or Awards theretofore granted under
the Plan, except with the consent of the Optionee or Grantee, nor shall any
amendment, modification, suspension or termination deprive any Optionee or
Grantee of any Shares which he or she may have acquired through or as a
result of the Plan; and
(b) to the extent necessary under any applicable law, regulation or
exchange requirement no amendment shall be effective unless approved by the
stockholders of the Company in accordance with applicable law, regulation
or exchange requirement.
18.2 Modification of Options and Awards. No modification of an Option or
Award shall adversely alter or impair any rights or obligations under the Option
or Award without the consent of the Optionee or Grantee, as the case may be.
19. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not be construed as amending,
modifying or rescinding any previously approved incentive arrangement or as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under the Plan, and such arrangements
may be either applicable generally or only in specific cases.
20. Limitation of Liability.
As illustrative of the limitations of liability of the Company, but not
intended to be exhaustive thereof, nothing in the Plan shall be construed to:
(a) give any person any right to be granted an Option or Award other
than at the sole discretion of the Committee;
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(b) give any person any rights whatsoever with respect to Shares
except as specifically provided in the Plan;
(c) limit in any way the right of the Company or any Subsidiary to
terminate the employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
21. Regulations and Other Approvals; Governing Law.
21.1 Except as to matters of federal law, the Plan and the rights of all
persons claiming hereunder shall be construed and determined in accordance with
the laws of the State of Delaware without giving effect to conflicts of laws
principles thereof.
21.2 The obligation of the Company to sell or deliver Shares with respect
to Options and Awards granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
21.3 The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to obtain
for Eligible Individuals granted Incentive Stock Options the tax benefits under
the applicable provisions of the Code and regulations promulgated thereunder.
21.4 Each Option and Award is subject to the requirement that, if at any
time the Committee determines, in its discretion, that the listing, registration
or qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or Award or the
issuance of Shares, no Options or Awards shall be granted or payment made or
Shares issued, in whole or in part, unless listing, registration, qualification,
consent or approval has been effected or obtained free of any conditions as
acceptable to the Committee.
21.5 Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not otherwise
exempt from such registration, such Shares shall be restricted against transfer
to the extent required by the Securities Act and Rule 144 or other regulations
thereunder. The Committee may require any individual receiving Shares pursuant
to an Option or Award granted under the Plan, as a condition precedent to
receipt of such Shares, to represent and warrant to the Company in writing that
the Shares acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to
an effective registration thereof under said Act or pursuant to an exemption
applicable under the Securities Act or the rules and regulations promulgated
thereunder. The
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certificates evidencing any of such Shares shall be appropriately amended to
reflect their status as restricted securities as aforesaid.
22. Withholding of Taxes.
22.1 At such times as the Company becomes obligated to pay withholding
taxes in connection with the granting, vesting, settlement, or exercise of an
Award or Option hereunder (a "Withholding Event"), the Optionee or Grantee shall
pay to the Company an amount equal to the federal, state and local income taxes
and other amounts as may be required by law to be withheld by the Company in
connection with the Withholding Event (the "Withholding Taxes") prior to the
issuance, or release from escrow, of such Shares or the payment of such cash. In
satisfaction of the obligation to pay Withholding Taxes, the Company shall have
the right to (i) deduct from any payment of cash to an Optionee or Grantee an
amount equal to the Withholding Taxes, or (ii) withhold from any Shares issuable
to an Optionee or Grantee the number of Shares having a Fair Market Value equal
to the Withholding Taxes. The Committee may provide in the Agreement at the time
of grant, or at any time thereafter, that the Optionee or Grantee, in
satisfaction of the obligation to pay Withholding Taxes to the Company, may
elect to have withheld a portion of the Shares then issuable to him or her
having an aggregate Fair Market Value equal to the Withholding Taxes. The
Committee may also include in an Agreement that the Optionee or Grantee is
required to satisfy the obligation to pay Withholding Taxes by having the
Company withhold a portion of the Shares then issuable to him or her having an
aggregate Fair Market Value equal to the Withholding Taxes.
22.2 If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive Stock
Option within the two-year period commencing on the day after the date of the
grant or within the one-year period commencing on the day after the date of
transfer of such Share or Shares to the Optionee pursuant to such exercise, the
Optionee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive
office.
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Schedule A
EARLY RETIREMENT WINDOW BENEFIT
Notwithstanding any provision of this Plan or any duly executed stock
option agreement to the contrary, any Window-Eligible Participant (as defined in
Item 1 below) who (i) makes a proper "Early Retirement Window Election" (as
defined in Item 2 below) during the period commencing on February 9, 2001 and
ending on February 28, 2001, (ii) executes and does not rescind the release and
waiver described in Item 2, and (iii) has a termination of employment on his
"Designated Termination Date" (as defined in Item 3 below), shall be entitled to
receive benefits described in Item 4 below.
1. "Window-Eligible Participant" means a person who is a full-time
employee of the Company on February 9, 2001 provided that the sum of his age and
years of Vesting Service (as defined in the General Semiconductor, Inc. Pension
Plan for Salaried and Hourly Paid Non-Union Employees) as of March 31, 2001
equals or exceeds 65.
2. Early Retirement Window Election. An "Early Retirement Window
Election" means a written election by a Window-Eligible Participant, on a form
provided by the Company, (i) to terminate employment with the Company on the
Designated Termination Date, and (ii) to execute a release and waiver in the
form provided by the Company. The Early Retirement Window Election must be
received by the General Semiconductor, Inc. Employee Benefits Administrative
Committee no later than February 28, 2001.
An Early Retirement Window Election shall be irrevocable following the
expiration of the applicable rescission period set forth in the Early Retirement
Window Election form.
3. Designated Termination Date. The "Designated Termination Date" of a
Window-Eligible Participant who has made an Early Retirement Window Election
shall be the date, as determined by the Company in its sole discretion, on which
the Window-Eligible Participant must have a termination of employment in order
to receive the benefits described in Item 4 below. Notwithstanding the
foregoing, a Window-Eligible Participant's Designated Termination Date shall not
be earlier than the last day of the applicable rescission period set forth in
the Window-Eligible Participant's Early Retirement Window Election and shall not
be later than May 31, 2001.
4. Continued Plan Participation. (i) A Window-Eligible Participant to
whom stock options were granted under the 1998 General Semiconductor, Inc.
Long-Term Incentive Plan, as amended through February 7, 2001, who properly
makes an Early Retirement Window Election, executes and does not rescind the
required release and waiver, and has a termination of employment on his
Designated Termination Date may at any time on or before the third anniversary
of his Designated Termination Date exercise his outstanding options to the
extent, but only to the extent, that the stock options or portions thereof are
exercisable. (ii) The stock options of a person whose period to exercise stock
options is extended by the preceding sentence shall continue to become
exercisable in accordance with the terms of the agreements granting the stock
options as if such person continued to be employed by the Company through the
third anniversary of his Designated Termination Date.
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