EXHIBIT 10.14
ENDEAVOR PHARMACEUTICALS, INC.
AMENDED AND RESTATED 1999 STOCK OPTION PLAN
1. PURPOSE
The purpose of the Endeavor Pharmaceuticals, Inc. Amended and Restated
1999 Stock Option Plan (the "Plan") is to promote the growth and profitability
of Endeavor Pharmaceuticals, Inc. (the "Company") and its subsidiaries
("Subsidiaries") from time to time by increasing the personal participation of
officers, key employees, key consultants, and directors in the financial
performance of the Company and by providing such officers, key employees, key
consultants, and directors with an opportunity to acquire shares of the
Company's common stock, $.01 par value ("Common Stock"). This purpose will be
achieved through the grant of stock options ("Option" or "Options"), restricted
shares ("Restricted Share" or "Restricted Shares"), and deferred shares
("Deferred Share" or "Deferred Shares") (with Options, Restricted Shares and
Deferred Shares collectively referred to as "Awards"), subject to such terms and
conditions as the administrators of the Plan may determine.
2. ADMINISTRATION
The Plan may be administered by one or more committees (each a
"Committee") of the Company's Board of Directors (the "Board"). Each Committee
shall consist of two or more members of the Board who have been appointed by the
Board; provided, however, that to the extent required by Rule 16b-3 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Committee
shall be composed of members of the Board who are "non- employee directors" (as
such term defined in Rule 16b-3(b)(3) promulgated under the Exchange Act, or any
applicable successor rule or regulation) and, to the extent required by Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), such
members shall also be "outside directors" (as that term is defined in the
regulations under Section 162(m) of the Code). Each Committee shall have such
authority and be responsible for such functions as the Board has assigned to it.
If no Committee has been appointed, the entire Board shall administer the Plan.
Subject to the provisions of the Plan, the Board shall have full
authority and discretion to take any actions it deems necessary or advisable for
the administration of the Plan. All decisions, interpretations, and other
actions of the Board shall be final and binding.
The Board or the Committee shall have complete authority to: (i)
interpret all terms and provisions of the Plan and any Awards consistent with
law; (ii) select from the group of officers, key employees, key consultants and
directors eligible to participate in the Plan the officers, key employees, key
consultants and directors to whom Awards shall be granted; (iii) within the
limits established herein, determine the number of shares to be subject to and
the exercise price (the "Exercise Price"), if any, of each Award; (iv) prescribe
the form of instrument(s) evidencing Awards granted under the Plan (each an
"Award Agreement"); (v) determine the time or times at which Awards shall be
granted to officers, key employees, key consultants or directors; (vi) provide,
if appropriate, for the exercisability of Options in installments or subject to
specified conditions; (vii) determine the method of exercise of Options; (viii)
adopt, amend and rescind
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general and special rules and regulations for the Plan's administration; and
(ix) make all other determinations necessary or advisable for the administration
of the Plan.
The Board or the Committee's determinations under this Plan need not be
uniform and may be made by them selectively among persons who receive, or are
eligible to receive, Awards (whether or not such persons are similarly
situated). Without limiting the generality of the foregoing, the Board or the
Committee shall be entitled, among other things, to make nonuniform and
selective determinations which may, inter alia, reflect the specific terms of
individual employment agreements, and to enter into nonuniform and selective
Award Agreements, as to the persons to receive Awards and the terms and
conditions of Awards.
Any action which the Board or the Committee is authorized to take may
be taken without a meeting if all the members of the Board or the Committee sign
a written document authorizing such action to be taken, unless different
provision is made by the By-Laws of the Company or by resolution of the Board or
the Committee.
The Board or the Committee may designate selected Board or Committee
members or certain employees of the Company to assist the Board or the Committee
in the administration of the Plan and may grant authority to such persons to
execute documents, including Award Agreements, on behalf of the Board or the
Committee. The Board may from time to time authorize one or more officers of the
Company (each such officer, a "Delegated Officer") to do one or both of the
following: (i) designate officers and employees of the Company or any Subsidiary
to be granted Options; and (ii) determine the number of Options to be granted to
such officers and employees; provided, however, that the Board may not authorize
any Delegated Officer to grant an Option to (i) himself or herself, (ii) any
officer or employee the compensation of which subject to the deduction
limitations of Code Section 162(m), or (iii) any officer or employee who is a
reporting person for purposes of Rule 16 of the Exchange Act. The Board
resolution providing such authorization shall specify both the total number of
Options that such Delegated Officer or Officers may grant and the formula for
determining the Exercise Price for each Option granted hereunder, provided that
the authorized Exercise Price shall be deemed to be the fair market value (the
"Fair Market Value") (as determined in SECTION 6(B)) of the underlying Shares if
the Board does not specify a different formula for determining the exercise
price for particular grants. Except as expressly provided herein, nothing in
this paragraph shall be construed as creating any limitations on the power or
authority of the Board and the Committee to administer and operate the Plan.
No member of the Board or the Committee or employee of the Company
assisting the Board or the Committee pursuant to the preceding paragraph shall
be liable for any action taken or determination made in good faith.
3. STOCK SUBJECT TO PLAN
The stock to be offered under the Plan shall be authorized but unissued
shares of the Company's Common Stock. An aggregate of 605,000 shares of Common
Stock is reserved for issuance pursuant to Awards. Any or all of the Options
granted under SECTION 4 hereof may be, at the Board's or the Committee's
discretion, intended to qualify as incentive stock options ("Incentive Stock
Options") under Section 422 of the Code. The number of shares reserved under the
Plan may be adjusted to reflect any change in the capitalization of the Company
as
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contemplated by SECTION 12 hereof and occurring after the adoption of the Plan.
The Board or the Committee will maintain records showing the cumulative total of
all shares subject to Options outstanding under the Plan.
4. ELIGIBILITY
The grant of Awards under this PLAN shall be limited to those officers,
key employees, key consultants, and directors of the Company or any of its
Subsidiaries (collectively "Qualified Participants") who have the greatest
contribution to the Company's long-term performance and are selected by the
Board, the Committee, or a Delegated Officer. In making any determination as to
the Qualified Participants to whom Options shall be granted under this PLAN and
as to the number of shares to be subject thereto, the Board, the Committee, or
Designated Officer shall take into account, in each case, the level and
responsibility of the person' s position, the level of the person' s
performance, the person' s level of compensation, the assessed potential of the
person and such additional factors as the Board, Committee, or Designated
Officer shall deem relevant to the accomplishment of the purposes of the Plan.
5. ALLOTMENT OF SHARES
The Board or the Committee, in its sole discretion and subject to the
provisions of the Plan, may grant Awards to Qualified Participants eligible
under this SECTION 4, on or after the date of adoption of the Plan (hereinafter
"Participant"). Awards may be, at the discretion of the Board or the Committee:
(i) Options that are intended to qualify as Incentive Stock Options; or (ii)
Options that are not intended to be Incentive Stock Options; (iii) Restricted
Shares, (iv) Deferred Shares, or (v) any combination of the foregoing. Each
Option granted under the Plan must be clearly identified as to its status as an
Incentive Stock Option or not.
Awards granted under this PLAN may be allotted to Qualified
Participants in such amounts, subject to the limitations specified in the Plan,
as the Board or the Committee, in its sole discretion, may from time to time
determine, provided that, except as otherwise determined by the Board or the
Committee, no Qualified Participant may be granted Awards with respect to more
than 200,000 shares of Common Stock. The limitations established by the
preceding sentence shall be subject to adjustment as provided in SECTION 12
hereof.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option granted pursuant to the PLAN shall be evidenced by an Award
Agreement in such forms as the Board or Committee may from time to time approve.
Options shall comply with and be subject to the following terms and conditions.
(a) Time of Granting Options
The date of grant of an Option under this SECTION 6 shall be, for all
purposes, the date on which the Board or the Committee makes the determination
of granting such Option (each such date, a "Grant Date"). Notice of the
determination shall be given to each Qualified Participant to whom an Option is
so granted under this SECTION 6 within a reasonable time after the Grant Date.
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(b) Exercise Price for Options
The Exercise Price at which each Option granted under this SECTION 6
may be exercised shall be such price per share as shall be determined by the
Board or the Committee at the time of grant based on such criteria as may be
adopted by the Board or the Committee at the time of grant in good faith, taking
into account, in each case, the Fair Market Value of the Common Stock, the level
and responsibility of the person's position, the level of the person's
performance, the person' s level of compensation, the assessed potential of the
person, and such additional factors as the Board or the Committee shall deem
relevant to the accomplishment of the purposes of the Plan; provided, however,
that in no event shall the Exercise Price of an Option be less than 100% of the
Fair Market Value of the Company's shares of Common Stock on the Grant Date for
such Option. In the case of an Option intended to qualify as an Incentive Stock
Option, the Exercise Price shall not be less than 100% (or 110% for owners of
more than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary) of the Fair Market Value of the Common Stock on the
Grant Date for such Option. Fair Market Value shall mean the average of the high
and low sales prices per share as reported by the exchange on which the Common
Stock is trading, including without limitation the NASDAQ National Market, on
any Grant Date, or if the Company is not so reported by an exchange, then the
Board or the Committee shall make a reasonable determination of Fair Market
Value.
(c) Annual Limitation for Incentive Stock Options
In the case of Options intended to be Incentive Stock Options, the
aggregate fair market value (determined at the time of such Incentive Stock
Options' respective grants) of the shares with respect to which Incentive Stock
Options are exercisable for the first time by an Participant hereunder during
any calendar year (under all plans taken into account pursuant to Section 422(d)
of the Code) shall not exceed $100,000. Options designated as Incentive Stock
Options that exceed this limitation shall be treated as Options that are not
intended to qualify as Incentive Stock Options.
(d) Term of Options
The term of each Option granted under this SECTION 6 shall be
established by the Board or the Committee, but shall not exceed 10 years (or 5
years for owners of more than 10% of the total combined voting power of all
classes of stock of the Company or of a Subsidiary) from the Grant Date for such
Option.
(e) Cancellation and Replacement of Options
The Board or the Committee may at any time or from time to time permit
the voluntary surrender by the holder of any outstanding Option granted under
this SECTION 6 where such surrender is conditioned upon the granting under this
SECTION 6 to such holder of new Option(s) for such number of shares as the Board
or the Committee shall determine, or may require such a voluntary surrender as a
condition precedent to the grant under this SECTION 6 of new Option(s) to such
holder.
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The Board or the Committee shall determine the terms and conditions of
any such new Option(s), including their Exercise Price and the periods during
which they may be exercised, subject to and in accordance with the provisions of
the Plan, all or any of which may differ from the terms and conditions of the
Option(s) surrendered. Any such new Option(s) shall be subject to all the
relevant provisions of the Plan.
The shares subject to any Option so surrendered or terminated shall no
longer be charged against the limitation or limitations provided in SECTION 3 of
the Plan and may thereafter become the subject of new Option grants under the
Plan.
The granting of new Option(s) in connection with the surrender of
outstanding Option(s) under the Plan shall be considered for the purposes of the
Plan as the grant of new Option(s) and not an alteration, amendment or
modification of the Plan or of the Option(s) being surrendered.
(f) Vesting
Except as otherwise determined by the Board or the Committee, Options
shall vest as follows:
Aggregate Percentage of Shares under
Date Options Vested on Such Date
- ---- ------------------------------------
Twelve months after Grant Date 33%
Twenty-four months after Grant Date 66%
Thirty-six months after Grant Date 100%
Notwithstanding the foregoing, unless otherwise provided in an Award
Agreement, employment agreement or consulting agreement, an Award granted
pursuant to this Plan shall be deemed fully vested immediately prior to an
Accelerating Event (as defined below).
Following an Accelerating Event (other than an event described in
SECTION 6(F)(III) below), the Committee shall promptly make an appropriate
adjustment to the number and class of shares of Common Stock available for
Awards, and to the amount and kind of shares or other securities or property
receivable upon exercise or vesting of any outstanding Awards after the
effective date of such transaction, and the price thereof (if applicable).
For the purposes of the Plan, an "Accelerating Event" shall mean and
include the following:
i. The consummation of a tender offer or exchange offer
for the ownership of securities of the Company
representing 30% or more of the combined voting
powers of the Company's then outstanding voting
securities by a person or group of persons as such
term is defined in Sections 13(d) and 14(d) of the
Exchange Act;
ii. The adoption by the Company's stockholders of a plan
of merger or consolidation providing for the merger
or consolidation of the Company with another
corporation (other than an affiliate of the Company
within
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the meaning of the Exchange Act) and as a result of
such merger or consolidation less than 51% of the
outstanding voting securities of the surviving or
resulting corporation would then be owned in the
aggregate by the former stockholders of the Company;
iii. Individuals who constituted the Board on the
effective date of the Plan (as defined below in
Section 18) or their approved replacements (as
defined below) cease for any reason to constitute a
majority of the Board;
iv. The transfer by the Company of substantially all of
its assets to another corporation or entity which is
not a wholly owned subsidiary of the Company; or
v. the Company's shareholders approve a plan or proposal
for liquidation or dissolution of the Company.
For purposes of (iii) above, a new member of the Board shall be
considered an "approved replacement" if his or her election (or nomination for
election) was approved by a vote of at least two-thirds of the members of the
Board then still in office who were either Board members on the effective date
this Plan or were themselves approved as replacement Board members.
7. EXERCISABILITY OF OPTIONS
Subject to the provisions of the Plan, Options granted under SECTION 6
hereof shall be exercisable at such time or times after the Grant Date to the
extent such Options are vested.
Except as otherwise determined by the Board or the Committee and as set
forth in a Award Agreement or an employment agreement, any Option shall
terminate in full (whether or not previously exercisable) prior to the
expiration of its term on the date thirty (30) days after the date the
Participant ceases to be an officer, director, employee, consultant or director
of the Company or a Company Subsidiary, unless (i) the Participant shall (a) die
while an Participant, in which case the Participant's legatee(s) under his or
her last will or the Participant's personal representative or representatives
may exercise all or part of the previously unexercised portion of such Option at
any time within one year, but not beyond the expiration of its term, after the
Participant's death to the extent the Participant could have exercised the
Option immediately prior to his or her death, (b) become permanently or totally
disabled within the meaning of section 22(e)(3) of the Code (or any successor
provision), as determined in the Committee's sole discretion, while an
Participant, in which case the Participant or his or her personal representative
may exercise the previously unexercised portion of such Option at any time
within one year, but not beyond the expiration of its term, after the
termination of his or her directorship, employment or status as a consultant to
the extent the Participant could have exercised the Option immediately prior to
such termination, or (c) resign or retire after age 62 with the consent of the
Company, in which case the Participant may exercise the previously unexercised
portion of such Option at any time within one year, but not beyond the
expiration of its term, after the Participant's resignation or retirement to the
extent the Participant could have exercised the Option immediately prior to such
resignation or retirement, or (ii) the Board or the Committee shall determine
otherwise.
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In no event may an Option be exercised after the expiration of its
fixed term.
8. METHOD OF EXERCISE
Each Option granted under the Plan shall be deemed exercised when the
holder (a) shall indicate the decision to do so in writing delivered to the
Company, (b) shall at the same time tender to the Company payment in full of the
exercise price for the shares for which the Option is exercised, which payment
may be made in cash, and (c) shall comply with such other reasonable
requirements as the Board or the Committee may establish; provided that to
enable a holder (including but not limited to officers) to exercise options
granted under the Plan, the Board or the Committee may determine, in the
exercise of its discretion, to permit such holder to pay the exercise price in
one or more of the following methods:
(i) the delivery of shares of Common Stock having a Fair
Market Value in the aggregate equal to such Exercise Price, provided that any
shares of Common Stock used to pay the Exercise Price must have been held by
the Participant for no less than six (6) months;
(ii) by cancellation of indebtedness of the Company to the
Participant;
(iii) by waiver of compensation due or accrued to
Participant for services rendered;
(iv) provide that a public market for the Company's stock
exists, (1) through a "same day sale" commitment from Participant and a
broker-dealer that is a member of the National Association of Securities
Dealers (an "NASD Dealer") whereby Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased to pay for the
Exercise Price and whereby NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to Company, or (2) through
a "margin" commitment from Participant and an NASD Dealer whereby Participant
irrevocably elects to exercise the Option and to pledge the Shares so
purchased to the NASD Dealer in a margin account as security foe a loan from
the NASD Dealer in the amount of the Exercise Price, and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the Exercise
Price directly to the Company; or
(v) such other form of payment as the Committee may, in
its discretion, approve.
The exercise of any Option granted under the Plan may be made subject
to the condition that, if at any time the Board or the Committee shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any state or federal law is necessary or desirable
as a condition of, or in connection with, such exercise or the delivery or
purchase of shares pursuant thereto, then in such event, the exercise of the
Option shall not be effective unless such withholding tax or other withholding
liabilities shall have been satisfied in a manner acceptable to the Company,
which may include the withholding by the Company of shares of Common Stock to be
issued upon exercise of an Option having a Fair Market Value equal but not in
excess of the required withholding amount. With respect to the foregoing
sentences, the value of the shares of Common Stock shall be the Fair Market
Value determined in accordance with SECTION 6(B) of the Plan as of the day of
such payment or withholding.
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No person, estate or other entity shall have any of the rights of a
shareholder with reference to shares subject to an Option until a certificate
for such shares has been issued by the Company.
An Option granted under the Plan may be exercised for any lesser number
of shares than the full amount for which it could be exercised. Such a partial
exercise of an Option shall not affect the right to exercise the Option from
time to time in accordance with the Plan for the remaining shares subject to the
Option.
9. TERMINATION OF OPTIONS
An Option granted under the Plan shall be considered terminated in
whole or in part, to the extent that, in accordance with the provisions of the
Plan and such Option, it can no longer be exercised for any shares originally
subject to the Option.
10. RESTRICTED SHARE AWARDS
(b) GRANTS. The Committee shall have the discretion to grant
Restricted Share Awards to Qualified Participants. As promptly as practicable
after a determination is made that a Restricted Share Award is to be made, the
Committee shall notify the Participant in writing of the grant of the Award, the
number of Shares covered by the Award, and the terms upon which the Shares
subject to the Award may be earned. The date on which the Committee so notifies
the Participant shall be considered the date of grant of the Restricted Share
Awards. The Committee shall maintain records as to all grants of Restricted
Share Awards under the Plan.
(c) EARNING SHARES. Unless the applicable Award Agreement
otherwise provides, Shares subject to Restricted Share Awards shall be earned
and become non-forfeitable by a Participant according to the schedule set forth
in Section 6(f), provided the Participant is a director, officer, employee or
consultant on the scheduled vesting date.
(d) ACCRUAL OF DIVIDENDS. Whenever Restricted Shares are paid to a
Participant under this Plan, the Participant shall also be entitled to receive,
with respect to each Restricted Share paid, an amount equal to any cash
dividends and a number of shares of Common Stock equal to any stock dividends
declared and paid with respect to a share of Common Stock between the date the
relevant Restricted Share Award was initially granted to such Participant and
the date the Restricted Shares are being distributed. The Committee may also, in
its discretion distribute an appropriate amount of net earnings, if any, with
respect to any cash dividends paid between the grant date of the Restricted
Share Award and the distribution date of the Restricted Shares.
(e) DISTRIBUTION OF RESTRICTED SHARES.
(i) TIMING OF DISTRIBUTIONS; GENERAL RULE. Except as
otherwise expressly stated in this Plan, the Committee shall distribute
Restricted Shares and accumulated dividends and interest to the Participant or
his beneficiary, as the case may be, as soon as practicable after they have been
earned. No fractional shares shall be distributed.
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(ii) FORM OF DISTRIBUTION. The Committee shall distribute
all Restricted Shares, together with any shares representing stock dividends, in
the form of Common Stock. One share of Common Stock shall be given for each
Restricted Share earned. Payments representing cash dividends (and earnings
thereon) shall be made in cash.
(f) DEFERRAL ELECTIONS. If expressly authorized in an Award
Agreement a Participant who is a member of a select group of management or
highly compensated employees (within the meaning of the Employee Retirement
Income Security Act of 1974, as amended) may irrevocably elect, at any time at
least 12 months prior to the date on which a Participant becomes vested in any
shares subject to his or her Restricted Share Award, to defer the receipt of all
or a percentage of the Restricted Shares that would otherwise be transferred to
the Participant upon the vesting of such Award pursuant to SECTION 11 of this
Plan. If such an election is made, the Restricted Shares shall be credited to
the Participant's account as Deferred Shares on the date such Restricted Shares
would otherwise have been distributed to the Participant.
11. Deferred shares.
(a) ELECTIONS TO DEFER. The Committee may, in its discretion,
authorize any Participant who is a director, consultant, or member of a select
group of management or highly compensated employees (within the meaning of the
Employee Retirement Income Security Act of 1974, as amended) to irrevocably
elect to forego the receipt of cash compensation and in lieu thereof to have the
Company credit Deferred Shares to an account payable to the Participant. Each
election shall take effect five business days after its delivery to the
Committee, unless in the meantime the Committee sends the Participant a written
notice explaining why the election is invalid. Notwithstanding the foregoing
sentence, elections shall be ineffective with respect to any compensation that a
Participant earns before the date on which the Committee receives the election.
(b) CASH EARNINGS ON DEFERRED SHARES. On the last day of each
fiscal year of the Company, the Committee shall credit to the Participant's
account a number of Deferred Shares having a value equal to the sum of any cash
dividends paid on Deferred Shares previously credited to the Participant's
account. The Committee shall hold each Participant's Deferred Shares until
distribution is required pursuant to subsection (c) hereof.
(c) DISTRIBUTIONS OF DEFERRED SHARES AND EARNINGS. The Committee
shall distribute a Participant's Deferred Shares in five substantially equal
annual installments that are paid before the last day of each of the five fiscal
years of the Company that end after the date on which the Participant's
continuous service terminates, unless the Participant has properly elected a
different form of distribution pursuant to an election (on a Form that the
Committee approves) that the Committee receives either more than 90 days before
an Accelerating Event or more than one year before the date on which the
Participant's continuous service terminates for any reason.
(d) HARDSHIP WITHDRAWALS. Notwithstanding any other provision of
the Plan or a Participant's election hereunder, in the event the Participant
suffers an unforeseeable hardship within the contemplation of this subsection,
the Participant may apply to the Committee for an immediate distribution of all
or a portion of his Deferred Shares. The hardship must result from a sudden and
unexpected illness or accident of the Participant or a dependent of the
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Participant, casualty loss of property, or other similar conditions beyond the
control of the Participant. Examples of purposes which are not considered
hardships include post-secondary school expenses or the desire to purchase a
residence. In no event will a distribution be made to the extent the hardship
could be relieved through reimbursement or compensation by insurance or
otherwise, or by liquidation of the Participant's nonessential assets to the
extent such liquidation would not itself cause a severe financial hardship. The
amount of any distribution hereunder shall be limited to the amount necessary to
relieve the Participant's financial hardship. The determination of whether a
Participant has a qualifying hardship and the amount which qualifies for
distribution, if any, shall be made by the Committee in its sole discretion. The
Committee may require evidence of the purpose and amount of the need, and may
establish such application or other procedures as it deems appropriate.
(e) RIGHTS TO DEFERRED SHARES. A Participant may not assign his or
her claim to Deferred Shares during his or her lifetime. A Participant's right
to Deferred Shares shall at all times constitute an unsecured promise of the
Company to pay benefits as they come due. The right of the Participant or his or
her beneficiary to receive benefits hereunder shall be solely an unsecured claim
against the general assets of the Company. Neither the Participant nor his or
her beneficiary shall have any claim against or rights in any specific assets,
shares, or other funds of the Company.
12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any change in the outstanding Common Stock or shares of
Common Stock issuable upon conversion of any preferred stock of the Company by
reason of a stock dividend, stock split, stock consolidation, recapitalization,
reorganization, merger, split up or the like, the shares available for purposes
of the Plan, the number of Shares subject to the Award, and the Exercise Price,
if any, shall be appropriately adjusted so as to preserve, but not increase, the
benefits of the Plan to the Company and the benefits to the holders of such
Awards; provided, however, that for any Incentive Stock Options, in the case of
a corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the excess of the aggregate Fair Market Value (as
determined under SECTION 6(B)) of the shares subject to any Options immediately
after such event over the aggregate Option price of such shares is not more than
the excess of the aggregate Fair Market Value of all shares subject to such
Options immediately before such event over the aggregate Option price of such
shares.
Adjustments under this Section shall be made by the Board or the
Committee.
13. NON-TRANSFERABILITY
An Award granted to a Participant under the Plan shall not be
transferable by him or her except: (i) by will; (ii) by the laws of descent and
distribution; (iii) pursuant to a qualified domestic relations order as defined
by the Code or in Title I of the Employee Retirement Income Security Act, or the
rules thereunder; or (iv) as otherwise determined by the Board or the Committee.
In the case of an Option intended to be an Incentive Stock Option, such Option
shall not be transferable by a Participant other than by will or the laws of
descent and distribution and during the Participant's lifetime shall be
exercisable only by him or her. Unless otherwise provided in an Award Agreement,
a Participant also may give an Award that is not an Incentive Stock Option to an
immediate family member, to a partnership or trust solely benefiting the
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Participant or immediate family members, or to an inter vivos trust or
testamentary trust from which the Award (or the Award proceeds) will be
transferred after the Participant's death. An immediate family member is a
Participant's natural or adopted child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law. A transfer shall
not relieve a Participant from his or her obligations under this Plan or the
applicable Award Agreement with respect to the transferred Award or Award
proceeds.
14. COMPLIANCE WITH SECURITIES LAWS AND OTHER REQUIREMENTS
No certificate(s) for shares shall be issued pursuant to an Award until
the Company shall have taken such action, if any, as is then required to comply
with the provisions of the Securities Act of 1933, as amended, the North
Carolina Uniform Securities Act, as amended, any other applicable state
securities law(s) and the requirements of any exchange (including the NASDAQ
National Market) on which the Common Stock may, at the time, be listed.
A Participant or a transferee of an Award shall have no rights as a
stockholder with respect to any Shares covered by such Award until the date of
the issuance of a stock certificate such Participant or transferee for such
Shares. No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distributions or other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in SECTIONS 10(C), 11(B), and 12 hereof.
In the case of an Award acquired by a person or estate by bequest or
inheritance, the Board or the Committee may require reasonable evidence as to
the ownership of the Award and may require such consents and releases of taxing
authorities as it may deem advisable before issuing shares thereunder.
15. NO RIGHT TO EMPLOYMENT
Neither the adoption of the Plan, nor its operation, nor any document
describing or referring to the Plan, or any part thereof, shall confer upon any
Participant the Plan any right to continue in the employ of the Company, or
shall in any way affect the right and power of the Company to terminate the
employment or position with the Company of any participant under the Plan at any
time with or without assigning a reason therefore, to the same extent as the
Company might have done if the Plan had not been adopted.
16. AGREEMENT BY PARTICIPANT REGARDING WITHHOLDING TAXES
(a) No later than the date of exercise of any Option or Stock
Appreciation Right, or the distribution of Shares to a Participant pursuant to a
Restricted Share or Deferred Share Award, the Participant shall pay to the
Company or make arrangements satisfactory to the Committee regarding payment of
any federal, state or local taxes of any kind required by law to be withheld,
and may satisfy minimum withholding consequences through the surrender of shares
subject to the Award; and
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(b) The Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the
Participant any federal, state or local taxes of any kind required by law to be
withheld with respect to an Award.
17. AMENDMENT AND TERMINATION OF THE PLAN; MODIFICATION OF AWARDS
(a) The Board may at any time and from time to time suspend,
terminate, modify or amend the Plan, provided that any amendment that requires
stockholder approval under applicable law shall be contingent on such approval.
Except as provided in SECTION 6(F) hereof, no suspension, termination,
modification or amendment of the Plan may adversely affect any Award previously
granted unless the written consent of the Participant is obtained.
(b) The Committee may modify an Award, provided that no
modification to such Award shall materially reduce the participant's rights or
materially increase the participant's obligations as determined by the
Committee.
18. EFFECTIVE DATE OF THE PLAN
The Plan was adopted by the Board on April 20, 1999 and shall be
effective for ten (10) years from the earlier of the adoption of the Plan by the
Board or approval of the Plan by the Company's stockholders, after which time no
Award shall be granted, but such termination shall not affect any Award
previously granted under the Plan.
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19. STOCK CERTIFICATE LEGEND
Each stock certificate issued for Options intended to be Incentive
Stock Options shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED PURSUANT TO A
STOCK OPTION PLAN AND WERE INTENDED TO BE A QUALIFIED OPTION AS SET
FORTH IN SECTION 422 OF THE INTERNAL REVENUE CODE. IF THESE SHARES ARE
TRANSFERRED OR SOLD PRIOR TO _______________, ________, YOU ARE
REQUIRED TO NOTIFY THE CORPORATION'S HUMAN RESOURCES DEPARTMENT AT
(910) ________________.
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