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EXHIBIT 10.7 (a)
GARTNER GROUP, INC.
1991 STOCK OPTION PLAN
AS AMENDED AND RESTATED ON FEBRUARY 24, 1997
This 1991 Stock Option Plan is an amendment and restatement of the
Gartner Group, Inc. 1991 Stock Option and Appreciation Right Incentive
Compensation Plan.
1. Purpose of the Plan. The purpose of this Stock Option Plan is to
enable the Company to provide incentive to eligible employees, consultants and
officers whose present and potential contributions are important to the
continued success of the Company, to afford these individuals the opportunity to
acquire a proprietary interest in the Company, and to enable the Company to
enlist and retain in its employment qualified personnel for the successful
conduct of its business. It is intended that this purpose will be effected
through the granting of (a) stock options, (b) stock purchase rights, (c) stock
appreciation rights, and (d) long-term performance awards.
2. Definitions. As used herein, the following definitions shall apply:
(a) "Administrator" means the Board or such of its Committees
as shall be administering the Plan, in accordance with Section 8 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to
the administration of stock option plans under applicable securities laws,
Delaware corporate law and the Code.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended.
(e) "Committee" means a Committee appointed by the Board in
accordance with Section 8 of the Plan.
(f) "Common Stock" means the Common Stock, $.01 par value, of
the Company.
(g) "Company" means Gartner Group, Inc., a Delaware
corporation, previously known as GGI Holding Corporation.
(h) "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services and who is
compensated for such services, provided that the term "Consultant" shall not
include Directors who are paid only
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a director's fee by the Company or who are not compensated by the Company for
their services as Directors.
(i) "Continuous Status as an Employee or Consultant" means
that the employment or consulting relationship is not interrupted or terminated
by the Company, or any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Administrator, including sick leave, military leave, or
any other personal leave; provided, however, that for purposes of Continuous
Status as an Employee or Consultant, no such leave may exceed ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
(including written Company policies) or statute or unless (in the case of
Options and Rights other than Incentive Stock Options) the Administrator has
expressly designated a longer leave period during which (for purposes of such
Options or Rights) Continuous Status as an Employee or Consultant shall
continue; or (ii) transfers between locations of the Company or between the
Company, its Parent, its Subsidiaries or its successor; and provided further
that any vesting or lapsing of the Company's right to repurchase Shares at their
original purchase price shall cease on the ninety-first (91st) consecutive day
of any leave of absence approved by the Administrator and shall not recommence
until such date, if any, upon which the Consultant or Optionee resumes his or
her service with the Company.
(j) "Director" means a member of the Board.
(k) "Disability" means total and permanent disability as
defined in Section 22(e)(3) of the Code.
(l) "Employee" means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director's fee by the Company
shall be sufficient to constitute "employment" by the Company.
(m) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(n) "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national
market system, including without limitation
the Nasdaq National Market of the National
Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the
Fair Market Value of a share of Common Stock
shall be the average of the closing sales
prices for such stock (or the average of the
closing bids, if no sales were reported) as
quoted
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on such system or exchange (or the exchange
with the greatest volume of trading in
Common Stock) on the five market trading
days immediately preceding the date of
determination, as reported in The Wall
Street Journal or such other source as the
Administrator of the Plan deems reliable;
provided, however, that in the event the
Fair Market Value as so determined is more
than 20% greater or more than 20% less than
the closing sales price for such stock (or
the closing bid, if no sales were reported)
as so quoted on the date of determination,
then the Administrator shall be entitled to
determine the Fair Market Value in good
faith, at a price within the range of prices
from the Fair Market Value as otherwise
determined above to the closing price (or
closing bid, as applicable) on the date of
determination;
(ii) If the Common Stock is quoted on the NASDAQ
System (but not on the Nasdaq National
Market thereof) or is regularly quoted by a
recognized securities dealer but selling
prices are not reported, the Fair Market
Value of a Share of Common Stock shall be
the average of the means between the high
bid and low asked prices for the Common
Stock on the five market trading days
immediately preceding the day of
determination, as reported in The Wall
Street Journal or such other source as the
Administrator deems reliable; provided,
however, that in the event the Fair Market
Value as so determined is more than 20%
greater or more than 20% less than the mean
between the high bid and low asked prices
for such stock as so quoted on the date of
determination, then the Administrator shall
be entitled to determine the Fair Market
Value in good faith, at a price within the
range of prices from the Fair Market Value
as otherwise determined above to the mean
between the high bid and low asked prices on
the date of determination;
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value
shall be determined in good faith by the
Administrator.
(o) "Incentive Stock Option" means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.
(p) "Long-Term Performance Award" means an award under Section
7 below. A Long-Term Performance Award shall permit the recipient to receive a
cash or stock bonus (as determined by the Administrator) upon satisfaction of
such performance
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factors as are set out in the recipient's individual grant. Long-term
Performance Awards will be based upon the achievement of Company, Subsidiary
and/or individual performance factors or upon such other criteria as the
Administrator may deem appropriate.
(q) "Long-Term Performance Award Agreement" means a written
agreement between the Company and an Optionee evidencing the terms and
conditions of an individual Long-Term Performance Award grant. The Long-Term
Performance Award Agreement is subject to the terms and conditions of the Plan.
(r) "Nonstatutory Stock Option" means any Option that is not
an Incentive Stock Option.
(s) "Notice of Grant" means a written notice evidencing
certain terms and conditions of an individual Option, Stock Purchase Right, SAR
or Long-Term Performance Award grant. The Notice of Grant is part of the Option
Agreement, the SAR Agreement and the Long-Term Performance Award Agreement.
(t) "Officer" means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.
(u) "Option" means a stock option granted pursuant to the
Plan.
(v) "Option Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.
(w) "Option Exchange Program" means a program whereby
outstanding options are surrendered in exchange for options with a lower
exercise price.
(x) "Optioned Stock" means the Common Stock subject to an
Option or Right.
(y) "Optionee" means an Employee or Consultant who holds an
outstanding Option or Right.
(aa) "Parent" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(bb) "Plan" means this Stock Option Plan, formerly the 1991
Stock Option and Appreciation Right Incentive Compensation Plan.
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(cc) "Restricted Stock" means shares of Common Stock subject
to a Restricted Stock Purchase Agreement acquired pursuant to a grant of Stock
Purchase Rights under Section 6 below.
(dd) "Restricted Stock Purchase Agreement" means a written
agreement between the Company and the Optionee evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase Right. The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.
(ee) "Right" means and includes SARs, Long-Term Performance
Awards and Stock Purchase Rights granted pursuant to the Plan.
(ff) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor rule thereto, as in effect when discretion is being exercised with
respect to the Plan.
(gg) "SAR" means a stock appreciation right granted pursuant
to Section 5 of the Plan.
(hh) "SAR Agreement" means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual SAR
grant. The SAR Agreement is subject to the terms and conditions of the Plan.
(ii) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 10 of the Plan.
(jj) "Stock Purchase Right" means the right to purchase Common
Stock pursuant to Section 6 of the Plan, as evidenced by a Notice of Grant.
(kk) "Subsidiary" means a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 424(f) of the Code.
3. Shares Subject to the Plan. Subject to the provisions of Section 10
of the Plan, the total number of Shares reserved and available for distribution
under the Plan is 5,700,000 Shares. Subject to Section 10 of the Plan, if any
Shares that have been optioned under an Option cease to be subject to such
Option (other than through exercise of the Option), or if any Option or Right
granted hereunder is forfeited or any such award otherwise terminates prior to
the issuance of Common Stock to the participant, the shares that were subject to
such Option or Right shall again be available for distribution in connection
with future Option or right grants under the Plan; provided, however, that
Shares that have actually been issued under the Plan, whether upon exercise of
an Option or Right, shall not in any event be returned to the Plan and shall not
become available for future distribution under the Plan.
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4. Eligibility. Nonstatutory Stock Options and Rights may be granted to
Employees and Consultants. Incentive Stock Options may be granted only to
Employees. If otherwise eligible, an Employee or Consultant who has been granted
an Option or Right may be granted additional Options or Rights.
5. Options and SARs.
(a) Options. The Administrator, in its discretion, may grant
Options to eligible participants and shall determine whether such Options shall
be Incentive Stock Options or Nonstatutory Stock Options. Each Option shall be
evidenced by a Notice of Grant which shall expressly identify the Options as
Incentive Stock Options or as Nonstatutory Stock Options, and be in such form
and contain such provisions as the Administrator shall from time to time deem
appropriate. Without limiting the foregoing, the Administrator may at any time
authorize the Company, with the consent of the respective recipients, to issue
new Options or Rights in exchange for the surrender and cancellation of
outstanding Options or Rights. Option agreements shall contain the following
terms and conditions:
(i) Exercise Price; Number of Shares. The per
Share exercise price for the Shares issuable
pursuant to an Option shall be such price as
is determined by the Administrator;
provided, however, that in the case of an
Incentive Stock Option, the price shall be
no less than 100% of the Fair Market Value
of the Common Stock on the date the Option
is granted, subject to any additional
conditions set out in Section 5(a)(iv)
below.
The Notice of Grant shall specify the number
of Shares to which it pertains.
(ii) Waiting Period and Exercise Dates. At the
time an Option is granted, the Administrator
will determine the terms and conditions to
be satisfied before Shares may be purchased,
including the dates on which Shares subject
to the Option may first be purchased. The
Administrator may specify that an Option may
not be exercised until the completion of the
service period specified at the time of
grant. (Any such period is referred to
herein as the "waiting period.") At the time
an Option is granted, the Administrator
shall fix the period within which the Option
may be exercised, which shall not be earlier
than the end of the waiting period, if any,
nor, in the case of an Incentive Stock
Option, later than ten (10) years, from the
date of grant.
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(iii) Form of Payment. The consideration to be
paid for the Shares to be issued upon
exercise of an Option, including the method
of payment, shall be determined by the
Administrator (and, in the case of an
Incentive Stock Option, shall be determined
at the time of grant) and may consist
entirely of:
(1) cash;
(2) check;
(3) promissory note;
(4) other Shares which (1) in the case of
Shares acquired upon exercise of an option,
have been owned by the Optionee for more
than six months on the date of surrender,
and (2) have a Fair Market Value on the date
of surrender not greater than the aggregate
exercise price of the Shares as to which
said Option shall be exercised;
(5) delivery of a properly executed exercise
notice together with such other
documentation as the Administrator and any
broker approved by the Company, if
applicable, shall require to effect an
exercise of the Option and delivery to the
Company of the sale or loan proceeds
required to pay the exercise price;
(6) any combination of the foregoing methods
of payment; or
(7) such other consideration and method of
payment for the issuance of Shares to the
extent permitted by Applicable Laws.
(iv) Special Incentive Stock Option Provisions.
In addition to the foregoing, Options
granted under the Plan which are intended to
be Incentive Stock Options under Section 422
of the Code shall be subject to the
following terms and conditions:
(1) Dollar Limitation. To the extent that
the aggregate Fair Market Value of (a) the
Shares with respect to which Options
designated as Incentive Stock Options plus
(b) the shares of stock of the Company,
Parent and any Subsidiary with respect to
which other incentive stock options are
exercisable for the first time by an
Optionee during any calendar year under all
plans of the Company and any Parent and
Subsidiary exceeds $100,000, such Options
shall be treated as Nonstatutory Stock
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Options. For purposes of the preceding
sentence, (a) Options shall be taken into
account in the order in which they were
granted, and (b) the Fair Market Value of
the Shares shall be determined as of the
time the Option or other incentive stock
option is granted.
(2) 10% Stockholder. If any Optionee to whom
an Incentive Stock Option is to be granted
pursuant to the provisions of the Plan is,
on the date of grant, the owner of Common
Stock (as determined under Section 424(d) of
the Code) possessing more than 10% of the
total combined voting power of all classes
of stock of the Company or any Parent or
Subsidiary of the Company, then the
following special provisions shall be
applicable to the Option granted to such
individual:
(a) The per Share Option price of
Shares subject to such Incentive
Stock Option shall not be less than
110% of the Fair Market Value of
Common Stock on the date of grant;
and
(b)The Option shall not have a term
in excess of five (5) years from the
date of grant.
Except as modified by the preceding
provisions of this subsection 5(a)(iv) and
except as otherwise limited by Section 422
of the Code, all of the provisions of the
Plan shall be applicable to the Incentive
Stock Options granted hereunder.
(v) Other Provisions. Each Option granted under
the Plan may contain such other terms,
provisions, and conditions not inconsistent
with the Plan as may be determined by the
Administrator.
(vi) Buyout Provisions. The Administrator may at
any time offer to buy out for a payment in
cash or Shares, an Option previously
granted, based on such terms and conditions
as the Administrator shall establish and
communicate to the Optionee at the time that
such offer is made.
(b) SARs.
(i) In Connection with Options. At the sole
discretion of the Administrator, SARs may be
granted in connection with all or any part
of an Option, either concurrently with the
grant of the
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Option or at any time thereafter during the
term of the Option. The following provisions
apply to SARs that are granted in connection
with Options:
(1) The SAR shall entitle the Optionee to
exercise the SAR by surrendering to the
Company unexercised a portion of the related
Option. The Optionee shall receive in
Exchange from the Company an amount equal to
the excess of (1) the Fair Market Value on
the date of exercise of the SAR of the
Common Stock covered by the surrendered
portion of the related Option over (2) the
exercise price of the Common Stock covered
by the surrendered portion of the related
Option. Notwithstanding the foregoing, the
Administrator may place limits on the amount
that may be paid upon exercise of an SAR;
provided, however, that such limit shall not
restrict the exercisability of the related
Option.
(2) When an SAR is exercised, the related
Option, to the extent surrendered, shall
cease to be exercisable.
(3) An SAR shall be exercisable only when
and to the extent that the related Option is
exercisable and shall expire no later than
the date on which the related Option
expires.
(4) An SAR may only be exercised at a time
when the Fair Market Value of the Common
Stock covered by the related Option exceeds
the exercise price of the Common Stock
covered by the related Option.
(ii) Independent of Options. At the sole
discretion of the Administrator, SARs may be
granted without related Options. The
following provisions apply to SARs that are
not granted in connection with Options:
(1) The SAR shall entitle the Optionee, by
exercising the SAR, to receive from the
Company an amount equal to the excess of (1)
the Fair Market Value of the Common Stock
covered by the exercised portion of the SAR,
as of the date of such exercise, over (2)
the Fair Market Value of the Common Stock
covered by the exercised portion of the SAR,
as of the last market trading date prior to
the date on which the SAR was granted;
provided, however, that the Administrator
may place limits on the aggregate amount
that may be paid upon exercise of an SAR.
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(2) SARs shall be exercisable, in whole or
in part, at such times as the Administrator
shall specify in the Optionee's SAR
agreement.
(iii) Form of Payment. The Company's obligation
arising upon the exercise of an SAR may be
paid in Common Stock or in cash, or in any
combination of Common Stock and cash, as the
Administrator, in its sole discretion, may
determine. Shares issued upon the exercise
of an SAR shall be valued at their Fair
Market Value as of the date of exercise.
(c) Method of Exercise.
(i) Procedure for Exercise; Rights as a
Stockholder. Any Option or SAR granted
hereunder shall be exercisable at such times
and under such conditions as determined by
the Administrator and as shall be
permissible under the terms of the Plan.
An Option may not be exercised for a
fraction of a Share.
An Option or SAR shall be deemed to be
exercised when written notice of such
exercise has been given to the Company in
accordance with the terms of the Option or
SAR by the person entitled to exercise the
Option or SAR and full payment for the
Shares with respect to which the Option is
exercised has been received by the Company.
Full payment may, as authorized by the
Administrator (and, in the case of an
Incentive Stock Option, determined at the
time of grant) and permitted by the Option
Agreement consist of any consideration and
method of payment allowable under subsection
5(a)(iii) of the Plan. Until the issuance
(as evidenced by the appropriate entry on
the books of the Company or of a duly
authorized transfer agent of the Company) of
the stock certificate evidencing such
Shares, no right to vote or receive
dividends or any other rights as a
stockholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise
of the Option. No adjustment will be made
for a dividend or other right for which the
record date is prior to the date the stock
certificate is issued, except as provided in
Section 10 of the Plan.
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Exercise of an Option in any manner shall
result in a decrease in the number of Shares
which thereafter shall be available, both
for purposes of the Plan and for sale under
the Option, by the number of Shares as to
which the Option is exercised. Exercise of
an SAR in any manner shall, to the extent
the SAR is exercised, result in a decrease
in the number of Shares which thereafter
shall be available for purposes of the Plan,
and the SAR shall cease to be exercisable to
the extent it has been exercised.
(ii) Rule 16b-3. Options and SARs granted to
individuals subject to Section 16 of the
Exchange Act ("Insiders") must comply with
the applicable provisions of Rule 16b-3 and
shall contain such additional conditions or
restrictions as may be required thereunder
to qualify for the maximum exemption from
Section 16 of the Exchange Act with respect
to Plan transactions.
(iii) Termination of Employment or Consulting
Relationship. In the event an Optionee's
Continuous Status as an Employee or
Consultant terminates (other than upon the
Optionee's death or Disability), the
Optionee may exercise his or her Option or
SAR, but only within such period of time as
is determined by the Administrator at the
time of grant, not to exceed six (6) months
(three (3) months in the case of an
Incentive Stock Option) from the date of
such termination, and only to the extent
that the Optionee was entitled to exercise
it at the date of such termination (but in
no event later than the expiration of the
term of such Option or SAR as set forth in
the Option or SAR Agreement). To the extent
that Optionee was not entitled to exercise
an Option or SAR at the date of such
termination, and to the extent that the
Optionee does not exercise such Option or
SAR (to the extent otherwise so entitled)
within the time specified herein, the Option
or SAR shall terminate.
(iv) Disability of Optionee. In the event an
Optionee's Continuous Status as an Employee
or Consultant terminates as a result of the
Optionee's Disability, the Optionee may
exercise his or her Option or SAR, but only
within six (6) months from the date of such
termination, and only to the extent that the
Optionee was entitled to exercise it at the
date of such termination (but in no event
later than the expiration of the term of
such Option or SAR as set forth in the
Option or SAR
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Agreement). To the extent that Optionee was
not entitled to exercise an Option or SAR at
the date of such termination, and to the
extent that the Optionee does not exercise
such Option or SAR (to the extent otherwise
so entitled) within the time specified
herein, the Option or SAR shall terminate.
(v) Death of Optionee. Notwithstanding Sections
5(c)(iii) and 5(c)(iv) above, in the event
of an Optionee's death during Optionee's
Continuous Status as an Employee or
Consultant, the Optionee's estate or a
person who acquired the right to exercise
the deceased Optionee's Option or SAR by
bequest or inheritance may exercise the
Option or SAR, but only within six (6)
months (or such lesser period as the Option
or SAR Agreement may provide, or such longer
period, not to exceed twelve (12) months, as
the Option or SAR Agreement may provide)
following the date of death, and only to the
extent that the Optionee was entitled to
exercise it at the date of death (but in no
event later than the expiration of the full
term of such Option or SAR as set forth in
the Option or SAR Agreement). To the extent
that Optionee was not entitled to exercise
an Option or SAR at the date of death, and
to the extent that the Optionee's estate or
a person who acquired the right to exercise
such Option does not exercise such Option or
SAR (to the extent otherwise so entitled)
within the time specified herein, the Option
or SAR shall terminate.
(d) The following limitations shall apply to grants of
Options to Employees:
(i) No Employee shall be granted, in any fiscal year
of the Company, Options to purchase more than 500,000 shares.
(ii) In connection with his or her initial
employment, an Employee may be granted Options to purchase up
to an additional 500,000 Shares which shall not count against
the limit set forth in subsection (i) above.
(iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's
capitalization as described in Section 10.
(iv) If an Option is canceled in the same fiscal year
of the Company in which it was granted (other than in
connection with a transaction describe in Section 10), the
canceled Option will be counted against the limit set forth in
Section 5(d)(i). For this purpose, if the exercise price of an
Option is reduced,
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the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
6. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the
Plan and/or cash awards made outside of the Plan. After the Administrator
determines that it will offer Stock Purchase Rights under the Plan, it shall
advise the offeree in writing of the terms, conditions and restrictions related
to the offer, including the number of Shares that the offeree shall be entitled
to purchase, the price to be paid, and the time within which the offeree must
accept such offer, which shall in no event exceed thirty (30) days from the date
upon which the Administrator made the determination to grant the Stock Purchase
Right. The offer shall be accepted by execution of a Restricted Stock Purchase
Agreement in the form determined by the Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the
Administrator may determine.
(c) Other Provisions. The Restricted Stock Purchase Agreement
shall contain such other terms, provisions and conditions not inconsistent with
the Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock Purchase Agreements need not be the
same with respect to each purchaser.
(d) Rule 16b-3. Stock Purchase Rights granted to Insiders, and
Shares purchased by Insiders in connection with Stock Purchase Rights, shall be
subject to any restrictions applicable thereto in compliance with Rule 16b-3. An
Insider may only purchase Shares pursuant to the grant of a Stock Purchase
Right, and may only sell Shares purchased pursuant to the grant of a Stock
Purchase Right, during such time or times as are permitted by Rule 16b-3.
(e) Rights as a Stockholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
stockholder, and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 10
of the Plan.
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7. Long-Term Performance Awards.
(a) Administration. Long-Term Performance Awards are cash or
stock bonus awards that may be granted either alone or in addition to other
awards granted under the Plan. Such awards shall be granted for no cash
consideration. The Administrator shall determine the nature, length and starting
date of any performance period (the "Performance Period") for each Long-Term
Performance Award, and shall determine the performance or employment factors, if
any, to be used in the determination of Long-Term Performance Awards and the
extent to which such Long-Term Performance Awards are valued or have been
earned. Long-Term Performance Awards may vary from participant to participant
and between groups of participants and shall be based upon the achievement of
Company, Subsidiary, Parent and/or individual performance factors or upon such
other criteria as the Administrator may deem appropriate. Performance Periods
may overlap and participants may participate simultaneously with respect to
Long-Term Performance Awards that are subject to different Performance Periods
and different performance factors and criteria. Long-Term Performance Awards
shall be confirmed by, and be subject to the terms of, a Long-Term Performance
Award agreement. The terms of such awards need not be the same with respect to
each participant.
At the beginning of each Performance Period, the Administrator
may determine for each Long-Term Performance Award subject to such Performance
Period the range of dollar values or number of shares of Common Stock to be
awarded to the participant at the end of the Performance Period if and to the
extent that the relevant measures of performance for such Long-Term Performance
Award are met. Such dollar values or number of shares of Common Stock may be
fixed or may vary in accordance with such performance or other criteria as may
be determined by the Administrator.
(b) Adjustment of Awards. The Administrator may adjust the
performance factors applicable to the Long-Term Performance Awards to take into
account changes in legal, accounting and tax rules and to make such adjustments
as the Administrator deems necessary or appropriate to reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships.
8. Administration.
(a) Composition of Administrator.
(i) Multiple Administrative Bodies. If permitted
by Rule 16b-3 and Applicable Laws, the Plan
may (but need not) be administered by
different administrative bodies with respect
to (A) Directors who are employees, (B)
Officers who are not Directors and (C)
Employees who are neither Directors nor
Officers.
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(ii) Administration with respect to Directors and
Officers. With respect to grants of Options
and Rights to eligible participants who are
Officers or Directors of the Company, the
Plan shall be administered by (A) the Board,
if the Board may administer the Plan in
compliance with Rule 16b-3 as it applies to
a plan intended to qualify thereunder as a
discretionary grant or award plan, or (B) a
Committee designated by the Board to
administer the Plan, which Committee shall
be constituted (1) in such a manner as to
permit the Plan to comply with Rule 16b-3 as
it applies to a plan intended to qualify
thereunder as a discretionary grant or award
plan and (2) in such a manner as to satisfy
the Applicable Laws.
(iii) Administration with respect to Other
Persons. With respect to grants of Options
to eligible participants who are neither
Directors nor Officers of the Company, the
Plan shall be administered by (A) the Board
or (B) a Committee designated by the Board,
which Committee shall be constituted in such
a manner as to satisfy the Applicable Laws.
(iv) General. Once a Committee has been appointed
pursuant to subsection (ii) or (iii) of this
Section 8(a), such Committee shall continue
to serve in its designated capacity until
otherwise directed by the Board. From time
to time the Board may increase the size of
any Committee and appoint additional members
thereof, remove members (with or without
cause) and appoint new members in
substitution therefor, fill vacancies
(however caused) and remove all members of a
Committee and thereafter directly administer
the Plan, all to the extent permitted by the
Applicable Laws and, in the case of a
Committee appointed under subsection (ii),
to the extent permitted by Rule 16b-3 as it
applies to a plan intended to qualify
thereunder as a discretionary grant or award
plan.
(b) Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a
Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the
Common Stock, in accordance with Section
2(n) of the Plan;
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(ii) to select the Consultants and Employees to
whom Options and Rights may be granted
hereunder;
(iii) to determine whether and to what extent
Options and Rights or any combination
thereof, are granted hereunder;
(iv) to determine the number of shares of Common
Stock to be covered by each Option and Right
granted hereunder;
(v) to approve forms of agreement for use under
the Plan;
(vi) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of
any award granted hereunder. Such terms and
conditions include, but are not limited to,
the exercise price, the time or times when
Options or Rights may be exercised (which
may be based on performance criteria), any
vesting acceleration or waiver of forfeiture
restrictions, and any restriction or
limitation regarding any Option or Right or
the shares of Common Stock relating thereto,
based in each case on such factors as the
Administrator, in its sole discretion, shall
determine;
(vii) to construe and interpret the terms of the
Plan;
(viii) to prescribe, amend and rescind rules and
regulations relating to the Plan;
(ix) to determine whether and under what
circumstances an Option or Right may be
settled in cash instead of Common Stock or
Common Stock instead of cash;
(x) to reduce the exercise price of any Option
or Right;
(xi) to modify or amend each Option or Right
(subject to Section 16 of the Plan);
(xii) to authorize any person to execute on behalf
of the Company any instrument required to
effect the grant of an Option or Right
previously granted by the Administrator;
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(xiii) to institute an Option Exchange Program;
(xiv) to determine the terms and restrictions
applicable to Options and Rights and any
Restricted Stock; and
(xv) to make all other determinations deemed
necessary or advisable for administering the
Plan.
(c) Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Rights.
9. Non-Transferability of Options. Options and Rights may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.
(a) Changes in Capitalization. Subject to any required action
by the stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option and Right, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
Options or Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Right, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, reverse stock split, stock
dividend, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected
without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to
have been "effected without receipt of consideration." Such adjustment shall be
made by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to an
Option or Right.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
has not been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option or Right shall terminate
as of a date fixed by the Board and give each Optionee
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the right to exercise his or her Option or Right as to all or any part of the
Optioned Stock, including Shares as to which the Option or Right would not
otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of
the assets of the Company, each outstanding Option and Right shall be assumed or
an equivalent Option or Right substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation does not agree to assume the Option or to substitute an
equivalent option, the Administrator shall, in lieu of such assumption or
substitution, provide for the Optionee to have the right to exercise the Option
or Right as to all or a portion of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If the Administrator makes an
Option or Right exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee that
the Option or Right shall be exercisable for a period of not less than fifteen
(15) days from the date of such notice, and the Option or Right will terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option or Right shall be considered assumed if, immediately following the merger
or sale of assets, the Option or Right confers the right to purchase, for each
Share of Optioned Stock subject to the Option or Right immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option or Right, for each Share of Optioned Stock subject to the Option or
Right, to be solely common stock of the successor corporation or its Parent
equal in Fair Market Value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.
11. Date of Grant. The date of grant of an Option or Right shall be,
for all purposes, the date on which the Administrator makes the determination
granting such Option or Right, or such other later date as is determined by the
Administrator. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
12. Conditions Upon Issuance of Shares.
(a) Legal Compliance. Shares shall not be issued pursuant to
the exercise of an Option or Right unless the exercise of such Option or Right
and the issuance and delivery of such Shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock
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exchange or quotation system upon which the Shares may then be listed or quoted,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
(b) Investment Representations. As a condition to the exercise
of an Option or Right, the Company may require the person exercising such Option
or Right to represent and warrant at the time of any such exercise that the
Shares are being purchased only for investment and without any present intention
to sell or distribute such Shares if, in the opinion of counsel for the Company,
such a representation is required.
13. Liability of Company.
(a) Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock
covered by an Option or Right exceeds, as of the date of grant, the number of
Shares which may be issued under the Plan without additional stockholder
approval, such Option or Right shall be void with respect to such excess
Optioned Stock, unless stockholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 16(b) of the Plan.
14. Reservation of Shares. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
15. Stockholder Approval. Continuance of the Plan shall be subject to
approval by the stockholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such stockholder approval shall be obtained
in the manner and to the degree required under applicable federal and state law.
16. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may at any time
amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Company shall obtain stockholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such stockholder approval, if required, shall be
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obtained in such a manner and to such a degree as is required by the applicable
law, rule or regulation.
(c) Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan shall impair the rights of any
Optionee, unless mutually agreed otherwise between the Optionee and the
Administrator, which agreement must be in writing and signed by the Optionee and
the Company.
17. Taxation Upon Exercise of Option or Right. At the discretion of the
Administrator, Optionees may satisfy withholding obligations as provided in this
Section 17. When an Optionee incurs tax liability in connection with an Option
or Right, which tax liability is subject to withholding under applicable tax
laws, the Optionee may satisfy the tax withholding obligation by one or some
combination of the following methods: (a) by cash payment, or (b) out of
Optionee's current compensation, or (c) by surrendering to the Company Shares
which (i) in the case of Shares previously acquired from the Company, have been
owned by the Optionee for more than six months on the date of surrender, and
(ii) have a fair market value on the date of surrender equal to or less than
Optionee's marginal tax rate times the ordinary income recognized, or (d) by
electing to have the Company withhold from the Shares to be issued upon exercise
of the Option or Right that number of Shares having a fair market value equal to
the amount required to be withheld. For this purpose, the fair market value of
the Shares to be withheld shall be determined on the date that the amount of tax
to be withheld is to be determined (the "Tax Date").
If the Optionee is an Insider, any surrender of previously owned Shares
to satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
All elections by an Optionee to have Shares withheld to satisfy tax
withholding obligations shall be made in writing in a form acceptable to the
Administrator and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable
Tax Date;
(b) once made, the election shall be irrevocable as to the
particular Shares of the Option as to which the election is made;
(c) all elections shall be subject to the consent or
disapproval of the Administrator;
(d) if the Optionee is an Insider, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or
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restrictions as may be required thereunder to qualify for the maximum exemption
from Section 16 of the Exchange Act with respect to Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
18. Term of the Plan. The Plan shall expire, and no further Options
shall be granted pursuant to the Plan, on April 25, 2001.
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