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Exhibit 10.20
MCMS, INC.
1998 STOCK OPTION PLAN
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MCMS, INC.
1998 STOCK OPTION PLAN
ARTICLE I
PURPOSE OF PLAN OF PLAN
The 1998 Stock Option Plan (the "Plan") of MCMS, Inc. (the "Company"),
adopted by the Board of Directors and shareholders of the Company effective May
14, 1998, is intended to advance the best interests of the Company by providing
executives, key employees and certain advisors of the Company or any Subsidiary
(as defined below) who have substantial responsibility for the management and
growth of the Company or any Subsidiary with additional incentives by allowing
such employees to acquire an ownership interest in the Company. The Plan is a
compensatory benefit plan within the meaning of Rule 701 under the Securities
Act of 1933, as amended (the "Securities Act") and, unless and until the Common
Stock (as defined below) is publicly traded, the issuance pursuant to the Plan
of stock purchase options to purchase shares of Common Stock ("Options"), and
the issuance of Common Stock upon the exercise of Options issued pursuant to the
Plan, are each intended to qualify for the exemption from registration under the
Securities Act provided by Rule 701.
ARTICLE II
DEFINITIONS
For purposes of the Plan the following terms have the indicated
meanings:
"Authorization Date" has the meaning ascribed thereto in Section 5.9(a)
hereof.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such specified Person. For
purposes of this definition, "control" (including the terms "controlled by" and
"under common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect a
majority of the board of directors or similar body governing the affairs of such
Person.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Committee" means the Compensation Committee or such other committee of
the Board as the Board may designate to administer the Plan or, if for any
reason the Board has not designated such a
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committee, the Board. The Committee, if other than the Board, shall be composed
of two or more directors as appointed from time to time by the Board.
"Common Stock" means the Class A Common Stock, $0.001 par value per
share, of MCMS, Inc., an Idaho corporation.
"Election Notice" has the meaning ascribed thereto in Section 5.9(b)
hereof.
"Fair Market Value" per share on any given date means the average of
the closing prices of the sales of the Common Stock on all securities exchanges
on which such stock may at the time be listed, or, if there have been no sales
on any such exchange on any day, the average of the highest bid and lowest asked
prices on all such exchanges at the end of such day, or, if on any day such
stock is not so listed, the average of the representative bid and asked prices
quoted on the Nasdaq Stock Market as of 4:00 P.M., New York time, or, if on any
day such stock is not quoted on the Nasdaq Stock Market, the average of the
highest bid and lowest asked prices on such day in the domestic over-the-counter
market as reported by the National Quotation Bureau, Incorporated, or any
similar successor organization. If at any time the Common Stock is not listed or
quoted, the Fair Market Value per share shall be determined by the Committee or
the Board based on such factors as the members thereof in the exercise of their
business judgment, consider relevant.
"Measurement Date" means the date on which any taxable income resulting
from the exercise of an Option is determined under applicable federal income tax
law.
"Option Agreement" has the meaning set forth in Section 6.1 hereof.
"Option Shares" shall mean (i) all shares of Common Stock issued or
issuable upon the exercise of an Option and (ii) all shares of Common Stock
issued with respect to the Common Stock referred to in clause (i) above by way
of stock dividend or stock split or in connection with any conversion, merger,
consolidation or recapitalization or other reorganization affecting the Common
Stock. Unless provided otherwise herein or in the Participant's Option
Agreement, Option Shares will continue to be Option Shares in the hands of any
holder other than the Participant (except for the Company), and each such
transferee thereof will succeed to the rights and obligations of a holder of
Option Shares hereunder.
"Options" has the meaning set forth in the preamble hereof.
"Participant" means (i) any employee of the Company or any Subsidiary
or (ii) any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity who has been selected to
participate in the Plan by the Committee or the Board.
"Permitted Transferee" means those persons to whom the Participant is
authorized (1) pursuant to Section 5.9, to transfer Option Shares, or (2)
pursuant to Section 6.3, to transfer Options.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated
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organization or other entity.
"Plan" has the meaning set forth in the preamble hereof.
"Qualified Initial Public Offering" means an offering by the
Corporation of its capital stock or equity securities to the public pursuant to
an effective registration statement under the Securities Act of 1933, as then in
effect, or any comparable statement under any similar federal statute then in
force pursuant to which the public offering price per share of which is not less
than $14.00 (adjusted to reflect stock dividends, stock splits or
recapitalizations) after the date hereof and results in aggregate gross cash
proceeds to the Corporation of at least $30,000,000 (before deduction of
underwriting discounts and expenses).
"Repurchase Notice" has the meaning ascribed thereto in Section 5.8(b)
hereof.
"Repurchase Option" has the meaning ascribed thereto in Section 5.8(a)
hereof.
"Right of First Refusal" has the meaning ascribed thereto in Section
5.9(b) hereof.
"Sale Notice" has the meaning ascribed thereto in Section 5.9(a)
hereof.
"Sale of the Company" means the sale of the Company to any Third Party
or Parties pursuant to which such party or parties acquire (i) capital stock of
the Company possessing the voting power under normal circumstances necessary to
elect a majority of the Board (whether by merger, consolidation or sale or
transfer of the Company's capital stock) or (ii) all or substantially all of the
Company's assets determined on a consolidated basis.
"Securities Act" has the meaning ascribed thereto in Article 1 hereof.
"Shareholders Agreement" means the Shareholders Agreement dated as of
February 26, 1998 by and among the Company, Cornerstone Equity Investors IV,
L.P., MEI California, Inc., Randolph Street Partners II, BT Investment Partners,
Inc. and the other investors listed in Appendix A thereto.
"Subsidiary" means any subsidiary corporation (as such term is defined
in Section 424(f) of the Code) of the Company.
"Termination Date" shall mean the date upon which such Participant's
employment or engagement, as the case may be, with the Company terminated.
"Third Party" means any Person which is not an Affiliate of the
Company.
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ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. Subject to the
limitations of the Plan, the Committee shall have the sole and complete
authority to: (i) select Participants, (ii) grant Options to Participants in
such forms and amounts as it shall determine, (iii) impose such limitations,
restrictions and conditions upon such Options as it shall deem appropriate, (iv)
interpret the Plan and adopt, amend and rescind administrative guidelines and
other rules and regulations relating to the Plan, (v) correct any defect or
omission or reconcile any inconsistency in the Plan or in any Options granted
under the Plan and (vi) make all other determinations and take all other actions
necessary or advisable for the implementation and administration of the Plan.
The Committee's determinations on matters within its authority shall be
conclusive and binding upon the Participants, the Company and all other persons.
All expenses associated with the administration of the Plan shall be borne by
the Company. The Committee may, as approved by the Board and to the extent
permissible by law, delegate any of its authority hereunder to such persons or
entities as it deems appropriate.
ARTICLE IV
LIMITATION ON AGGREGATE SHARES
The number of shares of Common Stock with respect to which Options may
be granted under the Plan shall not exceed, in the aggregate, 2,500,000 shares,
subject to adjustment in accordance with Section 6.4. To the extent any Options
expire unexercised or are canceled, terminated or forfeited in any manner
without the issuance of Common Stock thereunder, such shares shall again be
available under the Plan. The shares of Common Stock available under the Plan
may consist of authorized and unissued shares, treasury shares or a combination
thereof, as the Committee shall determine.
ARTICLE V
AWARDS
5.1 GRANT OF OPTIONS. The Committee may grant Options to Participants
from time to time in accordance with this Article V. Options granted under the
Plan may be nonqualified stock options or "incentive stock options" within the
meaning of Section 422 of the Code or any successor provision as specified by
the Committee; provided, however, that no incentive stock option may be granted
to any Participant who, at the time of grant, owns stock of the Company (or any
Subsidiary) representing more than 10% of the total combined voting power of all
classes of stock of the Company (or any Subsidiary), unless such incentive stock
option shall at the time of grant (a) have a termination date not later than the
fifth anniversary of the issuance date and (b) have an exercise price per share
equal to at least 110% of the Fair Market Value of a share of Common Stock on
the date of grant. The exercise price per share of Common Stock under each
Option shall be determined by the Committee or the
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Board at the time of grant; provided, however, that the exercise price per share
of Common Stock under each incentive stock option shall be fixed by the
Committee at the time of grant of the Option and shall equal at least 100% of
the Fair Market Value of a share of Common Stock on the date of grant, but not
less than the par value per share (as adjusted pursuant to Section 6.4). Subject
to Section 5.6, Options shall be exercisable at such time or times as the
Committee shall determine; provided, however, that any option intended to be an
incentive stock option shall be treated as an incentive stock option only to the
extent that the aggregate Fair Market Value of the Common Stock (determined as
of the date of Option grant) with respect to which incentive stock options (but
not nonqualified options) are exercisable for the first time by any Participant
during any calendar year (under all stock option plans of the Company and its
Subsidiaries) does not exceed $100,000. The Committee shall determine the term
of each Option, which term shall not exceed ten years from the date of grant of
the Option.
5.2 EXERCISE PROCEDURE. Options shall be exercisable, to the extent
they are vested, by written notice to the Company (to the attention of the
Company's Secretary) accompanied by payment in full of the applicable exercise
price. Payment of such exercise price may be made (i) in cash (including check,
bank draft, money order or wire transfer of immediately available funds), (ii)
if approved by the Committee prior to exercise (or in the case of an incentive
stock option, if approved by the Committee and set forth in the Option
Agreement) by delivery of a full recourse promissory note of the Participant
bearing interest at a rate not less than the applicable federal rate determined
pursuant to Section 1274 of the Code, (iii) in shares of Common Stock valued at
their Fair Market Value as of the date of exercise as provided in Section 5.3
below, (iv) in the consideration received by the Company pursuant to a cashless
exercise program implemented by the Company in connection with the Plan, or (v)
in a combination of the foregoing.
5.3 EXCHANGE OF PREVIOUSLY ACQUIRED STOCK. The Committee, in its
discretion and subject to such conditions as the Committee may determine, may
permit the exercise price for the shares being acquired upon the exercise of an
Option to be paid, in full or in part, by the delivery to the Company of Common
Stock. Any Common Stock so delivered shall be treated as the payment of cash
equal to the aggregate Fair Market Value on the date of delivery of such Common
Stock. In the case of incentive stock options, the Committee shall specify in
the Option Agreement whether the option holder may satisfy the exercise price
with respect to shares of Common Stock purchased upon exercise of such Option by
delivering to the Company shares of previously acquired Common Stock. In the
case of shares of Common Stock acquired upon exercise of an Option, such shares
shall have been owned by the optionee for more than six months on the date of
surrender, and have a Fair Market Value on the date of surrender equal to the
aggregate exercise price of the shares of Common Stock as to which said Option
shall be exercised.
5.4 WITHHOLDING TAX REQUIREMENTS.
(a) AMOUNT OF WITHHOLDING. It shall be a condition of the exercise of
any Option that the Participant exercising the Option make appropriate payment
or other provision acceptable to the Company with respect to any withholding tax
requirement arising from such exercise. The amount of withholding tax required,
if any, with respect to any Option exercise (the "Withholding Amount") shall be
determined by the Treasurer or other appropriate officer of the Company, and the
Participant
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shall furnish such information and make such representations as such officer
requires to make such determination.
(b) WITHHOLDING PROCEDURE. If the Company determines that
withholding tax is required with respect to any Option exercise, the Company
shall notify the Participant of the Withholding Amount, and the Participant
shall pay to the Company an amount not less than the Withholding Amount. In lieu
of making such payment and at the discretion of the Company, the Participant may
elect to pay the Withholding Amount by either (i) delivering to the Company a
number of shares of Common Stock having an aggregate Fair Market Value as of the
Measurement Date not less than the Withholding Amount or (ii) directing the
Company to withhold (and not to deliver or issue to the Participant) a number of
shares of Common Stock, otherwise issuable upon the exercise of an Option,
having an aggregate Fair Market Value as of the Measurement Date not less than
the Withholding Amount. In addition, if the Committee approves, a Participant
may elect pursuant to the prior sentence to deliver or direct the withholding of
shares of Common Stock having an aggregate Fair Market Value in excess of the
minimum Withholding Amount but not in excess of the Participant's applicable
highest marginal combined federal income and state income tax rate, as estimated
in good faith by such Participant. Any fractional share interests resulting from
the delivery or withholding of shares of Common Stock to meet withholding tax
requirements shall be settled in cash. All amounts paid to or withheld by the
Company and the value of all shares of Common Stock delivered to or withheld by
the Company pursuant to this Section 5.4 shall be deposited in accordance with
applicable law by the Company as withholding tax for the Participant's account.
If the Treasurer or other appropriate officer of the Company determines that no
withholding tax is required with respect to the exercise of any Option (because
such option is an incentive stock option or otherwise), but subsequently it is
determined that the exercise resulted in taxable income as to which withholding
is required (as a result of a disposition of shares or otherwise), the
Participant shall promptly, upon being notified of the withholding requirement,
pay to the Company, by means acceptable to the Company, the amount required to
be withheld; and at its election the Company may condition the transfer of any
shares issued upon exercise of an incentive stock option upon receipt of such
payment.
5.5 NOTIFICATION OF INQUIRIES AND AGREEMENTS. Each Participant and each
Permitted Transferee shall notify the Company in writing within 10 days after
the date such Participant or Permitted Transferee (i) first obtains knowledge of
any Internal Revenue Service inquiry, audit, assertion, determination,
investigation, or question relating in any manner to the value of Options
granted hereunder; (ii) includes or agrees (including, without limitation, in
any settlement, closing or other similar agreement) to include in gross income
with respect to any Option granted under this Plan (A) any amount in excess of
the amount reported on Form 1099 or Form W-2 to such Participant by the Company,
or (B) if no such Form was received, any amount; and/or (iii) exercises, sells,
disposes of, or otherwise transfers an Option acquired pursuant to this Plan.
Upon request, a Participant or Permitted Transferee shall provide to the Company
any information or document relating to any event described in the preceding
sentence which the Company (in its sole discretion) requires in order to
calculate and substantiate any change in the Company's tax liability as a result
of such event.
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5.6 CONDITIONS AND LIMITATIONS ON EXERCISE. At the discretion of the
Committee, exercised at the time of grant, Options may vest, in one or more
installments, upon (i) the fulfillment of certain conditions, (ii) the passage
of a specified period of time, and/or (iii) the achievement by the Company or
any Subsidiary of certain performance goals.
5.7 EXPIRATION OF OPTIONS.
(a) NORMAL EXPIRATION. In no event shall any part of any
Option be exercisable after the stated date of expiration thereof.
(b) EARLY EXPIRATION UPON TERMINATION OF EMPLOYMENT. Any part
of any Option that was not vested on a Participant's Termination Date shall
expire and be forfeited on such date, and any part of any Option that was vested
on the Termination Date shall also expire and be forfeited to the extent not
theretofore exercised on the thirtieth (30th) day (one year, if termination is
caused by the Participant's death or disability) following the Termination Date,
but in no event after the stated date of expiration thereof.
5.8 RIGHT TO PURCHASE OPTION SHARES UPON TERMINATION OF EMPLOYMENT.
(a) REPURCHASE RIGHT. In the event a Participant's employment
with the Company is terminated for any reason, the Option Shares (whether held
by such Participant or one or more transferees and including any Option Shares
acquired subsequent to such termination of employment) will be subject to
repurchase by the Company pursuant to the terms and conditions set forth in this
Section 5.8 (the "Repurchase Option") at a price per share equal to the Fair
Market Value thereof determined as of the Termination Date.
(b) REPURCHASE NOTICE. The Board may elect to purchase all or
any portion of the Option Shares by delivery of written notice (the "Repurchase
Notice") to the holder or holders of the Option Shares within 180 days after the
Termination Date (or if termination is caused by the Participant's death or
disability, 180 days after the expiration of the Options held by such
Participant). The Repurchase Notice will set forth the number of Option Shares
to be acquired from such holder, the aggregate consideration to be paid for such
shares and the time and place for the closing of the transaction.
(c) CLOSING OF REPURCHASE. The closing of the repurchase
transaction will take place on the date designated by the Company in the
Repurchase Notice, which date will not be more than 45 days nor less than 10
days after the delivery of such notice. The Company will pay for the Option
Shares to be purchased pursuant to the Repurchase Option by delivering, at the
option of the Company to such Participant and/or the other holder(s), (1) a
check in the amount of the aggregate sale price of the Option Shares to be
repurchased or (2) if the aggregate consideration to be paid to such holder(s)
of Option Shares exceeds $50,000, a check in the amount of 20% of the aggregate
sale price of the Option Shares to be repurchased (except to the extent not
permitted under that certain revolving credit facility with various lending
institutions and Bankers Trust Company of up to $40 million, a note in
compliance therewith) and a subordinated promissory note in a principal amount
equal to the
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remainder of the aggregate sale price, bearing interest at a floating rate of
interest equal to the prime rate as stated from time to time by Chase Manhattan
Bank or any successor thereto, and payable, as to principal and interest, in
four equal annual installments on the first four anniversaries of the closing of
such repurchase; provided that if the Company determines that withholding tax is
required with respect to the exercise of a Repurchase Option, the Company shall
withhold an amount equal to such withholding tax from the purchase price. At the
closing, the Participant and each other seller will deliver the certificates
representing the Option Shares to be sold duly endorsed in form for transfer to
the Company or its designee, and the Company will be entitled to receive
customary representations and warranties from the Participant and the other
sellers regarding title to the Option Shares.
5.9 RESTRICTIONS ON TRANSFER.
(a) RESTRICTIONS. A Participant may not sell, pledge or
otherwise transfer any interest in any Option Shares except pursuant to the
provisions of this Section 5.9. At least 60 days prior to making any transfer,
the Participant proposing such transfer shall deliver a written notice (the
"Sale Notice") to the Company. The Sale Notice will disclose in reasonable
detail the identity of the prospective transferee(s) and the terms and
conditions of the proposed transfer. Such Participant (and such Participant's
transferees) shall not consummate any such transfer until 60 days after the Sale
Notice has been delivered to the Company, unless the Company has notified such
Participant in writing that it will not exercise its rights under this Section
5.9. (The date of the first to occur of such events is referred to herein as the
"Authorization Date").
(b) REPURCHASE OPTION. The Company may elect to purchase all
or any portion of the Option Shares to be transferred upon the same terms and
conditions as those set forth in the Sale Notice (the "Right of First Refusal")
by delivering a written notice of such election to such Participant within 30
days after the receipt of the Sale Notice by the Company (the "Election
Notice"). If the Company has not elected to purchase all of the Option Shares
specified in the Sale Notice, such Participant may transfer the Option Shares
not purchased by the Company to the prospective transferee(s) as specified in
the Sale Notice at a price and on terms no more favorable to the transferee(s)
thereof than specified in the Sale Notice during the 60-day period immediately
following the Authorization Date. Any Option Shares not so transferred within
such 60-day period must be reoffered to the Company in accordance with the
provisions of this Section 5.9 in connection with any subsequent proposed
transfer.
(c) EXCEPTIONS. The restrictions contained in this Section 5.9
will not apply with respect to transfers of Option Shares (1) pursuant to
applicable laws of descent and distribution, (2) pursuant to the Shareholders
Agreement or (3) among the Participant's family group; provided that the
restrictions contained in this paragraph will continue to be applicable to the
Option Shares after any such transfer and the transferees of such Option Shares
have agreed in writing to be bound by the terms and provisions of this Plan and
the Option grant, as amended from time to time. The Participant's "family group"
means the Participant's spouse and descendants (whether natural or adopted) and
any trust solely for the benefit of the Participant and/or the Participant's
spouse and/or descendants.
5.10 TERMINATION OF RESTRICTIONS. The rights and obligations set forth
in Sections 5.8 and
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5.9 hereof will terminate upon the earlier of (A) the consummation by the
Company of a Qualified Initial Public Offering or (B) the sale of Option Shares
in accordance with the terms and conditions of Section 5.9 (except for a
transfer pursuant to Section 5.9 (c)); provided that with respect to clause (B)
above, such rights and obligations shall terminate only with respect to those
Option Shares sold.
ARTICLE VI
GENERAL PROVISIONS
6.1 WRITTEN AGREEMENT. Each Option granted hereunder shall be embodied
in a written agreement (the "Option Agreement") which shall be signed by the
Participant to whom the Option is granted and shall be subject to the terms and
conditions set forth herein.
6.2 LISTING, REGISTRATION AND LEGAL COMPLIANCE. If at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of the shares subject to Options upon any securities exchange or
under any state or federal securities or other law or regulation, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of Options or the purchase or
issuance of shares thereunder, no Options may be granted or exercised, in whole
or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee. The holders of such Options will supply the Company
with such certificates, representations and information as the Company shall
request and shall otherwise cooperate with the Company in obtaining such
listing, registration, qualification, consent or approval. In the case of
officers and other persons subject to Section 16(b) of the Securities Exchange
Act of 1934, as amended, the Committee may at any time impose any limitations
upon the exercise of Options that, in the Committee's discretion, are necessary
or desirable in order to comply with such Section 16(b) and the rules and
regulations thereunder. If the Company, as part of an offering of securities or
otherwise, finds it desirable because of federal or state regulatory
requirements to reduce the period during which any Options may be exercised, the
Committee may, in its discretion and without the Participant's consent, so
reduce such period on not less than 15 days' written notice to the holders
thereof.
6.3 OPTIONS NOT TRANSFERRABLE. Options may not be transferred other
than by will or the laws of descent and distribution and, during the lifetime of
the Participant to whom they were granted, may be exercised only by such
Participant (or, if such Participant is incapacitated, by such Participant's
legal guardian or legal representative). In the event of the death of a
Participant, Options which are not vested on the date of death shall terminate;
exercise of Options granted hereunder to such Participant, which are vested as
of the date of death, may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Options will pass by will or the laws of descent and distribution.
6.4 ADJUSTMENTS. In the event of a reorganization, recapitalization,
stock dividend or stock split, or combination or other change in the shares of
Common Stock, the Board or the Committee may, in order to prevent the dilution
or enlargement of rights under the Plan or outstanding Options, adjust
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(1) the number and type of shares as to which options may be granted under the
Plan, (2) the number and type of shares covered by outstanding Options, (3) the
exercise prices specified therein and (4) other provisions of this Plan which
specify a number of shares, all as such Board or Committee determines to be
appropriate and equitable.
6.5 RIGHTS OF PARTICIPANTS. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any Subsidiary to terminate any
Participant's employment at any time (with or without cause), or confer upon any
Participant any right to continue in the employ of the Company or any Subsidiary
for any period of time or to continue to receive such Participant's current (or
other) rate of compensation. No employee shall have a right to be selected as a
Participant or, having been so selected, to be selected again as a Participant.
6.6 FAIR MARKET VALUE DETERMINATION. Until the Common Stock is listed
on a security exchange or quoted on the Nasdaq Stock Market, the Board or the
Committee will determine the Fair Market Value per share of Common Stock based
on such factors as the members thereof in the exercise of their business
judgment consider relevant as necessary and any Participant may receive upon
termination of his or her employment with the Company the most recent Fair
Market Value determination for the Common Stock upon written request to the
Board.
6.7 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN. The Board or the
Committee may suspend or terminate the Plan or any portion thereof at any time
and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided, however, that no such amendment shall be
made without shareholder approval to the extent such approval is required by
law, agreement or the rules of any exchange or national market system upon which
the Common Stock is listed, and no such amendment, suspension or termination
shall impair the rights of Participants under outstanding Options without the
written consent of the Participants affected thereby, except as provided below.
No Options shall be granted hereunder after the tenth anniversary of the
adoption of the Plan.
6.8 AMENDMENT OF OUTSTANDING OPTIONS. The Committee may amend or modify
any Option in any manner to the extent that the Committee would have had the
authority under the Plan initially to grant such Option; provided that, except
as expressly contemplated elsewhere herein or in any agreement evidencing such
Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the written consent of such
Participant.
6.9 INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Committee shall be indemnified by the Company against (i) all
costs and expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be party by reason of any
action taken or failure to act under or in connection with the Plan or any
Option granted under the Plan, and (ii) all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding; provided, however, that any such Committee
member shall be entitled to the indemnification rights set forth in this Section
6.9 only if such member (1) acted in good faith and in a
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manner that such member reasonably believed to be in, and not opposed to, the
best interests of the Company, and (2) with respect to any criminal action or
proceeding, (A) had no reasonable cause to believe that such conduct was
unlawful, and (B) upon the institution of any such action, suit or proceeding a
Committee member shall give the Company written notice thereof and an
opportunity to handle and defend the same before such Committee member
undertakes to handle and defend it on his own behalf.
6.10 RESTRICTED SECURITIES. Unless registered as described in Section
6.2 hereof, all Common Stock issued pursuant to the terms of this Plan shall
constitute "restricted securities," as that term is defined in Rule 144
promulgated by the Securities and Exchange Commission pursuant to the Securities
Act, and may not be transferred except in compliance with the registration
requirements of the Securities Act or an exemption therefrom.
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