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EXHIBIT 4.2
BINGHAM FINANCIAL SERVICES CORPORATION
SECOND AMENDED AND RESTATED
1997 STOCK OPTION PLAN
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.01 Purpose. The purpose of the Bingham Financial Services Corporation
Stock Option Plan (the "Plan") is to provide certain employees, directors and
consultants of Bingham Financial Services Corporation (the "Company") with an
additional incentive to promote the Company's financial success and to provide
an incentive which the Company may use to induce able persons to enter into or
remain in service of the Company or a Subsidiary.
1.02 Adoption and Term. The Plan was approved by the Board and the
Company's stockholders on August 22, 1997, and amended by the Board on January
4, 2000 (effective as of January 1, 1999) and on May 8, 2000, and will remain in
effect until all shares authorized under the terms of the Plan have been issued,
unless earlier terminated or abandoned by action of the Board; provided,
however, that no Incentive Stock Option may be granted after August 22, 2007.
ARTICLE II.
DEFINITIONS
2.01 Administrator means the group of persons having authority to
administer the Plan pursuant to Section 3.01.
2.02 Award means any one or combination of Non-Qualified Stock Options,
Performance Based Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Share Rights or any other award made under the terms of the Plan.
2.03 Award Agreement means a written agreement between the Company and
Participant or a written acknowledgment from the Company specifically setting
forth the terms and conditions of an Award granted under the Plan.
2.04 Award Period means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified conditions set forth in the
Award Agreement must be satisfied.
2.05 Beneficiary means (a) an individual, trust or estate who or which, by
will or by operation of the laws of descent and distribution, succeeds to the
rights and obligations of the Participant under the Plan and Award Agreement
upon the Participant's death; or (b) an individual, who by designation of the
Participant, succeeds to the rights and obligations of the Participant under the
Plan and Award Agreement upon the Participant's death.
2.06 Board means the Board of Directors of the Company.
2.07 Change of Control Event means (a) an event or series of events by
which any Person or other entity or group (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) of Persons or other entities acting in concert as
a partnership or other group (a "Group of Persons") (other than Persons who are,
or Groups of Persons entirely made up of, (i) management personnel of the
Company or (ii) any affiliates of any such management personnel) shall, as a
result of a tender or exchange offer or offers, an open market purchase or
purchases, a privately negotiated purchase or purchases or otherwise, become the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to
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acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 20% or more of the combined voting power of
the then outstanding voting stock of the Company; (b) the Company consolidates
with, or merges with or into, another Person (other than a Subsidiary in a
transaction which is not otherwise a Change of Control Event), or sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into the Company, in any such event pursuant to a transaction
in which the outstanding voting stock of the Company is converted into or
exchanged for cash, securities or other property; (c) during any consecutive
two-year period, individuals who at the beginning of such period constituted the
Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company, was approved by a
vote of 66 2/3% of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board then in office; or (d) any liquidation or dissolution of the Company
(other than a liquidation into a Subsidiary that is not otherwise a Change of
Control Event).
2.08 Code means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
that section.
2.09 Common Stock means the Common Stock of the Company, no par value.
2.10 Company means Bingham Financial Services Corporation, a Michigan
corporation.
2.11 Date of Grant means the date designated by the Administrator as the
date as of which it grants an Award, which shall not be earlier than the date on
which the Administrator approves the granting of such Award.
2.12 Director means a member of the Board of Directors of the Company.
2.13 Exchange Act means the Securities Exchange Act of 1934, as amended.
2.14 Exercise Price means, with respect to a Stock Appreciation Right, the
amount established by the Administrator, in accordance with Section 7.03
hereunder, and set forth in the Award Agreement, which is to be subtracted from
the Fair Market Value on the date of exercise in order to determine the amount
of the Incremental Value to be paid to the Participant.
2.15 Expiration Date means the date specified in an Award Agreement as the
expiration date of such Award.
2.16 Fair Market Value means, with respect to Awards granted coincident
with the date of the closing of the Company's initial public offering of Common
Stock, the public offering price. Thereafter, Fair Market Value means the last
reported sale price per share of Common Stock, regular way, on such date or, in
case no such sale takes place on such date, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on a national securities exchange or included for quotation
on the Nasdaq National Market, or if the Common Stock is not so listed or
admitted to trading or included for quotation, the average of the highest bid
and lowest asked prices, regular way, in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use or, if the Common Stock is
not quoted by any such organization, the average of the closing bid and asked
prices, regular way, as furnished by a professional market maker making a market
in the Common Stock as selected in good faith by the Administrator. If, as the
case may be, the relevant date is not a Trading Day, the determination shall be
made as of the next preceding Trading Day.
2.17 Incentive Stock Option means a stock option described in Section 422
of the Code.
2.18 Incremental Value has the meaning given such term in Section 7.01 of
the Plan.
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2.19 Non-Employee Director Participant means a Participant that is a
"non-employee director" of the Company within the meaning of Rule 16b-3.
2.20 Non-Qualified Stock Option means a stock option which is not an
Incentive Stock Option.
2.21 Officer means a president, vice president, treasurer, secretary,
controller, and any other person who performs functions corresponding to the
foregoing officers for the Company, any member of the Board or any person
performing similar functions with respect to the Company, and any other
participant who is deemed to be an officer or director of the Company for
purposes of Section 16 of the Exchange Act and the rules thereunder, as
currently in effect or as amended from time to time.
2.22 Options means all Non-Qualified Stock Options, Incentive Stock Options
and Performance Based Options granted at any time under the Plan.
2.23 Participant shall have the meaning set forth in Article V.
2.24 Performance Based Option means a stock option which, upon exercise or
at any other time, would not result in or give rise to "applicable employee
remuneration" within the meaning of Section 162(m) of the Code.
2.25 Plan means the Bingham Financial Services Corporation Stock Option
Plan, as described herein and as it may be amended from time to time.
2.26 Purchase Price, with respect to options, shall have the meaning set
forth in Section 6.02.
2.27 Restricted Share Right means a right to receive Common Stock subject
to restrictions imposed under the terms of an Award granted pursuant to Article
IX.
2.28 Rule 16b-3 means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as currently in effect and as
it may be amended from time to time, and any successor rule.
2.29 Stock Appreciation Right means an Award granted in accordance with
Article VII.
2.30 Subsidiary shall have the meaning set forth in Section 424(f) of the
Code.
2.31 Termination of Employment means the voluntary or involuntary
termination of a Participant's employment with the Company for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant's employer or any other similar transaction in which the
Participant's employer ceases to be the Company or a Subsidiary of the Company.
Whether an authorized leave of absence or absence on military or government
service, absence due to disability, or absence for any other reason shall
constitute Termination of Employment shall be determined in each case by the
Administrator in its sole discretion.
2.32 Trading Day means a day on which public trading of securities occurs
and is reported in the principal consolidated reporting system referred to in
Section 2.16 above, or if the Common Stock is not listed or admitted to trading
on a national securities exchange or included for quotation on the Nasdaq
National Market, any business day.
ARTICLE III.
ADMINISTRATION
3.01 Administration. The Plan shall be administered by the Board or, to the
extent determined by the Board, a committee (the "Compensation Committee")
consisting of not less than two non-employee directors of the Company (within
the meaning of Rule 16b-3) to be appointed by, and to serve at the pleasure of,
the Board (in either case, the "Administrator"). It is the intention of the
Company that, with respect to Awards designated as Performance Based Options,
each of the members of the Compensation Committee shall also be "outside
directors" within the meaning of Section 162(m) of the Code. The Administrator
shall administer the Plan in accordance with this provision and shall have the
sole
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discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, to cancel Awards (including those made
pursuant to other plans of the Company) and to substitute new options (including
options granted under other plans of the Company) with the consent of the
recipient, and to take such steps in connection with the Plan and Awards granted
thereunder as it may deem necessary or advisable. The Administrator may, with
respect to Participants who are not Officers, delegate such of its powers and
authority under the Plan as it deems appropriate to designated officers or
employees of the Company.
3.02 Indemnification. Members of the Administrator shall be entitled to
indemnification and reimbursement from the Company for any action or any failure
to act in connection with service as Administrator to the full extent provided
for or permitted by the Company's articles of incorporation or bylaws or by any
insurance policy or other agreement intended for the benefit of the Company's
officers, directors or employees or by any applicable law.
ARTICLE IV.
COMMON STOCK ISSUABLE PURSUANT TO THE PLAN
4.01 Shares Issuable. Shares to be issued under the Plan may be authorized
and unissued shares or issued shares which have been reacquired by the Company.
Except as provided in Section 4.03, the Awards granted to any Participant and to
all Participants in the aggregate under the Plan shall be limited so that the
sum of the following shall never exceed the greater of 415,000 shares of Common
Stock or ten percent (10%) of the total number of outstanding shares of Common
Stock: (i) all shares which shall be issued upon the exercise of outstanding
Options or other Awards granted under the Plan, (ii) all shares for which
payment of Incremental Value shall be made by reason of the exercise of Stock
Appreciation Rights at any time granted under the Plan, and (iii) the number of
shares otherwise issuable under an Award which are applied by the Company to
payment of the withholding or tax liability discussed in Section 11.04;
provided, however, that in no event shall the number of shares of Common Stock
which may be issued upon the exercise of Incentive Stock Options exceed 100,000
shares, subject to adjustment in accordance with Section 4.03.
4.02 Shares Subject to Terminated Awards. In the event that any Award at
any time granted under the Plan shall be surrendered to the Company, be
terminated or expire before it shall have been fully exercised, or an award of
Stock Appreciation Rights is exercised for cash, then all shares formerly
subject to such Award as to which such Award shall not have been exercised shall
be available for any Award subsequently granted in accordance with the Plan.
Shares of Common Stock subject to Options, or portions thereof, which have been
surrendered in connection with the exercise of tandem Stock Appreciation Rights
shall not be available for subsequent Awards under the Plan, and shares of
Common Stock issued in payment of such Stock Appreciation Rights shall be
charged against the number of shares of Common Stock available for the grant of
Awards. Shares which are reacquired by the Company or shares issuable subject to
Restricted Share Rights which are forfeited pursuant to forfeiture provisions in
the Award Agreement shall be available for subsequently granted Awards only if
the forfeiting Participant received no benefits of ownership (such as dividends
actually paid to the Participant) other than voting rights of the forfeited
shares. Any shares of Common Stock issued by the Company pursuant to its
assumption or substitution of outstanding grants from acquired companies shall
not reduce the number of shares available for Awards under this Plan unless
issued under this Plan.
4.03 Adjustments to Reflect Capital Changes.
(a) Recapitalization. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares,
and the number and kind of shares available for Awards subsequently granted
under the Plan shall be appropriately adjusted to reflect any stock
dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan.
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The Administrator shall have the power to determine the amount of the
adjustment to be made in each case.
(b) Sale or Reorganization. After any reorganization, merger or
consolidation in which the Company is a surviving corporation, each
Participant shall, at no additional cost, be entitled upon exercise of an
Award to receive (subject to any required action by stockholders), in lieu
of the number of shares of Common Stock receivable or exercisable pursuant
to such Award, a number and class of shares of stock or other securities to
which such Participant would have been entitled pursuant to the terms of
the reorganization, merger or consolidation if, at the time of such
reorganization, merger or consolidation, such Participant had been the
holder of record of a number of shares of Common Stock equal to the number
of shares receivable or exercisable pursuant to such Award. Comparable
rights shall accrue to each Participant in the event of successive
reorganizations, mergers or consolidations of the character described
above.
(c) Options to Purchase Stock of Acquired Companies. After any
reorganization, merger or consolidation in which the Company or a
Subsidiary of the Company shall be a surviving corporation, the
Administrator may grant substituted Options under the provisions of the
Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the reorganization, merger or
consolidation, where such party's stock may no longer be issued following
such merger or consolidation. The foregoing adjustments and manner of
application of the foregoing provisions shall be determined by the
Administrator in its sole discretion. Any adjustments may provide for the
elimination of any fractional shares which might otherwise have become
subject to any Awards.
ARTICLE V.
PARTICIPATION
5.01 Eligible Participants. Participants in the Plan shall be the
employees, directors and consultants of the Company or any Subsidiary, as
determined and selected from time to time by the Administrator, in its sole and
absolute discretion. The Administrator's designation of a Participant in any
year shall not require the Administrator to designate such person to receive
Awards in any other year. The Administrator shall consider such factors as it
deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards.
ARTICLE VI.
OPTION AWARDS
6.01 Power to Grant Options. The Administrator may grant, to such
Participants as the Administrator may select, Options entitling the Participant
to purchase Common Stock from the Company at such price, in such quantity and on
such terms and subject to such conditions, not inconsistent with the terms of
this Plan, as may be established by the Administrator. The terms of any Option
granted under this Plan shall be set forth in an Award Agreement.
Notwithstanding the foregoing, Options granted to Officers shall not be
exercisable for a period of at least six months from the Date of Grant.
6.02 Purchase Price of Options. The Purchase Price of each share of Common
Stock which may be purchased upon exercise of any Option granted under the Plan
shall not be less than eighty five percent (85%) of the Fair Market Value on the
Date of Grant; provided, however, that the Purchase Price for shares of Common
Stock purchased pursuant to Stock Options designated by the Administrator as
Incentive Stock Options shall be equal to or greater than the Fair Market Value
on the Date of Grant as required under Section 422 of the Code and provided
further that the Purchase Price for shares of Common Stock purchased pursuant to
Stock Options designated by the Administrator as Performance Based Options shall
be equal to or greater than the Fair Market Value on the Date of Grant.
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6.03 Designation of Incentive Stock Options. Except as otherwise expressly
provided in the Plan, the Administrator may designate, at the Date of Grant of
each Option to a Participant that is an employee of the Company or a Subsidiary,
that the Option is an Incentive Stock Option under Section 422 of the Code.
(a) Incentive Stock Option Share Limitation. No Participant may be
granted Incentive Stock Options under the Plan (or any other plans of the
Company) which would result in stock with an aggregate Fair Market Value
(measured on the Date of Grant) of more than $100,000 first becoming
exercisable in any one calendar year, or which would entitle such
Participant to purchase a number of shares greater than the maximum number
permitted by Section 422 of the Code as in effect on the Date of Grant.
(b) Other Incentive Stock Option Terms. Whenever possible, each
provision in the Plan and in every Option granted under this Plan which is
designated by the Administrator as an Incentive Stock Option shall be
interpreted in such a manner as to entitle the Option to the tax treatment
afforded by Section 422 of the Code. If any provision of this Plan or any
Option designated by the Administrator as an Incentive Stock Option shall
be held not to comply with requirements necessary to entitle such Option to
such tax treatment, then (i) such provision shall be deemed to have
contained from the outset such language as shall be necessary to entitle
the Option to the tax treatment afforded under Section 422 of the Code, and
(ii) all other provisions of this Plan and the Award Agreement shall remain
in full force and effect. If any agreement covering an Option designated by
the Administrator to be an Incentive Stock Option under this Plan shall not
explicitly include any terms required to entitle such Incentive Stock
Option to the tax treatment afforded by Section 422 of the Code, all such
terms shall be deemed implicit in the designation of such Option and the
Option shall be deemed to have been granted subject to all such terms.
6.04 Designation of Performance Based Options. Except as otherwise
expressly provided in the Plan, the Administrator may designate, at the Date of
Grant of each Option to a Participant that is an employee of the Company or a
Subsidiary, that the Option is a Performance Based Option. A Performance Based
Option shall have a Purchase Price not less than the Fair Market Value on the
Date of Grant and shall contain such other terms and conditions as the
Administrator may deem necessary so that, upon exercise or at any other time,
the Performance Based Option does not result in or give rise to "applicable
employee remuneration" within the meaning of Section 162(m) of the Code.
6.05 Rights as a Stockholder. The Participant or any transferee of an
Option pursuant to Section 8.02 or Section 11.05 shall have no rights as a
stockholder with respect to any shares of Common Stock covered by an Option
until the Participant or transferee shall have become the holder of record of
any such shares, and no adjustment shall be made for dividends and cash or other
property or distributions or other rights with respect to any such shares of
Common Stock for which the record date is prior to the date on which the
Participant or a transferee of the Option shall have become the holder of record
of any such shares covered by the Option.
ARTICLE VII.
STOCK APPRECIATION RIGHTS
7.01 Power to Grant Stock Appreciation Rights. The Administrator is
authorized to grant to any Participant, on such terms established by the
Administrator on or prior to the Date of Grant and subject to and not
inconsistent with the provisions of this Plan, the right to receive the payment
from the Company, payable as provided in Section 7.04, of an amount equal to the
Incremental Value of the Stock Appreciation Rights, which shall be an amount
equal to the remainder derived from subtracting (i) the Exercise Price for the
right established in the Award Agreement from (ii) the Fair Market Value of a
share of Common Stock on the date of exercise. The terms of any Stock
Appreciation Right granted under the Plan shall be set forth in an Award
Agreement.
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7.02 Tandem Stock Appreciation Rights. The Administrator may grant to any
Participant a Stock Appreciation Right consistent with the provisions of this
Plan covering any share of Common Stock which is, at the Date of Grant of the
Stock Appreciation Right, also covered by an Option granted to the same
Participant, either prior to or simultaneously with the grant to such
Participant of the Stock Appreciation Right, provided: (i) any Option covering
any share of Common Stock shall expire and not be exercisable upon the exercise
of any Stock Appreciation Right with respect to the same share; (ii) any Stock
Appreciation Right covering any share of Common Stock shall not be exercisable
upon the exercise of any related Option with respect to the same share; and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously.
7.03 Exercise Price. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the
Administrator and, in the case of a tandem Stock Appreciation Right, shall not
be less than the Purchase Price of the related Option. Upon exercise of the
Stock Appreciation Rights, the number of shares subject to exercise under a
related Option shall automatically be reduced by the number of shares of Common
Stock represented by the Option or portion thereof which is surrendered as a
result of the exercise of such Stock Appreciation Rights.
7.04 Payment of Incremental Value. Any payment which may become due from
the Company by reason of Participant's exercise of a Stock Appreciation Right
may be paid to the Participant as determined by the Administrator (i) all in
cash, (ii) all in Common Stock, or (iii) in any combination of cash and Common
Stock. In the event that all or a portion of the payment is made in Common
Stock, the number of shares of the Common Stock delivered in satisfaction of
such payment shall be determined by dividing the amount of the payment by the
Fair Market Value on the date of exercise. The Administrator may determine
whether payment upon exercise of a Stock Appreciation Right will be made in cash
or in stock, or a combination thereof, upon or at any time prior to the exercise
of such Stock Appreciation Right. No fractional share of Common Stock shall be
issued to make any payment; if any fractional shares would be issuable, the mix
of cash and Common Stock payable to the Participant shall be adjusted as
directed by the Administrator to avoid the issuance of any fractional share.
Payment may be made in cash to Officers only if the Stock Appreciation Right is
exercised during the "window period" required under Rule 16b-3(e)(3) and
otherwise in accordance with Rule 16b-3.
ARTICLE VIII.
TERMS OF OPTIONS AND STOCK APPRECIATION RIGHTS
8.01 Duration of Options and Stock Appreciation Rights. Options and Stock
Appreciation Rights shall terminate after the first to occur of the following
events:
(a) Expiration Date of the Award as provided in the Award Agreement;
or
(b) Termination of the Award as provided in Section 8.02; or
(c) In the case of an Incentive Stock Option, ten years from the Date
of Grant; or
(d) Solely in the case of tandem Stock Appreciation Rights, upon the
Expiration Date of the related Option.
8.02 Exercise on Death, Termination of Employment or Removal of Director.
(a) Unless otherwise provided in the Award Agreement, in the event of
the death of a Participant while an employee of the Company or a Subsidiary
of the Company, the right to exercise all unexpired Awards shall be
accelerated and shall accrue as of the date of death, and the Participant's
Awards may be exercised by his Beneficiary at any time within one year
after the date of the Participant's death. Unless otherwise provided in the
Award Agreement, in the event of the death of a Participant while a
director of the Company or a Subsidiary of the Company, the right to
exercise all unexpired Awards shall be accelerated and shall accrue as of
the date of death, and the
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Participant's Awards may be exercised by his Beneficiary at any time within
one year after the date of the Participant's death.
(b) Unless otherwise provided in the Award Agreement, in the event of
a Participant's Termination of Employment at any time for any reason
(including disability or retirement) other than death or for "cause" (as
defined in paragraph (d) below), an Award may be exercised, but only to the
extent it was otherwise exercisable, on the date of Termination of
Employment, within ninety days after the date of Termination of Employment.
In the event of the death of the Participant within the ninety-day period
following Termination of Employment, his Award may be exercised by his
Beneficiary within the one year period provided in subparagraph (a) above.
Unless otherwise provided in the Award Agreement, in the event that a
Non-Employee Director Participant no longer serves on the Board for any
reason other than removal as described in subparagraph (d) below, an Award
may be exercised, but only to the extent it was otherwise exercisable, on
the date that such Non-Employee Director Participant ceases to be a
Director, within ninety days after the date such Non-Employee Director
Participant ceases to be a director. In the event of the death of the
Non-Employee Director Participant within the ninety-day period following
the date he ceases to be a Director, his Award may be exercised by his
Beneficiary within the one year period provided in subparagraph (a) above.
(c) With respect to an Award which is intended to constitute an
Incentive Stock Option, upon Termination of Employment, such Award shall be
exercisable as provided in Section 422 of the Code.
(d) In the event that a Participant's Termination of Employment is for
"cause", all Awards shall terminate immediately upon Termination of
Employment. A Participant's employment shall be deemed to have been
terminated for "cause" if such termination is determined, in the sole
discretion of the Administrator, to have resulted from an act or omission
by the Participant constituting active and deliberate dishonesty, as
established by a final judgment or actual receipt of an improper benefit or
profit in money, property or services, or from the Participant's continuous
failure to perform his or her duties under any employment agreement in
effect between the Participant and the Company in any material manner (or,
in the absence of such an agreement, the consistent failure or refusal of
the Participant to perform according to reasonable expectations and
standards set by the Board and/or management consistent with Participant's
title and position) after receipt of notice of such failure from the
Company specifying how the Participant has so failed to perform. In the
event that a Non-Employee Director Participant is removed for cause
pursuant to the Company's Restated Articles of Incorporation, all Awards
shall terminate immediately upon such removal.
8.03 Acceleration of Exercise Time. The Administrator, in its sole
discretion, shall have the right (but shall not in any case be obligated) to
permit purchase of shares under any Award prior to the time such Award would
otherwise become exercisable under the terms of the Award Agreement.
8.04 Extension of Exercise Time. The Administrator, in its sole discretion,
shall have the right (but shall not in any case be obligated) to permit any
Award granted under this Plan to be exercised after its Expiration Date or after
the ninety day period following Termination of Employment or service on the
Board, subject, however, to the limitations described in Section 8.01 (c) and
(d).
8.05 Conditions for Exercise. An Award Agreement may contain such waiting
periods, exercise dates and restrictions on exercise (including, but not limited
to, periodic installments which may be cumulative) as may be determined by the
Administrator at the Date of Grant. No Stock Appreciation Right may be exercised
prior to six months from the Date of Grant.
8.06 Change of Control Event. Unless otherwise provided in the Award
Agreement, and subject to such other terms and conditions as the Administrator
may establish in the Award Agreement, upon the occurrence of a Change of Control
Event, irrespective of whether or not an Award is then exercisable, the
Participant shall have the right to exercise in full any unexpired Award to the
extent not theretofore exercised or terminated; provided, however, that any
Stock Appreciation Right so exercised must have a Date of Grant at least six
months prior to the date of exercise.
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8.07 Exercise Procedures. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by written notice to the Company which must be
received by the officer of the Company designated in the Award Agreement on or
before the Expiration Date of the Award. The Purchase Price of shares purchased
upon exercise of an Option granted under the Plan shall be paid in full in cash
by the Participant pursuant to the Award Agreement; provided, however, that the
Administrator may (but need not) permit payment to be made by delivery to the
Company of either (a) shares of Common Stock (including shares issuable to the
Participant pursuant to the exercise of the Option), or (b) any combination of
cash and shares of Common Stock, or (c) such other consideration as the
Administrator deems appropriate and in compliance with applicable law (including
payment in accordance with a cashless exercise program under which, if so
instructed by the Participant, shares of Common Stock may be issued directly to
the Participant's broker or dealer upon receipt of the Purchase Price in cash
from the broker or dealer.) In the event that any Common Stock shall be
transferred to the Company to satisfy all or any part of the Purchase Price, the
part of the Purchase Price deemed to have been satisfied by such transfer of
Common Stock shall be equal to the product derived by multiplying the Fair
Market Value as of the date of exercise times the number of shares transferred.
The Participant may not transfer to the Company in satisfaction of the Purchase
Price (y) a number of shares which when multiplied times the Fair Market Value
as of the date of exercise would result in a product greater than the Purchase
Price or (z) any fractional share of Common Stock. Any part of the Purchase
Price paid in cash upon the exercise of any Option shall be added to the general
funds of the Company and used for any proper corporate purpose. Unless the
Administrator shall otherwise determine, any Common Stock transferred to the
Company as payment of all or part of the Purchase Price upon the exercise of any
Option shall be held as treasury shares.
ARTICLE IX.
RESTRICTED STOCK AWARDS
9.01 Restricted Share Awards. The Administrator may grant to any
Participant an Award of Restricted Share Rights entitling such person to receive
shares of Common Stock in such quantity, and on such terms, conditions and
restrictions (whether based on performance standards, periods of service or
otherwise) as the Administrator shall determine on or prior to the Date of
Grant. The terms of any Award of Restricted Share Rights granted under the Plan
shall be set forth in an Award Agreement.
9.02 Duration of Restricted Share Rights. In no event shall any Restricted
Share Rights granted entitle the holder to receive shares of Common Stock free
of all restrictions on transfer at any time prior to the expiration of one year
from the Date of Grant, and each Award Agreement shall provide, as a condition
to release of restrictions on ownership of the shares, that the Participant
shall remain employed by the Company or a Subsidiary for at least that one-year
period (subject to the Company's or Subsidiary's right to terminate such
employment).
9.03 Forfeiture of Restricted Share Rights. Subject to Section 9.05, all
Restricted Share Rights shall be forfeited and all Restricted Share Awards shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary until the expiration of the forfeiture and satisfies any other
conditions set forth in the Award Agreement. If the Award Agreement shall so
provide, in the case of death, disability or retirement (as defined in the Award
Agreement) of the Participant, all of the shares covered by the Restricted Share
Rights shall immediately vest and any restrictions shall lapse as of the date of
such death, disability or retirement.
9.04 Delivery of Shares Upon Vesting. Upon the lapse of the restrictions
established in the Award Agreement, the Participant shall be entitled to
receive, without payment of any cash or other consideration, certificates for
the number of shares covered by the Award.
9.05 Waiver or Modification of Forfeiture Provisions. The Administrator has
full power and authority to modify or waive any or all terms, conditions or
restrictions (other than the minimum restriction period set forth in Section
9.02) applicable to any Restricted Share Rights granted to a Participant under
the
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Plan; provided that no modification shall, without consent of the Participant,
adversely affect the Participant's rights thereunder and no modification shall
reduce the employment requirement to less than three years, except in the case
of death, disability or retirement.
9.06 Rights as a Stockholder. No person shall have any rights as a
stockholder with respect to any shares subject to Restricted Share Rights until
such time as the person shall have been issued a certificate for such shares.
ARTICLE X.
OTHER STOCK BASED AWARDS
10.01 Grant of Other Awards. Other Awards of Common Stock or other
securities of the Company and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, Common Stock ("Other Awards") may be
granted either alone or in addition to or in conjunction with Options or Stock
Appreciation Rights under the Plan. Subject to the provisions of the Plan, the
Administrator shall have the sole and complete authority to determine the
persons to whom and the time or times at which Other Awards shall be made, the
number of shares of Common Stock or other securities, if any, to be granted
pursuant to such Other Awards, and all other conditions of such Other Awards.
Any Other Award shall be confirmed by an Award Agreement executed by the
Administrator and the Participant, which agreement shall contain such provisions
as the Administrator determines to be necessary or appropriate to carry out the
intent of this Plan with respect to the Other Award.
10.02 Terms of Other Awards. In addition to the terms and conditions
specified in the Award Agreement, Other Awards made pursuant to this Article X
shall be subject to the following:
(a) Any shares of Common Stock subject to such Other Awards may not be
sold, assigned, transferred or otherwise encumbered prior to the date on
which the shares are issued, or, if later, the date on which any applicable
restriction, performance or deferral period lapses; and
(b) If specified by the Administrator and the Award Agreement, the
recipient of an Other Award shall be entitled to receive, currently or on a
deferred basis, interest or dividends or dividend equivalents with respect
to the Common Stock or other securities covered by the Other Award; and
(c) The Award Agreement with respect to any Other Award shall contain
provisions providing for the disposition of such Other Award in the event
of Termination of Employment prior to the exercise, realization or payment
of such Other Award, with such provisions to take account of the specific
nature and purpose of the Other Award.
ARTICLE XI.
TERMS APPLICABLE TO ALL AWARDS
11.01 Award Agreement. The grant and the terms and conditions of the Award
shall be set forth in an Award Agreement between the Company and the
Participant. No person shall have any rights under any Award granted under the
Plan unless and until the Administrator and the Participant to whom the Award is
granted shall have executed and delivered an Award Agreement expressly granting
the Award to such person and setting forth the terms of the Award.
11.02 Plan Provisions Control Award Terms. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the
Administrator have the power to grant any Award under the Plan which is contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 4.03,
(i) the terms of any Award granted under the Plan may not be changed after the
granting of such Award without the express approval of the Participant and (ii)
no modification may be made to an Award granted to an Officer except in
compliance with Rule 16b-3.
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11.03 Modification of Award After Grant. Each Award granted under the Plan
to a Participant other than an Officer may be modified after the date of its
grant by express written agreement between the Company and the Participant,
provided that such change (i) shall not be inconsistent with the terms of the
Plan and (ii) shall be approved by the Administrator. No modifications may be
made to any Awards granted to an Officer except in compliance with Rule 16b-3.
11.04 Taxes. The Company shall be entitled, if the Administrator deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or stock upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for such tax. The amount
of such withholding or tax payment shall be determined by the Administrator and,
unless otherwise provided by the Administrator, shall be payable by the
Participant at the time of issuance or payment in accordance with the following
rules:
(a) A Participant, other than an Officer, shall have the right to
elect to meet his or her withholding requirement by: (1) having the Company
withhold from such Award the appropriate number of shares of Common Stock,
rounded out to the next whole number, the Fair Market Value of which is
equal to such amount, or, in the case of the cash payment, the amount of
cash, as is determined by the Company to be sufficient to satisfy
applicable tax withholding requirements; or (2) direct payment to the
Company in cash of the amount of any taxes required to be withheld with
respect to such Award. (b) Unless otherwise provided by the Administrator,
with respect to Officers, the Company shall withhold from such Award the
appropriate number of shares of Common Stock, rounded up to the next whole
number, the Fair Market Value of which is equal to the amount, as
determined by the Administrator, (or, in the case of a cash payment, the
amount of cash) required to satisfy applicable tax withholding
requirements.
(c) In the event that an Award or property received upon exercise of
an Award has already been transferred to the Participant on the date upon
which withholding requirements apply, the Participant shall pay directly to
the Company the cash amount determined by the Company to be sufficient to
satisfy applicable federal, state or local withholding requirements. The
Participant shall provide to the Company such information as the Company
shall require to determine the amounts to be withheld and the time such
withholding requirements become applicable.
(d) If permitted under applicable federal income tax laws, a
Participant may elect to be taxed in the year in which an Award is
exercised or received, even if it would not otherwise have become taxable
to the Participant. If the Participant makes such an election, the
Participant shall promptly notify the Company in writing and shall provide
the Company with a copy of the executed election form as filed with the
Internal Revenue Service no later than thirty days from the date of
exercise or receipt. Promptly following such notification, the Participant
shall pay directly to the Company the cash amount determined by the Company
to be sufficient to satisfy applicable federal, state or local withholding
tax requirements.
11.05 Limitations on Transfer. A Participant's rights and interest under
the Plan may not be assigned or transferred other than by will or the laws of
descent and distribution. Notwithstanding the foregoing, or any other provision
of this Plan, a Participant who holds Non-Qualified Stock Options may transfer
such Options to his or her spouse, lineal ascendants, lineal descendants, or to
a duly established trust for the benefit of one or more of these individuals.
Options so transferred may thereafter be transferred only to the Participant who
originally received the Options or to an individual or trust to whom the
Participant could have initially transferred the Option pursuant to this Section
11.05. Options which are transferred pursuant to this Section 11.05 shall be
exercisable by the transferee according to the same terms and conditions as
applied to the Participant.
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11.06 Surrender of Awards. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Administrator
and Participant approve, including, but not limited to, terms which provide that
upon such surrender the Company will pay to the Participant cash or Common
Stock, or a combination of cash and Common Stock.
ARTICLE XII.
GENERAL PROVISIONS
12.01 Amendment and Termination of Plan.
(a) Amendment. The Board shall have complete power and authority to
amend the Plan at any time and to add any other stock based Award or other
incentive compensation programs to the Plan as it deems necessary or
appropriate and no approval by the stockholders of the Company or by any
other person, committee or entity of any kind shall be required to make any
amendment; provided, however, that the Board shall not, without the
requisite affirmative approval of the stockholders of the Company, (i) make
any amendment which requires stockholder approval under any applicable law,
including Rule 16b-3 or the Code; or (ii) which, unless approved by the
requisite affirmative approval of stockholders of the Company, would cause,
result in or give rise to "applicable employee remuneration" within the
meaning of Section 162(m) of the Code with respect to any Performance Based
Option. No termination or amendment of the Plan may, without the consent of
the Participant to whom any Award shall theretofore have been granted under
the Plan, adversely affect the right of such individual under such Award.
For the purposes of this section, an amendment to the Plan shall be deemed
to have the affirmative approval of the stockholders of the Company if such
amendment shall have been submitted for a vote by the stockholders at a
duly called meeting of such stockholders at which a quorum was present and
the majority of votes cast with respect to such amendment at such meeting
shall have been cast in favor of such amendment, or if the holders of
outstanding stock having not less than a majority of the outstanding shares
consent to such amendment in writing in the manner provided under the
Company's bylaws.
(b) Termination. The Board shall have the right and the power to
terminate the Plan at any time. If the Plan is not earlier terminated, the
Plan shall terminate when all shares authorized under the Plan have been
issued. No Award shall be granted under the Plan after the termination of
the Plan, but the termination of the Plan shall not have any other effect
and any Award outstanding at the time of the termination of the Plan may be
exercised after termination of the Plan at any time prior to the expiration
date of such Award to the same extent such award would have been
exercisable if the Plan had not been terminated.
12.02 No Right To Employment Or To Continue As Director. No employee or
other person shall have any claim or right to be granted an Award under this
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee any right to be retained in the employ of the Company or a
Subsidiary of the Company. Neither the Plan nor any action taken hereunder shall
be construed as giving any Director any right to be retained as a Director, or
to limit in any way the right of the stockholders of the Company to remove such
person as a Director.
12.03 Compliance with Rule 16b-3. It is intended that the Plan be applied
and administered in compliance with Rule 16b-3. If any provision of the Plan
would be in violation of Rule 16b-3 if applied as written, such provision shall
not have effect as written and shall be given effect so as to comply with
Rule 16b-3, as determined by the Administrator. The Board is authorized to amend
the Plan and to make any such modifications to Award Agreements to comply with
Rule 16b-3, as it may be amended from time to time, and to make any other such
amendments or modifications as it deems necessary or appropriate to better
accomplish the purposes of the Plan in light of any amendments made to Rule
16b-3.
12.04 Securities Law Restrictions. The shares of Common Stock issuable
pursuant to the terms of any Awards granted under the Plan may not be issued by
the Company without registration or qualification of such shares under the
Securities Act of 1933, as amended, or under various state securities
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laws or without an exemption from such registration requirements. Unless the
shares to be issued under the Plan have been registered and/or qualified as
appropriate, the Company shall be under no obligation to issue shares of Common
Stock upon exercise of an Award unless and until such time as there is an
appropriate exemption available from the registration or qualification
requirements of federal or state law as determined by the Administrator in its
sole discretion. The Administrator may require any person who is granted an
award hereunder to agree with the Company to represent and agree in writing that
if such shares are issuable under an exemption from registration requirements,
the shares will be "restricted" securities which may be resold only in
compliance with applicable securities laws, and that such person is acquiring
the shares issued upon exercise of the Award for investment, and not with the
view toward distribution.
12.05 Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock or stock options otherwise
than under the Plan.
12.06 Captions. The captions (i.e., all section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.
12.07 Severability. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of the
Plan or any Award at any time granted under the Plan shall be held to be
prohibited or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
12.08 No Strict Construction. No rule of strict construction shall be
implied against the Company, the Administrator, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Administrator.
12.09 Choice of Law. The Plan shall be governed by and construed in
accordance with the laws of the State of Michigan.
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