EXHIBIT 10.1
SPORTS RESORTS INTERNATIONAL, INC.
("THE COMPANY")
1995 LONG-TERM INCENTIVE PLAN
(AS AMENDED THROUGH DECEMBER 17, 2001)
SECTION 1
Establishment of Plan; Purpose of Plan
1.1 Establishment of Plan. Sports Resorts International, Inc., hereby
establishes the 1995 LONG-TERM INCENTIVE PLAN (the "Plan") for its corporate,
divisional, and subsidiary directors, officers, and other key employees. The
Plan permits the grant and award of Stock Options, Stock Appreciation Rights,
Restricted Stock, Stock Awards, and Tax Benefit Rights.
1.2 Purpose of Plan. The purpose of the Plan is to provide directors,
officers, and key management employees of the Company, its divisions, and its
subsidiaries with an increased incentive to make significant and extraordinary
contributions to the long-term performance and growth of the Company and its
subsidiaries, to join the interests of directors, officers, and key employees
with the interests of the Company's stockholders through the opportunity for
increased stock ownership, and to attract and retain officers and key employees
of exceptional ability. The Plan is further intended to provide flexibility to
the Company in structuring long-term incentive compensation to best promote the
foregoing objectives.
SECTION 2
Definitions
The following words have the following meanings unless a
different meaning is plainly required by the context:
2.1 "Act" means the Securities Exchange Act of 1934, as amended.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Change in Control" means (a) the sale, lease, exchange, or
other transfer of substantially all of the Company's assets
(in one transaction or in a series of related transactions)
to, or the merger or consolidation of the Company with, a
corporation that is not controlled by the Company; or (b) a
change in control of the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the Act; provided
that, without limitation, such a change in control shall be
deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Act), other than a
Subsidiary or any employee benefit plan of the Company or a
Subsidiary or any entity holding Common Stock pursuant to the
terms of any such employee benefit plan, is or becomes the
beneficial owner (as defined in Rule 13(d)-3 under the Act),
directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the combined
voting power of the Company's then outstanding securities; or
(ii) during any period of two consecutive years, individuals
who at
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the beginning of such period constitute the Board cease for
any reason to constitute at least a majority of the Board,
unless the election, or nomination for election by the
Company's shareholders, of each new director was approved by a
vote of at least two-thirds (2/3) of the directors then still
in office who were directors at the beginning of the period.
2.4 "Code" means the Internal Revenue Code of 1986, as amended.
2.5 "Committee" means the Compensation Committee of the Board or
such other committee as the Board shall designate to
administer the Plan. The Committee shall consist of at least
two members of the Board and all of its members shall be
"nonemployee directors" as defined in Rule 16b-3 issued under
the Act. The Board, in its discretion, may also require that
members of the Committee be "outside directors" as defined in
the rules promulgated pursuant to Section 162(m) of the Code.
2.6 "Common Stock" means the Common Stock of the Company, par
value $0.01 per share.
2.7 "The Company" means Sports Resorts International, Inc., a
Michigan corporation, and its successors and assigns.
2.8 "Incentive Award" means the award or grant of a Stock Option,
Stock Appreciation Right, Restricted Stock, Stock Award, or
Tax Benefit Right to a Participant pursuant to the Plan.
2.9 "Market Value" of any security on any given date means: (a) if
the security is listed for trading on one or more national
securities exchanges (including the NASDAQ National Market
System), the last reported sales price on the principal such
exchange on the date in question, or if such security shall
not have been traded on such principal exchange on such date,
the last reported sales price on such principal exchange on
the first day prior thereto on which such security was so
traded; or (b) if the security is not listed for trading on a
national securities exchange (including the NASDAQ National
Market System) but is traded in the over-the-counter market,
the mean of highest and lowest bid prices for such security on
the date in question, or if there are no such bid prices on
the first day prior thereto on which such prices existed; or
(c) if neither (a) nor (b) is applicable, the value as
determined by any means deemed fair and reasonable by the
Committee, which determination shall be final and binding on
all parties.
2.10 "Participant" means a corporate director or officer,
divisional officer, or other key employee of the Company, its
divisions, or its Subsidiaries who the Committee determines is
eligible to participate in the Plan and who is designated to
be granted an Incentive Award under the Plan.
2.11 "Restricted Period" means the period of time during which
Restricted Stock awarded under the Plan is subject to
restrictions. The Restricted Period may differ among
Participants and may have different expiration dates with
respect to shares of Common Stock covered by the same
Incentive Award.
2.12 "Restricted Stock" means Common Stock awarded to a Participant
pursuant to Section 6 of the Plan.
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2.13 "Retirement" means the voluntary termination of all employment
and service as a director with the Company by a Participant
after the Participant has attained 60 years of age, or age 55
with at least five years of service, or such other age as
shall be determined by the Committee in its sole discretion or
as otherwise may be set forth in the Incentive Award agreement
or other grant document with respect to a Participant and a
particular Incentive Award.
2.14 "Stock Appreciation Right" means a right granted in connection
with a Stock Option pursuant to Section 8 of the Plan.
2.15 "Stock Award" means an award of Common Stock awarded to a
Participant pursuant to Section 7 of the Plan.
2.16 "Stock Option" means the right to purchase Common Stock at a
stated price for a specified period of time. For purposes of
the Plan, a Stock Option may be either an incentive stock
option within the meaning of Section 422(b) of the Code or a
nonqualified stock option, and the option shall be interpreted
in accordance with such intention as stated in the applicable
Stock Option Agreement.
2.17 "Subsidiary" means any corporation or other entity of which
fifty percent (50%) or more of the outstanding voting stock or
voting ownership interest is directly or indirectly owned or
controlled by the Company or by one or more Subsidiaries of
the Company.
2.18 "Tax Benefit Right" means any right granted to a Participant
pursuant to Section 9 of the Plan.
SECTION 3
Administration
3.1 Power and Authority. The Committee shall have full power and
authority to interpret the provisions of the Plan, and shall have full power and
authority to supervise the administration of the Plan. All determinations,
interpretations, and selections made by the Committee regarding the Plan shall
be final and conclusive. The Committee shall hold its meetings at such times and
places as it deems advisable. Action may be taken by a written instrument signed
by a majority of the members of the Committee, and any action so taken shall be
fully as effective as if it had been taken at a meeting duly called and held.
The Committee shall make such rules and regulations for the conduct of its
business as it deems advisable.
3.2 Grants or Awards to Participants. In accordance with and subject to
the provisions of the Plan, the Committee shall have the authority to determine
all provisions of Incentive Awards as the Committee may deem necessary or
desirable and as are consistent with the terms of the Plan, including, without
limitation, the following: (a) the employees who shall be selected as
Participants; (b) the nature and extent of the Incentive Awards to be made to
each employee (including the number of shares of Common Stock to be subject to
each Incentive Award, any exercise price, the manner in which an Incentive Award
will vest or become exercisable, and the form of payment for the Incentive
Award); (c) the time or times when Incentive Awards will be granted to
employees; (d) the duration of each Incentive Award; and (e) the restrictions
and other conditions to which payment or vesting of Incentive Awards may be
subject.
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3.3 Amendments or Modifications of Awards. The Committee shall have the
authority to amend or modify the terms of any outstanding Incentive Award
granted to an employee Participant in any manner, provided that the amended or
modified terms are not prohibited by the Plan as then in effect, including,
without limitation, the authority to: (a) modify the number of shares or other
terms and conditions of an Incentive Award; (b) extend the term of an Incentive
Award; (c) accelerate the exercisability or vesting or otherwise terminate any
restrictions relating to an Incentive Award; (d) accept the surrender of any
outstanding Incentive Award; or (e) to the extent not previously exercised or
vested, authorize the grant of new Incentive Awards in substitution for
surrendered Incentive Awards. Modification of options granted to nonemployee
directors may be made only as necessary or desirable to comply with securities
or income tax law. No such amendment or modification shall become effective
without consent of the Participant except to the extent that such amendment
operates solely to the benefit of the Participant.
3.4 Indemnification of Committee Members. Each person who is or shall
have been a member of the Committee shall be indemnified and held harmless by
the Company from and against any cost, liability, or expense imposed or incurred
in connection with such person's or the Committee's taking or failing to take
any action under the Plan. Each such person shall be justified in relying on
information furnished in connection with the Plan's administration by any
appropriate person or persons.
3.5 Incentive Awards for Nonemployee Directors. Directors who are not
also employees shall receive nondiscretionary Stock Options awarded
automatically under the terms of subsection 5.5, and shall not receive other
Incentive Awards.
SECTION 4
Shares Subject to the Plan
4.1 Number of Shares. Subject to adjustment as provided in subsection
4.2 of the Plan, a maximum of 2,000,000 shares of Common Stock shall be
available for Incentive Awards under the Plan. Such shares shall be authorized
and may be either unissued or treasury shares.
4.2 Adjustments. If the number of shares of Common Stock outstanding
changes by reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination, exchange of shares, or any other change in the
corporate structure or shares of the Company, the number and kind of securities
subject to and reserved under the Plan, together with applicable exercise
prices, shall be appropriately adjusted. No fractional shares shall be issued
pursuant to the Plan, and any fractional shares resulting from adjustments shall
be eliminated from the respective Incentive Awards, with an appropriate cash
adjustment for the value of any Incentive Awards eliminated. If an Incentive
Award is cancelled, surrendered, modified, exchanged for a substitute Incentive
Award, or expires or terminates during the term of the Plan but prior to the
exercise or vesting of the Incentive Award in full, the shares subject to but
not delivered under such Incentive Award shall be available for other Incentive
Awards.
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SECTION 5
Stock Options
5.1 Grant. A Participant may be granted one or more Stock Options under
the Plan. Stock Options shall be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion. In addition, the Committee may vary, among
Participants and among Stock Options granted to the same Participant, any and
all of the terms and conditions of the Stock Options granted under the Plan. The
Committee shall have complete discretion in determining the number of Stock
Options granted to each Participant. The Committee may designate whether or not
a Stock Option is to be considered an incentive stock option as defined in
Section 422(b) of the Code.
5.2 Stock Option Agreements. Stock Options shall be evidenced by Stock
Option agreements containing such terms and conditions, consistent with the
provisions of the Plan, as the Committee shall from time to time determine.
Stock Options shall be subject to the terms and conditions set forth in this
Section 5.
5.3 Stock Option Price. The per share Stock Option price shall be
determined by the Committee, but shall be a price that is equal to or greater
than one hundred percent (100%) of the Market Value on the date of grant.
5.4 Medium and Time of Payment. The exercise price for each share
purchased pursuant to a Stock Option granted under the Plan shall be payable in
cash or, in shares of Common Stock (including Common Stock to be received upon a
simultaneous exercise) or other consideration substantially equivalent to cash.
The time and terms of payment may be amended with the consent of a Participant
before or after exercise of a Stock Option, but such amendment shall not reduce
the Stock Option price. The Committee may from time to time authorize payment of
all or a portion of the Stock Option price in the form of a promissory note or
installments according to such terms as the Committee may approve. The Board may
restrict or suspend the power of the Committee to permit such loans and may
require that adequate security be provided.
5.5 Stock Options Granted to Nonemployee Directors.
(a) Automatic Grants. Options shall be granted to nonemployee
Directors on March 1 and September 1 of each year, and no discretionary
options shall be granted to such Directors under the Plan. The number
of shares subject to options granted on September 1, 1995, shall be 500
shares. The number of shares to be subject to options granted on each
succeeding option date during the term of the Plan thereafter shall be
105% of the previous period's grant, with the result rounded up or down
to the nearest 5 share increment. This provision for automatic grants
shall be effective when there are insufficient shares available for
such automatic grants under prior Company stock option plans.
(b) Price and Terms. The price shall be 100% of the Market
Value as of the date of the grant and may be paid in cash or shares of
Common Stock. The term shall be ten years.
(c) New Directors. Any new nonemployee Director elected or
appointed other than on a grant date shall receive, as of the date of
his or her election or appointment, an option for the number of shares
granted to a nonemployee Director as of
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the previous grant date. The option price for such new Director shall
be the higher of the market value as of the date of grant or the market
value as of the prior grant date.
5.6 Limits on Exercisability. Stock Options shall be exercisable for
such periods as may be fixed by the Committee, not to exceed 10 years from the
date of grant. At the time of the exercise of a Stock Option, the holder of the
Stock Option, if requested by the Committee, must represent to the Company that
the shares are being acquired for investment and not with a view to the
distribution thereof. The Committee may in its discretion require a Participant
to continue the Participant's service with the Company and its Subsidiaries for
a certain length of time prior to a Stock Option becoming exercisable and may
eliminate such delayed vesting provisions. No Stock Option issued to directors
and employees subject to Section 16 of the Act shall be exercisable during the
first six months of its term.
5.7 Restrictions on Transferability.
(a) General. Unless the Committee otherwise consents or unless
the Stock Option agreement or grant provide otherwise: (i) no Stock
Options granted under the Plan may be sold, exchanged, transferred,
pledged, assigned, or otherwise alienated or hypothecated except by
will or the laws of descent and distribution; and (ii) all Stock
Options granted to a Participant shall be exercisable during the
Participant's lifetime only by such Participant, his guardian, or legal
representative.
(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to the
exercise of a Stock Option under the Plan as the Committee deems
advisable, including, without limitation, restrictions under applicable
federal or state securities laws.
5.8 Limits on Grants. No Participant shall be granted, during any
calendar year, Options to purchase more than 250,000 shares of Common Stock,
subject to adjustment as provided in subsection 4.2 of the Plan. The purpose of
this subsection 5.8 is to ensure that the Plan provides performance based
compensation under Section 162(m) of the Code. This subsection 5.8 shall be
interpreted or amended to achieve that purpose.
5.9 Termination of Employment or Directorship.
(a) General. If a Participant ceases to be employed by or a
director of the Company or one of its Subsidiaries for any reason other
than the Participant's death, disability, Retirement, or termination
for cause, the Participant may exercise his Stock Options only for a
period of three months after such termination of employment or director
status, but only to the extent the Participant was entitled to exercise
the Stock Options on the date of termination, unless the Committee
otherwise consents or the terms of the Stock Option agreement or grant
provide otherwise. For purposes of the Plan, the following shall not be
deemed a termination of employment or officer status: (i) a transfer of
an employee from the Company to any Subsidiary; (ii) a leave of
absence, duly authorized in writing by the Company, for military
service or for any other purpose approved by the Company if the period
of such leave does not exceed 90 days; (iii) a leave of absence in
excess of 90 days, duly authorized in writing by the Company, provided
that the employee's right to reemployment is guaranteed either by
statute or contract; or (iv) a termination of employment with continued
service as a director.
(b) Death. If a Participant dies either while an employee or
director of the Company or one of its Subsidiaries or after the
termination of employment other than for
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cause but during the time when the Participant could have exercised a
Stock Option under the Plan, the Stock Option issued to such
Participant shall be exercisable by the personal representative of such
Participant or other successor to the interest of the Participant for
one year after the Participant's death, but only to the extent that the
Participant was entitled to exercise the Stock Option on the date of
death or termination of employment or directorship, whichever first
occurred, unless the Committee otherwise consents or the terms of the
Stock Option agreement or grant provide otherwise.
(c) Disability. If a Participant ceases to be an employee or
director of the Company or one of its Subsidiaries due to the
Participant's disability, the Participant may exercise a Stock Option
for a period of one year following such termination of employment or
directorship, but only to the extent that the Participant was entitled
to exercise the Stock Option on the date of such event, unless the
Committee otherwise consents or the terms of the Stock Option agreement
or grant provide otherwise.
(d) Participant Retirement. If a Participant Retires as an
employee or director of the Company or one of its Subsidiaries, any
Stock Option granted under the Plan may be exercised during the
remaining term of the Stock Option, unless the terms of the Stock
Option agreement or grant provide otherwise.
(e) Termination for Cause. If a Participant is terminated for
cause, the Participant shall have no further right to exercise any
Stock Option previously granted.
SECTION 6
Restricted Stock
6.1 Grant. A Participant may be granted Restricted Stock under the
Plan. Restricted Stock shall be subject to such terms and conditions, consistent
with the other provisions of the Plan, as shall be determined by the Committee
in its sole discretion. The Committee may impose such restrictions or
conditions, consistent with the provisions of the Plan, to the vesting of
Restricted Stock as it deems appropriate. No more than one-half of the total
shares available for Incentive Awards under the Plan shall be awarded in the
form of Restricted Stock. Forfeited Restricted Stock shall again become
available for awards of Restricted Stock.
6.2 Restricted Stock Agreements. Awards of Restricted Stock shall be
evidenced by Restricted Stock agreements containing such terms and conditions,
consistent with the provisions of the Plan, as the Committee shall from time to
time determine. Unless a Restricted Stock agreement provides otherwise,
Restricted Stock Awards shall be subject to the terms and conditions set forth
in this Section 6.
6.3 Termination of Employment or Officer Status.
(a) General. In the event of termination of employment during
the Restricted Period for any reason other than death, disability,
Retirement, or termination for cause, then any shares of Restricted
Stock still subject to restrictions at the date of such termination
shall automatically be forfeited and returned to the Company; provided,
however, that in the event of a voluntary or involuntary termination of
the employment of a Participant by the Company, the Committee may, in
its sole discretion, waive the automatic forfeiture of any or all such
shares of Restricted Stock and/or may add such new restrictions to such
shares of Restricted Stock as it deems appropriate. For purposes of
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the Plan, the following shall not be deemed a termination of
employment: (i) a transfer of an employee from the Company to any
Subsidiary; (ii) a leave of absence, duly authorized in writing by the
Company, for military service or for any other purpose approved by the
Company if the period of such leave does not exceed 90 days; (iii) a
leave of absence in excess of 90 days, duly authorized in writing by
the Company, provided that the employee's right to reemployment is
guaranteed either by statute or contract; and (iv) a termination of
employment with continued service as a director.
(b) Death, Retirement, or Disability. Unless the Committee
otherwise consents or unless the terms of the Restricted Stock
agreement or grant provide otherwise, in the event a Participant
terminates his or her employment with the Company because of death,
disability, or Retirement during the Restricted Period, the
restrictions applicable to the shares of Restricted Stock shall
terminate automatically with respect to that number of shares (rounded
to the nearest whole number) equal to the total number of shares of
Restricted Stock granted to such Participant multiplied by the number
of full months that have elapsed since the date of grant divided by the
maximum number of full months of the Restricted Period. All remaining
shares shall be forfeited and returned to the Company; provided,
however, that the Committee may, in its sole discretion, waive the
restrictions remaining on any or all such remaining shares of
Restricted Stock either before or after the death, disability, or
Retirement of the Participant.
(c) Termination for Cause. If a Participant's employment is
terminated for cause, the Participant shall have no further right to
exercise or receive any Restricted Stock, and all Restricted Stock
still subject to restrictions at the date of such termination shall
automatically be forfeited and returned to the Company.
6.4 Restrictions on Transferability.
(a) General. Unless the Committee otherwise consents or unless
the terms of the Restricted Stock agreement or grant provide otherwise:
(i) shares of Restricted Stock shall not be sold, exchanged,
transferred, pledged, assigned, or otherwise alienated or hypothecated
during the Restricted Period except by will or the laws of descent and
distribution; and (ii) all rights with respect to Restricted Stock
granted to a Participant under the Plan shall be exercisable during the
Participant's lifetime only by such Participant, his or her guardian,
or legal representative.
(b) Other Restrictions. The Committee may impose other
restrictions on any shares of Common Stock acquired pursuant to an
award of Restricted Stock under the Plan as the Committee deems
advisable, including, without limitation, restrictions under applicable
federal or state securities laws.
6.5 Legending of Restricted Stock. Any certificates evidencing shares
of Restricted Stock awarded pursuant to the Plan shall bear the following
legend:
The shares represented by this certificate were issued subject
to certain restrictions under Sports Resorts International, Inc. 1995
LONG-TERM INCENTIVE PLAN (the "Plan"). A copy of the Plan is on file in
the office of the Secretary of the Company. This certificate is held
subject to the terms and conditions contained in a restricted stock
agreement that includes a prohibition against the sale or transfer of
the stock represented by this certificate except in compliance with
that agreement, and that provides for forfeiture upon certain events.
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6.6 Representations and Warranties. A Participant who is awarded
Restricted Stock shall represent and warrant that the Participant is acquiring
the Restricted Stock for the Participant's own account and investment and
without any intention to resell or redistribute the Restricted Stock. The
Participant shall agree not to resell or distribute such Restricted Stock after
the Restricted Period except upon such conditions as the Company may reasonably
specify to ensure compliance with federal and state securities laws.
6.7 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to Restricted Stock held of
record by such Participant as if the Participant held unrestricted Common Stock;
provided, however, that the unvested portion of any award of Restricted Stock
shall be subject to any restrictions on transferability or risks of forfeiture
imposed pursuant to subsections 6.1 and 6.4 of the Plan. Unless the Committee
otherwise determines or unless the terms of the Restricted Stock agreement or
grant provide otherwise, any noncash dividends or distributions paid with
respect to shares of unvested Restricted Stock shall be subject to the same
restrictions as the shares to which such dividends or distributions relate.
SECTION 7
Stock Awards
7.1 Grant. A Participant may be granted one or more Stock Awards under
the Plan in lieu of, or as payment for, the rights of a Participant under any
other compensation plan, policy, or program of the Company or its Subsidiaries.
Stock Awards shall be subject to such terms and conditions, consistent with the
other provisions of the Plan, as may be determined by the Committee in its sole
discretion.
7.2 Rights as a Stockholder. A Participant shall have all voting,
dividend, liquidation, and other rights with respect to shares of Common Stock
issued to the Participant as a Stock Award under this Section 7 upon the
Participant becoming the holder of record of the Common Stock granted pursuant
to such Stock Awards; provided, however, that the Committee may impose such
restrictions on the assignment or transfer of Common Stock awarded pursuant to a
Stock Award as it deems appropriate.
SECTION 8
Stock Appreciation Rights
8.1 Grant. The Committee may grant Stock Appreciation Rights to
individuals granted related options under the Plan.
8.2 Restrictions. A Stock Appreciation Right may be granted
simultaneously with or subsequent to the option to which the right is related,
but each Stock Appreciation Right must relate to a particular option. In
exchange for the surrender in whole or in part of the right to exercise the
related option to purchase shares of Common Stock, the exercise of a Stock
Appreciation Right shall entitle a Plan participant to an amount equal to the
appreciation in value of the shares covered by the related option surrendered.
Such appreciation in value shall be equal to the excess of the market value of
such shares at the time of the exercise of the Stock Appreciation Right over the
option price of such shares. Stock Appreciation Rights may be exercised only
when the related option could be exercised and only when the market price of the
stock subject to the option exceeds the exercise price of the option. Neither a
Stock Appreciation Right nor any related stock option issued to officers and
directors subject to Section 16 of
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the Securities and Exchange Act of 1934 shall be exercisable during the first
six months of the terms of the respective right or option.
8.3 Payment. Upon the exercise of a Stock Appreciation Right, payment
by the Company may be made in cash, in shares of Common Stock, or partly in cash
and partly in shares of Common Stock. The Committee shall have sole discretion
to determine the form of payment made upon the exercise of a Stock Appreciation
Right. If payment is made in shares of Common Stock, such shares shall be valued
at their market value as of the date of surrender of the right to exercise the
option. When an appreciation right is exercised pursuant to an option, the
shares subject to the underlying option shall no longer be available for grant
of Incentive Awards under the Plan.
SECTION 9
Tax Benefit Rights
9.1 Grant. A Participant may be granted Tax Benefit Rights under the
Plan to encourage a Participant to exercise Stock Options and provide certain
tax benefits to the Company. A Tax Benefit Right entitles a Participant to
receive from the Company or a Subsidiary a cash payment not to exceed the amount
calculated by multiplying the ordinary income, if any, realized by the
Participant for federal tax purposes as a result of the exercise of a
nonqualified stock option, or the disqualifying disposition of shares acquired
under an incentive stock option, by the maximum federal income tax rate
(including any surtax or similar charge or assessment) for corporations, plus
the applicable state and local tax imposed on the exercise of the Stock Option
or the disqualifying disposition.
9.2 Restrictions. A Tax Benefit Right may be granted only with respect
to a stock option issued and outstanding or to be issued under the Plan or any
other plan of the Company or its Subsidiaries that has been approved by the
shareholders as of the date of the Plan and may be granted concurrently with or
after the grant of the stock option. Such rights with respect to outstanding
stock options shall be issued only with the consent of the Participant if the
effect would be to disqualify an incentive stock option, change the date of
grant or the exercise price, or otherwise impair the Participant's existing
stock options. A stock option to which a Tax Benefit Right has been attached
shall not be exercisable by a director, officer or employee subject to Section
16 of the Act for a period of six months from the date of the grant of the Tax
Benefit Right.
9.3 Terms and Conditions. The Committee shall determine the terms and
conditions of any Tax Benefit Rights granted and the Participants to whom such
rights will be granted with respect to stock options under the Plan or any other
plan of the Company. The Committee may amend, cancel, limit the term of, or
limit the amount payable under a Tax Benefit Right at any time prior to the
exercise of the related stock option, unless otherwise provided under the terms
of the Tax Benefit Right. The net amount of a Tax Benefit Right, subject to
withholding, may be used to pay a portion of the stock option price, unless
otherwise provided by the Committee.
SECTION 10
Change in Control
10.1 Acceleration of Vesting. If a Change in Control of the Company
shall occur, then, unless the Committee or the Board otherwise determines with
respect to one or more Incentive Awards, without action by the Committee or the
Board (a) all outstanding Stock Options shall become immediately
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exercisable in full and shall remain exercisable during the remaining term
thereof, regardless of whether the Participants to whom such Stock Options have
been granted remain in the employ or service of the Company or any Subsidiary;
and (b) all other outstanding Incentive Awards shall become immediately fully
vested and nonforfeitable.
10.2 Cash Payment for Stock Options. If a Change in Control of the
Company shall occur, then the Committee, in its sole discretion, and without the
consent of any Participant affected thereby, may determine that some or all
Participants holding outstanding Stock Options shall receive, with respect to
some or all of the shares of Common Stock subject to such Stock Options, as of
the effective date of any such Change in Control of the Company, cash in an
amount equal to the greater of the excess of (a) the highest sales price of the
shares on the NASDAQ Market System (or other public exchange upon which the
Company's stock is then traded) on the date immediately prior to the effective
date of such Change in Control of the Company or (b) the highest price per share
actually paid in connection with any Change in Control of the Company over the
exercise price per share of such Stock Options.
10.3 Limitation on Change in Control Payments. Notwithstanding anything
in subsection 10.1 or 10.2 to the contrary, if, with respect to a Participant,
the acceleration of the vesting of an Incentive Award as provided in subsection
10.1 or the payment of cash in exchange for all or part of a Stock Option as
provided in subsection 10.2 (which acceleration or payment could be deemed a
"payment" within the meaning of Section 280G(b)(2) of the Code), together with
any other payments that such Participant has the right to receive from the
Company or any corporation that is a member of an "affiliated group" (as defined
in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of
which the Company is a member, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Code), then the payments to such
Participant pursuant to subsection 10.1 or 10.2 shall be reduced to the largest
amount as will result in no portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code.
SECTION 11
General Provisions
11.1 No Rights to Awards. No Participant or other person shall have any
claim to be granted any Incentive Award under the Plan, and there is no
obligation of uniformity of treatment of Participants or holders or
beneficiaries of Incentive Awards under the Plan. The terms and conditions of
Incentive Awards of the same type and the determination of the Committee to
grant a waiver or modification of any Incentive Award and the terms and
conditions thereof need not be the same with respect to each Participant.
11.2 Withholding. The Company or a Subsidiary shall be entitled to (a)
withhold and deduct from future wages of a Participant (or from other amounts
that may be due and owing to a Participant from the Company or a Subsidiary), or
make other arrangements for the collection of, all legally required amounts
necessary to satisfy any and all federal, state, and local withholding and
employment-related tax requirements attributable to an Incentive Award,
including, without limitation, the grant, exercise, or vesting of, or payment of
dividends with respect to, an Incentive Award or a disqualifying disposition of
Common Stock received upon exercise of an incentive stock option; or (b) require
a Participant promptly to remit the amount of such withholding to the Company
before taking any action with respect to an Incentive Award. Unless the
Committee determines otherwise, withholding may be satisfied by withholding
Common Stock to be received upon exercise or by delivery to the Company of
previously owned Common Stock. The Company may establish such rules and
procedures concerning timing of any withholding election as it deems appropriate
to comply with Rule 16b-3 under the Act.
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11.3 Compliance With Laws; Listing and Registration of Shares. All
Incentive Awards granted under the Plan (and all issuances of Common Stock or
other securities under the Plan) shall be subject to all applicable laws, rules,
and regulations, and to the requirement that if at any time the Committee shall
determine, in its discretion, that the listing, registration, or qualification
of the shares covered thereby upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory body, is
necessary or desirable as a condition of, or in connection with, the grant of
such Incentive Award or the issue or purchase of shares thereunder, such
Incentive Award may not be exercised in whole or in part, or the restrictions on
such Incentive Award shall not lapse, unless and until such listing,
registration, qualification, consent, or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
11.4 Limit on Plan Awards. No Participant shall be eligible to receive
Incentive Awards under the Plan which in the aggregate constitute more than 25%
of the total Incentive Awards granted under the Plan.
11.5 No Limit on Other Compensation Arrangements. Nothing contained in
the Plan shall prevent the Company or any Subsidiary from adopting or continuing
in effect other or additional compensation arrangements, including the grant of
stock options and other stock-based awards, and such arrangements may be either
generally applicable or applicable only in specific cases.
11.6 No Right to Employment. The grant of an Incentive Award shall not
be construed as giving a Participant the right to be retained in the employ of
the Company or any Subsidiary. The Company or any Subsidiary may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any
written agreement with a Participant.
11.7 Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Michigan and applicable federal law.
11.8 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining provisions of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
SECTION 12
Termination and Amendment
The Board may terminate the Plan at any time, or may from time
to time amend the Plan as it deems proper and in the best interests of the
Company, provided that without stockholder approval no such amendment may: (a)
materially increase either the benefits to Participants under the Plan or the
number of shares that may be issued under the Plan; (b) materially modify the
eligibility requirements; (c) modify the formula grant provisions of subsection
5.5 with respect to nonemployee directors more than once in any six month
period, or (d) impair any outstanding Incentive Award without the consent of the
Participant, except according to the terms of the Plan or the Incentive Award.
No termination, amendment, or modification of the Plan shall become effective
with respect to any Incentive Award previously granted under the Plan without
the prior written consent of the Participant holding such Incentive Award unless
such amendment or modification operates solely to the benefit of the
Participant.
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SECTION 13
Effective Date and Duration of the Plan
This Plan shall take effect upon approval by the shareholders
at the 1995 Annual Meeting of Shareholders or any adjournment thereof or at a
Special Meeting of Shareholders. Unless earlier terminated by the Board of
Directors, the Plan shall terminate on November 21, 2005. No Incentive Award
shall be granted under the Plan after such date.
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