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Exhibit - 10.1
FORM OF AXCELIS TECHNOLOGIES, INC.
2000 STOCK PLAN
ARTICLE I
PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Axcelis Technologies, Inc. 2000 Stock
Plan (hereinafter referred to as the "Plan") is to assist in attracting and
retaining highly competent employees, directors and consultants and to act as an
incentive in motivating selected employees, directors and consultants of Axcelis
Technologies, Inc. and its Subsidiaries (as defined below) to achieve long-term
corporate objectives.
1.02 ADOPTION AND TERM. The Plan has been approved by the Board of
Directors of Axcelis Technologies, Inc. and its stockholder to be effective as
of the date of the consummation of an initial public offering of the Company's
common stock (the "Effective Date"). The Plan shall remain in effect until
terminated by action of the Board; provided, however, that no Incentive Stock
Option (as defined below) may be granted hereunder after the tenth anniversary
of the Effective Date.
ARTICLE II
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the
following meanings:
2.01 AWARD means any grant to a Participant of one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in Article VI,
Stock Appreciation Rights described in Article VI, Restricted Shares described
in Article VII and Performance Awards described in Article VIII.
2.02 AWARD AGREEMENT means a written agreement between the Company and
a Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
2.03 AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.04 BENEFICIARY means an individual, trust or estate who or which, by
a written designation of the Participant filed with the Company or by operation
of law, succeeds to the
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rights and obligations of the Participant under the Plan and an Award Agreement
upon the Participant's death.
2.05 BOARD means the Board of Directors of the Company.
2.06 CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of any one of the following events after Eaton Corporation
disposes of substantially all of its interest in the Company:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of
either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, or
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company or the
acquisition of assets of another corporation (a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 75% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation which as a
result of such transaction
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owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person
(excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 25% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination;
or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
Neither the initial public offering of common stock of the Company nor the
disposition by Eaton of all or any portion of its interest in the Company shall
be a Change in Control for purposes of this Agreement.
2.07 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code include that section and any comparable
section or sections of any future legislation that amends, supplements or
supersedes said section.
2.08 COMPANY means Axcelis Technologies, Inc., a Delaware corporation,
and its successors.
2.09 COMMON STOCK means Common Stock of the Company, par value $0.001
per share.
2.10 COMPANY VOTING SECURITIES means the combined voting power of all
outstanding securities of the Company entitled to vote generally in the election
of directors of the Company.
2.11 DATE OF GRANT means the date designated by the Board as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Board approves the granting of such Award.
2.12 DISABILITY means a total and permanent disability such that, due
to physical or mental illness, injury or disease, a Participant is unable to
perform any services for the Company and its Subsidiaries and, in the opinion of
a qualified physician designated by the Board, such disability will be permanent
and continuous during the remainder of the Participant's life.
2.13 EFFECTIVE DATE shall have the meaning given to such term in
Section 1.02.
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2.14 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.15 EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Board in the related Award Agreement as the amount
to be subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).
2.16 FAIR MARKET VALUE means, as of any applicable date, the closing
price of a share of the Common Stock on the Nasdaq National Market System
("NMS") or, if not then authorized for trading on the NMS but traded on a
nationally recognized exchange, the closing price of a share of the Common on
such exchange or, if not then authorized or traded on any nationally recognized
exchange, the fair market value of the Common Stock as determined in good faith
under procedures established by the Board.
2.17 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.18 MERGER means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
2.19 NON-EMPLOYEE DIRECTOR means a member of the Board who is not also
a common law employee of Company or of Eaton Corporation. A member of the Board
who is an employee of Eaton Corporation shall be deemed a Non-Employee Director
upon the earlier to occur of (i) his or her Retirement from Eaton Corporation or
(ii) the date at which Eaton Corporation's ownership of the Common Stock of the
Company is less than 20% of all then outstanding shares of Common Stock of the
Company. A member of the Board who is a common law employee of the Company shall
become a Non-Employee Director as of the date he or she ceases to be an active
employee of the Company. For purposes of this Plan, a member of the Board who
receives deferred compensation or benefits, whether through a qualified plan or
other arrangement, will not be deemed to be an active employee of the Company or
Eaton Corporation solely on account of the receipt of such deferred compensation
or benefits.
2.20 NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.21 OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.22 PARTICIPANT means a person designated to receive an Award under
the Plan in accordance with Section 5.01.
2.23 PERFORMANCE AWARDS means Awards granted in accordance with Article
VIII.
2.24 PLAN means the Axcelis Technologies, Inc. 2000 Stock Plan as
described herein, as the same may be amended from time to time.
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2.25 PURCHASE PRICE, with respect to Options, shall have the meaning
set forth in Section 6.01(c).
2.26 RESTRICTED SHARES means Common Stock subject to restrictions
imposed in connection with Awards granted under Article VII.
2.27 RETIREMENT means a Participant's voluntary Termination of
Employment with the consent of the Board.
2.28 STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article VI.
2.29 SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
2.30 TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, Disability, Retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of Disability, shall be determined in each case by the Board in its
sole discretion. In the case of a Member of the Board or consultant who is not
an employee of the Company or a Subsidiary, Termination of Employment shall mean
voluntary or involuntary termination of Board service or the consulting
relationship, as the case may be, for any reason.
ARTICLE III
ADMINISTRATION
3.01 ADMINISTRATION. The Plan shall be administered by the Board,
except (i) awards to Non-Employee Directors under Section 6.01(b) shall be
automatic and granted under the terms set forth for Non-Employee Directors under
the Plan without power or authority of the Board (or if applicable a committee)
to alter or amend the number, terms or conditions of such awards and (ii) awards
intended to qualify as exempt from the limitations on deductible compensation
imposed by Section 162(m) of the Code shall be granted and administered by a
committee appointed by the Board consisting of no fewer than two members of the
Board who meet each and all requirements to serve as outside directors within
the meaning of Section 162(m) of the Code and the regulations promulgated
thereunder (the "162(m) Committee"). Except to the extent of matters reserved
for the 162(m) Committee, the Board (or its designee, as described below) shall
have exclusive and final authority in each determination, interpretation or
other action affecting the Plan and its Participants. The Board (or its
designee, as described below) shall have the sole 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, and to take such steps in connection with the Plan and Awards
granted hereunder as it may deem necessary or advisable. The Board may, subject
to compliance with
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applicable legal requirements, delegate to a person or a committee, none of whom
need be members of the Board of the Company, such of its powers and authority
under the Plan as it deems appropriate to designated officers or employees of
the Company. The Board may appoint such person or committee to exercise any of
the authority conferred upon the Board hereunder and, if a person or committee
is designated to so serve, the term "Board" as used in this Plan shall include
such committee. In the event of any such delegation of authority or exercise of
authority by a person or committee so designated, references in the Plan to the
Board shall be deemed to refer to the delegate of the Board or such committee,
as the case may be.
ARTICLE IV
SHARES
4.01 NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan shall be 18,500,000 shares of Common
Stock. The number of shares available for issuance under the Plan shall be
subject to adjustment in accordance with Section 9.07 and, for the purposes of
granting Awards other than Incentive Stock Options, shall be increased annually
by the lesser of (i) five (5%) percent of the then number of outstanding shares
of Common Stock of the Company, (ii) 5,000,000 shares or (iii) such lesser
amount determined by the Board. The shares to be offered under the Plan shall be
authorized and unissued shares of Common Stock, or issued shares of Common Stock
which will have been reacquired by the Company.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Common Stock
covered by any unexercised portions of terminated Options (including canceled
Options) granted under Article VI, shares of Common Stock forfeited as provided
in Section 7.02(a) and shares of Common Stock subject to any Award that are
otherwise surrendered by a Participant may be subject to new Awards under the
Plan. Shares of Common Stock subject to Options, or portions thereof, that have
been surrendered in connection with the exercise of Stock Appreciation Rights
shall not be available for subsequent Awards under the Plan, but shares of
Common Stock issued in payment of such Stock Appreciation Rights shall not be
charged against the number of shares of Common Stock available for the grant of
Awards hereunder.
4.03 SPECIAL SECTION 368(c) LIMITATION. Notwithstanding any other
provision of this Plan to the contrary, no award shall be converted into shares
of Common Stock (including, but not limited to, upon exercise of an Option) if
the effect of such conversion would cause Eaton Corporation to not be in control
of the Company for purposes of Section 368(c) of the Code or prevent Eaton
Corporation from filing a consolidated federal income tax return with the
Company. Any purported conversion (including, but not limited to, an attempt to
exercise an Option) shall be void and without force or effect. The Award
purported to be converted into shares of Common Stock shall remain outstanding
without any change in rights or obligations or the Participant or the Company.
No cash or other form of consideration shall be paid or delivered in connection
with any conversion prevented by this limitation. If Eaton disposes of all or
substantially all of its interest in the Company, this Section 4.03 shall be
without further force or effect.
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ARTICLE V
PARTICIPATION
Participants in the Plan shall be such employees, directors and
consultants of the Company and its Subsidiaries as the Board, in its sole
discretion, may designate from time to time. The Board's designation of a
Participant in any year shall not require the Board to designate such person to
receive Awards in any other year. The designation of a Participant to receive an
Award under one portion of the Plan does not require the Board to include such
Participant under other portions of the Plan. The Board shall consider such
factors as it deems pertinent in selecting Participants and in determining the
types and amounts of their respective Awards.
ARTICLE VI
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.01 OPTION AWARDS.
(a) GRANT OF OPTIONS. The Board may grant, to such Participants as the
Board may select, Options entitling the Participants to purchase shares of
Common Stock from the Company in such numbers, at such prices, and on such terms
and subject to such conditions, not inconsistent with the terms of the Plan, as
may be established by the Board. The terms of any Option granted under the Plan
shall be set forth in an Award Agreement. No Participant may be granted an
Option to purchase more than 1,250,000 shares of Common Stock in any fiscal year
of the Company, except that in his or her initial year of service, a Participant
may be granted an Option to purchase up to 1,250,000 shares of Common Stock.
(b) NON-EMPLOYEE DIRECTOR OPTIONS. As of the date of the initial public
offering of the Common Stock of the Company, each person then serving as a
Non-Employee Director shall be automatically granted a Non-Qualified Stock
Option to purchase 24,000 shares of Common Stock. Each calendar year thereafter
that a Non-Employee Director is then serving as a Non-Employee Director, he or
she will be granted a Non-Qualified Stock Option to purchase 12,000 shares of
Common Stock of the Company as of the day in such year that grants of options or
other Awards are first considered. Each such option shall be evidenced by a
written Award Agreement that shall set forth the following terms:
(1) The per share Purchase Price shall be equal to the Fair
Market Value of a share of Common Stock on the date of grant;
(2) The Option shall expire on the 10th anniversary of the
date of grant;
(3) The Option shall be fully vested on the 181st day after
the date of grant; and
(4) The Option shall be exercisable in accordance with Section
6.04 of this Plan but subject to Section 4.03 of this Plan.
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If a member of the Board of Directors becomes a Non-Employee Director
(including as a result of the operation of the second or third sentences of
Section 2.19 of this Plan) on a day other than the day of the initial public
offering of the Common Stock of the Company, (i) he or she shall be granted a
Non-Qualified Option to purchase up to 24,000 shares of Common Stock as of the
date he or she first becomes a Non-Employee Director subject to the terms set
forth in (1) through (4) above and (ii) he or she shall be eligible to receive a
grant of a Non-Qualified Stock Option as provided above on the day in the
subsequent calendar year and each calendar year thereafter on which grants of
options or other Awards under this Plan are first considered as long as he or
she serves as a Non-Employee Director. Nothing set forth in this section shall
prevent the Board from considering Non-Employee Directors for other awards under
this Plan and from making any Awards to Non-Employee Directors.
(c) PURCHASE PRICE OF OPTIONS. Subject to Section 6.01(e) with respect
to certain Incentive Stock Options, the Purchase Price of each share of Common
Stock which may be purchased upon exercise of any Option granted under the Plan
shall be determined by the Board; provided, however, that the Purchase Price
shall in all cases be equal to or greater than the Fair Market Value on the Date
of Grant.
(d)) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in
the Plan, the Board may designate, at the time of the grant of an Option, such
Option as an Incentive Stock Option or a Non-Qualified Stock Option; provided,
however, that an Option may be designated as an Incentive Stock Option only if
the applicable Participant is an employee of the Company or a Subsidiary on the
Date of Grant.
(e) SPECIAL INCENTIVE STOCK OPTION RULES. No Participant may be granted
Incentive Stock Options under the Plan (or any other plans of the Company and
its Subsidiaries) that would result in Incentive Stock Options to purchase
shares of Common Stock with an aggregate Fair Market Value (measured on the Date
of Grant) of more than $100,000 first becoming exercisable by such Participant
in any one calendar year. Notwithstanding any other provision of the Plan to the
contrary, no Incentive Stock Option shall be granted to any person who, at the
time the Option is granted, owns stock (including stock owned by application of
the constructive ownership rules in Section 424(d) of the Code) possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any Subsidiary, unless at the time the Incentive Stock Option is
granted the Option price is at least 110% of the Fair Market Value of the Common
Stock subject to the Incentive Stock Option and the Incentive Stock Option by
its terms is not exercisable for more than five (5) years from the Date of
Grant.
(f) RIGHTS AS A SHAREHOLDER. A Participant or a transferee of an Option
pursuant to Section 9.04 shall have no rights as a shareholder with respect to
the shares of Common Stock covered by an Option until that Participant or
transferee shall have become the holder of record of any such shares, and no
adjustment shall be made with respect to any such shares of Common Stock for
dividends in cash or other property or distributions of other rights on the
Common Stock for which the record date is prior to the date on which that
Participant or transferee shall have become the holder of record of any shares
covered by such Option; provided, however, that Participants are entitled to
share adjustments to reflect capital changes under Section 9.07.
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6.02 STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHT AWARDS. The Board is authorized to grant
to any Participant one or more Stock Appreciation Rights. Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Options; provided, however, that: (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 expire and not be exercisable
upon the exercise of any Option with respect to the same share, and (iii) an
Option and a Stock Appreciation Right covering the same share of Common Stock
may not be exercised simultaneously. Upon exercise of a Stock Appreciation Right
with respect to a share of Common Stock, the Participant shall be entitled to
receive an amount equal to the excess, if any, of (A) the Fair Market Value of a
share of Common Stock on the date of exercise over (B) the Exercise Price of
such Stock Appreciation Right established in the Award Agreement, which amount
shall be payable as provided in Section 6.02(c).
(b) EXERCISE PRICE. The Exercise Price established for any Stock
Appreciation Right granted under this Plan shall be determined by the Board, but
in the case of Stock Appreciation Rights granted in tandem with Options shall
not be less than the Purchase Price of the related Options. Upon exercise of
Stock Appreciation Rights, the number of shares issuable upon exercise under any
related Options shall automatically be reduced by the number of shares of Common
Stock represented by such Options which are surrendered as a result of the
exercise of such Stock Appreciation Rights.
(c) PAYMENT OF INCREMENTAL VALUE. Any payment that may become due from
the Company by reason of a Participant's exercise of a Stock Appreciation Right
may be paid to the Participant as determined by the Board (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 to be made in Common Stock,
the number of shares of Common Stock to be delivered in satisfaction of such
payment shall be determined by dividing the amount of such payment or portion
thereof by the Fair Market Value on the date of exercise . No fractional share
of Common Stock shall be issued to make any payment in respect of Stock
Appreciation Rights; if any fractional share would otherwise be issuable, the
combination of cash and Common Stock payable to a Participant shall be adjusted
as directed by the Board to avoid the issuance of any fractional share.
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6.03 TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) CONDITIONS ON EXERCISE. In addition to the conditions imposed under
Section 4.03 of this Plan, an Award Agreement with respect to Options and/or
Stock Appreciation Rights may contain such waiting periods, exercise dates and
restrictions on exercise (including, but not limited to, periodic installments)
as may be determined by the Board at the time of grant. Without limiting the
applicability of Section 4.03, no Option shall be exercisable prior to the date
of consummation of a disposition by Eaton Corporation of all or substantially
all of its interest in the Company.
(b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(i) Expiration of the Option or Stock Appreciation Right as
provided in the related Award Agreement; or
(ii) Termination of the Award as provided in Section 6.03(e),
following the applicable Participant's Termination of Employment; or
(iii) In the case of an Incentive Stock Option, ten years from
the Date of Grant (five years in certain cases, as described in Section
6.01(e)) Non-Qualified Stock Options may, if so approved by the Board,
have a stated term in excess of ten years, but such Options shall in
all events be subject to termination in accordance with clauses (i) and
(ii) above); or
(iv) Solely in the case of a Stock Appreciation Right granted
in tandem with an Option, upon the expiration of the related Option.
(c) ACCELERATION OF EXERCISE TIME. The Board, in its sole discretion,
shall have the right (but shall not in any case be obligated), exercisable at
any time after the Date of Grant, to permit the exercise of any Option or Stock
Appreciation Right prior to the time such Option or Stock Appreciation Right
would otherwise become exercisable under the terms of the related Award
Agreement.
(d) EXTENSION OF EXERCISE TIME. In addition to the extensions permitted
under Section 6.03(e) in the event of Termination of Employment, the Board, in
its sole discretion, shall have the right (but shall not in any case be
obligated), exercisable on or at any time after the Date of Grant, to permit the
exercise of any Option or Stock Appreciation Right after its expiration date
described in Section 6.03(e), subject, however, to the limitations described in
Sections 6.03(b)(i), (iii) and (iv).
(e) EXERCISE OF OPTIONS OR STOCK APPRECIATION RIGHTS UPON TERMINATION
OF EMPLOYMENT. Unless an Optionee's Award Agreement provides otherwise, the
following rules shall govern the treatment of Options and Stock Appreciation
Rights upon Termination of Employment:
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(i) TERMINATION OF VESTED OPTIONS AND STOCK APPRECIATION
RIGHTS UPON TERMINATION OF EMPLOYMENT.
(a) REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT. In the event of a Participant's voluntary or
involuntary Termination of Employment for any reason other
than death, Disability or Retirement, the right of the
Participant to exercise any Option or Stock Appreciation Right
shall terminate on the date of such Termination of Employment,
unless the exercise period is extended by the Board in
accordance with Section 6.03(d).
(b) DEATH, DISABILITY OR RETIREMENT. In the event of
a Participant's Termination of Employment by reason of death,
Disability or Retirement, the right of the Participant to
exercise any Option or Stock Appreciation Right which he or
she was entitled to exercise upon Termination of Employment
(or which became exercisable pursuant to Section 6.03(e)(ii))
shall, unless the exercise period is extended by the Board in
accordance with Section 6.03(d), terminate upon the earlier of
(i) the later to occur of (A) first anniversary of the date of
such Termination of Employment and (B) the first anniversary
of the date of consummation of a public offering of the Common
Stock and (ii) the date of expiration of the Option determined
pursuant to Section 6.03(b)(i), (iii) or (iv).
(ii) TERMINATION OF UNVESTED OPTIONS OR STOCK APPRECIATION
RIGHTS UPON TERMINATION OF EMPLOYMENT. Subject to Section 6.03(c), to
the extent the right to exercise an Option or a Stock Appreciation
Right, or any portion thereof, has not accrued as of the date of
Termination of Employment, such right shall expire at the date of such
Termination of Employment regardless of the reason for such Termination
of Employment. Notwithstanding the foregoing, the Board, in its sole
discretion and under such terms as it deems appropriate, may permit,
for a Participant who terminates employment by reason of Retirement and
who will continue to render significant services to the Company or one
of its Subsidiaries after his or her Termination of Employment, the
continued vesting of his or her Options and Stock Appreciation Rights
during the period in which that individual continues to render such
services.
6.04 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 or employee of the Company designated in the
Award Agreement at or before the close of business on 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 Board may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a)
shares of Common Stock held by the Participant for at least six months (which
may include Restricted Shares, subject to such rules as the Board deems
appropriate) or (b) any combination of cash and Common Stock or (c) such other
consideration as the Board deems appropriate and in compliance with applicable
law (including payment in accordance with a cashless exercise program under
which, if so instructed by a Participant, shares of Common Stock may be issued
directly to the Participant's broker or dealer upon receipt of an irrevocable
written notice of
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exercise from the Participant). In the event that any shares of 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 shares 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 of Common Stock transferred to the Company. The Participant may not
transfer to the Company in satisfaction of the Purchase Price 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
may be used for any proper corporate purpose. Unless the Board shall otherwise
determine, any shares of 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.
6.05 CHANGE IN CONTROL. Unless otherwise provided by the Board in the
applicable Award Agreement, in the event of a Change in Control, all Options and
Stock Appreciation Rights outstanding on the date of such Change in Control
shall become immediately and fully exercisable. The provisions of this Section
6.05 shall not be applicable to any Options or Stock Appreciation Rights granted
to a Participant if any Change in Control results from such Participant's
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of Company Voting Securities.
ARTICLE VII
RESTRICTED SHARES
7.01 RESTRICTED SHARE AWARDS. Subject to Section 4.03 of this Plan, the
Board may grant to any Participant an Award of such number of shares of Common
Stock on such terms, conditions and restrictions, whether based on performance
standards, periods of service, retention by the Participant of ownership of
purchased or designated shares of Common Stock or other criteria, as the Board
shall establish. The terms of any Restricted Share Award granted under this Plan
shall be set forth in an Award Agreement which shall contain provisions
determined by the Board and not inconsistent with this Plan.
(a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable
after the Date of Grant of a Restricted Share Award by the Board, the
Company shall cause to be transferred on the books of the Company or
its agent, shares of Common Stock, registered on behalf of the
Participant, evidencing the Restricted Shares covered by the Award,
subject to forfeiture to the Company as of the Date of Grant if an
Award Agreement with respect to the Restricted Shares covered by the
Award is not duly executed by the Participant and timely returned to
the Company. All shares of Common Stock covered by Awards under this
Article VII shall be subject to the restrictions, terms and conditions
contained in the Plan and the applicable Award Agreements entered into
by the appropriate Participants. Until the lapse or release of all
restrictions applicable to an Award of Restricted Shares the share
certificates representing such Restricted Shares may be held in custody
by the Company, its designee, or, if the certificates bear a
restrictive legend, by the Participant. Upon the lapse or release of
all restrictions with respect to an Award as described in
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Section 7.01(d), one or more share certificates, registered in the name
of the Participant, for an appropriate number of shares as provided in
Section 7.01(d), free of any restrictions set forth in the Plan and the
related Award Agreement shall be delivered to the Participant.
(b) SHAREHOLDER RIGHTS. Beginning on the Date of Grant of a
Restricted Share Award and subject to execution of the related Award
Agreement as provided in Section 7.01(a), and except as otherwise
provided in such Award Agreement, the Participant shall become a
shareholder of the Company with respect to all shares subject to the
Award Agreement and shall have all of the rights of a shareholder,
including, but not limited to, the right to vote such shares and the
right to receive dividends; provided, however, that any shares of
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed,
shall be subject to the same restrictions as such Restricted Shares and
held or restricted as provided in Section 7.01(a).
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws
of descent and distribution or to an inter vivos trust with respect to
which the Participant is treated as the owner under Sections 671
through 677 of the Code), pledged or sold prior to the lapse of the
restrictions applicable thereto.
(d) DELIVERY OF SHARES UPON VESTING. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and
the satisfaction of or release from any other conditions prescribed by
the Board, or at such earlier time as provided under the provisions of
Section 7.03, the restrictions applicable to the Restricted Shares
shall lapse. As promptly as administratively feasible thereafter,
subject to the requirements of Section 9.05, the Company shall deliver
to the Participant or, in case of the Participant's death, to the
Participant's Beneficiary, one or more share certificates for the
appropriate number of shares of Common Stock, free of all such
restrictions, except for any restrictions that may be imposed by law.
7.02 TERMS OF RESTRICTED SHARES.
(a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections
7.02(b) and 7.03, Restricted Shares shall be forfeited and returned to
the Company and all rights of the Participant with respect to such
Restricted Shares shall terminate unless the Participant continues in
the service of the Company or a Subsidiary as an employee until the
expiration of the forfeiture period for such Restricted Shares and
satisfies any and all other conditions set forth in the Award
Agreement. The Board shall determine the forfeiture period (which may,
but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.
(b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything
contained in this Article VII to the contrary, the Board may, in its
sole discretion, waive the forfeiture period and any other conditions
set forth in any Award Agreement under appropriate
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circumstances (including the death, Disability or Retirement of the
Participant or a material change in circumstances arising after the
date of an Award) and subject to such terms and conditions (including
forfeiture of a proportionate number of the Restricted Shares) as the
Board shall deem appropriate.
(c) REPURCHASE RIGHTS. The Board may, but shall not be
required to, grant to Participants who promptly inform the Board of
their intention to elect federal income taxation under Section 83(b) of
the Code, the right to require the Company to repurchase upon their
termination of employment for any reason other than cause the shares
for which federal income tax treatment under Section 83(b) of the Code
was elected. Such repurchase right, if granted, may be exercised by the
Participant at any time after his or her termination of employment at a
price to be determined by the Board at the date of grant but in no
event greater than the fair market value of such shares at the time
federal income tax treatment under Section 83(b) of the Code was
elected.
7.03 CHANGE IN CONTROL. Unless otherwise provided by the Board in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificates for such shares in accordance with Section 7.01(d).
ARTICLE VIII
PERFORMANCE AWARDS
8.01 PERFORMANCE AWARDS.
(a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE
AMOUNTS. Subject to Section 4.03 of this Plan, the Board may grant
Performance Awards to Participants. A Performance Award shall consist
of the right to receive a payment (measured by the Fair Market Value of
a specified number of shares of Common Stock, increases in such Fair
Market Value during the Award Period and/or a fixed cash amount)
contingent upon the extent to which certain predetermined performance
targets have been met during an Award Period. Performance Awards may be
made in conjunction with, or in addition to, any other Awards made
under this Plan. The Award Period shall be two or more fiscal or
calendar years as determined by the Board. The Board, in its discretion
and under such terms as it deems appropriate, may permit newly eligible
employees, such as those who are promoted or newly hired, to receive
Performance Awards after an Award Period has commenced.
(b) PERFORMANCE TARGETS. The performance targets may include
such goals related to the performance of the Company and/or the
performance of a Participant as may be established by the Board in its
discretion. The performance targets established by the Board may vary
for different Award Periods and need not be the same for each
Participant receiving a Performance Award in an Award Period. The
Board, in its discretion, but only under extraordinary circumstances as
determined by the Board, may
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change any prior determination of performance targets for any Award
Period at any time prior to the final determination of the value of a
related Performance Award when events or transactions occur to cause
such performance targets to be an inappropriate measure of achievement.
(c) EARNING PERFORMANCE AWARDS. The Board, on or as soon as
practicable after the Date of Grant, shall prescribe a formula to
determine the percentage of the applicable Performance Award to be
earned based upon the degree of attainment of performance targets.
(d) PAYMENT OF EARNED PERFORMANCE AWARDS. Payments of earned
Performance Awards shall be made in cash or shares of Common Stock or a
combination of cash and shares of Common Stock, in the discretion of
the Board. The Board, in its sole discretion, may provide such terms
and conditions with respect to the payment of earned Performance Awards
as it may deem desirable.
8.02 TERMS OF PERFORMANCE AWARDS.
(a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below
or in Section 8.03, in the case of a Participant's Termination of
Employment prior to the end of an Award Period, the Participant will
not have earned any Performance Awards for that Award Period.
(b) RETIREMENT. If a Participant's Termination of Employment
is because of Retirement prior to the end of an Award Period, the
Participant will not be paid any Performance Award, unless the Board,
in its sole and exclusive discretion, determines that an Award should
be paid. In such a case, the Participant shall be entitled to receive a
pro-rata portion of his or her Award as determined under subsection
(d).
(c) DEATH OR DISABILITY. If a Participant's Termination of
Employment is due to death or to Disability (as determined in the sole
and exclusive discretion of the Board) prior to the end of an Award
Period, the Participant or the Participant's personal representative
shall be entitled to receive a pro-rata share of his or her Award as
determined under subsection (d).
(d) PRO-RATA PAYMENT. The amount of any payment to be made to
a Participant whose employment is terminated by Retirement, death or
Disability (under the circumstances described in subsections (b) and
(c)) will be the amount determined by multiplying (i) the amount of the
Performance Award that would have been earned through the end of the
Award Period had such employment not been terminated by (ii) a
fraction, the numerator of which is the number of whole months such
Participant was employed during the Award Period, and the denominator
of which is the total number of months of the Award Period. Any such
payment made to a Participant whose employment is terminated prior to
the end of an Award Period shall be made at the end of such Award
Period, unless otherwise determined by the Board in its sole
discretion. Any partial payment previously made or credited to a
deferred account for the benefit of a
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Participant in accordance with Section 8.01(d) of the Plan shall be
subtracted from the amount otherwise determined as payable as provided
in this Section 8.02(d).
(e) OTHER EVENTS. Notwithstanding anything to the contrary in
this Article VIII, the Board may, in its sole and exclusive discretion,
determine to pay all or any portion of a Performance Award to a
Participant who has terminated employment prior to the end of an Award
Period under certain circumstances (including the death, Disability or
Retirement of the Participant or a material change in circumstances
arising after the Date of Grant), subject to such terms and conditions
as the Board shall deem appropriate.
8.03 CHANGE IN CONTROL. Unless otherwise provided by the Board in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully vested and payable
to all Participants and shall be paid to Participants within 30 days after such
Change in Control.
ARTICLE IX
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
9.01 PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Board have
the power to grant any Award under the Plan the terms of which are 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 9.03
and Section 9.07, the terms of any Award granted under the Plan may not be
changed after the Date of Grant of such Award so as to materially decrease the
value of the Award without the express written approval of the holder.
9.02 AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have received and acknowledged notice of the
Award authorized by the Board expressly granting the Award to such person and
containing provisions setting forth the terms of the Award.
9.03 MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of that Award) after its Date of Grant except by express
written agreement between the Company and such Participant, provided that any
such change (a) may not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Board.
9.04 LIMITATION ON TRANSFER. Except as provided in Section 7.01(c) in
the case of Restricted Shares, 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 and, during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
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exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Board may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to such persons, including, but not limited to, immediate family
members of the Participant or to trusts or partnerships for such family members,
and the Board may also amend outstanding Non-Qualified Stock Options to provide
for such transferability.
9.05 TAXES. The Company shall be entitled, if the Board 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 (i.e. a disposition prior to the
expiration of the requisite holding periods) of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment of cash
or issuance of shares upon exercise or vesting of an Award unless indemnified to
its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Board and shall be payable
by the Participant in cash at such time as the Board determines; provided,
however, that with the approval of the Board, the Participant may elect to meet
his or her withholding requirement, in whole or in part, by having withheld from
such Award at the appropriate time that number of shares of Common Stock,
rounded up to the next whole share, the Fair Market Value of which is equal to
the amount of withholding taxes due.
9.06 REDEMPTION OF AWARDS. Upon ten (10) days' prior written notice to
a Participant, the Company, by action of the Board, may redeem any Award granted
under the Plan, whether or not vested, in the manner described below. In the
case of an Option or Stock Appreciation Right, the redemption shall be for an
amount in cash or other consideration determined by the Board equal to the
excess of (i) the aggregate Fair Market Value of the shares of Common Stock
subject to such Option or Stock Appreciation Right over (ii) the aggregate
Purchase Price of such Option or Exercise Price of such Stock Appreciation
Right. In the case of Restricted Shares and Performance Awards, the redemption
shall be for an amount in cash or other consideration determined by the Board
equal to the aggregate Fair Market Value of the shares of Common Stock subject
to such Award.
9.07 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, the number and kind of shares available for Awards subsequently
granted under the Plan and the maximum number of shares in respect of
which Awards can be made to any Participant in any calendar year 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. The Board shall have the
power and sole discretion to determine the amount of the adjustment to
be made in each case.
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(b) MERGER. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost,
be entitled upon any exercise of an Option or receipt of any other
Award to receive (subject to any required action by shareholders), in
lieu of the number of shares of Common Stock receivable or exercisable
pursuant to such Award prior to such Merger, the number and class of
shares or other securities to which such Participant would have been
entitled pursuant to the terms of the Merger if, at the time of the
Merger, such Participant had been the holder of record of a number of
shares of Common Stock equal to the number of shares of Common Stock
receivable or exercisable pursuant to such Award. Comparable rights
shall accrue to each Participant in the event of successive Mergers of
the character described above. In the event of a Merger in which the
Company is not the surviving corporation, the surviving, continuing,
successor or purchasing corporation, as the case may be (the "Acquiring
Corporation"), will either assume the Company's rights and obligations
under outstanding Award Agreements or substitute awards in respect of
the Acquiring Corporation's stock for outstanding Awards, provided,
however, that if the Acquiring Corporation does not assume or
substitute for such outstanding Awards, the Board shall provide prior
to the Merger that any unexercisable and/or unvested portion of the
outstanding Awards shall be immediately exercisable and vested as of a
date prior to such Merger, as the Board so determines. The exercise
and/or vesting of any Award that was permissible solely by reason of
this Section 9.07(b) shall be conditioned upon the consummation of the
Merger. Any Options which are neither assumed by the Acquiring
Corporation not exercised as of the date of the Merger shall terminate
effective as of the effective date of the Merger.
(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES.
After any merger in which the Company or a Subsidiary shall be a
surviving corporation, the Board 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
merger whose shares of stock subject to the old options may no longer
be issued following the merger. The manner of application of the
foregoing provisions to such options and any appropriate adjustments
shall be determined by the Board in its sole discretion. Any such
adjustments may provide for the elimination of any fractional shares
which might otherwise become subject to any Options.
9.08 CERTAIN CONDITIONS ON AWARDS. The Board may cancel any unexpired
Awards at any time the Participant is not in compliance with any agreement
between the Company and the Participant or any other legal obligation of the
Participant relating to non-competition, confidentiality or proprietary
interests and failure to comply with such agreements or obligations prior to, or
during the twelve (12) months after, any exercise of an Option or Stock
Appreciation Right shall result in the rescission of the exercise and the
difference between the Fair Market Value on the date of exercise of the subject
shares of Common Stock and the Purchase Price or Exercise Price, as the case may
be, shall be returned to the Company by the Participant in cash within ten (10)
days after notice of the rescission has been given to the Participant by the
Company. Such notice may be given at any time within two years of the date of
exercise.
9.09 INITIAL PUBLIC OFFERING. As a condition of participation under
this Plan, each Participant shall be obligated to cooperate with the Company and
the underwriters in connection
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with any public offering of the Company's securities and any transactions
relating thereto and shall execute and deliver such agreements and documents,
including without limitation, a lock-up agreement, as may be requested by the
Company or the underwriters. The Participants' obligations under this Section
9.09 shall apply to any shares of Common Stock issued under the Plan as well as
to any and all other securities of the Company or its successor for which such
Common Stock may be exchanged or into which such Common Stock may be converted.
9.10 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under the 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 any of its Subsidiaries.
9.11 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
9.12 GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the internal laws of the State of Delaware,
except for its principles of conflict of laws, and construed in accordance
therewith.
9.13 NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Board 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 Board.
9.14 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 had
been used in the Plan.
9.15 SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
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 by 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, such Award and every other Award at any time granted under the Plan
shall remain in full force and effect.
9.16 AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time. 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, materially
adversely affect the right of such individual under such Award.
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(b) TERMINATION. The Board shall have the right and the power
to terminate the Plan at any time. 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 had the Plan not
been terminated.
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