EXHIBIT 10.01
2002 INCENTIVE PLAN
OF
OCEANEERING INTERNATIONAL, INC.
1. Plan. This 2002 Incentive Plan of Oceaneering International, Inc.
(the "Plan") was adopted by Oceaneering International, Inc. (the "Company") to
reward certain corporate officers and key employees of the Company and certain
independent consultants by enabling them to acquire shares of common stock of
the Company and/or through the provision of cash payments.
2. Objectives. This Plan is designed to attract and retain key
employees of the Company and its Subsidiaries, to attract and retain qualified
directors of the Company, to attract and retain consultants and other
independent contractors, to encourage the sense of proprietorship of such
employees, directors and independent contractors and to stimulate the active
interest of such persons in the development and financial success of the Company
and its Subsidiaries. These objectives are to be accomplished by making Awards
under this Plan and thereby providing Participants with a proprietary interest
in the growth and performance of the Company and its Subsidiaries.
3. Definitions. As used herein, the terms set forth below shall have
the following respective meanings:
"Annual Director Award Date" means the first business day of the month
next succeeding the date upon which the annual meeting of stockholders of the
Company is held in such year.
"Authorized Officer" means the Chairman of the Board or the Chief
Executive Officer of the Company (or any other senior officer of the Company to
whom either of them shall delegate the authority to execute any Award
Agreement).
"Award" means the grant of any Option, SAR, Stock Award or Cash Award,
whether granted singly, in combination or in tandem, to a Participant pursuant
to such applicable terms, conditions and limitations as the Committee may
establish in order to fulfill the objectives of the Plan.
"Award Agreement" means any written agreement between the Company and a
Participant setting forth the terms, conditions and limitations applicable to an
Award.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Committee" means the Compensation Committee of the Board or such other
committee of the Board as is designated by the Board to administer the Plan.
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"Common Stock" means the Common Stock, par value $0.25 per share, of
the Company.
"Company" means Oceaneering International, Inc., a Delaware
corporation.
"Director" means an individual serving as a member of the Board.
"Dividend Equivalents" means, with respect to shares of Restricted
Stock that are to be issued at the end of the Restriction Period, an amount
equal to all dividends and other distributions (or the economic equivalent
thereof) that are payable to stockholders of record during the Restriction
Period on a like number of shares of Common Stock.
"Employee" means an employee of the Company or any of its Subsidiaries
and an individual who has agreed to become an employee of the Company or any of
its Subsidiaries and actually becomes such an employee within the following six
months.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the last preceding date on which such a sale was so reported, or,
at the discretion of the Committee, the price prevailing on the exchange at the
time of exercise, (ii) if shares of Common Stock are not so listed but are
quoted on the Nasdaq National Market, the mean between the highest and lowest
sales price per share of Common Stock reported by the Nasdaq National Market on
that date, or, if there shall have been no such sale so reported on that date,
on the last preceding date on which such a sale was so reported, (iii) if the
Common Stock is not so listed or quoted, the mean between the closing bid and
asked price on that date, or, if there are no quotations available for such
date, on the last preceding date on which such quotations shall be available, as
reported by the Nasdaq Stock Market, or, if not reported by the Nasdaq Stock
Market, by the National Quotation Bureau Incorporated or (iv) if shares of
Common Stock are not publicly traded, the most recent value determined by an
independent appraiser appointed by the Company for such purpose.
"Incentive Option" means an Option that is intended to comply with the
requirements set forth in Section 422 of the Code.
"Independent Contractor" means a person providing services to the
Company or any of its Subsidiaries, except an Employee or Nonemployee Director,
who is eligible to receive such Awards as could be made to an Employee, other
than Incentive Options.
"Option" means a right to purchase a specified number of shares of
Common Stock at a specified price.
"Nonqualified Option" means an Option that is not intended to comply
with the requirements set forth in Section 422 of the Code.
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"Participant" means an Employee, Director or Independent Contractor to
whom an Award has been made under this Plan.
"Performance Award" means an award made pursuant to this Plan to a
Participant who is an Employee or Independent Contractor, which Award is subject
to the attainment of one or more Performance Goals.
"Performance Goal" means a standard established by the Committee, to
determine in whole or in part whether a Performance Award shall be earned.
"Restricted Stock" means any Common Stock that is restricted or subject
to forfeiture provisions.
"Restriction Period" means a period of time beginning as of the date
upon which an Award of Restricted Stock is made pursuant to this Plan and ending
as of the date upon which the Common Stock subject to such Award is no longer
restricted or subject to forfeiture provisions.
"SAR" means a right to receive a payment, in cash or Common Stock,
equal to the excess of the Fair Market Value or other specified valuation of a
specified number of shares of Common Stock on the date the right is exercised
over a specified strike price, in each case, as determined by the Committee.
"Stock Award" means an award in the form of shares of Common Stock or
units denominated in shares of Common Stock.
"Subsidiary" means (i) in the case of a corporation, any corporation of
which the Company directly or indirectly owns shares representing more than 50%
of the combined voting power of the shares of all classes or series of capital
stock of such corporation which have the right to vote generally on matters
submitted to a vote of the stockholders of such corporation and (ii) in the case
of a partnership or other business entity not organized as a corporation, any
such business entity of which the Company directly or indirectly owns more than
50% of the voting, capital or profits interests (whether in the form of
partnership interests, membership interests or otherwise).
4. Eligibility.
(a) Employees. Key Employees eligible for Awards under this Plan are
those who hold positions of responsibility and whose performance, in
the judgment of the Committee, can have a significant effect on the
success of the Company and its Subsidiaries.
(b) Directors. Directors eligible for Director Awards under this Plan
are those who are not employees of the Company or any of its
Subsidiaries ("Nonemployee Directors").
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(c) Independent Contractors. Independent Contractors eligible for
Awards under this Plan are those Independent Contractors providing
services to, or who will provide services to, the Company or any of its
Subsidiaries.
5. Common Stock Available for Awards. Subject to the provisions of
paragraph 15 hereof, there shall be available for Awards under this Plan granted
wholly or partly in Common Stock (including rights or options that may be
exercised for or settled in Common Stock) an aggregate of 1,325,000 shares of
Common Stock. No more than 975,000 shares of Common Stock shall be available
under this Plan for Incentive Options. No more than 350,000 shares of Common
Stock shall be available under this Plan for Awards other than Options or SARs.
Shares of Common Stock awarded pursuant to the 1996 Incentive Plan, the 1999
Incentive Plan or the 2000 Non-Executive Incentive Plan (the "Prior Plans")
which are cancelled, terminated, forfeited, expire unexercised, are settled in
cash in lieu of Common Stock, or are exchanged for a consideration that does not
involve Common Stock will immediately become available for Awards under this
Plan. Effective as of March 28, 2002, no further awards shall be made under the
Prior Plans. Additionally, the number of shares of Common Stock that are the
subject of Awards under this Plan, that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the shares covered by an Award are not issued to a
Participant or are exchanged for Awards that do not involve Common Stock, shall
again immediately become available for Awards hereunder. The Committee may from
time to time adopt and observe such procedures concerning the counting of shares
against the Plan maximum as it may deem appropriate. The Board and the
appropriate officers of the Company shall from time to time take whatever
actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that
shares of Common Stock are available for issuance pursuant to Awards . 6.
Administration.
6. Administration.
(a) Authority of the Committee. This Plan shall be administered by the
Committee. Subject to the provisions hereof, the Committee shall have
full and exclusive power and authority to administer this Plan and to
take all actions that are specifically contemplated hereby or are
necessary or appropriate in connection with the administration hereof.
The Committee shall also have full and exclusive power to interpret
this Plan and to adopt such rules, regulations and guidelines for
carrying out this Plan as it may deem necessary or proper, all of which
powers shall be exercised in the best interests of the Company and in
keeping with the objectives of this Plan. Subject to paragraph 6(c)
hereof, the Committee may, in its discretion, provide for the extension
of the exercisability of an Award, accelerate the vesting or
exercisability of an Award, eliminate or make less restrictive any
restrictions contained in an Award, waive any restriction or other
provision of this Plan or an Award or otherwise amend or modify an
Award in any manner that is (i) not adverse to the Participant to whom
such Award was granted, (ii) consented to by such Participant or (iii)
authorized by paragraph 15(c) hereof; provided, however, that no such
action shall permit the term of any Option to be greater than five
years from the applicable grant date. The Committee may make an Award
to an individual who it expects to become an employee of the Company or
any of its Subsidiaries within the
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next six months, with such Award being subject to the individual's
actually becoming an employee within such time period, and subject to
such other terms and conditions as may be established by the Committee.
The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner
and to the extent the Committee deems necessary or desirable to further
the Plan purposes. Any decision of the Committee in the interpretation
and administration of this Plan shall lie within its sole and absolute
discretion and shall be final, conclusive and binding on all parties
concerned.
(b) Indemnity. No member of the Committee or officer of the Company to
whom the Committee has delegated authority in accordance with the
provisions of paragraph 7 of this Plan shall be liable for anything
done or omitted to be done by him or her, by any member of the
Committee or by any officer of the Company in connection with the
performance of any duties under this Plan, except for his or her own
willful misconduct or as expressly provided by statute.
(c) Prohibition on Repricing of Awards. No Award may be repriced,
replaced, regranted through cancellation or modified without
shareholder approval (except in connection with a change in the
Company's capitalization), if the effect would be to reduce the
exercise price for the shares underlying such Award.
7. Delegation of Authority. The Committee may delegate to the Chief
Executive Officer and to other senior officers of the Company its duties under
this Plan pursuant to such conditions or limitations as the Committee may
establish.
8. Awards. (a) Except as otherwise provided in paragraph 9 hereof
pertaining to Awards to Directors, the Committee shall determine the type or
types of Awards to be made under this Plan and shall designate from time to time
the Participants who are to be the recipients of such Awards. Each Award may be
embodied in an Award Agreement, which shall contain such terms, conditions and
limitations as shall be determined by the Committee in its sole discretion and
shall be signed by the Participant to whom the Award is made and by an
Authorized Officer for and on behalf of the Company. Awards may consist of those
listed in this paragraph 8(a) hereof and may be granted singly, in combination
or in tandem. Awards may also be made in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this Plan or any
other plan of the Company or any of its Subsidiaries, including the plan of any
acquired entity; provided that, except as contemplated in paragraph 15 hereof,
no Option may be issued in exchange for the cancellation of an Option with a
higher exercise price nor may the exercise price of any Option be reduced. All
or part of an Award may be subject to conditions established by the Committee,
which may include, but are not limited to, continuous service with the Company
and its Subsidiaries, achievement of specific business objectives, increases in
specified indices, attainment of specified growth rates and other comparable
measurements of performance. Upon the termination of employment by a Participant
who is an Employee, any unexercised, deferred, unvested or unpaid Awards shall
be treated as set forth in the applicable Award Agreement.
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(i) Option. An Award may be in the form of an Option. An
Option awarded pursuant to this Plan may consist of an Incentive Option
or a Nonqualified Option. The price at which shares of Common Stock may
be purchased upon the exercise of an Option shall be not less than the
Fair Market Value of the Common Stock on the date of grant. The term of
an Option shall not exceed five years from the date of grant. Subject
to the foregoing provisions, the terms, conditions and limitations
applicable to any Options awarded pursuant to this Plan, including the
term of any Options and the date or dates upon which they become
exercisable, shall be determined by the Committee.
(ii) Stock Appreciation Right. An Award may be in the form of
a SAR. The strike price for a SAR shall not be less than the Fair
Market Value of the Common Stock on the date on which the SAR is
granted. The term of a SAR shall not exceed five years from the date of
grant. Subject to the foregoing limitations, the terms, conditions and
limitations applicable to any SARs awarded pursuant to this Plan,
including the term of any SARs and the date or dates upon which they
become exercisable, shall be determined by the Committee.
(iii) Stock Award. An Award may be in the form of a Stock
Award. The terms, conditions and limitations applicable to any Stock
Awards granted pursuant to this Plan shall be determined by the
Committee.
(iv) Cash Award. An Award may be in the form of a Cash Award.
The terms, conditions and limitations applicable to any Cash Awards
granted pursuant to this Plan shall be determined by the Committee.
(v) Performance Award. Without limiting the type or number of
Awards that may be made under the other provisions of this Plan, an
Award may be in the form of a Performance Award. A Performance Award
shall be paid, vested or otherwise deliverable solely on account of the
attainment of one or more pre-established, objective Performance Goals
established by the Committee prior to the earlier to occur of (x) 90
days after the commencement of the period of service to which the
Performance Goal relates and (y) the lapse of 25% of the period of
service (as scheduled in good faith at the time the goal is
established), and in any event while the outcome is substantially
uncertain. A Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the goal is
met. Such a Performance Goal may be based on one or more business
criteria that apply to the individual, one or more business units of
the Company, or the Company as a whole, and may include one or more of
the following: revenues, income from operations, net income, stock
price, market share, earnings per share, return on equity, assets or
invested capital, economic value added, market value added, decrease in
costs or achievement of balance sheet, income statement or cash flow
objectives. Unless otherwise stated, such a Performance Goal need not
be based upon an increase or positive result under a particular
business criterion and could include, for example, maintaining the
status quo or limiting economic losses (measured, in each case, by
reference to specific business criteria). In interpreting Plan
provisions applicable to Performance Goals and Performance Awards, it
is the intent of the Plan to conform with the standards of Section
162(m) of the Code and Treasury
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Regulation Section 1.162-27(e)(2)(i), and the Committee in establishing
such goals and interpreting the Plan shall be guided by such
provisions. Prior to the payment of any compensation based on the
achievement of Performance Goals, the Committee must certify in writing
that applicable Performance Goals and any of the material terms thereof
were, in fact, satisfied. Subject to the foregoing provisions, the
terms, conditions and limitations applicable to any Performance Awards
made pursuant to this Plan shall be determined by the Committee.
(b) Notwithstanding anything to the contrary contained in this
Plan, the following limitations shall apply to any Awards made
hereunder:
(i) no Participant may be granted, during any
one-year period, Awards consisting of Options or SARs that are
exercisable for more than 300,000 shares of Common Stock;
(ii) no Participant may be granted, during any
one-year period, Stock Awards covering or relating to more
than 300,000 shares of Common Stock (the limitation set forth
in this clause (ii), together with the limitation set forth in
clause (i) above, being hereinafter collectively referred to
as the "Stock Based Awards Limitations"); and
(iii) no Participant may be granted Awards consisting
of cash or in any other form permitted under this Plan (other
than Awards consisting of Options or SARs or otherwise
consisting of shares of Common Stock or units denominated in
such shares) in respect of any one-year period having a value
determined on the date of grant in excess of $3,000,000.
(c) The Committee shall have the sole responsibility and
authority to determine the type or types of Awards to an Independent
Contractor to be made under this Plan and may make any such Awards as
could be made to an Employee, other than Incentive Options; provided
that the limitations described in paragraph 8(b) hereof shall be
inapplicable to Awards to an Independent Contractor.
9. Awards to Directors. Each Nonemployee Director of the Company shall
be granted Director Awards in accordance with this paragraph 9 and subject to
the applicable terms, conditions and limitations set forth in this Plan and the
applicable Award Agreement. Notwithstanding anything to the contrary contained
herein, Awards to Directors shall not be made in any year in which a sufficient
number of shares of Common Stock are not available to make such Awards under
this Plan.
On or after the effective date of his or her first appointment
or election to the Board of Directors, a Nonemployee Director shall
automatically be granted an Option that provides for the purchase of 10,000
shares of Common Stock. In addition, on each Annual Director Award Date, each
Nonemployee Director shall automatically be granted an Option that provides for
the purchase of 10,000 shares of Common Stock. Each Option granted to a Director
shall have a term of five years from the date of grant, notwithstanding any
earlier termination of
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the status of the holder as a Nonemployee Director. The purchase price of each
share of Common Stock subject to an Option granted to a Director shall be equal
to the Fair Market Value of the Common Stock on the date of grant. No Option
granted to a Director may be issued in exchange for the cancellation of an
Option with a higher exercise price, nor may the exercise price of any Option
granted to a Director be reduced. All Options granted to a Director shall become
fully exercisable six months following the date of grant. All Options granted to
a Director that have not previously become exercisable shall be forfeited if the
Nonemployee Director resigns as a Director without the consent of a majority of
the other Directors.
Any Award of Options granted to a Director shall be embodied
in an Award Agreement, which shall contain the terms, conditions and limitations
set forth above and shall be signed by the Participant to whom the Options are
granted and by an Authorized Officer for and on behalf of the Company.
10. Award Payment; Dividends; Substitution.
(a) General. Payment of Awards may be made in the form of cash or
Common Stock, or a combination thereof, and may include such
restrictions as the Committee shall determine, including, in the case
of Common Stock, restrictions on transfer and forfeiture provisions. If
payment of an Award is made in the form of Restricted Stock, the
applicable Award Agreement relating to such shares shall specify
whether they are to be issued at the beginning or end of the
Restriction Period. In the event that shares of Restricted Stock are to
be issued at the beginning of the Restriction Period, the certificates
evidencing such shares (to the extent that such shares are so
evidenced) shall contain appropriate legends and restrictions that
describe the terms and conditions of the restrictions applicable
thereto. In the event that shares of Restricted Stock are to be issued
at the end of the Restricted Period, the right to receive such shares
shall be evidenced by book entry registration or in such other manner
as the Committee may determine.
(b) Deferral. With the approval of the Committee, amounts payable in
respect of Awards may be deferred and paid either in the form of
installments or as a lump-sum payment. The Committee may permit
selected Participants to elect to defer payments of some or all types
of Awards in accordance with procedures established by the Committee.
Any deferred payment of an Award, whether elected by the Participant or
specified by the Award Agreement or by the Committee, may be forfeited
if and to the extent that the Award Agreement so provides.
(c) Dividends and Interest. Rights to dividends or Dividend Equivalents
may be extended to and made part of any Award consisting of shares of
Common Stock or units denominated in shares of Common Stock, subject to
such terms, conditions and restrictions as the Committee may establish.
The Committee may also establish rules and procedures for the crediting
of interest on deferred cash payments and Dividend Equivalents for
Awards consisting of shares of Common Stock or units denominated in
shares of Common Stock.
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11. Stock Option Exercise. The price at which shares of Common Stock
may be purchased under an Option shall be paid in full at the time of exercise
in cash or, if elected by the Participant, the Participant may purchase such
shares by means of tendering Common Stock or surrendering another Award,
including Restricted Stock, valued at Fair Market Value on the date of exercise,
or any combination thereof. The Committee shall determine acceptable methods for
Participants to tender Common Stock or other Awards; provided that any Common
Stock that is or was the subject of an Award may be so tendered only if it has
been held by the Participant for six months. The Committee may provide for
procedures to permit the exercise or purchase of such Awards by use of the
proceeds to be received from the sale of Common Stock issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event
shares of Restricted Stock are tendered as consideration for the exercise of an
Option, a number of the shares issued upon the exercise of the Option, equal to
the number of shares of Restricted Stock used as consideration therefor, shall
be subject to the same restrictions as the Restricted Stock so submitted as well
as any additional restrictions that may be imposed by the Committee.
12. Taxes. The Company shall have the right to deduct applicable taxes
from any Award payment and withhold, at the time of delivery or vesting of cash
or shares of Common Stock under this Plan, an appropriate amount of cash or
number of shares of Common Stock or a combination thereof for payment of taxes
required by law or to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for withholding of such taxes. The
Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the Award
with respect to which withholding is required. If shares of Common Stock are
used to satisfy tax withholding, such shares shall be valued based on the Fair
Market Value when the tax withholding is required to be made. The Committee may
provide for loans, on either a short-term or demand basis, from the Company to a
Participant to permit the payment of taxes required by law.
13. Amendment, Modification, Suspension or Termination. The Board may
amend, modify, suspend or terminate this Plan for the purpose of meeting or
addressing any changes in legal requirements or for any other purpose permitted
by law, except that (i) no amendment or alteration that would adversely affect
the rights of any Participant under any Award previously granted to such
Participant shall be made without the consent of such Participant and (ii) no
amendment or alteration shall be effective prior to its approval by the
stockholders of the Company to the extent stockholder approval is otherwise
required by applicable legal requirements.
14. Assignability. Unless otherwise determined by the Committee and
provided in the Award Agreement, no Award or any other benefit under this Plan
shall be assignable or otherwise transferable. Any attempted assignment of an
Award or any other benefit under this Plan in violation of this paragraph 14
shall be null and void.
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15. Adjustments.
(a) The existence of outstanding Awards shall not affect in any manner
the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations or
other changes in the capital stock of the Company or its business or
any merger or consolidation of the Company, or any issue of bonds,
debentures, preferred or prior preference stock (whether or not such
issue is prior to, on a parity with or junior to the Common Stock) or
the dissolution or liquidation of the Company, or any sale or transfer
of all or any part of its assets or business, or any other corporate
act or proceeding of any kind, whether or not of a character similar to
that of the acts or proceedings enumerated above.
(b) In the event of any subdivision or consolidation of outstanding
shares of Common Stock, declaration of a dividend payable in shares of
Common Stock or other stock split, then (i) the number of shares of
Common Stock reserved under this Plan, (ii) the number of shares of
Common Stock covered by outstanding Awards in the form of Common Stock
or units denominated in Common Stock, (iii) the exercise or other price
in respect of such Awards, (iv) the Stock Based Award Limitations
described in paragraph 8(b) hereof, (v) the number of shares of Common
Stock covered by Awards to Directors automatically granted pursuant to
paragraph 9 hereof and (vi) the appropriate Fair Market Value and other
price determinations for such Awards shall each be proportionately
adjusted by the Board to reflect such transaction. In the event of any
other recapitalization or capital reorganization of the Company, any
consolidation or merger of the Company with another corporation or
entity, the adoption by the Company of any plan of exchange affecting
the Common Stock or any distribution to holders of Common Stock of
securities or property (other than normal cash dividends or dividends
payable in Common Stock), the Board shall make appropriate adjustments
to (i) the number of shares of Common Stock covered by Awards in the
form of Common Stock or units denominated in Common Stock, (ii) the
exercise or other price in respect of such Awards, (iii) the
appropriate Fair Market Value and other price determinations for such
Awards, (iv) the number of shares of Common Stock covered by Awards to
Directors automatically granted pursuant to paragraph 9 hereof and (v)
the Stock Based Award Limitations described in paragraph 8(b) hereof,
to give effect to such transaction shall each be proportionately
adjusted by the Board to reflect such transaction; provided that such
adjustments shall only be such as are necessary to maintain the
proportionate interest of the holders of the Awards and preserve,
without exceeding, the value of such Awards. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be
authorized to issue or assume Awards by means of substitution of new
Awards, as appropriate, for previously issued Awards or to assume
previously issued Awards as part of such adjustment.
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(c) In the event of a corporate merger, consolidation, acquisition of
property or stock, separation, reorganization or liquidation, the Board
may make such adjustments to Awards or other provisions for the
disposition of Awards as it deems equitable, and shall be authorized,
in its discretion, (i) to provide for the substitution of a new Award
or other arrangement (which, if applicable, may be exercisable for such
property or stock as the Board determines) for an Award or the
assumption of the Award, regardless of whether in a transaction to
which Section 424(a) of the Code applies, (ii) to provide, prior to the
transaction, for the acceleration of the vesting and exercisability of,
or lapse of restrictions with respect to, the Award and, if the
transaction is a cash merger, provide for the termination of any
portion of the Award that remains unexercised at the time of such
transaction or (iii) to provide for the acceleration of the vesting and
exercisability of an Award and the cancellation thereof in exchange for
such payment as shall be mutually agreeable to the Participant and the
Board.
16. Restrictions. No Common Stock or other form of payment shall be
issued with respect to any Award unless the Company shall be satisfied based on
the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
17. Unfunded Plan. Insofar as it provides for Awards of cash, Common
Stock or rights thereto, this Plan shall be unfunded. Although bookkeeping
accounts may be established with respect to Participants who are entitled to
cash, Common Stock or rights thereto under this Plan, any such accounts shall be
used merely as a bookkeeping convenience. The Company shall not be required to
segregate any assets that may at any time be represented by cash, Common Stock
or rights thereto, nor shall this Plan be construed as providing for such
segregation, nor shall the Company, the Board or the Committee be deemed to be a
trustee of any cash, Common Stock or rights thereto to be granted under this
Plan. Any liability or obligation of the Company to any Participant with respect
to an Award of cash, Common Stock or rights thereto under this Plan shall be
based solely upon any contractual obligations that may be created by this Plan
and any Award Agreement, and no such liability or obligation of the Company
shall be deemed to be secured by any pledge or other encumbrance on any property
of the Company. Neither the Company nor the Board nor the Committee shall be
required to give any security or bond for the performance of any obligation that
may be created by this Plan.
18. Governing Law. This Plan and all determinations made and actions
taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.
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19. Effectiveness. This Plan shall be effective as of March 28, 2002
(the "Effective Date"), as approved by the Board of Directors of the Company.
Notwithstanding the foregoing, the adoption of this Plan is expressly
conditioned upon the approval by the holders of a majority of shares of Common
Stock present, or represented, and entitled to vote at a meeting of the Company
Stockholders held on or before December 31, 2002. If the Stockholders of the
Company should fail to so approve this Plan prior to such date, this Plan shall
terminate and cease to be of any further force or effect, and all grants of
Awards hereunder shall be null and void.
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