Exhibit 10.5
HORACE MANN EDUCATORS CORPORATION
1991 STOCK INCENTIVE PLAN
AMENDED AND RESTATED EFFECTIVE DECEMBER 31, 1999
SECTION 1. Purpose; Definitions.
The purpose of the Plan is to enable existing and prospective officers,
employees and directors of the Company, its subsidiaries and affiliates to
participate in the Company's future and to enable the Company to attract
and retain such persons by offering them proprietary interests in the
Company.
For purposes of the Plan, the following terms are defined as set forth
below:
a. "Affiliate" means a corporation or other entity controlled by the
Company and designated by the Committee as such.
b. "Award" means a Stock Appreciation Right, Stock Option, or Common
Stock with or without restrictions.
c. "Board" means the Board of Directors of the Company.
d. "Cause" has the meaning set forth in Section 5(i).
e. "Change in Control" has the meaning set forth in Section 8(b).
f. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
g. "Commission" means the Securities and Exchange Commission or any
successor agency.
h. "Committee" means the Committee referred to in Section 2.
i. "Common Stock" means common stock, $.001 per share par value, of
the Company.
j. "Company" means Horace Mann Educators Corporation.
k. "Disability" means permanent and total disability as determined
under procedures established by the Committee for purposes of the
Plan.
l. "Early Retirement" means retirement from active employment with
the Company, a subsidiary or Affiliate pursuant to the early
retirement provisions of the applicable tax qualified pension
plan of such employer.
m. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
n. "Fair Market Value" means, except as provided in Sections 5(j)
and 6(b)(ii)(2), the mean, as of any given date, between the
highest and lowest reported sales prices of the Common Stock on
the New York Stock Exchange Composite Tape or, if not listed on
such exchange, on any other national exchange on which the Common
Stock is listed or on NASDAQ. If there is no regular public
trading market for such Common Stock, the Fair Market Value of
the Common Stock shall be determined by the Committee in good
faith.
o. "Incentive Stock Options" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning
of Section 422 of the Code.
p. "Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
q. "Normal Retirement" means retirement from active employment with
the Company, a subsidiary or Affiliate, pursuant to the normal
retirement provisions of the applicable tax qualified pension
plan of such employer.
r. "Outside Director" shall mean a director who satisfies both (i)
the requirements for an "outside director" as set forth in
Section 162m of the Code and Treasury Reg. Section 1.162-
27(e)(3)(i) promulgated thereunder and (ii) the requirements for
a "non-employee director" set forth in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, or successor
requirements thereto.
s. "Plan" means the Horace Mann Educators Corporation 1991 Stock
Incentive Plan, as set forth herein and as hereinafter amended
from time to time.
t. "Retirement" means Normal or Early Retirement.
u. "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission
under Section 16(b) of the Exchange Act, as amended from time to
time.
v. "Stock Appreciation Right" means a right granted under Section 6.
w. "Stock Option" or "Option" means an option granted under Section
5.
x. "Termination of Employment" means the termination of the
participant's employment with the Company and any Affiliate. A
participant employed by an Affiliate shall also be deemed to
incur a Termination of Employment if the Affiliate ceases to be
an Affiliate and the participant does not immediately thereafter
become an employee of the Company or another Affiliate.
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y. "Vested" or "Vesting" means (i) with respect to an Option or
Stock Appreciation Right, that it is exercisable subject to
whatever or restrictions on exercise may exist by the terms of
this Plan or the option agreement; and (ii) with respect to
Common Stock, that no longer has any restrictions.
In addition, certain other terms used herein have definitions
given to them in the first place on which they are used.
SECTION 2. Administration.
The Plan shall be administered by a Committee of the Board, composed of not
less than two Outside Directors, appointed by and serving at the pleasure
of the Board. If at any time no Committee shall be in office, the functions
of the Committee specified in the Plan shall be exercised by the Board.
The Committee shall have plenary authority to grant Awards to existing and
prospective officers, employees and directors of the Company or an
Affiliate.
Among other things, the Committee shall have the authority, subject to the
terms of the Plan:
(a) to select the existing and prospective officers, employees and
directors to whom Awards may from time to time be granted;
(b) to determine whether and to what extend Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights and Common
Stock or any combination thereof are to be granted hereunder;
(c) to determine the number of shares of Common Stock to be covered
by each Award granted hereunder;
(d) to determine the terms and conditions of any Award granted
hereunder (including, but not limited to, the share price, any
Vesting restriction or limitation and any Vesting acceleration or
forfeiture waiver regarding any Award and the shares of Common
Stock relating thereto, based on such factors as the Committee
shall determine);
(e) to adjust the terms and conditions, at any time or from time to
time, of any Award, including with respect to performance goals
and measurements applicable to performance-based Awards pursuant
to the terms of the Plan; and
(f) to determine to what extent and under what circumstances Common
Stock and other amounts payable with respect to an Award shall be
deferred.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it
shall, from time to time, deem advisable, to
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interpret the terms and provisions of the Plan and any Award issued under
the Plan (and any agreement relating thereto) and to otherwise supervise
the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their
number or any officer of the Company to execute and deliver documents on
behalf of the Committee.
Any determination made by the Committee pursuant to the provisions of the
Plan with respect to any Award shall be made in its sole discretion at the
time of the grant of the Award or, unless in contravention of any express
term of the Plan, at any time thereafter. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and Plan participants.
SECTION 3. Common Stock Subject to Plan.
Initially, the total number of shares of Common Stock reserved and
available for distribution pursuant to Awards under the Plan was 2,000,000
shares. Pursuant to the 2-for-1 split of Common Stock effective December
15, 1997, an additional 2,000,000 shares of Common Stock were reserved and
available for distribution pursuant to Awards under the Plan. Such shares
may consist, in whole or in part, of authorized and unissued shares or
treasury shares.
The number of shares with respect to which Stock Options or Stock
Appreciation Rights may be granted during any calendar year to any one
person (awards of Stock Options and of Stock Appreciation Rights granted in
tandem with each other being deemed to have been granted with respect to
the same shares) shall not in the aggregate exceed 500,000.
Subject to Section 6(b)(iv), if any shares of Common Stock that have been
optioned cease to be subject to a Stock Option, if any shares of Common
Stock that are subject to any Award are forfeited or if any Award otherwise
terminates without a payment being made to the participant in the form of
Common Stock, such shares shall again be available for distribution in
connection with Awards under the Plan; provided, the person holding such
Award received no benefits of ownership (within the meaning of Rule 16b-3
while holding such Award).
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, spin-off, stock split, extraordinary
distribution with respect to the Common Stock or other similar change in
corporate structure affecting the Common Stock, such substitution or
adjustments shall be made in the aggregate number of shares reserved for
issuance under the Plan, in the number and option price of shares subject
to outstanding Stock Options and Stock Appreciation Rights, and the number
of shares subject to other outstanding Awards granted under the Plan as may
be determined to be appropriate by the Committee, in its sole discretion;
provided, however, that the number of shares subject to any Award shall
always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock
Appreciation Right associated with any Stock Option.
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SECTION 4. Eligibility.
Existing and prospective officers, employees and directors of the Company
and its Affiliates who are or who are expected to be responsible for or
contribute to the management, growth and profitability of the business of
the Company and its Affiliates are eligible to be granted Awards under the
Plan.
SECTION 5. Stock Options.
Stock options may be granted alone or in addition to other Awards granted
under the Plan and may be of two types: Incentive Stock Options and Non-
Qualified Stock Options. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.
The committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options
(in each case with or without Stock Appreciation Rights). Incentive Stock
Options may be granted only to employees of the Company and its
subsidiaries (within the meaning of Section 425(f) of the Code). To the
extent that any Stock Option is not designated as an Incentive Stock Option
or even if so designated does not qualify as an Incentive Stock Option, it
shall constitute a Non-Qualified Stock Option.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. An option agreement shall indicate on its
face whether it is an agreement for an Incentive Stock Option or a Non-
Qualified Stock Option. The grant of a Stock Option shall occur on the date
the Committee by resolution selects an individual to be a participant in
any grant of a Stock Option, determines the number of shares of Common
Stock to be subject to such Stock Option to be granted to such individual
and specifies the terms and provisions of the option agreement. The Company
shall notify a participant of any grant of a Stock Option, and a written
option agreement or agreements shall be duly executed and delivered by the
Company to the participant. Such agreement or agreements shall become
effective upon execution by the participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or
altered nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the optionee affected, to disqualify any Incentive
Stock Option under such Section 422.
Options granted under the Plan shall be subject to the following terms and
conditions and shall contain such additional terms and conditions as the
Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock
purchasable under an Incentive Stock Option shall not be less
than the Fair Market Value of the Common Stock subject to the
Option at time of grant. The option price of a Non-Qualified
Stock Option shall be the Fair Market Value of the Common Stock
subject to the Option on the
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date of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than 10
years after the date the Option is granted.
(c) Vesting. Subject to Section 5(a) and 8(a)(i), Stock Options shall
be Vested at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the
Committee provides that any Stock Option is Vested only in
installments, the Committee may at any time waive such
installment Vesting provisions, in whole or in part, based on
such factors as the Committee may determine. In addition, the
Committee may at any time accelerate the Vesting of any Stock
Option.
(d) Method of Exercise. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time
during the option period by giving written notice of exercise to
the Company specifying the number of shares of Common Stock
subject to the Stock Option to be purchased.
Such notice shall be accompanied by payment in full of the
purchase price by certified or bank check or such other
instrument as the Company may accept. If approved by the
Committee, payment in full or in part may also be made in the
form of unrestricted Common Stock already owned by the optionee
of the same class as the Common Stock subject to the Stock Option
and, in the case of the exercise of a Non-qualified Stock Option,
Common Stock with restrictions subject to an Award hereunder
which is of the same class as the Common Stock subject to the
Stock Option (based, in each case, on the Fair Market Value of
the Common Stock on the date the Stock Option is exercised);
provided, however, that, in the case of an Incentive Stock
Option, the right to make a payment in the form of already owned
shares of Common Stock of the same class as the Common Stock
subject to the Stock Option may be authorized only at the time
the Stock Option is granted.
If payment of the option exercise price of a Non-Qualified Stock
Option is made in whole or in part in the form of Common Stock
with restrictions, the number of shares of Common Stock to be
received upon such exercise equal to the number of shares of such
Common Stock with restrictions used for payment of the option
exercise price shall be subject to the same forfeiture
restrictions or deferral limitations to which such Common Stock
with restrictions was subject, unless otherwise determined by the
Committee.
No shares of Common Stock shall be issued until full payment
therefor has been made. Subject to any forfeiture restrictions or
deferral limitations that may apply if a Stock Option is
exercised using Common Stock with restrictions, an optionee shall
have all of the rights of a stockholder of the Company holding
the class or series of Common Stock that is subject to such Stock
Option (including, if applicable, the right to vote the shares
and the right to receive dividends), when the optionee has given
written notice of
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exercise, has paid in full for such shares and, if requested, has
given the representation described in Section 11(a).
(e) Non-transferability of Options. No Stock Option shall be
transferable by the optionee other than by will or by the laws of
descent and distribution, and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee
or by the guardian or legal representative of the optionee, it
being understood that the terms "holder" and "optionee" include
the guardian and legal representative of the optionee named in
the option agreement and any person to whom an option is
transferred by will or the laws of descent and distribution.
Notwithstanding the foregoing, a Stock Option which is granted to
a Director may be transferred to the spouse or lineal descendant
of the Director optionee or to the trustee of a trust for the
primary benefit of a spouse or lineal descendent. Such assignee
shall be subject to all of the terms and provisions of the Plan.
(f) Termination by Death. If an optionee incurs a Termination of
Employment by reason of death, any Stock Option held by such
optionee may thereafter be exercised, to the extent that Vested
or such other option outstanding and not Vested for which Vesting
may be accelerated as the Committee may determine, for a period
of one year (or such shorter period as the Committee may specify
at grant) from the date of such death or until the expiration of
the stated term of such Stock Option, whichever period is the
shorter.
(g) Termination by Reason of Disability. If an optionee incurs a
Termination of Employment by reason of Disability, any Stock
Option held by such optionee may thereafter be exercised by the
optionee, to the extent it was Vested at the time of termination
or such other option outstanding and not Vested for which Vesting
may be accelerated as the Committee may determine, for a period
of one year (or such shorter period as the committee may specify
as grant) from the date of such Termination of Employment or
until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that if the
optionee dies within such one-year period (or such shorter
period), any unexercised Stock Option held by such optionee
shall, notwithstanding the expiration of such one-year (or such
shorter) period, continue to be Vested to the extent to which it
was Vested at the time of death for a period of 12 months from
the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter. In the
event of Termination of Employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the
exercise periods that apply for purposes of Section 422 of the
Code, such Stock Option will thereafter be treated as a Non-
Qualified Stock Option.
(h) Termination by Reason of Retirement. If an optionee incurs a
Termination of Employment by reason of Retirement, any Stock
Option held by such optionee which was unvested at the time of
such Retirement, will become Vested one year after the optionee's
date of Termination by reason of Retirement. Further, such
optionee may exercise such Stock Options for a period of one year
thereafter or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however,
that if the optionee dies within such one-year (or such shorter)
period any unexercised Stock Option held by such optionee shall,
notwithstanding the expiration of such one-
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year (or such shorter) period, continue to be Vested to the
extent to which it was Vested at the time of death for a period
of 12 months from the date of such death or until the expiration
of the stated term of such Stock Option, whichever period is the
shorter. In the event of Termination of Employment by reason of
Retirement, if an Incentive Stock Option is exercised after the
expiration of the exercise periods that apply for purposes of
Section 422 of the Code, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee,
if an optionee incurs a Termination of Employment for any reason
other than death, Disability or Retirement, any Stock Option held
by such optionee shall thereupon terminate, except that if such
Termination of Employment of the optionee is involuntary and
without Cause, such Stock Option shall be fully Vested and may be
exercised within the lesser of six months from the date of such
Termination of Employment or the balance of such Stock Option's
term. Notwithstanding the foregoing, if an optionee incurs a
Termination of Employment at or after a Change in Control (as
defined in Section 8(b)), other than by reason of death,
Disability or Retirement, any Stock Option held by such optionee
shall be Vested and may be exercised within the lesser of (1) six
months and one day from the date of such Termination of
Employment, and (2) the balance of such Stock Option's term.
Unless otherwise determined by the Committee, for the purposes of
the Plan "Cause" shall mean (1) the conviction of the optionee
for committing a felony under Federal law or the law of the state
in which such action occurred, (2) dishonesty in the course of
fulfilling the optionee's employment duties or (3) willful and
deliberate failure on the part of the optionee to perform his
employment duties in any material respect.
SECTION 6. Stock Appreciation Rights
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Non-Qualified Stock Option, such rights may be
granted either at or after the time of grant of such Stock Option. In
the case of an Incentive Stock Option, such rights may be granted only
at the time of grant of such Stock Option. A Stock Appreciation Right
shall terminate and no longer be exercisable upon the termination or
exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in
accordance with Section 6(b) by surrendering the applicable portion of
the related Stock Option in accordance with procedures established by
the Committee. Upon such exercise and surrender, the optionee shall be
entitled to receive an amount determined in the manner prescribed in
Section 6(b). Stock Options which have been so surrendered shall no
longer be exercisable to the extent the related Stock Appreciation
Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the
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extent that the Stock Options to which they relate are Vested in
accordance with the provisions of Section 5 and this Section 6;
provided, however, that a Stock Appreciation Right shall not be
Vested during the first six months of its term by an optionee who
is actually or potentially subject to Section 16(b) of the
Exchange Act.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive an amount in cash, shares of Common
Stock or both equal in value to the excess of the Fair Market
Value of one share of Common Stock over the option price per
share specified in the related Stock Option multiplied by the
number of shares in respect of which the Stock Appreciation Right
shall have been exercised, with the Committee having the right to
determine the form of payment.
In the case of Stock Appreciation Rights relating to Stock
Options held by optionees who are actually or potentially subject
to Section 16(b) of the Exchange Act, the Committee:
(1) may require that such Stock Appreciation Rights be exercised
only in accordance with the applicable "window period"
provisions of Rule 16b-3; and
(2) in the case of Stock Appreciation Rights relating to Non-
Qualified Stock Options, may provide that the amount to be
paid upon exercise of such Stock Appreciation Rights during
a Rule 16b-3 "window period" shall be based on the highest
mean sales price of the Common Stock on the New York Stock
Exchange on any day during such "window period".
(iii) Stock Appreciation Rights shall be transferable only when and to
the extent that the underlying Stock Option would be transferable
under Section 5(e).
(iv) Upon the exercise of a Stock Appreciation Right, the Stock Option
or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the
limitation set forth in Section 3 on the number of shares of
Common Stock to be issued under the Plan, but only to the extent
of the number of shares covered by the Stock Appreciation Right
at the time of exercise based on the value of the Stock
Appreciation Right at such time.
SECTION 7. Common Stock Awards
(a) Administration. Shares of Common Stock with or without specified
restrictions may be awarded either alone or in addition to other
Awards granted under the Plan. The Committee shall determine the
existing and prospective officers, employees and directors to whom and
the time or times at which grants of Common Stock will be awarded, the
number of shares to be awarded to any participant, the time or times
within which such Awards may be subject to forfeiture and any other
terms and conditions of the Awards, in addition to those continued in
Section 7(c).
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The Committee may condition the grant of Common Stock upon the
attainment of specified performance goals of the participant or of the
Company or subsidiary, division or department of the Company for or
within which the participant is primarily employed or upon such other
factors or criteria as the Committee shall determine. The provisions
of Common Stock Awards need not be the same with respect to each
recipient.
(b) Awards and Certificates. Each participant receiving an Award of Common
Stock shall be issued a certificate in respect of such shares of
Common Stock. Such certificate shall be registered in the name of such
participant.
Each participant receiving an Award of Common Stock with restrictions
shall be issued a certificate in respect of such shares of Common
Stock. Such certificate shall be registered in the name of such
participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award,
substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the Horace Mann Educators Corporation
1991 Stock Incentive Plan and a Restricted Stock Agreement.
Copies of such Plan and Agreement are on file at the offices of
Horace Mann Educators Corporation, 1 Horace Mann Plaza,
Springfield, IL 62715."
The Committee may be required that the certificates evidencing such
shares of Common Stock with restrictions be held in custody by the
Company until the restrictions thereon shall have lapsed and that, as
a condition of any such Award, the participant shall have delivered a
stock power, endorsed in blank, relating to the Common Stock covered
by such Award.
(c) Terms and Conditions. Shares of Common Stock with restrictions shall
be subject to the following terms and conditions:
(i) Subject to the provisions of the Plan and the Restricted Stock
Agreement referred to in Section 7(c)(vi), during a period set by
the Committee, commencing with the date of such Award (the
"Restriction Period"), the participant shall not be permitted to
sell, assign, transfer, pledge or otherwise encumber shares of
such Stock. Within these limits, the Committee may provide for
the Vesting of such shares in installments and may accelerate
Vesting, in whole or in part, based on service, performance of
the participant or of the Company or the subsidiary, division or
department for which the participant is employed or such other
factors or criteria as the Committee may determine.
(ii) Except as provided in this paragraph (ii) and Section 7(c)(i),
the participant shall have, with respect to the shares of such
Stock, all of the rights of a stockholder of the Company holding
the class or series of Common Stock that is the subject of the
restrictions, including, if applicable, the right to vote the
shares and the right to receive any cash dividends. Unless
otherwise determined by the Committee and subject to Section
11(f) of the Plan, (1) cash dividends on the class or series of
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Common Stock that is the subject of the restrictions shall be
automatically deferred and reinvested in additional Common Stock
with the same or similar restrictions, and (2) dividends on the
class or series of Common Stock that is the subject of the
restrictions payable in Common Stock shall be paid in the form
of Common Stock of the same class with the same restrictions on
which such dividend was paid.
(iii) Except for the extend otherwise provided in the applicable
Restricted Stock Agreement for Sections 7(c)(i), 7(c)(iv) and
8(a)(ii), upon a participant's Termination of Employment for any
reason during the Restriction Period, all shares still subject
to restriction shall be forfeited by the participant.
(iv) Except to the extent otherwise provided in Section 8(a)(ii), in
the event that a participant involuntarily incurs a Termination
of Employment (other than for Cause), the Committee shall have
the discretion to waive in whole or in part any or all remaining
restrictions with respect to any or all of such participant's
shares of Common Stock.
(v) If and when the Restriction Period expires without a prior
forfeiture of the Common Stock subject to such Restriction
Period, unlegended certificates for such Vested shares shall be
delivered to the participant.
(vi) Each Award shall be confirmed by, and be subject to the terms
of, a Restricted Stock Agreement.
SECTION 8. Change In Control Provisions.
(a) Impact of Event. Notwithstanding any other provision of the Plan to
the contrary, in the event of a Change in Control (as defined in
Section 8(b)), with regard to existing (not prospective) officers,
employees and directors of the Company or an Affiliate:
(i) Any Stock Appreciation Rights and Stock Options outstanding as
of the date such Change in Control is determined to have
occurred and not then Vested shall become fully Vested;
provided, however, that, in the case of the holder of Stock
Appreciation Rights who is actually subject to Section 16(b) of
the Exchange Act, such Stock Appreciation Rights shall have been
outstanding for at least six months prior to exercise.
(ii) The restrictions and deferral limitations applicable to any
Common Stock with restrictions shall lapse, and such Common
Stock shall become free of all restrictions and become fully
Vested and transferable to the full extent of the original
grant.
(b) Definition of Change in Control. For purposes of the Plan, a "Change
in Control" shall mean the happening of any of the following events:
(i) there shall be consummated (1) any consolidation or merger of
the Company in which the Company is not the continuing or
surviving corporation, or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities
or other property, other than a merger of the company in which
no
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Company shareholder's ownership percentage in the surviving
corporation immediately after the merger is less than such
shareholder's ownership percentage in the Company immediately
prior to such merger by ten percent (10%) or more; or (2) any
sale, lease exchange or other transfer (in one transaction or in
a series of related transactions) of all, or substantially all,
of the assets of the Company;
(ii) the shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company which is a part of
a sale of assets, merger, or reorganization of the Company or
other similar transaction;
(iii) any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act, other than The Fulcrum III Limited
Partnership, The Second Fulcrum III Limited Partnership and
Gibbons, Goodwin, van Amerongen L.P., is or becomes, directly or
indirectly, the "beneficial owner," as defined in Rule 13d-3
under the Exchange Act, of securities of the Company that
represent 51% or more of the combined voting power of the
Company's then outstanding securities; or
(iv) a majority of the members of the Company's Board of Directors
are persons who are then serving on the Board of Directors
without being elected by the Board of Directors or having been
nominated by the Company for election by its shareholders.
SECTION 9. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the
rights of an optionee under a Stock Option or a recipient of a Stock
Appreciation Right and Common Stock Award theretofore granted without the
optionee's or recipient's consent, except such an amendment made to cause
the Plan to qualify for the exemption provided by Rule16b-3 or (ii)
disqualify the Plan from the exemption provided by Rule 16b-3. In addition,
no such amendment shall be made without the approval of the Company's
stockholders to the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other Award
theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent, except
such an amendment made to cause the Plan or Award to qualify for the
exemption provided by Rule 16b-3. The Committee may also substitute new
Stock Options for previously granted Stock Options, including previously
granted Stock Options having higher option prices.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules,
as well as other developments and to grant Awards which qualify for
beneficial treatment under such rules without shareholder approval.
SECTION 10. Unfunded Status of Plan.
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred
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compensation. The Committee may authorize the creation of trusts or other
arrangements to meet the obligations created under the Plan to deliver
Common Stock or make payments; provided, however, that, unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 11. General Provisions.
(a) The Committee may require each person purchasing or receiving shares
pursuant to an Award to represent to and agree with the Company in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any
legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Common Stock or other securities
delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Committee may deem advisable
under the rules, regulations and other requirements of the Commission,
any stock exchange upon which the Common Stock is then listed and any
applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
(b) Nothing contained in the Plan shall prevent the Company or an
Affiliate from adopting other or additional compensation arrangements
for its employees.
(c) The adoption of the Plan shall not confer upon any employee any right
to continue employment nor shall it interfere in any way with the
right of the Company or an Affiliate to terminate the employment of
any employee at any time.
(d) No later than the date as of which an amount first becomes includible
in the gross income of the participant for Federal income tax purposes
with respect to any Award under the Plan, the participant shall pay
the Company, or make arrangements satisfactory to the Company
regarding the payment of, any Federal, state, local or foreign taxes
of any kind required by law to be withheld with respect to such
amount. Unless otherwise determined by the Company, withholding
obligations may be settled with Common Stock, including Common Stock
that is part of the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and its
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the
participant.
(e) At the time of grant, the Committee may provide in connection with any
grant made under the Plan that the shares of Common Stock received as
a result of such grant shall be subject to a right of first refusal
pursuant to which the participant shall be required to offer to the
Company any shares that the participant wishes to sell at the then
Fair Market Value of the Common Stock, subject to such other terms and
conditions as the Committee may specify at the time of grant.
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(f) The reinvestment of dividends in additional Common Stock with
restrictions at the time of any dividend payment shall only be
permissible if sufficient shares of Common Stock are available under
Section 3 for such reinvestment (taking into account then outstanding
Stock Options and other Awards).
(g) The Committee shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid.
(h) Pursuant to this Plan, the Company is vested with authority to assist
an optionee to whom an Award is granted hereunder (including any
director or officer of the Company or any of its Affiliates who is
also an optionee) in the payment of the purchase price or other
amounts payable in connection with the receipt or exercise of that
Award, by leading such amounts to such optionee on such terms and at
such rates of interest and upon such security (or unsecured) as shall
have been authorized by the Board or the Committee.
(i) The Plan and all Awards made and actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of
Delaware.
SECTION 12. Effective Date of Plan.
The Plan shall be effective on October 15, 1991. This Plan document amends
and restates the 1991 Stock Incentive Plan and is effective December 31,
1999.
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