Exhibit 4.10
GENERAL REHABILITATION SERVICES, INC.
STOCK-BASED INCENTIVE COMPENSATION PLAN
1. Definitions
1.01 "Affiliate" means any entity that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common control with,
Parent.
1.02 "Award" means an award of Deferred Stock, Restricted Stock, Options
or SARs under the Plan.
1.03 "Award Date" means the date on which an Award is made.
1.04 "Board" means the Board of Directors of Parent.
1.05 "Code" means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code shall include any successor to such section.
1.06 "Committee" means the committee designated by the Board to administer
the Plan under Section 4.
1.07 "Company" means Parent and its Subsidiaries, collectively, including
any successor to any thereof.
1.08 "Deferred stock" means an Award made under Section 6 to receive Stock
at the end of a specified Deferral Period.
1.09 "Deferral Period" means the period during which the receipt of a
Deferred Stock Award under Section 6 will be deferred.
1.10 "Disinterested Person" means a person defined in Rule 16b-3(c)(2)(i)
promulgated by the SEC under the 1934 Act, or any successor definition adopted
by the SEC.
1.11 "Employee" means an officer or key employee of the Company or an
Affiliate including a director who is such an employee.
1.12 "Fair Market Value" means, on any given date, (a) the mean between
the high and low prices of actual sales of shares of Stock (i) on the principal
national securities exchange on which the Stock is listed, or (ii) if the Stock
is not so listed, reported in the NASDAQ National Market System or (iii) if not
so listed or reported, traded in the over-the-counter market, in each case on
such date or, if the Stock was not traded on such date, on the next preceding
day on which the Stock was traded, or (b) if the Stock is not then listed for
trading on an exchange, included for reporting in the NASDAQ National Market
System or traded in the over-the-counter market, the value determined by the
Committee.
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1.13 "Holder" means an Employee to whom an Award is made.
1.14 "Incentive Stock Option" or "ISO" means a stock option intended to
meet the requirements of an incentive stock option as defined in Section 422 of
the Code and designated as such.
1.15 "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.16 "Non-Qualified Option" or "NQO" means a stock option not intended to
be an Incentive Stock Option, and designated as a Non-Qualified Option.
1.17 "Option" means any stock option granted by the Committee under
Section 8.
1.18 "Parent" means General Rehabilitation Services, Inc. and any
successor thereto.
1.19 "Plan" means the Stock-Based Incentive Compensation Plan herein set
forth, as amended from time to time.
1.20 "Restricted Stock" means Stock awarded by the Committee under
Section 7.
1.21 "Restriction Period" means the period during which Restricted Stock
awarded under Section 7 is subject to forfeiture.
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1.22 "Restructuring" means any reorganization, recapitalization, stock
split, spin-off, split-off, split-up, stock dividend, issuance of stock rights,
combination of shares, merger, consolidation or other change in corporate
structure.
1.23 "Retirement" means retirement from the active employment of the
Company or an Affiliate pursuant to the relevant provisions of the applicable
retirement plan of the employing entity or as otherwise determined by the Board.
1.24 "SEC" means the U.S. Securities and Exchange Commission.
1.25 "Stock" means the Common Stock of Parent or such other class or kind
of shares of capital stock or other securities as may result from the
application of Section 10.
1.26 "Stock Appreciation Right" or "SAR" means a stock appreciation right
awarded by the Committee under Section 9.
1.27 "Subsidiary" means any corporation (other than Parent) in an unbroken
chain of corporations beginning with Parent if at the time of the Award each of
the corporations other than the last corporation in the unbroken chain owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
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1.28 "Ten Percent Shareholder" means a person who on any given date owns,
either directly or within the meaning of the attribution rules contained in
section 424(d) of the Code, stock possessing more than ten percent of the total
combined voting power of all classes of stock of Parent, a Subsidiary or an
Affiliate.
2. Awards
2.01 Awards that may be granted under the Plan are:
(a) Deferred Stock Awards, giving the Holder the right to receive, without
payment, a specified number of shares of Stock at the end of a specified
Deferral Period or Periods.
(b) Restricted Stock Awards, giving the Holder the right to receive,
without payment, a specified number of shares of Stock subject to forfeiture
upon the occurrence of specified events.
(c) Incentive Stock Options, giving the Holder the right for a specified
time period to purchase a specified number of shares of Stock for a price per
share not less than Fair Market Value on the Award Date.
(d) Non-Qualified Options, giving the Holder the right for a specified
time period to purchase a specified number of shares of Stock for a price per
share determined by the Committee.
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(e) Stock Appreciation Rights, giving the Holder the right to receive,
upon exercise of the SAR, the increase in the Fair Market Value of a specified
number of shares of Stock from the Award Date to the date of exercise.
2.02 Each Award shall be evidenced by a written agreement with the Holder
which shall conform to the requirements of the Plan and may contain such other
provisions as the Committee shall deem advisable.
3. Eligibility
Any Employee is eligible to receive an Award, provided that an
Incentive Stock Option shall not be granted to a Ten Percent Shareholder except
on such terms concerning the option price and period of exercise as are provided
in Sections 8.01, 8.02 and 8.03.
4. Administration of Plan
4.01 The Plan shall be administered and interpreted by the Committee,
which shall have full authority to act in selecting Employees to whom Awards
will be granted, in determining the type and amount of Awards to be granted to
each such Employee, the terms and conditions of Awards and the terms of
agreements which will be entered into with Holders in connection with Awards.
The Committee shall have at least two members, and if the Stock is
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registered under the 1934 Act, each such member shall be a Disinterested Person.
4.02 The Committee's powers shall include, but not be limited to, the
power to (a) determine whether, to what extent and under what circumstances
(i) an Option may be exchanged for cash, Restricted Stock, Deferred Stock or
some combination thereof; (ii) an Award is made and operates on a tandem basis
with other Awards made hereunder; (iii) Stock or cash payable with respect to an
Award shall be deferred either automatically or at the election of the Holder
(including the power to add deemed earnings to any such deferral); (b) condition
an Award upon the attainment of specified performance goals; and (c) determine
the effect, if any, of a change in control of Parent upon outstanding Awards.
4.03 The Committee shall have the power to interpret and construe the Plan
and to adopt rules and regulations for carrying out the Plan and to make such
changes in such rules and regulations as it shall from time to time deem
advisable. The Committee shall have the power unilaterally and without approval
of a Holder to amend an existing Award in order to carry out the purposes of
the Plan so long as such amendment does not deprive the Holder of any benefit
granted by the Award and so long as the
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amended Award comports with the terms of the Plan. Amendments adverse to the
interests of the Holder (with respect to an existing Award) must be approved by
the Holder. Any interpretation by the Committee of the terms and provisions of
the Plan and the administration thereof, and all determinations made and
actions taken by the Committee, shall be final and binding on Plan participants
and shall be uncontestable.
5. Shares of Stock Subject to the Plan
5.01 Subject to adjustment as provided in Section 10, the total number of
shares of Stock available for Awards under the Plan shall be 250,000 shares.
5.02 Any shares issued by Parent in a business combination transaction
through the assumption or substitution of outstanding awards made by an
acquired company shall not reduce the shares available for Awards under the
Plan. If any shares subject to any Award granted hereunder are forfeited or such
Award otherwise terminates without the issuance of such shares or the payment of
other consideration in lieu of such shares, the shares subject to such Award,
to the extent of any such forfeiture or termination, shall again be available
for Awards under the Plan.
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6. Deferred Stock
An Award of Deferred Stock shall be subject to the following terms
and conditions:
6.01 Upon determination of the number of shares of Deferred Stock to
be awarded to a Holder, the Committee shall direct that the same be
credited to the Holder's account on the books of Parent but that issuance
and delivery of the same shall be deferred until the date or dates provided
in Section 6.03 hereof. Prior to such issuance and delivery, the Holder
shall have no rights as a shareholder with respect to any shares of
Deferred Stock credited to the Holder's account.
6.02 Amounts equal to any dividends declared and paid during the
Deferral Period with respect to the number of shares covered by a Deferred
Stock Award will be paid to the Holder currently, or deferred and deemed to
be reinvested in additional Deferred Stock, or otherwise reinvested on
such terms as determined at the time of the Award by the Committee in its
sole discretion.
6.03 The Deferred Stock agreement shall specify the duration of the
Deferral Period taking into account termination of employment on account
of death, disability, Retirement or other cause. The Deferral Period may
consist of one or more installments. At the end of the Deferral
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Period or any installment thereof, certificates representing the shares
of Deferred Stock applicable to such Period or installment credited to
the account of a Holder shall be issued and delivered to the Holder (or,
where appropriate, the Holder's legal representative) in accordance with
the terms of the Deferred Stock agreement. The Committee may, in its sole
discretion, accelerate the delivery of all or any part of a Deferred Stock
Award or waive the deferral limitations for all or any part of a Deferred
Stock Award.
7. Restricted Stock
An Award of Restricted Stock shall be subject to the following terms
and conditions:
7.01 Upon determination of the number of shares of Restricted Stock
to be granted to a Holder, the Committee shall direct that a certificate or
certificates representing such number of shares be issued to the Holder and
registered in the Holder's name. The certificate(s) representing such
shares shall be legended as to sale, transfer, assignment, pledge or other
encumbrance during the Restriction Period and deposited by the Holder,
together with a stock power with respect to the transfer thereof endorsed
in blank, with Parent, to be held in escrow during the Restriction Period.
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7.02 During the Restriction Period the Holder shall have the right
to receive dividends from and to vote the shares of Restricted Stock.
7.03 The Restricted Stock agreement shall specify the duration of
the Restriction Period and the performance, employment or other conditions
(including termination of employment on account of death, disability,
Retirement or other cause) under which the Restricted Stock may be
forfeited to Parent. At the end of the Restriction Period the restrictions
imposed hereunder shall lapse with respect to the number of shares of
Restricted Stock as determined by the Committee, and the legend shall be
removed and the certificates for such number of shares delivered to the
Holder (or, where appropriate, the Holder's legal representative). The
Committee may, in its sole discretion, modify or accelerate the vesting of
shares of Restricted Stock.
8. Options
An Award of Options shall be subject to the following terms and
conditions:
8.01 The price per share at which Stock may be purchased upon
exercise of an Option shall be determined by the Committee, but in the case
of grants of ISOs, shall be not less than the Fair Market Value on the
Award Date. In
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the case of any ISO granted to a Ten Percent Shareholder, the option price
per share shall not be less than 110% of the Fair Market Value on the
Award Date.
8.02 The Option agreement shall specify when an Option may be
exercisable and the terms and conditions applicable thereto and whether
the Option is an ISO or an NQO. The term of an Option shall in no event
be longer than twenty years (five years in the case of an ISO granted to
a Ten Percent Shareholder).
8.03 Each provision of the Plan and each Option agreement relating
to an ISO shall be construed so that each ISO shall be an incentive stock
option as defined in Section 422 of the Code, and any provisions of the
Option agreement thereof that cannot be so construed shall be disregarded.
In no event may an ISO be granted after December 26, 2001. ISOs may only
be granted to employees of the Company.
8.04 No Option shall be transferable otherwise than by will or the
laws of descent and distribution and, during the lifetime of the Holder,
shall be exercisable only by the Holder. Upon the death of a Holder, the
person to whom the rights have passed by will or by the laws of descent
and distribution may exercise an Option only in accordance with this
Section 8.
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8.05 The Option price of the shares of Stock payable upon the
exercise of an Option shall be paid in full in cash at the time of the
exercise or, with the consent of the Committee, in whole or in part in
shares of Stock valued at Fair Market Value on the date of exercise.
With the consent of the Committee, payment upon the exercise of a NQO
may be made in whole or in part (as determined by the Committee) by
Restricted Stock based on Fair Market Value on the date of exercise.
In such case, the shares of Stock to which the Option relates shall be
subject to the same forfeiture restrictions originally imposed on the
shares of Restricted Stock exchanged therefor.
9. Stock Appreciation Rights
An Award of SARs shall be subject to the following terms and conditions:
9.01 A SAR may be granted in tandem with all or a portion of a
related Option ("Tandem SAR"), or may be granted separately ("Freestanding
SAR"). A Tandem SAR may be granted either at the Award Date of the Option
or at any time thereafter during the term of the Option and shall be
exercisable only to the extent that the related Option is exercisable. In
no event shall any SAR be exercisable within the first six months of its
grant.
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9.02 The base price of a Tandem SAR shall be the option price under
the related Option. The base price per share of a Freestanding SAR shall be
not less than 100% of Fair Market Value on the Award Date of the
Freestanding SAR.
9.03 A SAR shall entitle the Holder to receive a payment equal to
the excess of the aggregate Fair Market Value of the shares of Stock
covered by the SAR on the date of exercise over the base price of the SAR.
Such payment may be in cash or in shares of Stock, Deferred Stock or
Restricted Stock, or in any combination thereof, as the Committee shall
determine. Upon exercise of a Tandem SAR as to some or all of the shares of
Stock covered, the related option shall be cancelled automatically to the
extent of the number of shares of Stock covered by such exercise, and such
shares shall no longer be available for purchase under the Option
pursuant to Section 8. Conversely, if the related Option is exercised as to
some or all of the shares of Stock covered thereby, the related Tandem
SAR, if any, shall be cancelled automatically to the extent of the number
of shares of Stock covered by the Option exercise.
9.04 SARs shall be subject to the same terms and conditions
applicable to Options as stated in Sections 8.02 and 8.04. SARs shall
also be subject to such other terms
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and conditions not inconsistent with the Plan as shall be determined by the
Committee.
10. Adjustments Upon Changes in Capitalization
In the event of a Restructuring of Parent affecting Stock, or any
distribution to shareholders other than a cash dividend, the Board shall make
appropriate adjustment in the number and kind of shares authorized by the Plan
and such adjustments to outstanding Awards as it determines appropriate
(including, without limitation, an adjustment to Options to provide that the
Holders of Options shall receive solely the consideration such Holders would
have received if the Option had been exercised (whether or not then currently
exercisable) immediately prior to the Restructuring). No fractional shares of
Stock shall be issued pursuant to such an adjustment, but an amount equivalent
to the portion of Fair Market Value attributable to any such fractional shares
shall, where appropriate, be paid in cash to the Holder.
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11. Registration of Stock
If the Stock is registered under the 1934 Act, Parent shall, as soon as
practicable thereafter, file a registration statement on Form S-8 with the SEC
under the Securities Act of 1933, as amended, covering the shares of Stock which
may be issued under the Plan.
12. Termination and Amendment
The Plan shall remain in full force and effect until terminated by the
Board. The Board shall have the power to amend, suspend or terminate the Plan at
any time, provided that no such amendment shall be made without shareholder
approval which shall:
(a) Increase (except as provided in Section 10) the total number of
shares available for issuance pursuant to the Plan;
(b) Change the class of employees eligible to be Holders;
(c) Change the provisions of this Section 11; or
(d) Effect other changes for which shareholder approval would be
required under Rule 16b-3 under the 1934 Act or any successor provision
promulgated by the SEC.
Termination of the Plan pursuant to this Section 12 shall not affect Awards
outstanding under the Plan at the time of termination.
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13. Non-Assignability
Awards may not be pledged, assigned or transferred for any reason during
the Holder's lifetime, and any attempt to do so shall be void and relevant Award
shall be forfeited.
14. General Provisions
14.01 Nothing contained in the Plan, or an Award granted pursuant to the
Plan, shall confer upon an Employee any right with respect to continuance of
employment by the Company or an Affiliate, nor interfere in any way with the
right of the Company or an Affiliate to terminate such employment at any time.
14.02 For purposes of this Plan, transfer of employment between any of
Parent, Subsidiaries and Affiliates shall not be deemed termination of
employment.
14.03 Holders shall make appropriate provision for all taxes required to
be withheld in connection with any Award, the exercise thereof and the transfer
of shares of Stock pursuant to this Plan. Such responsibility shall extend to
all applicable Federal, state, local or foreign withholding taxes. In the case
of payment of Awards in the form of Stock, or exercise of Options or SARs,
Parent shall, at the election of the Holder and with the consent of the
Committee, have the right to retain the number of shares of Stock whose
aggregate Fair Market Value equals the amount to
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be withheld in satisfaction of the applicable withholding taxes. Agreements
evidencing such Awards shall contain appropriate provisions to effect
withholding in this manner.
14.04 Without amending the Plan, Awards may be granted to Employees who
are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Committee, be necessary or desirable to further the purpose
of the Plan.
14.05 To the extent that Federal laws (such as the 1934 Act, the Code or
the Employee Retirement Income Security Act of 1974) do not otherwise control,
the Plan and all determinations made and actions taken pursuant hereto shall be
governed by the laws of the Commonwealth of Pennsylvania and construed
accordingly.
Adopted: December 27, 1991
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GENERAL REHABILITATION SERVICES, INC.
Unanimous Written Consent of Shareholders
The undersigned, being all of the shareholders of General Rehabilitation
Services, Inc., a Pennsylvania corporation (the "Company"), hereby consent to
the taking of the following action and adoption of the following resolution
without a meeting in accordance with the procedures established in Section 1766
of the Pennsylvania Business Corporation Law and agree that such action and
resolution shall have the same force and effect as though duly taken and adopted
at a meeting of the shareholders of the Company duly called and held:
RESOLVED, that the Stock-Based Incentive Compensation Plan of the Company
is approved and adopted in the form presented to the undersigned.
IN WITNESS WHEREOF, the undersigned have executed this Unanimous Written
Consent of Shareholders this 27th day of December, 1991.
/s/ Lawrence J. Kent
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Lawrence J. Kent
/s/ Maurice Kent
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Maurice Kent
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