EXHIBIT 10.17
Hyperion Telecommunications, Inc.
1996 LONG-TERM INCENTIVE COMPENSATION PLAN
Section 1. Establishment. There is hereby established the Hyperion
Telecommunications, Inc. 1996 Long-Term Incentive Compensation Plan (hereinafter
called the "Plan") pursuant to which directors, officers, employees and
consultants of Hyperion Telecommunications, Inc. ("Hyperion"), or any parent or
subsidiary of Hyperion (hereinafter collectively called the "Company") who are
mainly responsible for its continued growth and development and future financial
success may be granted options to purchase shares of Common Stock of the
Hyperion (as defined in Section 5 below), stock appreciation rights ("SARs")
and/or may receive awards of shares of Common Stock or stock equivalent units in
order to secure to the Company the advantage of the incentive and sense of
proprietorship inherent in stock ownership by such persons, to reward such
persons for services previously performed and/or as an added inducement to
continue to provide service to the Company.
Section 2. Duration. Incentive Stock Options (as hereinafter defined) under
this Plan may be granted only within the ten-year period beginning on the date
on which the Plan is adopted by the stockholders. Any Incentive Stock Options
outstanding after the expiration of such ten-year period may be exercised within
the periods prescribed by Section 8.
Section 3. Administration. The Plan shall be administered by the full Board
of Directors of Hyperion or one or more committees of such Board of Directors
(the "Plan Administrator"). Subject to the provisions of the Plan, the Plan
Administrator is authorized to construe the Plan and any award under the Plan,
to amend awards and to adopt such rules and regulations and to take such action
in the administration of the Plan as it shall deem proper. The determination of
the Plan Administrator or any and all such matters shall be conclusive.
Section 4. Eligibility. Directors, officers, employees and consultants of
the Company who, in the opinion of the Plan Administrator, are mainly
responsible for the continued growth and development and future financial
success of the business shall be eligible to participate in the Plan. The Plan
Administrator shall, in its sole discretion, from time to time, select from such
eligible persons those to whom options or SARs shall be granted or shares or
stock equivalent units awarded and determine the number of shares to be included
in such option, SAR or award. No participant shall have any right to receive an
option, SAR, share award or stock equivalent unit except as the Plan
Administrator in its discretion shall determine. The terms "subsidiary" and
"parent" where used in the Plan or in any stock option agreement entered into
under the Plan means a "subsidiary corporation" and a "parent corporation,"
respectively, as such terms are defined in Section 424 of the Internal Revenue
Code of 1986, as it may be amended from time to time (the "Code").
Section 5. Shares Subject to the Plan. The initial number of shares of stock
which may be issued pursuant to the Plan shall be 1,750,000 shares of the common
stock, par value $.01 per
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share, of the Hyperion (the "Common Stock"). The number of shares of Common
Stock which may be issued under the Plan shall be increased on the last day of
each fiscal year by a number of shares equal to one percent (1%) of the number
of outstanding shares of common stock (all classes) on such date; provided,
however, that: (a) in the event that the Hyperion effects a recapitalization of
its Common Stock into two or more classes in connection with Hyperion's initial
public offering of equity (the "IPO"), then, notwithstanding anything to the
contrary contained in this Plan (including Section 13 herein) or in any
outstanding option, SAR, share award or stock equivalent agreement, the Common
Stock subject to and to be issued pursuant to this Plan and pursuant to any
outstanding option, SAR, share award or stock equivalent unit issued under this
Plan shall be the same class of common stock that is offered to the public in
the IPO and listed for trading on an exchange or on the Nasdaq Stock Market; (b)
the number of shares of Common Stock to be issued pursuant to the Plan is
subject to adjustment as provided in Section 13; (c) to the extent that (i)
options or SARs granted under the Plan shall expire or terminate without being
exercised, (ii) shares are returned to the Plan in payment of the exercise price
of an option or for any tax obligation as permitted by this Plan and any
relevant option agreement, or (iii) shares or stock equivalent units awarded
under the Plan shall be forfeited, such shares shall remain available or again
become eligible for purposes of the Plan and (d) the maximum number of shares of
Common Stock which may be issued under the Plan shall be 2,500,000 (subject to
adjustment as provided in Section 13). To the extent that an SAR is granted in
conjunction with an option, the shares covered by such SAR and option shall be
counted only once. Common Stock to be issued under the Plan may be either
authorized and unissued shares or shares held in treasury by Hyperion.
Section 6. Types of Options. Options granted pursuant to the Plan may be
either options which are incentive stock options under Section 422 of the Code
(hereinafter called "Incentive Stock Options") or other options (hereinafter
called "Nonstatutory Stock Options"). Incentive Stock Options and Nonstatutory
Stock Options shall be granted separately hereunder. The Plan Administrator, in
its discretion, shall determine whether and to what extent options shall be
granted under the Plan and whether such options granted shall be Incentive Stock
Options or Nonstatutory Stock Options. The provisions of the Plan and any stock
option agreement pursuant to which Incentive Stock Options shall be issued shall
be construed in a manner consistent with Section 422 of the Code (or any
successor provision) and rules and regulations promulgated or proposed
thereunder.
Section 7. Stock Appreciation Rights. The Plan Administrator may, from time
to time, subject to the provisions of the Plan, grant SARs to eligible
participants. Such SARs may be granted (i) alone, (ii) simultaneously with the
grant of an option (either an Incentive Stock Option or Nonstatutory Stock
Option) and in conjunction therewith or in the alternative thereto or (iii)
subsequent to the grant of a Nonstatutory Stock Option and in conjunction
therewith or in the alternative thereto.
(a) An SAR shall entitle the holder upon exercise thereof to receive from
Hyperion, upon a written request filed with the Secretary of Hyperion at
its principal offices (the "Request"), (i) a number of shares of Common
Stock (with or without restrictions as to substantial risk of forfeiture
and transferability, as determined by the
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Plan Administrator in its sole discretion), (ii) an amount of cash, or
(iii) any combination of shares of Common Stock and cash, as specified in
the Request (but subject to the approval of the Plan Administrator in its
sole discretion, at any time up to and including the time of payment, as to
the making of any cash payment), having an aggregate fair market value
equal to the product of (i) the excess of the fair market value, on the day
of such Request, of one share of Common Stock over the exercise price per
share specified in such SAR or its related option, multiplied by (ii) the
number of shares of Common Stock for which such SAR shall be exercised.
(b) The exercise price of an SAR granted alone shall be determined by the Plan
Administrator. An SAR granted simultaneously with or subsequent to the
grant of an option and in conjunction therewith or in the alternative
thereto shall have the same exercise price as the related option, shall be
transferable only upon the same terms and conditions as the related option,
and shall be exercisable only to the same extent as the related Option;
provided, however, that an SAR, by its terms, shall be exercisable only
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when the fair market value of the Common Stock subject to the SAR and
related option exceeds the exercise price thereof.
(c) Upon exercise of an SAR granted simultaneously with or subsequent to an
option and in the alternative thereto, the number of shares of Common Stock
for which the related option shall be exercisable shall be reduced by the
number of shares of Common Stock for which the SAR shall have been
exercised. The number of shares of Common Stock for which an SAR shall be
exercisable shall be reduced upon any exercise of a related option by the
number of shares of Common Stock for which such option shall have been
exercised.
(d) Any SAR shall be exercisable upon such additional terms and conditions as
may be prescribed by the Plan Administrator.
(e) Any election by a holder of an SAR to receive cash in full or partial
settlement of such SAR, and any exercise of such SAR for cash, may be made
only by a Request filed with the Secretary. Within thirty (30) days of the
receipt by the Secretary of a Request to receive cash in full or partial
settlement of an SAR or to exercise such SAR for cash, the Plan
Administrator shall, in its sole discretion, either consent to or
disapprove, in whole or in part, such Request. A Request to receive cash
in full or partial settlement of an SAR may provide that, in the event the
Plan Administrator shall disapprove such Request, such Request shall be
deemed to be an exercise of such SAR for shares of Common Stock.
(f) If the Committee disapproves in whole or in part any election by a holder
to receive cash in full or partial settlement of an SAR or to exercise such
SAR for cash, such disapproval shall not affect such holder's right to
exercise such SAR at a later date, to the extent that such SAR shall be
otherwise exercisable, or to elect the form of payment at a later date,
provided that an election to receive cash upon such later exercise shall be
subject to the approval of the Plan Administrator. Additionally, such
disapproval
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shall not affect such holder's right to exercise any related option or
options granted to such holder under the Plan.
Section 8. Terms of Options and SARs. Each option or SAR granted under the
Plan shall be evidenced by an agreement between Hyperion and the person to whom
such option or SAR is granted and shall be subject to the following terms and
conditions:
(a) Subject to adjustment as provided in Section 13 of this Plan, the price at
which each share covered by an option may be purchased shall be determined
in each case by the Plan Administrator; provided, however, that such price
shall not, in the case of an Incentive Stock Option, be less than the fair
market value thereof at the time the option is granted. If an optionee
owns (or is deemed to own under applicable provisions of the Code and rules
and regulations promulgated thereunder) more than ten percent (10%) of the
combined voting power of all classes of the stock of the Company and an
option granted to such optionee is intended to qualify as an Incentive
Stock Option, the option price shall be no less than 110% of the fair
market value of the Common Stock covered by the option on the date the
option is granted.
(b) The aggregate fair market value of shares of Common Stock with respect to
which Incentive Stock Options are first exercisable by the optionee in any
calendar year (under all plans of the Company) shall not exceed the
limitations, if any, imposed by Section 422(d) of the Code (or any
successor provision). If any option designated as an Incentive Stock
Option, either alone or in conjunction with any other option or options,
exceeds the foregoing limitation, the portion of such option in excess of
such limitation shall automatically be reclassified (in whole share
increments and without fractional share portions) as a Nonstatutory Stock
Option, with later granted options being so reclassified first.
(c) Neither an option nor an SAR shall be transferable by the participant
otherwise than by will or by the laws of descent and distribution or
pursuant to a domestic relations order. After the death of the
participant, the option or SAR may be transferred to Hyperion upon such
terms and conditions, if any, as the Plan Administrator and the personal
representative or other person entitled to the option or SAR may agree
within the period specified in subsection 8(d)(iii) hereof.
(d) An option or SAR may be exercised in whole at any time, or in part from
time to time, within such period or periods (not to exceed ten years from
the granting of the option in the case of an Incentive Stock Option) as may
be determined by the Plan Administrator and set forth in the agreement
(such period or periods being hereinafter referred to as the "option
period"), provided that, unless the agreement provides otherwise:
(i) If a participant who is an employee of the Company shall cease to be
employed by the Company, all options and SARs may be exercised only
within three months after the termination of employment and within
the option period or, if such termination was due to disability or
retirement (as hereinafter defined),
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within one year after termination of employment and within the option
period, unless such termination of employment shall be for Cause (as
defined herein) or the participant becomes an officer or director of,
a consultant to or employed by a Competing Business (as defined
herein), in which case all options and SARs shall forthwith terminate;
provided, however, that the Plan Administrator may in its sole
discretion extend the option period of any option or SAR for up to
three years from the date of termination of employment regardless of
the original option period. For purposes of the Plan, retirement shall
mean the termination of employment with the Company, other than for
Cause, at any time after the age 65.
For purposes of this Plan, the term "Cause" shall mean (a) with
respect to an individual who is party to a written agreement with the
Company which contains a definition of "cause" or "for cause" or words
of similar import for purposes of termination of employment thereunder
by the Company, "cause" or "for cause" as in defined in such
agreement; (b) in all other cases (I) the willful commission by an
employee of a criminal or other act that causes substantial economic
damage to the Company or substantial injury to the business reputation
of the Company; (II) the commission of an act of fraud in the
performance of such person's duties to or on behalf of the Company;
(III) the continuing willful failure of a person to perform the duties
of such person to the Company (other than a failure to perform duties
resulting from such person's incapacity due to illness) after written
notice thereof (specifying the particulars thereof in reasonable
detail) and a reasonable opportunity to be heard and cure such failure
are given to the person by the Board of Directors of Hyperion or the
Plan Administrator. For purposes of the Plan, no act, or failure to
act, on the part of any person shall be considered "willful" unless
done or omitted to be done by the person in good faith and without
reasonable belief that the person's action or omission was in the best
interest of the Company.
For purposes of this Plan, the term "Competing Business" shall mean:
any person, corporation or other entity engaged in the business of (a)
providing telecommunications alternate access network systems or (b)
selling or attempting to sell any product or service which is the same
as or similar to products or services sold by the Company within the
last three (3) years prior to termination of person's employment,
consultant relationship or directorship, as the case may be,
hereunder.
(ii) If a participant who is a director of the Company shall cease to serve
as a director of the Company, the option or SAR may be exercised only
within three months after the cessation of service and within the
option period or, if such cessation was due to disability, within one
year after cessation of service and within the option period; unless
such cessation of service as a director was the result of removal for
Cause or the participant becomes an officer or director of, a
consultant to or employed by a Competing Business, in which case any
options and SARs shall forthwith terminate; provided, however, that
the Plan
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Administrator may in its sole discretion extend the option period of
any option or SAR for up to three years from the date of cessation of
service regardless of the original option period;
(iii) If the optionee shall die, the option or SAR may be exercised only
within one year after the participant's death and within the option
period and only by the participant's personal representative or
persons entitled thereto under the participant's will or the laws of
descent and distribution;
(iv) The option or SAR may not be exercised for more shares (subject to
adjustment as provided in Section 13) after the termination of the
participant's employment, cessation of service as a director or the
participant's death, as the case may be, than the participant was
entitled to purchase thereunder at the time of the termination of the
participant's employment or the participant's death; and
(v) If a participant owns (or is deemed to own under applicable provisions
of the Code and rules and regulations promulgated thereunder) more
than 10% of the combined voting power of all classes of stock of the
Company (or any parent or subsidiary corporation of the Company) and
an option granted to such participant is intended to qualify as an
Incentive Stock Option, the option by its terms may not be exercisable
after the expiration of five years from the date such option is
granted.
(e) The option exercise price of each share purchased pursuant to an option
shall be paid in full at the time of each exercise (the "Payment Date") of
the option (i) in cash; (ii) by delivering to Hyperion a notice of
exercise with an irrevocable direction to a broker-dealer registered under
the Securities Exchange Act of 1934, as amended, to sell a sufficient
portion of the shares and deliver the sale proceeds directly to Hyperion to
pay the exercise price; (iii) in the discretion of the Plan Administrator,
through the delivery to Hyperion of previously-owned shares of Common Stock
having an aggregate fair market value equal to the option price of the
shares being purchased pursuant to the exercise of the option; provided,
however, that shares of Common Stock delivered in payment of the option
price must have been held by the participant for at least six (6) months in
order to be utilized to pay the option price; (iv) through an election
pursuant to Section 9 hereof to have shares of Common Stock otherwise
issuable to the optionee withheld to pay the exercise price of such option;
or (v) in the discretion of the Plan Administrator, through any combination
of the payment procedures set forth in subsections (i)-(iv) of this Section
8(e).
(f) The Plan Administrator, in its discretion, may authorize "stock retention
options" which provide, upon the exercise of an option previously granted
under this Plan (a "prior option"), using previously owned shares, for the
automatic issuance of a new option under this Plan with an exercise price
equal to the current fair market value and for up to the number of shares
equal to the number of previously-owned shares delivered in
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payment of the exercise price of the prior option. Such stock retention
option shall have the same option period as the prior option.
(g) Nothing contained in the Plan nor in any stock option, SAR, share award or
stock equivalent agreement shall confer upon any participant any right with
respect to the continuance of employment by the Company nor interfere in
any way with the right of the Company to terminate his employment or change
his compensation at any time.
(h) The Plan Administrator may include such other terms and conditions not
inconsistent with the foregoing as the Plan Administrator shall approve.
Without limiting the generality of the foregoing sentence, the Plan
Administrator shall be authorized to determine that options or SARs shall
be exercisable in one or more installments during the term of the option
and the right to exercise may be cumulative as determined by the Plan
Administrator.
Section 9. Share Withholding.
(a) An optionee may, in the sole discretion of the Plan Administrator, pay the
exercise price of an option, in whole or in part, by requesting that
Hyperion withhold shares of stock otherwise issuable to the optionee having
a fair market value equal to the portion of the exercise price of the
option being paid pursuant to such election (a "Share Withholding
Election").
(b) A Share Withholding Election must be in writing and must be delivered to
Hyperion no later than with the delivery of the notice of exercise of the
option.
Section 10. Share Awards; Phantom Stock.
(a) The Plan Administrator may, from time to time, subject to the provisions of
the Plan, award shares of Common Stock or stock equivalent units with a
value equal to the Common Stock ("Phantom Stock") to participants.
(b) The award of shares or Phantom Stock shall be evidenced by an agreement
executed by Hyperion and the grantee setting forth the number of shares of
Common Stock or Phantom Stock awarded, the vesting period, the vesting
schedule or criteria and such other terms and conditions as the Plan
Administrator may determine.
(c) The grantee of a share award shall receive shares of Common Stock without
payment to Hyperion immediately upon grant; provided, however, that the
grantee's ownership of such shares shall be subject to the following terms
and conditions:
(i) Any award of shares to a participant shall vest in installments upon
achievement by the Company or grantee of specified performance goals
as determined by the Plan Administrator and as provided in the share
award agreement;
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(ii) If the grantee or the Company, as the case may be, fails to achieve
the designated goals or the grantee ceases to be employed by the
Company for any reason (including death, permanent disability or
retirement) prior to the expiration of the vesting period, the
grantee shall forfeit all shares so awarded which have not then
vested;
(iii) A grantee who has received a share award pursuant to the Plan shall
have all rights of a stockholder in such Common Stock, including but
not limited to the right to vote and receive dividends with respect
thereto; provided, however, that shares awarded pursuant to the Plan
which have not vested may not be sold or otherwise transferred by the
grantee and stock certificates representing such shares shall bear a
restrictive legend to that effect; and
(iv) Hyperion may, in the discretion of the Plan Administrator, retain
possession of the stock certificate for the shares awarded under any
share award until all restrictions on such ownership have vested or
lapsed.
(d) A vested Phantom Stock award shall entitle the holder thereof to receive
from Hyperion an amount of cash equal to the number of units of Phantom
Stock covered by the award multiplied by the fair market value of the
Common Stock on the date of exercise of the Phantom Stock. A holder of
Phantom Stock shall have no rights of a stockholder.
Section 11. Limitation on Options and Awards. The aggregate number of shares
covered by any options, SARs, share awards or Phantom Stock awards granted to
one person shall not exceed twenty-five percent (25%) of the aggregate number of
shares subject to the Plan as provided in Section 5 hereof.
Section 12. Tax Withholding.
(a) Whenever shares are to be issued or cash is to be paid under the Plan,
Hyperion shall have the right to require the participant to remit to
Hyperion an amount sufficient to satisfy federal, state and local tax
withholding requirements prior to the delivery of any certificate for
shares or any proceeds; provided, however, that in the case of a
participant who receives an award of shares under the Plan which is not
fully vested, the participant shall remit such amount on the first business
day following the Tax Date. The "Tax Date" for purposes of this Section 12
shall be the date on which the amount of tax to be withheld is determined.
If a participant makes a disposition of shares acquired upon the exercise
of an Incentive Stock Option within either two years after the option was
granted or one year after the receipt of stock by the participant, the
participant shall promptly notify Hyperion and Hyperion shall have the
right to require the participant to pay to Hyperion an amount sufficient to
satisfy federal, state and local tax withholding requirements.
(b) A participant who is obligated to pay Hyperion an amount required to be
withheld under applicable tax withholding requirements may pay such amount
(i) in cash;
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(ii) in the discretion of the Plan Administrator, through the delivery to
Hyperion of previously-owned shares of Common Stock having an
aggregate fair market value on the Tax Date equal to the tax
obligation provided that the previously owned shares delivered in
satisfaction of the withholding obligations must have been held by the
participant for at least six (6) months; or (iii) in the discretion of
the Plan Administrator, through a combination of the procedures set
forth in subsections (i) an (ii) of this Section 12(b).
(c) A participant who is obligated to pay to Hyperion an amount required to be
withheld under applicable tax withholding requirements in connection with
either the exercise of a Nonstatutory Stock Option or a share award under
the Plan may, in the discretion of the Plan Administrator, elect to satisfy
this withholding obligation, in whole or in part, by requesting that
Hyperion withhold shares of stock otherwise issuable to the participant
having a fair market value on the Tax Date equal to the amount of the tax
required to be withheld; provided, however, that shares may be withheld by
Hyperion only if such withheld shares have vested. Any fractional amount
shall be paid to Hyperion by the optionee in cash or shall be withheld from
the participant's next regular paycheck.
(d) An election by a participant to have shares of stock withheld to satisfy
federal, state and local tax withholding requirements pursuant to Section
12(c) (a "Tax Withholding Election") must be in writing and delivered to
Hyperion prior to the Tax Date.
Section 13. Adjustment of Number and Price of Shares.
The following shall be subject to the provisions of Section 5(a) of
this Plan.
(a) In the event that a dividend shall be declared upon the Common Stock of
Hyperion payable in shares of said stock, the number of shares of Common
Stock covered by each outstanding option and the number of shares which may
be issued pursuant to the Plan but are not yet covered by outstanding
options shall be adjusted by adding thereto the number of shares of Common
Stock which would have been distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders entitled to
receive such stock dividend.
(b) In the event that the outstanding shares of Common Stock of Hyperion shall
be changed into or exchanged for a different number or kind of shares of
stock or other securities of Hyperion or of another corporation, whether
through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, then there shall be substituted for the
shares of Common Stock covered by each outstanding option, and the shares
which may be issued pursuant to the Plan but are not yet covered by
outstanding options, the number and kind of shares of stock or other
securities which would have been substituted therefor if such shares had
been outstanding on the date fixed for determining the stockholders
entitled to receive such changed or substituted stock or other securities.
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(c) In the event there shall be any change, other than specified in this
Section 13, in the number or kind of outstanding shares of Common Stock of
Hyperion or of any stock or other securities into which such Common Stock
shall be changed or for which it shall have been exchanged, then, if the
Board of Directors shall determine, in its discretion, that such change
equitably requires an adjustment in the number or kind of shares covered by
outstanding options and the shares which may be issued pursuant to the Plan
but are not yet covered by outstanding options, such adjustment shall be
made by the Board of Directors and shall be effective and binding for all
purposes of the Plan and on each outstanding stock option agreement.
(d) In the event that, by reason of a corporate merger, consolidation,
acquisition of property or stock, separation, reorganization or
liquidation, the Board of Directors shall authorize the issuance or
assumption of a stock option or stock options in a transaction to which
Section 424(a) of the Code applies, then, notwithstanding any other
provision of the Plan, the Plan Administrator may grant an option or
options upon such terms and conditions as it may deem appropriate for the
purpose of assumption of the old option, or substitution of a new option
for the old option, in conformity with the provisions of Code Section
424(a) and the rules and regulations thereunder, as they may be amended
from time to time.
(e) No adjustment or substitution provided for in this Section 13 shall require
Hyperion to issue or to sell a fractional share under any stock option
agreement or share award agreement and the total adjustment or substitution
with respect to each stock option and share award agreement shall be
limited accordingly.
(f) In the case of any adjustment or substitution provided for in this Section
13, the option price per share in each stock option agreement shall be
equitably adjusted by the Board of Directors to reflect the greater or
lesser number of shares of stock or other securities into which the stock
covered by the option may have been changed or which may have been
substituted therefor.
Section 14. Fair Market Value. In any determination of fair market value of
the Common Stock hereunder, fair market value, as to any date, shall mean (i)
the closing sale price of the Common Stock on the day before the date in
question (or if no sales were reported on such day, on the next preceding day on
which sales were reported) if the Common Stock is listed for trading on a
national securities exchange, the Nasdaq National Market or other last reported
sale system; (ii) if last reported sales information is not available for the
Common Stock, the closing bid price on the day before the date in question; or
(iii) if the Common Stock is not listed for trading or quoted in a quotations
system, a price determined by the Plan Administrator. In all cases, the
determination by the Plan Administrator of fair market value shall be
conclusive.
Section 15. Change in Control.
(a) In the event of a Change in Control of Hyperion, as hereinafter defined,
the following provisions shall apply to options, SARs, share awards and
Phantom Stock
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previously awarded under the Plan, notwithstanding any provision
herein or in any agreement to the contrary:
(i) All options or SARs which provide for exercise in one or more
installments shall become immediately exercisable in full;
(ii) If any optionee shall cease to be employed by the Company within one
(1) year following a Change in Control, then the option or SAR, as the
case may be, may in all events be exercised for a period of three
months after such termination of employment if otherwise within the
option period;
(iii) All awards of shares and Phantom Stock under the Plan which have not
previously vested shall become vested.
(b) The term "Change in Control" shall mean a change in control of Hyperion of
a nature that would be required to be reported in response to Item 6(e) of
Schedule 14A promulgated under the Exchange Act as in effect on the date
thereof or, if Item 6(e) is no longer in effect, any regulations issued by
the Securities and Exchange Commission pursuant to the Exchange Act which
serve similar purposes other than any event or series of events the result
of which is that John J. Rigas and/or members of his family (the "Rigas
Family") or any affiliate of the Rigas Family obtains or maintains control;
provided that, without limitation, such a Change in Control shall be deemed
to have occurred if: (i) Hyperion shall be merged or consolidated with
another corporation or entity, other than the Rigas Family or a corporation
or entity which is an "affiliate" of the Rigas Family (as such term is
defined in Rule 144(a) promulgated under the Securities Act of 1933), or
(ii) Hyperion shall sell all or substantially all of its operating
properties and assets to another person, group of associated persons or
corporation, excluding the Rigas Family or any affiliate of the Rigas
Family, if any, or (iii) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) other than the Rigas Family or any
affiliate of the Rigas Family, is or becomes a beneficial owner, directly
or indirectly, of securities of Hyperion representing 25% or more of the
combined voting power of Hyperion's then outstanding securities coupled
with or followed by the election as directors of Hyperion of persons who
were not directors at the time of such acquisition if such person shall
elect a majority of the Board of Directors of Hyperion.
Section 16. Amendment and Discontinuance. The Board of Directors may alter,
amend, suspend or discontinue the Plan, provided that no such action shall
deprive any person without such person's consent of any rights theretofore
granted pursuant hereto.
Section 17. Compliance with Governmental Regulations. Notwithstanding any
provision of the Plan or the terms of any agreement entered into pursuant to the
Plan, Hyperion shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act of 1933
or the Exchange Act, if such registration shall be necessary, or before
compliance by Hyperion or any participant with any other provisions of either of
those acts or of regulations or rulings of the Securities and Exchange
Commission thereunder, or before compliance with other federal and state laws
and regulations and rulings
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thereunder, including the rules any applicable exchange or of the Nasdaq Stock
Market. Hyperion shall use its best efforts to effect such registrations and to
comply with such laws, regulations and rulings forthwith upon advice by its
counsel that any such registration or compliance is necessary.
Section 18. Compliance with Section 16. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 (or its successor rule). To
the extent that any grant of an option, SAR, share award or Phantom Stock award
fails to so comply, it shall be deemed null and void to the extent permitted by
law and to the extent deemed advisable by the Plan Administrator.
Section 19. Participation by Foreign Nationals. The Plan Administrator may,
in order to fulfill the purposes of the Plan and without amending the Plan,
modify grants to foreign nationals or United States citizens employed abroad in
order to recognize differences in local law, tax policy or custom.
Section 20. Effective Date of Plan. The Plan became effective on October 3,
1996, the date of approval and adoption of the Plan by the holders of the
outstanding shares of Common Stock of Hyperion.
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