FEDERATED INVESTORS, INC.
STOCK INCENTIVE PLAN
(Adopted as of February 20, 1998)
1. PURPOSE
The purpose of the Federated Investors, Inc. Stock Incentive Plan (the
"Plan") is to:
(a) Facilitate the assumption by Federated Investors, Inc., as the
surviving corporation of a merger with its parent corporation,
Federated Investors, of certain stock incentive awards previously made
by Federated Investors to its employees; and
(b) Continue to promote the long-term growth and performance of Federated
Investors, Inc. and its affiliates and to attract and retain
outstanding individuals by awarding directors, executive officers and
key employees stock options, stock appreciation rights, performance
awards, restricted stock and/or other stock-based awards.
2. DEFINITIONS
The following definitions are applicable to the Plan:
"Award" means the grant of Options, SARs, Performance Awards, Restricted
Stock or other stock-based award under the Plan.
"Board" means the Board of Directors of the Company.
"Board Committee" means the committee of the Board appointed in accordance
with Section 4 to administer the Plan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Class B Common Stock of the Company, par value
$0.01 per share.
"Company" means Federated Investors, Inc., a Pennsylvania corporation, and
its successors and assigns.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, on any date, the closing sale price of one share
of Common Stock, as reported on the New York Stock Exchange or any national
securities exchange on which the Common Stock is then listed or on The NASDAQ
Stock Market's National Market ("NNM") if the Common Stock is then quoted
thereon, as published in the Wall Street Journal or another newspaper of general
circulation, as of such date or, if there were no sales reported as of such
date, as of the last date preceding such date as of which a sale was reported.
In the event that the Common Stock is not listed for trading on a national
securities exchange or authorized for quotation on NNM, Fair Market Value shall
be the closing bid price as reported by The NASDAQ Stock Market or The NASDAQ
SmallCap Market (if applicable), or if no such prices shall have been so
reported for such date, on the next preceding date for which such prices were so
reported. In the event that the Common Stock is not listed on the New York Stock
Exchange, a national securities exchange or NNM, and is not listed for quotation
on The NASDAQ Stock Market or The NASDAQ SmallCap Market, Fair Market Value
shall be determined in good faith by the Board Committee in its sole discretion,
and for this purpose the Board Committee shall be entitled to rely on the
opinion of a qualified appraisal firm with respect to such Fair Market Value,
but the Board Committee shall in no event be obligated to obtain such an opinion
in order to determine Fair Market Value.
"Grant Date" means the date on which the grant of an Option under Section
5.1 hereof or a SAR under Section 6.1 hereof becomes effective pursuant to the
terms of the Stock Option Agreement or Stock Appreciation Rights Agreement, as
the case may be, relating thereto.
"Incentive Stock Option" means an option to purchase shares of Common Stock
designated as an incentive stock option and which complies with Section 422 of
the Code.
"Non-Statutory Stock Option" means an option to purchase shares of Common
Stock which is not an Incentive Stock Option.
"Offering" means the initial public offering of Class B Common Stock by
United States and international underwriters.
"Option" means any option to purchase shares of Common Stock granted under
Sections 5.1 or 10.1 hereof.
"Option Price" means the purchase price of each share of Common Stock under
an Option.
"Outside Director" means a member of the Board who is not an employee of
the Company or any Subsidiary.
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"Participant" means any salaried employee of the Company and its affiliates
designated by the Board Committee to receive an Award under the Plan.
"Performance Award" means an Award of shares of Common Stock granted under
Section 7.
"Performance Period" means the period of time established by the Board
Committee for achievement of certain objectives under Section 7.1 hereof.
"Restriction Period" means the period of time specified in a Performance
Share Award Agreement or a Restricted Stock Award Agreement, as the case may be,
between the Participant and the Company during which the following conditions
remain in effect: (i) certain restrictions on the sale or other disposition of
shares of Common Stock awarded under the Plan, and (ii) subject to the terms of
the applicable agreement, a requirement of continued employment of the
Participant in order to prevent forfeiture of the Award.
"Stock Appreciation Rights" or "SARs" means the right to receive a cash
payment from the Company equal to the excess of the Fair Market Value of a
stated number of shares of Common Stock at the exercise date over a fixed price
for such shares.
"Subsidiary" means any corporation, business trust or partnership (other
than the Company) in an unbroken chain of corporations, business trusts or
partnerships beginning with the Company if each of the corporations, business
trusts or partnerships (other than the last corporation, business trust or
partnership in the chain) owns stock, beneficial interests or partnership
interests possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations, business trusts or
partnerships in the chain.
"Ten Percent Holder" means a person who owns (within the meaning of Section
424(d) of the Code) more than ten percent of the voting power of all classes of
stock of the Company or of its parent corporation or Subsidiary.
3. SHARES SUBJECT TO PLAN
3.1 Shares Reserved under the Plan. Subject to adjustment as provided in
Section 3.2, the number of shares of Common Stock cumulatively available under
the Plan shall equal 9,000,000 shares. All of such authorized shares of Common
Stock shall be available for the grant of Incentive Stock Options under the
Plan. No Participant shall receive Awards in respect of more than 200,000 shares
of Common Stock in any fiscal year of the Company. In addition, the aggregate
Fair Market Value (determined on the Grant Date) of Common Stock with respect to
which Incentive Stock Options granted a Participant become exercisable for the
first time in any single calendar year shall not exceed $100,000. Any Common
Stock issued by the Company through the assumption or substitution of
outstanding grants from an acquired corporation or entity shall not reduce the
shares available for grants under the Plan. Shares of Common Stock to be issued
pursuant to the Plan may be authorized and unissued shares, treasury shares, or
any combination
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thereof. Subject to Section 6.2 hereof, if any shares of Common Stock subject to
an Award hereunder are forfeited or any such Award otherwise terminates without
the issuance of such shares of Common Stock to a Participant, or if any shares
of Common Stock are surrendered by a Participant in full or partial payment of
the Option Price of an Option, such shares, to the extent of any such
forfeiture, termination or surrender, shall again be available for grant under
the Plan.
3.2 Adjustments. The aggregate number of shares of Common Stock which may
be awarded under the Plan and the terms of outstanding Awards shall be adjusted
by the Board Committee to reflect a change in the capitalization of the Company,
including but not limited to, a stock dividend or split, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares, spin-
off, spin-out or other distribution of assets to shareholders; PROVIDED that the
number and price of shares subject to outstanding Options granted to Outside
Directors pursuant to Section 10 hereof and the number of shares subject to
future Options to be granted pursuant to Section 10 shall be subject to
adjustment only as set forth in Section 10 hereof.
3.3 Merger With Federated Investors. Notwithstanding the foregoing,
the Company's merger with Federated Investors and assumption of its outstanding
stock incentive awards will not result in any adjustment to the number of shares
available under the Plan and will reduce the number of shares available under
this Plan accordingly. For purposes of this Plan, after the merger all such
stock incentive awards shall be treated as Awards under this Plan, except that
any Grant Date, Performance Period or Restricted Period shall relate back to the
date on which the awards were made by Federated Investors.
4. ADMINISTRATION OF PLAN
4.1 Administration by the Board Committee. The Plan shall be administered
as follows.
(a) Prior to an Offering, the Plan shall be administered by either the
full Board or by the Board Committee if one is established by the
Board. Prior to an Offering, any member of the Board may serve on the
Board Committee.
(b) After an Offering, the Plan shall be administered by the Board
Committee, which shall consist of no fewer than two members of the
Board who are (i) "Non-Employee Directors" for purposes of Rule 16b-3
of the Commission under the Exchange Act and (ii) to the extent
required to ensure that awards under the Plan are exempt for purposes
of Section 162(m) of the Code, "outside directors" for purposes of
Section 162(m); PROVIDED, HOWEVER, that the Board Committee may
delegate some or all of its authority and responsibility under the
Plan with respect to Awards to Participants who are not subject to
Section 16 of the Exchange Act to the Chief Executive Officer of the
Company. In the event that, after an Offering, the Board does not have
two members who qualify
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has "Non-Employee Directors" for purposes of Rule 16b-3, the Plan
shall be administered by the full Board.
(c) The Board Committee shall have authority to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to
the Plan, to prescribe the form of any agreement or instrument
executed in connection herewith, and to make all other determinations
necessary or advisable for the administration of the Plan. All such
interpretations, rules, regulations and determinations shall be
conclusive and binding on all persons and for all purposes. In
addition, the Board Committee shall have authority, without amending
the Plan, to grant Awards hereunder to Participants who are foreign
nationals or employed outside the United States or both, on terms and
conditions different from those specified herein as may, in the sole
judgment and discretion of the Board Committee, be necessary or
desirable to further the purpose of the Plan.
(d) Notwithstanding the foregoing, the Board Committee shall not have any
discretion with respect to Options granted to Outside Directors
pursuant to Section 10 hereof. In the event that the Board does not
establish a Board Committee for any reason, any reference in this Plan
to the Board Committee shall be deemed to refer to the full Board.
4.2 Designation of Participants. Participants shall be selected, from
time to time, by the Board Committee, from those executive officers and key
employees of the Company and its affiliates who, in the opinion of the Board
Committee, have the capacity to contribute materially to the continued growth
and successful performance of the Company. Outside Directors shall be
Participants only in accordance with Section 10.
5. STOCK OPTIONS
5.1 Grants. Options may be granted, from time to time, to such
Participants as may be selected by the Board Committee on such terms, not
inconsistent with this Plan, as the Board Committee shall determine. The Option
Price shall be determined by the Board Committee effective on the Grant Date;
PROVIDED, HOWEVER, that (i) in the case of Incentive Stock Options granted to a
Participant who on the Grant Date is not a Ten Percent Holder, such price shall
not be less than one hundred percent (100%) of the Fair Market Value of a share
of Common Stock on the Grant Date, (ii) in the case of an Incentive Stock Option
granted to a Participant who on the Grant Date is a Ten Percent Holder, such
price shall be not less than one hundred and ten percent (110%) of the Fair
Market Value of a share of Common Stock on the Grant Date, and (iii) in the case
of Non-Statutory Stock Options, such price shall be not less than eighty-five
percent (85%) of the Fair Market Value of a share of Common Stock on the Grant
Date. The number of shares of Common Stock subject to each Option granted to
each Participant, the terms of each Option, and any other terms and conditions
of an Option granted hereunder shall be determined by the Board Committee, in
its sole discretion, effective on the Grant Date; PROVIDED, HOWEVER, that no
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Incentive Stock Option shall be exercisable any later than ten (10) years from
the Grant Date. Each Option shall be evidenced by a Stock Option Agreement
between the Participant and the Company which shall specify the type of Option
granted, the Option Price, the term of the Option, the number of shares of
Common Stock to which the Option pertains, the conditions upon which the Option
becomes exercisable and such other terms and conditions as the Board Committee
shall determine.
5.2 Payment of Option Price. No shares of Common Stock shall be issued
upon exercise of an Option until full payment of the Option Price therefor by
the Participant. Upon exercise, the Option Price may be paid in cash, in shares
of Common Stock having a Fair Market Value equal to the Option Price, or in any
combination thereof, or in any other manner approved by the Board Committee.
5.3 Rights as Shareholders. Participants shall not have any of the rights
of a shareholder with respect to any shares subject to an Option until such
shares have been issued upon the proper exercise of such Option.
5.4 Transferability of Options. Options granted under the Plan may not be
sold, transferred, pledged, assigned, hypothecated or otherwise disposed of
except by will or by the laws of descent and distribution; PROVIDED, HOWEVER,
that, if authorized in the applicable Award agreement, a Participant may make
one or more gifts of Options granted hereunder to members of the Participant's
immediate family or trusts or partnerships for the benefit of such family
members. All Options granted to a Participant under the Plan shall be
exercisable during the lifetime of such Participant only by such Participant,
his agent, guardian or attorney-in-fact.
5.5 Termination of Employment. If a Participant ceases to be an employee
of either the Company or of any of its affiliates, the Options granted hereunder
shall be exercisable in accordance with the Stock Option Agreement between the
Participant and the Company.
5.6 Designation of Incentive Stock Options. Except as otherwise expressly
provided in the Plan, the Board Committee may, at the time of the grant of an
Option, designate such Option as an Incentive Stock Option under Section 422 of
the Code.
5.7 Certain Incentive Stock Option Terms. In the case of any grant of an
Incentive Stock Option, whenever possible, each provision in the Plan and in any
related agreement shall be interpreted in such a manner as to entitle the Option
holder to the tax treatment afforded by Section 422 of the Code, and if any
provision of this Plan or such agreement shall be held not to comply with
requirements necessary to entitle such Option to such tax treatment, then (i)
such provision shall be deemed to have contained from the outset such language
as shall be necessary to entitle the Option to the tax treatment afforded under
Section 422 of the Code, and (ii) all other provisions of this Plan and the
agreement relating to such Option shall remain in full force and effect. If any
agreement covering an Option designated by the Board Committee to be an
Incentive Stock Option under this Plan
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shall not explicitly include any terms required to entitle such Incentive Stock
Option to the tax treatment afforded by Section 422 of the Code, all such terms
shall be deemed implicit in the designation of such Option and the Option shall
be deemed to have been granted subject to all such terms.
6. STOCK APPRECIATION RIGHTS
6.1 Grants. Stock Appreciation Rights may be granted, from time to time,
to such salaried employees of the Company and its affiliates as may be selected
by the Board Committee. SARs may be granted at the discretion of the Board
Committee either (i) in connection with an Option or (ii) independent of an
Option. The price from which appreciation shall be computed shall be established
by the Board Committee at the Grant Date; PROVIDED, HOWEVER, that such price
shall not be less than one-hundred percent (100%) of the Fair Market Value of
the number of shares of Common Stock subject of the grant on the Grant Date. In
the event the SAR is granted in connection with an Option, the fixed price from
which appreciation shall be computed shall be the Option Price. Each grant of a
SAR shall be evidenced by a Stock Appreciation Rights Agreement between the
Participant and the Company which shall specify the type of SAR granted, the
number of SARs, the conditions upon which the SARs vest and such other terms and
conditions as the Board Committee shall determine.
6.2 Exercise of SARs. SARs may be exercised upon such terms and
conditions as the Board Committee shall determine; PROVIDED, HOWEVER, that SARs
granted in connection with Options may be exercised only to the extent the
related Options are then exercisable. Notwithstanding Section 3.1 hereof, upon
exercise of a SAR granted in connection with an Option as to all or some of the
shares subject of such Award, the related Option shall be automatically canceled
to the extent of the number of shares subject of the exercise, and such shares
shall no longer be available for grant hereunder. Conversely, if the related
Option is exercised as to some or all of the shares subject of such Award, the
related SAR shall automatically be canceled to the extent of the number of
shares of the exercise, and such shares shall no longer be available for grant
hereunder.
6.3 Payment of Exercise. Upon exercise of a SAR, the holder shall be paid
in cash the excess of the Fair Market Value of the number of shares subject of
the exercise over the fixed price, which in the case of a SAR granted in
connection with an Option shall be the Option Price for such, shares.
6.4 Rights of Shareholders. Participants shall not have any of the rights
of a shareholder with respect to any Options granted in connection with a SAR
until shares have been issued upon the proper exercise of an Option.
6.5 Transferability of SARs. SARs granted under the Plan may not be sold,
transferred, pledged, assigned, hypothecated or otherwise disposed of except by
will or by the laws of descent and distribution. All SARs granted to a
Participant under the Plan shall
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be exercisable during the lifetime of such Participant only by such Participant,
his agent, guardian, or attorney-in-fact.
6.6 Termination of Employment. If a Participant ceases to be an employee
of either the Company or of any of its affiliates, SARs granted hereunder shall
be exercisable in accordance with the Stock Appreciation Rights Agreement
between the Participant and the Company.
7. PERFORMANCE AWARDS
7.1 Awards. Awards of shares of Common Stock may be made, from time to
time, to such Participants as may be selected by the Board Committee. Such
shares shall be delivered to the Participant only upon (i) achievement of such
corporate, sector, division, individual or any other objectives or criteria
during the Performance Period as shall be established by the Board Committee and
(ii) the expiration of the Restriction Period. Except as provided in the
Performance Share Award Agreement between the Participant and the Company,
shares subject to such Awards under this Section 7.1 shall be released to the
Participant only after the expiration of the relevant Restriction Period. Each
Award under this Section 7.1 shall be evidenced by a Performance Share Award
Agreement between the Participant and the Company which shall specify the
applicable performance objectives, the Performance Period, the Restriction
Period, any forfeiture conditions and such other terms and conditions as the
Board Committee shall determine.
7.2 Stock Certificates. Upon an Award of shares of Common Stock under
Section 7.1 of the Plan, the Company shall issue a certificate registered in the
name of the Participant bearing the following legend and any other legend
required by any federal or state securities laws or by the Delaware Business
Trust Act:
"The sale or other transfer of the shares of stock
represented by this certificate is subject to certain
restrictions set forth in the Federated Investors, Inc.
Stock Incentive Plan, administrative rules adopted
pursuant to such Plan and a Performance Share Award
Agreement between the registered owner and Federated
Investors, Inc. A copy of the Plan, such rules and such
Agreement may be obtained from the Secretary of
Federated Investors, Inc."
Unless otherwise provided in the Performance Share Award Agreement between the
Participant and the Company, such certificates shall be retained by the Company
until the expiration of the Restriction Period. Upon the expiration of the
Restriction Period, the Company shall (i) cause the removal of the legend from
the certificates for such shares as to which a Participant is entitled in
accordance with the Performance Share Award Agreement between the Participant
and the Company and (ii) release such shares to the custody of the Participant.
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7.3 Rights as Shareholders. Subject to the provisions of the Performance
Share Award Agreement between the Participant and the Company, during the
Performance Period, dividends and other distributions paid with respect to all
shares awarded thereto under Section 7.1 hereof shall, in the discretion of the
Board Committee, either be paid to Participants or held in escrow by the Company
and paid to Participants only at such time and to such extent as the related
Performance Award is earned. During the period between the completion of the
Performance Period and the expiration of the Restriction Period, Participants
shall be entitled to receive dividends and other distributions only as to the
number of shares determined in accordance with the Performance Share Award
Agreement between the Participant and the Company.
7.4 Transferability of Shares. Certificates evidencing the shares of
Common Stock awarded under the Plan shall not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise disposed of until the expiration
of the Restriction Period.
7.5 Termination of Employment. If a Participant ceases to be an employee
of either the Company or of one of its affiliates, the number of shares subject
of the Award, if any, to which the Participant shall be entitled shall be
determined in accordance with the Performance Share Award Agreement between the
Participant and the Company.
7.6 Transfer of Employment. If a Participant transfers employment from one
business unit of the Company or any of its affiliates to another business unit
during a Performance Period, such Participant shall be eligible to receive such
number of shares of Common Stock as the Board Committee may determine based upon
such factors as the Board Committee in its sole discretion may deem appropriate.
8. RESTRICTED STOCK AWARDS
8.1 Awards. Awards of shares of Common Stock subject to such restrictions
as to vesting and otherwise as the Board Committee shall determine, may be made,
from time to time, to Participants as may be selected by the Board Committee.
The Board Committee may in its sole discretion at the time of the Award or at
any time thereafter provide for the early vesting of such Award prior to the
expiration of the Restriction Period. Each Award under this Section 8.1 shall be
evidenced by a Restricted Stock Award Agreement between the Participant and the
Company which shall specify the vesting schedule, any rights of acceleration,
any forfeiture conditions, and such other terms and conditions as the Board
Committee shall determine.
8.2 Stock Certificates. Upon an Award of shares of Common Stock under
Section 8.1 of the Plan, the Company shall issue a certificate registered in the
name of the Participant bearing the following legend and any other legend
required by any federal or state securities laws or by the Delaware Business
Trust Act.
"The sale or other transfer of the shares of stock in
represented by this certificate is subject to certain
restrictions set forth
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the Federated Investors, Inc. Stock Incentive Plan,
administrative rules adopted pursuant to such Plan and
a Restricted Stock Award Agreement between the
registered owner and Federated Investors, Inc. A copy
of the Plan, such rules and such agreement may be
obtained form the Secretary of Federated Investors,
Inc."
Unless otherwise provided in the Restricted Stock Award Agreement between the
Participant and the Company, such certificates shall be retained in custody by
the Company until the expiration of the Restriction Period. Upon the expiration
of the Restriction Period, the Company shall (i) cause the removal of the legend
from the certificates for such shares as to which a Participant is entitled in
accordance with the Restricted Stock Award Agreement between the Participant and
the Company and (ii) release such shares to the custody of the Participant.
8.3 Rights as Shareholders. During the Restriction Period, Participants
shall be entitled to receive dividends and other distributions paid with respect
to all shares awarded thereto under Section 8.1 hereof.
8.4 Transferability of Shares. Certificates evidencing the shares of
Common Stock awarded under the Plan shall not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise disposed of until the expiration
of the Restriction Period.
8.5 Termination of Employment. If a Participant ceases to be an employee
of either the Company or of any of its affiliates, the number of shares subject
of the Award, if any, to which the Participant shall be entitled shall be
determined in accordance with the Restricted Stock Award Agreement between the
Participant and the Company. All remaining shares as to which restrictions apply
at the date of termination of employment shall be forfeited subject to such
exceptions, if any, authorized by the Board Committee.
9. OTHER STOCK-BASED AWARDS
Awards of shares of Common Stock and other awards that are valued in whole
or in part by reference to, or are otherwise based on, Common Stock, may be
made, from time to time, to salaried employees of the Company and its affiliates
as may be selected by the Board Committee. Such Awards may be made alone or in
addition to or in connection with any other Award hereunder. The Board Committee
may in its sole discretion determine the terms and conditions of any such Award.
Each such Award shall be evidenced by an agreement between the Participant and
the Company which shall specify the number of shares of Common Stock subject of
the Award, any consideration therefor, any vesting or performance requirements
and such other terms and conditions as the Board Committee shall determine.
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10. OUTSIDE DIRECTORS' OPTIONS
10.1 Initial Grants. Effective on the dates set forth below, each
category of Outside Director of the Company described below shall be
automatically granted an Option to purchase 3,000 shares of Common Stock:
(i) for any Outside Director serving on the Board at the effective date
of the Offering, the effective date of the Offering;
(ii) for any Outside Director elected by the shareholders of the Company
subsequent to the effective time of the Offering, the date of such
Outside Director's initial election to the Board; and
(iii) for any Outside Director appointed by the Board subsequent to the
effective time of the Offering, the date such Outside Director's
appointment to the Board becomes effective.
All such Options shall be Non-Statutory Stock Options. The Option Price for all
Options granted pursuant to this Section 10 shall be one hundred percent (100%)
of the Fair Market Value of the shares of Common Stock on the date at which the
Options are effective as set forth in this Section 10.1.
10.2 Annual Grants. Effective on a date established by the Board at or
prior to any Offering, and annually on such date thereafter, each Outside
Director shall automatically be granted an Option to purchase 1,000 shares of
Common Stock. All such Options shall be Non-Statutory Stock Options. The Option
Price shall be one-hundred percent (100%) of the Fair Market Value of the shares
of Common Stock on the date of grant.
1.03 Exercise of Options. One third (1/3) of the initial Options granted
pursuant to Section 10.1 shall vest in an Outside Director on each anniversary
of such grant until such Options are fully vested at the end of three years. All
Options granted pursuant to Section 10.2 shall vest immediately. All vested
Options shall be immediately exercisable and may be exercised by the Outside
Director for a period of ten (10) years from the date of grant PROVIDED,
HOWEVER, that in the event of the death of an Outside Director, the Option shall
be exercisable only within the twelve (12) months next succeeding the date of
death, and then only (i) by the executor or administrator of the Outside
Director's estate or by the person or persons to whom the Outside Director's
rights under the Option shall pass by the Outside Director's will or the laws of
descent and distribution, and (ii) if and to the extent that the Outside
Director was entitled to exercise the Option at the date of the Outside
Director's death, provided that in no event shall the Option be exercisable more
than ten (10) years after the date of grant.
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10.4 Payment of Option Price. An Option granted to an Outside Director
shall be exercisable only upon payment to the Company of the Option Price.
Payment for the shares shall be in United States dollars, payable in cash or by
check.
10.5 Adjustments. In case there shall be a merger, reorganization,
consolidation, recapitalization, stock dividend or other change in corporate
structure such that the shares of Common Stock are changed into or become
exchangeable for a larger or smaller number of shares, thereafter the number of
shares subject to outstanding Options granted to Outside Directors and the
number of shares subject to Options to be granted to Outside Directors pursuant
to the provisions of this Section 10 shall be increased or decreased, as the
case may be, in direct proportion to the increase or decrease in the number of
shares of Common Stock by reason of such change in corporate structure, provided
that the number of shares shall always be a whole number, and the purchase price
per share of any outstanding Options shall, in the case of an increase in the
number of shares, be proportionately reduced, and in the case of a decrease in
the number of shares, shall be proportionately increased.
11. AMENDMENT OR TERMINATION OF PLAN
The Board may amend, suspend or terminate the Plan or any part thereof from
time to time, provided that no change may be made which would impair the rights
of a Participant to whom shares of Common Stock have theretofore been awarded
without the consent of said Participant.
12. MISCELLANEOUS
12.1 Rights of Employees. Nothing in the Plan shall interfere with or
limit in any way the right of the Company or any affiliate to terminate any
Participant's employment at any time, nor confer upon any Participant any right
to continued employment with the Company or any affiliate.
12.2 Tax Withholding. The Company shall have the authority to withhold,
or to require a Participant to remit to the Company, prior to issuance or
delivery of any shares or cash hereunder, an amount sufficient to satisfy
federal, state and a local tax withholding requirements associated with any
Award. In addition, the Company may, in its sole discretion, permit a
Participant to satisfy any tax withholding requirements, in whole or in part, by
(i) delivering to the Company shares of Common Stock held by such Participant
having a Fair Market Value equal to the amount of the tax or (ii) directing the
Company to retain shares of Common stock otherwise issuable to the Participant
under the Plan.
12.3 Status of Awards. Awards hereunder shall not be deemed compensation
for purposes of computing benefits under any retirement plan of the Company or
affiliate and shall not affect any benefits under any other benefit plan now or
hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.
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12.4 Waiver of Restrictions. The Board Committee may, in its sole
discretion, based on such factors as the Board Committee may deem appropriate,
waive in whole or in part, any remaining restrictions or vesting requirements in
connection with any Award hereunder.
12.5 Adjustment of Awards. Subject to Section 11, the Board Committee
shall be authorized to make adjustments in performance award criteria or in the
terms and conditions of other Awards (except Options granted pursuant to Section
10 hereof) in recognition of unusual or nonrecurring events affecting the
Company or its financial statements or changes in applicable laws, regulations
or accounting principles; PROVIDED HOWEVER, that no such adjustment shall impair
the rights of any Participant without his consent. The Board Committee may also
make Awards hereunder in replacement of, or as alternatives to, Awards
previously granted to Participants, including without limitation, previously
granted Options having higher Option Prices and grants or rights under any other
plan of the Company or of any acquired entity. The Board Committee may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem desirable to carry it
into effect. In the event the Company shall assume outstanding employee benefit
awards or the right or obligation to make future such awards in connection with
the acquisition of another corporation or business entity, the Board Committee
may, in its discretion, make such adjustments in the terms of Awards under the
Plan as it shall deem appropriate. Notwithstanding the above, only the full
Board (and not the Board Committee) shall have the right to make any adjustments
in the terms or conditions of Options granted pursuant to Section 10.
12.6 Consideration for Awards. Except as otherwise required in any
applicable agreement or by the terms of the Plan, Participants under the Plan
shall not be required to make any payment or provide consideration for an Award
other than the rendering of services.
12.7 Special Forfeiture Rule. Notwithstanding any other provision of this
Plan to the contrary, the Board Committee shall be authorized to impose
additional forfeiture restrictions with respect to Awards granted under the
Plan, other than Awards pursuant to Section 10 hereof, including, without
limitation, provisions for forfeiture in the event the Participant shall engage
in competition with the Company or in any other circumstance the Board Committee
may determine.
12.8 Effective Date and Term of Plan. The Plan shall be effective as of
the date it is approved by the Board, subject to the approval thereof by the
shareholders of the Company. Unless terminated under the provisions of Section
11 hereof, the Plan shall continue in effect indefinitely; PROVIDED, HOWEVER,
that no Incentive Stock Options shall be granted after the tenth anniversary of
the effective date of the Plan.
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