1
EXHIBIT 10.1
BIORELIANCE CORPORATION
1997 INCENTIVE PLAN
(As Adopted May 28, 1997
and Amended September 24, 1997)
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EXHIBIT 10.1
BIORELIANCE CORPORATION
1997 INCENTIVE PLAN
1. Purpose. The purpose of this Plan is to strengthen
BioReliance Corporation, a Delaware corporation (the "Company"), by providing
an incentive to its employees, officers, consultants and directors and thereby
encouraging them to devote their abilities and industry to the success of the
Company's business enterprise. It is intended that this purpose be achieved by
extending to employees, officers, consultants and directors of the Company and
its Subsidiaries a long-term incentive for high levels of performance and
unusual efforts through the grant of Incentive Stock Options, Nonqualified
Stock Options, Stock Appreciation Rights, Dividend Equivalent Rights,
Performance Awards and/or Restricted Stock (as each term is herein defined).
After the Effective Date of this Plan, no further awards shall be made under
any of the Former Plans. Each award outstanding under a Former Plan as of the
Effective Date of this Plan shall remain outstanding and continue to be subject
to the terms of the Former Plan and the award agreement under which such award
was granted. Each Share that is available for the granting of new awards under
either of the Former Plans as of the Effective Date of this Plan and each Share
that is the subject of an award under either of the Former Plans but is not
issued prior to the time that such award expires or otherwise terminates shall,
after the Effective Date of this Plan, not be available for the granting of
awards under either of the Former Plans, but shall instead be available for the
granting of Options under this Plan.
2. Definitions. For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a
Change in Control, the greater of (i) the highest price per Share paid to
holders of the Shares in any transaction (or series of transactions)
constituting or resulting in a Change in Control or (ii) the highest Fair
Market Value of a Share during the sixty (60) day period ending on the date of
a Change in Control.
2.2 "Affiliate" means any entity, directly or indirectly,
controlled by, controlling or under common control with the Company or any
corporation or other entity acquiring, directly or indirectly, all or
substantially all the assets and business of the Company, whether by operation
of law or otherwise.
2.3 "Agreement" means the written agreement between the
Company and an Optionee or Grantee evidencing the grant of an Option or Award
and setting forth the terms and conditions thereof.
2.4 "Award" means a grant of Restricted Stock, a Stock
Appreciation Right, a Performance Award, a Dividend Equivalent Right or any or
all of them.
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EXHIBIT 10.1
2.5 "Beneficial Ownership" means ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.
2.6 "Beneficiary" means an individual, trust or estate
who or which, by a written designation of the Optionee or Grantee filed with
the Company by operation of law, succeeds to the rights and obligations of the
Optionee or Grantee under the Plan and an Agreement upon the Optionee's or
Grantee's death.
2.7 "Board" means the Board of Directors of the Company.
2.8 "Business Day" means any day on which the New York
Stock Exchange is open for trading.
2.9 "Cause" shall mean:
(a) for purposes of Section 6.4, (i) a willful
act which constitutes gross misconduct or fraud and which is materially
injurious to the Company or (ii) conviction of, or plea of "guilty" or "no
contest" to, a felony; and
(b) in all other cases, either (1) the definition
set forth in the employment agreement between the Optionee or Grantee and the
Company, or in absence thereof, (2) (i) intentional failure to perform
reasonably assigned duties, (ii) dishonesty or willful misconduct in the
performance of duties, (iii) involvement in a transaction in connection with
the performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation in connection with the performance of
duties (other than traffic violations or similar offenses). No act or failure
to act shall be considered willful unless done or omitted to be done in bad
faith and without reasonable belief that the action or omission was in the best
interest of the Company.
2.10 "Change in Capitalization" means any increase or
reduction in the number of Shares, or any change (including, without
limitation, a change in value) in the Shares or exchange of Shares for a
different number or kind of shares or other securities of the Company or
another corporation, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants or
rights or debentures, stock dividend, stock split or reverse stock split,
property dividend, combination or exchange of shares, change in corporate
structure or substantially similar event.
2.11 A "Change in Control" shall mean the occurrence
during the term of the Plan of any of the following events; provided, however,
that the Committee, in its sole discretion, may specify a more restrictive
definition of Change in Control in any Agreement and, in such event, the
definition of Change in Control set forth in the Agreement shall apply to the
Award granted under such Agreement:
(1) An acquisition in one or more transactions
(other than directly from the Company or pursuant to options granted under this
Plan or otherwise by the
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EXHIBIT 10.1
Company) of any voting securities of the Company (the "Voting Securities") by
any Person (other than any member of the Knafel Family) immediately after which
such Person has Beneficial Ownership of (i) thirty percent (30%) or more of the
combined voting power of the Company's then outstanding Voting Securities and
(ii) a number of Voting Securities having combined voting power greater than
the combined voting power of the Voting Securities then Beneficially Owned by
members of the Knafel Family; provided, however, in determining whether a
Change in Control has occurred, Voting Securities which are acquired in a
"Non-Control Acquisition" (as defined below) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (A) an employee benefit plan (or a trust forming a
part thereof) maintained by (i) the Company or (ii) any Subsidiary, (B) the
Company or any Subsidiary, or (C) any Person in connection with a "Non-Control
Transaction" (as defined below);
(2) The individuals who, as of April 24, 1997,
are members of the Board (the "Incumbent Board"), cease for any reason to
constitute at least two-thirds of the Board; provided, however, that if the
election, or nomination for election by the Company's stockholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of the Plan, be considered as a member of
the Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board (a "Proxy Contest") including by reason of any agreement
intended to avoid or settle any Election Contest or Proxy Contest; or
(3) Approval by stockholders of the Company of:
(A) A merger, consolidation or
reorganization involving the Company, unless
(i) the stockholders of the Company
immediately before such merger, consolidation
or reorganization own, directly or
indirectly, immediately following such
merger, consolidation or reorganization, more
than fifty percent (50%) of the combined
voting power of the outstanding voting
securities of the corporation resulting from
such merger or consolidation or
reorganization (the "Surviving Corporation")
in substantially the same proportion as their
ownership of the Voting Securities
immediately before such merger, consolidation
or reorganization;
(ii) the individuals who were
members of the Incumbent Board immediately
prior to the execution of the agreement
providing for such merger, consolidation or
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EXHIBIT 10.1
reorganization constitute at least two-thirds
of the members of the governing board of
directors of the Surviving Corporation;
(iii) no Person (other than the
Company or any Subsidiary, any employee
benefit plan (or any trust forming a part
thereof) maintained by the Company, the
Surviving Corporation or any Subsidiary, or
any Person who, immediately prior to such
merger, consolidation or reorganization had
Beneficial Ownership of twenty percent (20%)
or more of the then outstanding Voting
Securities) has Beneficial Ownership of
twenty percent (20%) or more of the combined
voting power of the Surviving Corporation's
then outstanding voting securities; and
(iv) a transaction described in
clauses (i) through (iii) shall herein be
referred to as a "Non-Control Transaction";
(B) A complete liquidation or
dissolution of the Company; or
(C) An agreement for the sale or other
disposition of all or substantially all of the assets
of the Company to any Person (other than a transfer
to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the outstanding Voting Securities as a
result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares beneficially owned by the Subject Person;
provided, however, that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Voting Securities
by the Company, and after such share acquisition by the Company, the Subject
Person becomes the Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities beneficially
owned by the Subject Person, then a Change in Control shall occur.
2.12 "Code" means the Internal Revenue Code of 1986, as
amended.
2.13 "Committee" means a committee, as described in
Section 3.1, appointed by the Board from time to time to administer the Plan
and to perform the functions set forth herein.
2.14 "Company" means BioReliance Corporation, a Delaware
corporation.
2.15 "Date of Grant" means the date designated by the
Committee as the date as of which it grants an Option or Award, which shall not
be earlier than the date on which the Committee approves the granting of such
Option or Award.
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EXHIBIT 10.1
2.16 "Director" means a director of the Company.
2.17 "Director Option" means an Option granted pursuant to
Section 6.
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EXHIBIT 10.1
2.18 "Disability" means:
(a) in the case of an Optionee or Grantee whose
employment with the Company or a Subsidiary is subject to the terms of an
employment agreement between such Optionee or Grantee and the Company or
Subsidiary, which employment agreement includes a definition of "Disability",
the term "Disability" as used in this Plan or any Agreement shall have the
meaning set forth in such employment agreement during the period that such
employment agreement remains in effect; and
(b) in all other cases, the term "Disability" as
used in this Plan or any Agreement shall mean a physical or mental infirmity
which impairs the Optionee's or Grantee's ability to perform substantially his
or her duties for a period of one hundred eighty (180) consecutive days.
2.19 "Disability Date" means the date which is six months
after the date on which an Optionee or Grantee is first absent from active
employment with the Company by reason of a Disability.
2.20 "Division" means any of the operating units or
divisions of the Company designated as a Division by the Committee.
2.21 "Dividend Equivalent Right" means a right to receive
all or some portion of the cash dividends that are or would be payable with
respect to Shares.
2.22 "Eligible Individual" means any director (other than
a Non-Employee Director), officer or employee of the Company or a Subsidiary,
or any consultant or advisor who is receiving cash compensation from the
Company or a Subsidiary, designated by the Committee as eligible to receive
Options or Awards subject to the conditions set forth herein.
2.23 "Employee Option" means an Option granted pursuant to
Section 5.
2.24 "Exchange Act" means the Securities Exchange Act of
1934, as amended.
2.25 "Fair Market Value" on any date means the closing
price of the Shares on such date on the principal national securities exchange
on which such Shares are listed or admitted to trading, or, if such Shares are
not so listed or admitted to trading, the closing price on such date as quoted
on the National Association of Securities Dealers Automated Quotation System or
such other market in which such prices are regularly quoted, or, if there have
been no published bid or asked quotations with respect to Shares on such date,
the Fair Market Value shall be the value established by the Board in good faith
and, in the case of an Incentive Stock Option, in accordance with Section 422
of the Code.
2.26 "Former Plans" means the Microbiological Associates,
Inc. 1988 Incentive Stock Option Plan, the Microbiological Associates, Inc.
1995 Non-Qualified Stock Option Plan, and the Magenta Corporation 1994
Incentive Stock Option Plan.
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EXHIBIT 10.1
2.27 "Grantee" means a person to whom an Award has been
granted under the Plan.
2.28 "Incentive Stock Option" means an Option satisfying
the requirements of Section 422 of the Code and designated by the Committee as
an Incentive Stock Option.
2.29 "Knafel Family" means (i) Sidney R. Knafel and/or
members of his "immediate family" (as defined in Rule 16a-1 promulgated under
the Exchange Act), (ii) a trust solely for the benefit of any of the
individuals referred to in clause (i) above; (iii) the guardian, conservator,
estate or other legal representative of any of the individuals referred to in
clause (i) above; and (iv) any corporation, partnership, limited liability
company or other entity all of the outstanding equity securities of which are
owned, directly or indirectly, by the individuals or entities referred to in
clause (i), (ii) or (iii) above.
2.30 "Non-Employee Director" means a director of the
Company who is a "Non-employee director" within the meaning of Rule 16b-3
promulgated under the Exchange Act.
2.31 "Nonqualified Stock Option" means an Option which is
not an Incentive Stock Option.
2.32 "Normal Retirement Date" means the date on which an
Optionee or Grantee terminates active employment with the Company on or after
attainment of age 65, but does not include termination by the Company for
Cause.
2.33 "Option" means a Nonqualified Stock Option, an
Incentive Stock Option, a Director Option, or any or all of them.
2.34 "Optionee" means a person to whom an Option has been
granted under the Plan.
2.35 "Outside Director" means a director of the Company
who is an "Outside Director" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder.
2.36 "Parent" means any corporation which is a parent
corporation (within the meaning of Section 424(e) of the Code) with respect to
the Company.
2.37 "Performance Awards" means Performance Units,
Performance Shares or either or both of them.
2.38 "Performance Cycle" means the time period specified
by the Committee at the time Performance Awards are granted during which the
performance of the Company, a Subsidiary or a Division will be measured.
2.39 "Performance Objectives" has the meaning set forth in
Section 11.
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EXHIBIT 10.1
2.40 "Performance Shares" means Shares issued or
transferred to an Eligible Individual under Section 11.
2.41 "Performance Units" means Performance Units granted
to an Eligible Individual under Section 11.
2.42 "Person" means "person" as such term is used for
purposes of Section 13(d) or 14(d) of the Exchange Act, including, without
limitation, any individual, firm, corporation, partnership, joint venture,
association, trust or other entity, or any group of Persons.
2.43 "Plan" means the BioReliance Corporation 1997
Incentive Plan, as amended and restated from time to time.
2.44 "Pooling Transaction" means an acquisition of the
Company in a transaction which is intended to be treated as a "pooling of
interests" under generally accepted accounting principles.
2.45 "Restricted Stock" means Shares issued or transferred
to an Eligible Individual pursuant to Section 10.
2.46 "Scientific Advisory Board" means the Scientific
Advisory Board of the Company.
2.47 "Shares" means the common stock, par value $.01 per
share, of the Company.
2.48 "Stock Appreciation Right" means a right to receive
all or some portion of the increase in the value of the Shares as provided in
Section 8 hereof.
2.49 "Subsidiary" means any corporation or other Person of
which a majority of its voting power or its equity securities or equity
interest is owned directly or indirectly by the Company.
2.50 "Successor Corporation" means a corporation, or a
parent or subsidiary thereof within the meaning of Section 424(a) of the Code,
which issues or assumes a stock option in a transaction to which Section 424(a)
of the Code applies.
2.51 "Ten-Percent Stockholder" means an Eligible
Individual, who, at the time an Incentive Stock Option is to be granted to him
or her, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company, or of a Parent or a Subsidiary.
2.52 "Termination of Employment" means the later of (i) a
severance of the employer-employee relationship with the Company or (ii) the
resignation, removal or termination of an officer of the Company.
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EXHIBIT 10.1
2.53 For the purpose of UK Approved Options, the following
terms and modifications shall apply, namely:
Agreement shall include an option certificate issued pursuant to Section 5.1
of the Plan.
Beneficiary shall include the Optionee's legal personal representatives or
executors (but so that, in the event of the insolvency of an
Optionee, all his UK Approved Options shall lapse).
Change in Capitalization a spin-off or other change which does not cause a variation of
share capital of the Company, shall not result in an adjustment to
the number, price or other terms of UK Approved Options, nor shall
any such adjustments be made without the prior approval of the UK
Inland Revenue.
Dividend Equivalent Right a UK Approved Option shall not carry a Dividend Equivalent Right.
Eligible Employee an employee (including a Full-Time director) of the Company or a
Subsidiary who is resident or ordinarily resident in the United
Kingdom at the Date of Grant of his Option, but excluding any
Excluded Person.
Option shall include a UK Approved Option unless otherwise stated in the
Plan.
Excluded Person any person who has (or within the preceding 12 months has had) a
material interest in the Company (if then a close company within
the meaning of Schedule 9 to the Taxes Act) or a company which is a
close company and either controls the Company or is a member of a
consortium which owns the Company.
Full-Time means required under his terms of employment to work for his
employing company or companies for at least 25 hours per week
(excluding meal breaks).
Performance Award The grant of a UK Approved Option shall not include a Performance
Award.
Stock Appreciation Right The grant of a UK Approved Option shall not include a Stock
Appreciation Right.
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EXHIBIT 10.1
Taxes Act Income and Corporation Taxes Act 1988 of the United Kingdom.
UK Approved Option means a non-transferable right to acquire Shares granted to an
Eligible Employee pursuant to Section 5 of the Plan and for the
time being subsisting.
3. Administration.
3.1 The Plan shall be administered by the Committee,
which shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings.
A quorum shall consist of not fewer than two members of the Committee and a
majority of a quorum may authorize any action. Any decision or determination
reduced to writing and signed by a majority of all of the members of the
Committee shall be as fully effective as if made by a majority vote at a
meeting duly called and held. The Committee shall consist of at least two (2)
directors of the Company and may consist of the entire Board; provided,
however, that (A) if the Committee consists of less than the entire Board, each
member shall be a Non-employee Director and (B) to the extent necessary for any
Option or Award intended to qualify as performance-based compensation under
Section 162(m) of the Code to so qualify, each member of the Committee, whether
or not it consists of the entire Board, shall be an Outside Director. No
member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to this Plan or
any transaction hereunder, except for liability arising from his or her own
willful misfeasance, gross negligence or reckless disregard of his or her
duties. The Company hereby agrees to indemnify each member of the Committee
for all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiating for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
transaction hereunder.
3.2 Subject to the express terms and conditions set forth
herein, the Committee shall have the power from time to time to:
(a) determine those Eligible Individuals to whom
Employee Options shall be granted under the Plan and the number of such
Employee Options to be granted and to prescribe the terms and conditions (which
need not be identical) of each such Employee Option, including the purchase
price per Share subject to each Employee Option, and make any amendment or
modification to any applicable Agreement consistent with the terms of the Plan;
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EXHIBIT 10.1
(b) select those Eligible Individuals to whom
Awards shall be granted under the Plan and to determine the number of Stock
Appreciation Rights, Performance Awards, Shares of Restricted Stock and/or
Dividend Equivalent Rights to be granted pursuant to each Award, the terms and
conditions of each Award, including the restrictions or Performance Objectives
relating to Awards and the maximum value of any Award, and make any amendment
or modification to any Agreement consistent with the terms of the Plan;
(c) accelerate an Employee Option or Award and to
waive restrictive conditions for an Employee Option or Award (including,
without limitation, any forfeiture conditions), in such circumstances as the
Committee deems appropriate, subject to any express limitations of the Plan,
including, without limitation, Section 16(b); provided, however, that nothing
in this Section 3.2(c) shall be construed to limit the Committee's authority
under other provisions of the Plan. In the case of any acceleration of an
Employee Option or Award after the attainment of the applicable Performance
Objective(s), the amount payable shall be discounted to its present value using
an interest rate equal to Moody's Average Corporate Bond Yield for the month
preceding the month in which such acceleration occurs. This paragraph shall
not apply in respect of a UK Approved Option.
(d) to construe and interpret the Plan and the
Options and Awards granted hereunder and to establish, amend and revoke rules
and regulations for the administration of the Plan, including, without
limitation, correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan or in any Agreement, in the manner and to the extent
it shall deem necessary or advisable so that the Plan complies with applicable
law including Rule 16b-3 under the Exchange Act and the Code to the extent
applicable, and otherwise to make the Plan fully effective. All decisions and
determinations by the Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, its Subsidiaries, the Optionees and
Grantees, and all other persons having any interest therein;
(e) to determine the duration and purposes for
leaves of absence which may be granted to an Optionee or Grantee on an
individual basis without constituting a termination of employment or service
for purposes of the Plan;
(f) to exercise its sole discretion with respect
to the powers and rights granted to it as set forth in the Plan; and
(g) generally, to exercise such powers and to
perform such acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan.
4. Stock Subject to the Plan.
4.1 The maximum number of Shares that may be made the
subject of Options and Awards granted under the Plan is 500,000 Shares, plus
the aggregate number of Shares that would have been available for new awards
under the Former Plans after the
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EXHIBIT 10.1
Effective Date of this Plan (but for the prospective termination of the Former
Plans), including the Shares that were available for new grants under each of
the Former Plans as of the Effective Date of this Plan and the Shares that are
subject to awards granted under either of the Former Plans which Shares are not
issued prior to the expiration or other termination of such awards (including
Shares subject to awards that expire or terminate after the expiration of the
term of a Former Plan); provided, however, that in the aggregate, not more than
one-third of the number of allotted Shares may be made the subject of
Restricted Stock Awards under Section 10 of the Plan; and provided, further,
that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options granted under the Plan become exercisable for the first
time by an Optionee during any calendar year shall not exceed $100,000. Upon a
Change in Capitalization, the maximum number of Shares referred to in the
preceding sentence shall be adjusted in number and kind pursuant to Section 13.
The Company shall reserve for the purposes of the Plan, out of its authorized
but unissued Shares or out of Shares held in the Company's treasury, or partly
out of each, such number of Shares as shall be determined by the Board.
4.2 Upon the granting of an Option or an Award, the
number of Shares available under Section 4.1 for the granting of further
Options and Awards shall be reduced as follows:
(a) In connection with the granting of an Option
or an Award (other than the granting of a Performance Unit denominated in
dollars), the number of Shares shall be reduced by the number of Shares in
respect of which the Option or Award is granted or denominated.
(b) In connection with the granting of a
Performance Unit denominated in dollars, the number of Shares shall be reduced
by an amount equal to the quotient of (i) the dollar amount in which the
Performance Unit is denominated, divided by (ii) the Fair Market Value of a
Share on the date the Performance Unit is granted.
4.3 Whenever any outstanding Option or Award or portion
thereof expires, is canceled or is otherwise terminated for any reason without
having been exercised or payment having been made in respect of the entire
Option or Award (including any outstanding Options under any of the Former
Plans), the Shares allocable to the expired, canceled or otherwise terminated
portion of the Option or Award may again be the subject of Options or Awards
granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of
the Plan, the Committee shall have full and final authority to select those
Eligible Individuals who will receive Employee Options, and the terms and
conditions of the grant to such Eligible Individuals shall be set forth in an
Agreement. The terms and conditions of UK Approved Options shall be set forth
in a certificate executed as a deed by the Company and UK Approved Options may
only be granted to Eligible Employees.
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EXHIBIT 10.1
5.2 Purchase Price. The purchase price (which may be
greater than, less than or equal to the Fair Market Value on the Date of Grant)
or the manner in which the purchase price is to be determined for Shares under
each Employee Option shall be determined by the Committee and set forth in the
Agreement; provided, however, that the purchase price per Share under each
Incentive Stock Option shall not be less than 100% of the Fair Market Value of
a Share on the Date of Grant (110% in the case of an Incentive Stock Option
granted to a Ten-Percent Stockholder).
(a) The purchase price of a Share under a UK
Approved Option shall be not less than:
(i) its market value as determined by
the Committee in accordance with the provisions of Part VIII of the Taxation of
Chargeable Gains Act 1992 of the United Kingdom and approved prior to the grant
of the related UK Approved Option by the Shares Valuation Division of the UK
Inland Revenue; or
(ii) its nominal amount
or (when applicable) such price as from time to time adjusted pursuant to the
Plan.
(b) No UK Approved Option shall be granted under
this Plan to an Eligible Employee if the aggregate purchase price of the Shares
comprised therein, when added to the aggregate of the amounts for which shares
of the Company may be acquired under any subsisting UK Approved Options granted
to him under the Plan or any other scheme (not being a savings-related share
option scheme) approved under Schedule 9 to the Taxes Act and established by
the Company or a Subsidiary, would exceed, or further exceed, pounds sterling
30,000 or such other limit as may apply from time to time under paragraph 28 of
Schedule 9 to the Taxes Act (the "Limit"). For the purposes of determining
whether an Option is subject to the Limit, Options which fell to be treated
under the provisions of Section 115 of the Finance Act 1996 of the United
Kingdom as unapproved options shall be treated as having been granted under a
scheme other than one which is approved under Schedule 9 to the Taxes Act.
5.3 Maximum Duration. Employee Options granted hereunder
shall be for such term as the Committee shall determine, provided that an
Incentive Stock Option shall not be exercisable after the expiration of ten
(10) years from the date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder) and a Nonqualified
Stock Option shall not be exercisable after the expiration of ten (10) years
from the Date of Grant. The Committee may, subsequent to the granting of any
Employee Option (other than a UK Approved Option), extend the term thereof, but
in no event shall the term as so extended exceed the maximum term provided for
in the preceding sentence.
5.4 Exercisability. Subject to Sections 5.5 and 7.3,
each Employee Option shall become exercisable in such installments (which need
not be equal) and at such times as may be designated by the Committee and set
forth in the Agreement. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time
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EXHIBIT 10.1
after becoming exercisable, but not later than the date the Employee Option
expires. No UK Approved Option shall become exercisable in any circumstances
by an Optionee who is at the time of such intended exercise an Excluded Person.
5.5 Termination. Except as provided in Section 12, and
unless otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Employee Options
upon a Termination of Employment:
(a) Subject to Section 5.3 and save as provided in
Section 5.5(d), unless otherwise determined by the Committee at the time of
grant (and set forth in the applicable Agreement) or at a later date, except in
the case of Disability, retirement on or after the Optionee's Normal Retirement
Date and death as provided in Sections 5.5(b) and 5.5(c) below, if an Optionee
of an Employee Option has a Termination of Employment with the Company or a
Subsidiary, any unexercised Employee Option held by such Optionee shall expire
ninety (90) days after the Optionee has a Termination of Employment for any
reason other than a termination for Cause, and such Employee Option may only be
exercised by the Optionee or his or her Beneficiary to the extent that the
Employee Option or a portion thereof was exercisable on the date of Termination
of Employment; provided, however, that no Employee Option may be exercised
after the expiration date specified for the particular Employee Option in the
Employee Option grant. If the Optionee's Termination of Employment arises as a
result of a termination for Cause, then, unless the Committee determines
otherwise at the time of the Termination of Employment, any unexercised Options
held by such Optionee shall terminate and expire concurrently with the
Optionee's Termination of Employment.
(b) Subject to Section 5.3, unless otherwise determined
by the Committee at the time of grant (and set forth in the applicable
Agreement) or at a later date, if an Optionee becomes disabled within the
meaning of Section 2.18 hereof or retires on or after the Optionee's Normal
Retirement Date, any unexercised Employee Option held by such disabled or
retired Optionee shall expire one (1) year after the Disability Date or date of
Termination of Employment by reason of retirement, as the case may be, and such
Option may only be exercised by the Optionee or his or her Beneficiary to the
extent that the Employee Option or a portion thereof was exercisable on the
Disability Date or the date of Termination of Employment by reason of
retirement, as the case may be; provided, however, no Employee Option may be
exercised after the expiration date specified for the particular Employee
Option in the Employee Option grant.
(c) Subject to Section 5.3, unless otherwise determined
by the Committee at the time of grant (and set forth in the applicable
Agreement) or at a later date, if an Optionee dies while still employed by the
Company, the Options which the Optionee was entitled to exercise on the date of
the Optionee's death may be exercised at any time after the Optionee's death by
the Optionee's Beneficiary; provided, however, that no Option may be exercised
after the earlier of: (i) one (1) year after the Optionee's death or (ii) the
expiration date specified for the particular Option in the Option Agreement.
If an Optionee dies after his or her Termination of Employment, then the
Options which the Optionee was entitled to
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EXHIBIT 10.1
exercise on the date of the Optionee's death may be exercised by his or her
Beneficiary within the period specified in Sections 5.5(a) or 5.5(b), as the
case may be.
(d) Subject to Section 5.3, upon an Optionee's
Termination of Employment following a Change in Control, each Option held by
the Optionee that was exercisable as of the date of such Termination of
Employment shall remain exercisable for a period ending not before the earlier
of (A) the first anniversary of the Termination of Employment or (B) the
expiration of the stated term of the Option.
5.6 Modification. No modification of an Employee Option
shall adversely alter or impair any rights or obligations under the Employee
Option without the Optionee's consent.
6. Option Grants for Non-Employee Directors and Scientific
Advisory Board Members.
6.1 Grant. Director Options shall be granted (i) to
Non-Employee Directors who become members of the Board after April 24, 1997
upon election or appointment, (ii) to all Non-Employee Directors who are
members of the Board, (iii) to members of the Scientific Advisory Board who
become members of the Scientific Advisory Board after April 24, 1997 upon
election or appointment and (iv) to all members of the Scientific Advisory
Board as follows:
(a) Initial Grant. Each Non-Employee Director
who becomes a Director after April 24, 1997 shall, upon becoming a Director, be
granted a Director Option in respect of 2,000 Shares and each member of the
Scientific Advisory Board who becomes a member of the Scientific Advisory Board
after April 24, 1997 shall, upon becoming a member of the Scientific Advisory
Board, be granted a Director Option in respect of 1,000 Shares.
(b) Annual Grant. Each Non-Employee Director
shall be granted a Director Option in respect of 1,000 Shares annually on the
first Business Day on or after January 1 of each calendar year that the Plan is
in effect provided that the Non-Employee Director is a Director on such date
and each member of the Scientific Advisory Board shall be granted a Director
Option in respect of 500 Shares annually on the first Business Day on or after
January 1 of each calendar year that the Plan is in effect provided that the
member of the Scientific Advisory Board is a member on such date; provided,
however, that a Director or member of the Scientific Advisory Board shall not
be entitled to receive an annual grant pursuant to this Section 6.1(b) for the
calendar year in which such Director or member of the Scientific Advisory Board
is first elected or appointed to the Board or to the Scientific Advisory Board,
as the case may be.
All Director Options shall be evidenced by an Agreement
containing such other terms and conditions not inconsistent with the provisions
of this Plan as determined by the Board; provided, however, that such terms
shall not vary the price, amount or timing
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EXHIBIT 10.1
of Director Options provided under this Section 6, including provisions dealing
with vesting, forfeiture and termination of such Director Options.
6.2 Purchase Price. The purchase price for Shares under
each Director Option shall be equal to 100% of the Fair Market Value of such
Shares on the Date of Grant.
6.3 Vesting. Subject to Sections 6.4 and 7.3, each
Director Option shall become fully vested and exercisable with respect to 100%
of the Shares subject thereto on the third anniversary of the Date of Grant;
provided, however, that the Optionee continues to serve as a Director or member
of the Scientific Advisory Board as of such date. If an Optionee ceases to
serve as a Director or member of the Scientific Advisory Board for any reason,
the Optionee shall have no rights with respect to any Director Option which has
not then vested pursuant to the preceding sentence and the Optionee shall
automatically forfeit any Director Option which remains unvested.
6.4 Duration. Each Director Option shall terminate on
the date which is the tenth anniversary of the Date of Grant, unless terminated
earlier as follows:
(a) If an Optionee's service as a Director or
member of the Scientific Advisory Board terminates for any reason other than
Disability, death or Cause, the Optionee may for a period of three (3) months
after such termination exercise his or her Option to the extent, and only to
the extent, that such Option or portion thereof was vested and exercisable as
of the date the Optionee's service as a Director or member of the Scientific
Advisory Board terminated, after which time the Option shall automatically
terminate in full.
(b) If an Optionee's service as a Director or
member of the Scientific Advisory Board terminates by reason of the Optionee's
resignation or removal due to Disability, the Optionee may, for a period of one
(1) year after such termination, exercise his or her Option to the extent, and
only to the extent, that such Option or portion thereof was vested and
exercisable, as of the date the Optionee's service as Director or member of the
Scientific Advisory Board terminated, after which time the Option shall
automatically terminate in full.
(c) If an Optionee's service as a Director or
member of the Scientific Advisory Board terminates for Cause, the Option
granted to the Optionee hereunder shall immediately terminate in full and no
rights thereunder may be exercised.
(d) If an Optionee dies while a Director or
member of the Scientific Advisory Board or within three (3) months after
termination of service as a Director or member of the Scientific Advisory Board
as described in clause (a) of this Section 6.4 or within twelve (12) months
after termination of service as a Director or member of the Scientific Advisory
Board as described in clause (b) of this Section 6.4, the Option granted to the
Optionee may be exercised at any time within twelve (12) months after the
Optionee's death by the person or persons to whom such rights under the Option
shall pass by will, or by the laws of descent or distribution, after which time
the Option shall terminate in full; provided, however, that an Option may be
exercised to the extent, and only to the extent, that
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EXHIBIT 10.1
the Option or portion thereof was exercisable on the date of death or earlier
termination of the Optionee's services as a Director or member of the
Scientific Advisory Board.
(e) In the event an Optionee's service as a
Director or member of the Scientific Advisory Board of the Company is
terminated by the Company following a Change in Control, each Option held by
the Optionee that was exercisable as of the date of termination of the
Optionee's employment or service shall remain exercisable for a period ending
not before the earlier of (A) the first anniversary of the termination of the
Optionee's service as a Director or member of the Scientific Advisory Board or
(B) the expiration of the stated term of the Option.
7. Terms and Conditions Applicable to All Options.
7.1 Method of Exercise.
(a) The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number of
Shares to be purchased and accompanied by payment therefor and otherwise in
accordance with the Agreement pursuant to which the Option was granted. The
purchase price for any Shares purchased pursuant to the exercise of an Option
shall be paid, as determined by the Committee in its sole discretion, in either
of the following forms (or any combination thereof): (i) cash or (ii) the
transfer of Shares to the Company upon such terms and conditions as determined
by the Committee. In addition, both Employee Options and Director Options may
be exercised through a registered broker-dealer pursuant to such cashless
exercise procedures (other than Share withholding) which are, from time to
time, deemed acceptable by the Committee. Any Shares transferred to the
Company (or withheld upon exercise) as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the date
of exercise of such Option. The Optionee shall deliver the Agreement
evidencing the Option to the Secretary of the Company who shall endorse thereon
a notation of such exercise and return such Agreement to the Optionee. No
fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an
Option and the number of Shares that may be purchased upon exercise shall be
rounded to the nearest number of whole Shares. Notwithstanding anything to the
contrary contained herein, payment on exercise of UK Approved Options shall be
made only in cash.
(b) If the Fair Market Value of the Shares with
respect to which the Option is being exercised exceeds the exercise price of
such Option, an Optionee may, instead of exercising an Option as provided in
Section 7.1(a), request that the Committee authorize payment to the Optionee of
the difference between the Fair Market Value of part or all of the Shares which
are the subject of the Option and the exercise price of the Option, such
difference to be determined as of the date the Committee receives the request
from the Optionee. The Committee, in its sole discretion, may grant or deny
such a request from an Optionee with respect to part or all of the Shares as to
which the Option is then exercisable and, to the extent granted, shall direct
the Company to make the payment to the Optionee either in cash or in Shares or
in any combination thereof; provided, however, that payment in
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EXHIBIT 10.1
Shares shall be made based upon the Fair Market Value of Shares as of the date
the Committee received the request from the Optionee. An Option shall be
deemed to have been exercised and shall be canceled to the extent that the
Committee grants a request pursuant to this Section 7.1(b). The provisions of
this paragraph shall not apply to holders of UK Approved Options.
7.2 Rights of Optionees. No Optionee shall be deemed for
any purpose to be the owner of any Shares subject to any Option unless and
until (i) the Option shall have been exercised pursuant to the terms thereof,
(ii) the Company shall have issued and delivered Shares to the Optionee, and
(iii) the Optionee's name shall have been entered as a stockholder of record on
the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such Shares, subject to
such terms and conditions as may be set forth in the applicable Agreement. The
preceding sentence shall not apply to any Optionee holding a UK Approved
Option. If under the terms of a resolution passed or an announcement made by
the Company prior to the date of exercise of a UK Approved Option, a dividend
is to be or is proposed to be paid to holders of Shares by reference to a
record date after such date of exercise, any Shares to be issued upon such
exercise of a UK Approved Option will not rank for such dividend. Subject as
aforesaid, the Shares so to be issued shall be identical and rank pari passu in
all respects with the fully paid Shares then in issue.
7.3 Effect of Change in Control. In the event of a
Change in Control, all Options outstanding on the date of such Change in
Control shall become immediately and fully exercisable. In addition, to the
extent set forth in an Agreement evidencing the grant of an Employee Option, an
Optionee will be permitted to surrender to the Company for cancellation within
sixty (60) days after such Change in Control any Employee Option or portion of
an Employee Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any, of
(x) (A) in the case of a Nonqualified Stock Option, the greater of (1) the Fair
Market Value, on the date preceding the date of surrender, of the Shares
subject to the Employee Option or portion thereof surrendered or (2) the
Adjusted Fair Market Value of the Shares subject to the Employee Option or
portion thereof surrendered or (B) in the case of an Incentive Stock Option,
the Fair Market Value, on the date preceding the date of surrender, of the
Shares subject to the Employee Option or portion thereof surrendered, over (y)
the aggregate purchase price for such Shares under the Employee Option or
portion thereof surrendered.
8. Stock Appreciation Rights. The Committee may in its
sole discretion, either alone or in connection with the grant of an Employee
Option, grant Stock Appreciation Rights in accordance with the Plan, the terms
and conditions of which shall be set forth in an Agreement. If granted in
connection with an Option, a Stock Appreciation Right shall cover the same
Shares covered by the Option (or such lesser number of Shares as the Committee
may determine) and shall, except as provided in this Section 8, be subject to
the same terms and conditions as the related Option.
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20
EXHIBIT 10.1
8.1 Time of Grant. A Stock Appreciation Right may be
granted (i) at any time if unrelated to an Option, or (ii) if related to an
Option, either at the time of grant, or at any time thereafter during the term
of the Option.
8.2 Stock Appreciation Right Related to an Option.
(a) Exercise. Subject to Section 8.8, a Stock
Appreciation Right granted in connection with an Option shall be exercisable at
such time or times and only to the extent that the related Options are
exercisable (including, without limitation, exercisability upon Termination of
Employment), and will not be transferable except to the extent the related
Option may be transferable. A Stock Appreciation Right granted in connection
with an Incentive Stock Option shall be exercisable only if the Fair Market
Value of a Share on the date of exercise exceeds the purchase price specified
in the related Incentive Stock Option Agreement.
(b) Treatment of Related Options and Stock
Appreciation Rights Upon Exercise. Upon the exercise of a Stock Appreciation
Right granted in connection with an Option, the Option shall be canceled to the
extent of the number of Shares as to which the Stock Appreciation Right is
exercised, and upon the exercise of an Option granted in connection with a
Stock Appreciation Right, the Stock Appreciation Right shall be canceled to the
extent of the number of Shares as to which the Option is exercised or
surrendered.
8.3 Stock Appreciation Right Unrelated to an Option.
(a) Terms. Stock Appreciation Rights unrelated
to Options shall contain such terms and conditions as to exercisability
(subject to Sections 8.3(b) and 8.8), vesting and duration as the Committee
shall determine, but in no event shall they have a term of greater than ten
(10) years.
(b) Termination. Except as provided in Section
8.8 and subject to Section 8.3(a), and unless otherwise provided by the
Committee, in its sole discretion, in the applicable Agreement, upon a
Grantee's Termination of Employment, a Stock Appreciation Right shall be
exercisable by the Grantee to the same extent that an Employee Option would be
exercisable by an Optionee upon the Optionee's Termination of Employment under
the provisions of Sections 5.5(a) through (d); provided, however, no Stock
Appreciation Right may be exercised after the expiration date specified for the
particular Stock Appreciation Right in the applicable Agreement.
8.4 Amount Payable. Upon exercise of a Stock
Appreciation Right, the Grantee shall be entitled to receive an amount
determined by multiplying (x) the excess of the Fair Market Value of a Share on
the date preceding the date of exercise of such Stock Appreciation Right over
(A) in the case of a Stock Appreciation Right related to an Option, the per
Share purchase price under the related option or (B) in the case of a Stock
Appreciation Right unrelated to an Option, the Fair Market Value of a Share on
the date the Stock Appreciation Right was granted, by (y) the number of Shares
as to which the Stock Appreciation Right is being exercised. Notwithstanding
the foregoing, the Committee may
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EXHIBIT 10.1
limit in any manner the amount payable with respect to any Stock Appreciation
Right by including such a limit in the Agreement evidencing the Stock
Appreciation Right at the time it is granted.
8.5 Method of Exercise. Stock Appreciation Rights shall
be exercised by a Grantee only by a written notice delivered in person or by
mail to the Secretary of the Company at the Company's principal executive
office, specifying the number of Shares with respect to which the Stock
Appreciation Right is being exercised. If requested by the Committee, the
Grantee shall deliver the Agreement evidencing the Stock Appreciation Right
being exercised and the Agreement evidencing any related Option to the
Secretary of the Company who shall endorse thereon a notation of such exercise
and return such Agreement to the Grantee.
8.6 Form of Payment. Payment of the amount determined
under Section 8.4 may be made in the sole discretion of the Committee solely in
whole Shares in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in a combination of cash and Shares. If the Committee decides to make
full payment in Shares and the amount payable results in a fractional Share,
payment for the fractional Share will be made in cash.
8.7 Modification. No modification of an Award shall
adversely alter or impair any rights or obligations under the Agreement without
the Grantee's consent.
8.8 Effect of Change in Control. In the event of a
Change in Control, all Stock Appreciation Rights shall become immediately and
fully exercisable. In addition, to the extent set forth in an Agreement
evidencing the grant of a Stock Appreciation Right (but not with respect to any
Stock Appreciation Right granted in connection with an Incentive Stock Option),
a Grantee will be permitted to surrender to the Company for cancellation within
sixty (60) days after such Change in Control any Stock Appreciation Right or
portion of a Stock Appreciation Right to the extent not yet exercised and the
Grantee will be entitled to receive a payment from the Company in cash or
Shares, in either case, with a value equal to the excess, if any, of (A) the
Adjusted Fair Market Value, on the date preceding the date of exercise, of the
Shares over (B) the aggregate Fair Market Value, on the date the Stock
Appreciation was granted, of the Shares subject to the Stock Appreciation Right
or portion thereof exercised.
9. Dividend Equivalent Rights. Dividend Equivalent
Rights may be granted to Eligible Individuals in tandem with an Option or
Award. The terms and conditions (including, without limitation, terms and
conditions relating to a Change in Control) applicable to each Dividend
Equivalent Right shall be specified in the Agreement under which the Dividend
Equivalent Right is granted. Amounts payable in respect of Dividend Equivalent
Rights may be payable currently or deferred until the lapsing of restrictions
on such Dividend Equivalent Rights or until the vesting, exercise, payment,
settlement or other lapse of restrictions on the Option or Award to which the
Dividend Equivalent Rights relate. In the event that the amount payable in
respect of Dividend
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EXHIBIT 10.1
Equivalent Rights are to be deferred, the Committee shall determine whether
such amounts are to be held in cash or reinvested in Shares or deemed
(notionally) to be reinvested in Shares. If amounts payable in respect of
Dividend Equivalent Rights are to be held in cash, there may be credited at the
end of each year (or portion thereof) interest on the amount of the account at
the beginning of the year at a rate per annum as the Committee, in its sole
discretion, may determine. Dividend Equivalent Rights may be settled in cash
or Shares or a combination thereof, in a single installment or multiple
installments. With respect to Dividend Equivalent Rights granted in tandem with
an Option, the Agreement may provide that the Optionee may elect to have
amounts payable in respect of such Dividend Equivalent Rights applied against
the exercise price of such Option. To the extent necessary for any Dividend
Equivalent Right intended to qualify as performance-based compensation under
Section 162(m) of the Code to so qualify, the terms and conditions of the
Dividend Equivalent Right shall be such that payment of the Dividend Equivalent
Right is contingent upon the attainment of specified Performance Objectives
within the Performance Cycle, as provided for in Section 11, and such Dividend
Equivalent Right shall be treated as a Performance Award for purposes of
Sections 11 and 16(b).
10. Restricted Stock.
10.1 Grant. The Committee may grant Awards to Eligible
Individuals of Restricted Stock, which shall be evidenced by an Agreement
between the Company and the Grantee. Each Agreement shall contain such
restrictions, terms and conditions as the Committee may, in its sole
discretion, determine and (without limiting the generality of the foregoing)
such Agreements may require that an appropriate legend be placed on Share
certificates. Awards of Restricted Stock shall be subject to the terms and
provisions set forth below in this Section 10.
10.2 Rights of Grantee. Shares of Restricted Stock
granted pursuant to an Award hereunder shall be issued in the name of the
Grantee as soon as reasonably practicable after the Date of Grant provided that
the Grantee has executed an Agreement evidencing the Award, the appropriate
blank stock powers and, in the sole discretion of the Committee, an escrow
agreement and any other documents which the Committee may require as a
condition to the issuance of such Shares. If a Grantee shall fail to execute
the Agreement evidencing a Restricted Stock Award, the appropriate blank stock
powers and, in the sole discretion of the Committee, an escrow agreement and
any other documents which the Committee may require within the time period
prescribed by the Committee at the time the Award is granted, the Award shall
be null and void. At the sole discretion of the Committee, Shares issued in
connection with a Restricted Stock Award shall be deposited together with the
stock powers with an escrow agent (which may be the Company) designated by the
Committee. Unless the Committee determines otherwise and as set forth in the
Agreement, upon delivery of the Shares to the escrow agent, the Grantee shall
have all of the rights of a stockholder with respect to such Shares, including
the right to vote the Shares and to receive all dividends or other
distributions paid or made with respect to the Shares.
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EXHIBIT 10.1
10.3 Non-transferability. Until all restrictions upon the
Shares of Restricted Stock awarded to a Grantee shall have lapsed in the manner
set forth in Section 10.4, such Shares shall not be sold, transferred or
otherwise disposed of and shall not be pledged or otherwise hypothecated, nor
shall they be delivered to the Grantee.
10.4 Lapse of Restrictions.
(a) Generally. Subject to Section 10.4(b),
restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at
such time or times and on such terms and conditions as the Committee may
determine. The Agreement evidencing the Award shall set forth any such
restrictions.
(b) Effect of Change in Control. Unless the
Committee shall determine otherwise at the time of the grant of an Award of
Restricted Stock, the restrictions upon Shares of Restricted Stock shall lapse
upon a Change in Control. The Agreement evidencing the Award shall set forth
any such provisions.
10.5 Terms of Restricted Stock.
(a) Forfeiture of Restricted Stock. Subject to
Sections 10.4(b) and 10.5(b), all Restricted Stock shall be forfeited and
returned to the Company and all rights of the Grantee with respect to such
Restricted Stock shall terminate unless the Grantee continues in the service of
the Company as an employee until the expiration of the forfeiture period for
such Restricted Stock and satisfies any and all other conditions set forth in
the Agreement. The Committee, in its sole discretion, shall determine the
forfeiture period (which may, but need not, lapse in installments) and any
other terms and conditions applicable with respect to any Restricted Stock
Award.
(b) Waiver of Forfeiture Period. Notwithstanding
anything contained in this Section 10 to the contrary, the Committee may, in
its sole discretion, waive the forfeiture period and any other conditions set
forth in any Agreement under appropriate circumstances (including, without
limitation, the death, Disability or retirement of the Grantee or a material
change in circumstances arising after the Date of Grant) and subject to such
terms and conditions (including, without limitation, forfeiture of a
proportionate number of the Restricted Stock) as the Committee shall deem
appropriate, provided that the Grantee shall at that time have completed at
least one (1) year of employment after the Date of Grant.
10.6 Modification or Substitution. Subject to the terms
of the Plan, including, without limitation, Section 16(b), the Committee may
modify outstanding Awards of Restricted Stock or accept the surrender of
outstanding Shares of Restricted Stock (to the extent the restrictions on such
Shares have not yet lapsed) and grant new Awards in substitution for them.
Notwithstanding the foregoing, no modification of an Award shall adversely
alter or impair any rights or obligations under the Agreement without the
Grantee's consent.
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EXHIBIT 10.1
10.7 Treatment of Dividends. At the time an Award of
Shares of Restricted Stock is granted, the Committee may, in its sole
discretion, determine that the payment to the Grantee of dividends, or a
specified portion thereof, declared or paid on such Shares by the Company shall
be (i) deferred until the lapsing of the restrictions imposed upon such Shares
and (ii) held by the Company for the account of the Grantee until such time.
In the event that dividends are to be deferred, the Committee shall determine
whether such dividends are to be reinvested in Shares (which shall be held as
additional Shares of Restricted Stock) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its sole discretion, may
determine. Payment of deferred dividends in respect of Shares of Restricted
Stock (whether held in cash or as additional Shares of Restricted Stock),
together with interest accrued thereon, if any, shall be made upon the lapsing
of restrictions imposed on the Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Shares of Restricted Stock shall be
forfeited upon the forfeiture of such Shares.
10.8 Delivery of Shares. Upon the lapse of the
restrictions on Shares of Restricted Stock, the Committee shall cause a stock
certificate to be delivered to the Grantee with respect to such Shares, free of
all restrictions hereunder.
11. Performance Awards.
11.1 (a) Performance Objectives. Performance
Objectives for Performance Awards may be expressed in terms of (i) earnings per
Share, (ii) Share price, (iii) pre-tax profits, (iv) net earnings, (v) return
on equity or assets, (vi) revenues, (vii) EBITDA, (viii) market share or market
penetration or (ix) any combination of the foregoing, and may be determined
before or after accounting changes, special charges, foreign currency effects,
acquisitions, divestitures or other extraordinary events. Performance
Objectives may be in respect of the performance of the Company and its
Subsidiaries (which may be on a consolidated basis), a Subsidiary or a
Division. Performance Objectives may be absolute or relative and may be
expressed in terms of a progression within a specified range. The Performance
Objectives with respect to a Performance Cycle shall be established in writing
by the Committee by the earlier of (i) the date on which a quarter of the
Performance Cycle has elapsed or (ii) the date which is ninety (90) days after
the commencement of the Performance Cycle, and in any event, while the
performance relating to the Performance Objectives remains substantially
uncertain.
(b) Determination of Performance. Prior to the
vesting, payment, settlement or lapsing of any restrictions with respect to any
Performance Award made to a Grantee who is subject to Section 162(m) of the
Code, the Committee shall certify in writing that the applicable Performance
Objectives have been satisfied.
11.2 Performance Units. The Committee, in its sole
discretion, may grant Awards of Performance Units to Eligible Individuals, the
terms and conditions of which shall
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EXHIBIT 10.1
be set forth in an Agreement between the Company and the Grantee. Performance
Units shall be denominated in Shares or dollars and, contingent upon the
attainment of specified Performance Objectives within the Performance Cycle,
represent the right to receive payment as provided in Section 11.2(b) depending
on the level of Performance Objective attainment. Each Agreement shall specify
the number of Performance Units to which it relates, the Performance Objectives
which must be satisfied in order for the Performance Units to vest and the
Performance Cycle within which such Performance Objectives must be satisfied.
(a) Vesting and Forfeiture. Subject to Sections
11.1(b) and 11.4, a Grantee shall become vested with respect to the Performance
Units to the extent that the Performance Objectives set forth in the Agreement
are satisfied for the Performance Cycle.
(b) Payment of Awards. Payment to Grantees in
respect of vested Performance Units shall be made as soon as practicable after
the last day of the Performance Cycle to which such Award relates unless the
Agreement evidencing the Award provides for the deferral of payment, in which
event the terms and conditions of the deferral shall be set forth in the
Agreement. Subject to Section 11.4, such payments may be made entirely in
Shares valued at their Fair Market Value as of the last day of the applicable
Performance Cycle or such other date specified by the Committee, entirely in
cash, or in such combination of Shares and cash as the Committee in its sole
discretion shall determine at any time prior to such payment.
11.3 Performance Shares. The Committee, in its sole
discretion, may grant Awards of Performance Shares to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the
Company and the Grantee. Each Agreement may require that an appropriate legend
be placed on Share certificates. Awards of Performance Shares shall be subject
to the following terms and provisions:
(a) Rights of Grantee. The Committee shall
provide at the time an Award of Performance Shares is made the time or times at
which the actual Shares represented by such Award shall be issued in the name
of the Grantee; provided, however, that no Performance Shares shall be issued
until the Grantee has executed an Agreement evidencing the Award, the
appropriate blank stock powers and, in the sole discretion of the Committee, an
escrow agreement and any other documents which the Committee may require as a
condition to the issuance of such Performance Shares. If a Grantee shall fail
to execute the Agreement evidencing an Award of Performance Shares, the
appropriate blank stock powers and, in the sole discretion of the Committee, an
escrow agreement and any other documents which the Committee may require within
the time period prescribed by the Committee at the time the Award is granted,
the Award shall be null and void. At the sole discretion of the Committee,
Shares issued in connection with an Award of Performance Shares shall be
deposited together with the stock powers with an escrow agent (which may be the
Company) designated by the Committee. Except as restricted by the terms of the
Agreement, upon delivery of the Shares to the escrow agent, the Grantee shall
have, in the sole discretion of the Committee, all of the rights of a
stockholder with respect to such
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EXHIBIT 10.1
Shares, including the right to vote the Shares and to receive all dividends or
other distributions paid or made with respect to the Shares.
(b) Non-transferability. Until any restrictions
upon the Performance Shares awarded to a Grantee shall have lapsed in the
manner set forth in Sections 11.3(c) or 11.4, such Performance Shares shall not
be sold, transferred or otherwise disposed of and shall not be pledged or
otherwise hypothecated, nor shall they be delivered to the Grantee. The
Committee may also impose such other restrictions and conditions on the
Performance Shares, if any, as it deems appropriate.
(c) Lapse of Restrictions. Subject to Sections
11.1(b) and 11.4, restrictions upon Performance Shares awarded hereunder shall
lapse and such Performance Shares shall become vested at such time or times and
on such terms, conditions and satisfaction of Performance Objectives as the
Committee may, in its sole discretion, determine at the time an Award is
granted.
(d) Treatment of Dividends. At the time the
Award of Performance Shares is granted, the Committee may, in its sole
discretion, determine that the payment to the Grantee of dividends, or a
specified portion thereof, declared or paid on actual Shares represented by
such Award which have been issued by the Company to the Grantee shall be (i)
deferred until the lapsing of the restrictions imposed upon such Performance
Shares and (ii) held by the Company for the account of the Grantee until such
time. In the event that dividends are to be deferred, the Committee shall
determine whether such dividends are to be reinvested in Shares (which shall be
held as additional Performance Shares) or held in cash. If deferred dividends
are to be held in cash, there may be credited at the end of each year (or
portion thereof) interest on the amount of the account at the beginning of the
year at a rate per annum as the Committee, in its sole discretion, may
determine. Payment of deferred dividends in respect of Performance Shares
(whether held in cash or in additional Performance Shares), together with
interest accrued thereon, if any, shall be made upon the lapsing of
restrictions imposed on the Performance Shares in respect of which the deferred
dividends were paid, and any dividends deferred (together with any interest
accrued thereon) in respect of any Performance Shares shall be forfeited upon
the forfeiture of such Performance Shares.
(e) Delivery of Shares. Upon the lapse of the
restrictions on Performance Shares awarded the Committee shall cause a stock
certificate to be delivered to the Grantee, free of all restrictions hereunder.
11.4 Effect of Change in Control. In the event of a
Change in Control:
(a) With respect to Performance Units, unless
otherwise determined by the Committee, the Grantee shall (i) become vested in
all Performance Units and (ii) be entitled to receive in respect of all
Performance Units which become vested as a result of a Change in Control a cash
payment within ten (10) Business Days after such Change in Control in an amount
as determined by the Committee at the time of the Award of such Performance
Unit and as set forth in the Agreement.
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EXHIBIT 10.1
(b) With respect to Performance Shares, unless
otherwise determined by the Committee, restrictions shall lapse immediately on
all Performance Shares.
(c) The Agreements evidencing Performance Shares
and Performance Units shall provide for the treatment of such Awards (or
portions thereof) which do not become vested as the result of a Change in
Control, including, without limitation, provisions for the adjustment of
applicable Performance Objectives.
11.5 Termination. Except as provided in Section 12,
and unless otherwise provided by the Committee, in its sole discretion, in the
applicable Agreement, the following provisions shall apply to Performance
Awards upon a Termination of Employment:
(a) Termination of Employment. Except as
provided in Sections 11.5(b) and (d), in the case of a Grantee's Termination of
Employment prior to the end of a Performance Cycle, the Grantee will not be
entitled to any Performance Awards, and any Performance Shares shall be
forfeited.
(b) Disability, Retirement or Death. Unless
otherwise provided by the Committee, in its sole discretion, in the Agreement,
if a Grantee's Disability Date or Termination of Employment by reason of
retirement on or after the Grantee's Normal Retirement Date or death occurs
following at least twelve months of participation in any Performance Cycle, but
prior to the end of a Performance Cycle, the Grantee or such Grantee's
Beneficiary, as the case may be, shall be entitled to receive a pro-rata share
of his or her Performance Award as determined under Subsection (c).
(c) Pro-Rata Payment.
(i) Performance Units. With respect to
Performance Units, the amount of any payment made to a Grantee (or Beneficiary)
under circumstances described in Section 11.5(b) will be the amount determined
by multiplying the amount of the Performance Units payable in Shares or dollars
which would have been earned, determined at the end of the Performance Cycle,
had such employment not been terminated, by a fraction, the numerator of which
is the number of whole months such Grantee was employed during the Performance
Cycle, and the denominator of which is the total number of months of the
Performance Cycle. Any such payment shall be made as soon as practicable after
the end of the respective Performance Cycle, and shall relate to attainment of
Performance Objectives over the entire Performance Cycle.
(ii) Performance Shares. With respect to
Performance Shares, the amount of Performance Shares held by a Grantee (or
Beneficiary) with respect to which restrictions shall lapse under circumstances
described in Section 11.5(b) will be the amount determined by multiplying the
amount of the Performance Shares with respect to which restrictions would have
lapsed, determined at the end of the Performance Cycle, had such employment not
been terminated, by a fraction, the numerator of which is the number of
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EXHIBIT 10.1
whole months such Grantee was employed during the Performance Cycle, and the
denominator of which is the total number of months of the Performance Cycle.
The Committee shall determine the amount of Performance Shares with respect to
which restrictions shall lapse under this Section 11.5(c)(ii) as soon as
practicable after the end of the respective Performance Cycle, and such
determination shall relate to attainment of Performance Objectives over the
entire Performance Cycle. At that time, all Performance Shares relating to
that Performance Cycle with respect to which restrictions shall not lapse shall
be forfeited.
(d) Other Events. Notwithstanding anything to
the contrary in this Section 11, the Committee may, in its sole discretion,
determine to pay all or any portion of a Performance Award to a Grantee who has
terminated employment prior to the end of a Performance Cycle under certain
circumstances (including, without limitation, a material change in
circumstances arising after the Date of Grant) and subject to such terms and
conditions that the Grantee shall have completed, at his or her Termination of
Employment, at least one year of employment after the Date of Grant.
11.6 Modification or Substitution. Subject to the terms
of the Plan, including, without limitation, Section 16(b), the Committee may
modify outstanding Performance Awards or accept the surrender of outstanding
Performance Awards and grant new Performance Awards in substitution for them.
Notwithstanding the foregoing, no modification of a Performance Award shall
adversely alter or impair any rights or obligations under the Agreement without
the Grantee's consent.
12. Employment Agreement Governs Termination of Employment. An
employment agreement, if applicable, between an Optionee or Grantee and the
Company shall govern with respect to the terms and conditions applicable to
such Option or Award upon a termination or change in the status of the
employment of the Optionee or Grantee, to the extent that such employment
agreement provides for terms and conditions that differ from the terms and
conditions provided for in the applicable Agreement or the Plan; provided,
however, that to the extent necessary for an Option or Award intended to
qualify as performance-based compensation under Section 162(m) of the Code to
so qualify, the terms of the applicable Agreement or the Plan shall govern the
Option or Award; and, provided further, that the Committee shall have reviewed
and, in its sole discretion, approved the employment agreement.
13. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the
Committee shall conclusively determine the appropriate adjustments, if any, to
(i) the maximum number and class of Shares or other stock or securities with
respect to which Options or Awards may be granted under the Plan, (ii) the
maximum number and class of Shares or other stock or securities with respect to
which Options or Awards may be granted to any Eligible Individual during any
calendar year, (iii) the number and class of Shares or other stock or
securities which are subject to outstanding Options or Awards granted under the
Plan and the purchase
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EXHIBIT 10.1
price therefor, if applicable, (iv) the number and class of Shares or other
securities in respect of which Director Options are to be granted under Section
6 and (v) the Performance Objectives.
(b) Any such adjustment in the Shares or other stock or
securities subject to outstanding Incentive Stock Options (including any
adjustments in the purchase price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a
Grantee of an Award shall be entitled to, or an Optionee shall be entitled to
exercise an Option with respect to, new, additional or different shares of
stock or securities, such new, additional or different shares shall thereupon
be subject to all of the conditions, restrictions and performance criteria
which were applicable to the Shares subject to the Award or Option, as the case
may be, prior to such Change in Capitalization.
14. Effect of Certain Transactions. Subject to Sections 7.3,
8.8, 10.4(b) and 11.4 or as otherwise provided in an Agreement, in the event of
(i) the liquidation or dissolution of the Company or (ii) a merger or
consolidation of the Company (a "Transaction"), the Plan and the Options and
Awards issued hereunder shall continue in effect in accordance with their
respective terms, except that following a Transaction each Optionee and Grantee
shall be entitled to receive in respect of each Share subject to any
outstanding Options or Awards, as the case may be, upon exercise of any Option
or payment or transfer in respect of any Award, the same number and kind of
stock, securities, cash, property or other consideration that each holder of a
Share was entitled to receive in the Transaction in respect of a Share;
provided, however, that such stock, securities, cash, property, or other
consideration shall remain subject to all of the conditions, restrictions and
performance criteria which were applicable to the Options and Awards prior to
such Transaction.
15. Limitation on Transfer. Subject to any limitations on
transferability specifically provided for elsewhere in the Plan, the rights and
interest of an Optionee or Grantee in any Option or Award may not be assigned
or transferred other than by will or the laws of descent and distribution or,
in the Committee's sole discretion, pursuant to a domestic relations order
(within the meaning of Exchange Act Rule 16a-12). During the lifetime of an
Optionee or Grantee, and except as the preceding sentence provides, only the
Optionee or Grantee personally may exercise rights under the Plan. Except as
otherwise specifically provided in the Plan, the Beneficiary of an Optionee or
Grantee may exercise the rights of the Optionee or Grantee only to the extent
they were exercisable under the Plan at the date of the death of the Optionee
or Grantee and are otherwise currently exercisable.
16. Interpretation. Following the required registration of any
equity security of the Company pursuant to Section 12 of the Exchange Act:
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EXHIBIT 10.1
(a) The Plan is intended to comply with Rule 16b-3
promulgated under the Exchange Act and the Committee shall interpret and
administer the provisions of the Plan or any Agreement in a manner consistent
therewith. Any provisions inconsistent with such Rule shall be inoperative and
shall not affect the validity of the Plan.
(b) Unless otherwise expressly stated in the relevant
Agreement, each Option, Stock Appreciation Right and Performance Award granted
under the Plan is intended to be performance-based compensation within the
meaning of Section 162(m)(4)(C) of the Code (except that, in the event of a
Change in Control, payment of Performance Awards to a Grantee who remains a
"covered employee" with respect to such payment within the meaning of Section
162(m)(3) of the Code may not qualify as performance-based compensation). The
Committee shall not be entitled to exercise any discretion otherwise authorized
hereunder with respect to such Options or Awards if the ability to exercise
such discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options or Awards to fail to qualify as
performance-based compensation. Notwithstanding anything to the contrary in the
Plan, the provisions of the Plan may at any time be bifurcated by the Board or
the Committee in any manner so that certain provisions of the Plan or any
Performance Award intended (or required in order) to satisfy the applicable
requirements of Section 162(m) of the Code are only applicable to persons whose
compensation is subject to Section 162(m).
(c) UK Approved Options are intended to comply with
Schedule 9 to the Taxes Act, and in particular, but without limitation, with
paragraphs 10 to 14 thereof, and the Plan shall, except were inconsistent with
the subject or context, be interpreted accordingly.
17. Pooling Transactions. Notwithstanding anything
contained in the Plan or any Agreement to the contrary, in the event of a
Change in Control which is also intended to constitute a Pooling Transaction,
the Committee shall take such actions, if any, as are specifically recommended
by an independent accounting firm retained by the Company to the extent
reasonably necessary in order to assure that the Pooling Transaction will
qualify as such, including, without limitation, (i) deferring the vesting,
exercise, payment, settlement or lapsing of restrictions with respect to any
Option or Award, (ii) providing that the payment or settlement in respect of
any Option or Award be made in the form of cash, Shares or securities of a
successor or acquirer of the Company, or a combination of the foregoing, and
(iii) providing for the extension of the term of any Option or Award to the
extent necessary to accommodate the foregoing, but not beyond the maximum term
permitted for any Option or Award.
18. Effective Date, Termination and Amendment of the
Plan. The effective date of this Plan shall be the date the Plan is adopted
by the Board, subject only to the approval by the affirmative vote of the
holders of a majority of the securities of the Company present, or represented,
and entitled to vote at a meeting of stockholders duly held in accordance with
the applicable laws of the State of Delaware within twelve (12) months of the
adoption of the Plan by the Board.
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EXHIBIT 10.1
The Plan shall terminate on the day preceding the tenth
anniversary of the date of its adoption by the Board and no Option or Award may
be granted thereafter. The Board may sooner terminate the Plan and the Board
may at any time and from time to time amend, modify or suspend the Plan;
provided, however, that: (a) no such amendment, modification, suspension or
termination shall impair or adversely alter any Options or Awards theretofore
granted under the Plan, except with the consent of the Optionee or Grantee, nor
shall any amendment, modification, suspension or termination deprive any
Optionee or Grantee of any Shares which he or she may have acquired through or
as a result of the Plan; and (b) to the extent necessary under applicable law,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law.
No alteration shall be made to provisions of the Plan relating
to UK Approved Options without the prior written approval of the UK Inland
Revenue.
19. Non-Exclusivity of the Plan. The adoption of the Plan by
the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on the
power of the Board to adopt such other incentive arrangements as it may deem
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.
20. Limitation of Liability. As illustrative of the limitations
of liability of the Company, but not intended to be exhaustive thereof, nothing
in the Plan shall be construed to:
(i) give any person any right to be granted an
Option or Award other than at the sole discretion of the
Committee;
(ii) give any person any rights whatsoever with
respect to Shares except as specifically provided in the Plan;
(iii) limit in any way the right of the Company to
terminate the employment of any person at any time; or
(iv) be evidence of any agreement or
understanding, expressed or implied, that the Company will
employ any person at any particular rate of compensation or
for any particular period of time.
21. Regulations and Other Approvals; Governing Law.
21.1 Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of Delaware without giving effect to
conflicts of laws principles thereof.
21.2 The obligation of the Company to sell or deliver
Shares with respect to Options and Awards granted under the Plan shall be
subject to all applicable laws, rules and
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EXHIBIT 10.1
regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
21.3 The Board may make such changes as may be necessary
or appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
The Board may make such changes as may be necessary or
appropriate to obtain or maintain the approval of the provisions of the Plan
relating to UK Approved Options by the UK Inland Revenue.
21.4 Each Option and Award is subject to the requirement
that, if at any time the Committee determines, in its sole discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan
is required by any securities exchange or under any state or federal law, or
the consent or approval of any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the grant of an Option or
Award or the issuance of Shares, no Options or Awards shall be granted or
payment made or Shares issued, in whole or in part, unless listing,
registration, qualification, consent or approval has been effected or obtained
free of any conditions as acceptable to the Committee.
21.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares acquired
pursuant to the Plan is not covered by a then current registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to an Option or Award granted under the Plan, as a
condition precedent to receipt of such Shares, to represent and warrant to the
Company in writing that the Shares acquired by such individual are acquired
without a view to any distribution thereof and will not be sold or transferred
other than pursuant to an effective registration thereof under said Act or
pursuant to an exemption applicable under the Securities Act or the rules and
regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately amended to reflect their status as restricted
securities as aforesaid.
22. Miscellaneous.
22.1 Multiple Agreements. The terms of each Option or
Award may differ from other Options or Awards granted under the Plan at the
same time, or at some other time. The Committee may also grant more than one
Option or Award to a given Eligible Individual during the term of the Plan,
either in addition to, or in substitution for, one or more Options or Awards
previously granted to that Eligible Individual.
22.2 Withholding of Taxes.
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EXHIBIT 10.1
(a) At such times as an Optionee or Grantee
recognizes taxable income in connection with the receipt of Shares or cash
hereunder (a "Taxable Event"), the Optionee or Grantee shall pay to the Company
an amount equal to the federal, state and local income taxes and other amounts
as may be required by law to be withheld by the Company in connection with the
Taxable Event (the "Withholding Taxes") prior to the issuance, or release from
escrow, of such Shares or the payment of such cash. The Company shall have the
right to deduct from any payment of cash to an Optionee or Grantee an amount
equal to the Withholding Taxes in satisfaction of the obligation to pay
Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes
to the Company, the Optionee or Grantee may make a written election (the "Tax
Election"), which may be accepted or rejected in the sole discretion of the
Committee, to have withheld a portion of the Shares then issuable to him or her
having an aggregate Fair Market Value equal to the Withholding Taxes.
(b) If an Optionee makes a disposition, within
the meaning of Section 424(c) of the Code and regulations promulgated
thereunder, of any Share or Shares issued to such Optionee pursuant to the
exercise of an Incentive Stock Option within the two-year period commencing on
the day after the date of the grant or within the one-year period commencing on
the day after the date of transfer of such Share or Shares to the Optionee
pursuant to such exercise, the Optionee shall, within ten (10) Business Days of
such disposition, notify the Company thereof, by delivery of written notice to
the Company at its principal executive office.
22.3 Power of Attorney given by UK Employees. The
following provisions shall apply only to Options and Awards granted to
UK-resident or ordinarily resident Employees.
(a) It shall be a condition of all Options (which
term shall for the purposes of paragraphs 22.3 (a) through (d) exclude UK
Approved Options which retain approval from the UK Inland Revenue under
Schedule 9 to the Taxes Act) and Awards granted to UK Employees and a condition
precedent to the vesting, exercisability, or release for consideration, of all
such Options and Awards that, if the vesting, exercise, or release for
consideration gives rise to a liability of the Company or any Subsidiary (the
"Relevant Body") under Section 203F of the Taxes Act or otherwise pursuant to
the United Kingdom's Pay As You Earn ("PAYE") system (or any other similar
withholding tax system in any other applicable jurisdiction), the Relevant Body
shall (to the extent permitted by English law) be entitled to withhold from
such Grantee's or Optionee's salary or other payments due to him, and/or the
Grantee or Optionee shall be required to pay to the Relevant Body, as a
condition of such vesting, exercise or release, the amount which the Relevant
Body is required to pay to the UK Inland Revenue (or other relevant taxing
authority).
(b) Any payment by the Grantee or Optionee shall
be made within such period as the Relevant Body shall notify to him. The
Company may refuse to permit (a) the vesting or exercise of any Option or Award
or (b) the release of any Option or Award for consideration if any such payment
is not satisfied by the Grantee or Optionee within such period as shall have
been notified to him.
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EXHIBIT 10.1
(c) Alternatively, if the Committee so decides in
its absolute discretion, the PAYE or other taxation liability falling upon any
Relevant Body may be satisfied by (a) the Company not releasing to the Grantee
or Optionee concerned such number of Shares (which expression shall for this
purpose include other shares or securities to be issued upon such vesting or
exercise) or (b) deducting from any consideration for the release of an Option
or Award such monetary amount as shall in either case equal in value the amount
required to be paid to the Inland Revenue (or other relevant taxing authority),
together (where relevant) with any commission or similar costs associated with
or to be incurred upon the disposal of any such Shares to fund such tax
liability.
(d) Each holder of an Option or an Award under
the Plan hereby appoints any Director of the Company or a Subsidiary as his
attorney for the purpose of signing, in the name and on behalf of such holder,
any documents required to implement the foregoing (including, without prejudice
to the generality of the foregoing, the right to sell Shares not so released as
aforesaid).
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