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NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
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NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
TABLE OF CONTENTS
1. Purpose...........................................................................................1
2. Definitions.......................................................................................1
3. Shares and Performance Units Available under the Plan.............................................6
4. Option Rights.....................................................................................8
5. Appreciation Rights...............................................................................9
6. Restricted Shares................................................................................11
7. Deferred Shares..................................................................................12
8. Performance Shares and Performance Units.........................................................13
9. Transferability..................................................................................14
10. Adjustments......................................................................................15
11. Fractional Shares................................................................................16
12. Withholding Taxes................................................................................16
13. Participation by Employees of or Consultants to a Less-Than-Eighty-Percent
Subsidiary.......................................................................................16
14. Certain Terminations of Employment, Hardship and Approved Leaves of Absence......................16
15. Foreign Participants.............................................................................17
16. Administration of the Plan.......................................................................17
17. Amendments and Other Matters.....................................................................18
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NEXTEL COMMUNICATIONS, INC.
AMENDED AND RESTATED INCENTIVE EQUITY PLAN
(AS AMENDED AND RESTATED AS OF JULY 14, 1999)
1. PURPOSE. The purpose of this Plan is to attract and
retain directors and officers and other key employees of and consultants to
Nextel Communications, Inc. (the "Corporation") and its Subsidiaries and to
provide such persons with incentives and rewards for superior performance.
2. DEFINITIONS. (a) As used in this Plan,
"ACCELERATED VESTING PERIOD" means the period beginning on the
effective date of a Change of Control and ending on the first anniversary of
such effective date.
"ACCELERATED VESTING PROVISION" means an Option Rights
agreement provision pursuant to Section 4(g)(ii) of this Plan, a Deferred
Shares agreement provision pursuant to Section 7(c)(ii) of this Plan or a
Performance Shares or Performance Units agreement provision pursuant to Section
8(b)(ii) of this Plan.
"APPRECIATION RIGHT" means a right granted pursuant to
Section 5 of this Plan, including a Free-Standing Appreciation Right and a
Tandem Appreciation Right.
"BASE PRICE" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-Standing Appreciation Right.
"BOARD" means the Board of Directors of the Corporation and,
to the extent of any delegation by the Board to a committee of the Board (or a
subcommittee thereof) pursuant to Section 16(a) of this Plan, such committee
(or subcommittee).
"CAUSE" means (i) the conviction of a felony involving an
intentional act of fraud, embezzlement or theft in connection with one's duties
or otherwise in the course of one's employment with an Employer, (ii) the
intentional and wrongful damaging of property, contractual interests or
business relationships of an Employer, (iii) the intentional and wrongful
disclosure of secret processes or confidential information of an Employer in
violation of an agreement with or a policy of an Employer, or (iv) intentional
conduct contrary to an Employer's announced policies or practices (including
those contained in the Corporation's Employee Handbook) where either:
(A) the nature and/or severity of the conduct or its
consequences typically would have resulted in immediate
termination based on the Corporation's established employee
termination or disciplinary practices in place on the
Reference Date; or
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(B) the employee has been provided with written notice
detailing the relevant policy or practice and the nature of
the objectionable conduct or other violation, and within 20
business days of the receipt of such notice the employee has
not remedied the violation or ceased to engage in the
objectionable conduct.
"CHANGE OF CONTROL" means the occurrence of any of the
following events:
(i) the Corporation is merged or consolidated or
reorganized into or with another company or other legal entity, and as
a result of such merger, consolidation or reorganization less than a
majority of the combined voting power of the then-outstanding
securities of such resulting company or entity immediately after such
transaction is held directly or indirectly in the aggregate by the
holders of voting securities of the Corporation immediately prior to
such transaction, including voting securities issuable upon the
exercise or conversion of options, warrants or other securities or
rights;
(ii) the Corporation sells or otherwise transfers all or
substantially all of its assets to another company or other legal
entity, and as a result of such sale or other transfer of assets, less
than a majority of the combined voting power or the then outstanding
securities of such company or other entity immediately after such sale
or transfer is held directly or indirectly in the aggregate by the
holders of voting securities of the Corporation immediately prior to
such sale or transfer, including voting securities issuable upon
exercise or conversion of options, warrants or other securities or
rights;
(iii) a report is filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated
pursuant to the Securities Exchange Act of 1934, as amended ( the
"Exchange Act"), disclosing that any "person" (as that term is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become
the "beneficial owner" (as that term is used in Rule 13d-3 promulgated
under the Exchange Act) of securities representing 50% or more of the
voting securities of the Corporation (or any successor thereto by
operation of law or by reason of the acquisition of all or
substantially all of the assets of the Corporation), including voting
securities issuable upon the exercise of options, warrants or other
securities or rights; or
(iv) the Corporation (or any successor thereto by
operation of law or by acquisition of all or substantially all of the
assets of the Corporation) files a report or proxy statement pursuant
to the Exchange Act disclosing in response to Form 8-K or Schedule 14A
(or any successor schedule, form, report or item therein) that a change
in control of the Corporation (or such successor) has occurred;
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provided, however, notwithstanding the provisions of (iii) and (iv) above, a
"Change of Control" shall not be deemed to have occurred solely because (1) the
Corporation, (2) an entity in which the Corporation directly or indirectly
beneficially owns 50% or more of the voting securities or (3) any
Corporation-sponsored employee stock ownership plan or other employee benefit
plan of the Corporation, either files or becomes obligated to file a report or
proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K
or Schedule 14A (or any successor form, report, schedule or item therein) under
the Exchange Act, disclosing beneficial ownership by it of voting securities,
whether in excess of 50% or otherwise, or because the Corporation reports that
a change of control of the Corporation has or may have occurred or will or may
occur in the future by reason of such beneficial ownership.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON SHARES" means (i) shares of the Class A Common Stock,
par value $.001 per share, of the Corporation and (ii) any security into which
Common Shares may be converted by reason of any transaction or event of the
type referred to in Section 10 of this Plan.
"DATE OF GRANT" means the date specified by the Board on which
a grant of Option Rights, Appreciation Rights or Performance Shares or
Performance Units or a grant or sale of Restricted Shares or Deferred Shares
shall become effective, which shall not be earlier than the date on which the
Board takes action with respect thereto.
"DEFERRAL PERIOD" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7 of this
Plan.
"DEFERRED SHARES" means an award pursuant to Section 7 of this
Plan of the right to receive Common Shares at the end of a specified Deferral
Period.
"EMPLOYER" means the Corporation or a Subsidiary (other than a
Less-Than-Eighty-Percent Subsidiary) or a successor to the Corporation or any
such Subsidiary by merger or otherwise upon or following a Change of Control.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time.
"EXECUTIVE" means any individual employed by any Employer in a
position having a salary grade of EX3, EX2 or EX1 (as the Corporation's salary
grades are established and in existence on July 14, 1999, and adjusting as
appropriate for any changes to the
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Corporation's system of classifying its employees by salary grades implemented
subsequent to such date).
"GOOD REASON" means that an Executive shall have made a good
faith determination that one or more of the following has occurred:
(i) any significant and adverse change in the Executive's
duties, responsibilities and authority, as compared in each case to
the corresponding circumstances in place on the Reference Date;
(ii) a relocation of the Executive's principal work
location as established on the Reference Date to a location that is
more than 30 miles away from such location;
(iii) a reduction in the Executive's salary or bonus
potential that is not in either case agreed to by the Executive, or
any other significant adverse financial consequences associated with
the Executive's employment as compared to the corresponding
circumstances in place on the Reference Date; or
(iv) a breach by any Employer of its obligations under any
agreement to which the Employer and the Executive are parties that is
not cured within 20 business days following the Employer's receipt of
a written notice from the Executive specifying the particulars of such
breach in reasonable detail.
"FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with
an Option Right or similar right.
"IMMEDIATE FAMILY" has the meaning ascribed thereto in Rule
16a-1(e), as promulgated and amended from time to time by the Commission under
the Exchange Act, or any successor rule to the same effect.
"INCENTIVE STOCK OPTION" means an Option Right that is
intended to quality as an "incentive stock option" under Section 422 of the
Code or any successor provision thereto.
"LESS-THAN-EIGHTY-PERCENT SUBSIDIARY" means a Subsidiary with
respect to which the Corporation directly or indirectly owns or controls less
than 80 percent of the total combined voting or other decision-making power.
"MANAGEMENT OBJECTIVES" means the achievement or performance
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares or Performance Units or, when so determined by the
Board, Restricted Shares.
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"MARKET VALUE PER SHARE" means the fair market value of the
Common Shares as determined by the Board from time to time.
"NONAFFILIATE DIRECTOR" means a person who (i) is serving (or
who has been elected or appointed and has agreed to serve) as a member of the
Board, (ii) is not an officer or employee of the Corporation or any Subsidiary
or a beneficial owner of 10 percent or more of the outstanding Common Shares
and (iii) was not elected or appointed as a member of the Board pursuant to or
in connection with any contractual or other commitment on the part of the
Corporation to cause such person to be elected or appointed, or to nominate or
otherwise advance such person for election or appointment, as a member of the
Board.
"NONQUALIFIED OPTION" means an Option Right that is not
intended to qualify as a Tax-Qualified Option.
"OPTIONEE" means the person so designated in an agreement
evidencing an outstanding Option Right.
"OPTION PRICE" means the purchase price payable upon the
exercise of an Option Right.
"OPTION RIGHT" means the right to purchase Common Shares from
the Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified
Option granted pursuant to Section 4, or a Replacement Option Right granted
pursuant to Section 17(c), of this Plan.
"PARTICIPANT" means a person who is selected by the Board to
receive benefits under this Plan and (i) is at that time a Nonaffiliate
Director or an officer (including but not limited to an officer who may also be
a member of the Board) or other key employee of or a consultant to the
Corporation or any Subsidiary or (ii) has agreed to commence serving as an
officer or other key employee of or as a consultant to the Corporation or any
Subsidiary.
"PERFORMANCE PERIOD" means, in respect of a Performance Share
or Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating thereto are to be
achieved.
"PERFORMANCE SHARE" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 8 of this Plan.
"PERFORMANCE UNIT" means a bookkeeping entry that records a
unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"REFERENCE DATE" means the day before the effective date of
any Change of Control of the Corporation.
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"REPLACEMENT OPTION RIGHT" means an Option Right granted
pursuant to Section 17(c) of this Plan in exchange for the surrender and
cancellation of an option to purchase shares of another corporation that is
acquired by the Corporation or a Subsidiary by merger or otherwise.
"RESTRICTED SHARES" means Common Shares granted or sold
pursuant to Section 6 of this Plan as to which neither the substantial risk of
forfeiture nor the restrictions on transfer referred to in Section 6 hereof has
expired.
"RULE 16b-3" means Rule 16b-3, as promulgated and amended from
time to time by the Commission under the Exchange Act, or any successor rule to
the same effect.
"SPREAD" means, in the case of a Free-Standing Appreciation
Right, the amount by which the Market Value per Share on the date when the
Appreciation Right is exercised exceeds the Base Price specified therein or, in
the case of a Tandem Appreciation Right, the amount by which the Market Value
per Share on the date when the Appreciation Right is exercised exceeds the
Option Price specified in the related Option Right.
"STOCK OPTION PLAN" means the Fleet Call, Inc. Stock Option
Plan (as amended and restated as of July 15, 1992).
"SUBSIDIARY" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Corporation has a
direct or indirect ownership or other equity interest; provided, however, for
the purpose of determining whether any person may be a Participant for the
purposes of any grant of Incentive Stock Options, "Subsidiary" means any
corporation in which the Corporation owns or controls directly or indirectly
more than 50 percent of the total combined voting power represented by all
classes of stock issued by such corporation at the time of the grant.
"TANDEM APPRECIATION RIGHT" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem with an
Option Right or any similar right granted under any other plan of the
Corporation.
"TAX-QUALIFIED OPTION" means an Option Right that is intended
to qualify under particular provisions of the Code, including but not limited
to an Incentive Stock Option.
(b) As used in this Plan, the term "employment" shall be
deemed to refer to service as a member of the Board or as a consultant, as well
as to a traditional employment relationship, as the case may be.
3. SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE
PLAN. (a)(i) Subject to adjustment as provided in Section 10 of this Plan, the
number of Common Shares
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covered by outstanding awards, except Replacement Option Rights, granted under
this Plan and issued or transferred upon the exercise or payment thereof shall
not in the aggregate exceed 45,000,000 Common Shares, which may be Common
Shares of original issuance or Common Shares held in treasury or a combination
thereof and which include 40,019,778 Common Shares that have been reserved by
the Board for issuance or transfer under this Plan only, the 921,859 Common
Shares that remained available for issuance or transfer under the Stock Option
Plan and were not covered by stock options outstanding thereunder as of July
22, 1993, and any of the 4,058,363 Common Shares that were covered by stock
options outstanding under the Stock Option Plan as of July 22, 1993, and have
or may become available for issuance or transfer under this Plan as a result of
the cancellation or termination of any such options prior to the exercise
thereof; provided, however, that the number of Common Shares issued or
transferred as Restricted Shares shall not in the aggregate exceed 200,000
Common Shares, and that the number of Common Shares covered by outstanding
Option Rights granted to consultants at an Option Price per Common Share that
is less than the Market Value per Share on the Date of Grant and issued or
transferred upon the exercise thereof shall not in the aggregate exceed
1,000,000 Common Shares, subject in each case to adjustment as provided in
Section 10 of this Plan.
(ii) Subject to adjustment as provided in Section
10 of this Plan, the number of Common Shares covered by Replacement Option
Rights granted under this Plan during any calendar year shall not in the
aggregate exceed five percent of the Common Shares outstanding on January 1 of
that year.
(iii) For the purposes of this Section 3(a):
(1) Upon payment in cash of the benefit
provided by any award granted under this Plan, any Common Shares that
were covered by that award shall again be available for issuance or
transfer hereunder.
(2) Common Shares covered by any award
granted under this Plan shall be deemed to have been issued or
transferred, and shall cease to be available for future issuance or
transfer in respect of any other award granted hereunder, at the
earlier of the time when they are actually issued or transferred or
the time when dividends or dividend equivalents are paid thereon;
provided, however, that Restricted Shares shall be deemed to have been
issued or transferred at the earlier of the time when they cease to be
subject to a substantial risk of forfeiture or the time when dividends
are paid thereon.
(b) The number of Performance Units that may be granted
under this Plan shall not in the aggregate exceed 500,000. Performance Units
that are granted under this Plan, but are not earned by the Participant at the
end of the Performance Period, shall be available for future grants of
Performance Units hereunder.
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4. OPTION RIGHTS. The Board may authorize grants to
Participants of options to purchase Common Shares upon such terms and
conditions as the Board may determine in accordance with the following
provisions:
(a) Each grant shall specify the number of Common Shares
to which it pertains.
(b) Each grant shall specify an Option Price per Common
Share, which shall be equal to or greater than the Market Value per
Share on the Date of Grant; provided, however, that the Option Price
per Common Share of a Replacement Option Right, and that the Option
Price per Common Share of an Option Right granted to a consultant, may
be less than the Market Value per Share on the Date of Grant
(c) Each grant shall specify the form of consideration to
be paid in satisfaction of the Option Price and the manner of payment
of such consideration, which may include (i) cash in the form of
currency or check or other cash equivalent acceptable to the
Corporation, (ii) nonforfeitable, nonrestricted Common Shares that are
already owned by the optionee and have a value at the time of exercise
that is equal to the Option Price, (iii) any other legal consideration
that the Board may deem appropriate, including but not limited to any
form of consideration authorized under Section 4(d), on such basis as
the Board may determine in accordance with this Plan and (iv) any
combination of the foregoing.
(d) On or after the Date of Grant of any Nonqualified
Option, the Board may determine that payment of the Option Price may
also be made in whole or in part in the form of Restricted Shares or
other Common Shares that are subject to risk of forfeiture or
restrictions on transfer. Unless otherwise determined by the Board on
or after the Date of Grant, whenever any Option Price is paid in whole
or in part by means of any of the forms of consideration specified in
this Section 4(d), the Common Shares received by the Optionee upon the
exercise of the Nonqualified Option shall be subject to the same risks
of forfeiture or restrictions on transfer as those that applied to the
consideration surrendered by the Optionee; provided, however, that
such risks of forfeiture and restrictions on transfer shall apply only
to the same number of Common Shares received by the Optionee as
applied to the forfeitable or restricted Common Shares surrendered by
the Optionee.
(e) Any grant may provide for deferred payment of the
Option Price from the proceeds of sale through a broker on the date of
exercise of some or all of the Common Shares to which the exercise
relates.
(f) Successive grants may be made to the same Participant
regardless of whether any Option Rights previously granted to the
Participant remain unexercised.
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(g) Each grant (i) shall specify the period or periods of
continuous employment of the Optionee by the Corporation or any
Subsidiary that are necessary before the Option Rights or installments
thereof shall become exercisable and (ii) in the case of any grant
subsequent to July 14, 1999, unless otherwise expressly determined in
a resolution duly adopted by the Board on the Date of Grant or such
later date on which the Board may ratify such grant, shall provide
that the Option Rights shall (A) if the Optionee is a Nonaffiliate
Director, immediately become fully exercisable upon the occurrence of
a Change of Control of the Corporation or (B) if the Optionee is
recognized by any Employer as a regular full time employee who is
subject to U.S. income tax withholding, immediately become fully
exercisable upon the termination of the Optionee's employment by an
Employer without Cause during the Accelerated Vesting Period or also,
in the case of an Optionee who is an Executive, upon the termination
of the Optionee's employment by the Optionee for Good Reason during
the Accelerated Vesting Period; provided, however, that any such
Accelerated Vesting Provision shall be deemed void ab initio and shall
be of no force or effect, if it should be determined that any such
provision would prevent a proposed merger or other business
combination that is intended by the parties thereto to be accounted
for as a pooling of interests from being so accounted for.
(h) Option Rights granted pursuant to this Section 4 may
be Nonqualified Options or Tax-Qualified Options or combinations
thereof.
(i) On or after the Date of Grant of any Nonqualified
Option, the Board may provide for the payment to the Optionee of
dividend equivalents thereon in cash or Common Shares on a current,
deferred or contingent basis, or the Board may provide that any
dividend equivalents shall be credited against the Option Price.
(j) No Option Right granted pursuant to this Section 4
may be exercised more than 10 years from the Date of Grant.
(k) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Optionee and shall contain such
terms and provisions as the Board may determine consistent with this
Plan.
5. APPRECIATION RIGHTS. The Board may authorize grants
to Participants of Appreciation Rights. An Appreciation Right shall be a right
of the Participant to receive from the Corporation an amount that shall be
determined by the Board and shall be expressed as a percentage (not exceeding
100 percent) of the Spread at the time of the exercise of the Appreciation
Right. Any grant of Appreciation Rights under this Plan shall be upon such
terms and conditions as the Board may determine in accordance with the
following provisions:
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(a) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right may be paid by the Corporation
in cash, Common Shares or any combination thereof and may (i) either
grant to the Participant or reserve to the Board the right to elect
among those alternatives or (ii) preclude the right of the Participant
to receive and the Corporation to issue Common Shares or other equity
securities in lieu of cash; provided, however, that no form of
consideration or manner of payment that would cause Rule 16b-3 to
cease to apply to this Plan shall be permitted.
(b) Any grant may specify that the amount payable upon
the exercise of an Appreciation Right shall not exceed a maximum
specified by the Board on the Date of Grant.
(c) Any grant may specify (i) a waiting period or periods
before Appreciation Rights shall become exercisable and (ii)
permissible dates or periods on or during which Appreciation Rights
shall be exercisable.
(d) Any grant may specify that an Appreciation Right may
be exercised only in the event of a Change of Control or other similar
transaction or event.
(e) On or after the Date of Grant of any Appreciation
Rights, the Board may provide for the payment to the Participant of
dividend equivalents thereon in cash or Common Shares on a current,
deferred or contingent basis.
(f) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Participant and shall contain
such terms and provisions as the Board may determine consistent with
this Plan.
(g) Regarding Tandem Appreciation Rights only: Each grant
shall specifically identify the related Option Right (or similar right
granted under any other plan of the Corporation) and shall provide
that the Tandem Appreciation Right may be exercised only (i) at a time
when the related Option Right (or such similar right) is also
exercisable and the Spread is positive and (ii) by surrender of the
related Option Right (or such similar right) for cancellation.
(h) Regarding Free-Standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-Standing Appreciation Right a Base Price per Common
Share, which shall be equal to or greater than the Market
Value per Share on the Date of Grant;
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(ii) Successive grants may be made to the same
Participant regardless of whether any Free-Standing
Appreciation Rights previously granted to the Participant
remain unexercised;
(iii) Each grant shall specify the period or
periods of continuous employment of the Participant by the
Corporation or any Subsidiary that are necessary before the
Free-Standing Appreciation Rights or installments thereof
shall become exercisable, and any grant may provide for the
earlier exercise of the Free-Standing Appreciation Rights in
the event of a Change of Control or other similar transaction
or event; and
(iv) No Free-Standing Appreciation Right granted
under this Plan may be exercised more than 10 years from the
Date of Grant.
6. RESTRICTED SHARES. The Board may authorize grants or
sales to Participants of Restricted Shares upon such terms and conditions as
the Board may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute an immediate
transfer of the ownership of Common Shares to the Participant in
consideration of the performance of services, entitling such
Participant to dividend, voting and other ownership rights, subject to
the substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale shall provide that the Restricted
Shares covered thereby shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period
to be determined by the Board on the Date of Grant, and any grant or
sale may provide for the earlier termination of such period in the
event of a Change of Control or other similar transaction or event.
(d) Each grant or sale shall provide that, during the
period for which such substantial risk of forfeiture is to continue,
the transferability of the Restricted Shares shall be prohibited or
restricted in the manner and to the extent prescribed by the Board on
the Date of Grant. Such restrictions may include without limitation
rights of repurchase or first refusal in the Corporation or provisions
subjecting the Restricted Shares to a continuing substantial risk of
forfeiture in the hands of any transferee.
(e) Any grant or sale may require that any or all
dividends or other distributions paid on the Restricted Shares during
the period of such restrictions be automatically sequestered and
reinvested on an immediate or deferred basis in additional
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Common Shares, which may be subject to the same restrictions as the
underlying award or such other restrictions as the Board may
determine.
(f) Each grant or sale shall be evidenced by an agreement
that shall be executed on behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Board may determine
consistent with this Plan. Unless otherwise directed by the Board, all
certificates representing Restricted Shares, together with a stock
power that shall be endorsed in blank by the Participant with respect
to the Restricted Shares, shall be held in custody by the Corporation
until all restrictions thereon lapse.
7. DEFERRED SHARES. The Board may authorize grants or
sales of Deferred Shares to Participants upon such terms and conditions as the
Board may determine in accordance with the following provisions:
(a) Each grant or sale shall constitute the agreement by
the Corporation to issue or transfer Common Shares to the Participant
in the future in consideration of the performance of services, subject
to the fulfillment during the Deferral Period of such conditions as
the Board may specify.
(b) Each grant or sale may be made without additional
consideration from the Participant or in consideration of a payment by
the Participant that is less than the Market Value per Share on the
Date of Grant.
(c) Each grant or sale (i) shall provide that the
Deferred Shares covered thereby shall be subject to a Deferral Period,
which shall be determined by the Board on the Date of Grant, and (ii)
in the case of any grant or sale subsequent to July 14, 1999, unless
otherwise expressly determined in a resolution duly adopted by the
Board on the Date of Grant or such later date on which the Board may
ratify such grant or sale, shall provide for the earlier termination
of the Deferral Period, and the immediate vesting of the Participant's
rights to all of the Deferred Shares subject to the grant or sale, (A)
if the Participant is a Nonaffiliate Director, upon the occurrence of
a Change of Control of the Corporation or (B) if the Participant is
recognized by any Employer as a regular full time employee who is
subject to U.S. income tax withholding, upon the termination of the
Participant's employment by an Employer without Cause during the
Accelerated Vesting Period or also, in the case of a Participant who
is an Executive, upon the termination of the Participant's employment
by the Participant for Good Reason during the Accelerated Vesting
Period; provided, however, that any such Accelerated Vesting Provision
shall be deemed void ab initio and shall be of no force or effect, if
it should be determined that any such provision would prevent a
proposed merger or other business combination that is intended by the
parties thereto to be accounted for as a pooling of interests from
being so accounted for.
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(d) During the Deferral Period, the Participant shall not
have any rights of ownership in the Deferred Shares, shall not have
any right to vote the Deferred Shares and, except as provided in
Section 9(c), shall not have any right to transfer any rights under
the subject award, but the Board may on or after the Date of Grant
authorize the payment of dividend equivalents on the Deferred Shares
in cash or additional Common Shares on a current, deferred or
contingent basis.
(e) Each grant or sale shall be evidenced by an agreement
that shall be executed on behalf of the Corporation by any officer
thereof and delivered to and accepted by the Participant and shall
contain such terms and provisions as the Board may determine
consistent with this Plan.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board
may authorize grants of Performance Shares and Performance Units, which shall
become payable to the Participant upon the achievement of specified Management
Objectives, upon such terms and conditions as the Board may determine in
accordance with the following provisions:
(a) Each grant shall specify the number of Performance
Shares or Performance Units to which it pertains, which may be subject
to adjustment to reflect changes in compensation or other factors.
(b) The Performance Period with respect to each
Performance Share or Performance Unit (i) shall be determined by the
Board on the Date of Grant and (ii) in the case of any grant made
subsequent to July 14, 1999, unless otherwise expressly determined in
a resolution duly adopted by the Board on the Date of Grant or such
later date on which the Board may ratify such grant, shall provide for
the earlier termination of the Performance Period, and the immediate
vesting of the Participant's rights to all of the Performance Shares
or Performance Units subject to the grant, (A) if the Participant is a
Nonaffiliate Director, upon the occurrence of a Change of Control of
the Corporation or (B) if the Participant is recognized by any
Employer as a regular full time employee who is subject to U.S. income
tax withholding, upon the termination of the Participant's employment
by an Employer without Cause during the Accelerated Vesting Period or
also, in the case of a Participant who is an Executive, upon the
termination of the Participant's employment by the Participant for
Good Reason during the Accelerated Vesting Period; provided, however,
that any such Accelerated Vesting Provision shall be deemed void ab
initio and shall be of no force or effect, if it should be determined
that any such provision would prevent a proposed merger or other
business combination that is intended by the parties thereto to be
accounted for as a pooling of interests from being so accounted for.
(c) Each grant shall specify the Management Objectives
that are to be achieved by the Participant, which may be described in
terms of Corporation-wide objectives or objectives that are related to
the performance of the individual Participant or
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the Subsidiary, division, department or function within the
Corporation or Subsidiary in which the Participant is employed or with
respect to which the Participant provides consulting services.
(d) Each grant shall specify in respect of the specified
Management Objectives a minimum acceptable level of achievement below
which no payment will be made and shall set forth a formula for
determining the amount of any payment to be made if performance is at
or above the minimum acceptable level but falls short of full
achievement of the specified Management Objectives.
(e) Each grant shall specify the time and manner of
payment of Performance Shares or Performance Units that shall have
been earned, and any grant may specify that any such amount may be
paid by the Corporation in cash, Common Shares or any combination
thereof and may either grant to the Participant or reserve to the
Board the right to elect among those alternatives; provided, however,
that no form of consideration or manner of payment that would cause
Rule 16b-3 to cease to apply to this Plan shall be permitted.
(f) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified
by the Board on the Date of Grant. Any grant of Performance Units may
specify that the amount payable, or the number of Common Shares
issuable, with respect thereto may not exceed maximums specified by
the Board on the Date of Grant
(g) On or after the Date of Grant of Performance Shares,
the Board may provide for the payment to the Participant of dividend
equivalents thereon in cash or additional Common Shares on a current,
deferred or contingent basis.
(h) The Board may adjust Management Objectives and the
related minimum acceptable level of achievement if, in the sole
judgment of the Board, events or transactions have occurred after the
Date of Grant that are unrelated to the performance of the Participant
and result in distortion of the Management Objectives or the related
minimum acceptable level of achievement.
(i) Each grant shall be evidenced by an agreement that
shall be executed on behalf of the Corporation by any officer thereof
and delivered to and accepted by the Participant and shall contain
such terms and provisions as the Board may determine consistent with
this Plan.
9. TRANSFERABILITY. (a) Except as otherwise determined
by the Board, no Option Right, Appreciation Right or other derivative security
granted under this Plan shall be transferable by a Participant other than by
will or the laws of descent and distribution and, except as otherwise
determined by the Board, Option Rights and Appreciation Rights shall be
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exercisable during a Participant's lifetime only by the Participant or his or
her guardian or legal representative.
(b) The Board may specify at the Date of Grant that all
or any part of the Common Shares that are to be issued or transferred by the
Corporation upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Deferral Period applicable to Deferred Shares or upon
payment under any grant of Performance Shares or Performance Units, or are to
be no longer subject to the substantial risk of forfeiture and restrictions on
transfer referred to in Section 6 of this Plan, shall be subject to further
restrictions on transfer.
(c) Notwithstanding the provisions of Section 10(a),
Option Rights (other than Incentive Stock Options), Appreciation Rights,
Restricted Shares, Deferred Shares, Performance Shares and Performance Units
shall be transferable by a Participant, without payment of consideration
therefor by the transferee, to any one or more members of the Participant's
Immediate Family (or to one or more trusts established solely for the benefit
of one or more members of the Participant's Immediate Family or to one or more
partnerships in which the only partners are members of the Participant's
Immediate Family); provided, however, that (i) no such transfer shall be
effective unless reasonable prior notice thereof is delivered to the
Corporation and such transfer is thereafter effected in accordance with any
terms and conditions that shall have been made applicable thereto by the
Corporation or the Board and (ii) any such transferee shall be subject to the
same terms and conditions hereunder as the Participant.
10. ADJUSTMENTS. The Board may make or provide for such
adjustments in the number of Common Shares covered by outstanding Option
Rights, Appreciation Rights, Deferred Shares and Performance Shares granted
hereunder, the Option Prices per Common Share or Base Prices per Common Share
applicable to any such Option Rights and Appreciation Rights, and the kind of
shares (including shares of another issuer) covered thereby, as the Board may
in good faith determine to be equitably required in order to prevent dilution
or expansion of the rights of Participants that otherwise would result from (a)
any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Corporation or (b) any merger,
consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of warrants
or other rights to purchase securities or any other corporate transaction or
event having an effect similar to any of the foregoing. In the event of any
such transaction or event, the Board may provide in substitution for any or all
outstanding awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require in
connection therewith the surrender of all awards so replaced. On or after the
Date of Grant of any award under this Plan, the Board may provide in the
agreement evidencing the award that the holder of the award may elect to
receive an equivalent award in respect of securities of the surviving entity of
any merger, consolidation or other transaction or event having a similar
effect, or the Board may provide that the holder will automatically be entitled
to receive such an equivalent award. The Board may also make or provide for
such adjustments in the numbers of Common Shares specified in Sections 3(a)(i)
and 3(a)(ii) of this Plan as the Board may in good
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faith determine to be appropriate in order to reflect any transaction or event
described in this Section 10.
11. FRACTIONAL SHARES. The Corporation shall not be
required to issue any fractional Common Shares pursuant to this Plan. The Board
may provide for the elimination of fractions or for the settlement thereof in
cash.
12. WITHHOLDING TAXES. To the extent that the
Corporation is required to withhold federal, state, local or foreign taxes in
connection with any payment made or benefit realized by a Participant or other
person under this Plan, and the amounts available to the Corporation for the
withholding are insufficient, it shall be a condition to the receipt of any
such payment or the realization of any such benefit that the Participant or
such other person make arrangements satisfactory to the Corporation for payment
of the balance of any taxes required to be withheld. At the discretion of the
Board, any such arrangements may include relinquishment of a portion of any
such payment or benefit. The Corporation and any Participant or such other
person may also make similar arrangements with respect to the payment of any
taxes with respect to which withholding is not required.
13. PARTICIPATION BY EMPLOYEES OF OR CONSULTANTS TO A
LESS-THAN-EIGHTY-PERCENT SUBSIDIARY. As a condition to the effectiveness of
any grant or award to be made hereunder to a Participant who is an employee of
or a consultant to a Less-Than-Eighty-Percent Subsidiary, regardless of whether
the Participant is also employed by or engaged as a consultant to the
Corporation or another Subsidiary, the Board may require the
Less-Than-Eighty-Percent Subsidiary to agree to transfer to the Participant
(as, if and when provided for under this Plan and any applicable agreement
entered into between the Participant and the Less-Than-Eighty-Percent
Subsidiary pursuant to this Plan) the Common Shares that would otherwise be
delivered by the Corporation upon receipt by the Less-Than-Eighty-Percent
Subsidiary of any consideration then otherwise payable by the Participant to
the Corporation. Any such award may be evidenced by an agreement between the
Participant and the Less-Than-Eighty-Percent Subsidiary, in lieu of the
Corporation, on terms consistent with this Plan and approved by the Board and
the Less-Than-Eighty-Percent Subsidiary. All Common Shares so delivered by or
to a Less-Than-Eighty-Percent Subsidiary will be treated as if they had been
delivered by or to the Corporation for the purposes of Section 3 of this Plan,
and all references to the Corporation in this Plan shall be deemed to refer to
the Less-Than-Eighty-Percent Subsidiary except with respect to the definitions
of the Board and the Board and in other cases where the context otherwise
requires.
14. CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND
APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of this Plan
to the contrary, in the event of termination of employment by reason of death,
disability, normal retirement, early retirement with the consent of the
Corporation, termination of employment to enter public service with the consent
of the Corporation or leave of absence approved by the Corporation, or in the
event of hardship or other special circumstances, of a Participant who holds an
Option
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Right or Appreciation Right that is not immediately and fully exercisable, any
Restricted Shares as to which the substantial risk of forfeiture or the
prohibition or restriction on transfer has not lapsed, any Deferred Shares as
to which the Deferral Period is not complete, any Performance Shares or
Performance Units that have not been fully earned, or any Common Shares that
are subject to any transfer restriction pursuant to Section 9(b) of this Plan,
the Board may take any action that it deems to be equitable under the
circumstances or in the best interests of the Corporation, including but not
limited to waiving or modifying any limitation or requirement with respect to
any award under this Plan.
15. FOREIGN PARTICIPANTS. In order to facilitate the
making of any award or combination of awards under this Plan, the Board may
provide for such special terms for awards to Participants who are foreign
nationals, or who are employed by or engaged as consultants to the Corporation
or any Subsidiary outside of the United States of America, as the Board may
consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. In addition, the Board may approve such supplements to, or
amendments, restatements or alternative versions of, this Plan as it may
consider necessary or appropriate for such purposes without thereby affecting
the terms of this Plan as in effect for any other purpose; provided, however,
that no such supplements, amendments, restatements or alternative versions
shall include any provisions that are inconsistent with the terms of this Plan,
as then in effect, unless this Plan could have been amended to eliminate the
inconsistency without further approval by the stockholders of the Corporation.
16. ADMINISTRATION OF THE PLAN. (a) This Plan shall be
administered by the Board, which may from time to time delegate all or any part
of its authority under this Plan to a committee of the Board consisting of two
or more members of the Board, or a subcommittee of a committee of the Board
consisting exclusively of two or more "Non-Employee Directors" (as defined in
Rule 16b-3), appointed by the Board. A majority of the committee (or
subcommittee) shall constitute a quorum, and the action of the members of the
committee (or subcommittee) present at any meeting at which a quorum is
present, or acts unanimously approved in writing, shall be the acts of the
committee (or subcommittee). To the extent of any such delegation, references
in this Plan to the Board shall be deemed to be references to any such
committee or subcommittee.
(b) The Board may from time to time reserve a specified
number of Common Shares, subject to adjustment as provided in Section 10 of
this Plan, for grants of Nonqualified Options to Participants who have agreed
to commence employment with the Corporation or any Subsidiary and may delegate
to one or more officers of the Corporation the authority to determine the
Participants to whom such Nonqualified Options shall be granted, and to
determine the number of such Common Shares to which any such Nonqualified
Option shall pertain, subject to the terms and conditions of this Plan and the
terms and conditions of an agreement evidencing any such Nonqualified Option and
approved by the Board. For the purposes of Section 4(b) of this Plan, as it
relates to any Nonqualified Option that shall be granted pursuant to this
Section 16(b), (i) the Date of Grant shall be the date on which the Participant
agrees to accept employment with the Corporation or any Subsidiary, which may
precede the date on which the Participant's employment actually commences (or,
if such date is not specified in the Participant's employment offer and
acceptance materials, the Date of Grant will be the commencement date of such
Participant's employment with the Corporation or any Subsidiary), and (ii) the
Market Value per Share on the Date of Grant shall be the closing price of the
Common Shares on the Nasdaq Stock Market on the last trading day immediately
preceding the Date of Grant.
(c) The interpretation and construction by the Board of
any provision of this Plan or any agreement, notification or document
evidencing the grant of Option Rights, Appreciation Rights, Restricted Shares,
Deferred Shares, Performance Shares or Performance Units, and any determination
by the Board pursuant to any provision of this Plan or any such agreement,
notification or document, shall be final and conclusive. No member of the Board
shall be liable for any such action taken or determination made in good faith.
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17 AMENDMENTS AND OTHER MATTERS. (a) The Board may at
any time and from time to time amend this Plan in whole or in part; provided,
however, that any amendment that must be approved by the stockholders of the
Corporation in order to comply with applicable law or the rules of the Nasdaq
National Market shall not be effective unless and until such approval has been
obtained.
(b) With the concurrence of the affected Participant, the
Board may cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of any such cancellation, the Board may
authorize the granting of new Option Rights or other awards hereunder, which
may or may not cover the same number of Common Shares as had been covered by
the canceled Option Rights or other award, at such Option Price, in such manner
and subject to such other terms, conditions and discretion as would have been
permitted under this Plan had the canceled Option Rights or other award not
been granted.
(c) The Board may grant under this Plan any award or
combination of awards authorized under this Plan, including but not limited to
Replacement Option Rights, in exchange for the surrender and cancellation of an
award that was not granted under this Plan (including but not limited to an
award that was granted by the Corporation or a Subsidiary, or by another
corporation that is acquired by the Corporation or a Subsidiary by merger or
otherwise, prior to the adoption of this Plan by the Board), and any such award
or combination of awards so granted under this Plan may or may not cover the
same number of Common Shares as had been covered by the canceled award and
shall be subject to such other terms, conditions and discretion as would have
been permitted under this Plan had the canceled award not been granted.
(d) This Plan shall not confer upon any Participant any
right with respect to continuance of employment or other service with the
Corporation or any Subsidiary and shall not interfere in any way with any right
that the Corporation or any Subsidiary would otherwise have to terminate any
Participant's employment or other service at any time.
(e) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as a Tax-Qualified Option
from so qualifying, any such provision shall be null and void with respect to
any such Option Right; provided, however, that any such provision shall remain
in effect with respect to other Option Rights, and there shall be no further
effect on any provision of this Plan.
(f) The Board may also permit Participants to elect to
defer the issuance of Common Shares or the settlement of awards in cash under
this Plan pursuant to such procedures, programs or rules as the Board may
establish for the purposes of this Plan. The Board may also provide that
deferred issuances and settlements include the payment or crediting of dividend
equivalents or interest on the deferral amounts.
(g) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral
by the Participant of his or her right to receive a cash bonus or other
compensation otherwise payable by the Company or a Subsidiary to the
Participant.
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