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EXHIBIT 10.11
SOFTWARE SPECTRUM, INC.
AMENDED AND RESTATED 1993 LONG TERM INCENTIVE PLAN*
1. Purpose
The SOFTWARE SPECTRUM, INC. AMENDED AND RESTATED 1993 LONG TERM
INCENTIVE PLAN (the "1993 Plan") has been established by SOFTWARE SPECTRUM, INC.
(the "Corporation") to:
(a) Attract and retain key executives and other key employees;
(b) Motivate participating employees, by means of appropriate
incentives, to achieve long-range goals;
(c) Attract and retain well-qualified individuals to serve as members
of the Corporation's Board of Directors;
(d) Provide incentive compensation opportunities that are competitive
with those of other corporations; and
(e) Further identify the interests of directors and eligible employees
with those of the Corporation's other stockholders through compensation
alternatives based on the Corporation's Common Stock;
and thereby promote the long-term financial interest of the Corporation and its
subsidiaries, including the growth in value of the Corporation's equity and
enhancement of long-term stockholder return.
2. Scope
Awards under the 1993 Plan may be granted in the form of (i) incentive
stock options ("incentive stock options") as provided in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) non-qualified stock
options ("non-qualified options") (unless otherwise indicated, references in the
1993 Plan to "options" include incentive stock options and non-qualified
options), (iii) shares of the Common Stock of the Corporation (the "Common
Stock") that are restricted as provided in paragraph 12 hereof ("restricted
shares") or (iv) units valued based upon the long-term performance of the
Corporation as determined pursuant to paragraph 13 hereof ("performance units").
Options may be accompanied by stock appreciation rights ("rights"). Rights may
also be granted without accompanying options. The maximum aggregate number of
performance units, shares of Common Stock with respect to which options and
restricted shares are granted, and rights granted without accompanying options,
which may be awarded from time to time under the 1993 Plan shall be 600,000
(subject to adjustment as described in paragraph 16 hereof). Shares of Common
Stock with respect to which awards are granted may be, in whole or in part,
authorized and unissued shares, authorized and issued shares held in the
treasury of the Corporation, or issued shares reacquired by the Corporation, as
the Board of Directors of the Corporation (the "Board of Directors") shall from
time to time determine. If for any reason (other than surrender of options or
Deemed Options (as herein defined) upon exercise of rights as provided in
paragraph 9 hereof) any shares as to which an option has been granted cease to
be subject to purchase thereunder, or any restricted shares are forfeited to the
Corporation, or any right issued without accompanying options terminates or
expires without being exercised, then the shares in respect of which such option
or right was granted, or such restricted shares, shall become available for
subsequent awards under the 1993 Plan.
* As amended through August 15, 1997.
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3. Effective Date
The 1993 Plan shall become effective on June 15, 1993 and, unless
sooner terminated pursuant to the terms hereof, the Plan shall terminate on June
15, 2003. The 1993 Plan (and each award granted under the 1993 Plan) will become
null and void unless the 1993 Plan is approved no later than June 15, 1994 by
the affirmative vote of the holders of a majority of the shares of voting stock
of all classes of the Corporation present, or represented, and entitled to vote
at a meeting of stockholders of the Corporation at which a majority of the
outstanding shares of the Corporation's voting stock is voted on the proposal to
approve the 1993 Plan. The agreement relating to each award granted under the
1993 Plan prior to approval of the Plan by stockholders as aforesaid shall
expressly provide that such award will not be exercisable or payable prior to
such approval and that such award will become null and void unless the 1993 Plan
is approved by the stockholders as aforesaid no later than June 15, 1994.
4. Administration
(a) The 1993 Plan shall be administered, construed and interpreted
solely by the Compensation Committee or any successor thereto of the Board of
Directors of the Corporation. (All references herein to the "Committee" shall be
deemed to refer exclusively to the Compensation Committee or any successor
thereto of the Board of Directors of the Corporation.) Notwithstanding anything
in this paragraph 4 to the contrary, all authority to exercise discretion with
respect to participation in the 1993 Plan by persons who are (i) "officers"
within the meaning of the applicable Securities and Exchange Commission rules
and regulations relating to Section 16 of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), or any successor statute, (ii) directors of the
Corporation, and/or (iii) beneficial owners of more than ten percent (10%) of
any class of equity securities of the Corporation who are otherwise eligible to
participate in the 1993 Plan, and the timing, pricing, amounts and other terms
and conditions of awards granted under the 1993 Plan to such officers, directors
and beneficial owners, shall be vested in (i) the Board of Directors of the
Corporation if all of the members of the Board are disinterested persons within
the meaning ascribed to such term in Rule 16b-3 promulgated under the 1934 Act,
or within any successor definition or under any successor rule ("disinterested
persons"), or (ii) the Committee, if consisting of two (2) or more directors
each of whom is a disinterested person.
(b) The Committee shall have plenary authority in its sole discretion
and subject to the express provisions of the 1993 Plan, to grant options, to
determine the purchase price of the Common Stock covered by each option (the
"exercise price"), the term of each option, the Employees (as herein defined) to
whom, and the time or times at which, options shall be granted and the number of
shares to be covered by each option; to designate options as incentive stock
options or non-qualified options and to determine which options shall be
accompanied by rights; to grant rights without accompanying options; to
determine the Employees to whom and the time or times at which such rights shall
be granted and the exercise price, term, and number of shares of Common Stock
covered by any Deemed Option (as defined in paragraph 9 hereof) corresponding
thereto; to grant restricted shares and performance units and to determine the
term of the restricted period and appropriate long-term objectives and other
conditions applicable to such restricted shares or performance units, the
Employees to whom and the time or times at which restricted shares or
performance units shall be granted and the number of restricted shares or
performance units to be covered by each grant; to interpret the 1993 Plan; to
prescribe, amend and rescind rules and regulations relating to the 1993 Plan; to
determine the terms and provisions of the option agreements, and the right,
restricted share and performance unit agreements entered into in connection with
awards under the 1993 Plan; to prepare and distribute in such manner as the
Committee determines to be appropriate information concerning the 1993 Plan, and
to make all other determinations deemed necessary or advisable for the
administration of the 1993 Plan. The Committee may delegate to one or more of
its members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the 1993 Plan;
provided, however, that the Committee shall not delegate its authority to
construe and interpret the 1993 Plan, to determine which Employees may
participate in the 1993 Plan, or its authority to make grants of options,
restricted shares, performance units and rights.
(c) The Committee may adopt such rules as it deems necessary, desirable
or appropriate. The Committee may act at a meeting or in writing without a
meeting. The Committee shall elect one of its members as chairman, appoint a
secretary (who may or may not be a Committee member, as the case may be) and
advise the Board of Directors of such actions. The secretary shall keep a record
of all minutes and forward all necessary communications to the Corporation. A
majority of the Committee shall constitute a quorum. All
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decisions of the Committee shall be made by a vote of not less than a majority
of the Committee members present at a meeting of the Committee at which a quorum
is present or by a written consent signed by all of the members of the
Committee. A dissenting Committee member who, within a reasonable time after he
has knowledge of any action or failure to act in accordance with the preceding
sentence, registers his dissent in writing delivered to the other Committee
members and to the Board of Directors, shall not be responsible for any such
action or failure to act.
(d) All usual and reasonable expenses of the Committee shall be paid by
the Corporation, and no member shall receive compensation with respect to his
services for the Committee except as may be authorized by the Board of
Directors. The Committee may employ attorneys, consultants, accountants or other
persons, and the Committee, the Corporation and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Committee in good faith shall be final and binding upon all Employees who have
received awards, the Corporation and all other interested persons. No member of
the Committee shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the 1993 Plan or
awards made thereunder, and the Corporation shall indemnify and hold harmless
each member of the Committee against all loss, cost, expenses or damages,
occasioned by any act or omission to act in connection with any such action,
determination or interpretation under or of the 1993 Plan, consistent with the
Corporation's articles of incorporation and bylaws.
(e) Subject to such limitations or restrictions as may be imposed by
the Code or other applicable law, and except for options granted to nonemployee
directors pursuant to the terms of paragraph 5 hereof, the Committee may grant
to an Employee who has been granted an award under the 1993 Plan or any other
benefit plan maintained by the Corporation or any of its subsidiaries, or any
predecessor or successor thereto, in exchange for the surrender and cancellation
of such prior award, a new award with such terms and conditions as the Committee
may deem appropriate consistent with the provisions of the 1993 Plan.
5. Eligibility; Factors To Be Considered in Granting Awards
(a) Except for options awarded to nonemployee directors pursuant to the
terms of this paragraph 5, awards shall be granted only to persons who are
regular full-time employees (meaning an employee who works 30 hours or more per
week for the Corporation) of the Corporation or one or more of its subsidiaries
(as defined below) and either are officers of, or in the opinion of the
Committee hold key positions in or for, the Corporation or a subsidiary
("Employees"). In determining the Employees to whom awards shall be granted, the
number of shares of Common Stock with respect to which each award shall be
granted, the number of performance units granted by each award, and the terms
and conditions of each award, the Committee shall take into account the nature
of the Employee's duties, his or her present and potential contributions to the
growth and success of the Corporation, and such other factors as the Committee
shall deem relevant in connection with accomplishing the purposes of the 1993
Plan. The chief executive officer of the Corporation shall assist the Committee
in this determination by making recommendations. An Employee who has been
granted an award or awards under the 1993 Plan may be granted an additional
award or awards, subject to such limitations as may be imposed by the Code on
the grant of incentive stock options or other applicable law.
(b) For purposes of this 1993 Plan, the term "subsidiary" means any
corporation (other than the Corporation) during any period of which fifty
percent (50%) or more of the total combined voting power of all classes of stock
is owned, directly or indirectly, by the Corporation. For purposes of this 1993
Plan, the term "affiliate" shall have the same meaning as in Rule 12b-2
promulgated under the 1934 Act.
(c) Each director of the Corporation who is not also a regular
full-time Employee of the Corporation or one of its subsidiaries (a "nonemployee
director") shall automatically be granted a non-qualified option to purchase
2,000 shares of Common Stock (appropriately adjusted to reflect stock splits,
dividends, recapitalizations and the like occurring after the effective date of
the 1993 Plan) on the date such individual becomes a nonemployee director, and
each year thereafter, each nonemployee director shall automatically be granted
an additional option to purchase 2,000 shares of the Corporation's Common Stock
(appropriately adjusted to reflect stock splits, dividends, recapitalizations
and the like occurring after the effective date of the 1993 Plan) immediately
following each annual meeting of the shareholders of the Corporation, subject
thereafter to adjustment under paragraph 16 hereof. Options granted to
nonemployee directors shall not be accompanied by rights. The exercise price per
share of Common Stock of each option granted to a nonemployee director shall be
the Fair Market Value per Share (as defined in paragraph 6 hereof) on the date
the option is granted. Each option
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granted to a nonemployee director shall become exercisable in full, six months
following the date of the grant. Subject to the provisions of paragraph 14, to
the extent not previously exercised, all options granted to a nonemployee
director under the 1993 Plan will expire on the fifth anniversary following the
date of each grant. Notwithstanding the provisions of paragraph 18 of the 1993
Plan, the provisions of this paragraph 5(c) may not be amended more than once
every six (6) months, other than to comply with changes in the Code, the
Employee Retirement Income Security Act of 1974, as amended, or the rules and
regulations thereunder.
(d) Unless a different meaning is indicated or required by the context,
the term "regular full-time Employee" or "Employee" as used in this 1993 Plan
shall include a nonemployee director of the Corporation, and the term "employed"
or "employment" shall include service by a nonemployee director as a member of
the Corporation's Board of Directors.
6. Option Price; Fair Market Value
The per share exercise price of each option for shares of Common Stock
(other than options granted pursuant to paragraph 5(c) hereof) shall be
determined by the Committee, but in no event shall be less than one hundred
percent (100%) of the Fair Market Value per Share on the date the option is
granted except as set forth in paragraph 10 hereof. For purposes of this 1993
Plan, the term "Fair Market Value per Share" as of any date shall mean, except
as provided in paragraph 9(d) hereof, for shares of Common Stock with respect to
which restricted shares, options and rights shall be granted, the closing price
of the Common Stock on such date (or if there are no sales on such date, on the
next preceding date on which there were sales), as reported on the New York
Stock Exchange Composite Tape, or if the Common Stock is not listed or admitted
to trading on the New York Stock Exchange, as reported on the principal
consolidated transaction reporting system for the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or if the
Common Stock is not listed or admitted to trading on any national securities
exchange, the closing price of the Common Stock as reported on the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), or if the Common Stock is not listed or admitted to
trading on the NASDAQ National Market System, the last quoted sales price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ System or such other system
as may then be in use, or if the Common Stock is not reported on any such system
and is not listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors, or if no such market maker is making a market in the Common Stock,
the fair value of the Common Stock as determined in good faith by the Board of
Directors; provided, however, that in any event the Fair Market Value per Share
shall be appropriately adjusted to reflect events described in paragraph 16
hereof. The Committee shall determine the date on which an option is granted,
provided that such date is consistent with the Code and any applicable rules or
regulations thereunder; in the absence of such determination, the date on which
the Committee adopts a resolution granting an option shall be considered the
date on which such option is granted, provided the Employee to whom the option
is granted is promptly notified of the grant and a written option agreement is
duly executed as of the date of the resolution. The exercise price so determined
shall also be applicable in connection with the exercise of any related right.
7. Term of Options
The term of each option granted under the 1993 Plan shall be as the
Committee shall determine, but in no event shall any option have a term of more
than ten (10) years from the date of grant, subject to earlier termination as
provided in paragraphs 14 and 15 hereof. If the holder of an incentive stock
option owns Common Stock possessing more than ten percent (10%) of the combined
voting power of all classes of stock of the Corporation or any subsidiary, the
term of such incentive stock option shall not exceed five (5) years from the
date of grant.
8. Exercise of Options
(a) Subject to the provisions of this 1993 Plan and unless otherwise
provided in the option agreement, an option granted under the 1993 Plan shall
become one hundred percent (100%) vested at the earliest of the Employee's
retirement from active employment at or after Retirement Age (as defined in
paragraph 14 hereof) or the Employee's death or total and permanent disability
(as defined in paragraph 15 hereof). Prior to becoming one hundred percent
(100%) vested, each option shall become exercisable in such cumulative
installments and upon such events as the Committee may determine in its sole
discretion. Subject to the
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foregoing, the unvested portion of any option or right granted under the 1993
Plan shall be forfeited on the date the Employee ceases to be a full-time
Employee of the Corporation. The Committee may also, in its sole discretion,
accelerate the exercisability of any option or installment thereof at any time.
(b) An option may be exercised at any time or from time to time
(subject, in the case of an incentive stock option, to such restrictions as may
be imposed by the Code), as to any or all full shares of Common Stock as to
which the option has become exercisable; provided, however, that an option shall
not be exercised at any time as to less than one hundred (100) shares (or less
than the number of shares of Common Stock as to which the option is then
exercisable, if that number is less than one hundred (100) shares).
(c) At the time of exercise of any option, the per share exercise price
of such option shall be paid in full for each share of Common Stock with respect
to which such option is exercised. Payment may be made in cash or, with the
approval of the Committee, in shares of the Common Stock, valued at the Fair
Market Value per Share on the date of exercise. An option holder may also make
payment at the time of exercise of an option by delivering to the Corporation a
properly executed exercise notice together with irrevocable instructions to a
broker approved by the Corporation that upon such broker's sale of shares with
respect to which such option is exercised, it is to deliver promptly to the
Corporation the amount of sale proceeds necessary to satisfy the option exercise
price and any required withholding taxes (subject to the provisions of paragraph
19 hereof).
(d) Notwithstanding any other provision in the 1993 Plan to the
contrary, no option may be exercised prior to the expiration of six (6) months
from the date of the award thereof.
(e) Upon the exercise of an option or portion thereof in accordance
with the 1993 Plan, the option agreement and such rules and regulations as may
be established by the Committee, the holder thereof shall have the rights of a
stockholder with respect to the Common Stock issued as a result of such
exercise.
9. Award and Exercise of Rights
(a) The Committee may grant a right as a primary right or an additional
right (each as defined in this paragraph 9) in the manner set forth in this
paragraph 9. A right granted in connection with an option may be granted either
at the time the option is granted or, in the case of an option that is not an
incentive stock option, thereafter at any time prior to the exercise,
termination or expiration of such option. Each right shall be subject to the
same terms and conditions as the related option or Deemed Option (as defined in
paragraph 9(b)) and shall be exercisable only to the extent the option or Deemed
Option is exercisable. Notwithstanding any other provision in the 1993 Plan to
the contrary, no right, with or without an underlying option, shall be
exercisable for cash by an Employee who is subject to the provisions of Section
16(b) of the 1934 Act (an "Insider") prior to the expiration of six (6) months
from the date the right is awarded.
(b) A primary right may be awarded by the Committee either alone or in
connection with any option granted under the 1993 Plan (other than options
granted to nonemployee directors under paragraph 5(c) hereof). Each primary
right granted without a corresponding option shall nevertheless be deemed for
certain purposes described in this paragraph 9 to have been accompanied by an
option (a "Deemed Option"). A Deemed Option shall have no value, and no shares
of Common Stock (or other consideration) shall be delivered upon exercise
thereof, but such Deemed Option shall serve solely to establish the terms and
conditions of the corresponding primary right. At the time of grant of a primary
right not granted in connection with an option, the Committee shall set forth
the terms and conditions of the corresponding Deemed Option. The terms and
conditions of such Deemed Option shall include all terms and conditions that at
the time of grant are required, and, in the discretion of the Committee, may
include any additional terms and conditions that at such time are permitted, to
be included in options granted under this 1993 Plan. A primary right shall
entitle the Employee to surrender unexercised the related option or Deemed
Option (or any portion or portions thereof that the Employee determines to
surrender) and to receive in exchange, subject to the provisions of the 1993
Plan and such rules and regulations as from time to time may be established by
the Committee, a payment having an aggregate value equal to (i) the excess of
(A) the Fair Market Value per Share on the exercise date over (B) the per share
exercise price of the option or Deemed Option, multiplied by (ii) the number of
shares of Common Stock subject to the option, Deemed Option or portion thereof
that is surrendered. Surrender of an option or Deemed Option or portion thereof
in exchange for a payment as described in this paragraph is referred to as the
"exercise of a primary right." Upon exercise of a primary right, payment shall
be made in the form of cash, shares of Common Stock, or a combination thereof,
as elected by the Employee, provided that the Committee shall have sole
discretion to approve or disapprove the election of an Insider to receive all or
part of a payment in cash (which
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approval or disapproval may be given at any time after the election to which it
relates); and, provided, further, that the election by an Insider to receive
cash in whole or in part upon exercise of a primary right shall be made only
during a "window period" (as defined in paragraph 9(d) hereof). Shares of Common
Stock paid upon exercise of a primary right will be valued at the Fair Market
Value per Share on the exercise date. Cash will be paid in lieu of any
fractional share of Common Stock based upon the Fair Market Value per Share on
the exercise date. Subject to paragraph 19 hereof, no payment will be required
from the Employee upon exercise of a primary right.
(c) An additional right may be awarded by the Committee in connection
with any option granted under the 1993 Plan (other than options granted to
nonemployee directors under paragraph 5(c) hereof). An additional right shall
entitle the Employee to receive, upon the exercise of a related option, a cash
payment equal to (i) the product determined by multiplying (A) the excess of (x)
the Fair Market Value per Share on the date of exercise of the related option
over (y) the option price per share at which such option is exercisable by (B)
the number of shares of Common Stock with respect to which the related option is
being exercised, multiplied by (ii) a percentage factor (which may be any
percentage factor equal to or greater than ten percent (10%) and equal to or
less than one hundred percent (100%)) as determined by the Committee at the time
of the grant of such additional right or as determined in accordance with a
formula for determination of such percentage factor established by the Committee
at the time of the grant of such additional right. If no percentage factor or
formula is otherwise specified by the Committee at the time of grant of such
additional right, the percentage factor shall be deemed to be one hundred
percent (100%). The Committee at any time, or from time to time, after the time
of grant may in its discretion increase such percentage factor (or amend such
formula so as to increase such factor) to not more than one hundred percent
(100%).
(d) Solely for purposes of paragraphs 9(b) and 9(c), with respect to
exercises of rights (other than rights that relate to an incentive stock option)
by an Insider, during any period commencing on the third business day following
the date of release for publication of any annual or quarterly summary
statements of the Corporation's sales and earnings and ending on the twelfth
business day following such date (a "window period"), the Committee may
prescribe, by rule of general application, such other measure of Fair Market
Value per Share as the Committee may, in its sole discretion, determine, but not
in excess of the highest sale price of the Common Stock during such window
period as reported on the New York Stock Exchange Composite Tape, or as further
determined as set forth in paragraph 6 hereof; provided, however, that the Fair
Market Value per Share shall be appropriately adjusted to reflect events
described in paragraph 16 hereof. In the case of rights that relate to an
incentive stock option, the Committee may prescribe a similar measure of Fair
Market Value per Share; provided, however, that such measure shall not exceed
the maximum amount that would be permissible under Section 422 of the Code
without disqualifying such option as an incentive stock option under Section 422
or causing such option not to be considered fully exercised within the meaning
of Section 422.
(e) Upon exercise of a primary right, the number of shares of Common
Stock subject to exercise under the related option or Deemed Option shall
automatically be reduced by the number of shares of Common Stock represented by
the option, Deemed Option or portion thereof surrendered. Shares of Common Stock
subject to options, Deemed Options or portions thereof surrendered upon the
exercise of rights shall not be available for subsequent awards under the 1993
Plan.
(f) A right related to an incentive stock option may only be exercised
if the Fair Market Value per Share on the exercise date (as determined pursuant
to paragraph 6 and without regard to paragraph 9(d) hereof) exceeds the exercise
price of the option per share of Common Stock.
(g) If neither the right nor, in the case of a right (whether primary
or additional) with a related option, the related option, is exercised before
the end of the day on which the right ceases to be exercisable, such right shall
be deemed exercised as of such date and, subject to paragraph 19 hereof, a
payment in the amount prescribed by paragraph 9(b) or paragraph 9(c), as the
case may be, shall be paid to the Employee in cash.
10. Incentive Stock Options
(a) The Committee shall designate the Employees to whom incentive stock
options, as described in Section 422 of the Code or any successor section
thereto, are to be awarded under the 1993 Plan and shall determine the number of
shares of Common Stock to be covered by each incentive stock option. Incentive
stock options shall be awarded only to regular full-time Employees of the
Corporation, and nonemployee
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directors shall not be eligible to receive awards of incentive stock options. In
no event shall the aggregate Fair Market Value Per Share of all Common Stock
(determined at the time the option is awarded) with respect to which incentive
stock options are exercisable for the first time by an individual during any
calendar year (under all plans of the Corporation and its subsidiaries) exceed
$100,000.
(b) The purchase price of a share of Common Stock under each incentive
stock option shall be determined by the Committee; provided, however, that in no
event shall such price be less than one hundred percent 100% of the Fair Market
Value Per Share as of the date of grant or one hundred ten percent (110%) of
such Fair Market Value Per Share if the holder of the incentive stock option
owns Common Stock possessing more than ten percent (10%) of the combined voting
power of all classes of stock of the Corporation or any subsidiary.
(c) Except as provided in paragraphs 14 and 15 hereof, no incentive
stock option shall be exercised at any time unless the holder thereof is then a
regular full-time Employee of the Corporation or one of its subsidiaries. For
this purpose, "subsidiary" shall include, as under Treasury Regulations Section
1.421-7(h)(3)-(4), example (3), any corporation that is a subsidiary of the
Corporation during the entire portion of the requisite period of employment
during which it is the employer of the holder.
(d) In the event of amendments to the Code or applicable rules or
regulations relating to incentive stock options subsequent to the date hereof,
the Corporation may amend the provisions of the 1993 Plan, and the Corporation
and the Employees holding such incentive stock options may agree to amend
outstanding option agreements to conform to such amendments.
11. Non-Transferability of Options and Rights
Options and rights granted under the 1993 Plan shall not be
transferable otherwise than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, and options and rights shall be exercisable during the
lifetime of the Employee only by the Employee or by the Employee's guardian or
legal representative (unless such exercise would disqualify an option as an
incentive stock option).
12. Award and Delivery of Restricted Shares
(a) At the time an award of restricted shares is made, the Committee
shall establish a period or periods of time (each a "Restricted Period")
applicable to such award that shall not be more than ten (10) years. Each award
of restricted shares may have a different Restricted Period or Restricted
Periods. The Committee may, in its sole discretion, at the time an award is
made, provide for the incremental lapse of Restricted Periods with respect to a
portion or portions of the restricted shares awarded, and for the lapse or
termination of restrictions upon all or any portion of the restricted shares
upon the satisfaction of other conditions in addition to or other than the
expiration of the applicable Restricted Period. The Committee may also, in its
sole discretion, shorten or terminate a Restricted Period or waive any
conditions for the lapse or termination of restrictions with respect to all or
any portion of the restricted shares. Notwithstanding the foregoing, all
restrictions shall lapse or terminate with respect to all restricted shares upon
the Employee's death, total and permanent disability (as defined in paragraph 15
hereof), or retirement from active employment at or after the Retirement Age (as
defined in paragraph 14 hereof).
(b) At the time a grant of restricted shares is made to an Employee, a
stock certificate representing a number of shares of Common Stock equal to the
number of such restricted shares shall be registered in the Employee's name but
shall be held in custody by the Corporation for such Employee's account. The
Employee shall generally have the rights and privileges of a stockholder as to
such restricted shares, including, without limitation, the right to vote such
restricted shares, except that, subject to the earlier lapse or termination of
restrictions as herein provided, the following restrictions shall apply: (i) the
Employee shall not be entitled to delivery of the stock certificate evidencing
restricted shares until the expiration or termination of the Restricted Period
applicable to such shares and the satisfaction of any other conditions
prescribed by the Committee; (ii) none of the shares then subject to a
Restricted Period shall be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of during the Restricted Period applicable to such shares
and until the satisfaction of any other conditions prescribed by the Committee;
and (iii) all of the shares then subject to a Restricted Period shall be
forfeited and all rights of the Employee to such restricted shares shall
terminate without
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further obligation on the part of the Corporation if the Employee ceases to be a
regular full-time Employee of the Corporation or any of its subsidiaries before
the expiration or termination of such Restricted Period and the satisfaction of
any other conditions prescribed by the Committee applicable to such restricted
shares. Dividends in respect of restricted shares shall be currently paid;
provided, however, that in lieu of paying currently a dividend of shares of
Common Stock in respect of restricted shares, the Committee may, in its sole
discretion, register in the name of an Employee a stock certificate representing
such shares of Common Stock issued as a dividend in respect of restricted
shares, and may cause the Corporation to hold such certificate in custody for
the Employee's account subject to the same terms and conditions as such
restricted shares. Upon the forfeiture of any restricted shares, such forfeited
restricted shares shall be transferred to the Corporation without further action
by the Employee. The Employee shall have the same rights and privileges, and be
subject to the same restrictions, with respect to any shares received pursuant
to paragraph 16 hereof.
(c) Upon the expiration or termination of the Restricted Period
applicable to such shares and the satisfaction of any other conditions
prescribed by the Committee or at such earlier time as provided for herein, the
restrictions applicable to the shares subject to such Restricted Period shall
lapse and a certificate for a number of shares of Common Stock equal to the
number of restricted shares with respect to which the restrictions have expired
or terminated shall be delivered, free of all such restrictions, except any that
may be imposed by law, to the Employee or the Employee's Beneficiary (as defined
in paragraph 14(b)). The Corporation shall not be required to deliver any
fractional share of Common Stock but shall pay to the Employee or the Employee's
Beneficiary, in lieu thereof, the product of (i) the Fair Market Value per Share
(determined as of the date the restrictions expire or terminate) and (ii) the
fraction of a share to which such Employee would otherwise be entitled. Subject
to paragraph 19 hereof, no payment will be required from the Employee upon the
issuance or delivery of any Common Stock upon the expiration or termination of a
Restricted Period with respect to restricted shares.
13. Award of Performance Units
(a) At the time an award of performance units is made, the Committee
shall prescribe a range of long-term financial or other performance objectives,
including minimum, maximum and target objectives of the Corporation ("long-term
objectives") during the Incentive Period (as defined in paragraph 13(c) hereof)
applicable to such performance units, and shall determine a range of dollar
values of each performance unit associated with such range of long-term earnings
objectives. If the minimum long-term objective prescribed by the Committee for
any performance unit is not achieved or exceeded, then such performance unit
shall have no value and no amount shall be payable with respect thereto. If such
minimum long-term objective is achieved or exceeded, then the dollar value of
all performance units to be paid with respect thereto shall be based upon the
level of long-term objective achieved, subject to any maximum performance unit
value imposed by the Committee. If during the course of an Incentive Period
there shall occur significant events that were not foreseen in establishing the
minimum long-term objective for such Incentive Period and which the Committee
expects to have a substantial effect on such objective during such Incentive
Period, in its discretion, the Committee may revise such objective.
(b) Any Employee who is an Employee of the Corporation or a subsidiary
as of the Valuation Date (as defined in paragraph 13(c)) with respect to
performance units that have been previously awarded to him, shall, if the
minimum long-term objective specified in paragraph 13(a) is met, be eligible to
receive a cash award equal to the value of such performance units determined
pursuant to such paragraph 13(a) as of the Valuation Date applicable thereto.
Payment of such cash award shall be made as soon as practicable following the
Valuation Date of such performance units. Except as otherwise provided in
paragraph 14 hereof, any performance units awarded to an Employee during his
employment period for which the Incentive Period has not ended shall be
forfeited upon the date such employment terminates, and he shall not be entitled
to any payment in respect thereof.
(c) For purposes of the 1993 Plan,
(i) The "Incentive Period" with respect to a performance unit shall
be a period beginning on the date such performance unit is granted and lasting
for such period, not shorter than two (2) years nor longer than 10 years, as the
Committee shall designate.
(ii) The "Valuation Date" means the last day of the Incentive
Period for a performance unit.
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14. Termination of Employment
(a) In the event that the employment of an Employee to whom an option
or right has been granted under the 1993 Plan terminates for any reason (except
as set forth in paragraph 15 hereof), all rights of such Employee under any then
outstanding option or right shall terminate and shall be forfeited immediately
as to any unexercised portion thereof. In the case the service of a nonemployee
director who is the holder of any option shall terminate as a director (except
by reason of death or disability) the outstanding options held by such
nonemployee director shall be exercisable at any time within three (3) months
after the date of such termination of service as a director, but in no event
later than the date on which the option or right expires and only to the extent
such option was exercisable at the date of such termination.
(b) Unless otherwise determined by the Committee, if an Employee to
whom performance units have been granted ceases to be an Employee of the
Corporation or of a subsidiary prior to the end of the Incentive Period with
respect to such performance units for any reason other than death, total and
permanent disability or retirement from active employment at or after the
Retirement Age, the Employee shall immediately forfeit all such performance
units. If an Employee to whom performance units have been granted terminates
employment by reason of retirement on or after the Retirement Age, total and
permanent disability or death, he shall, if the minimum long-term objectives
specified in paragraph 13(a) hereof are met, be eligible to receive a cash award
equal to the value of such performance units, determined pursuant to such
paragraph 13(a) and payable as soon as practicable following the Valuation Date
of such performance units. If the Employee terminates employment due to his
death or if an Employee who retires from active employment on or after his
Retirement Age or terminated employment due to total and permanent disability
dies prior to receipt of any such payment, then his designated Beneficiary
shall, if the minimum long-term objectives specified in paragraph 13(a) are met,
be entitled to receive a cash award equal to the value of such performance
units, determined pursuant to such paragraph 13(a), and payable as soon as
practicable following the Valuation Date of such performance units. In the event
that the person designated by the Employee as his Beneficiary shall not be
living at the time, or if no designation has been made, then the payment of such
cash award shall be made to the estate of the Employee. An Employee's Retirement
Age hereunder is 65. An Employee's "Beneficiary" is a person or persons (natural
or otherwise) designated by such Employee, pursuant to a written instrument
executed by such Employee and filed with the Committee, to receive any benefits
payable hereunder in the event of such Employee's death.
(c) Awards granted under the 1993 Plan shall not be affected by any
change of duties or position so long as the holder continues to be a regular
full-time Employee of the Corporation or any subsidiary thereof. Any option or
right, restricted share or performance unit agreement, and any rules and
regulations relating to the 1993 Plan, may contain such provisions as the
Committee shall approve with reference to the determination of the date
employment terminates and the effect of leaves of absence. Any such rules and
regulations with reference to any option agreement shall be consistent with the
provisions of the Code and any applicable rules and regulations thereunder.
Nothing in the 1993 Plan or in any award granted pursuant to the 1993 Plan shall
confer upon any Employee any right to continue in the employ of the Corporation
or any subsidiary or interfere in any way with the right of the Corporation or
any subsidiary to terminate such employment at any time.
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15. Death or Total Disability of Employee
If an Employee to whom an option or right has been granted under the
1993 Plan shall die or suffer a total and permanent disability while employed by
the Corporation or a subsidiary, such option or right may be exercised, to the
extent that the Employee was entitled to do so at the termination of employment
(including by reason of death or total disability), as set forth herein (subject
to any restrictions set forth in paragraph 9 with respect to Insiders) by the
Employee, legal guardian of the Employee (unless such exercise would disqualify
an option as an incentive stock option), a legatee or legatees of the Employee
under the Employee's last will, or by the Employee's personal representatives or
distributees, whichever is applicable, at any time within twelve (12) months
after the date of the Employee's death or total disability, but in no event
later than the date on which the option or right terminates. Notwithstanding the
above, if an Employee who terminates employment by reason of total and permanent
disability shall die, a legatee or legatees of such Employee under the
Employee's last will, or the executor of such Employee's estate, shall only have
the right to exercise such option or right, to the extent that the Employee was
entitled to do so at the termination of employment, during the period ending
twelve (12) months after the date of the Employee's termination of employment by
reason of disability. For purposes hereof, "total and permanent disability"
shall have the meaning set forth in Code Section 22(e)(3), or any successor
provision thereto.
16. Adjustments upon Changes in Capitalization, etc.
Notwithstanding any other provision of the 1993 Plan, the Committee
shall make or provide for such adjustments to the 1993 Plan, to the number and
class of shares available thereunder and to any outstanding options, rights,
restricted shares or performance units as it shall deem appropriate to prevent
dilution or enlargement, including adjustments in the event of changes in the
outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations, reorganizations, liquidations and the like. In the event of any
offer to holders of Common Stock generally relating to the acquisition of their
shares, the Committee shall make such adjustment as it deems equitable in
respect to outstanding options, rights, restricted shares and performance units,
including revision of outstanding options, rights, restricted shares and
performance units so that they may be exercisable or redeemable for or payable
in the consideration payable in the acquisition transaction. Any such
determination by the Committee shall be conclusive. Any fractional shares
resulting from such adjustments to options, rights, or restricted shares shall
be eliminated.
17. Business Combinations.
In addition to the rights and obligations of the Committee to modify,
adjust or accelerate exercisability of outstanding options, rights, restricted
shares or performance units, in the event that, while any options, rights,
restricted shares or performance units are outstanding under the 1993 Plan,
there shall occur (a) a merger or consolidation of the Corporation with or into
another corporation in which the Corporation shall not be the surviving
corporation (for purposes of this paragraph 17, the Corporation shall not be
deemed the surviving corporation in any such transaction if, as the result
thereof, it becomes a wholly-owned subsidiary of another corporation), (b) a
dissolution of the Corporation, or (c) a transfer of all or substantially all of
the assets or shares of stock of the Corporation in one transaction or a series
of related transactions to one or more other persons or entities, then, with
respect to each option, right, restricted share and performance unit outstanding
immediately prior to the consummation of such transaction and without the
necessity of any action by the Committee:
(i) If provision is made in writing in connection with such transaction
for the continuance and/or assumption of the options, rights, restricted shares
and performance units granted under the 1993 Plan, or the substitution for such
options, rights, restricted shares and performance units of new options, rights,
restricted shares and performance units, with appropriate adjustment as to the
number and kind of shares or other securities deliverable with respect thereto,
the options, rights, restricted shares and performance units granted under the
1993 Plan, or the new options, rights, restricted shares and performance units
substituted therefor, shall continue, subject to such adjustment, in the manner
and under the terms provided in the respective agreements pursuant to paragraph
4 of this 1993 Plan.
(ii) In the event provision is not made in connection with such
transaction for the continuance and/or assumption of the options, rights,
restricted shares and performance units granted under the 1993 Plan, or for the
substitution of equivalent options, rights and awards, then (A) each holder of
an outstanding option shall be entitled, immediately prior to the effective date
of such transaction, to purchase the full number of
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shares that he would otherwise have been entitled to purchase during the entire
remaining term of the option, (B) the holder of any right shall be entitled,
immediately prior to the effective date of such transaction, to exercise such
right to the extent the related option or Deemed Option is or becomes
exercisable at such time in accordance with its terms, (C) the holder of any
additional rights shall be entitled to receive, to the extent the related option
is exercised immediately prior to the effective date of such transaction, the
full amount of cash he would have been entitled to receive if the related option
had been exercised to such extent and the percentage factor relating to such
additional right were 100%, (D) the recipient of any performance unit shall be
entitled, immediately prior to the effective date of such transaction, to
receive all remaining values under such unit, (E) all restrictions on any award
of Restricted Shares shall lapse, and (F) any restriction or risk of forfeiture
imposed under the 1993 Plan shall lapse immediately prior to the effective date
of such transaction. The unexercised portion of any option, right, Deemed Option
or any additional right relating to the unexercised portion of a related option
shall be deemed cancelled and terminated as of the effective date of such
transaction.
18. Termination and Amendment
The Board of Directors of the Corporation shall have the right to
amend, suspend or terminate the 1993 Plan at any time; provided, however, that
an amendment shall be subject to stockholder approval if such approval is
required to comply with Rule 16b-3 promulgated under the 1934 Act or under any
successor rule, the Code or the rules of any securities exchange or market
system on which securities of the Company are listed or admitted to trading at
the time such amendment is adopted. The Board of Directors may delegate to the
Committee all or any portion of its authority under this paragraph 18. If the
1993 Plan is terminated, the terms of the 1993 Plan shall, notwithstanding such
termination, continue to apply to awards granted prior to such termination. In
addition, no suspension, termination, modification or amendment of the 1993 Plan
may, without the consent of the Employee to whom an award shall theretofore have
been granted, adversely affect the rights of such Employee under such award.
19. Withholding Tax
(a) The Corporation shall have the right to deduct from all amounts
paid in cash in consequence of the exercise of an option or right, or the
settlement of a performance unit, under the 1993 Plan any taxes required by law
to be withheld with respect to such cash payments. Subject to paragraph 19(c)
below, where an Employee or other person is entitled to receive shares of Common
Stock pursuant to the exercise of an option or a right pursuant to the 1993
Plan, the Corporation shall have the right to require the Employee or such other
person to pay to the Corporation the amount of any taxes that the Corporation is
required to withhold with respect to such shares, or, in lieu thereof, to
retain, or sell without notice, a sufficient number of such shares to cover the
amount required to be withheld. Upon the disposition (within the meaning of
Section 424(c) of the Code) of shares of Common Stock acquired pursuant to the
exercise of an incentive stock option prior to the expiration of the holding
period requirements of Section 422(a)(1) of the Code, the Employee shall be
required to give notice to the Corporation of such disposition and the
Corporation shall have the right to require the Employee to pay to the
Corporation the amount of any taxes that are required by law to be withheld with
respect to such disposition.
(b) Upon termination of the Restricted Period with respect to any
restricted shares (or such earlier time, if any, as an election is made by the
Employee under Section 83(b) of the Code, or any successor provisions thereto,
to include the value of such shares in taxable income), the Corporation shall
have the right to require the Employee or other person receiving shares of
Common Stock in respect of such restricted shares to pay to the Corporation the
amount of taxes that the Corporation is required to withhold with respect to
such shares of Common Stock or, in lieu thereof, to retain or sell without
notice a sufficient number of shares of Common Stock held by it to cover the
amount required to be withheld. The Corporation shall have the right to deduct
from all dividends paid with respect to restricted shares the amount of taxes
that the Corporation is required to withhold with respect to such dividend
payments.
(c) In the case of an Employee or other person who is subject to
Section 16 of the 1934 Act, all tax withholding obligations shall be satisfied
through the withholding or surrender of shares of Common Stock as necessary to
comply with Section 16 of the 1934 Act and the rules and regulations thereunder
or to obtain any exemption therefrom.
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20. Written Agreements
Each award of options, rights, restricted shares or performance units
shall be evidenced by a written agreement, executed by the Employee and the
Corporation, which shall contain such restrictions, terms and conditions as the
Committee may require.
21. Effect on Other Stock Plans
The adoption of the 1993 Plan shall have no effect on awards made or to
be made pursuant to other plans covering Employees of the Corporation or its
subsidiaries, or any predecessors or successors thereto.
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