EXHIBIT 99.1
WARREN BANCORP, INC.
2002 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Warren Bancorp, Inc. 2002 Stock Option and
Incentive Plan (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees and Independent Directors of Warren Bancorp, Inc. (the
"Corporation") and its Subsidiaries upon whose judgment, initiative and efforts
the Corporation largely depends for the successful conduct of its business to
acquire a proprietary interest in the Corporation. It is anticipated that
providing such persons with a direct stake in the Corporation's welfare will
assure a closer identification of their interests with those of the Corporation,
thereby stimulating their efforts on the Corporation's behalf and strengthening
their desire to remain with the Corporation.
The following terms shall be defined as set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"Administrator" is defined in Section 2(a).
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Deferred Stock Awards, Restricted Stock Awards and Unrestricted Stock
Awards.
"Board" means the Board of Directors of the Corporation.
"Change of Control" is defined in Section 13.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Executive Committee of the Board.
"Covered Employee" means an employee who is a "Covered Employee" within
the meaning of Section 162(m) of the Code.
"Deferred Stock Award" means Awards granted pursuant to Section 7.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 15.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder.
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"Fair Market Value" of the Stock on any given date means the fair
market value of the Stock determined in good faith by the Administrator;
provided, however, that if the Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ
National System or a national securities exchange, the determination shall be
made by reference to market quotations. If there are no market quotations for
such date, the determination shall be made by reference to the last date
preceding such date for which there are market quotations.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is not also an
employee of the Corporation or any Subsidiary.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Restricted Stock Award" means Awards granted pursuant to Section 6.
"Stock" means the Common Stock, par value $0.10 per share, of the
Corporation, subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the
Corporation) in which the Corporation has a controlling interest, either
directly or indirectly.
"Unrestricted Stock Award" means any Award granted pursuant to Section
8.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES
AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by either the Board or
the Committee (in either case, the "Administrator").
(b) Powers of Administrator. The Administrator shall have the power
and authority to grant Awards consistent with the terms of the Plan, including
the power and authority:
(i) to select the individuals to whom Awards may from time to
time be granted;
(ii) to determine the time or times of grant, and the extent, if
any, of Incentive Stock Options, Non-Qualified Stock Options,
Restricted Stock Awards, Deferred Stock Awards and Unrestricted
Stock Awards, or any combination of the foregoing, granted to any
one or more grantees;
(iii) to determine the number of shares of Stock to be covered by
any Award;
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(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the
terms of the Plan, of any Award, which terms and conditions may
differ among individual Awards and grantees, and to approve the
form of written instruments evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend at
any time the period in which Stock Options may be exercised;
(vii) to determine at any time whether, to what extent, and under
what circumstances distribution or the receipt of Stock and other
amounts payable with respect to an Award shall be deferred either
automatically or at the election of the grantee and whether and
to what extent the Corporation shall pay or credit amounts
constituting interest (at rates determined by the Administrator)
or dividends or deemed dividends on such deferrals; and
(viii) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for
its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all
determinations it deems advisable for the administration of the
Plan; to decide all disputes arising in connection with the Plan;
and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding
on all persons, including the Corporation and Plan grantees.
(c) Delegation of Authority to Grant Awards. The Administrator, in
its discretion, may delegate to the Chief Executive Officer of the Corporation
all or part of the Administrator's authority and duties with respect to the
granting of Awards at Fair Market Value, to individuals who are not subject to
the reporting and other provisions of Section 16 of the Exchange Act or "covered
employees" within the meaning of Section 162(m) of the Code. Any such delegation
by the Administrator shall include a limitation as to the amount of Awards that
may be granted during the period of the delegation and shall contain guidelines
as to the determination of the exercise price of any Stock Option, the
conversion ratio or price of other Awards and the vesting criteria. The
Administrator may revoke or amend the terms of a delegation at any time but such
action shall not invalidate any prior actions of the Administrator's delegate or
delegates that were consistent with the terms of the Plan.
(d) Indemnification. Neither the Board nor the Committee, nor any
member of either or any delegatee thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with the Plan, and the members of the Board and the Committee (and
any delegatee thereof) shall be entitled in all cases to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage or
expense (including, without limitation, reasonable attorneys' fees) arising or
resulting therefrom to the fullest extent
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permitted by law and/or under any directors' and officers' liability insurance
coverage which may be in effect from time to time.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 360,000 shares, subject to
adjustment as provided in Section 3(b) ; provided that not more than 90,000
shares shall be issued in the form of Unrestricted Stock Awards or Restricted
Stock Awards except to the extent such Awards are granted in lieu of cash
compensation or fees. For purposes of this limitation, the shares of Stock
underlying any Awards which are forfeited, canceled, reacquired by the
Corporation, satisfied without the issuance of Stock or otherwise terminated
(other than by exercise) shall be added back to the shares of Stock available
for issuance under the Plan. Subject to such overall limitation, shares of Stock
may be issued up to such maximum number pursuant to any type or types of Award;
provided, however, that Stock Options with respect to no more than 100,000
shares of Stock may be granted to any one individual grantee during any one
calendar year period. The shares available for issuance under the Plan may be
authorized but unissued shares of Stock or shares of Stock reacquired by the
Corporation and held in its treasury.
(b) Changes in Stock. Subject to Section 3(c) hereof, if, as a result
of any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Corporation's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Corporation, or additional shares or new or different shares or other securities
of the Corporation or other non-cash assets are distributed with respect to such
shares of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the
Corporation, the outstanding shares of Stock are converted into or exchanged for
a different number or kind of securities of the Corporation or any successor
entity (or a parent or subsidiary thereof), the Administrator shall make an
appropriate or proportionate adjustment in (i) the maximum number of shares
reserved for issuance under the Plan, including the maximum number of shares
that may be issued in the form of Unrestricted Stock Awards or Restricted Stock
Awards, (ii) the number of Stock Options that can be granted to any one
individual grantee, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, (iv) the repurchase price
per share subject to each outstanding Restricted Stock Award, and (v) the price
for each share subject to any then outstanding Stock Options under the Plan,
without changing the aggregate exercise price (i.e., the exercise price
multiplied by the number of Stock Options) as to which such Stock Options remain
exercisable. The adjustment by the Administrator shall be final, binding and
conclusive. No fractional shares of Stock shall be issued under the Plan
resulting from any such adjustment, but the Administrator in its discretion may
make a cash payment in lieu of fractional shares.
The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of
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the grantee, if it would constitute a modification, extension or renewal of the
Option within the meaning of Section 424(h) of the Code.
(c) Mergers and Other Transactions. In the case of and subject to the
consummation of (i) the dissolution or liquidation of the Corporation, (ii) the
sale of all or substantially all of the assets of the Corporation on a
consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for a different kind of securities of the successor
entity and the holders of the Corporation's outstanding voting power immediately
prior to such transaction do not own a majority of the outstanding voting power
of the successor entity immediately upon completion of such transaction, or (iv)
the sale of all of the Stock of the Corporation to an unrelated person or entity
(in each case, a "Sale Event"), all Options that are not exercisable immediately
prior to the effective time of the Sale Event shall become fully exercisable as
of the effective time of the Sale Event and all other Awards shall become fully
vested and nonforfeitable as of the effective time of the Sale Event, except as
the Administrator may otherwise specify with respect to particular Awards. Upon
the effective time of the Sale Event, the Plan and all outstanding Options
granted hereunder shall terminate, unless provision is made in connection with
the Sale Event in the sole discretion of the parties thereto for the assumption
or continuation of Options theretofore granted by the successor entity, or the
substitution of such Options with new Options of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if
appropriate, the per share exercise prices, as such parties shall agree (after
taking into account any acceleration hereunder). In the event of such
termination, each grantee shall be permitted, within a specified period of time
prior to the consummation of the Sale Event as determined by the Administrator,
to exercise all outstanding Options held by such grantee, including those that
will become exercisable upon the consummation of the Sale Event; provided,
however, that the exercise of Options not exercisable prior to the Sale Event
shall be subject to the consummation of the Sale Event.
Notwithstanding anything to the contrary in this Section 3(c), in the
event of a Sale Event pursuant to which holders of the Stock of the Corporation
will receive upon consummation thereof a cash payment for each share surrendered
in the Sale Event, the Corporation shall have the right, but not the obligation,
to make or provide for a cash payment to the grantees holding Options, in
exchange for the cancellation thereof, in an amount equal to the difference
between (A) the value as determined by the Administrator of the consideration
payable per share of Stock pursuant to the Sale Event (the "Sale Price") times
the number of shares of Stock subject to outstanding Options (to the extent then
exercisable at prices not in excess of the Sale Price) and (B) the aggregate
exercise price of all such outstanding Options.
(d) Substitute Awards. The Administrator may grant Awards under the
Plan in substitution for stock and stock based awards held by employees,
directors or other key persons of another corporation in connection with the
merger or consolidation of the employing corporation with the Corporation or a
Subsidiary or the acquisition by the Corporation or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances. Any substitute Awards granted under
the Plan shall not count against the share limitation set forth in Section 3(a).
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SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and
other employees and Independent Directors of the Corporation and its
Subsidiaries as are selected from time to time by the Administrator in its sole
discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. Incentive Stock Options may be granted
only to employees of the Corporation or any Subsidiary that is a "subsidiary
corporation" within the meaning of Section 424(f) of the Code. To the extent
that any Option does not qualify as an Incentive Stock Option, it shall be
deemed a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after March
20, 2012.
(a) Stock Option Grants. The Administrator in its discretion may
grant Stock Options to eligible grantees. Stock Options granted pursuant to this
Section 5(a) shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent with the terms of
the Plan, as the Administrator shall deem desirable. If the Administrator so
determines, Stock Options may be granted in lieu of cash compensation at the
optionee's election, subject to such terms and conditions as the Administrator
may establish.
(i) Exercise Price. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a)
shall be determined by the Administrator at the time of grant but
shall not be less than 100 percent of the Fair Market Value on
the date of grant. If an employee owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code)
more than 10 percent of the combined voting power of all classes
of stock of the Corporation or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such
employee, the option price of such Incentive Stock Option shall
be not less than 110 percent of the Fair Market Value on the
grant date.
(ii) Option Term. The term of each Stock Option shall be fixed by
the Administrator, but no Stock Option shall be exercisable more
than seven years after the date the Stock Option is granted. If
an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10
percent of the combined voting power of all classes of stock of
the Corporation or any parent or subsidiary corporation and an
Incentive Stock Option is granted to such employee, the term of
such Stock Option shall be no more than five years from the date
of grant.
(iii) Exercisability; Rights of a Stockholder. Stock Options
shall become exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at or
after the grant date. The Administrator may at any time
accelerate the exercisability of all or any portion of any Stock
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Option. An optionee shall have the rights of a stockholder only
as to shares acquired upon the exercise of a Stock Option and not
as to unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in whole
or in part, by giving written notice of exercise to the
Corporation, specifying the number of shares to be purchased.
Payment of the purchase price may be made by one or more of the
following methods to the extent provided in the Option Award
agreement:
(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;
(B) Through the delivery (or attestation to the ownership)
of shares of Stock that have been purchased by the optionee on
the open market or that have been beneficially owned by the
optionee for at least six months and are not then subject to
restrictions under any Corporation plan. Such surrendered shares
shall be valued at Fair Market Value on the exercise date; or
(C) By the optionee delivering to the Corporation a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Corporation
cash or a check payable and acceptable to the Corporation for the
purchase price; provided that in the event the optionee chooses
to pay the purchase price as so provided, the optionee and the
broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Administrator
shall prescribe as a condition of such payment procedure.
Payment instruments will be received subject to collection. The
delivery of certificates representing the shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Corporation of the full purchase price
for such shares and the fulfillment of any other requirements contained in the
Option Award agreement or applicable provisions of laws. In the event an
optionee chooses to pay the purchase price by previously-owned shares of Stock
through the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
shares attested to.
(v) Annual Limit on Incentive Stock Options. To the extent
required for "incentive stock option" treatment under Section 422
of the Code, the aggregate Fair Market Value (determined as of
the time of grant) of the shares of Stock with respect to which
Incentive Stock Options granted under this Plan and any other
plan of the Corporation or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. To the extent that any
Stock Option exceeds this limit, it shall constitute a
Non-Qualified Stock Option.
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(b) Non-transferability of Options. No Stock Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee, or by the optionee's legal
representative or guardian in the event of the optionee's incapacity.
Notwithstanding the foregoing, the Administrator, in its sole discretion, may
provide in the Award agreement regarding a given Option that the optionee may
transfer his Non-Qualified Stock Options to members of his immediate family, to
trusts for the benefit of such family members, or to partnerships in which such
family members are the only partners, provided that the transferee agrees in
writing with the Corporation to be bound by all of the terms and conditions of
this Plan and the applicable Option.
SECTION 6. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an
Award entitling the recipient to acquire, at such purchase price as determined
by the Administrator, shares of Stock subject to such restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The grant of a Restricted Stock Award is contingent on the grantee
executing the Restricted Stock Award agreement. The terms and conditions of each
such agreement shall be determined by the Administrator, and such terms and
conditions may differ among individual Awards and grantees.
(b) Rights as a Stockholder. Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any applicable purchase
price, a grantee shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Corporation until such Restricted
Stock is vested as provided in Section 6(d) below, and the grantee shall be
required, as a condition of the grant, to deliver to the Corporation a stock
power endorsed in blank.
(c) Restrictions. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein or in the Restricted Stock Award agreement. If a
grantee's employment (or other service relationship) with the Corporation and
its Subsidiaries terminates for any reason, the Corporation shall have the right
to repurchase Restricted Stock that has not vested at the time of termination at
its original purchase price, from the grantee or the grantee's legal
representative.
(d) Vesting of Restricted Stock. The Administrator at the time of
grant shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Corporation's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." The vesting period of a
Restricted Stock Award shall be at least three years, except that in the case of
a Restricted Stock Award that may become transferable and no longer subject to a
risk of forfeiture upon the attainment of pre-established performance goals, the
vesting period shall be at
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least one year. Except as may otherwise be provided by the Administrator either
in the Award agreement or, subject to Section 11 below, in writing after the
Award agreement is issued, a grantee's rights in any shares of Restricted Stock
that have not vested shall automatically terminate upon the grantee's
termination of employment (or other service relationship) with the Corporation
and its Subsidiaries and such shares shall be subject to the Corporation's right
of repurchase as provided in Section 6(c) above.
(e) Waiver, Deferral and Reinvestment of Dividends. The Restricted
Stock Award agreement may require or permit the immediate payment, waiver,
deferral or investment of dividends paid on the Restricted Stock.
SECTION 7. DEFERRED STOCK AWARDS
(a) Nature of Deferred Stock Awards. A Deferred Stock Award is an
Award of phantom stock units to a grantee, subject to restrictions and
conditions as the Administrator may determine at the time of grant. Conditions
may be based on continuing employment (or other service relationship) and/or
achievement of pre-established performance goals and objectives. The grant of a
Deferred Stock Award is contingent on the grantee executing the Deferred Stock
Award agreement. The terms and conditions of each such agreement shall be
determined by the Administrator, and such terms and conditions may differ among
individual Awards and grantees. At the end of the deferral period, the Deferred
Stock Award, to the extent vested, shall be paid to the grantee in the form of
shares of Stock.
(b) Election to Receive Deferred Stock Awards in Lieu of
Compensation. The Administrator may, in its sole discretion, permit a grantee to
elect to receive a portion of the cash compensation or Restricted Stock Award
otherwise due to such grantee in the form of a Deferred Stock Award. Any such
election shall be made in writing and shall be delivered to the Corporation no
later than the date specified by the Administrator and in accordance with rules
and procedures established by the Administrator. The Administrator shall have
the sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Administrator deems appropriate.
(c) Rights as a Stockholder. During the deferral period, a grantee
shall have no rights as a stockholder; provided, however, that the grantee may
be credited with dividend equivalents with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Administrator may determine.
(d) Restrictions. A Deferred Stock Award may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of during the deferral
period.
(e) Termination. Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 11 below, in
writing after the Award agreement is issued, a grantee's right in all Deferred
Stock Awards that have not vested shall automatically terminate upon the
grantee's termination of employment (or cessation of service relationship) with
the Corporation and its Subsidiaries for any reason.
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SECTION 8. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Administrator may, in its
sole discretion, grant (or sell at par value or such higher purchase price
determined by the Administrator) an Unrestricted Stock Award to any grantee
pursuant to which such grantee may receive shares of Stock free of any
restrictions ("Unrestricted Stock") under the Plan. Unrestricted Stock Awards
may be granted in respect of past services or other valid consideration, or in
lieu of cash compensation due to such grantee.
SECTION 9. TAX WITHHOLDING
(a) Payment by Grantee. Each grantee shall, no later than the date as
of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the grantee for
Federal income tax purposes, pay to the Corporation, or make arrangements
satisfactory to the Administrator regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Corporation and its Subsidiaries shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the grantee. The Corporation's obligation to deliver stock
certificates to any grantee is subject to and conditioned on tax obligations
being satisfied by the grantee.
(b) Payment in Stock. Subject to approval by the Administrator, a
grantee may elect to have the minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Corporation to withhold
from shares of Stock to be issued pursuant to any Award a number of shares with
an aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the
Corporation shares of Stock owned by the grantee with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due.
SECTION 10. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Corporation from a Subsidiary
or from the Corporation to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or
for any other purpose approved by the Corporation, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
SECTION 11. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent. Except as provided in Section 3(b) or 3(c), in no event
may the Administrator exercise its discretion to reduce the exercise price of
outstanding Stock Options or effect repricing through cancellation and
re-grants. If and to the extent
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determined by the Administrator to be required by the Code to ensure that
Incentive Stock Options granted under the Plan are qualified under Section 422
of the Code or to ensure that compensation earned under Awards qualifies as
performance-based compensation under Section 162(m) of the Code, if and to the
extent intended to so qualify, Plan amendments shall be subject to approval by
the Corporation stockholders entitled to vote at a meeting of stockholders.
Nothing in this Section 11 shall limit the Administrator's authority to take any
action permitted pursuant to Section 3(c).
SECTION 12. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised
and any payments in cash, Stock or other consideration not received by a
grantee, a grantee shall have no rights greater than those of a general creditor
of the Corporation unless the Administrator shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Corporation's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
SECTION 13. CHANGE OF CONTROL PROVISIONS
Upon the occurrence of a Change of Control as defined in this Section
13:
(a) Except as otherwise provided in the applicable Award agreement,
each outstanding Stock Option shall automatically become fully exercisable.
(b) Except as otherwise provided in the applicable Award Agreement,
all conditions and restrictions on each outstanding Restricted Stock Award and
Deferred Stock Award will be removed.
(c) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "Person," as such term is used in Sections 13(d) and
14(d) of the Act (other than the Corporation, any of its
Subsidiaries, or any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of
the Corporation or any of its Subsidiaries), together with all
"affiliates" and "associates" (as such terms are defined in Rule
12b-2 under the Exchange Act) of such person, shall become the
"beneficial owner" (as such term is defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation representing 25 percent or more of the combined
voting power of the Corporation's then outstanding securities
having the right to vote in an election of the Corporation's
Board of Directors ("Voting Securities") (in such case other than
as a result of an acquisition of securities directly from the
Corporation); or
(ii) persons who, as of the Effective Date, constitute the
Corporation's Board of Directors (the "Incumbent Directors")
cease for any reason, including, without limitation, as a result
of a tender offer, proxy contest, merger or similar transaction,
to constitute at least a majority of the Board, provided that any
person
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becoming a director of the Corporation subsequent to the
Effective Date shall be considered an Incumbent Director if such
person's election was approved by or such person was nominated
for election by either (A) a vote of at least a majority of the
Incumbent Directors or (B) a vote of at least a majority of the
Incumbent Directors who are members of a nominating committee
comprised, in the majority, of Incumbent Directors; but provided
further, that any such person whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of members of the Board of Directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board, including by
reason of agreement intended to avoid or settle any such actual
or threatened contest or solicitation, shall not be considered an
Incumbent Director; or
(iii) the stockholders of the Corporation shall approve a
consolidation, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Corporation (a "Corporate Transaction"); excluding, however, a
Corporate Transaction in which the stockholders of the
Corporation immediately prior to the Corporate Transaction,
would, immediately after the Corporate Transaction, beneficially
own (as such term is defined in Rule 13d-3 under the Act),
directly or indirectly, shares representing in the aggregate more
than 50 percent of the voting shares of the corporation issuing
cash or securities in the Corporate Transaction (or of its
ultimate parent corporation, if any); or
(iv) the approval by the stockholders of any plan or proposal for
the liquidation or dissolution of the Corporation.
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Corporation which, by reducing the
number of shares of Voting Securities outstanding, increases the proportionate
number of shares of Voting Securities beneficially owned by any person to 25
percent or more of the combined voting power of all then outstanding Voting
Securities; provided, however, that if any person referred to in this sentence
shall thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Corporation) and immediately thereafter beneficially owns 25 percent or more of
the combined voting power of all then outstanding Voting Securities, then a
"Change of Control" shall be deemed to have occurred for purposes of the
foregoing clause (i).
SECTION 14. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The
Administrator may require each person acquiring Stock pursuant to an Award to
represent to and agree with the Corporation in writing that such person is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The
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Administrator may require the placing of such stop-orders and restrictive
legends on certificates for Stock and Awards as it deems appropriate.
(b) Delivery of Stock Certificates. Stock certificates to grantees
under this Plan shall be deemed delivered for all purposes when the Corporation
or a stock transfer agent of the Corporation shall have mailed such certificates
in the United States mail, addressed to the grantee, at the grantee's last known
address on file with the Corporation.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Corporation or any Subsidiary.
(d) Trading Policy Restrictions. Option exercises and other Awards
under the Plan shall be subject to such Corporation's insider trading policy, as
in effect from time to time.
(e) Designation of Beneficiary. Each grantee to whom an Award has
been made under the Plan may designate a beneficiary or beneficiaries to
exercise any Award or receive any payment under any Award payable on or after
the grantee's death. Any such designation shall be on a form provided for that
purpose by the Administrator and shall not be effective until received by the
Administrator. If no beneficiary has been designated by a deceased grantee, or
if the designated beneficiaries have predeceased the grantee, the beneficiary
shall be the grantee's estate.
SECTION 15. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a
majority of the votes cast at a meeting of stockholders at which a quorum is
present. Subject to such approval by the stockholders and to the requirement
that no Stock may be issued hereunder prior to such approval, Stock Options and
other Awards may be granted hereunder on and after adoption of this Plan by the
Board.
SECTION 16. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Massachusetts, applied without regard to conflict of law principles.
Approved by Stockholders and Effective: May 1, 2002
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