EXHIBIT 10.2
PHYSIOME
SCIENCES
STOCK OPTION PLAN
(AS AMENDED SEPTEMBER 21, 2001)
PHYSIOME SCIENCES, INC.
STOCK OPTION PLAN
ARTICLE 1 ESTABLISHMENT AND PURPOSE
1.1 Establishment and Effective Date......................................... 1
1.2 Purpose.................................................................. 1
ARTICLE 2 AWARDS
2.1 Form of Awards........................................................... 1
2.2 Maximum Shares Available................................................. 2
2.3 Return of Prior Awards................................................... 2
ARTICLE 3 ADMINISTRATION
3.1 Committee................................................................ 2
3.2 Powers of the Committee.................................................. 3
3.3 Delegation............................................................... 3
3.4 Interpretations.......................................................... 3
3.5 Liability; Indemnification............................................... 4
ARTICLE 4 ELIGIBILITY................................................................. 4
ARTICLE 5 STOCK OPTIONS
5.1 Grant of Options......................................................... 4
5.2 Designation as Non-Qualified Stock Option or Incentive Stock Option...... 4
5.3 Option Price............................................................. 5
5.4 Limitation on Amount of Incentive Stock to Options....................... 5
5.5 Limitation on Time of Grant.............................................. 5
5.6 Exercise and Payment..................................................... 6
5.7 Term..................................................................... 6
5.8 Rights as a Stockholder.................................................. 6
5.9 General Restrictions..................................................... 7
ARTICLE 6 NONTRANSFERABILITY OF OPTIONS............................................... 7
ARTICLE 7 EFFECT OF TERMINATION OF EMPLOYMENT, DISABILITY, RETIREMENT OR DEATH
7.1 General Rule............................................................. 8
7.2 Disability or Retirement................................................. 8
7.3 Death.................................................................... 9
7.4 Termination of Unvested Options.......................................... 9
ARTICLE 8 RESTRICTED SHARES
8.1 Grant or Sale of Restricted Sales........................................ 10
8.2 Restrictions............................................................. 10
8.3 Restricted Stock Certificates............................................ 10
8.4 Rights of Holders of Restricted Shares................................... 10
8.5 Forfeiture; Repurchase................................................... 10
8.6 Delivery of Restricted Shares............................................ 11
ARTICLE 9 UNRESTRICTED SHARES
9.1 Grant or Sale of Unrestricted Shares..................................... 11
9.2 Delivery of Unrestricted Shares.......................................... 11
ARTICLE 10 TAX OFFSET PAYMENTS........................................................ 11
ARTICLE 11 ADJUSTMENT UPON CHANGES IN CAPITALIZATION.................................. 12
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ARTICLE 12 AMENDMENT AND TERMINATION.................................................. 12
ARTICLE 13 WRITTEN AGREEMENT.......................................................... 13
ARTICLE 14 MISCELLANEOUS PROVISIONS
14.1 Tax Withholding.......................................................... 13
14.2 Compliance with Section 16(b)............................................ 13
14.3 Successors............................................................... 14
14.4 General Creditor Status.................................................. 14
14.5 No Right to Employment................................................... 14
14.6 Notices.................................................................. 14
14.7 Severability............................................................. 15
14.8 Governing Law............................................................ 15
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PHYSIOME SCIENCES, INC.
STOCK OPTION PLAN
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 ESTABLISHMENT AND EFFECTIVE DATE
Physiome Sciences, Inc., a Delaware corporation (the "Corporation"),
hereby establishes a stock incentive plan to be known as the "Physiome
Sciences, Inc. Stock Option Plan" (the "Plan"). The Plan shall become
effective as of September 12, 1997 subject to the approval of the
stockholders of the Corporation. In the event that such stockholder
approval is not obtained, any awards made hereunder shall be cancelled and
all rights of employees and consultants with respect to such awards shall
thereupon cease. Upon approval of the Plan by the Board of Directors of
the Corporation (the "Board"), awards may be made by the Board or the
Board's Compensation Committee (the "Committee"), as provided herein.
1.2 PURPOSE
The purpose of the Plan is to encourage and enable key employees,
directors and consultants (subject to such requirements as may be
prescribed by the Committee) of the Corporation and its subsidiaries to
acquire a proprietary interest in the Corporation through the ownership of
the Corporation's common stock, par value $0.01 per share ("Common
Stock"), and other rights with respect to the Common Stock. Such ownership
will provide such employees, directors and consultants with a more direct
stake in the future welfare of the Corporation and encourage them to
remain with the Corporation and its subsidiaries. It is also expected that
the Plan will encourage qualified persons to seek and accept employment
with the Corporation and its subsidiaries.
ARTICLE 2
AWARDS
2.1 FORM OF AWARDS
Awards under the Plan may be granted in any one or all of the following
forms:
(i) incentive stock options ("Incentive Stock Options") meeting the
requirements of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code");
(ii) non-qualified stock options ("Non-qualified Stock Options") (unless
otherwise indicated, references in the plan to "Options" shall
include both Incentive Stock Options and Non-qualified Stock
Options);
(iii) shares of Common Stock which are subject to vesting requirements as
provided in Article 8 hereof ("Restricted Shares");
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(iv) shares of Common Stock that are not subject to any vesting
requirements ("Unrestricted Shares"); and
(v) tax offset payments ("Tax Offset Payments"), as described in Article
10 hereof.
2.2 MAXIMUM SHARES AVAILABLE
The maximum aggregate number of shares of Common Stock available for award
under the Plan is 5,130,000, subject to adjustment pursuant to Article 11
hereof. The maximum aggregate number of shares of Common Stock or Options
with respect thereto that may be awarded under the Plan to any individual
during any calendar year is 2,000,000, subject to adjustment pursuant to
Article 11 hereof. Shares of Common Stock issued pursuant to the Plan may
be either authorized by unissued shares or issued shares reacquired by the
Corporation. In the event that prior to the end of the period during which
Options may be granted under the Plan, any Option under the Plan expires
unexercised or is terminated, surrendered or cancelled without being
exercised in whole or in part for any reason, or any Restricted Shares are
forfeited, or if such awards are settled in case in lieu of shares of
Common Stock, then such shares shall be available for subsequent awards
under the Plan upon such terms and conditions as the Committee may
determine.
2.3 RETURN OF PRIOR AWARDS
As a condition to any subsequent award, the Committee shall have the
right, in its sole discretion, to require employees to return to the
Corporation awards previously granted under the Plan. Subject to the
provisions of the Plan, such new award shall be upon such terms and
conditions as are specified by the Committee at the time the new award is
granted.
ARTICLE 3
ADMINISTRATION
3.1 COMMITTEE
Awards shall be determined, and the Plan shall be administered, by the
Board or the Committee. Whenever the Plan grants power and authority to
the Committee, it shall also be deemed to have granted the same power and
authority to the Board. The Committee shall be appointed from time to time
by the Board, which Committee shall consist of not less than two (2)
members of the Board; PROVIDED, HOWEVER, that from and after the
consummation of the initial public offering of the Common Stock and so
long as the Plan shall be required to comply with Rule 16b-3 ("Rule
16b-3") promulgated by the Securities and Exchange Commissions (the "SEC")
under the Securities and Exchange Act of 1934, as amended (the "1934
Act"), in order to permit transactions pursuant to the Plan by employees
of the Corporation to be exempt from the provisions of Section 16(b) of
the 1934 Act, each member of the Committee shall be a "Non-Employee
Director," as that term is defined in subparagraph (b)(3)(i) of Rule
16b-3; and PROVIDED FURTHER, however, that each member of the Committee
shall also be an "outside director" as that term is defined in Treasury
Regulation Section 1.162-27(e)(3).
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3.2 POWERS OF THE COMMITTEE
Subject to the express provisions of the Plan, the Committee shall have
the power and authority
(i) to grant Options and to determine the purchase price of the Common
Stock covered by each Option, the term of each Option, the number of
shares of Common Stock to be covered by each Option, the time or
times at which each Option shall become exercisable and the duration
of the exercise period applicable to each Option;
(ii) to designated Options as Incentive Stock Options;
(iii) to grant or cause to be sold Restricted Shares and to determine the
purchase price, if any, of such shares and the vesting period and
other conditions and restrictions applicable to such shares;
(iv) to grant or cause to be sold Unrestricted Shares and to determine
the purchase price, if any, of such shares;
(v) to determine the amount of, and to make, Tax Offset Payments;
(vi) to determine the employees, directors and the consultants to whom,
and the time or times at which, Options, Restricted Shares,
Unrestricted Shares and Tax Offset Payments shall be granted or
made; and
(vii) to take all other actions contemplated to be taken by the Committee
under the Plan, including, but not limited to, authorizing the
amendment of any written agreement relating to any award made
hereunder.
Without limiting the forgoing, in the event of a merger, consolidation,
combination, exchange of shares, separation, spin-off, reorganization,
liquidation or other similar transaction, the Committee may, in its sole
discretion, accelerate the lapse of any vesting periods and waiting
periods and extend the exercise periods applicable to any award made under
the Plan.
3.3 DELEGATION
The Committee may delegate to one or more of its members or to any other
person or persons such ministerial duties as it may deem advisable;
PROVIDED, HOWEVER, that the Committee may not delegate any of its
responsibilities hereunder to any director who is not a "Non-Employee
Director," as that term is defined in subparagraph (b)(3)(i) of Rule
16(b)(3). The Committee may also employ attorneys, consultants,
accountants or other professional advisors and shall be entitled to rely
upon the advice opinions or valuations of any such advisors.
3.4 INTERPRETATIONS
The Committee shall have sole discretionary authority to interpret the
terms of the Plan, to adopt and revise rules, regulations and policies to
administer the Plan and to make any other factual determinations which it
believes to be necessary or advisable for the administration of the Plan.
All actions taken and interpretations and determinations made by the
Committee in good faith shall be final and binding upon the Corporation,
all employees, directors and consultants who have received awards under
the Plan and all other interested persons.
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3.5 LIABILITY; INDEMNIFICATION
No member of the Committee, nor any person to whom ministerial duties have
been delegated, shall be personally liable for any action, interpretation
or determination made with respect to the Plan or awards made thereunder,
and each member of the Committee shall be fully indemnified and protected
by the Corporation with respect to any liability he or she may incur with
respect to any such action, interpretation or determination, to the extent
permitted by applicable law and to the extent provided in the
Corporation's certificate of incorporation and bylaws, as amended from
time to time, or under any agreement between any such member of the
Corporation.
ARTICLE 4
ELIGIBILITY
Awards may be made to all employees, directors and consultants of the
Corporation or any of its subsidiaries (subject to such requirements as
may be prescribed by the Board or the Committee). In determining the
employees, directors and consultants to whom awards shall be granted and
the number of shares to be covered by each award, the Committee shall take
into account the nature of the services rendered by such employees,
directors and consultants, their present and potential contributions to
the success of the Corporation and its subsidiaries and such other factors
as the Committee in its sole discretion shall deem relevant.
Notwithstanding the foregoing, only employees of the Corporation and any
present of future corporation which is or may be a "subsidiary
corporation" of the Corporation (as such term is defined in Section 424(f)
of the Code) shall be eligible to receive Incentive Stock Options.
ARTICLE 5
STOCK OPTIONS
5.1 GRANT OF OPTIONS
Options may be granted under the Plan for the purchase of shares of Common
Stock. Options shall be granted in such form and upon such terms and
conditions, including the satisfaction of corporate or individual
performance objectives and other vesting standards, as the Committee shall
from time to time determine.
5.2 DESIGNATION AS NON-QUALIFIED STOCK OPTION OR INCENTIVE STOCK OPTION
In connection with any grant of Options, the Committee shall designate in
the written agreement require pursuant to Article 14 hereof whether the
Options granted shall be Incentive Stock Options or Non-Qualified Stock
Options, or in the case both are granted, the number of shares of each.
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5.3 OPTION PRICE
The purchase price per share under each Incentive Stock Option shall be
not less than the Market Price (as hereinafter defined) of the Common
Stock on the date the Incentive Stock Option is granted. The purchase
price per share under each Non-Qualified Stock Option shall be determined
by the Committee. In no case, however, shall the purchase price per share
of either an Incentive Stock Option or Non-Qualified Stock Option be less
than the par value of the Common Stock ($0.01). In the case of an
Incentive Stock Option granted to an employee owning (actually or
constructively under Section 424(d) of the Code), more than 10% of the
total combined voting power of all classes of stock of the Corporation or
of a subsidiary (a "10% Stockholder"), the option price shall not be less
than 110% of the Market Price of the Common Stock on the date of grant.
The "Market Price" of the Common Stock on any day shall be determined as
follows:
(i) if the Common Stock is listed on a national securities exchange or
quoted through the NASDAQ National Market System, the Market Price
on any day shall be, in the sole discretion of the Committee, either
(x) the average of the high and low reported Consolidated Trading
sales prices, or if no such sale is made on such day, the average of
the closing bid and asked prices reported on the Consolidated
Trading listing for such day or (y) the closing price reported on
the Consolidated Trading listing for such day;
(ii) if the Common Stock is quoted on the NASDAQ interdealer quotation
system, the Market Price on any day shall be the average of the
representative bid and asked prices at the close of business for
such day;
(iii) if the Common Stock is not listed on a national stock exchange or
quoted on NASDAQ, the Market Price on any day shall be the average
of the high bid and low asked prices reported by the National
Quotation Bureau, Inc. for such day; or
(iv) if the Common Stock is not listed on a national stock exchange,
quoted on NASDAQ or reported on by the National Quotation Bureau,
Inc., the Market Price on any day shall mean the fair market value
of one share of Common Stock on such day as determined by the Board
of Directors.
In no event shall the Market Price of a share of Common Stock subject to
an Incentive Stock Option be less than the fair market value as determined
for purposes of Section 422(b)(4) of the Code.
5.4 LIMITATION ON AMOUNT OF INCENTIVE STOCK OPTIONS
In the case of Incentive Stock Options, the aggregate Market price
(determined at the time the Incentive Stock Option is granted) of the
Common Stock with respect to which Incentive Stock Options are exercisable
for the first time by an optionee during any calendar year (under all
plans of the Corporation and any subsidiary) shall not exceed $100,000.
5.5 LIMITATION ON TIME OF GRANT
No grant of an Incentive Stock Option shall be made under the Plan more
than ten (10) years after the date of the Plan is approved by the
stockholders of the Corporation.
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5.6 EXERCISE AND PAYMENT
Options may be exercised in whole or in part. Common Stock purchased upon
the exercise of Options shall be paid for at the time of purchase. Such
payment shall be made in case or, in the sole discretion of the Committee,
through delivery of shares of Common Stock, installment payments under the
optionee's promissory note or combination of cash, Common Stock and/or
installment payments, in accordance with procedures to be established by
the Committee. Any shares so delivered shall be valued at their Market
Price on the date of exercise. Upon receipt of a notice of exercise and
payment in accordance with procedures to be established by the Committee,
the Corporation or its agent shall deliver to the persons exercising the
Option (or his or her designee) a certificate for such shares.
The Committee in its sole discretion may, on an individual basis or
pursuant to a general program established by the Committee in connection
with the Plan, lend money to an optionee to exercise all or a portion of
an Option granted hereunder. If the exercise price is paid in whole or
part with an optionee's promissory note, such note shall
(i) provide for full recourse to the maker;
(ii) be collateralized by the pledge of shares of Common Stock that the
optionee purchases upon exercise of such Option;
(iii) bear interest at a rate no less than the applicable Federal rate
within the meaning of Section 1274 of the Code); and
(iv) contain such other terms, as the Committee in its sole discretion
shall require.
In the event that payment for exercised Options is made through the
delivery of shares of Common Stock, the Committee, in accordance with
procedures established by the Committee, may grant Non-qualified Stock
Options ("Restoration Options") to the person exercising the Option for
the purchase of a number of shares equal to the number of shares of Common
Stock delivered to the Corporation in connection with the payment of the
exercise price of the Option and the payment of or surrender of shares for
any withholding taxes due upon such exercise. The purchase price per share
under each Restoration Option shall be the Market Price of the Common
Stock on the date the Restoration Option is granted.
5.7 TERM
The term of each Option granted hereunder shall be determined by the
Committee; PROVIDED, HOWEVER, that, notwithstanding any other provision of
the Plan, in no event shall an Incentive Stock Option be exercisable after
ten (10) years from the date it is granted, or in the case of an Incentive
Stock Option granted to a 10% Stockholder, five (5) years from the date it
is granted.
5.8 RIGHTS AS A STOCKHOLDER
A recipient of Options shall have no rights as a stockholder with respect
to any shares issuable or transferable upon exercise thereof until the
date a stock certificate representing such shares is issued to such
recipient. Except as otherwise expressly provided in the Plan or by the
Committee, no adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date such stock certificate is
issued.
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5.9 GENERAL RESTRICTIONS
Each Option granted under the Plan shall be subject to the requirement
that, if at any time the Board shall determine, in its sole discretion,
that the listing, registration or qualification of the shares issuable or
transferable upon exercise thereof upon any securities exchange or under
any state or Federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in
connection with, the granting of such Option or the issue, transfer, or
purchase of shares thereunder, such Option may not be exercised in whole
or in part unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board.
The Board or the Committee may, in connection with the granting of any
Option, require the individual to whom the Option is to be granted to
enter into an agreement with the Corporation stating that as a condition
precedent to each exercise of the Option, in whole or in part, such
individual shall if then required by the Corporation represent to the
Corporation in writing that such exercise is for investment only and not
with a view to distribution, and also setting forth such other terms and
conditions as the Board or the Committee may prescribe.
ARTICLE 6
NON-TRANSFERABILITY OF OPTIONS
No Option may be transferred, assigned, pledged or hypothecated (whether by
operation of law or otherwise), except as provided by will or the applicable
laws of descent and distribution, and no Option shall be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of an Option not specifically permitted
herein shall be null and void without effect. An Option may be exercised by the
recipient only during his or her lifetime, or following his or her death
pursuant to Section 8.3 hereof.
Notwithstanding anything to the contrary in the preceding paragraph, the
Committee may, in its sole discretion, cause the written agreement relating to
any Non-qualified Stock Options granted hereunder to provide that the recipient
of such Non-qualified Stock Options may transfer any of such Non-qualified Stock
Options other than by will or the laws of descent and distribution in any manner
authorized under applicable law; PROVIDED, HOWEVER, that in no event may the
Committee permit any transfers which would cause the Plan to fail to satisfy the
applicable requirements of Rule 16b-3 under the 1934 Act or which would cause
any recipient of awards hereunder to fail to be entitled to the benefits Rule
16b-3 or other exemptive rules under Section 16 of the 1934 Act or be subject to
liability thereunder.
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ARTICLE 7
EFFECT OF TERMINATION OF EMPLOYMENT,
DISABILITY, RETIREMENT OR DEATH
7.1 GENERAL RULE
Except as expressly provided in the written agreement relating to any
Option or as otherwise expressly determined by the Board or the Committee
in its sole discretion, in the event that a recipient of Options ceases to
be an employee, director or consultant of the Corporation and its
subsidiaries (a "Terminated person") for any reason other than Disability
or Retirement (as hereinafter defined) or death, any Options which were
held by such Person on the date on which he or she ceased to be an
employee, director or consultant (the "Termination Date") and which were
otherwise exercisable on such Date shall expire unless exercised within
the period of 30 days following the Termination Date, but in no event
after the expiration of the exercise period of such Options.
Except as expressly provided in the written agreement relating to the
Options or as otherwise expressly determined by the Committee in its sole
discretion, the Committee may, in its sole discretion, cause any Option to
be forfeited upon an employee's termination of employment, a director's
removal from the Board or the termination of a consultant's consulting
arrangement if the employee, director or consultant was terminated or
removed for one (or more) of the following reasons:
(i) the employee's, director's or consultant's commission of any fraud,
misappropriation or misconduct which causes demonstrable injury to
the Corporation or a subsidiary, or
(ii) an act of dishonesty by the employee, director or consultant
resulting or intended to result, directly or indirectly, in gain or
personal enrichment at the expense of the Corporation or subsidiary;
PROVIDED, HOWEVER, that "cause," in the case of an employees,
director or consultant who has an employment or consulting agreement
with the Corporation or a subsidiary thereof, shall have the
meaning, if any, set forth in such employment or consulting
agreement.
It shall be within the sole discretion of the Board or Committee to
determine whether an employee's, director's or consultant's termination or
removal was for one of the foregoing reasons, and the decision of the
Board or Committee shall be final and conclusive.
7.2 DISABILITY OR RETIREMENT
Except as expressly provided otherwise in the written agreement relating
to any Option granted under the Plan or as otherwise determined by the
Board or Committee in its sole discretion, in the event of a termination
of employment or consulting arrangement of a Terminated person due to the
Disability or Retirement of such Person, any Options which were held by
such Person on the Termination Date and which were otherwise exercisable
on such Date shall expire unless exercised within the period of 180 days
following such Termination Date, but in no event after the expiration date
of the exercise period of such Options; PROVIDED, HOWEVER, that any
Incentive Stock Option of such Terminated Person shall no longer be
treated as an
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Incentive Stock Option unless exercised within three (3) months of the
Termination Date (or within one (1) year in the case of an employee who is
"disabled" with the meaning of Section 22(e)(3) of the Code.).
"Disability" shall mean any termination of employment or consulting
arrangement with the Corporation or a subsidiary because of long-term or
total disability, as determined by the Board or Committee in its sole
discretion. "Retirement" shall mean a termination of employment or
consulting arrangement with the Corporation or a subsidiary with the
written consent of the Committee in its sole discretion. The decision of
the Committee shall be final and conclusive.
7.3 DEATH
Except as expressly provided in the written agreement relating to the
Options or as otherwise expressly determined by the Committee in its sole
discretion, in the event of the death of a recipient of Options while an
employee, director or consultant of the Corporation or any subsidiary, any
Options which were held by such Person at the date of death and which were
otherwise exercisable on such date shall be exercisable by the beneficiary
designated by the employee, director or consultant for such purpose (the
"Designated Beneficiary") or if no Designated Beneficiary shall be
appointed or if the Designated Beneficiary shall predecease such
recipient, by such recipient's personal representatives, heirs or legatees
for a period of one (1) year from the date of death, but in no event later
than the expiration date of the exercise period of such Options, at which
time such Options shall expire.
In the event of the death of a Terminated person following a termination
of employment due to Disability or Retirement, any Options which were held
by such person on the Termination Date and which were exercisable on such
Date shall be exercisable by such recipient's Designated Beneficiary, or
if no Designated Beneficiary shall be appointed or if the Designated
Beneficiary shall predecease such recipient, by such recipient's personal
representatives, heirs or legatees for a period of one (1) year from the
date of death but in no event later than the expiration date of the
exercise period of such Options, at which time such Options shall expire;
PROVIDED, HOWEVER, that any Incentive Stock Option of such Terminated
Person shall no longer be treated as an Incentive Stock Option unless
exercised within three (3) months of the date of such Termination Date (or
within one (1) year in the case of an employee whose termination of
employment occurs by reason of "disability" within the meaning of Section
22(e)(3) of the Code) or death.
7.4 TERMINATION OF UNVESTED OPTIONS
All Options which were not exercisable by a Terminated person as of the
Termination Date of such Terminated Person shall terminate as of such
Date, except as expressly provided in the written agreement relating to
the Options or as otherwise expressly determined by the Board or Committee
in its sole discretion. Options shall not be affected by any change of
employment so long as the recipient continues to be employed by either the
Corporation or a subsidiary.
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ARTICLE 8
RESTRICTED SHARES
8.1 GRANT OR SALE OF RESTRICTED SALES
The Board or the committee may from time to time cause the Corporation to
grant or to sell Restricted Shares under the Plan to employees, directors
and consultants, subject to such restrictions, conditions and other terms
as the Board or the Committee may determine. The purchase price, if any,
for Restricted Shares shall be determined by the Board or the Committee in
its sole discretion.
8.2 RESTRICTIONS
At the time a grant of Restricted Shares is made, the Board or the
Committee shall establish a period over which such Restricted Shares will
vest (the "Restricted Period"). Each grant of Restricted Shares may be
subject to a different Restricted Period. The Board or the Committee may,
in its sole discretion, at the time a grant is made prescribe restrictions
in addition to or other than the expiration of the Restricted Period,
including the satisfaction of corporate or individual performance
objectives, which shall be applicable to all or any portion of the
Restricted Shares. The Board or the Committee may also, in its sole
discretion, at any time shorten or terminate the Restricted Period or
waive any other restrictions applicable to all or a portion of such
Restricted Shares. None of the Restricted Shares may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during the
Restricted Period or prior to the satisfaction of any other restrictions
prescribed by the Board or the Committee with respect to such Restricted
Shares.
8.3 RESTRICTED STOCK CERTIFICATES
The Corporation shall issue, in the name of each employee, director or
consultant to whom Restricted Shares have been granted or sold, stock
certificates representing the total number of Restricted Shares granted or
sold to the employee, director or consultant, as soon as reasonably
practicable after the grant or sale. The Corporation, at the direction of
the Board or the Committee, shall hold such certificates, properly
endorsed for transfer, for the employee's, director's or consultant's
benefit until such time as the Restricted Shares are forfeited to or
repurchased by the Corporation or the restrictions lapse.
8.4 RIGHTS OF HOLDERS OF RESTRICTED SHARES
Holders of Restricted Shares shall have the right to vote such shares and
the right to receive any cash dividends with respect to such shares. All
distributions, if any, received by an employee, director or consultant
with respect to Restricted Shares as a result of any stock split, stock
distribution, a combination of shares, or other similar transaction shall
be subject to the restrictions of this Article 9.
8.5 FORFEITURE; REPURCHASE
Except as expressly provided in the written agreement relating to the
Restricted Shares or as otherwise expressly determined by the Board or the
Committee in its sole discretion, any
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Restricted Shares held by an employee, director or consultant pursuant to
the Plan shall be forfeited or subject to repurchase by the Corporation at
a price equal to the original price paid therefore by the employee,
director or consultant upon his or her ceasing to be an employee, director
or consultant of the Corporation or its subsidiaries, as the case may be,
prior to the expiration or termination of the Restricted Period and the
satisfaction of any other conditions applicable to such Restricted Shares.
Upon any such forfeiture or repurchase, the Restricted Shares shall be
retained in the treasury of the Corporation and available for subsequent
awards under the Plan, unless the Committee directs that such Restricted
Shares be cancelled.
8.6 DELIVERY OF RESTRICTED SHARES
Upon the expiration or termination of the Restricted Period applicable to
any Restricted Shares and the satisfaction of any other conditions
prescribed by the Board or the Committee that are applicable to such
Restricted Shares, the restrictions applicable to the Restricted Shares
shall lapse and a stock certificate for the number of Restricted Shares
with respect to which the restrictions have lapsed shall be delivered,
free of all such restrictions, to the employee, director, consultant,
beneficiary or estate, as the case may be.
ARTICLE 9
UNRESTRICTED SHARES
9.1 GRANT OR SALE OF UNRESTRICTED SHARES
The Board or the Committee may cause the Corporation to grant or to sell
Unrestricted Shares to employees, directors and consultants at such time
or times, in such amounts and for such reasons as the Board or the
Committee, in its sole discretion, shall determine. The purchase price, if
any, for Unrestricted Shares shall be determined by the Board or the
Committee in its sole discretion.
9.2 DELIVERY OF UNRESTRICTED SHARES
The Corporation shall issue, in the name of each employee, director or
consultant to whom Unrestricted Shares have been granted or sold, stock
certificates representing the total number of Unrestricted Shares granted
or sold to the employee, director or consultant, and shall deliver such
certificates to the employee, director or consultant as soon as reasonably
practicable after the date of grant or sale or on such later date as the
Board or the Committee shall determine at the time of grant or sale.
ARTICLE 10
TAX OFFSET PAYMENTS
The Board or the Committee shall have the authority at the time of any
award under the Plan or anytime thereafter to make Tax Offset Payments to
assist employees in paying income taxes incurred as a result of their
participation in the Plan. The Tax Offset Payments shall be determined by
applying a percentage established by the Board or the Committee to all or
a portion as the Board or the Board or the Committee shall determine) of
the taxable income recognizable by an employee upon
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(i) the exercise of Non-Qualified Stock Options,
(ii) the disposition of shares received upon exercise of Incentive Stock
Options,
(iii) the lapse of restrictions on Restricted Shares, or
(iv) the award or sale of Unrestricted Shares.
The percentage shall be established, from time to time, by the Board or
the Committee at that rate which the Board or the Committee, in its sole
discretion, determines to be appropriate and in the best interest of the
Corporation to assist employees in paying income taxes incurred as a
result of the events described in the preceding sentence. Tax offset
Payments shall be subject to the restrictions on transferability
applicable to Options under Article 6.
ARTICLE 11
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
Notwithstanding any other provisions of the Plan, the Board or the Committee
may:
(i) at any time, make or provide for such adjustments to the Plan or to
the number and class of shares available thereunder, or
(ii) at the time of grant of any Options or Restricted Shares, provide
for such adjustments to such Options or Restricted Shares,
in each case, as the Board or the Committee shall deem appropriate to
prevent dilution or enlargement of rights, including, without limitation,
adjustments in the event of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of
shares, separations, spin-offs, reorganizations, liquidations and the
like.
ARTICLE 12
AMENDMENT AND TERMINATION
The Board may suspend, terminate, modify or amend the Plan, provided that any
amendment that would
(i) materially increase the aggregate number of shares which may be
issued under the Plan,
(ii) materially increase the benefits accruing to employees under the
Plan, or
(iii) materially modify the requirements as to eligibility for
participation in the Plan,
shall be subject to the approval of the Corporation's stockholders, except that
any such increase or modification that may result from adjustments authorized by
Article 11 hereof shall not require such stockholder approval. If the Plan is
terminated, the terms of the Plan shall, notwithstanding such termination,
continue to apply to awards granted prior to such termination. No suspension,
termination, modification or amendment of the Plan may, without the consent of
the employee or consultant to whom an award shall theretofore have been granted,
adversely affect the rights of such employee or consultant under such award.
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ARTICLE 13
WRITTEN AGREEMENT
Each ward of Options, Restricted Shares, Unrestricted Shares and Tax Offset
Payments shall be evidenced by a written agreement containing such restrictions,
terms and conditions, if any, as the Board of the Committee may require. In the
event of any conflict between a written agreement and the Plan, the terms of the
Plan shall govern.
ARTICLE 14
MISCELLANEOUS PROVISIONS
14.1 TAX WITHHOLDING
The Corporation shall have the right to require employees or their
beneficiaries or legal representatives to remit to the Corporation an
amount sufficient to satisfy Federal, state and local withholding tax
requirements, or to deduct from all payments under the Plan, including Tax
Offset Payments, amounts sufficient to satisfy all withholding tax
requirements. Whenever payments under the Plan are to be made to an
employee in cash, such payments shall be net of any amounts sufficient to
satisfy all Federal, state and local withholding tax requirements. The
Committee may, in its sole discretion, permit an employee to satisfy his
or her tax withholding obligations either by
(i) surrendering shares owned by the employee, or
(ii) having the Corporation withhold from shares otherwise deliverable to
the employee.
Shares surrendered or withheld shall be valued at their Market Price as of
the date on which income is required to be recognized for income tax
purposes.
14.2 COMPLIANCE WITH SECTION 16(b)
In the case of employees who are or may be subject to Section 16 of the
1934 Act, it is the intent of the Corporation that the Plan and any award
granted hereunder satisfy and be interpreted in a manner that satisfies
the applicable requirements of Rule 16b-3 so that such persons will be
entitled to the benefits of Rule 16b-3 or other exemptive rules under
Section 16 of the 1934 Act and will not be subjected to liability
thereunder. If any provision of the Plan or any award would otherwise
conflict with the intent expressed herein, that provision, to the extent
possible, shall be interpreted and deemed amended so as to avoid such
conflict. The extent of any remaining irreconcilable conflict with such
intent, such provision shall be deemed void as applicable to employees who
are or may be subject to Section 16 of the 1934 Act.
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14.3 SUCCESSORS
The obligations of the Corporation under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Corporation, or upon any
successor corporation or organization succeeding to all or substantially
all of the assets and business of the Corporation. In the event of any of
the foregoing, the Board or the Committee may, in its discretion prior to
the consummation of the transaction and subject to Article 12 hereof,
cancel, offer to purchase, exchange, adjust or modify any outstanding
awards, at such time and in such manner as the Board or the Committee
deems appropriate and in accordance with applicable law.
14.4 GENERAL CREDITOR STATUS
Employees, directors and consultants shall have no right, title or
interest whatsoever in or to any investments which the Corporation may
make to aid it in meeting its obligations under the Plan. Nothing
contained in the Plan, and no action taken pursuant to its provisions,
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Corporation and any employee, director,
consultant, beneficiary or legal representative of such employee or
consultant. To the extent that any person acquires a right to receive
payments from the Corporation under the Plan, such right shall be no
greater than the right of an unsecured general creditor of the
Corporation. All payments to be made hereunder shall be paid from the
general funds of the Corporation and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment
of such amounts except as expressly set forth in the Plan.
14.5 NO RIGHT TO EMPLOYMENT
Nothing in the Plan or in any written agreement entered into pursuant to
Article 13 hereof, nor the grant of any award, shall confer upon any
employee any right to continue in the employ of the Corporation or a
subsidiary or to be entitled to any remuneration or benefits not set forth
in the Plan or such written agreement or interfere with or limit the right
of the Corporation or a subsidiary to modify the terms of or terminate
such employee's employment at any time. The preceding sentence shall be
equally applicable with respect to consultants of the Corporation or a
subsidiary.
14.6 NOTICES
Notices required or permitted to be given under the Plan shall be
sufficiently given if in writing and personally delivered to the employee,
director or consultant or sent by regular mail addressed
(a) to the employee, director or consultant at the employee's,
director's or consultant's address as set forth in the books and
records of the Corporation or its subsidiaries, or
(b) to the Corporation or the Committee at the principal office of the
Corporation clearly marked "Attention: Compensation Committee."
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14.7 SEVERABILITY
In the event that any provisions of the Plan shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.
14.8 GOVERNING LAW
To the extent not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by the laws
of the State of Delaware.
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