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Exhibit 10.2
BOLT BERANEK AND NEWMAN INC.
1986 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions.
The name of the plan is the Bolt Beranek and Newman Inc. 1986 Stock
Incentive Plan (the "Plan"). The purpose of the Plan is to secure for Bolt
Beranek and Newman Inc. (the "Company") and its stockholders the benefit of the
incentives of Common Stock ownership and the receipt of incentive awards by
directors of the Company and by selected key employees of the Company and its
subsidiaries, and by other key persons and entities, who contribute to and will
be responsible for continued long term growth of the Company. The Plan is
intended to stimulate the efforts of such persons by providing an opportunity
for capital appreciation and giving suitable recognition for services which
contribute materially to the success of the Company.
The following terms shall be defined as set forth below:
(a) "Act" means the Securities Exchange Act of 1934.
(b) "Award" or "Awards" except where referring to a
particular category of grant under the Plan shall include Incentive
Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Unrestricted Stock Awards, Deferred Stock
Awards, Performance Unit Awards, and Other Stock-based Awards.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as
amended, and any successor Code, and related rules, regulations, and
interpretations.
(e) "Committee" means the Committee referred to in
Section 2. If at any time no Committee shall be in office, the
functions of the Committee shall be exercised by the Board.
(f) "Deferred Stock Award" is defined in Section 9(a).
(g) "Disability" means disability as determined in
accordance with standards and procedures similar to those used under
the Company's long term disability program.
(h) "Disinterested Person" shall have the meaning set
forth in Rule 16b-3(d)(3) promulgated under the Act, or any successor
definition under the Act.
(i) "Fair Market Value" on any given date means the last
sale price regular way at which Stock is traded on such date as
reflected in the New York Stock Exchange-Composite Transactions Index
or, where applicable, the value of a share of Stock as determined by
the Committee in accordance with the applicable provisions of the
Code.
(j) "Incentive Stock Option" means any Stock Option
intended to be and designated as an "incentive stock option" as
defined in the Code.
(k) "Non-employee Director" means an individual who is a
director of the Company but who is not a full-time employee of the
Company or a Subsidiary.
(l) "Non-Qualified Stock Option" means any Stock Option
that is not an Incentive Stock Option.
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(m) "Normal Retirement" means retirement from active
employment with the Company and its Subsidiaries on or after the
normal retirement date specified in the Bolt Beranek and Newman Inc.
Retirement Trust Agreement.
(n) "Other Stock-based Award" is defined in Section 11(a).
(o) "Performance Unit Award" is defined in Section 10(a).
(p) "Restricted Stock Award" is defined in Section 8(a).
(q) "Stock" means the Common Stock, $1.00 par value, of
the Company, subject to adjustments pursuant to Section 3.
(r) "Stock Appreciation Right" means a right described in
Section 7(a) and granted, either independently of other Awards or in
tandem with the grant of a Stock Option.
(s) "Stock Option" means any option to purchase shares of
Stock granted pursuant to Section 6.
(t) "Subsidiary" means any corporation or other entity
(other than the Company) in an unbroken chain beginning with the
Company if each of the entities (other than the last entity in the
unbroken chain) owns stock or other interests possessing 50% or more
of the total combined voting power of all classes of stock or other
interest in one of the other corporations in the chain.
(u) "Unrestricted Stock Award" is defined in Section 8(f).
SECTION 2. Committee Authority to Select Participants and Determine Awards, Etc.
The Plan shall be administered by a Committee of not less than three
Directors who are Disinterested Persons, who shall be appointed by the Board
and who shall serve at the pleasure of the Board.
The Committee shall have the power and authority to grant Awards
consistent with the terms of the Plan, including the power and authority:
(i) to select from among the eligible persons and entities
described in Section 4 those 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, Stock
Appreciation Rights, Restricted Stock, Unrestricted Stock, Deferred
Stock, Performance Units, and any Other Stock-based Awards, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any
Award;
(iv) to determine 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 participants;
(v) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or
credit amounts equal to interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and
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(vi) 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 Award
Agreements); 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 Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. Shares Issuable Under the Plan; Mergers; Substitution
(a) Shares Issuable. The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 1,800,000,
including shares issued in lieu of or upon reinvestment of dividends arising
from Awards. Of this number, 100,000 are reserved and available for issuance
under stock options granted to Non-employee Directors under Section 6(m). For
purposes of the foregoing limitations, Awards and Stock which are forfeited,
reacquired by the Company, or satisfied without the issuance of Stock shall not
be counted. Subject to such overall limitation, shares may be issued up to
such maximum pursuant to any type or types of Award, including Incentive Stock
Options. Shares issued under the Plan may be authorized but unissued shares or
shares reacquired by the Company.
(b) Stock Dividends, Mergers, etc. In the event of a stock
dividend, stock split, or similar change in capitalization affecting the Stock,
the Committee shall make appropriate adjustments in (i) the number and kind of
shares of stock or securities on which Awards may thereafter be granted, (ii)
the number and kind of shares remaining subject to outstanding Awards, and
(iii) the option or purchase price in respect of such shares. In the event of
any merger, consolidation, dissolution, or liquidation of the Company, the
Committee in its sole discretion may, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine, or accelerate, amend, or terminate
such Awards upon such terms and conditions as it shall provide (which, in the
case of the termination of the vested portion of any Award, shall require
payment or other consideration which the Committee deems equitable in the
circumstances); provided, however, that no adjustment pursuant to this sentence
shall affect options granted under subsection (m) of Section 6 of the Plan if
the effect of such adjustment shall cause the members of the Committee to fail
to be disinterested persons under Section 16(b) of the Act.
(c) Substitute Awards. The Company may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of or
other persons providing services to another corporation who concurrently become
employees of or providers of service to the Company or a Subsidiary as the
result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances. The shares which may be delivered
under such substitute Awards shall be in addition to the maximum number of
shares provided for in Section 3(a) only to the extent that the substitute
Awards are both granted to persons whose relationship to the Company does not
make (and is not expected to make) them subject to Section 16(b) of the Act and
are granted in substitution for awards issued under a plan approved, to the
extent then required under Rule 16b-3 (or any successor rule under the Act) by
the stockholders of the entity which issued such predecessor awards.
SECTION 4. Eligibility.
Participants in the Plan will be such full or part time officers and
other key employees of the Company and its Subsidiaries ("Employees") and other
persons or entities who are responsible for or contribute to the management,
growth, or profitability of the Company and its Subsidiaries and who are
selected from time to time by the Committee. Notwithstanding the foregoing,
persons who are directors of
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the Company, other than any such person who is a full time employee, shall not
be eligible for awards under the Plan except as provided in Section 6(m).
SECTION 5. Limitations on Term and Dates of Awards.
(a) Duration of Awards. Subject to Sections 15(a), 15(c), and
15(d) below, no restrictions or limitations on Awards shall extend beyond 10
years (or 10 years and one day in the case of Non-Qualified Stock Options) from
the grant date, except that deferrals, elected by participants, of the receipt
of Stock or other benefits under the Plan may extend beyond such date.
(b) Latest Grant Date. No Award shall be granted more than 10
years after the effective date of the Plan, but then- outstanding Awards may
extend beyond such date.
SECTION 6. Stock Options.
Any stock option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option. Incentive Stock Options may be granted only to Employees.
Anything in the Plan to the contrary notwithstanding, no term of this
Plan relating to Incentive Stock Options shall be interpreted, amended, or
altered, nor shall any discretion or authority granted to the Committee under
the Plan be so exercised, so as to disqualify the Plan or, without the consent
of the optionee, any Incentive Stock Option under Section 422 of the Code.
Stock Options granted under the Plan 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 Committee shall deem
desirable.
(a) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant but shall be, in the case of Incentive Stock
Options, not less than 100% of Fair Market Value on the date of grant
and, in the case of Non-Qualified Stock Options, not less than 50% of
Fair Market Value on the date of grant. If an employee owns or is
deemed to own (by reason of the attribution rules applicable under
Section 424(d) of the Code) more than 10% of the combined voting power
of all classes of stock of the Company or any Subsidiary or parent
corporation and an Incentive Stock Option is granted to such employee,
the option price shall be no less than 110% of Fair Market Value on
the date of grant.
(b) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than 10 years after the date the option is granted
and no Non-Qualified Stock Option shall be exercisable more than 10
years and one day after the date the 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% of the combined voting
power of all classes of stock of the Company or any Subsidiary or
parent corporation and an Incentive Stock Option is granted to such
employee, the term of such option shall be no more than five years
from the date of grant.
(c) Exercisability. Stock Options shall be exercisable
at such future time or times, whether or not in installments, as shall
be determined by the Committee at or after the date of grant. The
Committee may at any time accelerate the exercisability of all or any
portion of any Stock Option.
(d) [Intentionally left blank.]
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(e) Method of Exercise. Stock Options may be exercised
in whole or in part, by giving written notice of exercise to the
Company specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price, either
by certified or bank check or other instrument acceptable to the
Committee. As determined by the Committee, in its discretion, at (or,
in the case of Non-Qualified Stock Options, at or after) the time of
grant, payment in full or in part may also be made in the form of
shares of Stock not then subject to restrictions under any Company
plan (but which may include shares the disposition of which
constitutes a disqualifying disposition for purposes of obtaining
incentive stock option treatment for federal tax purposes), unless the
Board should in any case determine otherwise. Such surrendered shares
shall be valued at Fair Market Value on the exercise date. An
optionee shall have the rights of a shareholder only as to shares
acquired upon the exercise of a Stock Option and not as to unexercised
Stock Options.
(f) 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.
(g) Termination by Death. If an optionee's employment by
or other service relationship with the Company and its Subsidiaries
terminates by reason of death, the Stock Option may thereafter be
exercised, both as to that portion which was exercisable by the
optionee immediately prior to death and, except as otherwise
determined by the Committee, as to any remaining portion, by the legal
representative or legatee of the optionee, for a period of three years
(or such other period, not to exceed three years, as the Committee
shall specify at or after the time of grant) from the date of death or
until the expiration of the stated term of the option, if earlier.
(h) Termination by Reason of Disability. Any Stock
Option held by an optionee whose employment by or whose service
relationship with the Company and its Subsidiaries has terminated, or
who has been designated an inactive employee, by reason of Disability
may thereafter be exercised to the extent it was exercisable at the
time of the earlier of such termination or such designation (or on
such accelerated basis as the Committee shall at any time determine
prior to such termination or designation) for a period of three years
(or such other period, not to exceed three years, as the Committee
shall specify at or after the time of grant) from the date of such
termination of employment or other service relationship or designation
or until the expiration of the stated term of the option, if earlier.
Except as otherwise provided by the Committee at the time of grant,
the death of an optionee during the final year of such exercise period
shall extend such period for one year following death, or until the
expiration of the stated term of the option, if earlier. The
Committee shall have the authority to determine whether a participant
has been terminated or designated an inactive employee by reason of
Disability.
(i) Termination by Reason of Normal Retirement. If an
optionee's employment by the Company and its Subsidiaries terminates
by reason of Normal Retirement, any Stock Option held by such optionee
may thereafter be exercised to the extent that it was then exercisable
(or on such accelerated basis as the Committee shall at any time
determine) for a period of three years (or such other period, not to
exceed three years, as the Committee shall specify at or after the
time of grant) from the date of Normal Retirement or until the
expiration of the stated term of the option, if earlier. Except as
otherwise provided by the Committee at the time of grant, the death of
an optionee during the final year of such exercise period shall extend
such period for one year following death, or until the expiration of
the stated term of the option, if earlier.
(j) Other Termination. Unless otherwise determined by
the Committee, if an optionee's employment by or other service
relationship with the Company or its Subsidiaries terminates for any
reason other than death, Disability or Normal Retirement, any Stock
Option held by such optionee may thereafter be exercised to the extent
it was exercisable on the date of termination of employment or other
termination of the service relationship (or on such accelerated basis
as the Committee shall
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determine at or after the time of grant) for a period of sixty (60)
days (or such longer period up to three years as the Committee shall
specify at or after the time of grant) from the date of termination of
employment or other termination of the service relationship or until
the expiration of the stated term of the option, if earlier, provided,
that if the optionee's employment or other service relationship is
terminated for "cause" as a result of the optionee's misconduct which,
in the judgment of the Committee, casts discredit on him or her, or is
otherwise harmful to the business, interests or reputation of the
Company, its parent, or a Subsidiary, all Stock Options shall
terminate immediately.
For purposes of the preceding paragraph, if an optionee's
employment by the Company or its Subsidiaries is terminated under
circumstances entitling the optionee to cash severance pay under any
written severance plan, program, policy, or agreement of the Company
or its Subsidiaries in force at the time of such termination of
employment (a "Severance Program"), then except as otherwise
determined by the Committee any Stock Option held by the optionee at
termination of employment shall be treated as "exercisable on the date
of termination of employment" as to those shares for which it was in
fact exercisable immediately prior to termination of employment plus
any additional shares for which it would have become exercisable
during the severance period (as hereinafter defined) had the optionee
remained employed by the Company or its Subsidiaries. For purposes of
the preceding sentence, the severance period in the case of any
terminated employee entitled to severance under a Severance Program
shall be the period of weeks over which his or her cash severance, if
paid as salary continuation, would have been paid (whether or not such
severance is in fact so paid in such form).
(k) Incentive Stock Options. Notwithstanding any
designation of a Stock Option as an Incentive Stock Option, such Stock
Option shall be treated for tax purposes as a Non-Qualified Stock
Option to the extent prescribed under Section 422(d) of the Code.
(l) Form of Settlement. Subject to Sections 15(a),
15(c), and 15(d) below, shares of Stock issued upon exercise of a
Stock Option shall be free of all restrictions under the Plan, except
as provided in the following sentence. The Committee may provide at
time of grant that the shares to be issued upon the exercise of a
Stock Option shall be in the form of Restricted Stock or Deferred
Stock, or may reserve the right to so provide after time of grant.
(m) Options Granted to Non-employee Directors. Subject
to the limits set forth in Section 3, each Non-employee Director
serving in such position as of the effective date of this Plan who
does not then own more than five percent of the outstanding shares of
Stock is hereby granted a Non-Qualified Stock Option covering 10,000
shares of Stock. The option price under such Option shall be the fair
market value of the Stock on the effective date of this Plan.
Each person who is first elected as a Non-employee Director
after the effective date of this Plan and who at the time of such
election does not own more than five percent of the outstanding shares
of Stock shall be granted automatically upon such election a
Non-Qualified Stock Option covering the lesser of (a) 10,000 shares
(appropriately adjusted pursuant to Section 3) of Stock or (b) the
number of shares then available under the applicable limits imposed by
Section 3 hereof. If, on account of the limit set forth in the second
sentence of Section 3, such Non-employee Director upon his election as
such receives no Option or an Option covering fewer than 10,000 shares
(appropriately adjusted pursuant to Section 3), and additional shares
later become available under said limit while he remains a
Non-employee Director and during the term of this Plan, such
Non-employee Director shall be granted automatically upon such
availability a Non-Qualified Stock Option covering a number of shares
equal to the lesser of (a) 10,000 shares (appropriately adjusted
pursuant to Section 3) less the numbers of shares (so adjusted) for
which one or more Options were previously granted to him under this
paragraph or (b) the number of shares then available under Section 3.
For purposes of the preceding sentence priority among such
Non-employee Directors for additional Options as shares become
available shall be determined on the basis of the order of their
election as such. If the limit set forth in the second sentence of
Section 3 affects two or more such Non-employee Directors elected as
such on the same date, the total number of shares which are then
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available or which later become available for Options shall be
allocated proportionately among such Non-employee Directors elected on
the same date and entitled to receive additional Options until each
such Non-employee Director has received Options for the number of
shares (appropriately adjusted pursuant to Section 3) he would have
received initially if said limit had not applied. The option price of
any Option granted by this paragraph shall be the fair market value of
the Stock at the time the Option is granted (such time being either
the date of the Non-employee Director's election as such or the date
of the availability of shares), as determined by the Committee.
If on the day following the expiration of the term of an
Option granted initially hereunder to a Non-employee Director the
optionee remains serving in the position of a Director (and does not
then own more than five percent of the outstanding shares of Stock),
the Non-employee Director shall be automatically granted an Option
covering the lesser of (a) 10,000 shares (appropriately adjusted
pursuant to Section 3) of Stock or (b) the number of shares then
available under the applicable limits imposed by Section 3 herein.
If, on account of the limits set forth in the second sentence of
Section 3, such Non-employee Director receives under this paragraph no
Option or an Option covering fewer than 10,000 shares (appropriately
adjusted pursuant to Section 3), and shares later become available
under said limit while he remains a Non- employee Director and during
the term of this Plan, such Non-employee Director shall be granted
automatically upon such availability of a Non-Qualified Stock Option
covering a number of shares equal to the lesser of (a) 10,000 shares
(appropriately adjusted pursuant to Section 3) less the number of
shares (so adjusted) for which one or more Options were previously
granted to him under this paragraph or (b) the number of shares then
available under Section 3. For purposes of the preceding sentence,
priority among such Non-employee Directors for additional Options as
shares become available shall be determined on the basis of the order
of their becoming eligible as such. If the limit set forth in the
second sentence of Section 3 affects two or more such Non-employee
Directors eligible to receive shares under this paragraph on the same
date, the total number of shares which are then available or which
later become available from Options shall be allocated proportionately
among such Non-employee Directors entitled to receive additional
Options until each such Non-employee Director has received Options for
the number of shares (appropriately adjusted pursuant to Section 3) he
would have initially received if said limit had not applied. The
option price of any Option granted by this paragraph shall be the fair
market value of the Stock at the time the Option is granted.
Each Option granted under this subsection (m) may be exercised as
follows:
(1) (A) 25% of the shares subject to such Option may be
purchased commencing one year after the date of grant, and
(B) an additional 25% of such shares may be purchased
commencing on the second, third, and fourth anniversaries of the date
of grant; and
(2) subject to (1) above, such Option may only be exercised
during the five-year period beginning on the date the Option is
granted.
To the extent that an Option granted hereunder to a
Non-employee Director is not exercised when it initially becomes
exercisable, it shall be carried forward and be exercisable until the
expiration of the term of such Option as described in (2) above;
provided, that if the Non-employee Director ceases to be a Director
for any reason (including death), any Option held by such Non-employee
Director may thereafter be exercised, to the extent it was exercisable
immediately prior to the date the optionee ceased to be a Director,
only within the three-month period beginning from such date (but in no
event beyond the five-year term described in (2) above).
All options granted under this subsection (m) may be exercised
by delivery of cash and/or Stock.
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Non-employee Directors shall not be granted any Award or Grant
under this Plan (including any Stock Appreciation Right or
Supplemental Grant) other than Non-Qualified Options as specifically
provided hereunder.
Anything in Section 13 to the contrary notwithstanding, the
provisions of this subsection (m) shall not be amended more than once
every six months, other than to comport with changes in the Internal
Revenue Code or the rules and regulations thereunder.
SECTION 7. Stock Appreciation Rights; Discretionary Payments.
(a) Nature of Stock Appreciation Right. A Stock Appreciation
Right is an Award entitling the recipient to receive an amount in cash or
shares of Stock (or forms of payment permitted under paragraph (e) below) or a
combination thereof having a value equal to (or if the Committee shall so
determine at time of grant, less than) the excess of the Fair Market Value of a
share of Stock on the date of exercise over the Fair Market Value of a share of
Stock on the date of grant (or over the option exercise price, if the Stock
Appreciation Right was granted in tandem with a Stock Option) multiplied by the
number of shares with respect to which the Stock Appreciation Right shall have
been exercised, with the Committee having the right to determine the form of
payment.
(b) Grant and Exercise of Stock Appreciation Rights. Stock
Appreciation Rights may be granted in tandem with, or independently of, any
Stock Option granted under the Plan. In the case of a Stock Appreciation Right
granted in tandem with a Non- Qualified Stock Option, such Right may be granted
either at or after the time of the grant of such option. In the case of a
Stock Appreciation Right granted in tandem with an Incentive Stock Option, such
Right may be granted only at the time of the grant of the option.
A Stock Appreciation Right or applicable portion thereof granted in
tandem with a given Stock Option shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option, except that a
Stock Appreciation Right granted with respect to less than the full number of
shares covered by a related Stock Option shall not be reduced until the
exercise or termination of the related Stock Option exceeds the number of
shares not covered by the Stock Appreciation Right.
(c) Terms and Conditions of Stock Appreciation Rights. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Stock
Options shall be exercisable only at such time or times and to the
extent that the related Stock Options shall be exercisable.
(ii) Upon the exercise of a Stock Appreciation Right, the
applicable portion of any related Stock Option shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with a
Stock Option shall be transferable only with such Stock Option. Stock
Appreciation Rights shall not be transferable otherwise than by will
or the laws of descent and distribution. All Stock Appreciation
Rights shall be exercisable during the participant's lifetime only by
the participant or the participant's legal representative.
(iv) A Stock Appreciation Right granted in tandem with an
Incentive Stock Option may be exercised only when the market price of
the Stock subject to the Incentive Stock Option exceeds the exercise
price of such option.
(d) Discretionary Payments. Notwithstanding that a Stock Option
at the time of exercise shall not be accompanied by a related Stock
Appreciation Right, if the market price of the shares subject to such Stock
Option exceeds the exercise price of such Stock Option at the time of its
exercise, the Committee may, in its discretion, cancel such Stock Option, in
which event the Company shall pay to the person exercising
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such Stock Option an amount equal to the difference between the Fair Market
Value of the Stock to have been purchased pursuant to such exercise of such
Stock Option (determined on the date the Stock Option is cancelled) and the
aggregate consideration to have been paid by such person upon such exercise.
Such payment shall be by check or in Stock (or in a form of payment permitted
under paragraph (e) below) having a Fair Market Value (determined on the date
the payment is to be made) equal to the amount of such payments or any
combination thereof, as determined by the Committee. The Committee may
exercise its discretion under the first sentence of this paragraph (d) only in
the event of a written request of the person exercising the option, which
request shall not be binding on the Committee.
(e) Settlement in the Form of Restricted Shares or Rights to
Receive Deferred Stock. Subject to Sections 15(a), 15(c), and 15(d) below,
shares of Stock issued upon exercise of a Stock Appreciation Right or as a
Discretionary Payment shall be free of all restrictions under the Plan, except
as provided in the following sentence. The Committee may provide at time of
grant in the case of a Stock Appreciation Right (and at the time of payment in
the case of a Discretionary Payment) that such shares shall be in the form of
shares of Restricted Stock or rights to acquire Deferred Stock, or in the case
of a Stock Appreciation Right may reserve the right to so provide at any time
after the time of grant. Any such shares and any shares subject to rights to
acquire Deferred Stock shall be valued at Fair Market Value on the date of
exercise of the Stock Appreciation Right or the date the Stock Option is
cancelled in the case of Discretionary Payments.
(f) Rules Relating to Exercise. In the case of a participant
subject to the restrictions of Section 16(b) of the Act, no stock appreciation
right (as referred to in Rule 16b-3(e) or any successor Rule under the Act)
shall be exercised (and no request or payment under paragraph (d) above shall
be honored or made) except in compliance with any applicable requirements of
Rule 16b-3(e) or any successor rule. Notwithstanding paragraph (a) above, in
the event of such exercise (or request and payment) during an exercise period
currently prescribed by such rule, the Committee may prescribe, by rule of
general application, such other measure of value as it may determine but not in
excess of the highest per share closing sale price of the Common Stock reported
on the New York Stock Exchange Composite Transactions Index during such period
and, where a Stock Appreciation Right relates to an Incentive Stock Option, not
in excess of an amount consistent with the qualification of such Stock Option
as an "incentive stock option" under Section 422 of the Code.
SECTION 8. Restricted Stock; Unrestricted Stock.
(a) Nature of Restricted Stock Award. A Restricted Stock Award is
an Award entitling the recipient to acquire shares of Stock for a purchase
price (which may be zero), subject to such conditions, including a Company
right during a specified period or periods to repurchase such shares at their
original purchase price (or to require forfeiture of such shares, if the
purchase price was zero) upon the participant's termination of employment or
other service relationship, as the Committee may determine at the time of
grant. The original purchase price, if any, shall be determined by the
Committee, but if any purchase price is payable in an amount which exceeds the
lesser of the par value of the shares or 10% of the fair market value of the
Common Stock on the award date, it shall be equal to at least 50% of the fair
market value of the Common Stock on the award date.
(b) Award Agreement. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within 60 days (or such shorter date
as the Committee may specify) following the award date by making payment to the
Company by certified or bank check or other instrument acceptable to the
Committee in an amount equal to the specified purchase price, if any, of the
shares covered by the Award and by executing and delivering to the Company a
Restricted Stock Award Agreement in such form as the Committee shall determine.
(c) Rights as a Shareholder. Upon complying with paragraph (b)
above, a participant shall have all the rights of a shareholder with respect to
the Restricted Stock including voting and dividend rights, subject to
nontransferability restrictions and Company repurchase or forfeiture rights
described in this Section and subject to any other conditions contained in the
Award Agreement. Unless the Committee shall otherwise
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determine, certificates evidencing shares of Restricted Stock shall remain in
the possession of the Company until such shares are free of any restrictions
under the Plan.
(d) Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged, or otherwise encumbered or disposed of except
as specifically provided herein. In the event of termination of employment or
other service relationship of the participant with the Company and its
Subsidiaries for any reason, such shares shall be resold to the Company at
their purchase price, or forfeited to the Company if the purchase price was
zero, except as set forth below.
(i) The Committee at the time of grant shall specify the date
or dates (which may depend upon or be related to the attainment of
performance goals and other conditions) on which the
nontransferability of the Restricted Stock and the obligation to
resell such shares to the Company shall lapse. The Committee at any
time may accelerate such date or dates and otherwise waive or, subject
to Section 13, amend any conditions of the Award.
(ii) Except as may otherwise be provided in the Award
Agreement, in the event of termination of employment or other service
relationship of a participant with the Company and its Subsidiaries
for any reason (including death), the participant or the participant's
legal representative shall offer to resell to the Company, at the
price paid therefor, all Restricted Stock, and the Company shall have
the right to purchase the same at such price, or if the price was zero
to require forfeiture of the same, provided that except as provided in
the Award Agreement, the Company must exercise such right of
repurchase or forfeiture not later than the 60th day following such
termination of employment or other service relationship.
(e) Waiver, Deferral, and Investment 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.
(f) Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at a purchase price not to exceed the lesser of the
par value of the shares or 10% of the fair market value of the Common Stock at
the time of sale) to any participant shares of Stock free of restrictions under
the Plan ("Unrestricted Stock"). Shares of Unrestricted Stock may be granted
or sold as described in the preceding sentence in respect of past services or
other valid consideration. Any sale of Unrestricted Stock must take place
within 60 days after the time of grant of the right to purchase such shares.
SECTION 9. Deferred Stock Awards.
(a) Nature of Deferred Stock Award. A Deferred Stock Award is an
award entitling the recipient to acquire shares of Stock without payment in one
or more installments at a future date or dates, all as determined by the
Committee. The Committee may also condition such acquisition on the attainment
of specified performance goals.
(b) Award Agreement. A participant who is granted a Deferred
Stock Award shall have no rights with respect to a such Award unless within 60
days of the grant of such Award or such shorter period as the Committee may
specify, the participant shall have accepted the Award by executing and
delivering to the Company a Deferred Stock Award Agreement.
(c) Restrictions on Transfer. Deferred Stock Awards and all
rights with respect to such Awards may not be sold, assigned, transferred,
pledged, or otherwise encumbered. Rights with respect to such Awards shall be
exercisable during the participant's lifetime only by the participant or the
participant's legal representative.
(d) Rights as a Shareholder. A participant receiving a Deferred
Stock Award will have rights of a shareholder only as to shares actually
received by the participant under the Plan and not with respect to shares
subject to the Award but not actually received by the participant. A
participant shall be entitled to
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receive a stock certificate for shares of Deferred Stock only upon satisfaction
of all conditions therefor specified in the Deferred Stock Award Agreement.
(e) Termination. Except as may otherwise be provided in the Award
Agreement, a participant's rights in all Deferred Stock Awards shall
automatically terminate upon the participant's termination of employment by or
other service relationship with the Company and its Subsidiaries for any reason
(including death).
(f) Acceleration, Waiver, etc. At any time prior to the
participant's termination of employment or other service relationship the
Committee may in its discretion accelerate, waive, or, subject to Section 13,
amend any or all of the restrictions or conditions imposed under any Deferred
Stock Award.
(g) Payments in Respect of Deferred Stock. Without limiting the
right of the Committee to specify different terms, the Deferred Stock Award
Agreement may either make no provisions for, or may require or permit the
immediate payment, deferral, or investment of amounts equal to, or less than,
any cash dividends which would have been payable on the Deferred Stock had such
stock been outstanding, all as determined by the Committee in its sole
discretion.
SECTION 10. Performance Unit Awards.
(a) Nature of Performance Units. A Performance Unit Award is an
award entitling the recipient to acquire cash or shares of Stock, or a
combination of cash and Stock, upon the attainment of specified performance
goals. The Committee in its sole discretion shall determine whether and to
whom Performance Unit Awards shall be made, the performance goals applicable
under each such Award, the periods during which performance is to be measured,
and all other limitations and conditions applicable to the awarded Performance
Unit. Performance Units may be awarded independent of or in connection with
the granting of any other Award under the Plan.
(b) Award Agreement. A participant shall have no rights with
respect to a Performance Unit Award unless within 60 days of the grant of such
Award or such shorter period as the Committee may specify, the participant
shall have accepted the Award by executing and delivering to the Company a
Performance Unit Award Agreement.
(c) Restrictions on Transfer. Performance Unit Awards and all
rights with respect to such Awards may not be sold, assigned, transferred,
pledged, or otherwise encumbered, and if exercisable over a specified period,
shall be exercisable during the participant's lifetime only by the participant
or the participant's legal representative.
(d) Rights as a Shareholder. A participant receiving a
Performance Unit Award will have rights of a shareholder only as to shares
actually received by the participant under the Plan and not with respect to
shares subject to the Award but not actually received by the participant. A
participant shall be entitled to receive a stock certificate evidencing the
acquisition of shares of Stock under a Performance Unit Award only upon
satisfaction of all conditions therefor specified in the Performance Unit Award
Agreement.
(e) Termination. Except as may otherwise be provided by the
Committee at any time prior to termination of employment or other service
relationship, a participant's rights in all Performance Unit Awards shall
automatically terminate upon the participant's termination of employment by or
other service relationship with the Company and its Subsidiaries for any reason
(including death).
(f) Acceleration, Waiver, etc. At any time prior to the
participant's termination of employment by or other service relationship with
the Company and its Subsidiaries, the Committee may in its sole discretion
accelerate, waive, or, subject to Section 13, amend any or all of the goals,
restrictions, or conditions imposed under any Performance Unit Award.
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(g) Exercise. The Committee in its sole discretion shall
establish procedures to be followed in exercising any Performance Unit, which
procedures shall be set forth in the Performance Unit Award Agreement. The
Committee may at any time provide that payment under a Performance Unit shall
be made, upon satisfaction of the applicable performance goals, without
exercise by the participant. Except as otherwise specified by the Committee,
(i) a Performance Unit granted in tandem with a Stock Option may be exercised
only while the Stock Option is exercisable, and (ii) the exercise of a
Performance Unit granted in tandem with any Award shall reduce the number of
shares subject to the related Award on such basis as is specified in the
Performance Unit Award Agreement.
SECTION 11. Other Stock-Based Awards; Supplemental Grants.
(a) Nature of Awards. The Committee may grant other Awards under
which Stock is or may in the future be acquired ("Other Stock-based Awards").
Such awards may include, without limitation, debt securities convertible into
or exchangeable for shares of Stock upon such conditions, including attainment
of performance goals, as the Committee shall determine. Subject to the
purchase price limitations in paragraph (b) below, such convertible or
exchangeable securities may have such terms and conditions as the Committee may
determine at the time of grant. However, no convertible or exchangeable debt
shall be issued unless the Committee shall have provided (by Company right of
repurchase, right to require conversion or exchange, or other means deemed
appropriate by the Committee) a means of avoiding any right of the holders of
such debt to prevent a Company transaction by reason of covenants in such debt.
(b) Purchase Price; Form of Payment. The Committee may determine
the consideration, if any, payable upon the issuance or exercise of an Other
Stock-based Award. However, no shares of Stock (whether acquired by purchase,
conversion, or exchange or otherwise) shall be issued unless (i) issued at no
cost to the recipient (or for a purchase price not in excess of the lesser of
the par value of the Shares or 10% of the Fair Market Value of the Stock as of
the time of sale), or (ii) sold, exchanged, or converted by the Company, and
the Company shall have received payment for such Stock or securities so sold,
exchanged, or converted equal to at least 50% of Fair Market Value of the Stock
on the grant or effective date, or the exchange or conversion date, under the
Award, as specified by the Committee. The Committee may permit payment by
certified check or bank check or other instrument acceptable to the Committee
or by surrender of other shares of Stock (excluding shares then subject to
restrictions under the Plan).
(c) Forfeiture of Awards; Repurchase of Stock; Acceleration or
Waiver of Restrictions. The Committee may determine the conditions under which
an Other Stock-based Award shall be forfeited or, in the case of an Award
involving a payment by the recipient, the conditions under which the Company
may or must repurchase such Award or related Stock. At any time the Committee
may in its sole discretion accelerate, waive, or, subject to Section 13, amend
any or all of the limitations or conditions imposed under any Other Stock-based
Award.
(d) Award Agreements. A participant shall have no rights with
respect to any Other Stock-based Award unless within 60 days after the grant of
such Award (or such shorter period as the Committee may specify) the
participant shall have accepted the Award by executing and delivering to the
Company an Other Stock-based Award Agreement.
(e) Nontransferability. Other Stock-based Awards may not be sold,
assigned, transferred, pledged, or encumbered except as may be provided in the
Other Stock-based Award Agreement. However, in no event shall any Other
Stock-based Award be transferred other than by will or by the laws of descent
and distribution or be exercisable during the participant's lifetime by other
than the participant or the participant's legal representative.
(f) Rights as a Shareholder. A recipient of any Other Stock-based
Award will have rights of a shareholder only at the time and to the extent, if
any, specified by the Committee in the Other Stock-based Award Agreement.
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(g) Deemed Dividend Payments; Deferrals. Without limiting the
right of the Committee to specify different terms, an Other Stock-based Award
Agreement may require or permit the immediate payment, waiver, deferral, or
investment of dividends or deemed dividends payable or deemed payable on Stock
subject to the Award.
(h) Supplemental Grants. The Company may in its sole discretion
make a loan to the recipient of an Award hereunder, either on or after the date
of grant of such Award. Such loans may be made either in connection with the
exercise of a Stock Option, a Stock Appreciation Right, or an Other Stock-based
Award, in connection with the purchase of shares under any Award, or in
connection with the payment of any federal income tax in respect of income
recognized under an Award. The Committee shall have full authority to decide
whether to make a loan hereunder and to determine the amount, term, and
provisions of any such loan, including the interest rate (which may be zero)
charged in respect of any such loan, whether the loan is to be secured or
unsecured, the terms on which the loan is to be repaid and the conditions, if
any, under which it may be forgiven. However, no loan hereunder shall provide
or reimburse to the borrower the amount used by him for the payment of the par
value of any shares of Common Stock issued, have a term (including extensions)
exceeding ten years in duration, or be in an amount exceeding the total
exercise or purchase price paid by the borrower under an Award or for related
Stock under the Plan plus an amount equal to the cash payment permitted in the
following paragraph.
The Committee may at any time authorize a cash payment, in respect of
the grant or exercise of an Award under the Plan or the lapse or waiver of
restrictions under an Award which shall not exceed the amount which would be
required in order to pay in full the federal income tax due as a result of
income recognized by the recipient under both the Award and such cash payment,
in each case assuming that such income is taxed at the regular maximum marginal
rate applicable to individuals under the Code as in effect at the time such
income is includable in the recipient's income. Subject to the foregoing, the
Committee shall have complete authority to decide whether to make such cash
payments in any case, to make provision for such payments either simultaneously
with or after the grant of the associated Award, and to determine the amount of
each such payment.
SECTION 12. 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 Company from a
Subsidiary or from the Company 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 Company, if the
employee's right to reemployment 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 Committee otherwise so provides in writing.
For purposes of Section 6(j), Section 8(a), Section 8(d), Section
9(e), Section 9(f), Section 10(e) and Section 10(f), except as
otherwise determined by the Committee an optionee employed as an
employee by the Company and its Subsidiaries shall be treated as
having incurred a termination of employment by or other service
relationship with the Company and its Subsidiaries on the date he or
she ceases to be an employee, whether or not he or she continues to
provide services to the Company or its Subsidiaries on some other
basis.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes
in law or for any other lawful purpose, but no such action shall adversely
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affect rights under any outstanding Award without the holder's consent.
However, no such amendment, unless approved by stockholders, shall be effective
if it would cause the Plan to fail to satisfy the incentive stock option
requirements of the Code or the requirements of Rule 16b-3 or any successor
rule under the Act as in effect on the date of such amendment.
SECTION 14. Status of Plan.
With respect to the portion of any Award which has not been exercised
and any payments in cash, stock, or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the Company'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 provision of the foregoing sentence.
SECTION 15. General Provisions.
(a) No Distribution; Compliance with Legal Requirements, etc. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company 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 laws and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) Other Compensation Arrangements; No Employment Rights.
Nothing contained in this Plan shall prevent the Board of Directors from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required; and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of the
Plan does not confer upon any employee or other person any right to continued
employment or the continuation of any service relationship with the Company or
a Subsidiary, nor does it interfere in any way with the right of the Company or
a Subsidiary to terminate the employment or other service relationship that may
exist between it and any person.
(c) Tax Withholding, etc. Each participant 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
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any Federal,
state, or local taxes of any kind required by law to be withheld with respect
to such income. The Company 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 participant.
(d) Cancellation of Awards. The Committee may provide, with
respect to any Award, that the Award shall be cancelled or rescinded and any
associated shares forfeited, and that the participant be obligated to pay to
the Company any gain received upon exercise or vesting, in the event that the
participant competes with the Company or its Subsidiaries, discloses
confidential information of the Company or its Subsidiaries, or otherwise is
not in compliance with any provision of the Award, in each case on such terms
and conditions as the Committee considers appropriate in the circumstances.
SECTION 16. Effective Date of Plan.
The Plan shall not become effective unless approved by the vote of the
holders of a majority of the shares of capital stock of the Company represented
at a meeting of stockholders. Subject to such effectiveness, and to the
requirement that no Stock may be issued hereunder prior to such approval,
Options and other Awards may be granted hereunder on and after adoption of the
Plan by the Board.
Revised: August, 1994
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