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EXHIBIT 10.2
XTRA CORPORATION
1987 STOCK INCENTIVE PLAN
1. PURPOSE
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The purpose of this 1987 Stock Incentive Plan (the "Plan") is to
advance the interests of XTRA Corporation (the "Company") by enhancing the
ability of the Company (a) to attract and retain employees who are in a
position to make significant contributions to the success of the Company; (b)
to reward employees for such contributions; and (c) to encourage employees to
take into account the long-term interests of the Company through ownership of
shares of, and other interests in, the Company's common stock ("Common Stock").
The Plan is intended to accomplish these goals by enabling the Company
to grant awards ("Awards") to eligible employees. Awards may be in the form of
Stock Options (as described in Section 6), Stock Appreciation Rights (as
described in Section 7) and Restricted Stock Awards (as described in Section
8).
2. ADMINISTRATION
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The Plan will be administered by the Compensation Committee of the
Board of Directors of the Company, excluding any member who would not be an
"outside director" for purposes of Section 162(m) of the Internal Revenue Code
of 1986, as amended, and the regulations, including proposed regulations,
thereunder (the "Committee"). The Committee will have authority, not
inconsistent with the express provisions of the Plan, (a) to grant Awards to
such eligible employees as the Committee may select ("Participants"); (b) to
determine the type of Awards to be granted and the times of grants; (c) to
determine the number of shares of Common Stock to be covered by any Award; (d)
to determine the terms and conditions of any Award, which terms and conditions
may differ among individual Awards and Participants; (e) to prescribe the form
or forms of instruments evidencing Awards and any other instruments required
under the Plan and to change such forms from time to time; (f) to adopt, amend
and rescind rules and regulations for the administration of the Plan; (g) to
interpret the Plan and to decide any questions and settle all controversies and
disputes that may arise in connection with the Plan; and (h) to waive
compliance by a Participant with any obligation to be performed by him under an
Award, except that the Committee may not, in the case of an incentive stock
option (as
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described in Section 6), take any action without consent of the Participant
which would cause such option to lose its status as an "incentive stock option"
("ISO") within the meaning of section 422 of the Internal Revenue Code of 1986
(the "Code"). Such determinations and actions of the Committee shall be
conclusive and shall bind all parties.
A majority of the members of the Committee will constitute a quorum,
and all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Plan may be made without
notice or meeting of the Committee by a writing signed by a majority of the
Committee members. All members of the Committee shall be disinterested persons
within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934.
3. EFFECTIVE DATE AND TERM OF PLAN
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The Plan will become effective on the date on which it is approved by
the stockholders of the Company. Grants of Awards under the Plan may be made
prior to that date (but after adoption of the Plan by the Board of Directors),
subject to approval of the Plan by stockholders.
No Award may be granted under the Plan after the completion of ten
years from the date on which the Plan was adopted by the Board of Directors,
but Awards previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
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(a) NUMBER OF SHARES. Subject to adjustment as provided in Section
11, the aggregate number of shares of Common Stock that may be delivered under
the Plan is 1,150,000. Shares of Common Stock may be issued up to this maximum
pursuant to any type or types of Award, including ISOs. For purposes of this
limitation, Awards and shares of Common Stock which are forfeited or reacquired
by the Company, and Awards which are satisfied without the issuance of shares
of Common Stock, will not be counted. Such limitation will apply only to
shares of Common Stock which have become free of any restrictions under the
Plan.
(b) SPECIAL LIMITATIONS APPLICABLE TO CERTAIN AWARDS. The Committee
shall have the discretion under the Plan to award Options and SARs that are
intended to satisfy certain performance-based compensation arrangements
intended to be exempt from the deduction limitations of Section 162(m) of the
Code (the "Section 162(m) requirements") ("exempt Options and SARs") as well as
Options and SARs that not intended to satisfy those requirements ("non-exempt
Options and SARs"); provided, that the Committee shall award non-exempt Options
and SARs only if it shall have determined that such award will not jeopardize
the continued exemption under Section 162(m)(4)(C) of exempt Options and SARs.
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Subject to adjustment as provided in Section 11, to the extent such adjustment
is consistent with the continued satisfaction by exempt Options and SARs of the
requirements of Section 162(m)(4)(C) of the Code, the maximum number of shares
of Common Stock for which exempt Options may be awarded under the Plan to any
Participant in any calendar year, is in each case 100,000 shares. For purposes
of the preceding sentence, the regrant of a canceled Option or SAR, or the
repricing of an Option or SAR, shall be treated as a separate Award to the
extent required under Section 162(m)(4)(C) of the Code. The per-individual
Award limitations described in this paragraph are intended to enable exempt
Options and SARs awarded under the Plan to qualify for the performance-based
compensation exemption rules set forth under Section 162(m)(4)(c) of the Code
and shall be subject to amendment or revision to the extent (but only to the
extent) consistent with such rules.
(c) SHARES TO BE DELIVERED. Shares delivered under the Plan will be
authorized but unissued shares of Common Stock or, if the Committee so decides
in its sole discretion, previously issued Common Stock acquired by the Company
and held in treasury. No fractional shares of Common Stock will be delivered
under the Plan.
5. ELIGIBILITY
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Employees eligible to become Participants shall be those key employees
of the Company and its subsidiaries who, in the opinion of the Committee, are
in a position to make a significant contribution to the success of the Company
or its subsidiaries. A subsidiary for purposes of the Plan is a corporation in
which the Company owns, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock. Members of the
Committee will not be eligible to become Participants.
6. STOCK OPTIONS
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Stock Options granted under the Plan ("Options") may be either ISOs or
non-qualified stock options ("NSOs"). Except to the extent expressly
designated as an ISO (or to the extent it does not qualify as an ISO even if so
designated), each Option will be an NSO.
No term of this Plan relating to ISOs will be interpreted, amended or
altered, nor will any discretion or authority granted to the Committee under
the Plan be exercised, so as to disqualify the Plan or, without the consent of
the optionee, any ISO, under section 422 of the Code. The documents evidencing
ISOs will contain such provisions as are required of ISOs under the applicable
provisions of the Code.
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Options granted under the Plan will be subject to the following terms
and conditions and will contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee deems desirable:
(a) EXERCISE PRICE. The exercise price of each Option will be
determined by the Committee but may not be less than 100% (110%, in the case of
an ISO granted to a ten-percent stockholder) of the fair market value per share
of Common Stock at the time the Option is granted. For this purpose,
"ten-percent stockholder" means any employee who at the time of grant owns
directly, or is deemed to own by reason of the attribution rules in section
424(d) of the Code, Common Stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any of its parent or
subsidiary corporations.
(b) DURATION OF OPTIONS. An Option will be exercisable during such
period or periods as the Committee may specify. The latest date on which an
Option may be exercised will be the date which is ten years (five years, in the
case of an ISO granted to a ten-percent stockholder) from the date the Option
was granted or such earlier date as may be specified by the Committee at the
time the Option is granted.
(c) Exercise of Options.
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(1) Options will be exercisable at such future time or times,
whether or not in installments, as determined by the Committee
at or after the grant date. The Committee may at any time
accelerate the exercisability of all or any portion of any
Option.
If Options intended to be ISOs when granted to an individual
Participant first become exercisable in any one calendar year
as to shares of Common Stock having a value (determined when
the Options were granted) in excess of $100,000, such Options
will be treated as NSOs rather than ISOs for federal income
tax purposes to the extent required by applicable provisions
of the Code.
(2) Any exercise of an Option must be by written notice to the
Company, accompanied by (i) the document evidencing the Option
(the "Option Certificate") and any other documents required by
the Committee and (ii) payment in accordance with Section 6(d)
below for the number of shares of Common Stock for which the
Option is exercised.
(3) Notwithstanding any other provision of the Plan, during the
60-day period from and after the date of a Change of Control,
the Participant shall have the right (by giving written notice
to the Company in form satisfactory to
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the Committee) to surrender all or part of an Option to the Company
and to receive an amount in cash equal to the excess of the aggregate
Value (as defined below) of the shares of Common Stock covered by the
Option, or portion thereof surrendered, determined on the date the
Option is exercised, over the aggregate Option exercise price of such
shares (such excess is referred to herein as the "Aggregate Spread");
provided however, and notwithstanding any other provision of the Plan,
if the end of such 60 day period from and after the date of a Change
of Control is within six months of the date of grant of an Option held
by a Participant who is an officer or director of the Company (within
the meaning of Section 16(b) of the Securities Exchange Act of 1934,
as amended), then, unless (i) a merger with the Corporation will occur
in connection with the Change of Control, (ii) such merger is not
effective until more than six months from the date of grant of such
Participant's Option and (iii) upon effectiveness of such merger the
Participant's Option will be cancelled in exchange for the Aggregate
Spread, the Option shall either remain outstanding notwithstanding the
cancellation of Options generally upon the effectiveness of such
merger or shall be exchanged for a fully exercisable option of the
surviving corporation of such merger (or its parent corporation) on an
economically equivalent basis as set forth in Section 1.425-1 of the
Treasury Income Tax Regulations. The foregoing right shall not apply
to ISOs granted prior to January 31, 1989, other than any such Option
that has been modified, extended or renewed within the meaning of
Section 424(b) of the Code. As used in this Section 6(c)(3) with
respect to an election by a Participant to receive cash in respect of
a NSO the term "Value" means the higher of (i) the highest fair market
value (as defined in Section 12(d) during the 60-day period prior to
the date of a Change of Control and (ii) if the Change of Control is
the result of a transaction or series of transactions described in
paragraphs (i), (ii) or (iii) of the definition of Change of Control
set forth in Exhibit A, the highest price per share of the Common
Stock paid in such transaction or series of transactions (which in the
case of paragraph (i) shall be the highest price per share of the
common Stock as reflected in a Schedule 13D by the person having made
the acquisition), and as used in this paragraph 6(c)(3) with respect
to an election by a Participant to receive cash in respect of an ISO,
unless the Participant otherwise elects in writing the term "Value"
shall mean "fair market value" (as defined in Section 12(d)).
Notwithstanding the foregoing, the right to receive cash under this
paragraph and the right to a special determination of "Value" with
respect to
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NSOs shall not apply in the case of any Change of Control
intended to qualify for "pooling of interests" accounting
treatment, to the extent the Committee determines that such
features would be incompatible with such treatment.
(d) PAYMENT FOR AND DELIVERY OF COMMON STOCK. Common Stock purchased
on exercise of an Option shall be paid for as follows: (1) in cash or by
certified check, bank draft or money order payable to the order of the Company
or (2) if so permitted by the Option Certificate, (i) through the delivery of
shares of Common Stock (held for at least six months, or such other period as
the Committee may specify) having a fair market value on the last business day
preceding the date of exercise equal to the purchase price or (ii) by a
combination of cash and Common Stock as provided in clauses (1) and (2)(i)
above or (iii) by delivery of a promissory note of the Participant to the
Company, payable on such terms as are specified in the Option Certificate
(except that the Option Certificate may provide that the rate of interest on
the note will be the lowest rate which is sufficient, at the time the note is
given, to avoid imputation of interest under the applicable provisions of the
Code), or by a combination of cash (or cash and Common Stock) and the
Participant's promissory note; PROVIDED, that if the Common Stock delivered
upon exercise of the Option is an original issue of authorized Common Stock, at
least so much of the exercise price as represents the par value of such Common
Stock must be paid in cash if the Committee determines that cash payment is
required by law.
(e) NONTRANSFERABILITY OF OPTIONS. No Option may be transferred
other than by will or by the laws of descent and distribution, and during a
Participant's lifetime an Option may be exercised only by him.
(f) DEATH OR DISABILITY. If a Participant's employment with the
Company and its subsidiaries terminates by reason of death or total and
permanent disability, each Option held by the Participant will become fully
exercisable and will remain exercisable after the date of such termination for
a period of two years in the case of death and one year in the case of
disability (but in no event later than the date the option would have expired
in all events under Section 6(b)). In the case of a deceased Participant, such
Option may be exercised within such time limits by his executor or
administrator, or by the person or persons to whom the Option is transferred by
will or the applicable laws of descent and distribution.
(g) OTHER TERMINATION OF EMPLOYMENT. If a Participant's employment
with the Company and its subsidiaries terminates for any reason other than
death or total and permanent disability, all Options held by the Participant
that are not then exercisable shall terminate. Options that are exercisable on
the date of
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termination will continue to be exercisable for a period of three months (but
in no event later than the date the option would have expired in all events
under Section 6(b)) unless the employee has confessed to, or been convicted of,
any act of fraud, theft or dishonesty arising in the course of, or in
connection with, his employment with the Company, in which case the Option will
terminate immediately and in full. After completion of that three-month period
such Options shall terminate to the extent not previously exercised, expired or
terminated.
7. STOCK APPRECIATION RIGHTS
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(a) NATURE OF STOCK APPRECIATION RIGHT. A Stock Appreciation Right
("SAR") is an Award entitling the recipient to receive an amount in cash or
shares of Common Stock or a combination thereof having a value equal to the
excess of the fair market value of a share of Common Stock on the date of
exercise over the fair market value of a share of Common Stock on the date of
grant (or over the Option exercise price, if the SAR was granted in tandem with
an Option) multiplied by the number of shares with respect to which the SAR has
been exercised, with the Committee having the right to determine the form of
payment.
(b) GRANT OF SARS. SARs may be granted in tandem with, or
independently of, Options granted under the Plan. In the case of an SAR
granted in tandem with an NSO, such SAR may be granted either at or after the
time of the grant of such Option. In the case of an SAR granted in tandem with
an ISO, such SAR may be granted only at the time of the grant of the Option.
SARs will be evidenced by such written agreement as is deemed appropriate by
the Committee.
An SAR or applicable portion thereof granted in tandem with an Option
will terminate and no longer be exercisable upon the termination or exercise of
such Option, except that an SAR granted with respect to less than the full
number of shares covered by an Option will not be reduced until the exercise or
termination of the related Option exceeds the number of shares not covered by
the SAR.
(c) TERMS AND CONDITIONS OF SARS. SARs will be subject to such terms
and conditions as are determined from time to time by the Committee, subject,
in the case of SARs granted in tandem with Options, to the following:
(1) SARs will be exercisable only at such time or times and to the
extent that the related Option is exercisable.
(2) Upon the exercise of an SAR, the applicable portion of any
related Option must be surrendered.
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(3) SARs will be transferable only with the related
Option. All SARs will be exercisable during the
Participant's lifetime only by the Participant or his
legal representative.
(4) An SAR granted in tandem with an Option may be exercised only
when the market price of the Common Stock subject to the
Option exceeds the exercise price of such Option.
The provisions of Sections 6(f) and 6(g) relating to the
exercisability and termination of Options shall also apply to SARs, whether or
not granted in tandem with Options.
Any exercise of an SAR must be by written notice to the Company,
accompanied by the document evidencing the SAR and any other documents required
by the Committee.
(d) SPECIAL RULES RELATING TO EXERCISE. In the case of a Participant
subject to the restrictions of Section 16(b) of the Securities Exchange Act of
1934, no SAR may be exercised except in compliance with any applicable
requirements of Rule 16b-3(e) or any successor rule. Notwithstanding Section
7(a) above, in the event of such exercise during the exercise period currently
prescribed by Rule 16b-3(e), the Committee may prescribe, by guidelines 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 in tandem with an ISO, not in excess of any amount consistent with
the qualification of such option as an ISO under section 422A of the Code;
provided, however, that such guidelines shall be put into operation only if the
Company has received a favorable letter from the Staff of the Securities and
Exchange Commission, or an opinion of counsel, to the effect that such
operation will not adversely affect compliance with Rule 16b-3(e).
8. RESTRICTED STOCK
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(a) NATURE OF RESTRICTED STOCK AWARD. A Restricted Stock Award is an
Award entitling the recipient to acquire shares of Common Stock ("Restricted
Stock") for a purchase price (which may be zero) not to exceed par value,
subject to such conditions, including the restrictions specified in Section
8(d) below, as the Committee may impose at the time of grant.
(b) AWARD AGREEMENT. A Participant who is granted a Restricted Stock
Award will have no rights with respect to such Award unless the Participant
accepts the Award within 60 days (or such shorter period 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
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covered by the Award and by executing and delivering to the Company an
agreement (an "Award Agreement") in such form as the Committee
determines.
(c) RIGHTS AS A STOCKHOLDER. Upon complying with Section 8(b) above,
a Participant will have all the rights of a stockholder with respect to the
Restricted Stock awarded to him including voting and dividend rights, subject
to the restrictions described in this Section 8 and subject to any other
conditions contained in the Award Agreement. Unless the Committee otherwise
determines, certificates evidencing shares of Restricted Stock will remain in
the possession of the Company until such shares are free of any restrictions
under the Plan.
(d) RESTRICTION. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. If a Participant ceases for any reason to be
employed by the Company or its subsidiaries, shares of Restricted Stock held by
such Participant shall be resold to the Company at their purchase price, or
forfeited to the Company if the purchase price was zero, except as specifically
set forth herein. Shares of Restricted Stock resold to the Company shall have
the status of authorized but unissued shares of Common Stock.
(1) The Committee will specify in the Award Agreement 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
of the Participant to resell such Stock to the Company will
lapse. The Committee may at any time accelerate such date or
dates.
(2) If the Participant's employment terminates because of death or
total and permanent disability, all restrictions on Restricted
Stock held by the Participant will lapse.
(e) NOTICE OF ELECTION. Any Participant making an election under
section 83(b) of the Code with respect to a Restricted Stock Award must provide
a copy thereof to the Company within 30 days of the filing of such election
with the Internal Revenue Service.
9. CASH AWARDS
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In connection with any Award hereunder the Committee may, in its sole
discretion, at the time such Award is made or at a later date, provide for and
grant a cash award to the Participant not to exceed an amount equal to (a) the
amount of any federal, state and local income tax on ordinary income for which
the Participant will be liable with respect to the Award, plus (b) an
additional amount on a grossed-up basis necessary to make him whole after tax,
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discharging all his income tax liabilities arising from all payments
under this Section 9. Any payments under this Section 9 will be made
at the time the Participant incurs federal income tax liability with
respect to the Award.
10. CHANGE OF CONTROL
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Notwithstanding any other provision of this Plan, in the event of a
Change of Control of the Company as defined in Exhibit A hereto (a) each Option
and SAR held by each Participant will immediately become fully exercisable; and
(b) restrictions and conditions on Restricted Stock held by the Participant
will immediately lapse.
11. CHANGES IN COMPANY; SUBSTITUTE AWARDS
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(a) CHANGES IN STOCK. In the event of a stock dividend, stock split
or combination of shares, recapitalization or other change in the Company's
capital stock, the number and kind of shares of stock or securities of the
Company subject to Awards then outstanding or subsequently granted under the
Plan, the maximum number of shares of stock or securities that may be delivered
under the Plan, the purchase price, and other relevant provisions will be
appropriately adjusted by the Committee, whose determination shall be binding
on all persons.
The Committee may also adjust the number of shares subject to
outstanding Awards, the exercise price of outstanding Options and the terms of
outstanding Awards, to take into consideration material changes in accounting
practices or principles, consolidations or mergers (except those described in
Section 11(b) below), acquisitions or dispositions of stock or property or any
other event if it is determined by the Committee that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
(b) MERGER, ETC. Subject to Section 10, in the event of a
dissolution or liquidation of the Company or a merger or consolidation in which
the Company is not the surviving corporation or its outstanding shares are
converted into securities of another corporation or exchanged for other
consideration, all Options and SARs granted hereunder will terminate, but at
least 20 days prior to the effective date of any such dissolution or
liquidation (or 20 days prior to any earlier related sale of substantially all
the assets of the Company) or of any such merger or consolidation, the
Committee shall (1) make all Options and SARs outstanding hereunder immediately
exercisable, provided that, unless the event will give rise to a Change of
Control or it is anticipated that a Change of Control will coincide with or
follow the event, the Committee may instead arrange that the successor or
surviving corporation, if any, grant
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replacement Options and/or SARs and (2) eliminate immediately all restrictions
and conditions on all Restricted Stock.
(c) SUBSTITUTE AWARDS. The Company may grant Awards under the Plan
in substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of 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. The shares which may be delivered under such substitute
Awards will be in addition to the maximum number of shares provided for in
Section 4(a) only to the extent that the substitute Awards are both (1) 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 Securities Exchange Act of 1934
and (2) 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 such
Act) by the stockholders of the entity which issued such predecessor awards.
12. GENERAL PROVISIONS
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(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS, ETC. The
Committee may require each person acquiring Common Stock pursuant to an Award
to represent to and agree with the Company in writing that such person is
acquiring the Common Stock without a view to distribution thereof.
The Company will not be obligated to deliver any shares of Common
Stock pursuant to an Award (1) until, in the opinion of the Company's counsel,
all applicable federal and state laws and regulations have been complied with,
and (2) if the outstanding Common Stock is at the time listed on any stock
exchange, until the shares to be delivered have been listed or authorized to be
listed on such exchange upon official notice of issuance, and (3) until all
other legal matters in connection with the issuance and delivery of such shares
have been approved by the Company's counsel. If the sale of Common Stock has
not been registered under the Securities Act of 1933, as amended, the Company
may require such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Common Stock bear an appropriate legend
restricting transfer.
Notwithstanding any provision of the Plan, the Company will be under
no obligation to deliver shares of Common Stock to an estate of a deceased
Participant, or to the person or persons to whom the Award has been transferred
by the Participant's will or
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the applicable laws of descent and distribution, until the Company is satisfied
as to the authority of such person or persons.
(b) TAX WITHHOLDING, ETC. Each Participant will, no later than the
date as of which the value of an Award or of any Common Stock or other amounts
received hereunder first becomes includable in gross income for federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, all federal, state and local taxes required by
law to be withheld with respect to such income. The Company and its
subsidiaries will, 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.
The Committee may provide, in respect of any transfer of Common Stock
under an Award, that if and to the extent withholding of any federal, state or
local tax is required, the Participant may elect in such manner as the
Committee prescribes, to have the Company hold back from the transfer Common
Stock having a value calculated to satisfy such withholding obligation, or to
deliver to the Company previously owned shares of equal value. Notwithstanding
the foregoing, in the case of a Participant subject to the restrictions of
Section 16(b) of the Securities Exchange Act of 1934 no such election shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3(e) or any successor rule under such Act.
(c) CONTINUANCE OF EMPLOYMENT. For purposes of the Plan, employment
of a Participant will not be considered terminated (1) in the case of sick
leave or other bona fide leave of absence approved for purposes of the Plan by
the Committee, so long as the Participant's right to reemployment is guaranteed
either by statute or by contract, or (2) in the case of a transfer to the
employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which section
424(a) of the Code would apply.
(d) FAIR MARKET VALUE. For purposes of the Plan, in general, "fair
market value" of a share of Common Stock on any date means the closing price on
such date as reflected in the New York Stock Exchange Composite Index. If,
however, the Committee determines that a different meaning is in any
circumstance necessary in order to comply with applicable law, such different
meaning will apply in that circumstance.
(e) EMPLOYMENT RIGHTS. Neither the adoption of the Plan nor the
grant of Awards will confer upon any employee any right to continued employment
with the Company or any subsidiary or affect in any way the right of the
Company or subsidiary to terminate the employment of an employee at any time.
Except as specifically provided by the Committee in any particular case, the
loss of existing or potential profit in Awards granted under this Plan
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shall not constitute an element of damages in the event of termination of the
employment of an employee even if the termination is in violation of an
obligation of the Company to the employee by contract or otherwise.
13. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION.
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Neither adoption of the Plan nor the grant of Awards to a Participant
shall affect the Company's right to grant to such Participant awards that are
not subject to the Plan, to issue to such Participant Common Stock as a bonus
or otherwise, or to adopt other plans or arrangements under which Common Stock
may be issued to employees.
The Committee may at any time discontinue granting Awards under the
Plan. With the consent of the Participant, the Committee may at any time
cancel an existing Award in whole or in part and grant the Participant another
Award for such number of shares of Common Stock as the Committee specifies,
subject to Section 4(b). The Committee may at any time or times amend the Plan
or any outstanding Award for the purpose of satisfying the requirements of any
changes in applicable laws or regulations or for any other purpose which may at
the time be permitted by law; or may at any time terminate the Plan as to any
further grants of Awards, provided that (except to the extent expressly
required or permitted herein above) no such amendment shall, without the
approval of the stockholders of the Company, (a) increase the maximum number of
shares available for delivery under the Plan, (b) change the group of employees
eligible to receive Awards under the Plan, (c) reduce the price at which ISOs
may be granted, (d) extend the time within which Awards may be granted, or (e)
amend the provisions of this Section 13, and no such amendment shall adversely
affect the rights of any Participant (without his consent) under any Award
previously granted.
AS ADOPTED BY THE BOARD OF DIRECTORS: NOVEMBER 5, 1987
AS AMENDED AND RATIFIED BY THE BOARD OF DIRECTORS: DECEMBER 10, 1987
AS APPROVED BY THE STOCKHOLDERS: JANUARY 28, 1988
AS AMENDED AND RATIFIED BY THE BOARD OF DIRECTORS: JANUARY 31, 1989
AS AMENDED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
NOVEMBER 1, 1989
AS AMENDED BY THE BOARD OF DIRECTORS: NOVEMBER 17, 1994
AS APPROVED BY THE STOCKHOLDERS: JANUARY 26, 1995
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14
EXHIBIT A
A Change of Control will occur for purposes of this Plan if (i) any
individual, corporation, partnership, company or other entity (a "Person")
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of securities of the Company representing more than 30%
of the combined voting power of the Company's then-outstanding securities
(other than as a result of acquisitions of such securities from the Company),
(ii) there is a change of control of the Company of a kind which would be
required to be reported under Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the "Act") (or a similar
item in a similar schedule or form), whether or not the Company is then subject
to such reporting requirement, (iii) the Company is a party to, or the
stockholders approve, a merger consolidation, or other reorganization (other
than (a) a merger, consolidation or other reorganization which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent, either by remaining outstanding or by being converted
into vested securities of the surviving entity, more than 50% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger, consolidation, or other
reorganization, or (b) a merger, consolidation, or other reorganization
effected to implement a recapitalization of the Company, or similar transaction
in which no Person acquires more than 20% of the combined voting power of the
Company's then outstanding securities), a sale of all or substantially all
assets, or a plan of liquidation or (iv) individuals who, at the date hereof,
constitute the Board cease for any reason to constitute a majority thereof,
PROVIDED, HOWEVER, that any director who is not in office at the date hereof
but whose election by the Board or whose nomination for election by the
Company's shareholders was approved by a vote of at least a majority of the
directors then still in office who either were directors at the date hereof or
whose election or nomination for election was previously so approved (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Act) shall be deemed to have
been in office at the date hereof for purpose of this definition.
Notwithstanding the foregoing provisions of this Exhibit A, a "Change
of Control" will not be deemed to have occurred solely because of the
acquisition of securities of the Company (or any reporting requirement under
the Act relating thereto) by an employment benefit plan maintained by the
Company for its employees.
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