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Exhibit 10
PEOPLES HERITAGE FINANCIAL GROUP, INC.
1996 EQUITY INCENTIVE PLAN
(AS AMENDED AS OF MAY 26, 1998 AND/AS ADJUSTED TO
REFLECT A 2 FOR 1 SPLIT OF THE SHARES
EFFECTIVE MAY 18, 1998)
SECTION 1. PURPOSE. The purposes of the Peoples Heritage Financial Group, Inc.
1996 Equity Incentive Plan are to promote the interests of Peoples Heritage
Financial Group, Inc. and its stockholders by (i) attracting and retaining
exceptional executive personnel and other key employees of the Company and its
Affiliates; (ii) motivating such employees by means of performance-related
incentives to achieve long-range performance goals; and (iii) enabling such
employees to participate in the long-term growth and financial success of the
Company.
SECTION 2. DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or indirectly, is
controlled by the Company and (ii) any entity in which the Company has a
significant equity interest, in either case as determined by the Committee.
"Award" shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Award or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Change in Control" shall be deemed to have occurred if: (i) any
"person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company and any trustee or other fiduciary holding securities
under any employee benefit plan of the Company), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities; (ii) during
any period of two consecutive years (not including any period prior to the
adoption of the Plan), individuals who at the beginning of such period
constitute the Board of Directors, and any new director whose election by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board of Directors; (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately
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prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50% of
the combined voting power of the voting securities of the Company outstanding
immediately after such merger or consolidation; or (iv) the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets. If any of the events enumerated in clauses (i) through (iv)
occur, the Board shall determine the effective date of the Change in Control
resulting therefrom for purposes of the Plan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Committee" shall mean a committee of the Board designated by the Board
to administer the Plan and composed of not less than the minimum number of
persons from time to time required by Rule 16b-3, each of whom, to the extent
necessary to comply with Rule 16b-3 only, is a "non-employee director" within
the meaning of Rule 16b-3, as from time to time amended. Until otherwise
determined by the Board, the Human Resources Committee designated by the Board
shall be the Committee under the Plan.
"Company" shall mean Peoples Heritage Financial Group, Inc.
"Employee" shall mean an employee of the Company or of any Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean the fair market value of the property or
other item being valued, as determined by the Committee in its sole discretion,
provided that, unless otherwise determined by the Committee in order to satisfy
the requirements relating to Incentive Stock Options under applicable laws and
regulations, the "Fair Market Value" of a Share shall be (i) if the Shares are
listed or admitted to trading on any securities exchange or national market
system in the United States, the closing price, regular way, on such day on the
principal securities exchange or national market system in the United States on
which Shares are traded, (ii) if the Shares are not then listed or admitted to
trading on any such day, or if no sale takes place on such day, the average of
the closing bid and asked prices in the United States on such day, as reported
by a reputable quotation source designated by the Committee, and (iii) if the
Shares are not then listed or admitted to trading on any such securities
exchange or national market system and no such reported sale price or bid and
asked prices are available, the average of the reported high bid and low asked
prices in the United States on such day, as reported in The Wall Street Journal
(Eastern edition) or other newspaper designated by the Committee.
"Incentive Stock Option" shall mean a right to purchase Shares from the
Company that is granted under Section 6 of the Plan and that is intended to meet
the requirements of Section 422 of the Code or any successor provisions thereto.
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"Net After-Tax Amount" shall mean the net amount of compensation,
assuming for this purpose only that all vested Awards and other forms of
compensation subject to vesting upon a Change of Control are exercised upon such
Change in Control, to be received (or deemed to have been received) by such
Participant in connection with such Change of Control under any option agreement
and under any other plan, arrangement or contract of the Company to which such
Participant is a party, after giving effect to all income and excise taxes
applicable to such payments.
"Nonqualified Stock Option" shall mean a right to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is not intended
to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a Nonqualified Stock
Option.
"Other Stock-Based Award" shall mean any right granted under Section 10
of the Plan.
"Participant" shall mean any Employee selected by the Committee to
receive an Award under the Plan.
"Performance Award" shall mean any right granted under Section 9 of the
Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
"Plan" shall mean this Peoples Heritage Financial Group, Inc. 1996
Equity Incentive Plan.
"QDRO" shall mean a domestic relations order meeting such requirements
as the Committee shall determine, in its sole discretion.
"Restricted Stock Award" shall mean any Award granted under Section 8
of the Plan.
"Restricted Stock" shall mean any Share granted under Section 8 of the
Plan.
"Restricted Stock Unit" shall mean any unit granted under Section 8 of
the Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and interpreted by
the SEC under the Exchange Act, or any successor rule or regulation thereto as
in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the staff thereof.
"Shares" shall mean shares of the common stock, $.01 par value, of the
Company, or such other securities of the Company as may be designated by the
Committee from time to time.
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"Stock Appreciation Right" shall mean any right granted under Section 7
of the Plan.
SECTION 3. ADMINISTRATION.
(a) AUTHORITY OF COMMITTEE. The Plan shall be administered by the
Committee. Subject to the terms of the Plan and applicable law, and in addition
to other express powers and authorizations conferred on the Committee by the
Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to an
eligible Employee; (iii) determine the number of Shares to be covered by, or
with respect to which payments, rights or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent and under what circumstances Awards may be
settled or exercised in cash, Shares, other securities, other Awards or other
property, or canceled, forfeited or suspended; (vi) determine whether, to what
extent and under what circumstances cash, Shares, other securities, other
Awards, other property and other amounts payable with respect to an Award shall
be deferred either automatically or at the election of the holder thereof or of
the Committee; (vii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; (viii) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; and (ix) make any
other determination and take any other action that the Committee deems necessary
or desirable for the administration of the Plan.
(b) COMMITTEE DISCRETION BINDING. Unless otherwise expressly provided
in the Plan, all designations, determinations, interpretations and other
decisions under or with respect to the Plan or any Award shall be within the
sole discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons, including the Company, any Affiliate,
any Participant, any holder or beneficiary of any Award, any stockholder and any
Employee.
(c) DELEGATION. Subject to the terms of the Plan and applicable law,
the Committee may delegate to one or more officers of the Company or any
Affiliate, or to a committee of such officers, the authority, subject to such
terms and limitations as the Committee shall determine, to grant Awards to, or
to cancel, modify or waive rights with respect to, or to alter, discontinue,
suspend or terminate Awards held by, Employees who are not officers or directors
of the Company for purposes of Section 16 of the Exchange Act, or any successor
section thereto, or who are otherwise not subject to such Section.
(d) AUTHORITY OF BOARD. Notwithstanding anything to the contrary
contained in the Plan, the Plan also may be administered by the Board to the
extent permitted by Rule 16b-3, as amended from time to time. In the event of
such administration by the Board, all references to the Committee in the Plan
shall be deemed to refer to the Board and any officer or employee-director of
the Company or any Affiliate shall be eligible to be designated a Participant.
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SECTION 4. SHARES AVAILABLE FOR AWARDS.
(a) SHARES AVAILABLE. Subject to adjustment as provided in Section
4(b), the number of Shares with respect to which Awards may be granted under the
Plan shall be equal to 6,000,000. If, after the effective date of the Plan, any
Shares covered by an Award granted under the Plan, or to which such an Award
relates, are forfeited, or if such an Award is settled for cash or otherwise
terminates or is canceled without the delivery of Shares, then the Shares
covered by such Award, or to which such Award relates, or the number of Shares
otherwise counted against the aggregate number of Shares with respect to which
Awards may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again become Shares with respect to which
Awards may be granted. In the event that any Option or other Award granted
hereunder is exercised through the delivery of Shares or in the event that
withholding tax liabilities arising from such Award are satisfied by the
withholding of Shares by the Company, the number of Shares available for Awards
under the Plan shall be increased by the number of Shares so surrendered or
withheld. Notwithstanding the foregoing and subject to adjustment as provided in
Section 4(b), no Participant may receive Awards under the Plan in any calendar
year that relate to more than 300,000 Shares.
(b) ADJUSTMENTS. In the event that the Committee determines that any
dividend or other distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, issuance
of warrants or other rights to purchase Shares or other securities of the
Company, or other similar corporate transaction or event affects the Shares such
that an adjustment is determined by the Committee to be appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Committee shall, in such manner as
it may deem equitable, adjust any or all of (i) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
with respect to which Awards may be granted, (ii) the number of Shares or other
securities of the Company (or number and kind of other securities or property)
subject to outstanding Awards and (iii) the grant or exercise price with respect
to any Award, or, if deemed appropriate, make provision for a cash payment to
the holder of an outstanding Award; provided, in each case, that (A) with
respect to Awards of Incentive Stock Options no such adjustment shall be
authorized to the extent that such authority would cause the Plan to violate
Section 422(b)(1) of the Code, as from time to time amended, and (B) with
respect to any Award no such adjustment shall be authorized to the extent that
such authority would be inconsistent with the Plan's meeting the requirements of
Section 162(m) of the Code, as from time to time amended, or Rule 16b-3, as from
time to time amended.
(c) SOURCES OF SHARES DELIVERABLE UNDER AWARDS. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury Shares.
SECTION 5. ELIGIBILITY. Any Employee, including any officer or employee-director
of the Company or any Affiliate, who is not a member of the Committee, shall be
eligible to be designated a Participant.
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SECTION 6. STOCK OPTIONS.
(a) GRANT. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom Options
shall be granted, the number of Shares to be covered by each Option, the option
price therefor and the conditions and limitations applicable to the exercise of
the Option. The Committee shall have the authority to grant Incentive Stock
Options, or to grant Nonqualified Stock Options, or to grant both types of
options. In the case of Incentive Stock Options, the terms and conditions of
such grants shall be subject to and comply with such rules as may be prescribed
by Section 422 of the Code, as from time to time amended, and any regulations
implementing such statute.
(b) EXERCISE PRICE. The Committee in its sole discretion shall
establish the exercise price at the time each Option is granted, provided that
the per share price at which Shares may be purchased upon exercise of an Option
shall be no less than one hundred percent (100%) of the Fair Market Value of a
Share at the time such Option is granted.
(c) EXERCISE. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation any conditions relating to the application of
federal or state securities laws, as it may deem necessary or advisable.
(d) PAYMENT. No Shares shall be delivered pursuant to any exercise of
an Option until payment in full of the option price therefor is received by the
Company. Such payment may be made in cash, or its equivalent, or, if and to the
extent permitted by the Committee, by exchanging Shares owned by the optionee
(which are not the subject of any pledge or other security interest), or by a
combination of the foregoing, provided that the combined value of all cash and
cash equivalents and the Fair Market Value of any such Shares so tendered to the
Company as of the date of such tender is at least equal to such option price.
SECTION 7. STOCK APPRECIATION RIGHTS.
(a) GRANT. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom Stock
Appreciation Rights shall be granted, the number of Shares to be covered by each
Stock Appreciation Right, the grant price thereof and the conditions and
limitations applicable to the exercise thereof. Stock Appreciation Rights may be
granted in tandem with another Award, in addition to another Award, or
freestanding and unrelated to another Award. Stock Appreciation Rights granted
in tandem with or in addition to an Award may be granted either at the same time
as the Award or at a later time. Stock Appreciation Rights shall have a grant
price as determined by the Committee on the date of grant.
(b) EXERCISE AND PAYMENT. A Stock Appreciation Right shall entitle
the Participant to receive an amount equal to the excess of the Fair Market
Value of a Share on the date of exercise of
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the Stock Appreciation Right over the grant price thereof, provided that the
Committee may for administrative convenience determine that, with respect to any
Stock Appreciation Right that is not related to an Incentive Stock Option and
that can only be exercised for cash during limited periods of time in order to
satisfy the conditions of Rule 16b-3, the exercise of such Stock Appreciation
Right for cash during such limited period shall be deemed to occur for all
purposes hereunder on the day during such limited period on which the Fair
Market Value of the Shares is the highest. Any such determination by the
Committee may be changed by the Committee from time to time and may govern the
exercise of Stock Appreciation Rights granted prior to such determination as
well as Stock Appreciation Rights granted thereafter. The Committee shall
determine whether a Stock Appreciation Right shall be settled in cash, Shares or
a combination of cash and Shares.
(c) OTHER TERMS AND CONDITIONS. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine, at or after the
grant of a Stock Appreciation Right, the term, methods of exercise, methods and
form of settlement and any other terms and conditions of any Stock Appreciation
Right. Any such determination by the Committee may be changed by the Committee
from time to time and may govern the exercise of Stock Appreciation Rights
granted prior to such determination as well as Stock Appreciation Rights granted
thereafter. The Committee may impose such conditions or restrictions on the
exercise of any Stock Appreciation Right as it shall deem appropriate.
SECTION 8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS.
(a) GRANT. Subject to the provisions of the Plan, the Committee shall
have sole and complete authority to determine the Employees to whom Shares of
Restricted Stock and Restricted Stock Units shall be granted, the number of
Shares of Restricted Stock and/or the number of Restricted Stock Units to be
granted to each Participant, the duration of the period during which, and the
conditions under which, the Restricted Stock and Restricted Stock Units may be
forfeited to the Company and the other terms and conditions of such Awards.
Notwithstanding any other provision of the Plan to the contrary, Restricted
Stock and Restricted Stock Units shall have a minimum vesting period of three
years from the date of grant, except (i) as provided in Section 12 hereof and
(ii) in the Committee's sole discretion, in the event of the Participant's
retirement, permanent and total disability or death. The meaning of the terms
"retirement" and "permanent and total disability" for purposes of this Section
8(a) and the other provisions of the Plan shall be determined by the Committee.
(b) TRANSFER RESTRICTIONS. Shares of Restricted Stock and Restricted
Stock Units may not be sold, assigned, transferred, pledged or otherwise
encumbered, except, in the case of Restricted Stock, as provided in the Plan or
the applicable Award Agreements. Certificates issued in respect of Shares of
Restricted Stock shall be registered in the name of the Participant and
deposited by such Participant, together with a stock power endorsed in blank,
with the Company. Upon the lapse of the restrictions applicable to such Shares
of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
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(c) PAYMENT. Each Restricted Stock Unit shall have a value equal to
the Fair Market Value of a Share. Restricted Stock Units shall be paid in cash,
Shares, other securities or other property, as determined in the sole discretion
of the Committee, upon the lapse of the restrictions applicable thereto, or
otherwise in accordance with the applicable Award Agreement.
(d) DIVIDENDS AND DISTRIBUTIONS. Dividends and other distributions
paid on or in respect of any Shares of Restricted Stock may be paid directly to
the Participant, or may be reinvested in additional Shares of Restricted Stock
or in additional Restricted Stock Units, as determined by the Committee in its
sole discretion.
(e) VOTING OF RESTRICTED STOCK. Unless otherwise determined by the
Committee at the time of grant, an Employee to whom Shares of Restricted Stock
shall be granted shall be entitled to vote such Shares.
SECTION 9. PERFORMANCE AWARDS.
(a) GRANT. The Committee shall have sole and complete authority to
determine the Employees who shall receive a Performance Award, which shall
consist of a right that is (i) denominated in cash or Shares, (ii) valued, as
determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish and (iii) payable at such time and in such form as the Committee shall
determine. Notwithstanding any other provision of the Plan to the contrary, a
Performance Award shall have a minimum vesting period of one year from the date
of grant, except (i) as provided in Section 12 hereof and (ii) in the
Committee's sole discretion, in the event of the Participant's retirement,
permanent and total disability or death.
(b) TERMS AND CONDITIONS. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award.
(c) PAYMENT OF PERFORMANCE AWARDS. Performance Awards may be paid in
a lump sum or in installments following the close of the performance period or,
in accordance with procedures established by the Committee, on a deferred basis.
SECTION 10. OTHER STOCK-BASED AWARDS. The Committee shall have authority to
grant to eligible Employees an Other Stock-Based Award, which shall consist of
any right that is (i) not an Award described in Sections 6 through 9 above and
(ii) an Award of Shares or an Award denominated or payable in, valued in whole
or in part by reference to, or otherwise based on or related to, Shares
(including, without limitation, securities convertible into Shares), as deemed
by the Committee to be consistent with the purposes of the Plan; provided that
any such rights must comply, to the extent deemed desirable by the Committee,
with Rule 16b-3 and applicable law. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the terms and
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conditions of any such Other Stock-Based Award. Notwithstanding any other
provision of the Plan to the contrary, an Other Stock-Based Award which is not
granted in lieu of base salary or bonuses shall have a minimum vesting period of
three years from the date of grant, except (i) as provided in Section 12 hereof
and (ii) in the Committee's sole discretion, in the event of the Participant's
retirement, permanent and total disability or death.
SECTION 11. TERMINATION OR SUSPENSION OF EMPLOYMENT. The following provisions
shall apply in the event of the Participant's termination of employment unless
the Committee shall have provided otherwise, either at the time of the grant of
the Award or thereafter.
(a) NONQUALIFIED STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(i) TERMINATION OF EMPLOYMENT. If the Participant's employment with
the Company or its Affiliates is terminated for any reason other than
death, permanent and total disability or retirement, the Participant's
right to exercise any Nonqualified Stock Option or Stock Appreciation
Right shall terminate, and such Option or Stock Appreciation Right
shall expire, on the earlier of (A) the first anniversary of such
termination of employment or (B) the date such Option or Stock
Appreciation Right would have expired had it not been for the
termination of employment. The Participant shall have the right to
exercise such Option or Stock Appreciation Right prior to such
expiration to the extent it was exercisable at the date of such
termination of employment and shall not have been exercised.
(ii) DEATH, DISABILITY OR RETIREMENT. If the Participant's employment
with the Company or its Affiliates is terminated by death, permanent
and total disability or retirement, the Participant or his successor
(if employment is terminated by death) shall have the right to exercise
any Nonqualified Stock Option or Stock Appreciation Right to the extent
it was exercisable at the date of such termination of employment and
shall not have been exercised, but in no event shall such Option or
Stock Appreciation Right be exercisable later than the date the Option
or Stock Appreciation Right would have expired had it not been for the
termination of such employment.
(iii) ACCELERATION AND EXTENSION OF EXERCISABILITY. Notwithstanding the
foregoing, the Committee may, in its discretion, provide (A) that an
Option granted to a Participant may terminate at a date earlier than
that set forth above, including without limitation the date of
termination of employment, (B) that an Option granted to a Participant
may terminate at a date later than that set forth above, provided such
date shall not be beyond the date the Option would have expired had it
not been for the termination of the Participant's employment, and (C)
that an Option or Stock Appreciation Right may become immediately
exercisable when it finds that such acceleration would be in the best
interests of the Company.
(b) INCENTIVE STOCK OPTIONS. Except as otherwise determined by the
Committee at the time of grant, if the Participant's employment with the Company
is terminated for any reason, the
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Participant shall have the right to exercise any Incentive Stock Option and any
related Stock Appreciation Right during the 90 days after such termination of
employment to the extent it was exercisable at the date of such termination, but
in no event later than the date the option would have expired had it not been
for the termination of such employment. If the Participant does not exercise
such Option or related Stock Appreciation right to the full extent permitted by
the preceding sentence, the remaining exercisable portion of such Option
automatically will be deemed a Nonqualified Stock Option, and such Option and
any related Stock Appreciation Right will be exercisable during the period set
forth in Section 11(a) of the Plan, provided that in the event that employment
is terminated because of death or the Participant dies during such 90-day
period, the option will continue to be an Incentive Stock Option to the extent
provided by Section 421 or Section 422 of the Code, or any successor provisions,
and any regulations promulgated thereunder.
(c) RESTRICTED STOCK. Except as otherwise determined by the Committee
at the time of grant, upon termination of employment for any reason during the
restriction period, all shares of Restricted Stock still subject to restriction
shall be forfeited by the Participant and reacquired by the Company at the price
(if any) paid by the Participant for such Restricted Stock, provided that in the
event of a Participant's retirement, permanent and total disability or death, or
in cases of special circumstances, the Committee may, in its sole discretion,
when it finds that a waiver would be in the best interests of the Company, waive
in whole or in part any or all remaining restrictions with respect to such
participant's shares of Restricted Stock.
SECTION 12. CHANGE IN CONTROL. Notwithstanding any other provision of the Plan
to the contrary, upon a Change in Control all outstanding Awards shall vest,
become immediately exercisable or payable or have all restrictions lifted as may
apply to the type of Award; provided, however, that unless otherwise determined
by the Committee at the time of grant or thereafter, if it is determined that
the Net After-Tax Amount to be realized by any Participant, taking into account
the accelerated vesting provided for by this Section as well as all other
payments to be received by such Participant in connection with such Change in
Control, would be higher if Awards did not vest in accordance with this Section,
then and to such extent the Awards of such Participant shall not vest. The
determination of whether any such Award should not vest shall be made by a
nationally-recognized accounting firm selected by the Company, which shall be
instructed to consider that (i) Awards and other forms of compensation subject
to vesting upon a Change of Control shall be vested in the order in which they
were granted and within each grant in the order in which they would otherwise
have vested and (ii) unless and to the extent any other plan, arrangement or
contract of the Company pursuant to which any such payment is to be received
provides to the contrary, such other payment shall be deemed to have occurred
after any acceleration of Awards or other forms of compensation subject to
vesting upon a Change in Control.
SECTION 13. AMENDMENT AND TERMINATION.
(a) AMENDMENTS TO THE PLAN. The Board may amend, alter, suspend,
discontinue or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such
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approval is (i) necessary to comply with any tax or regulatory requirement,
including for these purposes any approval requirement that is a prerequisite for
exemptive relief from Section 16(b) of the Exchange Act, for which or with which
the Board deems it necessary or desirable to qualify or comply or (ii) otherwise
required by applicable law.
(b) AMENDMENTS TO AWARDS. The Committee may waive any conditions or
rights under, amend any terms of, or alter, suspend, discontinue, cancel or
terminate, any Award theretofore granted, prospectively or retroactively;
provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would adversely affect the
rights of any Participant or any holder or beneficiary of any Award theretofore
granted shall not to that extent be effective without the consent of the
affected Participant, holder or beneficiary. Notwithstanding any other provision
of the Plan to the contrary, the Committee may not amend more than 10% of
outstanding Options at any particular time to reduce the per share exercise
price thereof and, to the extent permitted by the foregoing, may not amend
outstanding Options to reduce the per share exercise price thereof to lower than
85% of the Fair Market Value of a Share on the date of repricing.
(c) ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee is hereby authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 4(b) hereof) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or of changes in
applicable laws, regulations or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan; provided that no such adjustment shall be authorized to the
extent that such authority would be inconsistent with the Plan's meeting the
requirements of Section 162(m) of the Code, as from time to time amended, or
Rule 16b-3, as from time to time amended.
SECTION 14. GENERAL PROVISIONS.
(a) DIVIDEND EQUIVALENTS. In the sole and complete discretion of the
Committee, an Award, whether made as an Other Stock-Based Award under Section 10
or as an Award granted pursuant to Sections 6 through 9 hereof, may provide the
Participant with dividends or dividend equivalents, payable in cash, Shares,
other securities or other property on a current or deferred basis.
(b) NONTRANSFERABILITY. No Award shall be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by a Participant,
except by will or the laws of descent and distribution or pursuant to a QDRO,
provided, however, that an Award may be transferable, to the extent determined
by the Committee and set forth in the applicable Award Agreement, (i) if such
Award Agreement provisions do not disqualify such Award for exemption under Rule
16b-3, as from time to time amended, (ii) if such Award is not intended to
qualify for exemption under such rule or (iii) with respect to Awards which are
Incentive Stock Options, if such Award Agreement provisions do not prevent the
Incentive Stock Options from qualifying as such under Section 422 of the Code,
as from time to time amended.
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(c) NO RIGHTS TO AWARDS. No Employee, Participant or other Person
shall have any claim to be granted any Award, and there is no obligation for
uniformity of treatment of Employees, Participants or holders or beneficiaries
of Awards. The terms and conditions of Awards need not be the same with respect
to each recipient.
(d) SHARE CERTIFICATES. All certificates for Shares or other
securities of the Company of any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the SEC, any stock exchange or
national market quotation system upon which such Shares or other securities are
then listed or quoted, respectively, and any applicable Federal or state laws,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(e) WITHHOLDING. A participant may be required to pay to the Company
or any Affiliate and the Company or any Affiliate shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan or from any compensation or other amount
owing to a Participant the amount (in cash, Shares, other securities, other
Awards or other property) of any applicable withholding taxes in respect of any
Award, its exercise or any payment or transfer under an Award or under the Plan
and to take such other action as may be necessary in the opinion of the Company
to satisfy all obligations for the payment of such taxes. The Committee may
provide for additional cash payments to holders of Awards to defray or offset
any tax arising from the grant, vesting, exercise or payments of any Award.
(f) AWARD AGREEMENTS. Each Award hereunder shall be evidenced by an
Award Agreement that shall be delivered to the Participant and shall specify the
terms and conditions of the Award and any rules applicable thereto.
(g) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Plan shall prevent the Company or any Affiliate from adopting or continuing
in effect other compensation arrangements, which may, but need not, provide for
the grant of options, restricted stock, Shares and other types of Awards
provided for hereunder (subject to stockholder approval if such approval is
required), and such arrangements may be either generally applicable or
applicable only in specific cases.
(h) NO RIGHT TO EMPLOYMENT. Neither the Plan nor the grant of any
Awards hereunder nor any action taken by the Committee or the Board in
connection with the Plan shall create any right on the part of any Employee to
continue in the employ of the Company or any Affiliate.
(i) NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award and the Plan, no Participant or holder or beneficiary of any
Award shall have any rights as a stockholder with respect to any Shares to be
distributed under the Plan until he or she has become the holder of such Shares.
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(j) GOVERNING LAW. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan and any Award Agreement shall
be determined in accordance with the laws of the State of Maine.
(k) SEVERABILITY. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction
or as to any Person or Award, or would disqualify the Plan or any Award under
any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to the applicable laws, or if it cannot be construed
or deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award and the remainder of the Plan and any
such Award shall remain in full force and effect.
(l) OTHER LAWS. The Committee may refuse to issue or transfer any
Shares or other consideration under an Award if, acting in its sole discretion,
it determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation or entitle the
Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws and any other laws to which such offer, if made, would
be subject.
(m) NO TRUST OR FUND CREATED. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(n) NO FRACTIONAL SHARES. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred in
lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
(o) HEADINGS. Headings are given to the Sections and subsections of
the Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
(p) SUCCESSORS AND ASSIGNS. The Plan and any Award Agreement shall be
binding upon the successors and assigns of the Company and upon each Participant
and such Participant's heirs, executors, administrators, personal
representatives, permitted assignees and successors in interest.
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SECTION 15. EFFECTIVE DATE; TERM OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall be effective as of February 13,
1996, subject to approval by the stockholders of the Company within one year
thereafter. The amendment to Section 4(a) of the Plan adopted by the Board of
Directors of the Company on March 3, 1998 shall be effective as of such date,
subject to approval by the stockholders of the Company within one year
thereafter. The amendments to Plan adopted by the Committee on May 26, 1998
shall be effective as of such date.
(b) TERM OF THE PLAN. Unless sooner terminated, the Plan shall remain
in effect for a period of ten years ending on the tenth anniversary of the
Effective Date. Termination of the Plan shall not affect any Awards previously
granted and such Awards shall remain valid and in effect until they have been
fully exercised or earned, are surrendered or by their terms expire or are
forfeited.
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