EXHIBIT 4.1
AMENDED
RTW, INC.
1994 STOCK PLAN
SECTION CONTENTS PAGE
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1. General Purpose of Plan; Definitions................................................................1
2. Administration......................................................................................3
3. Stock Subject to Plan...............................................................................4
4. Eligibility.........................................................................................4
5. Stock Options.......................................................................................5
6. Stock Appreciation Rights...........................................................................8
7. Restricted Stock....................................................................................9
8. Deferred Stock Awards..............................................................................11
9. Transfer, Leave of Absence, etc....................................................................12
10. Amendments and Termination.........................................................................12
11. Unfunded Status of Plan............................................................................13
12. General Provisions.................................................................................13
13. Effective Date of Plan.............................................................................14
AMENDED
RTW, INC.
1994 STOCK PLAN
SECTION 1. General Purpose of Plan; Definitions.
The name of this plan is the Amended RTW, Inc. 1994 Stock Plan (the
"Plan"). The purpose of the Plan is to enable RTW, Inc. (the "Company") and its
Subsidiaries to retain and attract executives and other key employees, directors
and consultants who contribute to the Company's success by their ability,
ingenuity and industry, and to enable such individuals to participate in the
long-term success and growth of the Company by giving them a proprietary
interest in the Company.
For purposes of the Plan, the following terms shall be defined as set forth
below:
a. "Board" means the Board of Directors of the Company as it may be
comprised from time to time.
b. "Cause" means a felony conviction of a participant or the failure
of a participant to contest prosecution for a felony, willful
misconduct, dishonesty or intentional violation of a statute, rule
or regulation, any of which, in the judgment of the Company, is
harmful to the business or reputation of the Company.
c. "Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor statute.
d. "Committee" means the Committee referred to in Section 2 of the
Plan.
e. "Consultant" means any person performing services for the Company
or any Parent Corporation or Subsidiary of the Company and who is
not an employee of the Company or any Parent Corporation or
Subsidiary of the Company.
f. "Company" means RTW, Inc., a corporation organized under the laws
of the State of Minnesota (or any successor corporation).
g. "Deferred Stock" means an award made pursuant to Section 8 below
of the right to receive stock at the end of a specified deferral
period.
h. "Disability" means permanent and total disability as determined by
the Committee.
i. "Early Retirement" means retirement, with consent of the Committee
at the time of retirement, from active employment with the Company
and any Subsidiary or Parent Corporation of the Company.
j. "Fair Market Value" of Stock on any given date shall be determined
by the Committee as follows: (a) if the Stock is listed for
trading on one or more national securities exchanges, or is traded
on the Nasdaq Stock Market, the last reported sale price on the
principal such exchange or the Nasdaq Stock Market on the date in
question, or if such Stock shall not have
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been traded on such principal exchange on such date, the last
reported sales price on such principal exchange or the Nasdaq
Stock Market on the first day prior thereto on which such Stock
was so traded; or (b) if the Stock is not listed for trading on a
national securities exchange or the Nasdaq Stock Market, but is
traded in the over-the-counter market, including the Nasdaq
System, closing bid price for such Stock on the date in question,
or if there is no such bid price for such Stock on such date, the
closing bid price on the first day prior thereto on which such
price existed; or (c) if neither (a) or (b) is applicable, by any
means fair and reasonable by the Committee, which determination
shall be final and binding on all parties.
k. "Incentive Stock Option" means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of
Section 422 of the Code.
l. "Non-Employee Director" means a "Non-Employee Director" within the
meaning of Rule 16b-3(b)(3) under the Securities Exchange Act of
1934.
m. "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option, and is intended to be and is designated as
a "Non-Qualified Stock Option."
n. "Normal Retirement" means retirement from active employment with
the Company and any Subsidiary or Parent Corporation of the
Company on or after age 60.
o. "Outside Director" means a Director who: (a) is not a current
employee of the Company or any member of an affiliated group which
includes the Company; (b) is not a former employee of the Company
who receives compensation for prior services (other than benefits
under a tax-qualified retirement plan) during the taxable year;
(c) has not been an officer of the Company; (d) does not receive
remuneration from the Company, either directly or indirectly, in
any capacity other than as a director, except as otherwise
permitted under Code Section 162(m) and regulations thereunder.
For this purpose, remuneration includes any payment in exchange
for good or services. This definition shall be further governed by
the provisions of Code Section 162(m) and regulations promulgated
thereunder.
p. "Parent Corporation" means any corporation (other than the
Company) in an unbroken chain of corporations ending with the
Company if each of the corporations (other than the Company) owns
stock possessing 50% or more of the total combined voting power of
all classes of stock in one of the other corporations in the
chain.
q. "Restricted Stock" means an award of shares of Stock that are
subject to restrictions under Section 7 below.
r. "Retirement" means Normal Retirement or Early Retirement.
s. "Stock" means the Common Stock of the Company.
t. "Stock Appreciation Right" means the right pursuant to an award
granted under Section 6 below to surrender to the Company all or a
portion of a Stock Option in exchange for an amount equal to the
difference between (i) Fair Market Value, as of the date such
Stock
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Option or such portion thereof is surrendered, of the shares of
Stock covered by such Stock Option or such portion thereof, and
(ii) the aggregate exercise price of such Stock Option or such
portion thereof.
u. "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5 below.
v. "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each
of the corporations (other than the last corporation in the
unbroken chain) owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other
corporations in the chain.
SECTION 2. Administration.
The Plan shall be administered by the Board of Directors or by a Committee
appointed by the Board of Directors, consisting of not less than two Directors,
all of whom shall be Outside Directors and Non-Employee Directors, and who shall
serve at the pleasure of the Board. Any or all of the functions of the Committee
specified in the Plan may be exercised by the Board, unless the Plan
specifically states otherwise.
The Committee shall have the power and authority to grant to eligible
employees, members of the Board of Directors, or Consultants, pursuant to the
terms of the Plan: (i) Stock Options, (ii) Stock Appreciation Rights, (iii)
Restricted Stock, or (iv) Deferred Stock awards.
In particular, the Committee shall have the authority:
(i) to select the officers and other key employees of the Company and
its Subsidiaries and other eligible persons to whom Stock Options,
Stock Appreciation Rights, Restricted Stock and/or Deferred Stock
awards may from time to time be granted hereunder;
(ii) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted
Stock and/or Deferred Stock awards, or a combination of the
foregoing, are to be granted hereunder;
(iii) to determine the number of shares to be covered by each such award
granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder (including, but
not limited to, any restriction on any Stock Option or other award
and/or the shares of Stock relating thereto); and
(v) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under
this Plan shall be deferred either automatically or at the
election of the participant.
The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall,
from time to time, deem advisable; to interpret the terms and provisions of the
Plan and any award issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
delegate to executive officers of
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the Company the authority to exercise the powers specified in (i), (ii), (iii),
(iv), and (v) above with respect to persons who are not executive officers of
the Company.
All decisions made by the Committee pursuant to the provisions of the Plan
shall be final and binding on all persons, including the Company and Plan
participants.
SECTION 3. Stock Subject to Plan.
The total number of shares of Stock reserved and available for distribution
under the Plan shall be 2,000,000 shares.(1) Such shares may consist, in whole
or in part, of authorized and unissued shares.
Subject to paragraph (b)(iv) of Section 6 below, if any shares that have
been optioned cease to be subject to Stock Options, or if any shares subject to
any Restricted Stock or Deferred Stock award granted hereunder are forfeited or
such award otherwise terminates without a payment being made to the participant,
such shares shall again be available for distribution in connection with future
awards under the Plan.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, other change in corporate structure affecting
the Stock, or spin-off or other distribution of assets to shareholders, such
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan, in the number and option price of shares
subject to outstanding options granted under the Plan, and in the number of
shares subject to Restricted Stock or Deferred Stock awards granted under the
Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number. Such adjusted option price shall also be used to determine
the amount payable by the Company upon the exercise of any Stock Appreciation
Right associated with any Option.
SECTION 4. Eligibility.
Officers, other key employees of the Company and Subsidiaries, Directors
and Consultants who are responsible for or contribute to the management, growth
and/or profitability of the business of the
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(1)When adopted, the Plan reserved 50,000 shares. The Company effected
a 5-for-1 stock split on February 2, 1995 and a subsequent 3-for-2 stock split
on May 17, 1996, resulting in 375,000 shares being reserved. On January 23,
1997, the Board of Directors increased the number of shares reserved to
1,500,000 shares. This amendment was approved by the share- holders on May 15,
1997. On February 2, 1999, the Board of Directors increased the number of shares
reserved to 2,000,000. This amendment was approved by the shareholders on May
27, 1999.
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Company and its Subsidiaries are eligible to be granted Stock Options, Stock
Appreciation Rights, Restricted Stock or Deferred Stock awards under the Plan.
The optionees and participants under the Plan shall be selected from time to
time by the Committee, in its sole discretion, from among those eligible, and
the Committee shall determine, in its sole discretion, the number of shares
covered by each award.
Notwithstanding the foregoing, no person may, during any fiscal year of the
Company, receive grants of Stock Options and Stock Appreciation Rights under
this Plan which, in the aggregate, exceed 500,000 shares.
SECTION 5. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
The Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. No Incentive Stock Options
shall be granted under the Plan after June 12, 2004.
The Committee shall have the authority to grant any optionee Incentive
Stock Options, Non-Qualified Stock Options, or both types of options (in each
case with or without Stock Appreciation Rights). To the extent that any option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option.
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 under the Plan be so exercised, so
as to disqualify either the Plan or any Incentive Stock Option under Section 422
of the Code. The preceding sentence shall not preclude any modification or
amendment to an outstanding Incentive Stock Option, whether or not such
modification or amendment results in disqualification of such Option as an
Incentive Stock Option, provided the optionee consents in writing to the
modification or amendment.
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. In no
event shall the option price per share of Stock purchasable under a
Non-Qualified Stock Option be less than 85% of the Fair Market Value of the
Stock on the date of the grant of the option or, in the case of an Incentive
Stock Option, less than 100% of such Fair Market Value. 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 Parent Corporation or Subsidiary and an Incentive
Stock Option is granted to such employee, the option price shall be no less than
110% of the Fair Market Value of the Stock on the date the option is granted.
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(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 ten
years 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
Parent Corporation or Subsidiary 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 time or
times as determined by the Committee at or after grant. If the Committee
provides, in its discretion, that any option is exercisable only in
installments, the Committee may waive such installment exercise provisions at
any time. Notwithstanding anything contained in the Plan to the contrary, the
Committee may, in its discretion, extend or vary the term of any Stock Option or
any installment thereof, whether or not the optionee is then employed by the
Company, if such action is deemed to be in the best interests of the Company.
Notwithstanding anything contained in the Plan to the contrary, in the event of
the sale by the Company of substantially all of its assets and the consequent
discontinuance of its business, or in the event of a merger, exchange,
consolidation or liquidation of the Company, the Board shall, in its sole
discretion, in connection with the Board's adoption of the plan for sale,
merger, exchange, consolidation or liquidation, provide for one or more of the
following: (i) the acceleration of the exercisability of any or all outstanding
Stock Options; (ii) the complete termination of this Plan and cancellation of
outstanding Stock Options not exercised prior to a date specified by the Board
(which date shall give optionees a reasonable period of time in which to
exercise vested options prior to the effectiveness of such sale, merger,
exchange, consolidation or liquidation); and (iii) the continuance of the Plan
with respect to the exercise of options which were outstanding as of the date of
adoption by the Board of such plan for sale, merger, exchange, consolidation or
liquidation and provide to optionees holding such options the right to exercise
their respective options as to an equivalent number of shares of stock of the
corporation succeeding the Company by reason of such sale, merger, exchange,
consolidation or liquidation. The grant of an option pursuant to the Plan shall
not limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate, sell
or transfer all or any part of its business or assets.
(d) Method of Exercise. Stock Options may be exercised in whole or in part
at any time during the option period 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 check, or by any
other form of legal consideration deemed sufficient by the Committee and
consistent with the Plan's purpose and applicable law, including promissory
notes or a properly executed exercise notice together with irrevocable
instructions to a broker acceptable to the Company to promptly deliver to the
Company the amount of sale or loan proceeds to pay the exercise price. As
determined by the Committee at the time of grant or exercise, in its sole
discretion, payment in full or in part may also be made in the form of Stock
already owned by the optionee (which have been owned for more than six months on
the date of surrender) or, in the case of the exercise of a Non-Qualified Stock
Option, by delivery of Restricted Stock or Deferred Stock subject to an award
hereunder (based, in each case, on the Fair Market Value of the Stock on the
date the option is exercised, as determined by the Committee), provided,
however, that, in the case of an Incentive Stock Option, the right to make a
payment in the form of already owned shares may be authorized only at the time
the option is granted, and provided further that in the event payment is made in
the form of shares of Restricted Stock or a Deferred Stock award, the optionee
will receive a portion of the option shares in the form of, and in an amount
equal to, the
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Restricted Stock or Deferred Stock award tendered as payment by the optionee. If
the terms of an option so permit, an optionee may elect to pay all or part of
the option exercise price by having the Company withhold from the shares of
Stock that would otherwise be issued upon exercise that number of shares of
Stock having a Fair Market Value equal to the aggregate option exercise price
for the shares with respect to which such election is made. No shares of Stock
shall be issued until full payment therefor has been made. An optionee shall
generally have the rights to dividends and other rights of a shareholder with
respect to shares subject to the option when the optionee has given written
notice of exercise, has paid in full for such shares, and, if requested, has
given the representation described in paragraph (a) of Section 12.
(e) 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.
(f) Termination by Death. If an optionee's employment by the Company and
any Subsidiary or Parent Corporation terminates by reason of death, the Stock
Option may thereafter be immediately exercised, to the extent then exercisable,
by the legal representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of three years from the date of
such death or until the expiration of the stated term of the option, whichever
period is shorter.
(g) Termination by Reason of Disability. If an optionee's employment by the
Company and any Subsidiary or Parent Corporation terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be exercised,
to the extent it was exercisable at the time of termination due to Disability,
but may not be exercised after one year from the date of such termination of
employment or the expiration of the stated term of the option, whichever period
is the shorter. In the event of termination of employment by reason of
Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, the
option will thereafter be treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. If an optionee's employment by the
Company and any Subsidiary or Parent Corporation terminates by reason of
Retirement, any Stock Option held by such optionee may thereafter be exercised
to the extent it was exercisable at the time of such Retirement, but may not be
exercised after one year from the date of such termination of employment or the
expiration of the stated term of the option, whichever period is the shorter. In
the event of termination of employment by reason of Retirement, if an Incentive
Stock Option is exercised after the expiration of the exercise periods that
apply for purposes of Section 422 of the Code, the option will thereafter be
treated as a Non-Qualified Stock Option.
(i) Other Termination. Unless otherwise determined by the Committee, if an
optionee's employment by the Company and any Subsidiary or Parent Corporation
terminates for any reason other than death, Disability or Retirement, the Stock
Option shall thereupon terminate, except that, if the optionee is involuntarily
terminated without Cause by the Company and any Subsidiary or Parent
Corporation, the option may be exercised to the extent it was exercisable at
such termination for the lesser of three months or the balance of the option's
term.
(j) Annual Limit on Incentive Stock Options. The aggregate Fair Market
Value (determined as of the time the Stock Option is granted) of the Common
Stock with respect to which an Incentive Stock
7
Option under this Plan or any other plan of the Company and any Subsidiary or
Parent Corporation is exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000.
(k) Directors Who Are Not Employees. Effective January 1, 2001, each year
on the date of the annual meeting of shareholders, each person who is not an
employee of the Company, any Parent Corporation or Subsidiary and is serving as
a member of the Board of Directors of the Company immediately following such
annual meeting, will automatically, without any Committee action, be granted a
Stock Option to purchase 5,000 shares of the Company's Stock at an option price
per share equal to 100% of the Fair Market Value of a share of Stock on such
date. All such Stock Options shall be designated as Non-Qualified Stock Options
and shall be subject to the same terms and provisions as are then in effect with
respect to the grant of Non-Qualified Stock Options to employees of the Company,
except that (i) the term of each such Stock Option shall be ten years; and (ii)
the Stock Option shall immediately become exercisable in full at the time of
grant. Upon termination of a person's service as a Director of the Company, such
Director will be allowed to exercise such Stock Option for a period of one year
after the date on which such person ceased to be a Director, after which date
the Stock Option, if not exercised, shall terminate. The Committee may elect to
grant a similar Non-Qualified Stock Option, consisting of such number of shares
as the Committee deems appropriate under the circumstances, to any person who is
elected to the Board of Directors between January 1, 2001 and the annual meeting
of shareholders held in 2001 or between any other annual meetings of
shareholders. Subject to the foregoing, all provisions of this Plan not
inconsistent with the foregoing shall apply to Stock Options granted pursuant to
this Section 5(k).
SECTION 6. Stock Appreciation Rights.
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of the grant of the option.
A Stock Appreciation Right or applicable portion thereof granted with
respect to 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.
A Stock Appreciation Right may be exercised by an optionee, in accordance
with paragraph (b) of this Section 6, by surrendering the applicable portion of
the related Stock Option. Upon such exercise and surrender, the optionee shall
be entitled to receive an amount determined in the manner prescribed in
paragraph (b) of this Section 6. Stock Options which have been so surrendered,
in whole or in part, shall no longer be exercisable to the extent the related
Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions, not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:
8
(i) Stock Appreciation Rights shall be exercisable only at such
time or times and to the extent that the Stock Options to which they relate
shall be exercisable in accordance with the provisions of Section 5 and
this Section 6 of the Plan.
(ii) Upon the exercise of a Stock Appreciation Right, an optionee
shall be entitled to receive up to, but not more than, an amount in cash or
shares of Stock equal in value to the excess of the Fair Market Value of
one share of Stock over the option price per share specified in the related
option multiplied by the number of shares in respect of which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable only when
and to the extent that the underlying Stock Option would be transferable
under Section 5 of the Plan.
(iv) Upon the exercise of a Stock Appreciation Right, the Stock
Option or part thereof to which such Stock Appreciation Right is related
shall be deemed to have been exercised for the purpose of the limitation
set forth in Section 3 of the Plan on the number of shares of Stock to be
issued under the Plan, but only to the extent of the number of shares
issued or issuable under the Stock Appreciation Right at the time of
exercise based on the value of the Stock Appreciation Right at such time.
(v) A Stock Appreciation Right granted in connection with an
Incentive Stock Option may be exercised only if and when the market price
of the Stock subject to the Incentive Stock Option exceeds the exercise
price of such Option.
SECTION 7. Restricted Stock.
(a) Administration. Shares of Restricted Stock may be issued either alone
or in addition to other awards granted under the Plan. The Committee shall
determine the officers, key employees, members of the Board of Directors and
Consultants of the Company and Subsidiaries to whom, and the time or times at
which, grants of Restricted Stock will be made, the number of shares to be
awarded, the time or times within which such awards may be subject to
forfeiture, and all other conditions of the awards. The Committee may also
condition the grant of Restricted Stock upon the attainment of specified
performance goals. The provisions of Restricted Stock awards need not be the
same with respect to each recipient.
(b) Awards and Certificates. The prospective recipient of an award of
shares of Restricted Stock shall not have any rights with respect to such award,
unless and until such recipient has executed an agreement evidencing the award
and has delivered a fully executed copy thereof to the Company, and has
otherwise complied with the then applicable terms and conditions.
(i) Each participant shall be issued a stock certificate in
respect of shares of Restricted Stock awarded under the Plan. Such
certificate shall be registered in the name of the participant, and shall
bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of the Amended RTW, Inc. 1994 Stock Plan
and an Agreement entered into between the
9
registered owner and RTW, Inc. Copies of such Plan and Agreement
are on file in the offices of RTW, Inc., 8500 Normandale Lake
Boulevard, Minneapolis, MN 55437."
(ii) The Committee shall require that the stock certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock award, the participant shall have delivered a stock power,
endorsed in blank, relating to the Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock awarded
pursuant to the Plan shall be subject to the following restrictions and
conditions:
(i) Subject to the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with the date of
such award (the "Restriction Period"), the participant shall not be
permitted to sell, transfer, pledge or assign shares of Restricted Stock
awarded under the Plan. In no event shall the Restriction Period be less
than one (1) year. Within these limits, the Committee may provide for the
lapse of such restrictions in installments where deemed appropriate.
(ii) Except as provided in paragraph (c)(i) of this Section 7, the
participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a shareholder of the Company, including the right to vote
the shares and the right to receive any cash dividends. The Committee, in
its sole discretion, may permit or require the payment of cash dividends to
be deferred and, if the Committee so determines, reinvested in additional
shares of Restricted Stock (to the extent shares are available under
Section 3 and subject to paragraph (f) of Section 12). Certificates for
shares of unrestricted Stock shall be delivered to the grantee promptly
after, and only after, the period of forfeiture shall have expired without
forfeiture in respect of such shares of Restricted Stock.
(iii) Subject to the provisions of the award agreement and
paragraph (c)(iv) of this Section 7, upon termination of employment for any
reason during the Restriction Period, all shares still subject to
restriction shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for Cause),
including death, Disability or Retirement, or in the event of an
unforeseeable emergency of a participant still in service, the Committee
may, in its sole discretion, when it finds that a waiver would be in the
best interest of the Company, waive in whole or in part any or all
remaining restrictions with respect to such participant's shares of
Restricted Stock.
(v) Notwithstanding the foregoing, in the event of the sale by the
Company of substantially all of its assets and the consequent
discontinuance of its business, or in the event of a merger, exchange,
consolidation or liquidation of the Company, the Board shall, in its sole
discretion, in connection with the Board's adoption of the plan for sale,
merger, exchange, consolidation or liquidation, provide for one or more of
the following with respect to Restricted Stock Awards that are, on such
date, still subject to a Restriction Period: (i) the removal of the
restrictions on any or all outstanding Restricted Stock Awards; (ii) the
complete termination of this Plan and forfeiture of outstanding Restricted
Stock Awards prior to a date specified by the Board; and (iii) the
continuance of the Plan with respect to the Restricted Stock Award which
were outstanding as of the date of adoption by the Board of such plan for
sale, merger, exchange, consolidation or liquidation and
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provide to participants holding Restricted Stock Awards the right to an
equivalent number of restricted shares of stock of the corporation
succeeding the Company by reason of such sale, merger, exchange,
consolidation or liquidation. The grant of a Restricted Stock Award
pursuant to the Plan shall not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure or to merge, exchange or consolidate
or to dissolve, liquidate, sell or transfer all or any part of its business
or assets.
SECTION 8. Deferred Stock Awards.
(a) Administration. Deferred Stock may be awarded either alone or in
addition to other awards granted under the Plan. The Committee shall determine
the officers, key employees, members of the Board of Directors and Consultants
of the Company and Subsidiaries to whom and the time or times at which Deferred
Stock shall be awarded, the number of Shares of Deferred Stock to be awarded to
any participant or group of participants, the duration of the period (the
"Deferral Period") during which, and the conditions under which, receipt of the
Stock will be deferred, and the terms and conditions of the award in addition to
those contained in paragraph (b) of this Section 8. The Committee may also
condition the grant of Deferred Stock upon the attainment of specified
performance goals. The provisions of Deferred Stock awards need not be the same
with respect to each recipient.
(b) Terms and Conditions.
(i) Subject to the provisions of this Plan and the award
agreement, Deferred Stock awards may not be sold, assigned, transferred,
pledged or otherwise encumbered during the Deferral Period. In no event
shall the Deferral Period be less than one (1) year. At the expiration of
the Deferral Period (or Elective Deferral Period, where applicable), share
certificates shall be delivered to the participant, or his legal
representative, in a number equal to the shares covered by the Deferred
Stock award.
(ii) Amounts equal to any dividends declared during the Deferral
Period with respect to the number of shares covered by a Deferred Stock
award will be paid to the participant currently or deferred and deemed to
be reinvested in additional Deferred Stock or otherwise reinvested, all as
determined at the time of the award by the Committee, in its sole
discretion.
(iii) Subject to the provisions of the award agreement and
paragraph (b)(iv) of this Section 8, upon termination of employment for any
reason during the Deferral Period for a given award, the Deferred Stock in
question shall be forfeited by the participant.
(iv) In the event of special hardship circumstances of a
participant whose employment is terminated (other than for Cause) including
death, Disability or Retirement, or in the event of an unforeseeable
emergency of a participant still in service, the Committee may, in its sole
discretion, when it finds that a waiver would be in the best interest of
the Company, waive in whole or in part any or all of the remaining deferral
limitations imposed hereunder with respect to any or all of the
participant's Deferred Stock.
(v) A participant may elect to further defer receipt of the award
for a specified period or until a specified event (the "Elective Deferral
Period"), subject in each case to the Committee's approval and to such
terms as are determined by the Committee, all in its sole discretion.
Subject to any
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exceptions adopted by the Committee, such election must generally be made
prior to completion of one half of the Deferral Period for a Deferred Stock
award (or for an installment of such an award).
(vi) Each award shall be confirmed by, and subject to the terms
of, a Deferred Stock agreement executed by the Company and the participant.
SECTION 9. Transfer, Leave of Absence, etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer of an employee from the Company to a Parent Corporation or
Subsidiary, or from a Parent Corporation or Subsidiary to the Company, or from
one Subsidiary to another;
(b) a leave of absence, approved in writing by the Committee, for military
service or sickness, or for any other purpose approved by the Company if the
period of such leave does not exceed ninety (90) days (or such longer period as
the Committee may approve, in its sole discretion); and
(c) a leave of absence in excess of ninety (90) days, approved in writing
by the Committee, but only if the employee's right to reemployment is guaranteed
either by a statute or by contract, and provided that, in the case of any leave
of absence, the employee returns to work within 30 days after the end of such
leave.
SECTION 10. Amendments and Termination.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration, or discontinuation shall be made (i) which would impair the rights
of an optionee or participant under a Stock Option, Restricted Stock or other
Stock-based award theretofore granted, without the optionee's or participant's
consent, or (ii) which without the approval of the stockholders of the Company
would cause the Plan to no longer comply with Rule 16b-3 under the Securities
Exchange Act of 1934, Section 422 of the Code or any other regulatory
requirements.
The Committee may amend the terms of any award or option theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any holder without his or her consent except to the extent authorized
under the Plan. The Committee may also substitute new Stock Options for
previously granted options, including previously granted options having higher
option prices.
SECTION 11. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained herein shall give any
such participant or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver Stock or payments in lieu of or with respect to awards
hereunder, provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.
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SECTION 12. General Provisions.
(a) The Committee may require each person purchasing shares pursuant to a
Stock Option under the Plan to represent to and agree with the Company in
writing that the optionee is acquiring the shares without a view to distribution
thereof. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.
All certificates for shares of Stock delivered under the Plan pursuant to
any Restricted Stock, Deferred Stock or other Stock-based awards shall be
subject to such stock-transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations, and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Stock is
then listed, and any applicable Federal or state securities laws, and the
Committee may cause a legend or legends to be put on any such certificates to
make appropriate reference to such restrictions.
(b) Subject to paragraph (d) below, recipients of Restricted Stock,
Deferred Stock and other Stock-based awards under the Plan (other than Stock
Options) are not required to make any payment or provide consideration other
than the rendering of services.
(c) 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 shall not confer upon any employee of the Company or any Subsidiary
any right to continued employment with the Company or a Subsidiary, as the case
may be, nor shall it interfere in any way with the right of the Company or a
Subsidiary to terminate the employment of any of its employees at any time.
(d) Each participant shall, no later than the date as of which any part of
the value of an award first becomes includible as compensation 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 the award. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements and the Company and 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. With respect to
any award under the Plan, if the terms of such award so permit, a participant
may elect by written notice to the Company to satisfy part or all of the
withholding tax requirements associated with the award by (i) authorizing the
Company to retain from the number of shares of Stock that would otherwise be
deliverable to the participant, or (ii) delivering to the Company from shares of
Stock already owned by the participant, that number of shares having an
aggregate Fair Market Value equal to part or all of the tax payable by the
participant under this Section 12(d). Any such election shall be in accordance
with, and subject to, applicable tax and securities laws, regulations and
rulings.
(e) At the time of grant, the Committee may provide in connection with any
grant made under this Plan that the shares of Stock received as a result of such
grant shall be subject to a repurchase right in favor of the Company, pursuant
to which the participant shall be required to offer to the Company upon
termination of employment for any reason any shares that the participant
acquired under the Plan, with the price being the then Fair Market Value of the
Stock or, in the case of a termination for Cause, an amount equal to the cash
consideration paid for the Stock, subject to such other terms and conditions as
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the Committee may specify at the time of grant. The Committee may, at the time
of the grant of an award under the Plan, provide the Company with the right to
repurchase, or require the forfeiture of, shares of Stock acquired pursuant to
the Plan by any participant who, at any time within two years after termination
of employment with the Company, directly or indirectly competes with, or is
employed by a competitor of, the Company.
(f) The reinvestment of dividends in additional Restricted Stock (or in
Deferred Stock or other types of Plan awards) at the time of any dividend
payment shall only be permissible if the Committee (or the Company's chief
financial officer) certifies in writing that under Section 3 sufficient shares
are available for such reinvestment (taking into account then outstanding Stock
Options and other Plan awards).
SECTION 13. Effective Date of Plan.
The Plan shall be effective on the date it is approved by a vote of the
holders of a majority of the Stock present and entitled to vote at a meeting of
the Company's shareholders.
AS AMENDED NOVEMBER 9, 2000
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