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EXHIBIT 10.11
PENN AKRON CORPORATION
EQUITY INCENTIVE PLAN
October 6, 2000
Section 1. PURPOSE OF THE PLAN
The purpose of the Penn Akron Corporation Equity Incentive
Plan (the "Plan") is to further the interests of Penn Akron Corporation (the
"Company") and its shareholders by providing long-term performance incentives
to those key employees of the Company and its Subsidiaries who are largely
responsible for the management, growth and protection of the business of the
Company and its Subsidiaries.
Section 2. DEFINITIONS
For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Award" means any Option, Performance Unit, SAR (including a
Limited SAR), Restricted Stock, Stock granted as a bonus or in lieu of other
awards, other Stock-Based Award, Tax Bonus or other cash payments granted to a
Participant under the Plan.
(b) "Award Agreement" shall mean the written agreement, instrument
or document evidencing an Award.
(c) "Change of Control" means and includes each of the following:
(i) the acquisition, in one or more transactions, of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) by any person or
entity or any group of persons or entities who constitute a group (within the
meaning of Section 13(d)(3) of the Exchange Act), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
Subsidiary, of any securities of the Company such that, as a result of such
acquisition, such person, entity or group either (A) beneficially owns (within
the meaning of Rule 13d-3 under the Exchange Act), directly or indirectly, more
than 20% of the Company's outstanding voting securities entitled to vote on a
regular basis for a majority of the members of the Board of Directors of the
Company or (B) otherwise has the ability to elect, directly or indirectly, a
majority of the members of the Board; (ii) a change in the composition of the
Board of Directors of the Company such that a majority of the members of the
Board of Directors of the Company are not Continuing Directors; or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation 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 voting securities of the surviving entity) at least 80% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
the stockholders of the Company approve a plan of complete
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liquidation of the Company or an agreement for the sale or disposition by the
Company of (in one or more transactions) all or substantially all of the
Company's assets.
Notwithstanding the foregoing, the preceding events shall not
be deemed to be a Change of Control if, prior to any transaction or
transactions causing such change, a majority of the Continuing Directors shall
have voted not to treat such transaction or transactions as resulting in a
Change of Control.
(d) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(e) A "Continuing Director" means, as of any date of
determination, any member of the Board of Directors of the Company who (i) was
a member of such Board on the effective date of the Plan or (ii) was nominated
for election or elected to such Board with the affirmative vote of a majority
of the Continuing Directors who were members of such Board at the time of such
nomination or election.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
(g) "Fair Market Value" means, with respect to Stock, Awards, or
other property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee in good faith and in accordance with applicable law.
Unless otherwise determined by the Committee, the Fair Market Value of Stock
shall mean the mean of the high and low sales prices of Stock on the relevant
date as reported on the stock exchange or market on which the Stock is
primarily traded, or if no sale is made on such date, then the Fair Market
Value is the weighted average of the mean of the high and low sales prices of
the Stock on the next preceding day and the next succeeding day on which such
sales were made, as reported on the stock exchange or market on which the Stock
is primarily traded.
(h) "ISO" means any Option designated as an incentive stock option
within the meaning of Section 422 of the Code.
(i) "Limited SAR" means an SAR exercisable only for cash upon a
Change of Control or other event, as specified by the Committee.
(j) "Option" means a right granted to a Participant pursuant to
Section 6(b) to purchase Stock at a specified price during specified time
periods. An Option may be either an ISO or a nonstatutory Option (an Option not
designated as an ISO).
(k) "Performance Unit" means a right granted to a Participant
pursuant to Section 6(c) to receive a payment in cash equal to the increase in
the book value of the Company during specified time periods if specified
performance goals are met.
(l) "Restricted Stock" means Stock awarded to a Participant
pursuant to Section 6(d) that may be subject to certain restrictions and to a
risk of forfeiture.
(m) "Stock-Based Award" means a right that may be denominated or
payable in, or valued in whole or in part by reference to the market value of,
Stock, including, but not limited
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to, any Option, SAR (including a Limited SAR), Restricted Stock, Stock granted
as a bonus or Awards in lieu of cash obligations.
(n) "SAR" or "Stock Appreciation Right" means the right granted to
a Participant pursuant to Section 6(e) to be paid an amount measured by the
appreciation in the Fair Market Value of Stock from the date of grant to the
date of exercise of the right, with payment to be made in cash, Stock or as
specified in the Award, as determined by the Committee.
(o) "Subsidiary" shall mean any corporation, partnership, joint
venture or other business entity of which 50% or more of the outstanding voting
power is beneficially owned, directly or indirectly, by the Company.
(p) "Tax Bonus" means a payment in cash in the year in which an
amount is included in the gross income of a Participant in respect of an Award
of an amount equal to the federal, foreign, if any, and applicable state and
local income and employment tax liabilities payable by the Participant as a
result of (i) the amount included in gross income in respect of the Award and
(ii) the payment of the amount in clause (i) and the amount in this clause
(ii). For purposes of determining the amount to be paid to the Participant
pursuant to the preceding sentence, the Participant shall be deemed to pay
federal, foreign, if any, and state and local income taxes at the highest
marginal rate of tax imposed upon ordinary income for the year in which an
amount in respect of the Award is included in gross income, after giving effect
to any deductions therefrom or credits available with respect to the payment of
any such taxes.
Section 3. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Compensation Committee
of the Board of Directors of the Company (the "Committee"). No member of the
Committee while serving as such shall be eligible for participation in the
Plan. Any action of the Committee in administering the Plan shall be final,
conclusive and binding on all persons, including the Company, its Subsidiaries,
employees, Participants, persons claiming rights from or through Participants
and stockholders of the Company.
Subject to the provisions of the Plan, the Committee shall
have full and final authority in its discretion (a) to select the key employees
who will receive Awards pursuant to the Plan ("Participants"), (b) to determine
the type or types of Awards to be granted to each Participant, (c) to determine
the number of shares of Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not limited to,
restrictions as to transferability or forfeiture, exercisability or settlement
of an Award and waivers or accelerations thereof, and waivers of or
modifications to performance conditions relating to an Award, based in each
case on such considerations as the Committee shall determine) and all other
matters to be determined in connection with an Award; (d) to determine whether,
to what extent, and under what circumstances an Award may be settled, or the
exercise price of an Award may be paid, in cash, Stock, other Awards or other
property, or an Award may be canceled, forfeited, or surrendered; (e) to
determine whether, and to certify that, performance goals to which the
settlement of an Award is subject are satisfied; (f) to correct any defect or
supply any omission or reconcile any inconsistency in the Plan, and to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan; and (g) to make all other
determinations as it may deem necessary or advisable for the
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administration of the Plan. The Committee may delegate to officers or managers
of the Company or any Subsidiary or to unaffiliated service providers the
authority, subject to such terms as the Committee shall determine, to perform
administrative functions and to perform such other functions as the Committee
may determine, to the extent permitted under Rule 16b-3, Section 162(m) of the
Code and applicable law.
Section 4. PARTICIPATION IN THE PLAN
Participants in the Plan shall be selected by the Committee
from among the key employees of the Company and its Subsidiaries; provided,
however, that only persons who are key employees of the Company or any
subsidiary corporation (within the meaning of Section 424(f) of the Code) may
be granted Options which are intended to qualify as ISOs.
Section 5. PLAN LIMITATIONS; SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of Section 8(a) hereof, the
aggregate number of shares of common stock, $0.01 par value, of the Company
(the "Stock") available for issuance as Awards under the Plan shall not exceed
11,264,304 shares.
No Award may be granted if the number of shares to which such
Award relates, when added to the number of shares previously issued under the
Plan and the number of shares which may then be acquired pursuant to other
outstanding, unexercised Awards, exceeds the number of shares available for
issuance pursuant to the Plan. If any shares subject to an Award are forfeited
or such Award is settled in cash or otherwise terminates for any reason
whatsoever without an actual distribution of shares to the Participant, any
shares counted against the number of shares available for issuance pursuant to
the Plan with respect to such Award shall, to the extent of any such
forfeiture, settlement, or termination, again be available for Awards under the
Plan; provided, however, that the Committee may adopt procedures for the
counting of shares relating to any Award to ensure appropriate counting, avoid
double counting, and provide for adjustments in any case in which the number of
shares actually distributed differs from the number of shares previously
counted in connection with such Award.
(b) Subject to the provisions of Section 8(a) hereof, the
aggregate number of Performance Units which may be awarded under the Plan shall
not exceed 100. If any Performance Units awarded under the Plan shall be
forfeited or canceled, such Performance Units shall thereafter be available for
award under the Plan.
Section 6. AWARDS
(a) General. Awards may be granted on the terms and conditions set
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
8(a)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant; provided, however, that the Committee shall retain full power to
accelerate or waive any such additional term or condition as it may have
previously imposed. All Awards shall be evidenced by an Award Agreement.
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(b) Options. The Committee may grant Options to Participants on
the following terms and conditions:
(i) Exercise Price. The exercise price of each Option
shall be determined by the Committee at the time the Option is granted and may
be any amount, including an exercise price at less than the Fair Market Value
of the shares covered thereby at the time the Option is granted.
(ii) Time and Method of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part, whether the exercise price shall be paid in cash or by the surrender at
Fair Market Value of Stock, or by any combination of cash and shares of Stock,
including, without limitation, cash, Stock, other Awards, or other property
(including notes or other contractual obligations of Participants to make
payment on a deferred basis, such as through "cashless exercise" arrangements,
to the extent permitted by applicable law), and the methods by which Stock will
be delivered or deemed to be delivered to Participants.
(iii) Incentive Stock Options. The terms of any Option
granted under the Plan as an ISO shall comply in all respects with the
provisions of Section 422 of the Code, including, but not limited to, the
requirement that no ISO shall be granted more than ten years after the
effective date of the Plan.
(c) Performance Units. The Committee is authorized to grant
Performance Units to Participants on the following terms and conditions:
(i) Performance Criteria and Period. At the time it makes an
award of Performance Units, the Committee shall establish both the performance
goal or goals and the performance period or periods applicable to the
Performance Units so awarded. A performance goal shall be a goal, expressed in
terms of growth in book value, earnings per share, return on equity or any
other financial or other measurement deemed appropriate by the Committee, or
may relate to the results of operations or other measurable progress of either
the Company as a whole or the Participant's Subsidiary, division or department.
The performance period will be the period of time over which one or more of the
performance goals must be achieved, which may be of such length as the
Committee, in its discretion, shall select. Neither the performance goals nor
the performance periods need be identical for all Performance Units awarded at
any time or from time to time. The Committee shall have the authority, in its
discretion, to accelerate the time at which any performance period will expire
or waive or modify the performance goals of any Participant or Participants.
The Committee may also make such adjustments, to the extent it deems
appropriate, to the performance goals for any Performance Units awarded to
compensate for, or to reflect, any material changes which may have occurred in
accounting practices, tax laws, other laws or regulations, the financial
structure of the Company, acquisitions or dispositions of business or
Subsidiaries or any unusual circumstances outside of management's control
which, in the sole judgment of the Committee, alters or affects the computation
of such performance goals or the performance of the Company or any relevant
Subsidiary, division or department.
(ii) Value of Performance Units. The value of each
Performance Unit at any time shall equal the book value per share of the
Company's Stock, as such value appears on the
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consolidated balance sheet of the Company as of the end of the fiscal quarter
immediately preceding the date of valuation.
(d) Restricted Stock. The Committee is authorized to grant
Restricted Stock to Participants on the following terms and conditions:
(i) Restricted Period. Restricted Stock awarded to a
Participant shall be subject to such restrictions on transferability and other
restrictions for such periods as shall be established by the Committee, in its
discretion, at the time of such Award, which restrictions may lapse separately
or in combination at such times, under such circumstances, or otherwise, as the
Committee may determine.
(ii) Forfeiture. Restricted Stock shall be forfeitable to
the Company upon termination of employment during the applicable restricted
periods. The Committee, in its discretion, whether in an Award Agreement or
anytime after an Award is made, may accelerate the time at which restrictions
or forfeiture conditions will lapse or remove any such restrictions, including
upon death, disability or retirement, whenever the Committee determines that
such action is in the best interests of the Company.
(iii) Certificates for Stock. Restricted Stock granted
under the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are registered in the
name of the Participant, such certificates may bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock.
(iv) Rights as a Shareholder. Subject to the terms and
conditions of the Award Agreement, the Participant shall have all the rights of
a stockholder with respect to shares of Restricted Stock awarded to him or her,
including, without limitation, the right to vote such shares and the right to
receive all dividends or other distributions made with respect to such shares.
If any such dividends or distributions are paid in Stock, the Stock shall be
subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which the Stock has been distributed.
(e) Stock Appreciation Rights. The Committee is authorized to
grant SARs to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the
Participant to whom it is granted a right to receive, upon exercise thereof,
the excess of (A) the Fair Market Value of one share of Stock on the date of
exercise over (B) the grant price of the SAR as determined by the Committee as
of the date of grant of the SAR, which grant price (except as provided in
Section 7(a)) shall not be less than the Fair Market Value of one share of
Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the time
or times at which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in settlement,
method by which Stock will be delivered or deemed to be delivered to
Participants, whether or not an SAR shall be in tandem with any other Award,
and any other terms and conditions of any SAR. Limited SARs may be granted on
such terms, not inconsistent with this Section 6(e), as the Committee may
determine. Limited SARs may be either freestanding or in tandem with other
Awards.
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(f) Bonus Stock and Awards in Lieu of Cash Obligations. The
Committee is authorized to grant Stock as a bonus, or to grant Stock or other
Awards in lieu of Company or Subsidiary obligations to pay cash or deliver
other property under other plans or compensatory arrangements; provided that,
in the case of Participants subject to Section 16 of the Exchange Act, such
cash amounts are determined under such other plans in a manner that complies
with applicable requirements of Rule 16b-3 so that the acquisition of Stock or
Awards hereunder shall be exempt from Section 16(b) liability. Stock or Awards
granted hereunder shall be subject to such other terms as shall be determined
by the Committee.
(g) Other Stock-Based Awards. The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other
Stock-Based Awards in addition to those provided in Sections 6(b) and (d)
through (e) hereof, as deemed by the Committee to be consistent with the
purposes of the Plan. The Committee shall determine the terms and conditions of
such Awards. Stock delivered pursuant to an Award in the nature of a purchase
right granted under this Section 6(g) shall be purchased for such consideration
and paid for at such times, by such methods, and in such forms, including,
without limitation, cash, Stock, other Awards, or other property, as the
Committee shall determine.
(h) Cash Payments. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants Tax Bonuses and
other cash payments, whether awarded separately or as a supplement to any
Stock-Based Award. The Committee shall determine the terms and conditions of
such Awards.
Section 7. ADDITIONAL PROVISIONS APPLICABLE TO AWARDS
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards
granted under the Plan may, in the discretion of the Committee, be granted
either alone or in addition to, in tandem with, or in substitution for, any
other Award granted under the Plan or any award granted under any other plan of
the Company or any Subsidiary, or any business entity acquired by the Company
or any Subsidiary, or any other right of a Participant to receive payment from
the Company or any Subsidiary. If an Award is granted in substitution for
another Award or award, the Committee shall require the surrender of such other
Award or award in consideration for the grant of the new Award. Awards granted
in addition to, or in tandem with other Awards or awards may be granted either
as of the same time as, or a different time from, the grant of such other
Awards or awards.
(b) Exchange and Buy Out Provisions. The Committee may at any time
offer to exchange or buy out any previously granted Award for a payment in
cash, Stock, other Awards (subject to Section 7(a)), or other property based on
such terms and conditions as the Committee shall determine and communicate to a
Participant at the time that such offer is made.
(c) Performance Conditions. The right of a Participant to
exercise or receive a grant or settlement of any Award, and the timing thereof,
may be subject to such performance conditions as may be specified by the
Committee.
(d) Term of Awards. The term of each Award shall, except as
provided herein, be for such period as may be determined by the Committee;
provided, however, that in no event shall the term of any ISO, or any SAR
granted in tandem therewith, exceed a period of ten years from the date of its
grant (or such shorter period as may be applicable under Section 422 of the
Code).
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(e) Form of Payment. Subject to the terms of the Plan and any
applicable Award Agreement, payments or transfers to be made by the Company or
a Subsidiary upon the grant or exercise of an Award may be made in such forms
as the Committee shall determine, including, without limitation, cash, Stock,
other Awards, or other property (and may be made in a single payment or
transfer, in installments, or on a deferred basis), in each case determined in
accordance with rules adopted by, and at the discretion of, the Committee.
(Such payments may include, without limitation, provisions for the payment or
crediting of reasonable interest on installments or deferred payments.) The
Committee, in its discretion, may accelerate any payment or transfer upon a
change in control as defined by the Committee. The Committee may also authorize
payment upon the exercise of an Option by net issuance or other cashless
exercise methods.
(f) Loan Provisions. With the consent of the Committee, and
subject at all times to laws and regulations and other binding obligations or
provisions applicable to the Company, the Company may make, guarantee, or
arrange for a loan or loans to a Participant with respect to the exercise of
any Option or other payment in connection with any Award, including the payment
by a Participant of any or all federal, state, or local income or other taxes
due in connection with any Award. Subject to such limitations, the Committee
shall have full authority to decide whether to make a loan or loans hereunder
and to determine the amount, terms, and provisions of any such loan or loans,
including the interest rate to be charged in respect of any such loan or loans,
whether the loan or loans are to be with or without recourse against the
borrower, the terms on which the loan is to be repaid and the conditions, if
any, under which the loan or loans may be forgiven.
(g) Awards to Comply with Section 162(m). The Committee may (but
is not required to) grant an Award pursuant to the Plan to a Participant which
is intended to qualify as "performance-based compensation" under Section 162(m)
of the Code (a "Performance-Based Award"). The right to receive a
Performance-Based Award, other than Options and SARs granted at not less than
Fair Market Value, shall be conditional upon the achievement of performance
goals established by the Committee in writing at the time such
Performance-Based Award is granted. Such performance goals, which may vary from
Participant to Participant and Performance-Based Award to Performance-Based
Award, shall be based upon the attainment by the Company or any Subsidiary,
division or department of specific amounts of, or increases in, one or more of
the following, any of which may be measured either in absolute terms or as
compared to another company or companies: revenues, earnings, cash flow, net
worth, book value, stockholders' equity, financial return ratios, market
performance or total stockholder return, and/or the completion of certain
business or capital transactions. Before any compensation pursuant to a
Performance-Based Award (other than Options and SARs granted at not less than
Fair Market Value) is paid, the Committee shall certify in writing that the
performance goals applicable to the Performance-Based Award were in fact
satisfied.
The maximum amount which may be granted as Performance-Based Awards to
any Participant in any calendar year shall not exceed (i) Stock-Based Awards for
11,264,304 shares of Stock (whether payable in cash or stock), subject to
adjustment as provided in Section 8(a) hereof, (ii) 100 Performance Units, (iii)
a Tax Bonus payable with respect to the Stock- Based Awards described in clause
(i) and Performance Units described in clause (ii), and (iv) cash payments
(other than Tax Bonuses) of $50,000.
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(h) Change of Control. In the event of a Change of Control of the
Company, all Awards granted under the Plan (including Performance-Based Awards)
that are still outstanding and not yet vested or exercisable or which are
subject to restrictions shall become immediately 100% vested in each
Participant or shall be free of any restrictions, as of the first date that the
definition of Change of Control has been fulfilled, and, except as otherwise
set forth in any individual Award Agreement, shall be exercisable for the
remaining duration of the Award. All Awards that are exercisable as of the
effective date of the Change of Control will remain exercisable for the
remaining duration of the Award.
Section 8. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION;
ACCELERATION IN CERTAIN EVENTS
(a) In the event that the Committee shall determine that any stock
dividend, recapitalization, forward split or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or share exchange, or
other similar corporate transaction or event, affects the Stock or the book
value of the Company such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Stock which may thereafter be issued in
connection with Awards, (ii) the number and kind of shares of Stock issuable in
respect of outstanding Awards, (iii) the aggregate number and kind of shares of
Stock available under the Plan, (iv) the number of Performance Units which may
thereafter be granted and the book value of the Company with respect to
outstanding Performance Units, and (v) the exercise price, grant price, or
purchase price relating to any Award or, if deemed appropriate, make provision
for a cash payment with respect to any outstanding Award; provided, however, in
each case, that no adjustment shall be made which would cause the Plan to
violate Section 422(b)(1) of the Code with respect to ISOs or would adversely
affect the status of a Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
(b) In addition, the Committee is 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,
events described in the preceding paragraph) affecting the Company or any
Subsidiary, or in response to changes in applicable laws, regulations, or
accounting principles. Notwithstanding the foregoing, no adjustment shall be
made in any outstanding Performance-Based Awards to the extent that such
adjustment would adversely affect the status of that Performance-Based Award as
"performance-based compensation" under Section 162(m) of the Code.
Section 9. GENERAL PROVISIONS
(a) Changes to the Plan and Awards. The Board of Directors of the
Company may amend, alter, suspend, discontinue, or terminate the Plan or the
Committee's authority to grant Awards under the Plan without the consent of the
Company's stockholders or Participants, except that any such amendment,
alteration, suspension, discontinuation, or termination shall be subject to the
approval of the Company's stockholders within one year after such Board action
if such stockholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on
which the Stock may then be listed or quoted, and the Board may otherwise, in
its discretion, determine to submit other such changes to the Plan to the
stockholders for approval; provided, however, that without the consent of an
affected
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Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted and any Award Agreement
relating thereto. The Committee may waive any conditions or rights under, or
amend, alter, suspend, discontinue, or terminate, any Award theretofore granted
and any Award Agreement relating thereto; provided, however, that without the
consent of an affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially and adversely
affect the rights of such Participant under such Award.
The foregoing notwithstanding, any performance condition
specified in connection with an Award shall not be deemed a fixed contractual
term, but shall remain subject to adjustment by the Committee, in its
discretion at any time in view of the Committee's assessment of the Company's
strategy, performance of comparable companies, and other circumstances, except
to the extent that any such adjustment to a performance condition would
adversely affect the status of a Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
Notwithstanding the foregoing, if the Plan is ratified by the
stockholders of the Company at the Company's 2000 Annual Meeting of
Stockholders, then unless approved by the stockholders of the Company, no
amendment will: (i) change the class of persons eligible to receive Awards;
(ii) materially increase the benefits accruing to Participants under the Plan,
or (iii) increase the number of shares of Stock or the number of Performance
Units subject to the Plan.
(b) No Right to Award or Employment. No employee or other person
shall have any claim or right to receive an Award under the Plan. Neither the
Plan nor any action taken hereunder shall be construed as giving any employee
any right to be retained in the employ of the Company or any Subsidiary.
(c) Taxes. The Company or any Subsidiary is authorized to withhold
from any Award granted, any payment relating to an Award under the Plan,
including from a distribution of Stock or any payroll or other payment to a
Participant amounts of withholding and other taxes due in connection with any
transaction involving an Award, and to take such other action as the Committee
may deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax obligations
relating to any Award. This authority shall include authority to withhold or
receive Stock or other property and to make cash payments in respect thereof in
satisfaction of a Participant's tax obligations.
(d) Limits on Transferability; Beneficiaries. No Award or other
right or interest of a Participant under the Plan shall be pledged, encumbered,
or hypothecated to, or in favor of, or subject to any lien, obligation, or
liability of such Participants to, any party, other than the Company or any
Subsidiary, or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution, and such Awards and rights shall
be exercisable during the lifetime of the Participant only by the Participant
or his or her guardian or legal representative. Notwithstanding the foregoing,
the Committee may, in its discretion, provide that Awards or other rights or
interests of a Participant granted pursuant to the Plan (other than an ISO) be
transferable, without consideration, to immediate family members (i.e.,
children, grandchildren or spouse), to trusts for the benefit of such immediate
family members and to partnerships in which such family members are the only
partners. The Committee may attach to
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such transferability feature such terms and conditions as it deems advisable.
In addition, a Participant may, in the manner established by the Committee,
designate a beneficiary (which may be a person or a trust) to exercise the
rights of the Participant, and to receive any distribution, with respect to any
Award upon the death of the Participant. A beneficiary, guardian, legal
representative or other person claiming any rights under the Plan from or
through any Participant shall be subject to all terms and conditions of the
Plan and any Award Agreement applicable to such Participant, except as
otherwise determined by the Committee, and to any additional restrictions
deemed necessary or appropriate by the Committee.
(e) No Rights to Awards; No Stockholder Rights. No Participant
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants. No Award shall confer
on any Participant any of the rights of a stockholder of the Company unless and
until Stock is duly issued or transferred to the Participant in accordance with
the terms of the Award.
(f) Discretion. In exercising, or declining to exercise, any grant
of authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the affect such exercise, or declining to exercise such
grant of authority or discretion, would have upon the affected Participant, any
other Participant, any employee, the Company, any Subsidiary, any stockholder
or any other person.
(g) Shareholder Approval. If the Plan is not approved by the
stockholders of the Company prior to the first anniversary of the date hereof,
no Stock-Based Awards may be granted thereafter, and any Stock-Based Awards
granted prior to such stockholder approval shall be null and void.