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EXHIBIT 10.28
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AMENDMENT NO. 1
TO THE
CAROLINA FIRST BANCSHARES, INC. 1990 STOCK OPTION PLAN
This Amendment No. 1 ("Amendment") to the Carolina First BancShares,
Inc. 1990 Stock Option Plan is made and executed this 20th day of May, 1999, to
be effective as of May 1, 1999.
WHEREAS, the Board of Directors of Carolina First BancShares, Inc. (the
"Corporation"), deems it to be in the best interests of the Corporation and its
shareholders to effect certain amendments to the Carolina First BancShares, Inc.
1990 Stock Option Plan (the "Plan") pursuant to Section 5.3 of the Plan, which
amendments do not require approval of the stockholders of the Corporation;
NOW, THEREFORE, in accordance with Section 5.3 of the Plan, the Plan is
hereby amended as follows:
1. Definition of Acceleration Event. Section 1.2 of the Plan is hereby
amended by removing subsection (a) thereto and renumbering subsections (b) and
(c) accordingly.
2. Definition of Change in Control. Section 1.2 of the Plan is hereby
amended by adding the following definition as new subsection (c):
(c) "Change in Control" means and includes each of the following:
(1) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of
25% or more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (1), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition by a Person who is on May 1, 1999 (the "Amendment Date")
the beneficial owner of 25% or more of the Outstanding Company Voting
Securities, (ii) any acquisition directly from the Company, (iii) any
acquisition by the Company, (iv) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company, or (v) any acquisition by
any corporation pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of subsection (3) of this definition; or
(2) Individuals who, as of the Amendment Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the Amendment Date whose election, or
nomination for election by the Company's shareholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(3) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners of the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
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owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Voting Securities, and
(ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 25% or more of the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination, and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(4) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
3. Committee Requirements. The first two sentences of Section 1.3 shall
be deleted in their entirety, and the following sentences are substituted in
lieu thereof:
The Plan shall be administered by the Compensation and Benefits
Committee of the Board (the "Committee") or, at the discretion of the
Board from time to time, by the Board. The Committee shall consist of
two or more members of the Board. It is intended that the directors
appointed to serve on the Committee shall be "non-employee directors"
(within the meaning of Rule 16b-3 promulgated under the 1934 Act) and
"outside directors" (within the meaning of Code Section 162(m) and the
regulations thereunder) to the extent that Rule 16b-3 and, if necessary
for relief from the limitation under Code Section 162(m) and such
relief is sought by the Company, Code Section 162(m), respectively, are
applicable. However, the mere fact that a Committee member shall fail
to qualify under either of the foregoing requirements shall not
invalidate any Award made by the Committee which Award is otherwise
validly made under the Plan. The members of the Committee shall be
appointed by, and may be changed at any time and from time to time in
the discretion of, the Board. During any time that the Board is acting
as administrator of the Plan, it shall have all the powers of the
Committee hereunder, and any reference herein to the Committee (other
than in this Section 1.3) shall include the Board.
4. Payment with Common Stock. Section 1.5(e) of the Plan is hereby
amended by adding the following clause to the end of the first sentence:
; provided that if shares of Stock surrendered in payment of the
exercise price were themselves acquired otherwise than on the open
market, such shares shall have been held by the Optionee for at least
six months.
5. Acceleration Upon a Change in Control. Section 1.6 of the Plan is
hereby deleted in its entirety and the following is substituted in lieu thereof:
1.6 Acceleration Upon a Change in Control.
Except as otherwise provided in the Option Agreement, upon the
occurrence of a Change in Control, all outstanding Options,
SARs, and STARs shall become fully exercisable and all
restrictions on outstanding Options, SARs, and STARs shall
lapse; provided, however that such acceleration will not occur
if, in the opinion of the Company's accountants, such
acceleration would preclude the use of "pooling of interest"
accounting treatment for a Change in Control transaction that
(a) would otherwise qualify for such accounting treatment, and
(b) is contingent upon qualifying for such accounting
treatment. To the extent that this provision causes Incentive
Stock Options to exceed the dollar limitation set forth in
Section 2.2, the excess Options shall be deemed to be
Nonqualified Stock Options.
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6. Acceleration Upon Certain Events Not Constituting a Change in
Control. Section 1.7 of the Plan is hereby deleted in its entirety and the
following is substituted in lieu thereof:
1.7 Acceleration Upon Certain Events Not Constituting a Change in
Control.
In the event of the occurrence of any circumstance,
transaction or event not constituting a Change in Control (as
defined in Section 1.2(c)) but which the Board of Directors
deems to be, or to be reasonably likely to lead to, an
effective change in control of the Company of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of the 1934 Act, the Committee may in its sole
discretion declare all outstanding Options, SARs, and STARs to
be fully exercisable, and/or all restrictions on all
outstanding Options, SARs, and STARs to have lapsed, in each
case, as of such date as the Committee may, in its sole
discretion, declare, which may be on or before the
consummation of such transaction or event. To the extent that
this provision causes Incentive Stock Options to exceed the
dollar limitation set forth in Section 2.2, the excess Options
shall be deemed to be Nonqualified Stock Options.
7. Acceleration for Any Other Reason; Changes in Capital Structure. The
Plan is hereby amended by adding the following as Sections 1.8 and 1.9 of the
Plan and by renumbering the present Section 1.8 to Section 1.10:
1.8 Acceleration for Any Other Reason.
Regardless of whether an event has occurred as described in
Section 1.6 or 1.7 above, the Committee may in its sole
discretion at any time determine that all or a portion of an
Optionee's Options, SARs, and STARs shall become fully or
partially exercisable, and/or that all or a part of the
restrictions on all or a portion of the outstanding Options,
SARs, and STARs shall lapse, in each case, as of such date as
the Committee may, in its sole discretion, declare. The
Committee may discriminate among Participants and among Awards
granted to a Participant in exercising its discretion pursuant
to this Section 1.8.
1.9 Changes in Capital Structure.
In the event a stock dividend or stock split is declared, the
authorization limits under Section 5.1 and 5.4 shall be
changed proportionately, and the shares of Stock then subject
to each Award shall be increased or decreased proportionately
and appropriately without any change in the aggregate purchase
price therefor. In the event the Stock shall be changed into
or exchanged for a different number or class of shares of
stock or securities of the Company or of another corporation,
whether through reorganization, recapitalization,
reclassification, share exchange, stock split-up, combination
of shares, merger or consolidation, the authorization limits
under Section 5.1 and 5.4 shall be adjusted proportionately,
and there shall be substituted for each such share of Stock
then subject to each Award the number and class of shares into
which each outstanding share of Stock shall be so exchanged,
all without any change in the aggregate purchase price for the
shares then subject to each Award, or, subject to Section
11.2, there shall be made such other equitable adjustment as
the Committee shall approve.
8. Continued Employment. Section 2.3 of the Plan is hereby amended by
adding the following clause to the end of the first sentence:
; provided that with respect to Incentive Stock Options, if a period of
leave exceeds 90 days and the individual's right to reemployment is not
guaranteed whether by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such
leave.
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9. Termination of Employment. Section 3.1(b) of the Plan is hereby
changing the term "Stock Option Committee" to "Committee" and by deleting the
words "an Incentive or" from the first sentence.
10. Section 83(b) Election. Section 3.2 of the Plan shall be deleted in
its entirety.
11. Certain Tax Code References. All references in the Plan to Section
422A of the Code shall be changed to refer to "Section 422 of the Code," except
the references to Section 422A(c)(7) contained in Sections 1.5(c) and 1.5(d) of
the Plan, which shall be changed to refer to "Section 22(e)(3) of the Code," and
all references in the Plan to Section 425 of the Code, or any subsection
thereof, shall be changed to refer to "Section 424 of the Code," or the
corresponding subsection thereof.
12. Effect of Amendment. As modified hereby, the provisions of the Plan
shall remain in full force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Amendment to be
duly executed as of the date first above written.
Carolina First BancShares, Inc.
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By:
Title:
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CAROLINA FIRST BANCSHARES, INC.
1990 STOCK OPTION AND STOCK APPRECIATION RIGHTS PLAN
ARTICLE I GENERAL
1.1 Purpose of the Plan.
The purpose of the Carolina First BancShares, Inc. 1990 Stock Option and Stock
Appreciation Rights Plan (the "Plan") is to assist Carolina First BancShares,
Inc. (the "Company") in securing and retaining key employees of outstanding
ability by making it possible to offer them an increased incentive to join or
continue in the service of the Company and to increase their efforts for its
welfare by participating in the ownership and growth of the Company.
1.2 Definitions .
(a) "Acceleration Event" means any event which in the opinion of the
Board of Directors of the Company is likely to lead to changes in control of
share ownership of the Company, whether or not such change in control actually
occurs.
(b) "Board of Directors" or "Board" means the Board of Directors of the
Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the committee referred to in Section 1.3.
(e) "Common Stock" means the common stock of the Company having a par
value of $2.50 per share.
(f ) "Fair Market Value" means the closing "asked" price of the shares
in the over-the-counter market on the day on which such value is to be
determined or, if such "asked" price is not available, the last sales price on
such day or, if no shares were traded on such day, on the next preceding day on
which the shares were traded, as reported by the National Association of
Securities Dealers Automatic Quotation System (NASDAQ) or other national
quotation service. If the shares are listed on a National Securities Exchange,
"fair market value" means the closing price of the shares on such National
Securities Exchange on the day on which such value is to be determined or, if no
shares were traded on such day, on the next preceding day on which shares were
traded, as reported by National Quotation Bureau, Inc. or other national
quotation service. If at any time shares of Common Stock are not traded on an
exchange or in the over-the-counter market, Fair Market Value shall be the value
determined by the Board of Directors or Committee administering the Plan, taking
into consideration those factors affecting or reflecting value which they deem
appropriate.
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(g) "Incentive Stock Option" means an option to purchase shares of
Common Stock which is intended to qualify as an incentive stock option as
defined in Section 422A of the Code.
(h) "Key Employee" means any person, including officers and directors,
in the regular employment of the Company or its Subsidiaries who is designated a
Key Employee by the Committee and is, or is expected to be, primarily
responsible for the management, growth, or supervision of some part or all of
the business of the Company or its Subsidiaries. The power to determine who is
and who is not a Key Employee is reserved solely for the Committee.
(i) "Nonqualified Stock Option" means an option to purchase shares of
Common Stock which is not intended to qualify as an Incentive Stock Option as
defined in Section 422A of the Code.
(j) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
(k) "Optionee" means a Key Employee to whom an Option is granted under
the Plan.
(I) "Parent" means any corporation which qualifies as a parent of a
corporation under the definition of "parent corporation" contained in Section
425(e) of the Code.
(m) "Stock Appreciation Right" shall have the meaning stated in Article
IV of the Plan.
(n) "Subsidiary" means any corporation which qualifies as a subsidiary
of a corporation under the definition of "subsidiary corporation" contained in
Section 425(f) of the Code.
(o) "Term" means the period during which a particular Option may be
exercised as determined by the Committee and as provided in the Option
agreement.
1.3 ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Stock Option Committee (the "Committee")
appointed by the Board of Directors and consisting of at least three members
from the Board of Directors. No person while a member of the Committee shall be
eligible to participate in the Plan. Subject to the control of the Board, and
without limiting the control over decisions described in Section 1.7, the
Committee shall have the power to interpret and apply the Plan and to make
regulations for carrying out its purpose. More particularly, the Committee shall
determine which Key Employees shall be granted Options under the Plan, the
number of shares subject to each Option, the price per share under each Option,
the Term of each Option,
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and any restrictions on the exercise of each Option. When granting Options, the
Committee shall designate the Option as either an Incentive Stock Option or a
Nonqualified Stock Option. The Committee shall also designate whether the Option
is granted with Stock Appreciation Rights. Determinations by the Committee under
the Plan (including, without limitation, determinations of the person to receive
Options, the form, amount and timing of such Options, and the terms and
provisions of such Options and the agreements evidencing same) need not be
uniform and may be made by the Committee selectively among persons who receive,
or are eligible to receive, Options under the Plan whether or not such persons
are similarly situated.
1.4 Shares Subject to the Plan.
The total number of shares that may be purchased pursuant to Options or
transferred pursuant to the exercise of Stock Appreciation Rights under the Plan
shall not exceed 110,0 00 shares of Common Stock. Shares subject to the Options
which terminate or expire prior to exercise shall be available for future
Options. Shares represented by an unexercised Option surrendered upon an
exercise of Stock Appreciation Rights including, without duplication, any shares
issued in payment of any Stock Appreciation Rights, shall be deducted from the
aggregate and shall not be available for further Options hereunder. Shares
issued pursuant to the Plan may be either unissued shares of Common Stock or
reacquired shares of Common Stock held in treasury.
1.5 Terms and Conditions of Options.
All Options shall be evidenced by agreements in such form as the Committee shall
approve from time to time subject to the provisions of Article II or Article
Ill, as appropriate, and the following provisions:
(a) Exercise Price. Except as provided in Section 3.1, the exercise
price of the Option shall not be less than the Fair Market Value (as determined
by the Committee) of the Common Stock at the time the Option is granted.
(b) Exercise. The Committee shall determine whether the Option shall be
exercisable in full at any time during the Term or in cumulative or
noncumulative installments during the Term.
(c) Termination of Employment. An Optionee's Option shall expire on the
earlier of the expiration of (i) the date specified in the Option which in no
event shall be later than three months after the termination of the Optionee's
employment for any reason other than death or disability (as defined in Section
422A(c)(7) of the Code), or (ii) the Term specified in Section 2.1 or 3.1(a) as
the case may be.In the event of exercise of the Option after termination of
employment, the Optionee may exercise the Option only with respect to the shares
which could have been purchased by
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the Optionee at the date of termination of employment. However, the Committee
may, but is not required to, waive any requirements made pursuant to Section
1.5(b) so that some or all of the shares subject to the Option may be exercised
within the time limitation described in this subsection. An Optionee's
employment shall be deemed to terminate on the last date for which he receives a
regular wage or salary payment.
(d) Death or Disability. Upon termination of an Optionee's employment
by reason of death or disability (as determined by the Committee consistent with
the definition of Section 422A(c)(7) of the Code), the Option shall expire on
the earlier of the expiration of (i) the date specified in the Option which in
no event shall be later than 12 months after the date of such termination, or
(ii) the Term specified in Section 2.1 or 3.1(a) as the case may be. The
Optionee or his successor in interest, as the case may be, may exercise the
Option only as to the shares which could have been purchased by the Optionee at
the date of his termination of employment. However, the Committee may, but is
not required to, waive any requirements made pursuant to Section 1.5(b) so that
some or all of the shares subject to the Option may be exercised within the time
limitation described in this subsection.
(e) Payment. Payment for shares as to which an Option is exercised
shall be made in such manner and at such time or times as shall be provided in
the Option agreement, including cash, Common Stock which was previously acquired
by the Optionee, or any combination thereof. The Fair Market Value of the
surrendered Common Stock as of the date of exercise shall be determined in
valuing Common Stock used in payment for Options.
(f) Nontransferability. No Option granted under the Plan shall be
transferable other than by will or by the laws of descent and distribution.
During the lifetime of the Optionee, an Option shall be exercisable only by the
Optionee.
(g) Additional Provisions. Each option agreement may contain such other
terms and conditions not inconsistent with the provisions of the Plan as the
Committee may deem appropriate from time to time.
1.6 Stock Adjustments; Mergers.
Notwithstanding Section 1.4, in the event the outstanding shares are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Company or of any other corporation by reason
of any merger, sale of stock, consolidation, liquidation, recapitalization,
reclassification, stock split, combination of shares, or stock dividend, the
total number of shares set forth in Section 1.4 shall be proportionately and
appropriately adjusted by the Committee. If the Company continues in existence,
(i) the number and kind of shares that are subject to any Option and the option
price per
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share shall be proportionately and appropriately adjusted without any change in
the aggregate price to be paid therefor upon exercise of the Option, and (ii)
the Committee may make such adjustments in the number and kind of Stock
Appreciation Rights as it shall deem appropriate in the circumstances. If the
Company will not remain in existence or substantially all of its voting Common
Stock and Common Stock will be purchased by a single purchaser or group of
purchasers acting together, then the Committee may (i) declare that all Options
and Stock Appreciation Rights shall terminate 30 days after the Committee gives
written notice to all Optionees of their immediate right to exercise all Options
and Stock Appreciation Rights then outstanding (without regard to limitations on
exercise otherwise contained in the Options), or (ii) notify all Optionees that
all options and Stock Appreciation Rights granted under the Plan shall apply
with appropriate adjustments as determined by the Committee to the securities pf
the successor corporation to which holders of the numbers of shares subject to
such Options and Stock Appreciation Rights would have been entitled, or (iii)
some combination of aspects of (i) and (ii). The determination by the Committee
as to the terms of any of the foregoing adjustments shall be conclusive and
binding. Any fractional shares resulting from any of the foregoing adjustments
under this section shall be disregarded and eliminated.
1.7 Acceleration Event.
If an Acceleration Event occurs in the opinion of the Board of Directors, based
on circumstances known to it, the Board of Directors may direct the Committee to
declare that all Options and Stock Appreciation Rights granted under the Plan
shall become exercisable immediately, notwithstanding the provisions of the
respective Option agreements regarding exercisability.
1.8 Notification of Exercise.
Options shall be exercised by written notice directed to the Secretary of the
Company at the principal executive offices of the Company. Such written notice
shall be accompanied by any payment required pursuant to Section 1.5(e).
Exercise by an Optionee's heir or the representative of his estate shall be
accompanied by evidence of his authority to so act in form reasonably
satisfactory to the Company.
ARTICLE II
INCENTIVE STOCK OPTIONS
2.1 Terms of Incentive Stock Options.
Each Incentive Stock Option granted under the Plan shall be exercisable only
during a Term fixed by the Committee; provided, however, that the Term shall end
no later than 10 years after the date the Incentive Stock Option is granted.
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2. 2 Limitation on Options.
The aggregate Fair Market Value of Common Stock (determined at the time the
Incentive Stock Option is granted), subject to Incentive Stock Options granted
to a Key Employee under all plans of the Key Employee's employer corporation and
its Parent or Subsidiary corporations and that become exercisable for the first
time by such Key Employee during any calendar year, may not exceed $100,000.
2.3 Continued Employment.
Whether military, government or other service or other leave of absence shall
constitute a termination of employment shall be determined in each case by the
Committee at its discretion, and any determination by the Committee shall be
final and conclusive. A termination of employment shall not occur where the
Optionee transfers from the Company to one of its Subsidiaries or transfers from
a Subsidiary to the Company.
2.4 Special Rule for Ten Percent Shareholder.
If at the time an Incentive Stock Option is granted, an employee owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of his employer corporation or of its Parent or any of its
Subsidiaries, as determined using the attribution rules of Section 425(d) of the
Code, then the terms of the Incentive Stock Option shall specify that the option
price shall be at least 110% of the Fair Market Value of the stock subject to
the Incentive Stock Option and such Incentive Stock Option shall not be
exercisable after the expiration of five years from the date such Incentive
Stock Option is granted.
2.5 Interpretation.
In interpreting this Article II of the Plan and the provisions of individual
option agreements, the Committee and the Board shall be governed by the
principles and requirements of Sections 421, 422A and 425 of the Code, and
applicable Treasury Regulations.
ARTICLE III
NONQUALIFIED STOCK OPTIONS
3.1 Terms and Conditions of Options.
In addition to the requirements of Section 1.5, Nonqualified Stock Options shall
be subject to the following provisions:
(a) Term. Each Nonqualified Stock Option granted under the Plan shall
be exercisable only during a Term fixed by the Committee.
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(b) Termination of Employment. Notwithstanding the provisions of
Sections 1.5(c) and 1.5(d), the Stock Option Committee in its discretion may
provide, either upon the original grant of an Option or in an amendment to an
Incentive or Nonqualified Stock Option, that an Option may be exercisable during
a Term that does not expire upon the expiration of three months following an
Optionee's termination of employment (one year in the case of termination as a
result of death or disability), but in no event later than the Term specified in
Section 3.l(a) above.
(c) Exercise Price. The Company may elect to grant Nonqualified Stock
Options at a price less than the Fair Market Value of the Common Stock at the
time the Option is granted, but in no event may the price for such Options be
less than the par value of such Shares.
(d) Additional Terms. Pursuant to Section 1.5(g), the Committee may add
additional terms and conditions to a Nonqualified Stock Option, including, but
not limited to, a cash award for any federal tax liability suffered by the
Optionee upon the grant and/or exercise of a Nonqualified Stock Option.
3.2 Section 83(b) Election.
The Company recognizes that certain persons who receive Nonqualified Stock
Options may be subject to restrictions regarding their right to trade Common
Stock under applicable securities laws. Such may cause Optionees exercising such
Options not to be taxable under the provisions of Section 83(c) of the Code.
Accordingly, Optionees exercising such Nonqualified Stock Options may consider
making an election to be taxed upon exercise of the Option under Section 83(b)
of the Code and to effect such election will file such election with the
Internal Revenue Service within thirty (30) days of exercise of the Option and
otherwise in accordance with applicable Treasury Regulations.
ARTICLE IV
STOCK APPRECIATION RIGHTS
4.1 Terms and Conditions of Stock Appreciation Rights.
Stock Appreciation Rights ("SAR") shall be granted by the Committee in
connection with the grant of an Option. All SARs shall be in such form as the
Committee may from time to time determine and shall be subject to the following
terms and conditions:
(a) Term and Exercise. An SAR shall be exercisable only (i) with the approval of
the Committee, (ii) during the Term of the Option to which it relates, (iii) at
such times as the Option to which it relates is exercisable, and (iv) if the
Fair Market Value of the Common Stock subject to the Option surrendered (on the
date surrendered) minus the aggregate option price of the Common Stock subject
to the Option surrendered is a positive amount.
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(b) Payment. In the event the Committee agrees to permit exercise of the SAR,
the Optionee shall surrender to the Company the right to exercise the
Option with respect to a specified number of shares as to which the Option
is then exercisable. In return, the Optionee shall receive from the Company
no more than an amount payable in cash and/or shares (as determined by the
Committee after considering the request of the Optionee) equal to the
difference between the Fair Market Value of Common Stock as to which the
Optionee has surrendered the Option and the exercise price with respect
thereto. In the event the committee determines to tender shares in full or
partial payment of the SAR, the number of shares to be issued to the
Optionee shall be based on the Fair market Value of the shares as of the
date of exercise of the SAR. No fractional shares shall be issued to
Optionees upon exercise of an SAR. Instead, the Company shall pay the
Optionee the value of such fractional share based upon the Fair Market
Value of a share on the date the SAR is exercised.
(c) Nontransferability. An SAR granted under the Plan shall be transferable
only when the Option to which it relates is transferable.
4.2 OTHER TERMS AND CONDITIONS.
Option agreements reflecting Stock Appreciation Rights which are granted under
the Plan may contain such other conditions not inconsistent with the provisions
of the Plan as the Committee may deem appropriate from time to time.
4.3 NOTIFICATION OF REQUEST TO EXERCISE.
The Optionee shall request the Committee's approval to exercise a Stock
Appreciation Right by written notice to the Secretary of the Company at the
principal executive offices of the Company. Such written notice shall state the
number of shares subject to the Option for which approval of the exercise of the
SAR is requested and the Optioniee's preferred form of payment of the SAR, as
hereinafter provided. The Optionee may indicate his or her preference to receive
payment of the SAR in cash or in Common Stock or in a combination thereof.
Notwithstanding anything to the contrary contained herein, the Committee shall
have absolute discretion in determining whether the request for the approval of
the exercise of the SAR shall be approved and, if such approval is given,
whether payment shall be made in cash or Common Stock or in a combination
thereof.
With 30 days after the delivery to the Secretary of the Optionee's request to
exercise the SAR as provided above, the Committee shall inform the Optionee in
writing of its determination, by personal delivery of such determination to the
Optionee by certified or registered mail, return receipt requested. The Optionee
must act on any approved exercise of an SAR within 30 days after the date of
such determination by the Committee
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(or such longer period as may be permitted by the Committee) and in accordance
with the terms approved by the Committee. Exercise shall be by written notice
actually delivered, or mailed by certified or registered mail, return receipt
requested, to the Secretary of the Company at the principal executive offices of
the Company.
4.4 Effect of Exercise.
Upon exercise of a Stock Appreciation Right, the Option to which it relates
shall lapse with respect to the shares as to which the SAR is exercised and such
shares shall not be available for further grant of Options.
ARTICLE V
ADDITIONAL PROVISIONS
5.1 Stockholder Approval.
The Plan shall be submitted for the approval of the shareholders of the Company
at the first annual meeting of shareholders held subsequent to the adoption of
the Plan and in all events within one year of its approval by the Board of
Directors. If at said meeting the stockholders of the Company do not approve the
Plan, the Plan shall terminate.
5.2 Compliance with Other Laws and Regulations.
The Plan, the grant and exercise of Options hereunder, and the obligation of the
Company to sell and deliver shares under such Options, shall be subject to all
applicable Federal and state laws, rules, and regulations and to such approvals
by any government or regulatory agency as may be required. The Company shall not
be required to issue or deliver any certificates for shares of Common Stock
prior to (a) the listing of such shares on any stock exchange on which the
Common Stock may then be listed and (b) the completion of any registration or
qualification of such shares under any Federal or state law, or any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
5.3 Amendments.
The Board of Directors may discontinue the Plan at any time, and may amend it
from time to time, but no amendment, without approval by stockholders, may (a)
increase the total number of shares which may be issued under the Plan or to any
individual under the Plan, (b) reduce the Option price for shares which may be
purchased pursuant to Options under Articles II and III of the Plan, (c) extend
the period during which Options may be granted, or (d) change the class of
employees to whom Options may be granted, except as provided in Section 1.6.
Other than as expressly
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permitted under the Plan, no outstanding Option may be revoked or altered in a
manner unfavorable to the Optionee without the consent of the Optionee.
5.4 No Rights As Shareholder.
No Optionee shall have any rights as a shareholder with respect to any share
subject to his or her Option prior to the date of issuance to him or her of a
certificate or certificates for such shares.
5.5 Withholding.
Whenever the Company proposes or is required to issue or transfer shares of
Common Stock under the Plan, the Company shall have the right to require the
Optionee to remit to the Company an amount sufficient to satisfy any Federal,
state or local withholding tax liability prior to the delivery of any
certificate or certificates for such shares. Whenever under the Plan payments
are to be made in cash, such payments shall be made net of an amount sufficient
to satisfy any Federal, state, or local withholding tax liability.
5.6 Continued Employment Not Presumed.
This Plan, and any document describing this Plan and the grant of any stock
Option or Stock Appreciation Right hereunder, shall not give any Optionee or
other employee aright to continued employment by the Company or its Subsidiaries
or affect the right of the Company or its Subsidiaries to terminate the
employment of any such person with or without cause.
5.7 Effective Date: Duration.
The Plan shall become effective as of September 6, 1990 subject to shareholder
approval pursuant to Section 5.1 and shall expire on the same date in the year
2000. No Options may be granted 'under the Plan after such expiration date, but
Options granted on or before that date may be exercised according to the terms
of the Option agreements and shall continue to be governed by and interpreted
consistent with the terms hereof.
ARTICLE VI
DETACHED STOCK APPRECIATION RIGHTS
6.1 Purpose.
The purpose of this Article VI is to provide a means whereby the Committee may
grant Key Employees Stock Appreciation Rights without granting Options in
connection with such Stock Appreciation Rights ("STAR").
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6.2 Administration.
The Committee shall determine which Key Employees shall be granted STARs and the
number of STARs granted to such employees in accordance with Section 1.3 of the
Plan. Each grant of a STAR shall be communicated to the Key Employee within
thirty (30) days after the date such STAR is granted.
6.3 Terms and Conditions of STAR.
Each STAR shall be evidenced by agreements in such form as the Committee shall
approve from time to time. Each agreement shall provide the following terms and
conditions as determined by the Committee in its sole discretion:
(a) Vesting Schedule. The Committee shall determine whether STARs are fully
vested upon grant or whether the STARs shall vest or mature in whole or in part
over a specific time period.
(b) Exercise. The Comm1ttee shall determine whether the STARs are exerciseable
immediately, exerciseable in installments, or exerciseable after a specified
waiting period. The Committee shall also determine if the STARs expire if not
exercised within a specified period.
(c) Forfeiture. The Committee shall determine those events which will result in
the forfeiture of nonvested STARs and what events, if any, would result in the
forfeiture of vested STARs. Forfeiture events could include (but are not limited
to) voluntary or involuntary termination of employment, death or disability.
(d) Form of Payment. The Committee, in its sole discretion, shall determine
whether payment of an exercised STAR will be made in cash, shares of Common
Stock, or any combination thereof.
(e) Nontransferability. STARs granted under this Plan, and any rights and
privileges pertaining thereto, may not be transferred, assigned, pledged or
hypothecated in any manner, by operation of law or otherwise, other than by will
or by the laws of descent or distribution, and shall not be subject to
execution, attachment or similar process. In the event of the Key Employee's
death, payment of any amount due under the agreement shall be made to the Key
Employee's estate.
(f) Additional Provisions. Each award agreement may contain such other terms and
conditions not inconsistent with the provisions of this Article VI as the
Committee deems appropriate.
6.4 Exercise.
STARs may be exercised, to the extent exerciseable by the terms of the related
award agreement, by written notice directed to the Secretary of
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the Company at the Company's principal executive offices. Such written notice
shall indicate the number of shares subject to the STAR that the Key Employee is
exercising. The written notice shall be by hand delivery or mailed by registered
or certified mail, return receipt requested.
6.5 Payment.
Upon exercise of a STAR, the Key Employee shall be entitled to receive the
economic value of such STAR. The economic value of each individual STAR shall
equal the Fair Market Value of one share of Common Stock on the date such STAR
is exercised, reduced by the Fair Market Value of one share of Common Stock on
the date such STAR is granted to the Key Employee. The economic value of all
STARs exercised by the Key Employee shall be the economic value of each STAR as
determined in the preceding sentence multiplied by the number of STARs
exercised.
6.6 Nature of STAR.
STARs shall be used solely as a device for the measurement and determination of
the amount to be paid to Key Employees upon exercise of the STAR. STARs shall
not constitute or be treated as property or a trust fund of any kind and nothing
in this Article VI shall require the Company to fund or to segregate any of its
assets to pay its obligations hereunder. Key Employees shall have only the right
of a general unsecured creditor of the Company with respect to any STARs granted
under this Plan.
6.7 Limits on Awards.
The total number of shares represented by STARs may not exceed the number of
shares of Common Stock described in Section 1.4, reduced by the number of shares
of Common Stock previously granted to Optionees under this Plan in the form of
Options, and further reduced or adjusted as described in . Section 1.4. Shares
represented by a STAR shall be deducted from the total number of shares subject
to the Plan in the manner described in Section 1.4.
6.8 Coordination with the Plan.
Except as modified in this Article VI, the provisions of Article I (General)
(other than Section 1.5) and Article V (Additional Provisions) shall also apply
to STARs and the use of the word "Option" or "SAR," where applicable, in such
provisions shall also refer to STARs. Articles II, III, IV and Section 1.5 of
Article I shall not be applied to this Article VI.
6.9 Effective Date.
This Article VI shall be effective as of January 24, 1991 ("Effective Date") and
STARs may be granted immediately thereafter. However, if the Plan is not
approved by the Company's shareholders as required by Section
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5.7 of the Plan, all STARs granted shall be null and void as of the Effective
Date described in this Section 6.9 and no compensation shall be paid as a result
of such action. No STARs may be granted after the Plan's expiration date
described in Section 5.7 but STARs granted on or before that date may be
exercised according to the terms of the respective award agreements and shall
continue to be governed by and interpreted consistent with the terms of the
Plan.
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