EXHIBIT 10.1
AS ADOPTED JANUARY 24, 1997 AND
AMENDED THROUGH MAY 10, 2004
EMS TECHNOLOGIES, INC.
1997 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS............................................................ 1
(a) "Award"............................................................ 1
(b) "Board"............................................................ 1
(c) "Code"............................................................. 1
(d) "Committee"........................................................ 1
(e) "Company" ......................................................... 1
(f) "Director"......................................................... 2
(g) "Disinterested Person"............................................. 2
(h) "Employee"......................................................... 2
(i) "Employer"......................................................... 2
(j) "Fair Market Value" ............................................... 3
(k) "Grantee" ......................................................... 3
(l) "ISO".............................................................. 3
(m) "1934 Act"......................................................... 3
(n) "Officer".......................................................... 3
(o) "Option"........................................................... 3
(p) "Option Agreement"................................................. 4
(q) "Optionee"......................................................... 4
(r) "Option Price" .................................................... 4
(s) "Parent"........................................................... 4
(t) "Plan"............................................................. 4
(u) "Purchasable" ..................................................... 4
(v) "Qualified Domestic Relations Order"............................... 4
(w) "Reload Option".................................................... 4
(x) "Restricted Stock"................................................. 5
(y) "Restriction Agreement"............................................ 5
(z) "Stock"............................................................ 5
(aa) "Subsidiary"....................................................... 5
ARTICLE II THE PLAN.............................................................. 5
Section 2.1 Name....................................................... 5
Section 2.2 Purpose.................................................... 5
Section 2.3 Effective Date............................................. 5
Section 2.4 Termination Date .......................................... 5
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TABLE OF CONTENTS (CONT'D)
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ARTICLE III ELIGIBILITY.......................................................... 6
ARTICLE IV ADMINISTRATION....................................................... 6
Section 4.1 Duties and Powers of the Committee......................... 6
Section 4.2 Interpretation; Rules...................................... 6
Section 4.3 No Liability............................................... 7
Section 4.4 Majority Rule.............................................. 7
Section 4.5 Company Assistance......................................... 7
ARTICLE V SHARES OF STOCK SUBJECT TO PLAN....................................... 7
Section 5.1 Limitations ............................................... 7
Section 5.2 Antidilution............................................... 8
ARTICLE VI OPTIONS .............................................................. 9
Section 6.1 Types of Options Granted................................... 9
Section 6.2 Option Grant and Agreement................................. 10
Section 6.3 Optionee Limitations....................................... 10
Section 6.4 $100,000 Limitation........................................ 11
Section 6.5 Option Price............................................... 11
Section 6.6 Exercise Period............................................ 11
Section 6.7 Option Exercise............................................ 12
Section 6.8 Nontransferability of Option............................... 13
Section 6.9 Termination of Employment.................................. 14
Section 6.10 Employment Rights.......................................... 14
Section 6.11 Certain Successor Options.................................. 14
Section 6.12 Conditions to Issuing Option Stock......................... 15
Section 6.13 Automatic Option Grants to Certain
Directors.......................................... 15
ARTICLE VII RESTRICTED STOCK..................................................... 17
Section 7.1 Awards of Restricted Stock ................................ 17
Section 7.2 Non-Transferability........................................ 18
Section 7.3 Lapse of Restrictions ..................................... 18
Section 7.4 Termination of Employment.................................. 18
Section 7.5 Treatment of Dividends..................................... 18
Section 7.6 Delivery of Shares......................................... 19
Section 7.7 Payment of Withholding Taxes............................... 19
ARTICLE VIII TERMINATION, AMENDMENT AND MODIFICATION OF PLAN .................... 20
ARTICLE IX MISCELLANEOUS........................................................ 20
Section 9.1 Replacement or Amended Grants.............................. 20
Section 9.2 Forfeiture for Competition................................. 21
Section 9.3 Plan Binding on Successors................................. 21
Section 9.4 Headings Not a Part of Plan................................ 21
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EMS TECHNOLOGIES, INC.
1997 STOCK INCENTIVE PLAN
ARTICLE I
DEFINITIONS
As used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the contrary:
(a) "Award" shall mean a grant of Restricted Stock.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the United States Internal Revenue Code
of 1986, as amended, including effective date and transition rules
(whether or not codified). Any reference herein to a specific section
or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
(d) "Committee" shall mean a committee of at least two
Directors appointed from time to time by the Board, having the duties
and authority set forth herein in addition to any other authority
granted by the Board; provided, however, that with respect to any
Options or Awards granted to an individual who is also an Officer or
Director, the Committee shall consist of at least two Non-Employee
Directors (who need not be members of the Committee with respect to
Options or Awards granted to any other individuals), and all authority
and discretion shall be exercised by such Non-Employee Directors, and
references herein to the "Committee" shall mean such Non-Employee
Directors insofar as any actions or determinations of the Committee
shall relate to or affect Options or Awards made to or held by any
Officer or Director.
(e) "Company" shall mean EMS Technologies, Inc., a Georgia
corporation.
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(f) "Director" shall mean a member of the Board.
(g) "Employee" shall mean any employee of the Company or any
Subsidiary of the Company.
(h) "Employer" shall mean the corporation that employs a
Grantee.
(i) "Fair Market Value" of the shares of Stock on any date
shall mean
(i) the closing sales price, regular way, or in the
absence thereof the mean of the last reported bid and
asked quotations, on such date on the exchange having
the greatest volume of trading in the shares during
the thirty-day period preceding such date (or if such
exchange was not open for trading on such date, the
next preceding date on which it was open); or
(ii) if there is no price as specified in (i), the
final reported sales price, or if not reported in the
following manner, the mean of the closing high bid
and low asked prices, in the over-the-counter market
for the shares as reported by the National
Association of Securities Dealers Automatic Quotation
System or, if not so reported, then as reported by
the National Quotation Bureau Incorporated, or if
such organization is not in existence, by an
organization providing similar services, on such date
(or if such date is not a date for which such system
or organization generally provides reports, then on
the next preceding date for which it does so); or
(iii) if there also is no price as specified in (ii),
the price determined by the Committee by reference to
bid-and-asked quotations for the shares provided by
members of an association of brokers and dealers
registered pursuant to subsection 15(b) of the 1934
Act, which members make a market in the shares, for
such recent dates
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as the Committee shall determine to be appropriate
for fairly determining current market value; or
(iv) if there also is no price as specified in (iii),
the amount determined in good faith by the Committee
based on such relevant facts, which may include
opinions of independent experts, as may be available
to the Committee.
(j) "Grantee" shall mean an Employee, former employee or other
person who is an Optionee or who has received an Award of Restricted
Stock.
(k) "ISO" shall mean an Option that complies with and is
subject to the terms, limitations and conditions of Code section 422
and any regulations promulgated with respect thereto.
(l) "1934 Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(m) "Non-Employee Director" shall have the meaning set forth
for such term or corresponding concept in Rule 16b-3 under the 1934
Act, as the same may be in effect from time to time, or in any
successor rule thereto, and shall be determined for all purposes under
the Plan according to interpretative or "no-action" positions with
respect thereto issued by the Securities and Exchange Commission or its
staff; provided, however, that to the extent it is determined and
intended that Options qualify as "performance-based compensation"
within the meaning of section 162(m) of the Code, a person shall be a
"Non-Employee Director" only if he or she is also an "outside director"
within the meaning of such section 162(m).
(n) "Officer" shall mean a person who constitutes an officer
of the Company for the purposes of Section 16 of the 1934 Act, as
determined by reference to such Section 16 and to the rules,
regulations, judicial decisions, and interpretative or "no-action"
positions with respect thereto of the Securities and Exchange
Commission or its staff, as the same may be in effect or set forth from
time to time.
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(o) "Option" shall mean a contractual right to purchase Stock
granted pursuant to the provisions of Article VI hereof.
(p) "Option Agreement" shall mean an agreement between the
Company and an Optionee setting forth the terms of an Option.
(q) "Optionee" shall mean a person to whom an Option has been
granted hereunder.
(r) "Option Price" shall mean the price at which an Optionee
may purchase a share of Stock pursuant to an Option.
(s) "Parent", when used with respect to any subject
corporation, shall mean any other corporation that owns stock
possessing 50% or more of the total combined voting power of all
classes of stock of the subject corporation or that owns such stock of
another corporation in an unbroken chain of corporations having such
ownership of the stock of another corporation and ending with the
subject corporation.
(t) "Plan" shall mean the 1997 Stock Incentive Plan of the
Company.
(u) "Purchasable," when used to describe Stock, shall refer to
Stock that may be purchased by an Optionee under the terms of this Plan
on or after a certain date specified in the applicable Option
Agreement.
(v) "Qualified Domestic Relations Order" shall have the
meaning set forth in the Code or in the Employee Retirement Income
Security Act of 1974, as amended, or the rules and regulations
promulgated under the Code or such Act.
(w) "Reload Option" shall mean an Option that is granted,
without further action of the Committee, (i) to an Optionee who
surrenders or authorizes the withholding of shares of Stock in payment
of amounts specified in paragraphs 6.7(c) or 6.7(d) hereof, (ii) for
the same number of shares as is so paid, (iii) as of the date of such
payment and at an Option Price equal to the Fair Market Value of the
Stock on such date, and (iv) otherwise on the same terms and conditions
as the Option whose exercise has occasioned such payment, subject to
such contingencies, conditions or other terms as
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the Committee shall specify at the time such exercised Option is
granted.
(x) "Restricted Stock" shall mean Stock issued, subject to
restrictions, to an Employee pursuant to Article VII hereof.
(y) "Restriction Agreement" shall mean the agreement setting
forth the terms of an Award, and executed by a Grantee as provided in
Section 7.1 hereof.
(z) "Stock" shall mean the $.10 par value common stock of the
Company or, in the event that the outstanding shares of such stock are
hereafter changed into or exchanged for shares of a different class of
stock or securities of the Company or some other corporation, such
other stock or securities.
(aa) "Subsidiary", when used with respect to any subject
corporation, shall mean any other corporation as to which the subject
corporation is a Parent.
ARTICLE II
THE PLAN
2.1 NAME. This plan shall be known as the "EMS Technologies, Inc. 1997
Stock Incentive Plan."
2.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Company, its shareholders, and any Subsidiary of the Company, by offering
certain Employees and Directors an opportunity to acquire or increase their
proprietary interests in the Company. Options and Awards will promote the growth
and profitability of the Company and any Subsidiary of the Company, because
Grantees will be provided with an additional incentive to achieve the Company's
objectives through participation in its success and growth.
2.3 EFFECTIVE DATE. The Plan shall become effective on January 24,
1997.
2.4 TERMINATION DATE. No further Options or Awards shall be
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granted hereunder on or after January 24, 2007, but all Options or Awards
granted prior to that time shall remain in effect in accordance with their
terms.
ARTICLE III
ELIGIBILITY
The persons eligible to participate in this Plan shall consist only of
Directors and those Employees whose participation the Committee determines is in
the best interests of the Company. However, no ISO's may be granted, and no
Options or Awards may be granted to any Director or Officer, prior to the
approval of this Plan by the Company's shareholders. Persons who are not
Employees but who serve as directors of any Subsidiary of the Company shall also
be eligible to participate in this Plan, and references herein to "Employee"
shall be deemed to include any such persons to the extent appropriate for him or
her to become a Grantee.
ARTICLE IV
ADMINISTRATION
4.1 DUTIES AND POWERS OF THE COMMITTEE. The Plan shall be administered
by the Committee. The Committee shall select one of its members as its Chairman
and shall hold its meetings at such times and places as it may determine. The
Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it may deem necessary. The
Committee shall have the power to act by unanimous written consent in lieu of a
meeting, and shall have the right to meet telephonically. In administering the
Plan, the Committee's actions and determinations shall be binding on all
interested parties. The Committee shall have the power to grant Options or
Awards in accordance with the provisions of the Plan. Subject to the provisions
of the Plan, the Committee shall have the discretion and authority to determine
those individuals to whom Options or Awards will be granted and whether such
Options shall be accompanied by the right to receive Reload Options, the number
of shares of Stock subject to each Option or Award, such other matters as are
specified herein, and any other terms and conditions of an Option Agreement or
Restriction Agreement. To the extent not inconsistent with the provisions of the
Plan, the Committee shall have the authority to amend or modify an outstanding
Option Agreement or Restriction Agreement, or to waive any provision thereof,
provided that the Grantee consents to such action.
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4.2 INTERPRETATION; RULES. Subject to the express provisions of the
Plan, the Committee also shall have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable in the administration of the
Plan, including, without limitation, the amending or altering of any Options or
Awards granted hereunder as may be required to comply with or to conform to any
federal, state or local laws or regulations.
4.3 NO LIABILITY. Neither any member of the Board nor any member of the
Committee shall be liable to any person for any act or determination made in
good faith with respect to the Plan or any Option or Award granted hereunder.
4.4 MAJORITY RULE. A majority of the members of the Committee shall
constitute a quorum, and any action taken by a majority at a meeting at which a
quorum is present, or any action taken without a meeting evidenced by a writing
executed by all the members of the Committee, shall constitute the action of the
Committee.
4.5 COMPANY ASSISTANCE. The Company shall supply full and timely
information to the Committee on all matters relating to eligible persons, their
employment, death, retirement, disability or other termination of employment,
and such other pertinent facts as the Committee may require. The Company shall
furnish the Committee with such clerical and other assistance as is necessary in
the performance of its duties.
ARTICLE V
SHARES OF STOCK SUBJECT TO PLAN
5.1 LIMITATIONS. Shares subject to an Option or issued as an Award may
be either authorized and unissued shares or shares issued and later acquired by
the Company. Subject to any antidilution adjustment pursuant to the provisions
of Section 5.2 hereof, the maximum number of shares of Stock that may be issued
hereunder shall be 1,450,000 (of which a maximum of 80,000 shares may be issued
as Restricted Stock). Shares (i) covered by any unexercised
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portion of an Option that has terminated for any reason; (ii) covered by any
forfeited portion of an Award (except any portion as to which the Grantee has
received, and not forfeited, dividends or other benefits of ownership other than
voting rights); (iii) withheld in payment of the Option Price or withholding
taxes; or (iv) issued hereunder but equal to the number of shares surrendered in
payment of the Option Price or withholding taxes or purchased by the Company for
an aggregate price not exceeding the aggregate cash received from Grantees in
payment of Option Prices or withholding taxes, may each again be optioned or
awarded under the Plan, and such shares shall not be considered as having been
optioned or issued in computing the number of shares of Stock remaining
available for option or award hereunder.
5.2 ANTIDILUTION.
(a) In the event that the outstanding shares of Stock are
changed into or exchanged for a different number or kind of shares or
other securities of the Company by reason of merger, consolidation,
reorganization, recapitalization, reclassification, combination or
exchange of shares, stock split or stock dividend, or in the event that
any spin-off, spin-out or other distribution of assets materially
affects the price of the Company's stock:
(i) The aggregate number and kind of shares of Stock
for which Options or Awards may be granted hereunder shall be
adjusted proportionately by the Committee; and
(ii) The rights of Optionees (concerning the number
of shares subject to Options and the Option Price) under
outstanding Options and the rights of the holders of Awards
(concerning the terms and conditions of the lapse of any
then-remaining restrictions), shall be adjusted
proportionately by the Committee.
(b) If the Company shall be a party to any reorganization in
which it does not survive, involving merger, consolidation, or
acquisition of the stock or substantially all the assets of the
Company, the Committee, in its discretion, may:
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(i) notwithstanding other provisions hereof, declare
that all Options granted under the Plan shall become
exercisable immediately notwithstanding the provisions of the
respective Option Agreements regarding exercisability, that
all such Options shall terminate a specified period of time
after the Committee gives written notice of the immediate
right to exercise all such Options and of the decision to
terminate all Options not exercised within such period, and
that all then-remaining restrictions pertaining to Awards
under the Plan shall immediately lapse; or
(ii) notify all Grantees that all Options or Awards
granted under the Plan shall be assumed by the successor
corporation or substituted on an equitable basis with options
or restricted stock issued by such successor corporation.
(c) If the Company is to be liquidated or dissolved in
connection with a reorganization described in paragraph 5.2(b), the
provisions of such paragraph shall apply. In all other instances, the
adoption of a plan of dissolution or liquidation of the Company shall,
notwithstanding other provisions hereof, cause all then-remaining
restrictions pertaining to Awards under the Plan to lapse, and shall
cause every Option outstanding under the Plan to terminate to the
extent not exercised prior to the adoption of the plan of dissolution
or liquidation by the shareholders, provided that, notwithstanding
other provisions hereof, the Committee may declare all Options granted
under the Plan to be exercisable at any time on or before the fifth
business day following such adoption notwithstanding the provisions of
the respective Option Agreements regarding exercisability.
(d) The adjustments described in paragraphs (a) through (c) of
this Section 5.2, and the manner of their application, shall be
determined solely by the Committee, and any such adjustment may provide
for the elimination of fractional share interests. The adjustments
required under this Article V shall apply to any successors of the
Company and shall be made regardless of the number or type of
successive events
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requiring such adjustments.
ARTICLE VI
OPTIONS
6.1 TYPES OF OPTIONS GRANTED. Within the limitations provided herein,
Options may be granted to one Employee at one or several times or to different
Employees at the same time or at different times, in either case under different
terms and conditions, as long as the terms and conditions of each Option are
consistent with the provisions of the Plan. Without limitation of the foregoing,
Options may be granted subject to conditions based on the financial performance
of the Company or any other factor the Committee deems relevant.
6.2 OPTION GRANT AND AGREEMENT. Each Option granted or modified
hereunder shall be evidenced (a) by either minutes of a meeting or a written
consent of the Committee, and (b) by a written Option Agreement executed by the
Company and the Optionee. The terms of the Option, including the Option's
duration, time or times of exercise, exercise price, whether the Option is
intended to be an ISO, whether the Option is transferable under paragraph
6.8(b), and whether the Option is to be accompanied by the right to receive a
Reload Option, shall be stated in the Option Agreement. Separate Option
Agreements shall be used for Options intended to be ISO's and those not so
intended, but any failure to use such separate Agreements shall not invalidate,
or otherwise adversely affect the Optionee's rights under and interest in, the
Options evidenced thereby.
6.3 OPTIONEE LIMITATIONS. The Committee shall not grant an ISO to any
person who, at the time the ISO would be granted:
(a) is not an Employee; or
(b) owns or is considered to own stock possessing more than
10% of the total combined voting power of all classes of stock of the
Employer, or any Parent or Subsidiary of the Employer; provided,
however, that this limitation shall not apply if at the time an ISO is
granted the Option Price is at least 110% of the Fair Market Value of
the Stock subject to
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such Option and such Option by its terms would not be exercisable after
the expiration of five years from the date on which the Option is
granted. For the purpose of this paragraph (b), a person shall be
considered to own (i) the stock owned, directly or indirectly, by or
for his brothers and sisters (whether by the whole or half blood),
spouse, ancestors and lineal descendants, (ii) the stock owned,
directly or indirectly, by or for a corporation, partnership, estate,
or trust in proportion to such person's stock interest, partnership
interest or beneficial interest therein, and (iii) the stock which such
person may purchase under any outstanding options of the Employer or of
any Parent or Subsidiary of the Employer.
6.4 CERTAIN LIMITATIONS
(a) LIMITATION ON NUMBER OF SHARES. No Optionee shall be
granted, during any calendar year, Options to purchase in excess of
80,000 shares of stock.
(b) $100,000 LIMITATION ON ISO'S. Except as provided below,
the Committee shall not grant an ISO to, or modify the exercise
provisions of outstanding ISO's held by, any person who, at the time
the ISO is granted (or modified), would thereby receive or hold any
incentive stock options (as described in Code section 422) of the
Employer and any Parent or Subsidiary of the Employer, such that the
aggregate Fair Market Value (determined as of the respective dates of
grant or modification of each option) of the stock with respect to
which such incentive stock options are exercisable for the first time
during any calendar year is in excess of $100,000; provided, that the
foregoing restriction on modification of outstanding ISO's shall not
preclude the Committee from modifying an outstanding ISO if, as a
result of such modification and with the consent of the Optionee, such
Option no longer constitutes an ISO; and provided that, if the $100,000
limitation described in this Section 6.4 is exceeded, an Option that
otherwise qualifies as an ISO shall be treated as an ISO up to the
limitation and the excess shall be treated as an Option not qualifying
as an ISO. The preceding sentence shall be applied by taking options
intended to be ISO's into account in the order in which they were
granted.
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6.5 OPTION PRICE. The Option Price under each Option shall be
determined by the Committee. However, the Option Price shall not be less than
the Fair Market Value of the Stock on the date that the Option is granted (or,
in the case of an ISO that is subsequently modified, on the date of such
modification).
6.6 EXERCISE PERIOD. The period for the exercise of each Option granted
hereunder shall be determined by the Committee, but the Option Agreement with
respect to each Option intended to be an ISO shall provide that such Option
shall not be exercisable after a date not more than ten years from the date of
grant (or modification) of the Option. In addition, no Option granted to an
Employee who is also an Officer or Director shall be exercisable prior to the
expiration of six months from the date such Option is granted, other than in the
case of the death or disability of such Employee.
6.7 OPTION EXERCISE.
(a) Unless otherwise provided in the Option Agreement, an
Option may be exercised at any time or from time to time during the
term of the Option as to any or all whole shares that have become
Purchasable under the provisions of the Option, but not at any time as
to less than 100 shares unless the remaining shares that have become so
Purchasable are less than 100 shares. The Committee shall have the
authority to prescribe in any Option Agreement that the Option may be
exercised only in accordance with a vesting schedule during the term of
the Option.
(b) An Option shall be exercised by (i) delivery to the
Treasurer of the Company at its principal office of written notice of
exercise with respect to a specified number of shares of Stock, and
(ii) payment to the Company at that office of the full amount of the
Option Price for such number of shares.
(c) The Option Price shall be paid in full upon the exercise
of the Option. The Committee may provide in an Option Agreement that,
in lieu of cash, all or any portion of the Option Price may be paid by
(i) tendering to the Company shares of Stock duly endorsed for transfer
and owned by the
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Optionee, or (ii) delivering to the Company an attestation of the
Optionee's then-current ownership of a number of shares equal to the
number thereby authorized to be withheld by the Company from the shares
otherwise deliverable upon exercise of the Option, in each case to be
credited against the Option Price at the Fair Market Value of such
shares on the date of exercise (however, no fractional shares may be so
transferred, and the Company shall not be obligated to make any cash
payments in consideration of any excess of the aggregate Fair Market
Value of shares transferred over the aggregate Option Price).
(d) In addition to and at the time of payment of the Option
Price, the Optionee shall pay to the Company in cash the full amount of
any federal, state and local income, employment or other taxes required
to be withheld from the income of such Optionee as a result of such
exercise. However, in the discretion of the Committee any Option
Agreement may provide that all or any portion of such tax obligations,
together with additional taxes not exceeding the actual additional
taxes to be owed by the Optionee as a result of such exercise, may,
upon the irrevocable election of the Optionee, be paid by (i) tendering
to the Company whole shares of Stock duly endorsed for transfer and
owned by the Optionee, (ii) delivering to the Company an attestation of
the Optionee's then-current ownership of a number of shares equal to
the number thereby authorized to be withheld by the Company from the
shares otherwise deliverable upon exercise of the Option, or (iii)
authorizing the Company to withhold shares of Stock otherwise issuable
upon exercise of the Option, in either case in that number of shares
having a Fair Market Value on the date of exercise equal to the amount
of such taxes thereby being paid, in all cases subject to such
restrictions as the Committee may from time to time determine,
including any such restrictions as may be necessary or appropriate to
satisfy the conditions of the exemption set forth in Rule 16b-3 under
the 1934 Act.
(e) The holder of an Option shall not have any of the rights
of a shareholder with respect to the shares of Stock subject to the
Option until such shares have been issued upon exercise of the Option.
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6.8 NONTRANSFERABILITY OF OPTION.
(a) Except as provided in paragraph 6.8(b), no Option or any
rights therein shall be transferable by an Optionee other than by will
or the laws of descent and distribution, or (except for an ISO)
pursuant to a Qualified Domestic Relations Order. During the lifetime
of an Optionee, an Option granted to that Optionee shall be exercisable
only by such Optionee, by such Optionee's guardian or other legal
representative, should one be appointed, or by such Optionee's
transferee permitted under paragraph 6.8(b).
(b) The Committee may, in its discretion, provide that all or
a portion of an Option (other than an ISO) may be transferred by the
Optionee to (i) the spouse, children or grandchildren of the Optionee
("Immediate Family Member"), (ii) a trust or trusts for the exclusive
benefit of such Immediate Family Members, or (iii) a partnership in
which the Optionee and or such Immediate Family Members are the only
partners. Following transfer, any such Option shall continue to be
subject to the same terms and conditions as were applicable immediately
prior to transfer, including those terms and conditions governing
transfer and the effect on such Option of the termination of employment
of the Optionee. The Company shall have no obligation to any transferee
to provide notice of any termination of an Option as a result of
termination of the Optionee's employment. The Committee may specify as
a condition of any such transfer the manner in which the Optionee shall
remain responsible for the payment of taxes required to be withheld as
a result of the exercise of such transferred Option.
6.9 TERMINATION OF EMPLOYMENT. The Committee shall have the power to
specify, with respect to the Options granted to any particular Optionee, the
effect upon such Optionee's right to exercise an Option of the termination of
such Optionee's employment under various circumstances, which effect may include
(but is not limited to) immediate or deferred termination of such Optionee's
rights under an Option, or acceleration of the date at which an Option may be
exercised in full. With respect to an ISO, such effects shall be consistent with
applicable requirements for treatment as an ISO.
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6.10 EMPLOYMENT RIGHTS. Options granted under the Plan shall not be
affected by any change of employment so long as the Optionee continues to be an
Employee. Nothing in the Plan or in any Option Agreement shall confer on any
person any right to continue in the employ of the Company or any Subsidiary of
the Company, or shall interfere in any way with the right of the Company or any
such Subsidiary to terminate such person's employment at any time.
6.11 CERTAIN SUCCESSOR OPTIONS. To the extent not inconsistent with the
terms, limitations and conditions of Code section 422, and any regulations
promulgated with respect thereto, an Option issued in respect of an option held
by an employee to acquire stock of any entity acquired, by merger or otherwise,
by the Company (or by any Subsidiary of the Company) may contain terms that
differ from those stated in this Article VI, but solely to the extent necessary
to preserve for any such employee the rights and benefits contained in such
predecessor option, or to satisfy the requirements of Code section 424(a).
6.12 CONDITIONS TO ISSUING OPTION STOCK. The Company shall not be
required to issue or deliver any Stock upon the full or partial exercise of any
Option prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which the Stock is then listed;
(b) The completion of any registration or other qualification
of such shares that the Company shall determine to be necessary or
advisable under any federal or state law or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body, or the Company's determination that an
exemption is available from such registration or qualification;
(c) The obtaining of any approval or other clearance from any
federal or state governmental agency that the Company shall determine
to be necessary or advisable; and
(d) The lapse of such reasonable period of time following
exercise as shall be appropriate for reasons of administrative
convenience.
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Unless the shares of Stock covered by the Plan shall be the subject of
an effective registration statement under the Securities Act of 1933, as
amended, stock certificates issued and delivered to Optionees shall bear such
restrictive legends as the Company shall deem necessary or advisable pursuant to
applicable federal and state securities laws.
6.13 AUTOMATIC OPTION GRANTS TO CERTAIN DIRECTORS.
(a) OPTIONS FOR NEW DIRECTORS. Each person who is not an
Employee, or an employee of any Parent of the Company, shall
automatically, and without any action of the Board or the Committee, be
granted, on the first day on which such person serves as a Director, an
Option for the purchase of 10,000 shares of Stock if such first day of
service occurs prior to 1999, and of 15,000 shares if such first day
occurs in 1999 or thereafter (subject in all cases to automatic
proportionate adjustment for stock splits or stock dividends, and
otherwise to proportionate adjustment by the Committee as provided in
Section 5.2). Each such Option shall become exercisable as to one-fifth
of the subject shares on the date that is six months after the date of
grant, and as to an additional one-fifth of the subject shares on each
of the first, second, third and fourth anniversaries of such six-month
date. Persons receiving such Option prior to 1999 shall also be
granted, automatically and without further action of the Board or
Committee, upon election in 1999 to a further term of service as a
Director, an Option for 1,000 shares for each 2,000 shares of such
original Option not yet exercisable as of such 1999 election, which
additional Option shall become exercisable as to 1,000 shares on each
date on which an additional 2,000 shares of the original Option becomes
exercisable.
(b) ADDITIONAL OPTIONS FOR CONTINUING SERVICE. Each person who
at that time is a member of the Board but who is not an Employee, or an
employee of any Parent of the Company, shall automatically and without
any action of the Board or the Committee, be granted, on each date on
which such person is elected to a new one-year term of service, an
Option for the purchase of 3,000 shares (subject to automatic
proportionate adjustment for stock splits or stock dividends, and
otherwise to proportionate adjustment by the Committee as provided in
Section 5.2). Each such Option shall become exercisable on the date
that is six months after the date of grant. [THIS
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PARAGRAPH IS EFFECTIVE FOR PERIODS AFTER DECEMBER 31, 2003]
(c) OTHER TERMS OF AUTOMATIC OPTIONS. Each Option
automatically granted under this Section 6.13 shall not be an ISO,
shall not include the right to receive a Reload Option, and shall have
an Option Price equal to the Fair Market Value of the Stock on the date
of grant. Each such Option shall become immediately exercisable in the
event a party other than the Company or any Parent or Subsidiary of the
Company purchases or otherwise acquires shares of Stock pursuant to a
tender offer or exchange offer for such shares, or any person or group
becomes the beneficial owner (for the purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended) of 50% or more of the
outstanding shares of the Stock. To the extent such an Option shall
have become exercisable, it shall be non-forfeitable and shall remain
exercisable until the tenth anniversary of its date of grant, but if
the Grantee ceases to be a Director for any reason, any portion of such
Option that is not at that time exercisable shall immediately terminate
and shall not thereafter become exercisable. The Option Price for each
such Option may be paid in cash or in the manners specified in the
second sentence of paragraph 6.7(c) hereof. In addition, any taxes
related to the exercise of each such Option may be paid in the manner
contemplated in the second sentence of paragraph 6.7(d) hereof.
ARTICLE VII
RESTRICTED STOCK
7.1 AWARDS OF RESTRICTED STOCK. The Committee may grant Awards of
Restricted Stock upon determination by the Committee, acting pursuant to the
delegation hereby of the Board's authority to make such determinations, that the
value or other benefit to the Company of the services of a Grantee theretofore
performed or to be performed as a condition of the lapse of restrictions
applicable to such Restricted Stock, or the benefit to the Company of the
incentives created by the issuance thereof, is adequate consideration for the
issuance of such shares. Each such Award shall be governed by a Restriction
Agreement between the Company and the Grantee. Each Restriction Agreement shall
contain such restrictions, terms and conditions as the Committee shall, in its
discretion, determine, and may require that an appropriate legend be placed on
the certificates evidencing the subject Restricted Stock.
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Shares of Restricted Stock granted pursuant to an Award hereunder shall
be issued in the name of the Grantee as soon as reasonably practicable after the
Award is granted, provided that the Grantee has executed the Restriction
Agreement governing the Award, the appropriate blank stock powers and, in the
discretion of the Committee, an escrow agreement and any other documents which
the Committee may require as a condition to the issuance of such shares. If a
Grantee shall fail to execute the foregoing documents, within any time period
prescribed by the Committee, the Award shall be null and void. At the discretion
of the Committee, shares of Restricted Stock issued in connection with an Award
shall be held by the Company or deposited together with the stock powers with an
escrow agent designated by the Committee. Unless the Committee determines
otherwise and as set forth in the Restriction Agreement, upon issuance of such
shares, the Grantee shall have all of the rights of a shareholder with respect
to such shares, including the right to vote the shares and to receive all
dividends or other distributions paid or made with respect to them.
7.2 NON-TRANSFERABILITY. Until any restrictions upon Restricted Stock
awarded to a Grantee shall have lapsed in a manner set forth in Section 7.3,
such shares of Restricted Stock shall not be transferable other than by will or
the laws of descent and distribution, or pursuant to a Qualified Domestic
Relations Order, nor shall they be delivered to the Grantee.
7.3 LAPSE OF RESTRICTIONS. Restrictions upon Restricted Stock awarded
hereunder shall lapse at such time or times (but, with respect to any award to
an Employee who is also a Director or Officer, not less than six months after
the date of the Award) and on such terms and conditions as the Committee shall,
in its discretion, determine at the time the Award is granted or thereafter.
7.4 TERMINATION OF EMPLOYMENT. The Committee shall have the power to
specify, with respect to each Award granted to any particular Employee, the
effect upon such Grantee's rights with respect to such Restricted Stock of the
termination of such Grantee's employment under various circumstances, which
effect may include (but is not limited to) immediate or deferred forfeiture of
such Restricted Stock or acceleration of the date at which any then-remaining
restrictions shall lapse.
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7.5 TREATMENT OF DIVIDENDS. At the time an Award of Restricted Stock is
made the Committee may, in its discretion, determine that the payment to the
Grantee of any dividends, or a specified portion thereof, declared or paid on
such Restricted Stock shall be (i) deferred until the lapsing of the relevant
restrictions, and (ii) held by the Company for the account of the Grantee until
such time. In the event of such deferral, there shall be credited at the end of
each year (or portion thereof) interest on the amount of the account at the
beginning of the year at a rate per annum determined by the Committee. Payment
of deferred dividends, together with interest thereon, shall be made upon the
lapsing of restrictions imposed on such Restricted Stock, and any dividends
deferred (together with any interest thereon) in respect of Restricted Stock
shall be forfeited upon any forfeiture of such Restricted Stock.
7.6 DELIVERY OF SHARES. Within a reasonable period of time following
the lapse of the restrictions on shares of Restricted Stock, the Committee shall
cause a stock certificate or certificates to be delivered to the Grantee with
respect to such shares. Such shares shall be free of all restrictions hereunder,
except that if the shares of stock covered by the Plan shall not be the subject
of an effective registration statement under the Securities Act of 1933, as
amended, such stock certificates shall bear such restrictive legends as the
Company shall deem necessary or advisable pursuant to applicable federal and
state securities laws.
7.7 PAYMENT OF WITHHOLDING TAXES.
(a) The Restriction Agreement may authorize the Company to
withhold from compensation otherwise due to the Grantee the full amount
of any federal, state and local income, employment or other taxes
required to be withheld from the income of such Grantee as a result of
the lapse of the restrictions on shares of Restricted Stock, or
otherwise as a result of the recognition of taxable income with respect
to an Award. At the time of and as a condition to the delivery of a
stock certificate or certificates pursuant to Section 7.6, the Grantee
shall pay to the Company in cash any balance owed with respect to such
withholding requirements.
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(b) In the discretion of the Committee, any Restriction
Agreement may provide that all or any portion of the tax obligations
otherwise payable in the manner set forth in paragraph 7.7(a), together
with additional taxes not exceeding the actual additional taxes to be
owed by the Grantee with respect to the Award, may, upon the
irrevocable election of the Grantee, be paid by tendering to the
Company whole shares of Stock duly endorsed for transfer and owned by
the Grantee, or by authorizing the Company to withhold and cancel
shares of Stock otherwise deliverable pursuant to Section 7.6, in
either case in that number of shares having a Fair Market Value on the
date that taxable income is recognized equal to the amount of such
taxes thereby being paid, in all cases subject to such restrictions as
the Committee may from time to time determine.
ARTICLE VIII
TERMINATION, AMENDMENT AND MODIFICATION OF PLAN
The Board may at any time, (i) cause the Committee to cease granting
Options and Awards, (ii) terminate the Plan, or (iii) in any respect amend or
modify the Plan. However, the Board (unless its actions are approved or ratified
by the shareholders of the Company within twelve months of the date the Board
amends the Plan) may not amend the Plan to materially increase the number of
shares of Stock available under the Plan to Directors or Officers.
No termination, amendment or modification of the Plan shall affect
adversely a Grantee's rights under an Option Agreement or Restriction Agreement
without the consent of the Grantee or his or her legal representative.
From and after the first date on which an Option is automatically
granted pursuant to Section 6.13, the provisions of such Section 6.13 may not be
amended in any manner more frequently than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, as amended, or the rules and regulations promulgated under the Code or
such Act.
ARTICLE IX
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MISCELLANEOUS
9.1 REPLACEMENT OR AMENDED GRANTS. At the sole discretion of the
Committee, and subject to the terms of the Plan, the Committee may modify
outstanding Options or Awards or accept the surrender of outstanding Options or
Awards on terms specified by the Committee, which terms may include the grant of
new Options or Awards in substitution for them. However, no modification of an
Option or Award shall adversely affect a Grantee's rights under an Option
Agreement or Restriction Agreement without the consent of the Grantee or his or
her legal representative, and no modification of an existing Option, or grant of
a new Option in substitution for the surrender of an existing Option, shall be
at an Option Price lower than that of the existing Option at the time it was
first granted (as thereafter adjusted pursuant to Section 5.2).
9.2 FORFEITURE FOR COMPETITION. If a Grantee provides services to a
competitor of the Company or any of its Subsidiaries, whether as an employee,
officer, director, independent contractor, consultant, agent or otherwise, such
services being of a nature that can reasonably be expected to involve the skills
and experience used or developed by the Grantee while a Director or an Employee,
then that Grantee's rights under any Options outstanding hereunder shall be
forfeited and terminated, and any shares of Restricted Stock held by such
Grantee subject to remaining restrictions shall be forfeited, subject in each
case to a determination to the contrary by the Committee.
9.3 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
successors of the Company.
9.4 HEADINGS NOT A PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference, and do not constitute a part
of the Plan.
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