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EXHIBIT(4)-4
MEDPARTNERS, INC.
1994 STOCK INCENTIVE PLAN
1. PURPOSE.
The purpose of the 1994 Stock Incentive Plan ("Plan") of MedPartners,
Inc. ("Company") is to provide a means through which the Company and its
Subsidiaries and Affiliates may attract able persons to enter and remain in the
employ of the Company and its Subsidiaries and Affiliates, and to provide a
means whereby those key persons upon whom the responsibilities of the successful
administration and management of the Company rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, thereby strengthening their commitment to
the welfare of the Company and promoting an identity of interest between
stockholders and these key persons.
A further purpose of the Plan is to provide such key persons with
additional incentive and reward opportunities designed to enhance the profitable
growth of the Company. So that the appropriate incentive can be provided, the
Plan provides for granting Incentive Stock Options, Nonqualified Stock Options,
Restricted Stock Awards, or any combination of the foregoing.
2. DEFINITIONS.
The following definitions shall be applicable throughout the Plan.
"Affiliate" means any affiliate of the Company within the meaning of 17
CFR ss. 230.405.
"Award" means, individually or collectively, any Incentive Stock
Option, Nonqualified Stock Option or Restricted Stock Award.
"Board" means the Board of Directors of the Company.
"Cause" means the Company, a Subsidiary or an Affiliate having cause to
terminate a Participant's employment under any existing employment agreement
between the Participant and the Company, a Subsidiary or an Affiliate or, in the
absence of such an employment agreement, upon (i) the determination by the
Committee that the Participant has ceased to perform his duties to the Company,
or a Subsidiary or an Affiliate (other than as a result of his incapacity due to
physical or mental illness or injury), which failure amounts to an intentional
and extended neglect of his duties to such party, (ii) the Committee's
determination that the Participant has engaged or is about to engage in conduct
materially injurious to the Company, or a Subsidiary or an Affiliate, or (iii)
the Participant having been convicted of a felony.
"Change in Control" shall, unless the Board otherwise directs by
resolution adopted prior thereto, be deemed to occur if (i) any "person" (as
that term is used in Sections 13 and 14(d)(2)
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of the Securities and Exchange Act of 1934 ("Exchange Act")) is or becomes the
beneficial owner (as that term is used in Section 13(d) of the Exchange Act"),
directly or indirectly, of 25% or more of the voting Stock or (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election or the nomination for election by the Company's
stockholders of each new director was approved by a vote of at least
three-quarters of the directors then still in office who were directors at the
beginning of the period. Any merger, consolidation or corporate reorganization
in which the owners of the Company's capital stock entitled to vote in the
election of directors ("Voting Stock") prior to said combination, own 50% or
more of the resulting entity's Voting Stock shall not, by itself, be considered
a Change in Control.
"Code" means the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to such section and any regulations under such section.
"Committee" means the Compensation Committee of the Board or such other
committee as the Board may appoint to administer the Plan.
"Common Stock" means the common stock, par value $.001 per share, of
the Company.
"Company" means MedPartners, Inc.
"Date of Grant" means the date on which the granting of an Award is
authorized or such other date as may be specified in such authorization.
"Disability" means the complete and permanent inability by reason of
illness or accident to perform the duties of the occupation at which a
Participant was employed when such disability commenced or, if the Participant
was retired when such disability commenced, the inability to engage in any
substantial gainful activity, as determined by the Committee based upon medical
evidence acceptable to it.
"Eligible Employee" means any person regularly employed by the Company
or a Subsidiary or Affiliate on a full-time salaried basis, and any independent
contractor of the Com pany or a Subsidiary or Affiliate, who satisfies all of
the requirements of Section 6.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" on a given date means (i) the last reported sale
price for the Stock on that date (or, if there were no such sales on that date,
on the next most recent date on which there were such sales) as reported on the
Composite Tape if the Stock is listed on The New York Stock Exchange ("NYSE") or
on the National Association of Securities Dealers National Market System
("NMS"), (ii) if the Stock is not then issued on the NYSE or the NMS but sales
of the Stock are reported by the National Association of Securities Dealers
Automatic Quotation System
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or any success thereto ("AQS"), the average between the closing bid and asked
price quotations for the Stock on that date (or if none on that date, on the
next most recent date) as reported on the AQS, or (iii) if the Stock is not then
issued on the NYSE or the NMS, and sales of the Stock are not reported by the
AQS, the amount determined by the Board to be the fair market value based upon a
good faith attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service.
"Holder" means a Participant who has been granted an Option or a
Restricted Stock Award.
"Incentive Stock Option" means an Option granted by the Committee to a
Participant under the Plan which is designated by the Committee as an Incentive
Stock Option pursuant to Section 422 of the Code.
"Non-Employee Director" means a Director of the Company who (i) is not
currently an officer or employee of the Company or any Subsidiary of the
Company; (ii) does not directly or indirectly receive any compensation from the
Company or any subsidiary for services rendered as a consultant or in any other
non-director capacity that would exceed the $60,000 threshhold for which
disclosure would be required under Item 404(a) of Regulation S-K; (iii) does not
possess an interest in any other transaction for which disclosure would be
required under Item 404(a) of Regulation S-K; and (iv) is not engaged in a
business relationship with the Company which would be disclosable under Item
404(b) of Regulation S-K.
"Nonqualified Stock Option" means an Option granted by the Committee to
a Participant under the Plan which is not designated by the Committee as an
Incentive Stock Option.
"Normal Termination" means termination:
(i) with respect to the Company or a Subsidiary, at
retirement (excluding early retirement) pursuant to the Company
retirement plan then in effect;
(ii) with respect to an Affiliate, at retirement
(excluding early retire ment) pursuant to the retirement plan of such
Affiliate then in effect or, if the Affiliate has no such plan, at
retirement upon or after the attainment of age 65;
(iii) on account of Disability;
(iv) with the written approval of the Committee; or
(v) by the Company, a Subsidiary or Affiliate without
Cause.
"Option" means an Award granted under Section 7 of the Plan.
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"Option Period" means the period described in Section 7(c).
"Participant" means an Eligible Employee who has been selected to
participate in the Plan and to receive an Award pursuant to Section 6.
"Plan" means the MedPartners, Inc. 1994 Stock Incentive Plan.
"Reporting Company" means the Company.
"Restricted Period" means, with respect to any share of Restricted
Stock, the period of time determined by the Committee during which such share of
Restricted Stock is subject to the restrictions set forth in Section 8.
"Restricted Stock" means shares of Common Stock issued or transferred
to a Participant subject to the restrictions set forth in Section 8 and any new,
additional or different securities a Participant may become entitled to receive
as a result of adjustments made pursuant to Section 10.
"Restricted Stock Award" means an Award granted under Section 8 of the
Plan.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock" means the Common Stock or such other authorized shares of stock
the Company as the Committee may from time to time authorize for use under the
Plan.
"Subsidiary" means any subsidiary of the Company as defined in Section
424(f) of the Code.
3. EFFECTIVE DATE, DURATION AND STOCKHOLDER APPROVAL.
The Plan became effective on May 7, 1994, and no further Awards
may be made after the expiration of 10 years therefrom.
The Plan shall continue in effect until all matters relating to the
payment of Awards and administration of the Plan have been settled.
4. ADMINISTRATION.
The Committee shall administer the Plan. Each member of the Committee
shall, at the time he takes any action with respect to an Award under the Plan,
be a Non-Employee Director.
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The acts of a majority of the members present at any meeting at which a
quorum is present or acts approved in writing by a majority of the Committee
shall be deemed the acts of the Committee.
Subject to the provisions of the Plan, the Committee shall have
exclusive power to:
(a) Select the Eligible Employees to participate in the Plan;
(b) Determine the nature and extent of the Awards to be made
to each Participant;
(c) Determine the time or times when Awards will be made;
(d) Determine the conditions to which the payment of Awards
may be subject;
(e) Prescribe the form or forms evidencing Awards; and
(f) Cause records to be established in which there shall be
entered, from time to time, as Awards are made to Participants, the
date of each Award, the number of Incentive Stock Options, Nonqualified
Stock Options, and shares of Restricted Stock awarded by the Committee
to each Participant, the expiration date, and the duration of any
applicable Restricted Period.
The Committee shall have the authority, subject to the provisions of
the Plan, to establish, adopt, or revise such rules and regulations and to make
all such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's inter pretation of
the Plan or any Awards granted pursuant thereto and all decisions and
determinations by the Committee with respect to the Plan shall be final,
binding, and conclusive on all parties unless otherwise determined by the Board.
5. GRANT OF OPTIONS AND RESTRICTED STOCK AWARDS; SHARES SUBJECT TO THE
PLAN.
The Committee may, from time to time, grant Awards of Options and/or
Restricted Stock to one or more Participants; provided, however, that:
(a) Subject to Section 10, the aggregate number of shares of
Stock made subject to Awards may not exceed 2,950,000;
(b) Such shares shall be deemed to have been used in payment
of Awards whether they are actually delivered or the Fair Market Value
equivalent of such shares is paid in cash. In the event any Option or
Restricted Stock shall be
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surrendered, terminate, expire, or be forfeited, the number of shares
of Stock no longer subject thereto shall thereupon be released and
shall thereafter be available for new Awards under the Plan to the
fullest extent permitted by Rule 16b-3 under the Exchange Act (if
applicable at the time);
(c) Stock delivered by the Company in settlement of Awards
under the Plan may be authorized and unissued Stock or Stock held in
the treasury of the Company or may be purchased on the open market or
by private purchase at prices no higher than the Fair Market Value at
the time of purchase; and
6. ELIGIBILITY.
Participants shall be limited to officers, key employees and
independent contractors of the Company and its Subsidiaries and Affiliates who
have received written notification from the Committee or from a person
designated by the Committee, that they have been selected to participate in the
Plan.
7. STOCK OPTIONS.
One or more Incentive Stock Options or Nonqualified Stock Options may
be granted to any Participant; provided, however, that Incentive Stock Options
may be granted only to employees of the Company or a Subsidiary. Each Option so
granted shall be subject to the following conditions:
(a) Option Price. The Option price ("Option Price") per share of Stock
shall be set by the Committee at the time of grant but shall not be less than
(i) in the case of an Incentive Stock Option, the Fair Market Value of a share
of Stock at the Date of Grant, and (ii) in the case of a Nonqualified Stock
Option, the par value per share of Stock.
(b) Manner of Exercise and Form of Payment. Options which have become
exercisable may be exercised by delivery of written notice of exercise to the
Committee accompanied by payment of the Option Price. The Option Price shall be
payable in cash and/or shares of Stock valued at the Fair Market Value at the
time the Option is exercised, or, in the discretion of the Committee, either (i)
in other property having a fair market value on the date of exercise equal to
the Option Price, or (ii) by delivering to the Committee a copy of irrevocable
instructions to a stockbroker to deliver promptly to the Company an amount of
sale or loan proceeds sufficient to pay the Option Price.
(c) Other Terms and Conditions. If the Holder has not died or
terminated, the Option shall become exercisable in such manner and within such
period or periods ("Option Period"), not to exceed 10 years from its Date of
Grant, as set forth in the Stock Option Agreement to be entered into in
connection therewith:
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(i) Each Option shall lapse in the following situations:
-- ten years after it is granted;
-- three months after Normal Termination,
except as otherwise provided by the Committee, or
-- any earlier time set forth in the Stock
Option Agreement.
(ii) If the Holder terminates otherwise than by Normal
Termination or death, the Option shall lapse at the time of
termination.
(iii) If the Holder dies within the Option Period or within
3 months after Normal Termination (or such other period as may have
been established by the Committee), the Option shall lapse unless it is
exercised within the Option Period and in no event later than 12 months
after the date of Holder's death by the Holder's legal representative
or representatives or by the person or persons entitled to do so under
the Holder's last will and testament or, if the Holder shall fail to
make testamentary disposition of such Option or shall die intestate, by
the person entitled to receive said Option under the applicable laws of
descent and distribution.
(d) Stock Option Agreement. Each Option granted under the Plan shall be
evidenced by a "Stock Option Agreement" between the Company and the Holder of
the Option containing such provisions as may be determined by the Committee, but
shall be subject to the following terms and conditions:
(i) Each Option or portion thereof that is exercisable
shall be exercisable for the full amount or for any part thereof,
except as otherwise determined by the terms of the Stock Option
Agreement.
(ii) Each share of Stock purchased through the exercise of
an Option shall be paid for in full at the time of the exercise. Each
Option shall cease to be exercisable, as to any share of Stock, when
the Holder purchases the share or when the Option lapses.
(iii) Options shall not be transferable by the Holder
except by will or the laws of descent and distribution and shall be
exercisable during the Holder's lifetime only by him.
(iv) Each Option shall become exercisable by the Holder in
accordance with the vesting schedule established by the Committee for
the Award.
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(v) Each Stock Option Agreement may contain an agreement
that, upon demand by the Committee for such a representation, the
Holder shall deliver to the Committee at the time of any exercise of an
Option a written representation that the shares to be acquired upon
such exercise are to be acquired for investment and not for resale or
with a view to the distribution thereof. Upon such demand, delivery of
such representation prior to the delivery of any shares issued upon
exercise of an Option shall be a condition precedent to the right of
the Holder or such other person to purchase any shares. In the event
certificates for Stock are delivered under the Plan with respect to
which such investment representation has been obtained, the Committee
may cause a legend or legends to be placed on such certificates to make
appropriate reference to such representation and to restrict transfers
in the absence of compliance with applicable federal or state
securities laws.
(e) Grants to 10% Holders of Company Voting Stock. Notwithstanding
Section 7(a), if an Incentive Stock Option is granted to a Holder who owns stock
representing more than ten percent of the voting power of all classes of stock
of the Company or of the Company and its Sub sidiaries, the period specified in
the Stock Option Agreement for which the Option thereunder is granted and at the
end of which such Option shall expire shall not exceed five years from the Date
of Grant of such Option and the Option Price shall be at least 110 percent of
the Fair Market Value (on the Date of Grant) of the Stock subject to the Option.
(f) Limitation. To the extent the aggregate Fair Market Value (as
determined as of the Date of Grant) of Stock for which Incentive Stock Options
are exercisable for the first time by any Participant during any calendar year
(under all plans of the Company and its Subsidiaries) exceeds $100,000, such
excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
(g) Voluntary Surrender. The Committee may permit the voluntary
surrender of all or any portion of any Nonqualified Stock Option granted under
the Plan to be conditioned upon the granting to the Holder of a new Option for
the same or a different number of shares as the Option surrendered or require
such voluntary surrender as a condition precedent to a grant of a new Option to
such Participant. Such new Option shall be exercisable at the Option Price,
during the exercise period, and in accordance with any other terms or
conditions specified by the Committee at the time the new Option is granted,
all determined in accordance with the provisions of the Plan without regard to
the Option Price, exercise period, or any other terms and conditions of the
Nonqualified Stock Option surrendered.
(h) Order of Exercise. Options granted under the Plan may be exercised
in any order, regardless of the Date of Grant or the existence of any other
outstanding Option.
(i) Notice of Disposition. Participants shall give prompt notice to the
Company of any disposition of Stock acquired upon exercise of an Incentive Stock
Option if such disposition occurs
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within either two years after the Date of Grant of such Option and/or one year
after the receipt of such Stock by the Holder.
8. RESTRICTED STOCK AWARDS.
(a) Award of Restricted Stock.
(i) The Committee shall have the authority (1) to grant
Restricted Stock, (2) to issue or transfer Restricted Stock to Participants, and
(3) to establish terms, conditions and restrictions applicable to such
Restricted Stock, including the Restricted Period, which may differ with respect
to each grantee, the time or times at which Restricted Stock shall be granted or
become vested and the number of shares or units to be covered by each grant.
(ii) The Holder of a Restricted Stock Award shall execute
and deliver to the Secretary of the Company an agreement with respect to
Restricted Stock and escrow agreement satisfactory to the Committee and the
appropriate blank stock powers with respect to the Restricted Stock covered by
such agreements. If a Participant shall fail to execute the agreement, escrow
agreement and stock powers within such period, the Award shall be null and void.
Subject to the restrictions set forth in Section 8(b), the Holder shall
generally have the rights and privileges of a stockholder as to such Restricted
Stock, including the right to vote such Restricted Stock. At the discretion of
the Committee, cash and stock dividends with respect to the Restricted Stock may
be either currently paid or withheld by the Company for the Holder's account,
and interest may be paid on the amount of cash dividends withheld at a rate and
subject to such terms as determined by the Committee. Cash or stock dividends so
withheld by the Committee shall not be subject to forfeiture.
(iii) In the case of a Restricted Stock Award, the
Committee shall then cause stock certificates registered in the name of the
Holder to be issued and deposited together with the stock powers with an escrow
agent to be designated by the Committee. The Committee shall cause the escrow
agent to issue to the Holder a receipt evidencing any stock certificate held by
it regis tered in the name of the Holder.
(b) Restrictions.
(i) Restricted Stock awarded to a Participant shall be
subject to the following restrictions until the expiration of the Restricted
Period: (1) the Holder shall not be entitled to delivery of the stock
certificate; (2) the shares shall be subject to the restrictions on
transferability set forth in the grant; (3) the shares shall be subject to
forfeiture to the extent provided in subpara graph (d) and, to the extent such
shares are forfeited, the stock certificates shall be returned to the Company,
and all rights of the Holder to such shares and as a stockholder shall terminate
without further obligation on the part of the Company.
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(ii) The Committee shall have the authority to remove any or all of the
restrictions on the Restricted Stock whenever it may determine that, by reasons
of changes in applicable law or other changes in circumstances arising after
the date of the Restricted Stock Award such action is appropriate.
(c) Restricted Period. The Restricted Period of Restricted Stock shall
commence on the Date of Grant and shall expire from time to time as to that part
of the Restricted Stock indicated in a schedule established by the Committee in
the Incentive Plan Agreement.
(d) Forfeiture Provisions. In the event a Holder terminates employment
during a Restricted Period, that portion of the Award with respect to which
restrictions have not expired ("Non-Vested Portion") shall be treated as
follows:
(i) Resignation or discharge: The Non-Vested Portion of
the Award shall be completely forfeited.
(ii) Normal Termination: The Non-Vested Portion of the
Award shall be prorated for service during the Restricted Period and
shall be received as soon as practicable following termination.
(iii) Death: The Non-Vested Portion of the Award shall be
prorated for service during the Restricted Period and paid to the
Participant's beneficiary as soon as practicable following death.
(e) Delivery of Restricted Stock. Upon the expiration of the Restricted
Period with respect to any shares of Stock covered by a Restricted Stock Award,
a stock certificate evidencing the shares of Restricted Stock which have not
then been forfeited and with respect to which the Restricted Period has expired
(to the nearest full share) shall be delivered without charge to the Holder, or
his beneficiary, free of all restrictions under the Plan.
(f) SEC Restrictions. Each certificate representing Restricted Stock
awarded under the Plan shall bear the following legend:
"Transfer of this certificate and the shares represented
hereby is restricted pursuant to the terms of a Restricted Stock
Agreement, dated as of __________, between MedPartners, Inc. and
__________. A copy of such Agreement is on file at the offices of the
Company in Birmingham, Alabama."
Stop transfer orders shall be entered with the Company's transfer agent and
registrar against the transfer of legend securities except in compliance with
the Securities Act.
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9. GENERAL.
(a) Additional Provisions of an Award. The award of any benefit under
the Plan may also be subject to such other provisions (whether or not applicable
to the benefit awarded to any other Participant) as the Committee determines
appropriate including, without limitation, provi sions to assist the Participant
in financing the purchase of Common Stock through the exercise of Options,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares acquired under any form of benefit, provisions giving the Company the
right to repurchase shares acquired under any form of benefit in the event the
Participant elects to dispose of such shares, and provisions to comply with
Federal and state securities laws and Federal and state income tax withholding
requirements.
(b) Privileges of Stock Ownership. Except as otherwise specifically
provided in the Plan, no person shall be entitled to the privileges of stock
ownership in respect of shares of Stock which are subject to Options or
Restricted Stock Awards, hereunder until such shares have been issued to that
person upon exercise of an Option according to its terms or upon sale or grant
of those shares in accordance with a Restricted Stock Award.
(c) Government and Other Regulations. The obligation of the Company to
make payment of Awards in Stock or otherwise shall be subject to all applicable
laws, rules, and regulations, and to such approvals by governmental agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act any of the shares of Stock paid under the Plan. If the shares
paid under the Plan may in certain circumstances be exempt from registration
under the Securities Act, the Company may restrict the transfer of such shares
in such manner as it deems advisable to ensure the availability of any such
exemption.
(d) Tax Withholding. Notwithstanding any other provision of the Plan,
the Company or a Subsidiary or Affiliate, as appropriate, shall have the right
to deduct from all Awards, to the extent paid in cash, all federal, state or
local taxes as required by law to be withheld with respect to such Awards and,
in the case of Awards paid in Stock, the Holder or other person receiving such
Stock may be required to pay to the Company or a Subsidiary or Affiliate, as
appropriate prior to delivery of such Stock, the amount of any such taxes which
the Company or Subsidiary is required to withhold, if any, with respect to such
Stock. Subject in particular cases to the disapproval of the Committee, the
Company may accept shares of Stock of equivalent Fair Market Value in payment of
such withholding tax obligations if the Holder of the Award elects to make
payment in such manner at least six months prior to the date such tax obligation
is determined.
(e) Claim to Awards and Employment Rights. No employee or other person
shall have any claim or right to be granted an Award under the Plan nor, having
been selected for the grant of an Award, to be selected for a grant of any other
Award. Neither this Plan nor any action taken hereunder shall be construed as
giving any Participant any right to be retained in the employ of the Company or
a Subsidiary or Affiliate.
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(f) Designation and Change of Beneficiary. Each Participant shall file
with the Committee a written designation of one or more persons as the
beneficiary who shall be entitled to receive the amounts payable with respect to
an Award of Restricted Stock, if any, due under the Plan upon his death. A
Participant may, from time to time, revoke or change his beneficiary designation
without the consent of any prior beneficiary by filing a new designation with
the Committee. The last such designation received by the Committee shall be
controlling; provided, however, that no designation, or change or revocation
thereof, shall be effective unless received by the Committee prior to the
Participant's death, and in no event shall it be effective as of a date prior to
such receipt.
(g) Payments to Persons Other Than Participants. If the Committee shall
find that any person to whom any amount is payable under the Plan is unable to
care for his affairs because of illness or accident, or is a minor, or has died,
then any payment due to such person or his estate (unless a prior claim therefor
has been made by a duly appointed legal representative), may, if the Committee
so directs the Company, be paid to his spouse, child, relative, an institution
main taining or having custody of such person, or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment. Any such payment shall be a complete discharge of the liability of
the Committee and the Company therefor.
(h) No Liability of Committee Members. No member of the Committee shall
be personally liable by reason of any contract or other instrument executed by
such member or on his behalf in his capacity as a member of the Committee nor
for any mistake of judgment made in good faith, and the Company shall indemnify
and hold harmless each member of the Committee and each other employee, officer
or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan may be allocated or delegated,
against any cost or expense (including counsel fees) or liability (including any
sum paid in settlement of a claim) arising out of any act or omission to act in
connection with the Plan unless arising out of such person's own fraud or bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or ByLaws, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them harmless.
(i) Governing Law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Delaware without reference to
the principles of conflicts of law thereof.
(j) Funding. Except as provided under Section 8, no provision of the
Plan shall require the Company, for the purpose of satisfying any obligations
under the Plan, to purchase assets or place any assets in a trust or other
entity to which contributions are made or otherwise to segregate any assets, nor
shall the Company maintain separate bank accounts, books, records or other
evidence of the existence of a segregated or separately maintained or
administered fund
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for such purposes. Holders shall have no rights under the Plan other than as
unsecured general creditors of the Company, except that insofar as they may
become entitled to payment of additional compensation by performance of
services, they shall have the same rights as other employees under general law.
(k) Nontransferability. A person's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
a Holder's death, to a designated bene ficiary to the extent permitted by the
Plan, or in the absence of such designation, by will or the laws of descent and
distribution.
(l) Reliance on Reports. Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and its
Subsidiaries or Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than himself.
(m) Relationship to Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
profit sharing, group insurance or other benefit plan of the Company or any
Subsidiary or Affiliate except as otherwise specifically provided.
(n) Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries and Affiliates.
(o) Pronouns. Masculine pronouns and other words of masculine gender
shall refer to both men and women.
(p) Titles and Headings. The titles and headings of the sections in the
Plan are for convenience of reference only, and in the event of any conflict,
the text of the Plan, rather than such titles or headings shall control.
10. CHANGES IN CAPITAL STRUCTURE.
Options and Restricted Stock Awards and any agreements evidencing such
Awards shall be subject to adjustment or substitution, as determined by the
Committee in its sole discretion, as to the number, price or kind of a share of
Stock or other consideration subject to such Awards or as otherwise determined
by the Committee to be equitable (i) in the event of changes in the outstanding
Stock or in the capital structure of the Company by reason of stock dividends,
stock splits, recapitalizations, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the Date of Grant of any such Award or (ii) in the event of any change in
applicable laws or
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any change in circumstances which results in or would result in any substantial
dilution or enlargement of the rights granted to, or available for, Participants
in the Plan, or which otherwise warrants equitable adjustment because it
interferes with the intended operation of the Plan. In addition, in the event of
any such adjustments or substitution, the aggregate number of shares of Stock
available under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive. Any adjustment in Incentive Stock Options
under this Section 10 shall be made only to the extent not constituting a
"modification" within the meaning of Section 424(h)(3) of the Code, and any
adjustments under this Section 10 shall be made in a manner which does not
adversely affect the exemption provided pursuant to Rule 16b-3 under the
Exchange Act. The Company shall give each Participant notice of an adjustment
hereunder and, upon notice, such adjustment shall be conclusive and binding for
all purposes.
11. EFFECT OF CHANGE IN CONTROL.
(a) In the event of a Change in Control, notwithstanding any vesting
schedule provided for hereunder or by the Committee with respect to an Award of
Options or Restricted Stock, such Option shall become immediately exercisable
with respect to 100 percent of the shares subject to such Option and the
Restricted Period shall expire immediately with respect to 100 percent of the
Restricted Stock subject to Restrictions; provided, however, to the extent that
so accelerating the time an Incentive Stock Option may first be exercised would
cause the limitation provided in Section 7(f) to be exceeded, such Options shall
instead first become exercisable in so many of the next following years as is
necessary to comply with such limitation.
(b) The obligations of the Company under the Plan shall be binding upon
any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor
corporation or organization succeeding to substantially all of the assets and
business of the Company. The Company agrees that it will make appropriate
provisions for the preservation of Participant's rights under the Plan in any
agreement or plan which it may enter into or adopt to effect any such merger,
consolidation, reorganization or transfer of assets.
12. NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board nor the submission of
this Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive
arrangements as it may deem desirable, including, without limitation, the
granting of stock options otherwise than under this Plan, and such arrangements
may be either applicable generally or only in specific cases.
13. AMENDMENTS AND TERMINATION.
The Committee may at any time terminate the Plan. With the express
written consent of an individual Participant, the Board may cancel or reduce or
otherwise alter the outstanding
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Awards thereunder if, in its judgment, the tax, accounting, or other effects of
the Plan or potential payouts thereunder would not be in the best interest of
the Company. The Committee may, at any time, or from time to time, amend or
suspend and, if suspended, reinstate, the Plan in whole or in part; provided,
however, that without further stockholder approval, the Committee shall not:
(a) Increase the maximum number of shares of Stock which may
be issued on exercise of Options or pursuant to Restricted Stock
Awards, except as provided in Section 10;
(b) Change the maximum Option Price;
(c) Extend the maximum Option term;
(d) Extend the termination date of the Plan;
(e) Cancel and regrant or reprice any outstanding Option,
except as provided in Section 10; or
(f) Change the class of persons eligible to receive Awards
under the Plan.
As adopted, as amended, by the Committee
as of June 27, 1997 by
unanimous written consent.
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