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EXHIBIT 10.16
1997 OMNIBUS STOCK PLAN
OF
C3, INC.
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1997 OMNIBUS STOCK PLAN
OF
C3, INC.
1. PURPOSE
The purpose of the 1997 Omnibus Stock Plan of C3, Inc. (the "Plan") is to
encourage and enable selected employees, directors and independent contractors
of C3, Inc. (the "Corporation") and its related corporations to acquire or to
increase their holdings of common stock of the Corporation (the "Common Stock")
and other proprietary interests in the Corporation in order to promote a closer
identification of their interests with those of the Corporation and its
shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of the
Corporation. This purpose will be carried out through the granting of benefits
(collectively referred to herein as "Awards") to selected employees, independent
contractors and directors, including but not necessarily limited to the granting
of incentive stock options ("Incentive Options"), nonqualified stock options
("Nonqualified Options"), stock appreciation rights ("SARs"), restricted stock
awards ("Restricted Stock Awards"), and restricted units ("Restricted Units") to
such participants. Incentive Options and Nonqualified Options shall be referred
to herein collectively as "Options." Restricted Stock Awards and Restricted
Units shall be referred to herein collectively as "Restricted Awards."
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors of the
Corporation, or upon its delegation to the Compensation Committee of the Board
of Directors, by the Committee (in either case hereinafter the "Committee"). The
Committee shall include no fewer than the minimum number of "non-employee
directors," as such term is defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and as may be
required by Rule 16b-3.
(b) Any action of the Committee with respect to the Plan may be taken by
a written instrument signed by all of the members of the Committee and any such
action so taken by written consent shall be as fully effective as if it had been
taken by a majority of the members at a meeting duly held and called. Subject to
the provisions of the Plan, and unless authority is granted to the Chief
Executive Officer as provided in Section 2(c), the Committee shall have full and
final authority in its discretion to take any action with respect to the Plan
including, without limitation, the authority (i) to determine all matters
relating to Awards, including selection of individuals to be granted Awards, the
types of Awards, the number of shares of the Common Stock, if any, subject to an
Award, and all terms, conditions, restrictions and limitations of an Award; (ii)
to prescribe the form or forms of the Agreements evidencing any Awards granted
under the Plan; (iii) to establish, amend and rescind rules and regulations for
the administration of the Plan; and (iv) to construe and interpret the Plan and
Agreements evidencing Awards granted under the Plan, to establish and interpret
rules and regulations for administering the Plan and to make all other
determinations deemed necessary or advisable for administering the Plan. In
addition, the Committee shall have authority, in its sole discretion, to
accelerate the date that any Award which was not otherwise exercisable or vested
shall become exercisable or vested in whole or in part without any obligation to
accelerate such date with respect to any other Awards granted to any recipient.
(c) Notwithstanding Section 2(b), the Committee may delegate to the
Chief Executive Officer of the Corporation the authority to grant Awards, and
to make any or all of the determinations reserved for the Committee in the
Plan and summarized in subsection (b) (i) with respect to such Awards,
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to any individual who, at the time of said grant or other determination, (i) is
not deemed to be an officer or director of the Corporation within the meaning
of Section 16 of the Exchange Act; (ii) is not deemed to be a Covered Employee;
and (iii) is otherwise eligible under Section 5. To the extent that the
Committee has delegated authority to grant Awards pursuant to this Section 2(c)
to the Chief Executive Officer, references to the Committee shall include
references to the Chief Executive Officer, subject, however, to the
requirements of the Plan, Rule 16b-3 and other applicable law.
3. EFFECTIVE DATE
The effective date of the Plan shall be October 1, 1997 (the "Effective
Date"). Awards may be granted under the Plan on and after the effective date,
but no awards will be granted after September 30, 2007.
4. SHARES OF STOCK SUBJECT TO THE PLAN; AWARD LIMITATIONS
(a) The number of shares of Common Stock that may initially be issued
pursuant to Awards shall be 477,979 shares of authorized but unissued shares of
the Corporation, subject to adjustments and increases as provided in this
Section 4. The maximum number of shares authorized for issuance under the Plan
shall be increased at any time and from time to time by an amount (the
"Adjustment Amount") so that the maximum number of shares authorized for
issuance under the Plan shall be equal to (i) twenty percent (20%) of the
authorized and issued shares of Common Stock as of such date less (ii) the
number of shares of Common Stock subject to outstanding options granted under
the 1996 Stock Option Plan of C3, Inc. or any other prior stock option plan (the
"Prior Plans").
(b) The Corporation hereby reserves sufficient authorized shares of
Common Stock to meet the grant of Awards hereunder. Any shares subject to an
Award which is subsequently forfeited, expires or is terminated may again be the
subject of an Award granted under the Plan. To the extent that any shares of
Common Stock subject to an Award are not delivered to a Participant (or his
beneficiary) because the Award is forfeited or canceled or because the Award is
settled in cash, such shares shall not be deemed to have been issued for
purposes of determining the maximum number of shares of Common Stock available
for issuance under the Plan. If the option price of an Option granted under the
Plan (or any Prior Plan) is satisfied by tendering shares of Common Stock, only
the number of shares issued net of the shares of Common Stock tendered shall be
deemed issued for purposes of determining the maximum number of shares of Common
Stock available for issuance under the Plan.
(c) If there is any change in the shares of Common Stock because of a
merger, consolidation or reorganization involving the Corporation or a related
corporation, or if the Board of Directors of the Corporation declares a stock
dividend or stock split distributable in shares of Common Stock, or if there is
a change in the capital stock structure of the Corporation or a related
corporation affecting the Common Stock, the number of shares of Common Stock
reserved for issuance under the Plan shall be correspondingly adjusted, and the
Committee shall make such adjustments to Awards or to any provisions of this
Plan as the Committee deems equitable to prevent dilution or enlargement of
Awards.
(d) Subject to the terms of this Section 4, the following limitations
upon Awards shall apply:
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(i) The maximum number of shares of Common Stock that may be
issued pursuant to Incentive Options shall be 1,187,695 shares, which
number shall be equal to twenty percent (20%) of the number of outstanding
shares of Common Stock as of the effective date of the consummation of the
initial public offering of the Common Stock.
(ii) In no event shall an employee be granted Awards under the Plan
for more than 100,000 shares of Common Stock (or the equivalent value
thereof based on the fair market value of the Common Stock on the date of
grant of the Award) during any calendar year.
5. ELIGIBILITY
An Award may be granted only to an individual who satisfies the following
eligibility requirements on the date the Award is granted:
(a) The individual is either (i) an employee of the Corporation or a
related corporation, (ii) a director of the Corporation or a related
corporation, or (iii) an independent contractor, consultant or advisor
(collectively, "independent contractors") providing services to the Corporation
or a related corporation. For this purpose, an individual shall be considered to
be an "employee" only if there exists between the individual and the Corporation
or a related corporation the legal and bona fide relationship of employer and
employee.
(b) With respect to the grant of Incentive Options, the individual does
not own, immediately before the time that the Incentive Option is granted, stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Corporation. For this purpose, an individual will be
deemed to own stock which is attributable to him under Section 424(d) of the
Internal Revenue Code of 1986, as amended (the "Code").
(c) The individual, being otherwise eligible under this Section 5, is
selected by the Committee as an individual to whom an Award shall be granted (a
"Participant").
6. OPTIONS
(a) Grant of Options: Subject to the limitations of the Plan, the
Committee may in its sole and absolute discretion grant Options to such eligible
individuals in such numbers, upon such terms and at such times as the Committee
shall determine. Both Incentive Options and Nonqualified Options may be granted
under the Plan. To the extent necessary to comply with Section 422 of the Code
and related regulations, (i) if an Option is designated as an Incentive Option
but does not qualify as such under Section 422 of the Code, the Option (or
portion thereof) shall be treated as a Nonqualified Option; and (ii) the
provisions relating to the grant and terms of Incentive Options (including but
not limited to the provisions in Section 4(d)(i) herein regarding the maximum
number of shares available for issuance pursuant to such Incentive Options)
shall be deemed to be a separate plan.
(b) Option Price: The price per share at which an Option may be
exercised (the "Option Price") shall be established by the Committee at the time
the Option is granted and shall be set forth in the terms of the agreement
evidencing the grant of the Option; provided, that in the case of an Incentive
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Option, the Option Price shall be no less than the fair market value per share
of the Common Stock on the date the Option is granted. In addition, the
following rules shall apply:
(i) An Incentive Option shall be considered to be granted on the
date that the Committee acts to grant the Option, or on any later date
specified by the Committee as the effective date of the Option. A
Nonqualified Option shall be considered to be granted on the date the
Committee acts to grant the Option or any other date specified by the
Committee as the date of grant of the Option.
(ii) The fair market value of the shares shall be determined in
good faith by the Committee in accordance with the following provisions:
(i) if the shares of Common Stock are listed for trading on the New York
Stock Exchange or the American Stock Exchange or included in The Nasdaq
National Market, the fair market value shall be the closing sales price of
the shares on the New York Stock Exchange or the American Stock Exchange
or as reported in The Nasdaq National Market (as applicable) on the date
immediately preceding the date the Option is granted, or, if there is no
transaction on such date, then on the trading date nearest preceding the
date the Option is granted for which closing price information is
available and, provided further, if the shares are quoted on The Nasdaq
System but are not included in The Nasdaq National Market, the fair market
value shall be the mean between the high bid and low asked quotations in
The Nasdaq System on the date immediately preceding the date the Option is
granted for which such information is available; or (ii) if the shares of
Common Stock are not listed or reported in any of the foregoing, then fair
market value shall be determined by the Committee in accordance with the
applicable provisions of Section 20.2031-2 of the Federal Estate Tax
Regulations, or in any other manner consistent with the Code and
accompanying regulations.
(iii) In no event shall there first become exercisable by an
employee in any one calendar year Incentive Options granted by the
Corporation or any related corporation with respect to shares having an
aggregate fair market value (determined at the time an Incentive Option is
granted) greater than $100,000.
(c) Option Period and Limitations on the Right to Exercise Options
(i) The period during which an Option may be exercised (the
"Option Period") shall be determined by the Committee at the time the
Option is granted. With respect to Incentive Options, such period shall
not extend more than ten years from the date on which the Option is
granted. Any Option or portion thereof not exercised before expiration of
the Option Period shall terminate.
(ii) An Option may be exercised by giving written notice to the
Corporation at such place as the Corporation shall direct. Such notice
shall specify the number of shares to be purchased pursuant to an Option
and the aggregate purchase price to be paid therefor, and shall be
accompanied by the payment of such purchase price. Such payment shall be
in the form of (A) cash; (B) shares of Common Stock owned by the
Participant at the time of exercise; (C) shares of Common Stock withheld
upon exercise; (D) delivery of written notice of exercise to the
Corporation and delivery to a broker of written notice of exercise and
irrevocable instructions
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to promptly deliver to the Corporation the amount of sale or loan proceeds
to pay the Option Price; or (E) a combination of the foregoing methods, as
elected by the Participant. Shares tendered or withheld in payment on the
exercise of an Option shall be valued at their fair market value on the
date of exercise, as determined by the Committee by applying the
provisions of Section 6(b)(ii).
(iii) No Option granted to a Participant who was an employee at the
time of grant shall be exercised unless the Participant is, at the time of
exercise, an employee as described in Section 5(a), and has been an
employee continuously since the date the Option was granted, subject to
the following:
(A) An Option shall not be affected by any change in the
terms, conditions or status of the Participant's employment,
provided that the Participant continues to be an employee of the
Corporation or a related corporation.
(B) The employment relationship of a Participant shall be
treated as continuing intact for any period that the Participant is
on military or sick leave or other bona fide leave of absence,
provided that the period of such leave does not exceed ninety days,
or, if longer, as long as the Participant's right to reemployment is
guaranteed either by statute or by contract. The employment
relationship of a Participant shall also be treated as continuing
intact while the Participant is not in active service because of
disability. The Committee shall determine whether a Participant is
disabled within the meaning of this paragraph.
(C) If the employment of a Participant is terminated because
of disability within the meaning of subparagraph (B), or if the
Participant dies while he is an employee or dies after the
termination of his employment because of disability, the Option may
be exercised only to the extent exercisable on the date of the
Participant's termination of employment or death while employed (the
"termination date"), except that the Committee may in its discretion
accelerate the date for exercising all or any part of the Option
which was not otherwise exercisable on the termination date. The
Option must be exercised, if at all, prior to the first to occur of
the following, whichever shall be applicable: (X) the close of the
period of twelve months next succeeding the termination date; or (Y)
the close of the Option Period. In the event of the Participant's
death, such Option shall be exercisable by such person or persons as
shall have acquired the right to exercise the Option by will or by
the laws of intestate succession.
(D) If the employment of the Participant is terminated for
any reason other than disability (as defined in subparagraph (B)) or
death or for "cause," his Option may be exercised to the extent
exercisable on the date of such termination of employment, except
that the Committee may in its discretion accelerate the date for
exercising all or any part of the Option which was not otherwise
exercisable on the date of such termination of employment. The
Option must be exercised, if at all, prior to the first to occur of
the following,
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whichever shall be applicable: (X) the close of the period of 90
days next succeeding the termination date; or (Y) the close of the
Option Period. If the Participant dies following such termination of
employment and prior to the earlier of the dates specified in (X) or
(Y) of this subparagraph (D), the Participant shall be treated as
having died while employed under subparagraph (C) immediately
preceding (treating for this purpose the Participant's date of
termination of employment as the termination date). In the event of
the Participant's death, such Option shall be exercisable by such
person or persons as shall have acquired the right to exercise the
Option by will or by the laws of intestate succession.
(E) If the employment of the Participant is terminated for
"cause," his Option shall lapse and no longer be exercisable as of
the effective time of his termination of employment, as determined
by the Committee. For purposes of this subparagraph (E) and
subparagraph (D), the Participant's termination shall be for "cause"
if such termination results from the Participant's personal
dishonesty, gross incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, rule,
regulation (other than traffic violations or similar offences),
written Company policy or final cease-and-desist order, conviction
of a felony or of a misdemeanor involving moral turpitude, unethical
business practices in connection with the Company's business, or
misappropriation of the Company's assets. The determination of
"cause" shall be made by the Committee and its determination shall
be final and conclusive.
(F) Notwithstanding the foregoing, the Committee shall have
authority, in its discretion, to extend the period during which an
Option may be exercised; provided that, in the event that any such
extension shall cause an Incentive Option to be designated as a
Nonqualified Option, no such extension shall be made without the
prior written request and consent of the Participant.
(iv) An Option granted to a Participant who was an independent
contractor or director of the Corporation or a related corporation at the
time of grant (and who does not thereafter become an employee, in which
case he shall be subject to the provisions of Section 6(c)(iii) herein)
may be exercised only to the extent exercisable on the date of the
Participant's termination of service to the Corporation or a related
corporation (unless the termination was for cause), and must be exercised,
if at all, prior to the first to occur of the following, as applicable:
(X) the close of the period of 90 days next succeeding the termination
date; or (Y) the close of the Option Period. If the services of such a
Participant are terminated for cause (as defined in Section 6(c)(iii)(E)
herein), his Option shall lapse and no longer be exercisable as of the
effective time of his termination of services, as determined by the
Committee. Notwithstanding the foregoing, the Committee may in its
discretion accelerate the date for exercising all or any part of an Option
which was not otherwise exercisable on the termination date or extend the
period during which an Option may be exercised, or both.
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(v) A Participant or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject to
an Option unless and until certificates for such shares are delivered to
him or them under the Plan.
(vi) Nothing in the Plan shall confer upon the Participant any
right to continue in the service of the Corporation or a related
corporation as an employee, director, or independent contractor or to
interfere in any way with the right of the Corporation or a related
corporation to terminate the Participant's employment or service at any
time.
(vii) A certificate or certificates for shares of Common Stock
acquired upon exercise of an Option shall be issued in the name of the
Participant and distributed to the Participant (or his beneficiary) as
soon as practicable following receipt of notice of exercise and payment of
the purchase price.
(d) Nontransferability of Options
(i) Options shall not be transferable other than by will, the laws
of intestate succession or pursuant to a qualified domestic relations
order. The designation of a beneficiary does not constitute a transfer. An
Option shall be exercisable during the Participant's lifetime only by him
or by his guardian or legal representative.
(ii) If a Participant is subject to Section 16 of the Exchange Act,
shares of Common Stock acquired upon exercise of an Option may not,
without the consent of the Committee, be disposed of by the Participant
until the expiration of six months after the date the Option was granted.
7. STOCK APPRECIATION RIGHTS
(a) Grant of SARs: Subject to the limitations of the Plan, the Committee
may in its sole and absolute discretion grant SARs to such eligible individuals,
in such numbers, upon such terms and at such times as the Committee shall
determine. SARs may be granted to an optionee of an Option (hereinafter called a
"related Option") with respect to all or a portion of the shares of Common Stock
subject to the related Option (a "Tandem SAR") or may be granted separately to
an eligible key employee (a "Freestanding SAR"). Subject to the limitations of
the Plan, SARs shall be exercisable in whole or in part upon notice to the
Corporation upon such terms and conditions as are provided in the Agreement
relating to the grant of the SAR.
(b) Tandem SARs: A Tandem SAR may be granted either concurrently with
the grant of the related Option or (if the related Option is a Nonqualified
Option) at any time thereafter prior to the complete exercise, termination,
expiration or cancellation of such related Option. Tandem SARs shall be
exercisable only at the time and to the extent that the related Option is
exercisable (and may be subject to such additional limitations on exercisability
as the Committee may provide in the Agreement), and in no event after the
complete termination or full exercise of the related Option. For purposes of
determining the number of shares of Common Stock that remain subject to such
related Option and for purposes of determining the number of shares of Common
Stock in respect of which other Awards may be granted, upon the exercise of
Tandem SARs, the related Option shall be considered to have been
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surrendered to the extent of the number of shares of Common Stock with respect
to which such Tandem SARs are exercised. Upon the exercise or termination of the
related Option, the Tandem SARs with respect thereto shall be canceled
automatically to the extent of the number of shares of Common Stock with respect
to which the related Option was so exercised or terminated. Subject to the
limitations of the Plan, upon the exercise of a Tandem SAR, the Participant
shall be entitled to receive from the Corporation, for each share of Common
Stock with respect to which the Tandem SAR is being exercised, consideration
equal in value to the excess of the fair market value of a share of Common Stock
(as determined in accordance with Section 6(b)(ii) herein) on the date of
exercise over the related Option Price per share; provided, that the Committee
may, in any Agreement granting Tandem SARs, establish a maximum value payable
for such SARs.
(c) Freestanding SARs: The base price of a Freestanding SAR shall be not
less than 100% of the fair market value of the Common Stock (as determined in
accordance with Section 6(b)(ii) herein) on the date of grant of the
Freestanding SAR. Subject to the limitations of the Plan, upon the exercise of a
Freestanding SAR, the Participant shall be entitled to receive from the
Corporation, for each share of Common Stock with respect to which the
Freestanding SAR is being exercised, consideration equal in value to the excess
of the fair market value of a share of Common Stock on the date of exercise over
the base price per share of such Freestanding SAR; provided, that the Committee
may, in any Agreement granting Freestanding SARs, establish a maximum value
payable for such SARs.
(d) Exercise of SARs:
(i) Subject to the terms of the Plan, SARs shall be exercisable in
whole or in part upon such terms and conditions as are provided in the
Agreement relating to the grant of the SAR. The period during which an SAR
may be exercisable shall not exceed ten years from the date of grant or,
in the case of Tandem SARs, such shorter Option Period as may apply to the
related Option. Any SAR or portion thereof not exercised before expiration
of the period stated in the Agreement relating to the grant of the SAR
shall terminate.
(ii) SARs may be exercised by giving written notice to the
Corporation at such place as the Committee shall direct. The date of
exercise of the SAR shall mean the date on which the Corporation shall
have received notice from the Participant of the exercise of such SAR.
(iii) No SAR may be exercised unless the Participant is, at the time
of exercise, an eligible Participant, as described in Section 5, and has
been a Participant continuously since the date the SAR was granted,
subject to the provisions of Section 6(c)(iii) herein.
(e) Consideration; Election: The consideration to be received upon the
exercise of the SAR by the Participant shall be paid in cash, shares of Common
Stock (valued at fair market value on the date of exercise of such SAR in
accordance with Section 6(b)(ii) herein) or a combination of cash and shares of
Common Stock, as elected by the Participant, subject to the terms of the Plan
and the applicable Agreement. The Corporation's obligation arising upon the
exercise of the SAR may be paid currently or on a deferred basis with such
interest or earnings equivalent as the Committee may determine. A certificate or
certificates for shares of Common Stock acquired upon exercise of an SAR for
shares shall be issued in the name of the Participant (or his beneficiary) and
distributed to the Participant (or his beneficiary) as soon as practicable
following receipt of notice of exercise. No fractional shares of
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Common Stock will be issuable upon exercise of the SAR and, unless otherwise
provided in the applicable Agreement, the Participant will receive cash in lieu
of fractional shares.
(f) Limitations: The applicable Agreement shall contain such terms,
conditions and limitations consistent with the Plan as may be specified by the
Committee. Unless otherwise so provided in the applicable Agreement or the Plan,
any such terms, conditions or limitations relating to a Tandem SAR shall not
restrict the exercisability of the related Option.
(g) Nontransferability:
(i) SARs shall not be transferable other than by will, the laws of
intestate succession or pursuant to a qualified domestic relations order.
The designation of a beneficiary does not constitute a transfer. SARs may
be exercised during the Participant's lifetime only by him or by his
guardian or legal representative.
(ii) If the Participant is subject to Section 16 of the Exchange
Act, shares of Common Stock acquired upon exercise of an SAR may not,
without the consent of the Committee, be disposed of by the Participant
until the expiration of six months after the date the SAR was granted.
8. RESTRICTED AWARDS
(a) Grant of Restricted Awards: Subject to the limitations of the Plan,
the Committee may in its sole and absolute discretion grant Restricted Awards to
such eligible key employees in such numbers, upon such terms and at such times
as the Committee shall determine. A Restricted Award may consist of a Restricted
Stock Award or a Restricted Unit, or both. Restricted Awards shall be payable in
cash or whole shares of Common Stock (including Restricted Stock), or partly in
cash and partly in whole shares of Common Stock, in accordance with the terms of
the Plan and the sole and absolute discretion of the Committee. The Committee
may condition the grant or vesting, or both, of a Restricted Award upon the
continued service of the Participant for a certain period of time, attainment of
such performance objectives as the Committee may determine, or upon a
combination of continued service and performance objectives. The Committee shall
determine the nature, length and starting date of the period during which the
Restricted Award may be earned (the "Restriction Period") for each Restricted
Award, which shall be as stated in the Agreement to which the Award relates. In
the case of Restricted Awards based upon performance criteria, or a combination
of performance criteria and continued service, the Committee shall determine the
performance objectives to be used in valuing Restricted Awards and determine the
extent to which such Awards have been earned. Performance objectives may vary
from participant to participant and between groups of participants and shall be
based upon such Corporation, business unit and/or individual performance factors
and criteria as the Committee in its sole discretion may deem appropriate,
including, but not limited to, earnings per share, return on equity, return on
assets or total return to shareholders. The Committee shall determine the terms
and conditions of each Restricted Award, including the form and terms of payment
of Awards. The Committee shall have sole authority to determine whether and to
what degree Restricted Awards have been earned and are payable and to interpret
the terms and conditions of Restricted Awards and the provisions herein.
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(b) Earning of Restricted Awards: Unless the applicable Agreement
provides otherwise, a Restricted Award granted to a Participant shall be deemed
to be earned as of the first to occur of the completion of the Restriction
Period, retirement, displacement, death or disability of the Participant, or
acceleration of the Restricted Award, provided that, in the case of Restricted
Awards based upon performance criteria or a combination of performance criteria
and continued service, the Committee shall have sole discretion to determine if,
and to what degree, the Restricted Awards shall be deemed earned at the end of
the Restriction Period or upon the retirement, displacement, death or disability
of the Participant. In addition, the following rules shall also apply to the
earning of Restricted Awards:
(i) Completion of Restriction Period: For this purpose, a
Restricted Award shall be deemed to be earned upon completion of the
Restriction Period (except as otherwise provided herein for performance-
based Restricted Awards). In order for a Restricted Award to be deemed
earned, the Participant must have been continuously employed or in service
during the Restriction Period. Continuous employment or service shall mean
employment with or service to any combination of the Corporation and one
or more related corporations, and a temporary leave of absence with
consent of the Corporation shall not be deemed to be a break in continuous
employment or service.
(ii) Retirement of the Participant: For this purpose, the
Participant shall be deemed to have retired as of the earlier of (A) his
normal retirement date under the retirement plan established by the
Corporation for its employees which is applicable to the Participant, or
(B) his retirement date under a contract, if any, between the Participant
and the Corporation providing for his retirement from the employment of
the Corporation or a related corporation prior to such normal retirement
date, or (C) a mutually agreed upon early retirement date under such
retirement plan of the Corporation between the Participant and the
Corporation.
(iii) Displacement of the Participant: For this purpose, the
Participant shall be deemed to have been displaced in the event of the
termination of the Participant's employment or service due to the
elimination of the Participant's job or position without fault on the part
of the Participant.
(iv) Death or Disability of the Participant: Except as otherwise
provided herein for performance-based Restricted Awards, if the
Participant shall terminate continuous employment or service because of
death or disability before a Restricted Award is otherwise deemed to be
earned pursuant to this Section 8(b), the Participant shall be deemed to
have earned a percentage of the Award (rounded to the nearest whole share
in the case of Restricted Awards payable in shares) determined by dividing
the number of his full years of continuous employment or service then
completed during the Restriction Period with respect to the Award by the
number of years of such Restriction Period.
(v) Acceleration of Restricted Awards by the Committee:
Notwithstanding the provisions of this Section 8(b), in the event of the
termination of employment or service of a Participant for reasons other
than retirement, displacement, death or disability, the Committee, in its
sole and absolute discretion, may accelerate the date that any Restricted
Award granted to the Participant shall be deemed to be earned in whole or
in part, without any obligation to accelerate such date with respect to
other Restricted Awards granted to the Participant or to
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accelerate such date with respect to Restricted Awards granted to any
other Participant, or to treat all Participants similarly situated in the
same manner.
(c) Forfeiture of Restricted Awards: If the employment or service of a
Participant shall be terminated for any reason, and the Participant has not
earned all or part of a Restricted Award pursuant to the terms herein, such
Award to the extent not then earned shall be forfeited immediately upon such
termination and the Participant shall have no further rights with respect
thereto.
(d) Dividend and Voting Rights; Share Certificates: A Participant shall
have no dividend rights or voting rights with respect to shares reserved in his
name pursuant to a Restricted Award payable in shares but not yet earned
pursuant to Section 8(b). A certificate or certificates for shares of Common
Stock representing a Restricted Award payable in shares shall be issued in the
name of the Participant and distributed to the Participant (or his beneficiary)
as soon as practicable following the date that the shares subject to the Award
are earned as provided in Section 8(b). No certificate shall be issued hereunder
in the name of the Participant (or his beneficiary) except to the extent the
shares represented thereby have been earned.
(e) Nontransferability:
(i) The recipient of a Restricted Award shall not sell, transfer,
assign, pledge or otherwise encumber shares subject to the Award until the
Restriction Period has expired or until all conditions to vesting have
been met.
(ii) Restricted Awards shall not be transferable other than by
will, the laws of intestate succession or pursuant to a qualified domestic
relations order. The designation of a beneficiary does not constitute a
transfer.
(iii) If a Participant of a Restricted Award is subject to Section
16 of the Exchange Act, shares of Common Stock subject to such Award may
not, without the consent of the Committee, be sold or otherwise disposed
of within six months following the date of grant of such Award.
9. WITHHOLDING
The Corporation shall withhold all required local, state and federal taxes
from any amount payable in cash with respect to an Award. The Corporation shall
require any recipient of an Award payable in shares of the Common Stock to pay
to the Corporation in cash the amount of any tax or other amount required by any
governmental authority to be withheld and paid over by the Corporation to such
authority for the account of such recipient. Notwithstanding the foregoing, the
recipient may satisfy such obligation in whole or in part, and any other local,
state or federal income tax obligations relating to such an Award, by electing
(the "Election") to have the Corporation withhold shares of Common Stock from
the shares to which the recipient is entitled. The number of shares to be
withheld shall have a fair market value (determined in accordance with Section
6(b)(ii)) as of the date that the amount of tax to be withheld is determined
(the "Tax Date") as nearly equal as possible to (but not exceeding) the amount
of such obligations being satisfied. Each Election must be made in writing to
the Committee prior to the Tax Date.
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10. PERFORMANCE-BASED COMPENSATION
It is the general intent of the Corporation that Awards conferred under
the Plan to Covered Employees, as such term is defined in Section 14(b) herein,
shall comply with the qualified performance-based compensation exception to
employer compensation deductions set forth in Section 162(m) of the Code, and
the Plan generally shall be construed in favor of meeting the requirements of
Section 162(m) of the Code and the regulations thereunder to the extent
possible.
11. SECTION 16(B) COMPLIANCE
It is the intention of the Corporation that the Plan shall comply in all
respects with Rule 16b-3 under the Exchange Act, and, if any Plan provision is
later found not to be in compliance with Section 16 of the Exchange Act, the
provision shall be deemed null and void, and in all events the Plan shall be
construed in favor of it meeting the requirements of Rule 16b-3. Notwithstanding
anything in the Plan to the contrary, the Committee, in its sole and absolute
discretion, may bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to participants who are officers or directors
subject to Section 16 of the Exchange Act without so restricting, limiting or
conditioning the Plan with respect to other participants.
12. NO RIGHT OR OBLIGATION OF CONTINUED EMPLOYMENT
Nothing contained in the Plan shall require the Corporation or a related
corporation to continue the employment or service of a Participant, nor shall
any such individual be required to remain in the employment or service of the
Corporation or a related corporation. Except as otherwise provided in the Plan,
Awards granted under the Plan to employees of the Corporation shall not be
affected by any change in the duties or position of the participant, as long as
such individual remains an employee of, or in service to, the Corporation or a
related corporation.
13. RETIREMENT PLANS
In no event shall any amounts accrued, distributable or payable under the
Plan be treated as compensation for the purpose of determining the amount of
contributions or benefits to which any person shall be entitled under any
retirement plan sponsored by the Corporation or a related corporation that is
intended to be a qualified plan within the meaning of Section 401(a) of the
Code.
14. CERTAIN DEFINITIONS
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) "Agreement" means any written agreement or agreements between the
Corporation and the recipient of an Award pursuant to the Plan relating to the
terms, conditions and restrictions of Options, SARs, Restricted Awards and any
other Awards conferred herein.
(b) "Covered employee" shall have the meaning given the term in Section
162(m) of the Code or the regulations thereunder.
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(c) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or which has lasted or can
be expected to last for a continuous period of not less than twelve months.
(d) "Parent" or "parent corporation" shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock possessing
50% or more of the total combined voting power of all classes of stock in
another corporation in the chain.
(e) "Predecessor" or "predecessor corporation" means a corporation which
was a party to a transaction described in Section 424(a) of the Code (or which
would be so described if a substitution or assumption under that Section had
occurred) with the Corporation, or a corporation which is a parent or subsidiary
of the Corporation, or a predecessor of any such corporation.
(f) "Related corporation" means any parent, subsidiary or predecessor of
the Corporation.
(g) "Restricted Stock" shall mean shares of Common Stock which are
subject to Restricted Awards payable in shares, the vesting of which is subject
to restrictions set forth in the Plan or the Agreement relating to such Award.
(h) "Subsidiary" or "subsidiary corporation" means any corporation
(other than the Corporation) in an unbroken chain of corporations beginning with
the Corporation if each corporation other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in another corporation in the chain.
15. AMENDMENT AND TERMINATION OF THE PLAN
The Plan may be amended or terminated at any time by the Board of
Directors of the Corporation; provided, that such amendment or termination shall
not, without the consent of the recipient of an Award, adversely affect the
rights of the recipient with respect to an outstanding Award; and provided
further, that approval by the shareholders of the Corporation shall be required
for any amendment which would (i) increase the number of shares of Common Stock
which may be issued under the Plan, except to the extent of adjustments pursuant
to Section 4; or (ii) materially change the requirements for eligibility to be a
recipient of an Award, unless shareholder approval of any such amendments is not
required by applicable law, rule or regulation.
16. RESTRICTIONS ON SHARES
The Committee may impose such restrictions on any shares representing
Awards hereunder as it may deem advisable, including without limitation
restrictions under the Securities Act, under the requirements of any stock
exchange or similar organization and under any blue sky or state securities laws
applicable to such shares. The Corporation may cause a restrictive legend to be
placed on any certificate issued pursuant to an Award hereunder in such form as
may be prescribed from time to time by applicable laws and regulations or as may
be advised by legal counsel.
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17. APPLICABLE LAW
The Plan shall be governed by and construed in accordance with the laws of
the State of North Carolina.
18. SHAREHOLDER APPROVAL
The Plan is subject to approval by the shareholders of the Corporation,
which approval must occur, if at all, within 12 months of the effective date of
the Plan. Awards granted prior to such shareholder approval shall be conditioned
upon and shall be effective only upon approval of the Plan by such shareholders
on or before such date.
19. CHANGE OF CONTROL
(a) Notwithstanding any other provision of the Plan to the contrary, in
the event of a Change of Control (as defined in Section 19(b) herein):
(i) All Options and SARs outstanding as of the date of such Change
of Control shall become fully exercisable, whether or not then otherwise
exercisable.
(ii) Any restrictions including but not limited to the Restriction
Period applicable to any Restricted Award shall be deemed to have expired,
and such Restricted Awards shall become fully vested and payable to the
fullest extent of the original grant of the applicable Award.
(iii) Notwithstanding the foregoing, in the event of a merger, share
exchange, reorganization or other business combination affecting the
Corporation or a related corporation, the Committee may, in its sole and
absolute discretion, determine that any or all Awards granted pursuant to
the Plan shall not vest or become exercisable on an accelerated basis, if
the Board of Directors of the surviving or acquiring corporation, as the
case may be, shall have taken such action, including but not limited to
the assumption of Awards granted under the Plan or the grant of substitute
awards (in either case, with substantially similar terms as Awards granted
under the Plan), as in the opinion of the Committee is equitable or
appropriate to protect the rights and interests of participants under the
Plan. For the purposes herein, the Committee authorized to make the
determinations provided for in this Section 19(a)(iii) shall be appointed
by the Board of Directors, two-thirds of the members of which shall have
been directors of the Corporation prior to the merger, share exchange,
reorganization or other business combinations affecting the Corporation or
a related corporation.
(b) For the purposes herein, a "Change of Control" shall be deemed to
have occurred on the earliest of the following dates:
(i) The date any person or group of persons (as defined in Section
13(d) and 14(d) of the Exchange Act) together with its affiliates,
excluding employee benefit plans of Corporation, becomes, directly or
indirectly, the "beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act) of securities of the Corporation representing
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20% or more of the combined voting power of the Corporation's then
outstanding securities;
(ii) The date upon which, as a result of a tender offer or exchange
offer for the purchase of securities of Corporation (other than such an
offer by the Corporation for its own securities), or as a result of a
proxy contest, merger, consolidation or sale of assets, or as a result of
any combination of the foregoing, individuals who at the beginning of any
year period during such term constitute the Corporation's Board of
Directors, plus new directors whose election by the Corporation's
shareholders is approved by a vote of at least two-thirds of the
outstanding voting shares of the Corporation, cease for any reason during
such year period to constitute at least two-thirds of the members of such
Board of Directors;
(iii) The date the shareholders of the Corporation approve a merger
or consolidation of the Corporation with any other corporation or entity
regardless of which entity is the survivor, other than a merger or
consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting securities
of the surviving entity) at least 60% of the combined voting power of the
voting securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation;
(iv) The date the shareholders of the Corporation approve a plan of
complete liquidation or winding-up of the Corporation or an agreement for
the sale or disposition by the Corporation of all or substantially all of
the Corporation's assets; or
(v) The occurrence of any other event which the Corporation's
Board of Directors determines should constitute a Change of Control.
IN WITNESS WHEREOF, this 1997 Omnibus Stock Plan of C3, Inc., is, by the
authority of the Board of Directors of the Corporation, executed in behalf of
the Corporation, the 25th day of September, 1997.
C3, INC.
By: /s/ Jeff N. Hunter
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Jeff N. Hunter
President
ATTEST:
/s/ Mark W. Hahn
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Mark W. Hahn, Secretary
[Corporate Seal]
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