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Exhibit 10.7
MAXXIM MEDICAL, INC.
1999 STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Plan is to give Maxxim Medical, Inc., a Texas
corporation (the "Company"), and its Affiliates (as defined below) a
competitive advantage in attracting, retaining and motivating officers,
employees, consultants and non-employee directors, and to provide the Company
and its subsidiaries and Affiliates with a stock plan providing incentives
linked to the financial results of the Company's businesses and increases in
shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
"Affiliate" of a Person means a Person, directly or indirectly,
controlled by, controlling or under common control with such Person.
"Award" means a Stock Appreciation Right, Stock Option or Restricted
Stock.
"Award Agreement" means a Restricted Stock Agreement or an Option
Agreement. An Award Agreement may include provisions included in an employment
or consulting agreement.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor thereto.
"Committee" means (a) before an IPO, the Executive Committee of the Board
or such other committee of the Board as the Board may designate for such
purpose under the Plan, and (b) after an IPO, such committee of the Board as
the Board may designate, which shall be composed of not less than two
Non-Employee Directors, each of whom shall be appointed by and serve at the
pleasure of the Board.
"Common Stock" means the Common Stock, par value $0.001 per share, of the
Company.
"Company" means Maxxim Medical, Inc., a Texas corporation.
"Effective Date" has the meaning set forth in Section 12.
"Employment" means, unless otherwise defined in an applicable Restricted
Stock Agreement, Award Agreement or employment agreement, employment with, or
service as a director of, or as a consultant to, the Company or any of
its Affiliates.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor thereto.
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"Exercise Price" has the meaning set forth in Section 5(a).
"Fair Market Value" of the Common Stock, unless otherwise provided in the
applicable Award Agreement, means, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange, Inc. or, if not listed on such exchange, on any other national
securities exchange on which the Common Stock is listed or, if not so listed,
on the Nasdaq National Market. If such sales prices are not so available, the
Fair Market Value of the Common Stock shall be determined by the Committee in
good faith.
"IPO" means the consummation of a registered underwritten public offering
or offerings of Common Stock after the date hereof with gross proceeds to the
Company in the aggregate of at least $50 million.
"Incentive Stock Option" means any Stock Option designated as, and
qualified as, an "incentive stock option" within the meaning of Section 422 of
the Code.
"Non-Employee Director" means a member of the Board who qualifies as a
Non-Employee Director (as defined in Rule 16b-3(b)(3) as promulgated by the SEC
under the Exchange Act, or any successor definition adopted by the SEC).
"Nonqualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option Agreement" means an agreement setting forth the terms and
conditions of an Award of Stock Options and, if applicable, Stock Appreciation
Rights.
"Participant" has the meaning set forth in Section 4.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization, government (or any
department or agency thereof) or other entity.
"Plan" means the Maxxim Medical, Inc. 1999 Stock Incentive Plan, as set
forth herein and as hereinafter amended from time to time.
"Plan Shares" has the meaning set forth in Section 11(b).
"Recapitalization Price" means $26.00 per share of Common Stock.
"Restricted Stock" means an Award granted under Section 7.
"Restricted Stock Agreement" means an agreement setting forth the terms
and conditions of an Award of Restricted Stock.
"Rule 13d-3" means Rule 13d-3, as promulgated by the SEC under the
Exchange Act, as amended from time to time.
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"SEC" means the Securities and Exchange Commission or any successor
agency.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and any successor thereto.
"Stock Appreciation Right" means a right granted under Section 6.
"Stock Option" means an option granted under Section 5.
"Stockholders' Agreement" has the meaning set forth in Section 11(a).
In addition, certain other terms used herein have definitions otherwise
ascribed to them herein.
SECTION 2. ADMINISTRATION
This Plan shall be administered by the Committee, or, if no Committee has
been designated or appointed, by the Board (in which case all references herein
to the Committee shall include the Board).
Among other things, the Committee shall have the authority, subject to
the terms of the Plan, to:
(a) select the Participants to whom Awards may from time to time be
granted and designate the Affiliates of the Company for purposes of the Plan;
(b) determine whether and to what extent Awards of Incentive Stock
Options, Nonqualified Stock Options, Stock Appreciation Rights and Restricted
Stock or any combination thereof are to be granted hereunder;
(c) determine the number of shares of Common Stock to be covered by each
Award granted hereunder;
(d) determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the option price (subject to Section 5(a)), any
vesting conditions, restrictions or limitations (which may be related to the
performance of the Participant, the Company or any of its Affiliates)) and any
acceleration of vesting or waiver or forfeiture regarding any Award and the
shares of Common Stock relating thereto, based on such factors as the Committee
shall determine;
(e) modify, amend or adjust the terms and conditions of any Award, at any
time or from time to time;
(f) determine to what extent and under what circumstances Common Stock
and other amounts payable with respect to an Award shall be deferred;
(g) determine under what circumstances an Award may be settled in cash or
Common Stock under Sections 5(g) and 6(b)(ii);
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(h) adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan as it shall from time to time deem advisable;
(i) interpret the terms and provisions of the Plan and any Award issued
under the Plan (and any agreement relating thereto); and
(j) otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then in office,
except that the members thereof may authorize any one or more of their number
or any officer of the Company to execute and deliver documents on behalf of the
Committee.
Any dispute or disagreement which may arise under, or as a result of, or
in any way relate to, the interpretation, construction or application of the
Plan or an Award (or related Award Agreement) granted hereunder shall be
determined by the Committee. Any determination made by the Committee pursuant
to the provisions of the Plan with respect to the Plan, any Award or Award
Agreement shall be made in the sole discretion of the Committee and, with
respect to an Award, at the time of the grant of the Award or, unless in
contravention of any express term of the Plan or the Award Agreement, at any
time thereafter. Except as otherwise set forth herein or in any Award
Agreement, all decisions made by the Committee in accordance with the terms of
this Plan or the Award Agreements shall be final and binding on all Persons,
including the Company and the Participants.
SECTION 3. COMMON STOCK SUBJECT TO PLAN
The total number of shares of Common Stock reserved and available for
grant under the Plan shall be 1,172,875. Shares subject to an Award under the
Plan may be authorized and unissued shares or may be treasury shares.
If any shares of Restricted Stock are forfeited or if any Stock Option
(and related Stock Appreciation Right, if any) terminates without being
exercised, or if any Stock Appreciation Right is exercised for or settled in
cash, the shares subject to such Awards shall again be available for
distribution in connection with Awards under the Plan.
In the event any merger, reorganization, consolidation, recapitalization,
spinoff, stock dividend, stock split, reverse stock split, extraordinary
distribution with respect to the Common Stock or other change in corporate
structure affecting the Common Stock occurs or is proposed, the Committee or
the Board may make such substitution or adjustment in the aggregate number and
kind of shares or other property reserved for issuance under the Plan, in the
number, kind and Exercise Price (as defined herein) of shares or other property
subject to outstanding Stock Options and Stock Appreciation Rights, in the
number and kind of shares or other property subject to Restricted Stock Awards,
and/or such other substitution or adjustments as the Committee or the Board may
determine to be fair and appropriate in its sole discretion, provided that, in
no case shall such determination adversely affect in any material respect the
rights of a Participant hereunder or under any Award Agreement or the value of
the Awards then held thereunder. Any such adjusted Exercise Price shall also be
used to determine the amount payable by the Company upon the exercise of any
Stock Appreciation Right associated with any Stock Option.
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SECTION 4. PARTICIPANTS
Officers, employees, consultants and non-employee directors of the
Company and its Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Company and its
Affiliates shall be "Participants" eligible to be granted Awards under the
Plan.
SECTION 5. STOCK OPTIONS
The Committee shall have the authority to grant any Participant Incentive
Stock Options, Nonqualified Stock Options or both types of Stock Options (in
each case, with or without Stock Appreciation Rights). Incentive Stock Options
may be granted only to employees of the Company and its subsidiaries (within
the meaning of Section 424(f) of the Code). To the extent that any Stock Option
is not designated as an Incentive Stock Option or even if so designated does
not qualify as an Incentive Stock Option, it shall constitute a Nonqualified
Stock Option.
Stock Options shall be evidenced by Option Agreements, which shall
include such terms and provisions as the Committee may determine from time to
time. An Option Agreement shall expressly indicate whether it is intended to be
an agreement for an Incentive Stock Option or a Nonqualified Stock Option. The
grant of a Stock Option shall occur on the date the Committee, by resolution
selects an individual to receive a grant of a Stock Option, determines the
number of shares of Common Stock to be subject to such Stock Option to be
granted to such individual and specifies the terms and provisions of the Stock
Option, or on such other date as the Committee may determine. The Company shall
notify a Participant of any grant of a Stock Option, and a written Option
Agreement shall be duly executed and delivered by the Company to the
Participant. Subject to Section 11(a), such Option Agreement shall become
effective upon execution by the Company and the Participant.
Anything in the Plan to the contrary notwithstanding, no term of the Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be exercised, so
as to disqualify the Plan under Section 422 of the Code or, without the consent
of the Participant affected, to disqualify any Incentive Stock Option under
such Section 422 of the Code.
Stock Options shall be subject to the following terms and conditions, and
shall contain such additional terms and conditions as the Committee shall deem
desirable:
(a) Exercise Price. The price per share of Common Stock purchasable under
a Stock Option shall be (i) with respect to Stock Options granted as of the
Effective Date, the Recapitalization Price, and (ii) with respect to all
subsequent grants of Stock Options, as such price may be determined by the
Committee and set forth in the Option Agreement (the "Exercise Price").
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee. Absent any such term being fixed by the Committee, pursuant to an
Option Agreement or otherwise, such term shall be 10 years.
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(c) Exercisability. Except as otherwise provided herein, Stock Options
shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
(d) Method of Exercise. Subject to the provisions of this Section 5,
vested Stock Options may be exercised, in whole or in part, at any time during
the option term by giving written notice of exercise to the Company specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.
Such notice shall be accompanied by payment in full of the Exercise Price
per share by certified or bank check or such other instrument as the Company
may accept. Unless determined otherwise by the Committee at the time of grant
and set forth in the Option Agreement, payment, in full or in part, may also be
made in the form of fully vested Common Stock already owned by the Participant
(for at least six months if acquired upon exercise of a stock option or
received upon the lapse of restrictions on an Award of Restricted Stock) of the
same class as the Common Stock subject to the Stock Option (based on the Fair
Market Value of the Common Stock on the date the Stock Option is exercised);
provided, however, that, in the case of an Incentive Stock Option, the right to
make a payment in the form of already-owned shares of Common Stock of the same
class as the Common Stock subject to the Stock Option may be authorized only at
the time the Stock Option is granted.
In the discretion of the Committee, after an IPO, payment for any shares
subject to a Stock Option may also be made by delivering a properly executed
exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the aggregate Exercise Price, and, if requested by the
Company, the amount of any United States federal, state or local or foreign
withholding taxes. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.
In addition, in the discretion of the Committee, payment of the Exercise
Price for any shares subject to a Stock Option may also be made by instructing
the Committee to withhold a number of such shares having a Fair Market Value on
the date of exercise equal to the aggregate Exercise Price of such Stock Option
or in accordance with such other payment methods as may be permitted by the
Committee in its sole discretion.
No shares of Common Stock shall be issued until full payment therefor has
been made. Except as otherwise provided in the Stockholders' Agreement or the
applicable Option Agreement, subject to a Participant's compliance with Section
11(a), a Participant shall have all of the rights of a stockholder of the
Company holding the class or series of Common Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends and distributions), when the Participant has given
written notice of exercise, has paid in full for such shares and, if requested,
has given the representations referred to in Section 11(c).
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(e) Nontransferability of Stock Options. No Stock Option shall be
transferable by the Participant other than (i) by will or by the laws of
descent and distribution, or (ii) in the case of a Nonqualified Stock Option,
as otherwise expressly permitted under the applicable Option Agreement,
including, if so permitted pursuant to a gift to such Participant's spouse,
children, grandchildren or other living descendants, whether directly or
indirectly or by means of a trust, partnership, limited liability company or
otherwise, in each case, subject to the restrictions in the Stockholders'
Agreement. All Stock Options shall be exercisable, subject to the terms of the
Plan, during the Participant's lifetime, only by the Participant or any person
to whom such Stock Option is transferred pursuant to the preceding sentence,
including such Participant's guardian, legal representative and other
transferee. The term "Participant" includes the estate of the Participant or
the legal representative of the Participant named in the Option Agreement and
any person to whom an Option is otherwise transferred in accordance with this
Section 5(e), by will or the laws of descent and distribution; provided,
however, that references herein to Employment of a Participant or termination
of Employment of a Participant shall continue to refer to the Employment or
termination of Employment of the applicable grantee of an Award hereunder.
(f) Termination of Employment. Except as otherwise provided hereunder or
in the applicable Option Agreement, upon the Participant's death or when the
Participant's Employment is terminated for any reason, the Participant:
(i) shall forfeit all Stock Options that have not previously vested;
and
(ii) shall have twelve months to exercise the Participant's vested
Stock Options that are vested on the date of the Participant's termination
of Employment.
Any vested Stock Options not exercised within the permissible period of
time shall be forfeited by the Participant. Notwithstanding any of the
foregoing, the Participant shall not be permitted to exercise any Stock Option
at a time beyond the initial option term.
(g) Cashing Out of Stock Option. Upon receipt of written notice of
exercise, the Committee may elect to cash out all or any portion of the shares
of Common Stock for which a Stock Option is being exercised by paying the
Participant an amount, in cash or Common Stock, equal to the excess of the Fair
Market Value of one share of Common Stock over the Exercise Price per share
times the number of shares of Common Stock having such Exercise Price for which
the Stock Option is being exercised on the effective date of such cash-out.
SECTION 6. STOCK APPRECIATION RIGHTS
(a) Grant and Exercise. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Nonqualified Stock Option, such rights may be granted either at or
after the time of grant of such Stock Option. In the case of an Incentive Stock
Option, such rights may be granted only at the time of grant of such Stock
Option. A Stock Appreciation Right shall terminate and no longer be exercisable
upon the termination or exercise of the related Stock Option. In either case,
the terms and conditions of a Stock Appreciation Right shall be set forth in
the Option Agreement for the related Stock Option or an amendment thereto.
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A Stock Appreciation Right may be exercised by a Participant in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the
Committee. Upon such exercise and surrender, the Participant shall be entitled
to receive an amount determined in the manner prescribed in Section 6(b). Stock
Options that have been so surrendered shall no longer be exercisable to the
extent the related Stock Appreciation Rights have been exercised.
(b) Terms and Conditions. Stock Appreciation Rights shall be subject to
such terms and conditions as shall be determined by the Committee, including
the following:
(i) Stock Appreciation Rights shall be exercisable only at such time
or times and to the extent that the Stock Options to which they relate
are exercisable in accordance with the provisions of Section 5 and this
Section 6;
(ii) upon the exercise of a Stock Appreciation Right, a Participant
shall be entitled to receive an amount equal to the product of (A) the
excess of the Fair Market Value of one share of Common Stock over the
Exercise Price per share specified in the related Stock Option times (B)
the number of shares in respect of which the Stock Appreciation Right
shall have been exercised, in cash, shares of Common Stock or both, with
the Committee having the right to determine the form of payment;
(iii) Stock Appreciation Rights shall be transferable only with the
related Stock Option in accordance with Section 5(e); and
(iv) upon the exercise of a Stock Appreciation Right (other than an
exercise for cash), the Stock Option or part thereof to which such Stock
Appreciation Right is related shall be deemed to have been exercised for
the purpose of the limitation set forth in Section 3 on the number of
shares of Common Stock to be issued under the Plan, but only to the
extent of the number of shares covered by the Stock Appreciation Right at
the time of exercise.
SECTION 7. RESTRICTED STOCK
The Committee shall determine the Participants to whom and the time or
times at which grants of Restricted Stock will be awarded, the number of shares
to be awarded to any Participant, the conditions for vesting, the time or times
within which such Awards may be subject to forfeiture and restrictions on
transfer and any other terms and conditions of the Awards (including provisions
(i) relating to placing legends on certificates representing shares of
Restricted Stock, (ii) permitting the Company to require that shares of
Restricted Stock be held in custody by the Company with a stock power from the
owner thereof until restrictions lapse and (iii) relating to any rights to
purchase Restricted Stock on the part of the Company and its Affiliates), in
addition to those contained in the Stockholders' Agreement. The terms and
conditions of Restricted Stock Awards shall be set forth in a Restricted Stock
Agreement, which shall include such terms and provisions as the Committee may
determine from time to time. Except as provided in this Section 7, the
Restricted Stock Agreement, the Stockholders' Agreement and any other relevant
agreements, the Participant shall have, with respect to the shares of
Restricted Stock, all of the rights of a stockholder of the Company holding the
class or
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series of Common Stock that is the subject of the Restricted Stock Award,
including, if applicable, the right to vote the shares and, subject to the
following sentence, the right to receive any cash dividends or distributions
(but, subject to the third paragraph of Section 3, not the right to receive
non-cash dividends or distributions). If so determined by the Committee in the
applicable Restricted Stock Agreement, cash dividends and distributions on the
class or series of Common Stock that is the subject of the Restricted Stock
Award shall be automatically deferred and reinvested in additional Restricted
Stock, held subject to the vesting of the underlying Restricted Stock, or held
subject to meeting conditions applicable only to dividends and distributions.
SECTION 8. TAX OFFSET BONUSES
At the time an Award is made hereunder or at any time thereafter, the
Committee may grant to the Participant receiving such Award the right to
receive a cash payment in an amount specified by the Committee, to be paid at
such time or times (if ever) as the Award results in compensation income to the
Participant, for the purpose of assisting the Participant to pay the resulting
taxes, all as determined by the Committee, and on such other terms and
conditions as the Committee shall determine.
SECTION 9. TERM, AMENDMENT AND TERMINATION
This Plan will terminate 10 years after the Effective Date. Awards
outstanding as of such date shall not be affected or impaired by the
termination of the Plan.
The Board may amend, alter, or discontinue the Plan, prospectively or
retroactively, but no amendment, alteration or discontinuation shall be made
that would impair the rights of any Participant under an Award theretofore
granted without the Participant's consent.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but no such amendment shall be made which would
impair the rights of any Participant thereunder without the Participant's
consent.
SECTION 10. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Committee may authorize the creation
of trusts or other arrangements to meet the obligations created under the Plan
to deliver Common Stock or make payments; provided, however, that unless the
Committee otherwise determines, the existence of such trusts or other
arrangements is consistent with the "unfunded" status of the Plan.
SECTION 11. GENERAL PROVISIONS
(a) Stockholders' Agreement. Notwithstanding anything in the Plan to the
contrary, unless the Committee determines otherwise, it shall be a condition to
receiving any Award under the Plan or transferring any Stock Option in
accordance with Section 5(e) or any other transfer permitted under the terms of
an Award Agreement or otherwise, that a Participant (or transferee in the case
of such transfer) shall become a party to the Stockholders' Agreement, dated as
of November 12, 1999, among the Company and certain stockholders of the
Company, as amended
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from time to time (the "Stockholders' Agreement"), and such Participant (or
transferee in the case of such transfer) shall become a "Executive Management
Investor" thereunder (or such transferee shall become a "Permitted Transferee"
of a "Executive Management Investor" thereunder).
(b) Awards and Certificates. Shares of Restricted Stock and shares of
Common Stock issuable upon the exercise of a Stock Option or Stock Appreciation
Right (together, "Plan Shares") shall be evidenced in such manner as the
Committee may deem appropriate, including book entry registration or issuance
of one or more stock certificates. Any certificate issued in respect of Plan
Shares shall be registered in the name of such Participant and shall bear
appropriate legends referring to the terms, conditions, and restrictions
applicable to such Award, substantially in the following form:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms, conditions and
restrictions (including forfeiture) of the Maxxim Medical, Inc. 1999
Stock Incentive Plan and a Restricted Stock Agreement and/or an
Award Agreement, as the case may be, between the issuer and the
registered holder hereof. Copies of such Plan and Agreement are on
file at the offices of Maxxim Medical, Inc., 10300 49th Street
North, Clearwater, Florida 33762."
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
the securities laws of any state, and may not be sold or otherwise
disposed of except pursuant to an effective registration statement
under said Act and applicable state securities laws or an applicable
exemption to the registration requirements of such Act and laws."
Such Plan Shares may bear other legends to the extent the Committee or the
Board determines it to be necessary or appropriate, including any required by
the Stockholders' Agreement or pursuant to any applicable Restricted Stock
Agreement or Award Agreement. If and when all restrictions expire without a
prior forfeiture of the Plan Shares theretofore subject to such restrictions,
upon surrender of legended certificates representing such shares new
certificates for such shares shall be delivered to the Participant without the
first legend listed above.
(c) Representations and Warranties. The Committee may require each person
purchasing or receiving Plan Shares to (i) represent to and agree with the
Company in writing that such person is acquiring the shares without a view to
the distribution thereof and (ii) make any other representations and warranties
that the Committee deems appropriate.
(d) Additional Compensation. Nothing contained in the Plan shall prevent
the Company or any of its Affiliates from adopting other or additional
compensation arrangements for its employees.
(e) No Right of Employment. Adoption of the Plan or grant of any Award
shall not confer upon any employee any right to continued Employment, nor shall
it interfere in any way with the right of the Company or any of its Affiliate
to terminate the Employment of any eligible Participant at any time.
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(f) Withholding Taxes. No later than the date as of which an amount first
becomes includible in the gross income of a Participant for income tax purposes
with respect to any Award under the Plan, such Participant shall pay to the
Company or, if appropriate, any of its Affiliates, or make arrangements
satisfactory to the Committee regarding the payment of, any United States
federal, state or local or foreign taxes of any kind required by law to be
withheld with respect to such amount. If approved by the Committee, withholding
obligations may be settled with Common Stock, including Common Stock that is
part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant. The Committee may establish such procedures
as it deems appropriate, including making irrevocable elections, for the
settlement of withholding obligations with Common Stock.
(g) Beneficiaries. The Committee shall establish such procedures as it
deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid or by
whom any rights of the Participant, after the Participant's death, may be
exercised.
(h) Pooling of Interests. Notwithstanding any other provision of the Plan
or an Award Agreement, if any right (or the exercise of such right) granted
pursuant to the Plan would make any transaction involving the Company
ineligible for pooling of interests accounting under APB No. 16, which
transaction, but for the nature of such grant or grants, would otherwise be
eligible for such accounting treatment, the Committee shall have the ability to
substitute for the cash payable pursuant to such grant or grants Common Stock
with a Fair Market Value equal to the cash that would otherwise be payable
hereunder, or make any other appropriate adjustment or amendment to the Plan or
an Award Agreement, including elimination or suspension of such rights.
(i) Governing Law. The Plan and all Awards made and actions taken
thereunder shall be governed by and construed and enforced in accordance with
the laws of the State of New York without regard to the principles of conflicts
of law thereof.
(j) Compliance with Laws. If any law or any regulation of any commission
or agency having jurisdiction shall require the Company or a Participant
seeking to exercise Stock Options or Stock Appreciation Rights to take any
action with respect to the Plan Shares to be issued upon the exercise of Stock
Options or Stock Appreciation Rights then the date upon which the Company shall
issue or cause to be issued the certificate or certificates for the Plan Shares
shall be postponed until full compliance has been made with all such
requirements of law or regulation; provided, that the Company shall use its
reasonable efforts to take all necessary action to comply with such
requirements of law or regulation. Moreover, in the event that the Company
shall determine that, in compliance with the Securities Act or other applicable
statutes or regulations, it is necessary to register any of the Plan Shares
with respect to which an exercise of a Stock Option or Stock Appreciation Right
has been made, or to qualify any such Plan Shares for exemption from any of the
requirements of the Securities Act or any other applicable statute or
regulation, no Stock Options or Stock Appreciation Rights may be exercised and
no Plan Shares shall be issued to the exercising Participant until the required
action has been completed;
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provided, that the Company shall use its reasonable efforts to take all
necessary action to comply with such requirements of law or regulation.
Notwithstanding anything to the contrary contained herein, neither the Board
nor the members of the Committee owes a fiduciary duty to any Participant in
his or her capacity as such.
SECTION 12. EFFECTIVE DATE OF PLAN
This Plan shall be effective as of the date it is approved by the holders
of a majority of the outstanding shares of Common Stock, which approval is
evidenced by Section 5.4 of the Stockholders' Agreement (the "Effective Date").
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