CYCARE SYSTEMS, INC.
1995 LONG-TERM INCENTIVE PLAN
ARTICLE 1. PURPOSE AND EFFECTIVE DATE
1.1 General. The purpose of the CyCare Systems, Inc. 1995 Long-Term
Incentive Plan (the "Plan") is to promote the success, and enhance the value, of
CyCare Systems, Inc. (the "Company") by linking the personal interests of its
key employees to those of Company stockholders and by providing its key
employees with an incentive for outstanding performance. The Plan is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of employees upon whose judgment, interest, and
special effort the successful conduct of the Company's operation is largely
dependent. Accordingly, the Plan permits the grant of incentive awards from time
to time to selected officers and key employees. It is also intended that the
Plan replace the CyCare Systems, Inc. Stock Option Plan (the "Prior Plan");
provided, however, that options granted under the Prior Plan shall continue to
be subject to the terms and conditions set forth in the agreement evidencing the
option grant.
1.2 Effective Date. The Plan is effective as of March 1, 1995 (the
"Effective Date"). Within one year after the Effective Date, the Plan shall be
submitted to the shareholders of the Company for their approval. The Plan will
be deemed to be approved by the stockholders if it receives the affirmative vote
of the holders of a majority of the shares of stock of the Company present, or
represented, and entitled to vote at a meeting duly held (or by the written
consent of the holders of a majority of the shares of stock of the Company
entitled to vote) in accordance with the applicable provisions of Delaware law
and the Company's Bylaws and Restated Certificate of Incorporation. Any Awards
granted under the Plan prior to stockholder approval are effective when made
(unless the Committee specifies otherwise at the time of grant), but no Award
may be exercised or settled and no restrictions relating to any Award may lapse
before stockholder approval. If the stockholders fail to approve the Plan, any
Award previously made shall be automatically canceled without any further act.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. When a word or phrase appears in this Plan with the
initial letter capitalized, and the word or phrase does not commence a sentence,
the word or phrase shall generally be given the meaning ascribed to it in this
Section or in Sections 1.1 or 1.2 unless a clearly different meaning is required
by the context. The following words and phrases shall have the following
meanings:
(a) "Award" means any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share Award, Dividend Equivalent Award,
or Other Stock-Based Award, or any other right or interest
relating to Stock or cash, granted to a Participant under the
Plan.
(b) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Change of Control" means and includes each of the following:
(1) A change of control of the Company through a transaction
or series of transactions, such that any person (as that term is
used in Section 13 and 14(d)(2) of the 1934 Act), excluding
affiliates of the Company as of the Effective Date, is or becomes
the beneficial owner (as that term is used in Section 13(d) of
the 1934 Act) directly or indirectly, of securities of the
Company representing 35% or more of the combined voting power of
the Company's then outstanding securities;
(2) Upon the first purchase under a tender offer or exchange
offer for 20% or more of the outstanding shares of Stock (or
securities convertible into Stock), other than an offer by the
Company or any Subsidiary or any employee benefit plan sponsored
by the Company or any Subsidiary;
(3) Any merger or consolidation of the Company in which the
Company is not the continuing or surviving corporation or
pursuant to which Shares would be converted into cash, securities
or other property, other than a merger of the Company in which
the holders of the Shares immediately before the merger have the
same proportionate ownership of Common Stock of the surviving
corporation immediately after the merger;
(4) Substantially all of the assets of the Company are sold
or otherwise transferred to parties that are not within a
"controlled group of corporations" (as defined in Section 1563 of
the Code) in which the Company is a member; or
(5) If, at any time after March 1, 1995, there shall cease
to be a majority of the Board comprised as follows: individuals
who as of March 1, 1995, constitute the Board and any new
director(s) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of
the majority of the directors still in office who either were
directors as of March 1, 1995, or whose election or nomination
for election was previously so approved.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) "Committee" means the committee of the Board described in Article
3.
(g) "Disability" shall mean any illness or other physical or mental
condition of a Participant which renders the Participant
incapable of performing his full-time duties for the Company for
six consecutive months and within 30 days after notice by the
Committee to the Participant, the Participant does not return
to the full-time performance of his duties.
(h) "Dividend Equivalent" means a right granted to a Participant
under Article 10.
(i) "Fair Market Value" means with respect to Stock or any other
property, the fair market value of such Stock or other property
determined by such methods or procedures as may be established
from time to time by the Committee. Unless otherwise determined
by the Commttee, the Fair Market Value of Stock as of any date
shall be the closing price for the Stock as reported in The Wall
Street Journal for that date or, if no closing price is so
reported for that date, the closing price on the next preceding
date for which a closing price was reported.
(j) "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code or any successor
provision thereto.
(k) "Non-Qualified Stock Option" means an Option that is not intended
to be an Incentive Stock Option.
(l) "Option" means a right granted to a Participant under Article 6
of the Plan to purchase Stock at a specified price during
specified time periods. An Option may be either an Incentive
Stock Option or a Non-Qualified Stock Option.
(m) "Other Stock-Based Award" means a right, granted to a Participant
under Article 11, that relates to or is valued by reference to
Stock or other Awards relating to Stock.
(n) "Participant" means a person who, as an officer or key employee
of the Company or any Subsidiary, has been granted an Award under
the Plan.
(o) "Performance Share" means a right granted to a Participant under
Article 8, to receive cash, Stock, or other Awards, the payment
of which is contingent upon achieving certain performance goals
established by the Committee.
(p) "Plan" means the CyCare Systems, Inc. 1995 Long-Term Incentive
Plan, as amended from time to time.
(q) "Restricted Stock Award" means Stock granted to a Participant
under Article 9 that is subject to certain restrictions and to
risk of forfeiture.
(r) "Stock" means the Common Stock of the Company and such other
securities of the Company that may be substituted for Stock
pursuant to Article 12.
(s) "Stock Appreciation Right" or "SAR" means a right granted to a
Participant under Article 7 to receive a payment equal to the
difference between the Fair Market Value of a share of Stock as
of the date of exercise of the SAR over the grant price of the
SAR, all as determined pursuant to Article 7.
(t) "Subsidiary" means any corporation of which a majority of the
outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Company.
ARTICLE 3. ADMINISTRATION
3.1 Committee. The Plan shall be administered by a Committee that is
appointed by, and shall serve at the discretion of, the Board. The Committee
shall consist of at least two individuals who are members of the Board who are
"disinterested persons," as such term is defined in Rule 16b3 promulgated under
Section 16 of the Securities Exchange Act of 1934 (the "1934 Act") or any
successor provision, except as may be otherwise permitted under Section 16 of
the 1934 Act and the regulations and rules promulgated thereunder.
3.2 Action By The Committee. A majority of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present and acts approved in writing by a majority of the Committee in
lieu of a meeting shall be deemed the acts of the Committee. Each member of the
Committee is entitled to, in good faith, rely or act upon any report or other
information furnished to that member by any officer or other employee of the
Company or any Subsidiary, the Company's independent certified public
accountants, or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan.
3.3 Authority of Committee. The Committee has the exclusive power,
authority and discretion to:
(a) Designate Participants;
(b) Determine the type or types of Awards to be granted to each
Participant;
(c) Determine the number of Awards to be granted and the number of
shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award granted under the
Plan including but not limited to, the exercise price, grant
price, or purchase price, any restrictions or limitations on the
Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations
or waivers thereof, based in each case on such considerations as
the Committee in its sole discretion determines;
(e) Determine whether, to what extent, and under what circumstances
an Award may be settled in, or the exercise price of an Award may
be paid in, cash, Stock, other Awards, or other property, or an
Award may be canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(g) Decide all other matters that must be determined in connection
with an Award;
(h) Establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer the Plan; and
(i) Make all other decisions and determinations that may be required
under the Plan or as the Committee deems necessary or advisable
to administer the Plan.
3.4 Decisions Binding. The Committee's interpretation of the Plan, any
Awards granted under the Plan, any Award Agreement and all decisions and
determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment provided in Section 13.1, the
aggregate number of shares of Stock reserved and available for Awards or which
may be used to provide a basis of measurement for or to determine the value of
an Award (such as with a Stock Appreciation Right or Performance Share Award)
shall be 1,120,000.
4.2 Lapsed Awards. To the extent that an Award terminates, expires or
lapses for any reason, any shares of Stock subject to the Award will again be
available for the grant of an Award under the Plan and shares subject to SARs or
other Awards settled in cash will be available for the grant of an Award under
the Plan, in each case to the full extent available pursuant to the rules and
interpretations of the Securities and Exchange Commission under Section 16 of
the 1934 Act, as amended.
4.3 Stock Distributed. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury Stock
or Stock purchased on the open market.
4.4 Limitation On Number of Shares Subject To Awards. Notwithstanding any
provision in the Plan to the contrary, the maximum number of shares of Stock
with respect to one or more Awards that may be granted to any one Participant
over the term of the Plan shall be 600,000.
ARTICLE 5. ELIGIBILITY
5.1 General. Awards may be granted only to individuals who are officers or
other key employees (including employees who also are directors or officers) of
the Company or a Subsidiary, as determined by the Committee.
ARTICLE 6. STOCK OPTIONS
6.1 General. The Committee is authorized to grant Options to Participants
on the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock under
an Option shall be determined by the Committee, provided that the
exercise price for any Option shall not be less than the Fair Market
Value as of the date of grant.
(b) Time And Conditions Of Exercise. The Committee shall
determine the time or times at which an Option may be exercised in
whole or in part, provided that no Option may be exercisable prior to
six months following the date of the grant of such Option. The
Committee also shall determine the performance or other conditions, if
any, that must be satisfied before all or part of an Option may be
exercised.
(c) Payment. The Committee shall determine the methods by which
the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, shares of Stock, or other
property (including "cashless exercise" arrangements), and the methods
by which shares of Stock shall be delivered or deemed to be delivered
to Participants. Without limiting the power and discretion conferred
on the Committee pursuant to the preceding sentence, the Committee
may, in the exercise of its discretion, but need not, allow a
Participant to pay the Option price by directing the Company to
withhold from the shares of Stock that would otherwise be issued upon
exercise of the Option that number of shares having a Fair Market
Value on the exercise date equal to the Option price, all as
determined pursuant to rules and procedures established by the
Committee.
(d) Evidence of Grant. All Options shall be evidenced by a
written Award Agreement between the Company and the Participant. The
Award Agreement shall include such provisions as may be specified by
the Committee.
6.2 Incentive Stock Options. The terms of any Incentive Stock Options
granted under the Plan must comply with the following additional rules:
(a) Exercise Price. The exercise price per share of Stock shall
be set by the Committee, provided that the exercise price for any
Incentive Stock Option may not be less than the Fair Market Value as
of the date of the grant.
(b) Exercise. In no event, may any Incentive Stock Option be
exercisable for more than ten years from the date of its grant.
(c) Lapse of Option. An Incentive Stock Option shall lapse under
the following circumstances:
(1) The Incentive Stock Option shall lapse ten years after
it is granted, unless an earlier time is set in the Award
Agreement.
The Incentive Stock Option shall lapse twelve months after
the Participant's termination of employment, if the termination
of employment employment was attributable to Disability.
(2) If the Participant separates from employment other than
as provided in paragraph (2), the Incentive Stock Option shall
lapse three months after the Participant's termination of
employment.
(3) If the Participant dies before the Option lapses
pursuant to paragraph (1), (2) or (3), above, the Incentive Stock
Option shall lapse, unless it is previously exercised, on the
earlier of (i) the date on which the Option would have lapsed had
the Participant lived and had his employment status (i.e.,
whether the Participant was employed by the Company on the date
of his death or had previously terminated employment) remained
unchanged; or (ii) 15 months after the date of the Participant's
death. Upon the Participant's death, any exercisable Incentive
Stock Options may be exercised by the Participant's legal
representative or representatives, by the person or persons
entitled to do so under the Participant's last will and
testament, or, if the Participant shall fail to make testamentary
disposition of such Incentive Stock Option or shall die
intestate, by the person or persons entitled to receive said
Incentive Stock Option under the applicable laws of descent and
distribution.
(d) Individual Dollar Limitation. The aggregate Fair Market Value
(determined as of the time an Award is made) of all shares of Stock
with respect to which Incentive Stock Options are first exercisable by
a Participant in any calendar year may not exceed $100,000.00.
(e) Ten-Percent Owners. An Incentive Stock Option shall be
granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of
all classes of Stock of the Company only if such Option is granted at
a price that is not less than 110% of Fair Market Value on the date of
grant and the Option is exercisable for no more than five years from
the date of grant.
(f) Expiration of Incentive Stock Options. No Award of an
Incentive Stock Option may be made pursuant to this Plan after 2005.
(g) Right To Exercise. During a Participant's lifetime, an
Incentive Stock Option may be exercised only by the Participant.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 Grant of SARs. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(a) Right of Payment. Upon the exercise of a Stock Appreciation
Right, the Participant to whom it is granted has the right to receive
the excess, if any, of:
(1) The Fair Market Value of one share of Stock on the date
of exercise; over
(2) The grant price of the Stock Appreciation Right as
determined by the Committee, which shall not be less than the
Fair Market Value of one share of Stock on the date of grant in
the case of any SAR related to any Incentive Stock Option.
(b) Other Terms. All awards of Stock Appreciation Rights shall be
evidenced by an Award Agreement. The terms, methods of exercise,
methods of settlement, form of consideration payable in settlement,
and any other terms and conditions of any Stock Appreciation Right
shall be determined by the Committee at the time of the grant of the
Award and shall be reflected in the Award Agreement.
ARTICLE 8. PERFORMANCE SHARES
8.1 Grant of Performance Shares. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete discretion to
determine the number of Performance Shares granted t each Participant. All
Awards of Performance Shares shall be evidenced by an Award Agreement.
8.2 Right To Payment. A grant of Performance Shares gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Shares are granted, in whole or in
part, as the Committee shall establish at grant or thereafter. The Committee
shall set performance goals and other terms or conditions to payment of the
Performance Shares in its discretion which, depending on the extent to which
they are met, will determine the number and value of Performance Shares that
will be paid to the Participant, provided that the time period during which the
performance goals must be met shall, in all cases, exceed six months.
8.3 Other Terms. Performance Shares may be payable in cash, Stock, or other
property, and have such other terms and conditions as determined by the
Committee and reflected in the Award Agreement.
ARTICLE 9. RESTRICTED STOCK AWARDS
9.1 Grant of Restricted Stock. The Committee is authorized to make Awards
of Restricted Stock to Participants in such amounts and subject to such terms
and conditions as may be selected by the Committee. All Awards of Restricted
Stock shall be evidenced by an Award Agreement.
9.2 Issuance And Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions as the Committee may
impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times, under
such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter.
9.3 Forfeiture. Except as otherwise determined by the Committee at the time
of the grant of the Award or thereafter, upon termination of employment during
the applicable restriction period, Restricted Stock that is at that time subject
to restrictions shall be forfeited and reacquired by the Company, provided,
however, that the Committee may provide in any Award Agreement that restrictions
or forfeiture conditions relating to Restricted Stock will be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Restricted Stock.
9.4 Certificates For Restricted Stock. Restricted Stock granted under the
Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the name
of the Participant, certificates must bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Restricted Stock, and
the Company shall retain physical possession of the certificate until such time
as all applicable restrictions lapse.
ARTICLE 10. DIVIDEND EQUIVALENTS
10.1 Grant Of Dividend Equivalents. The Committee is authorized to grant
Dividend Equivalents to Participants subject to such terms and conditions as may
be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to dividends with respect to all or a portion of the
number of shares of Stock subject to an Option Award or SAR Award, as determined
by the Committee. The Committee may provide that Dividend Equivalents be paid or
distributed when accrued or be deemed to have been reinvested in additional
shares of Stock, or otherwise reinvested.
ARTICLE 11. OTHER STOCK-BASED AWARDS
11.1 Grant Of Other Stock-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other
Awards that are payable in, valued in whole or in part by reference to, or
otherwise based on or related to shares of Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including without limitation shares
of Stock awarded purely as a "bonus" and not subject to any restrictions or
conditions, convertible or exchangeable debt securities, other rights
convertible or exchangeable into shares of Stock, and Awards valued by reference
to book value of shares of Stock or the value of securities of or the
performance of specified Subsidiaries. The Committee shall determine the terms
and conditions of such Awards.
ARTICLE 12. PROVISIONS APPLICABLE TO AWARDS
12.1 Stand-Alone, Tandem, And Substitute Awards. Awards granted under the
Plan may, in the discretion of the Committee, be granted either alone or in
addition to, in tandem with, or in substitution for, any other Award granted
under the Plan. If an Award is granted in substitution for another Award, the
Committee may require the surrender of such other Award in consideration of the
grant of the new Award. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the
grant of such other Awards.
12.2 Exchange Provisions. The Committee may at any time offer to exchange
or buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 12.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is made.
12.3 Term Of Award. The term of each Award shall be for the period as
determined by the Committee, provided that in no event shall the term of any
Incentive Stock Option or a Stock Appreciation Right granted in tandem with the
Incentive Stock Option exceed a period of ten years from the date of its grant.
12.4 Form Of Payment For Awards. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary on the grant or exercise of an Award may be made in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, Stock, other Awards, or other property, or any
combination, and may be made in a single payment or transfer, in installments,
or on a deferred basis, in each case determined in accordance with rules adopted
by, and at the discretion of, the Committee.
12.5 Limits Of Transfer. No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company or a
Subsidiary. Except as otherwise provided below, no Award shall be assignable or
transferable by a Participant other than by will or the laws of descent and
distribution or, except in the case of an Incentive Stock Option, pursuant to a
court order that would otherwise satisfy the requirements to be a domestic
relations order as defined in Section 414(p)(1)(B) of the Code, if the order
satisfies Section 414(p)(1)(A) of the Code notwithstanding that such an order
relates to the transfer of a stock option rather than an interest in an employee
benefit pension plan. In the Award Agreement for any Award other than an Award
that includes an Incentive Stock Option, the Committee may allow a Participant
to assign or otherwise transfer all or a portion of the rights represented by
the Award to specified individuals or classes of individuals, or to a trust
benefiting such individuals or classes of individuals, subject to such
restrictions, limitations, or conditions as the Committee deems to be
appropriate.
12.6 Beneficiaries. Notwithstanding Section 12.5, a Participant may, in the
manner determined by the Committee, designate a beneficiary to exercise the
rights of the Participant and to receive any distribution with respect to any
Award upon the Participant's death. A beneficiary, legal guardian, legal
representative, or other person claiming any rights under the Plan is subject to
all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise
provide, and to any additional restrictions deemed necessary or appropriate by
the Committee. If the Participant is married, a designation of a person other
than the Participant's spouse as his beneficiary with respect to more than 50
percent of the Participant's interest in the Award shall not be effective
without the written consent of the Participant's spouse. If no beneficiary has
been designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant's will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is
filed with the Committee.
12.7 Stock Certificates. All Stock certificates delivered under the Plan
are subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock.
12.8 Acceleration Upon A Change Of Control. If a Change of Control occurs,
all outstanding Options, Stock Appreciation Rights, and other Awards in the
nature of rights that may be exercised shall become fully exercisable and all
restrictions on outstanding Awards shall lapse. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set
forth in Section 6.2(d), the excess Options shall be deemed to be Non-Qualified
Stock Options. Notwithstanding any provision in this Plan to the contrary, if a
Change of Control of the Company has occurred and the Participant's employment
is terminated for any reason except those "excepted causes" detailed below, the
Participant shall be entitled for a seven-month period following such
termination, to exercise all Options and other Awards that were exercisable as
of the date of such termination (taking into account the acceleration provision
of this Section 12.8). For this purpose, excepted cause shall mean termination
of employment due to (i) the death of the Participant, (ii) the disability of
the Participant, or (iii) cause (which shall deem to occur if the Participant
willfully engages in conduct that is demonstrably and materially injurious to
the Company, monetarily, or otherwise; and in making such determination, no act,
or failure to act, on the Participant's part shall be deemed "willful" unless
done, or omitted to be done, by the Participant in bad faith and without
reasonable belief that the act or omission was in the best interest of the
Company.
ARTICLE 13. CHANGES IN CAPITAL STRUCTURE
13.1 General. In the event a stock dividend is declared upon the Stock, the
shares of Stock then subject to each Award (and the number of shares subject
thereto) shall be increased proportionately without any change in the aggregate
purchase price therefor. In the event the Stock shall be changed into or
exchanged for a different number or class of shares of Stock or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, there shall be substituted for
each such share of Stock then subject to each Award (and for each share of Stock
then subject thereto) the number and class of shares of Stock into which each
outstanding share of Stock shall be so exchanged, all without any change in the
aggregate purchase price for the shares then subject to each Award.
ARTICLE 14. AMENDMENT, MODIFICATION AND TERMINATION
14.1 Amendment, Modification and Termination. With the approval of the
Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan. However, without approval of the stockholders of the Company or
other conditions (as may be required by the Code, by the insider trading rules
of Section 16 of the 1934 Act, by any national securities exchange or system on
which the Stock is listed or reported, or by a regulatory body having
jurisdiction), no such termination, amendment, or modification may:
(a) Materially increase the total number of shares of Stock that
may be issued under the Plan, except as provided in Section 13.1;
(b) Materially modify the eligibility requirements for
participation in the Plan; or
(c) Materially increase the benefits accruing to Participants
under the Plan.
14.2 Awards Previously Granted. No termination, amendment, or modification
of the Plan shall adversely affect in any material way any Award previously
granted under the Plan, without the written consent of the Participant.
ARTICLE 15. GENERAL PROVISIONS
15.1 No Rights To Awards. No Participant or employee shall have any claim
to be ganted any Award under the Plan, and neither the Company nor the Committee
is obligated to treat Participants and employees uniformly.
15.2 No Stockholders Rights. No Award gives the Participant any of the
rights of a shareholder of the Company unless and until shares of Stock are in
fact issued to such person in connection with such Award.
15.3 Withholding. The Company or any Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy Federal, state, and local taxes
(including the Participant's FICA obligation) required by law to be withheld
with respect to any taxable event arising as a result of this Plan. With respect
to withholding required upon any taxable event under the Plan, Participants may
elect, subject to the Committee's approval, to satisfy the withholding
requirement, in whole or in part, by having the Company or any Subsidiary
withhold shares of Stock having a Fair Market Value on the date of withholding
equal to the amount to be withheld for tax purposes in accordance with such
procedures as the Committee establishes. The Committee may, at the time any
Award is granted, require that any and all applicable tax withholding
requirements be satisfied by the withholding of shares of Stock as set forth
above.
15.4 No Right To Employment. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company or any
Subsidiary.
15.5 Unfunded Status Of Awards. The Plan is intended to be an "unfunded"
plan for incentive and deferred compensation. With respect to any payments not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.
15.6 Indemnification. To the extent allowable under applicable law, each
member of the Committee or of the Board shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in
which he or she may be involved by reason of any action or failure to act under
the Plan and against and from any and all amounts paid by him or her in
satisfaction of judgment in such action, suit, or proceeding against him or her
provided he or she gives the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. 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 Bylaws or Restated Certificate of Incorporation, as
a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
15.7 Relationship To Other Benefits. No payment under the Plan shall be
taken into account in determining any benefits under any pension, retirement,
savings, profit sharing, group insurance, welfare or other benefit plan of the
Company or any Subsidiary.
15.8 Expenses. The expenses of administering the Plan shall be borne by
the Company and its Subsidiaries.
15.9 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.
15.10 Fractional Shares. No fractional shares of stock shall be issued and
the Committee shall determine, in its discretion, whether cash shall be given in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up.
15.11 Securities And Compliance. With respect to any person who is, on the
relevant date, obligated to file reports under Section 16 of the 1934 Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
void to the extent permitted by law and voidable as deemed advisable by the
Committee.
15.12 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 government agencies as
may be required. The Company shall be under no obligation to register under the
Securities Act of 1933, as amended (the "1933 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 1933 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.
15.13 Governing Law. The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of Arizona.