Exhibit 4.1
INDYMAC MORTGAGE HOLDINGS, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose of Plan. The purpose of this 2000 Stock Incentive Plan
("Plan") of IndyMac Mortgage Holdings, Inc., a Delaware corporation (the
"Company"), is to enable the Company and any of its subsidiaries or affiliates
to attract, retain and motivate their employees, consultants, agents, officers
and directors by providing incentives related to equity interests in and the
financial performance of the Company.
2. Persons Eligible Under Plan. Any person, including any director of
the Company or any of its subsidiaries or affiliates, who is an officer or
employee of the Company or any of its subsidiaries or affiliates or an
individual who performs services for the Company or any of its subsidiaries or
affiliates of a nature similar to those performed by officers or employees, such
as consultants and agents (any of the foregoing, an "Employee") shall be
eligible to be considered for the grant of an Award (as defined in Section 5
below) or Awards under Section 5 of this Plan. Members of the Board of Directors
of the Company (the "Board"), and members of the boards of directors of any of
the Company's subsidiaries or affiliates who are not officers or employees of
the Company or any of its subsidiaries or affiliates ("Non-Employee Directors")
shall be eligible to receive Awards under this Plan only in the form of
nonqualified stock options granted automatically under the provisions of Section
10 of this Plan ("Director Options").
3. Stock Subject to Plan.
(a) ISO Limit. The maximum number of Common Shares, $0.01 par
value per share, of the Company (the "Common Shares") that may be issued
pursuant to options intended to qualify as incentive stock options
("Incentive Stock Options") under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), granted under this Plan is
5,000,000, and provided further that, except as otherwise provided
herein, the aggregate Fair Market Value (as defined in Section 10) of
Common Shares with respect to which options intended to qualify as
Incentive Stock Options are exercisable for the first time by any
individual during any calendar year shall not exceed the limit, if any,
set forth in Section 422(d) of the Code or any successor provision
thereto. For purposes of this subsection (a), the Fair Market Value (as
defined in Section 10) of any Common Shares shall be determined as of
the time the Incentive Stock Option with respect to the Common Shares is
granted. Pursuant to Section 422(a)(2) of the Code, only employees (as
that term is used in Section 422(a)(2) of the Code) of the Company or
the Company's wholly-owned subsidiaries may receive options intended to
qualify as Incentive Stock Options under this Plan.
(b) Aggregate/Individual Share Limit.
(i) The maximum number of Common Shares that may be
issued pursuant to all Awards (including Incentive Stock Options,
as set forth in subsection (a) above) granted under this Plan,
other than Common Shares that are issued pursuant to Awards and
subsequently reacquired by the Company pursuant to the terms and
conditions of such Awards ("Reacquired Common Shares"), is
5,000,000, subject to adjustment as provided in or pursuant to
Section 6 or 10 hereof (such maximum number, as so adjusted,
shall be referred to as the "Share Limit").
(ii) Notwithstanding anything contained herein to the
contrary, the aggregate number of Common Shares subject to
options, stock appreciation rights, and awards of restricted
stock granted during any calendar year to any individual shall be
limited to 1,000,000.
(c) Share Reservation. No Award may be granted under this Plan
unless, on the date of grant, the sum of (i) the maximum number of
Common Shares issuable at any time pursuant to such Award, plus (ii) the
number of Common Shares that have previously been issued pursuant to
Awards granted under this Plan, other than Reacquired Common Shares
available for reissue, plus (iii) the maximum number of Common Shares
that may be issued at any time after such date of grant pursuant to
Awards that are outstanding on such date, does not exceed the Share
Limit. Common Shares distributed under the Plan may be treasury shares,
authorized but unissued shares or shares purchased in the open market
for this purpose.
(d) Reissue of Awards and Common Shares. Awards payable in cash
or Common Shares that are forfeited or for any reason are not so paid
under this Plan, as well as Common Shares subject to Awards that expire
or for any reason are terminated and are not issued or constitute
Reacquired Common Shares, shall again be available for subsequent Awards
under the Plan.
(e) Fractional Shares/Minimum Issue. Fractional share interests
shall be disregarded, but may be accumulated. No fewer than 100 Common
Shares may be purchased on exercise of any option granted under this
Plan ("Option") at one time unless the number purchased is the total
number at the time available for purchase under the Option.
(f) Privileges of Stock Ownership. Except as otherwise expressly
authorized by this Plan, an Award recipient shall not be entitled to any
privilege of stock ownership as to any Common Shares subject to an
Option granted under this Plan prior to the satisfaction of all
conditions to the valid exercise of the Option.
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4. Administration of Plan.
(a) The Committee. Except for the provisions of Section 10 (which
to the maximum extent feasible shall be self-effectuating), this Plan
shall be administered by a committee of the Board (the "Committee")
consisting of two or more directors, each of whom is a "Non-Employee
Director," as such term is defined in Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and an "Outside
Director," as such term is defined for purposes of Section 162(m) of the
Code.
(b) Powers of the Committee. Subject to the express provisions of
this Plan, the Committee shall be authorized and empowered to do all
things necessary or desirable in connection with the administration of
this Plan including, without limitation, the following:
(i) adopt, amend and rescind rules and regulations
relating to this Plan;
(ii) determine which persons meet the requirements of
Section 2 hereof for eligibility under this Plan and to which of
such eligible persons, if any, Awards will be granted hereunder;
(iii) grant Awards to eligible persons and determine the
terms and conditions thereof, including, but not limited to, the
number of Common Shares issuable pursuant thereto, the time not
more than ten (10) years after the date of an Award at which time
the Award shall expire or (if not vested) terminate, and the
conditions upon which Awards become exercisable or vest or shall
expire or terminate, and the consideration, if any, to be paid
upon receipt, exercise or vesting of Awards;
(iv) determine whether, and the extent to which,
adjustments are required pursuant to Section 6 hereof;
(v) interpret and construe this Plan and the terms and
conditions of any Award granted under Section 5, whether before
or after the date set forth in Section 7; and
(vi) determine the circumstances under which, consistent
with the provisions of Section 7, any outstanding Award under
Section 5 may be amended;
which authority (except as to clauses (ii) and (iii) above) shall remain
in effect so long as any Award remains outstanding under this Plan.
(c) Specific Committee Responsibility and Discretion Regarding
Awards. Subject to the express provisions of this Plan, the Committee,
in its sole
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and absolute discretion, shall determine all of the terms and conditions
of each Award granted under Section 5 of this Plan, which terms and
conditions may include, subject to such limitations as the Committee may
from time to time impose, among other things, provisions that:
(i) permit the recipient of such Award, including any
recipient who is a director or officer of the Company, to pay the
purchase price of the Common Shares or other property issuable
pursuant to such Award, or such recipient's tax withholding
obligation upon such issuance or in respect of such Award or
Shares, in whole or in part, by any one or more of the following:
(A) the delivery of previously owned shares of
capital stock of the Company (including shares acquired
as or pursuant to Awards) then having been owned by the
recipient for at least six (6) months (or such other
period required under applicable law) or the delivery of
other property, or
(B) the delivery of a promissory note, under any
applicable financing plan or on such other terms and
conditions, as in either case authorized by the
Committee, consistent with applicable law;
(ii) accelerate the receipt of benefits pursuant to such
Award upon the occurrence of specified events, including, without
limitation, a change of control of the Company, an acquisition of
a specified percentage of the voting power of the Company, the
dissolution or liquidation of the Company, a sale of
substantially all of the property and assets of the Company or an
event of the type described in Section 6 hereof, or pursuant to
the provisions of an employment contract not inconsistent with
the terms of this Plan, or in other circumstances or upon the
occurrence of other events as deemed appropriate by the
Committee;
(iii) qualify such Award as an Incentive Stock Option;
(iv) extend the exercisability or term of any or all such
outstanding Awards, change the price of any or all such
outstanding Awards or otherwise change previously imposed terms
and conditions, in the specified events described in clause (ii)
above or in other circumstances or upon the occurrence of other
events as deemed appropriate by the Committee, in each case
subject to Section 7;
(v) authorize the conversion, succession or substitution
of outstanding Awards under Section 5 upon the occurrence of any
event of the type described in Section 6, or in other
circumstances or upon the occurrence of other events as deemed
appropriate by the Committee; and/or
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(vi) provide for automatic grants of Awards or successive
Awards.
(d) Binding Determinations. Any action taken by, or inaction of,
the Company, the Board or the Committee relating or pursuant to this
Plan shall be within the absolute discretion of that entity or body and
shall be conclusive and binding upon all persons. No member of the Board
or officer of the Company shall be liable for any such action or
inaction of the entity or body, of another person or, except in
circumstances involving bad faith, of himself or herself.
(e) Reliance on Experts. In making any determination or in taking
or not taking any action under this Plan, the Board and the Committee
may obtain and may rely upon the advice of experts, including
professional advisors to the Company. No director, officer or agent of
the Company shall be liable for any such action or determination taken
or made or omitted in good faith.
(f) Delegation. The Committee may delegate ministerial,
non-discretionary functions to individuals who are officers or employees
of the Company. The Committee also may delegate to certain officer(s) of
the Company the authority to grant Awards pursuant to Section 5 of the
Plan, provided that such delegation is set forth in writing and includes
all applicable limitations and parameters to such Awards, and provided
further that such Awards are subsequently ratified by the Committee.
5. Awards.
(a) Types of Awards. The Committee, on behalf of the Company, is
authorized under this Plan to enter into any type of arrangement with an
Employee that is not inconsistent with the provisions of this Plan and
that by its terms, involves or might involve the issuance of (i) Common
Shares, (ii) an option, warrant, convertible security, stock
appreciation right or similar right with an exercise or conversion
privilege at a fixed or variable price related to the Common Shares or
other equity securities of the Company and/or the passage of time, the
occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or any combination of these variables, or
any similar security contemplated by subsection (b) below, or (iii) any
similar security with a value derived from the value of the Common
Shares or other equity securities of the Company, all of which may or
may not involve the payment of cash consideration, subject to subsection
(e) below. The authorization of any such arrangement (including any
benefits described in Section 5(e)) is referred to herein as the grant
of an "Award". The date of grant may be at or after (but not before) the
date the Committee authorizes the Award. All Awards shall be evidenced
by a writing with a schedule memorializing the grant of the Award to the
recipient and setting forth certain specifics with respect to the terms
and conditions of the Award ("Award Memorandum").
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(b) Form of Awards. Awards are not restricted to any specified
form or structure and may include, without limitation, sales or bonuses
of stock, restricted stock, performance restricted stock, stock options,
reload stock options, stock purchase warrants, other rights to acquire
stock, securities convertible into or redeemable for stock, stock
appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, and an
Award may consist of one such security or benefit, or two or more of
them in any combination or alternative. In addition, any Award that is
intended to qualify as an Incentive Stock Option will automatically be
converted into a non-qualified stock option to the extent that such
Award does not satisfy any applicable requirement under Section 422 of
the Code.
(c) Restricted Stock Awards. If expressly provided by the
Committee, and without limiting subsection (b) above, Awards of
restricted Common Shares ("Restricted Stock") may be made to the holder
of any Option, based upon dividends or distributions that would have
been received had the Common Shares covered by the Option been issued
and outstanding on the applicable dividend record date. The terms and
conditions of any such Awards of Restricted Stock shall be determined by
the Committee and set forth in the applicable Award Memorandum.
(d) Time and Method of Exercise. Awards may be exercised in whole
or in part at such time or times as shall be determined by the Committee
and set forth in the applicable Award Memorandum. Awards shall be
exercised in accordance with procedures established by the Committee,
subject to Section 4(c)(i) and any holding periods required under
applicable law.
(e) Price; Consideration; Option Pricing Limit. Common Shares may
be issued pursuant to an Award for any lawful consideration as
determined by the Committee, including, without limitation, cash, Common
Shares (valued at then Fair Market Value, as defined in Section 10), or
services rendered by the recipient of such Award; provided that no
Common Shares shall be issued for less than the minimum lawful
consideration and no Option which is intended to be an Incentive Stock
Option shall be granted with an exercise price that is less than the
Fair Market Value (as defined in Section 10) of the underlying Common
Shares on the date of grant.
(f) Effect of Termination of Service or Death; Change in
Subsidiary Status. Subject to Section 4(c)(ii), and except as otherwise
provided in the applicable Award Memorandum or otherwise specified or
approved by the Committee, each Option and all other rights thereunder,
to the extent not exercised (whether or not presently exercisable),
shall terminate and become null and void at such time as the holder of
such Option terminates service as an Employee, except that:
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(i) if the holder terminates service as an Employee for a
reason other than cause (as determined by the Committee in its
sole discretion), death or permanent and total disability (as
defined in clause (ii) below), the holder may at any time within
a period of three months after such termination exercise such
Option to the extent such Option was exercisable on the date of
such termination;
(ii) if the holder terminates service as an Employee by
reason of permanent and total disability (within the meaning of
Section 22(e)(3) of the Code), or if the holder becomes
permanently and totally disabled within three months after
termination described in clause (i), the holder may at any time
within a period of twelve (12) months after such termination
exercise such Option to the extent such Option was exercisable on
the date of such termination; and
(iii) if the holder terminates service as an Employee by
reason of death, or within three months after a termination
described in clauses (i) or (ii), then such Option may be
exercised within a period of twelve (12) months after the
holder's termination of service as an Employee, to the extent
such Option was exercisable on the date of such termination;
provided, however, that in no event may any such Option be exercised by
any holder after its expiration date.
Notwithstanding any of the foregoing provisions of this
subsection (f), if the holder of an Option is an Employee of an entity
which is a subsidiary or affiliate of the Company and such entity ceases
to be such a subsidiary or affiliate of the Company, such event shall be
deemed for purposes of this subsection (f) to be a termination of the
holder's service as an Employee described in clause (i) above. Absence
from work caused by military service or authorized sick leave shall not
be considered a termination of service as an Employee for purposes of
this subsection (f).
(g) Cash Awards; Loans. The Committee shall have the express
authority to create, add or include a cash payment or benefit under this
Plan, whether in lieu of, in addition to or as an Award or as a
component of another type of Award, and to make or authorize loans to
finance, or to otherwise accommodate the financing, acquisition or
exercise of an Award or the satisfaction of any related tax liability.
(h) Transfer Restrictions. Unless otherwise permitted in the
applicable Award Memorandum pursuant to the discretion of the Committee,
no Award granted hereunder shall be transferable other than by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order.
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(i) Tax Withholding. Upon the issuance of Common Shares, the
payment of cash or any other taxable event in respect of an Award under
this Plan, such number of shares or amount of cash or other
consideration, as the case may be, otherwise issuable or payable may be
reduced by the amount necessary to satisfy the minimum applicable tax
withholding requirements imposed on the Company or any of its
subsidiaries or affiliates in respect of such Award or event, all to the
extent and in such manner as the Committee may determine.
6. Adjustments and Acceleration.
(a) Adjustments. If (i) the outstanding securities of the class
then subject to this Plan (the "outstanding shares") (A) are
increased, decreased, exchanged or converted as a result of a
stock split (including a split in the form of a stock dividend),
reverse stock split, recapitalization, or similar event or (B)
are exchanged for or converted into cash, property or a
different number or kind of securities (or if cash, property or
securities are distributed in respect of the outstanding
shares), as a result of a reorganization, merger, consolidation,
exchange, recapitalization, restructuring or reclassification,
or (ii) substantially all of the property and assets of the
Company are sold as an entirety, or (iii) the Company is
liquidated and dissolved, then, the Committee (or, in the case
of Director Options, the Board) shall, in such manner and to
such extent (if any) as is equitable and appropriate, make
proportionate adjustments in (x) the number and type of shares
or other securities or cash or other property that may be
acquired pursuant to Options and other Awards previously granted
under this Plan (and, where applicable, the exercise price
thereof so as to maintain the same aggregate exercise price),
(y) the maximum number and type of shares or other securities,
cash, or property that may be issued or delivered pursuant to
Options (including Incentive Stock Options and Director Options)
and other Awards thereafter granted under this Plan, and (z)
such other terms as necessarily are affected by such event. In
the case of an extraordinary distribution, merger,
reorganization, consolidation, combination, sale of assets,
exchange or spin off, the Committee (or the Board, in the case
of Director Options) may make provisions for a substitution or
exchange of any or all outstanding Options or other Awards or
rights (or for the securities, cash or property deliverable upon
exercise of such outstanding Options or other Awards or rights),
based upon the distribution or consideration payable to holders
of the Common Shares of the Company upon or in respect of such
event.
(b) Acceleration.
(i) The Committee, in the exercise of its reasonable
discretion, may, but need not, make an affirmative determination
in light of all circumstances surrounding a transaction or group
of related transactions that a "Change in Control" for purposes
of this Plan will either occur or
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not occur. In making any such determination, the Committee shall
give due consideration, without limitation, to the likely effect
of such transaction(s) on the makeup of the shareholder base, the
Board and the senior management of the Company. If the Committee
does not exercise the right to make this affirmative
determination with respect to a specific transaction or group of
related transactions, then, with respect thereto, a "Change in
Control" shall be deemed to occur for purposes of this Plan upon
the occurrence of any one of the following events:
(A) An acquisition (other than directly from the
Company) of any common stock or other "Voting Securities"
(as hereinafter defined) of the Company by any "Person"
(as the term person is used for purposes of Sections
13(d) or 14(d) of the Exchange Act, immediately after
which such Person has "Beneficial Ownership" (within the
meaning of Rule 13d-3 under the Exchange Act) of twenty
five percent (25%) or more of the then outstanding shares
of the Company's common stock or the combined voting
power of the Company's then outstanding Voting
Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting
Securities which are acquired in a "Non-Control
Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in
Control. For purposes of this Plan, (1) "Voting
Securities" shall mean the Company's outstanding voting
securities entitled to vote generally in the election of
directors and (2) a "Non-Control Acquisition" shall mean
an acquisition by (a) an employee benefit plan (or a
trust forming a part thereof) maintained by (x) the
Company, or, (y) any corporation or other Person of which
a majority of its voting power or its voting equity
securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this
definition, a "Subsidiary"), (b) the Company or any of
its Subsidiaries, or (c) any Person in connection with a
"Non-Control Transaction" (as hereinafter defined);
(B) The individuals who as of March 1, 2000 are
members of the Board (the "Incumbent Board") cease for
any reason to constitute at least two-thirds of the
members of the Board; provided, however, that if the
election, or nomination for election by the Company's
common stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Plan, be
considered as a member of the Incumbent Board; provided
further, however, that no individual shall be considered
a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual
or threatened "Election Contest" (as described in Rule
14a-11 under the Exchange Act) or other actual or
threatened
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solicitation of proxies or consents by or on behalf of a
Person other than the Board (a "Proxy Contest") including
by reason of any agreement intended to avoid or settle
any Election Contest or Proxy Contest; or
(C) The consummation of: (1) A merger,
consolidation or reorganization involving the Company,
unless such merger, consolidation or reorganization is a
"Non-Control Transaction." A "Non-Control Transaction"
shall mean a merger, consolidation or reorganization of
the Company where: (a) the stockholders of the Company,
immediately before such merger, consolidation or
reorganization, own directly or indirectly immediately
following such merger, consolidation or reorganization,
at least seventy percent (70%) of the combined voting
power of the outstanding Voting Securities of the
corporation resulting from such merger, consolidation or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership of
the Voting Securities immediately before such merger,
consolidation or reorganization; (b) the individuals who
were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger,
consolidation or reorganization constitute at least
two-thirds of the members of the board of directors of
the Surviving Corporation, or in the event that,
immediately following the consummation of such
transaction, a corporation beneficially owns, directly or
indirectly, a majority of the Voting Securities of the
Surviving Corporation, the board of directors of such
corporation; and (c) no Person other than (w) the
Company, (x) any Subsidiary, (y) any employee benefit
plan (or any trust forming a part thereof) maintained by
the Company, the Surviving Corporation, or any
Subsidiary, or (z) any Person who, immediately prior to
such merger, consolidation or reorganization had
Beneficial Ownership of twenty-five percent (25%) or more
of the then outstanding Voting Securities or common stock
of the Company, has Beneficial Ownership of twenty-five
percent (25%) or more of the combined voting power of the
Surviving Corporation's then outstanding Voting
Securities or its common stock;
(2) A complete liquidation or
dissolution of the Company,
(3) The sale or other disposition of all
or substantially all of the assets of the
Company to any Person (other than a transfer to
a Subsidiary); or
(D) or any other occurrence or state of facts,
whether similar or dissimilar to the foregoing, that is
determined by the
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Committee to constitute a change in control of the
management or policies of the Company.
Notwithstanding the foregoing provisions of this Section
6(b)(i), a Change in Control shall not be deemed to occur solely
because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then
outstanding common stock or Voting Securities as a result of the
acquisition of common stock or Voting Securities by the Company
which, by reducing the number of shares of common stock or Voting
Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons; provided,
however, that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of
common stock or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional common stock or Voting
Securities which increases the percentage of the then outstanding
common stock or Voting Securities Beneficially Owned by the
Subject Person, then a Change in Control shall occur.
(i) Except as otherwise provided in Section 10(j), prior
to a Change in Control, the Committee may determine in respect of
Awards held by Employees that upon or in anticipation of the
occurrence of the Change in Control benefits under Awards shall
be accelerated only for a limited period of time, which period of
time shall not be less than a period of time reasonably necessary
to realize the benefits of such acceleration nor more than one
year after the Change in Control. If such a determination is not
made, then (subject to the last sentence of this clause) upon the
occurrence of a Change in Control and without further action by
the Board or the Committee, (A) each Option and stock
appreciation right shall become immediately exercisable, (B)
performance Restricted Stock shall immediately vest free of
restrictions, and (C) each performance share Award shall become
payable to the Employee. The Committee may override the
limitations on acceleration in this Section 6(b)(ii) by express
provision in the Award Memorandum or otherwise, and may accord
any holder of an Award a right to refuse any acceleration,
whether pursuant to the Award Memorandum or otherwise, in such
circumstances as the Committee may approve. Any acceleration of
Awards shall comply with any applicable regulatory and financial
accounting requirements, including without limitation Section 422
of the Code.
(ii) Any Awards that are (or but for a holder's rejection
of acceleration would have been) accelerated under this Section 6
and that are not exercised or vested prior to a dissolution of
the Company or a reorganization event described in Section 6(a)
that the Company does not survive shall terminate, provided that
if provision has been made,
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consistent with the terms hereof, for the substitution, exchange
or other settlement of Awards, such Awards shall be substituted,
exchanged or otherwise settled in accordance with such provision.
(iii) Any Awards that are (or but for the holder's
rejection of the acceleration would have been) accelerated that
are not exercised or vested prior to an abandonment or
termination of a transaction subject to shareholder approval that
triggered the Change in Control (as evidenced by public
announcement, Board resolution, execution of documents
terminating the transaction, or other action or document
objectively confirming such abandonment or termination), shall be
restored to their prior status (except for the effects of the
passage of time) as if no Change in Control had occurred.
7. Amendment and Termination of Plan.
(a) No Award shall be granted under this Plan after March 1,
2010. Although Common Shares may be issued after March 1, 2010 pursuant
to Awards granted prior to such date, no Common Shares otherwise shall
be issued under this Plan after such date. Notwithstanding the
foregoing, any Award granted prior to such date may vest or be amended
after such date in any manner that would have been permitted prior to
such date, except that (except as provided herein) no such amendment
shall increase the number of shares subject to or comprising such Award,
or extend the final expiration date of the Award or reduce (below the
Fair Market Value (as defined in Section 10) on the date of the
amendment) the exercise price of or under such Award.
(b) The Board may, without shareholder approval, at any time and
from time to time, suspend, discontinue or amend this Plan in any
respect whatsoever, except that no such amendment shall impair any
rights under any Award theretofore made under the Plan without the
consent of the holder of such Award. Furthermore, and except as and to
the extent otherwise permitted by the provisions hereof, no such
amendment shall, without shareholder approval, cause the Plan to cease
to satisfy any applicable condition of Rule 16b-3 under the Exchange Act
or cause any Award under the Plan to cease to qualify for any applicable
exception under Section 162(m) of the Code.
8. Effective Date of Plan: Shareholder Approval. This Plan shall be
effective as of March 1, 2000, the date upon which it was approved by the Board;
provided, however, that no Common Shares may be issued under this Plan until it
has been approved by the affirmative votes of the holders of a majority of the
Common Shares of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable law.
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9. Legal Issues.
(a) Compliance and Choice of Law: Severability. This Plan, the
granting and vesting of Awards under this Plan and the issuance and
delivery of Common Shares and/or the payment of money under this Plan or
under Awards granted hereunder are subject to compliance with all
applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law and federal margin
requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any
securities delivered under this Plan shall be subject to such
restrictions as the Company may deem necessary or desirable to assure
compliance with all applicable legal requirements. This Plan, the
Awards, all documents evidencing Awards and all other related documents
shall be governed by, and construed in accordance with, the laws of the
State of Delaware. If any provision shall be held by a court of
competent jurisdiction to be invalid and unenforceable, the remaining
provisions of this Plan (subject to Section 9(b)) shall continue in
effect.
(b) Plan Construction. It is the intent of the Company that this
Plan and Awards hereunder satisfy and be interpreted in a manner that in
the case of recipients who are or may become persons subject to Section
16 of the Exchange Act satisfies the applicable requirements of Rule
16b-3 under the Exchange Act so that such persons will be entitled to
the benefits of Rule 16b-3 or other exemptive rules under Section 16 of
the Exchange Act and will not be subjected to avoidable liability
thereunder. If any provision of this Plan or of any Award would
otherwise frustrate or conflict with the intent expressed above, that
provision to the extent possible shall be interpreted and deemed amended
so as to avoid such conflict, but to the extent of any remaining
irreconcilable conflict with such intent as to such persons in the
circumstances, such provision shall be deemed inoperative.
(c) Non-Exclusivity of Plan. Nothing in this Plan shall limit or
be deemed to limit the authority of the Board or the Committee to grant
awards or authorize any other compensation, with or without reference to
the Common Shares, under any other plan or authority.
10. Non-Employee Director Options
(a) Participation. Awards relating to the Common Shares
authorized under this Plan shall be made under this Section 10 only to
Non-Employee Directors.
(b) Certain Definitions. The following definitions shall apply to
this Section 10:
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(i) "Business Day" shall mean any day, other than
Saturday, Sunday or any statutory holiday in the state of
California.
(ii) "Director Option" shall mean an Option granted to a
Non-Employee Director pursuant to this Section 10.
(iii) "Disability" shall mean a "permanent and total
disability" within the meaning of Section 22(e)(3) of the Code.
(iv) "Fair Market Value" on a specified date shall mean
(A) if the Common Shares are listed or admitted to trade on a
national securities exchange, the average of the high and low
reported sales prices of the Common Shares on the Composite Tape
on such date, as published in the Western Edition of The Wall
Street Journal, on the principal national securities exchange on
which the Common Shares are so listed or admitted to trade, or,
if there is no trading of the Shares on such date, then the
average of the high and low reported sales prices of the Common
Shares as quoted on such Composite Tape on the next preceding
date on which there is trading in such Shares; (B) if the Common
Shares are not listed or admitted to trade on a national
securities exchange, the average of the high and low reported
prices for the Common Shares on such date, as furnished by the
National Association of Securities Dealers, Inc. ("NASD") through
the NASDAQ National Market Reporting System (or a similar
organization, if the NASD is no longer reporting such
information); (C) if the Common Shares are not listed or admitted
to trade on a national securities exchange and are not reported
on the National Market Reporting System, the arithmetic mean
between the bid and asked prices for the Shares on such date, as
furnished by the NASD or a similar organization; or (D) if the
Common Shares are not listed or admitted to trade on a national
securities exchange nor reported on the National Market Reporting
System and if bid and asked prices for the stock are not
furnished by the NASD or a similar organization, the value as
established by the Board at such time for purposes of this Plan.
(v) "Retirement" shall mean retirement or resignation as
a director after at least five (5) years service as a director.
(c) Annual Awards. On the same date as the annual grant of Awards
to Employees pursuant to this Plan in each calendar year after 2000
during the term of the Plan, there shall be granted to each Non-Employee
Director then in office nonqualified stock options to purchase the
number of Common Shares equal to 0.025% of the issued and outstanding
Common Shares of the Company (excluding any Common Shares held in
treasury by the Company) as of the end of the preceding fiscal year.
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(d) Minimum Number of Shares. Notwithstanding anything to the
contrary contained herein, a Non-Employee Director shall not receive
Options for less than 7,500 Common Shares pursuant to this Section 10 in
any calendar year.
(e) Purchase Price. The exercise price for Shares under any
Director Option shall be equal to 100% of the Fair Market Value of a
Common Share on the date the Director Option is granted. The exercise
price for Shares under any Director Option may be modified by a separate
vote of the members of the Board who are officers of the Company, as
well as the full Board; provided, that the modified exercise price shall
be no less than 100% of the Fair Market Value of a Common Share on the
date the exercise price of the Director Option is modified. The exercise
price of any option granted under this Section 10 shall be paid in full
at the time of each purchase in cash equivalent or in Common Shares
valued at their Fair Market Value on the date of exercise of such
option, or partly in such shares and partly in cash, provided that any
such Common Shares used in payment shall have been owned by the
Non-Employee Director at least six months prior to the date of exercise.
(f) Option Period and Exercisability. Each Director Option
granted under this Section 10 shall become fully exercisable, in whole
or in part, on the first anniversary of the grant date. Each option
granted under this Section 10 and all rights or obligations thereunder
shall expire on the earlier of the tenth anniversary of the date of
grant or the liquidation or dissolution of the Company and shall be
subject to earlier termination as provided below.
(g) Termination of Directorship. If a Non-Employee Director's
services as a member of the Board, or as a member of the board of
directors of a subsidiary or affiliate of the Company, terminate by
reason of death, Disability or Retirement, an option granted pursuant to
this Section 10 then held by such Non-Employee Director shall
immediately become and shall remain exercisable for one year after the
date of such termination or until the expiration of the stated term of
such option, whichever first occurs. If a Non-Employee Director's
services as a member of the Board, or as a member of the board of
directors of a subsidiary or affiliate of the Company, terminate for any
other reason (other than Cause), any option granted pursuant to this
Section 10 which is not then exercisable shall terminate and any such
option which is then exercisable may be exercised for three months after
the date of such termination or until the expiration of the stated term,
which ever first occurs. If a Non-Employee Director is terminated for
Cause, all Director Options granted to such Non-Employee Director shall
be forfeited and shall no longer be exercisable, effective on the date
of such termination for Cause. For purposes of this Section 10, "Cause"
shall mean, with respect to any Non-Employee Director, termination on
account of any act of (i) fraud or intentional misrepresentation, (ii)
embezzlement, misappropriation or conversion of assets or opportunities
of the Company or any subsidiary or affiliate, or (iii) conviction of a
felony.
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(h) Adjustments. The provisions of this Section 10 and Director
Options granted hereunder shall be subject to Section 6. If there shall
occur any event described in Section 6(a), then in addition to the
matters contemplated thereby, the Board shall, in such manner and to
such extent (if any) as is appropriate and equitable, proportionately
adjust the dollar amounts set forth elsewhere in this Section 10.
(i) Loans. Subject to the requirements of applicable law, the
Board may authorize loans to Non-Employee Directors to finance the
exercise of Awards; provided, however, that no loan shall be made to any
Non-Employee Director to finance the exercise of an Award made under
this Section 10 unless (i) such loan is made pursuant to a full recourse
promissory note, and (ii) such loan, if secured by Common Shares
(whether issuable under the Award in question or otherwise), is made in
compliance with Regulation G of the Federal Reserve Board.
(j) Acceleration Upon a Change in Control. Upon the occurrence of
a Change in Control referred to in Section 6(b), each Director Option
granted under this Section 10 shall become immediately exercisable in
full subject to the terms thereof. To the extent that any Director
Option granted under this Section 10 is not exercised prior to (i) a
dissolution of the Company or (ii) a merger or other corporate event
that the Company does not survive, and no provision is (or consistent
with the provisions of Section 9 or 10 can be) made for the assumption,
conversion, substitution or exchange of the option, the Director Option
shall terminate upon the occurrence of such event.
(k) Other Provisions. The provisions of Sections 3(e)-(f), 5(h)
and 7 through 9 are incorporated herein by this reference.
(l) Grant of Options to Newly Elected Non-Employee Directors.
Upon the election of a newly elected Non-Employee Director, there shall
be granted automatically (without any action by the Committee or the
Board) a nonqualified stock option (the grant date of which shall be the
date of such election) to each newly elected Non-Employee Director as
follows: (i) if the Non-Employee Director is elected within six months
of the date on which the most recent Director Options were granted to
existing Non-Employee Directors, a non-qualified stock option to
purchase the same number of Common Shares for which the most recent
Director Options were granted to existing Non-Employee Directors, and
(ii) if the Non-Employee Director is elected more than six months
following the date on which the most recent Director Options were
granted to existing Non-Employee Directors, but prior to the date in the
following calendar year on which Director Options are granted to
existing Non-Employee Directors, a non-qualified stock option to
purchase one-half the number of Common Shares for which the most recent
Director Options were granted to existing Non-Employee Directors.
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Amendments to the
2000 Stock Incentive Plan
(Adopted by the Board of Directors on October 17, 2000)
1. Section 4(c)(iv) of the 2000 Stock Incentive Plan ("2000 Plan") shall be
deleted in its entirety and replaced with the following:
"(iv) extend the exercisability or term of any or all
such outstanding Awards or otherwise change previously imposed
terms and conditions, in the specified events described in clause
(ii) above, or in other circumstances or upon the occurrence of
other events as deemed appropriate by the Committee, in each case
subject to Section 7;"
2. Section 5(f)(iii) of the 2000 Plan shall be deleted in its entirety and
replaced with the following:
"(iii) if the holder terminates service as an Employee by
reason of death, or if such death occurs within three months
after a termination described in clauses (i) or (ii), then such
Option may be exercised within a period of twelve (12) months
after the holder's termination of services as an Employee, to the
extent such Option was exercisable on the date of such
termination;"
3. To correct the error in Section 6(b) of the 2000 Plan whereby there
exist two subparagraphs enumerated as "(i)", the second such
subparagraph shall be renumbered (ii) and the subparagraphs currently
numbered (ii) and (iii) shall be renumbered (iii) and (iv).
4. The second sentence of Section 7(a) of the 2000 Plan shall be deleted in
its entirety and replaced with the following:
"Notwithstanding the foregoing, any Award granted prior to such
date may vest or be amended after such date in any manner that
would have been permitted prior to such date, except that no such
amendment shall increase the number of shares subject to or
comprising such Award, extend the final expiration date of the
Award or reduce the exercise price of or under such Award."
5. The second sentence of Section 10(e) of the 2000 Plan shall be deleted
in its entirety.
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Amendments to the
2000 Stock Incentive Plan
(Adopted by the Board of Directors on April 24, 2002)
The 2000 Stock Incentive Plan ("Plan") is hereby amended, effective as of April
24, 2002, as follows:
1. By adding the following new sentence at the end of Section 3(b)(i) of
the Plan:
"Subject to Section 6, the maximum number of Common Shares that may be
issued in conjunction with Awards of Restricted Stock granted after
April 24, 2002 shall not exceed the sum of (i) 157,153 Common Shares;
and (ii) any Common Shares issued in conjunction with an Award of
Restricted Stock and reacquired after April 24, 2002 by the Company."
2. By substituting the following sentence for the first sentence of Section
5(d) of the Plan:
"Awards may be exercised in whole or in part at such time or times as
shall be determined by the Committee and set forth in the applicable
Award Memorandum; provided, however that, if the right to become vested
in such Award is conditioned on the completion of a specified period of
service with the Company or the Subsidiaries, without achievement of
performance objectives being required as a condition of either grant or
vesting, then the required period of service for full vesting shall not
be less than one year for shares covered by an Option Award and not less
than three years for shares covered by a Restricted Stock Award (subject
to acceleration of vesting, to the extent permitted by the Committee, in
the event of the Participant's death, disability, retirement, change in
control or involuntary termination)."
3. By substituting the following for Section 5(e) of the Plan:
"Common Shares may be issued pursuant to an Award for any lawful
consideration as determined by the Committee, including, without
limitation, cash, Common Shares (valued at then Fair Market Value, as
defined in Section 10), or services rendered by the recipient of such
Award; provided that no Common Shares shall be issued for less than the
minimum lawful consideration and, for Options granted after April 24,
2002, no Option shall be granted with an exercise price that is less
than the Fair Market Value (as defined in Section 10) of the underlying
Common Shares on the date of grant. Except for either adjustments
pursuant to Section 6(a) (relating to adjustment of shares), or
decreases approved by the Company's shareholders, the Exercise Price for
any outstanding Option granted under the Plan may not be decreased after
the date of grant nor may an outstanding Option granted under the Plan
be surrendered to the Company as consideration for the grant of a new
Option with a lower exercise price."
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4. By adding the following new sentence at the end of Section 7(b) of the
Plan:
"The provisions of Section 5(e) (relating to option pricing) cannot be
amended unless the amendment is approved by the Company's shareholders."
5. By adding the following sentence to Section 10(e) of the Plan as the
second sentence thereof:
"The exercise price for Shares under any Director Option may not be
modified without shareholder approval."
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