EXHIBIT 99(C)
BORON, LEPORE & ASSOCIATES, INC.
2002 EMPLOYEE STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Boron, LePore & Associates, Inc. 2002 Employee
Stock Option and Incentive Plan (the "Plan"). The purpose of the Plan is to
encourage and enable the employees of Boron, LePore & Associates, Inc. (the
"Company") and its Subsidiaries (who are not officers or directors) and upon
whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"Administrator" is defined in Section 2(a).
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Stock Options and Restricted Stock Awards.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Fair Market Value" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Administrator; provided,
however, that if the Stock is admitted to quotation on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ National
System or a national securities exchange, the determination shall be made by
reference to market quotations. If there are no market quotations
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for such date, the determination shall be made by reference to the last date
preceding such date for which there are market quotations.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Restricted Stock Award" means Awards granted pursuant to Section 6.
"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
"Subsidiary" means any corporation or other entity (other than the
Company) in which the Company has a controlling interest, either directly or
indirectly.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES
AND DETERMINE AWARDS
(a) Committee. The Plan shall be administered by either the Board or a
committee of the Board (in either case, the "Administrator").
(b) Powers of Administrator. The Administrator shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the employees of the Company and its
Subsidiaries who are not officers or directors and to whom Awards may from time
to time be granted;
(ii) to determine the time or times of grant, and the extent,
if any, of Stock Options and Restricted Stock Awards, or any combination of the
foregoing, granted to any one or more grantees;
(iii) to determine the number of shares of Stock to be covered
by any Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
grantees, and to approve the form of written instruments evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of
all or any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend
at any time the period in which Stock Options may be exercised;
(vii) to determine at any time whether, to what extent, and
under what circumstances distribution or the receipt of Stock and other amounts
payable with respect to an Award shall be deferred either automatically or at
the election of the grantee and whether and to
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what extent the Company shall pay or credit amounts constituting interest (at
rates determined by the Administrator) or dividends or deemed dividends on such
deferrals; and
(viii) at any time to adopt, alter and repeal such rules,
guidelines and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan grantees.
(c) Delegation of Authority to Grant Awards. The Administrator, in its
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to the granting of
Awards at Fair Market Value. Any such delegation by the Administrator shall
include a limitation as to the amount of Awards that may be granted during the
period of the delegation and shall contain guidelines as to the determination of
the exercise price of any Stock Option, the conversion ratio or price of other
Awards and the vesting criteria. The Administrator may revoke or amend the terms
of a delegation at any time but such action shall not invalidate any prior
actions of the Administrator's delegate or delegates that were consistent with
the terms of the Plan.
(d) Indemnification. Neither the Board nor the Committee, nor any member
of either or any delegatee thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Committee (and any delegatee
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under any directors' and officers'
liability insurance coverage which may be in effect from time to time.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan shall be 500,000 shares, subject to
adjustment as provided in Section 3(b); provided that not more than 75,000
shares shall be issued in the form of Restricted Stock Awards except to the
extent such Awards are granted in lieu of cash compensation. For purposes of
this limitation, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number pursuant to
any type or types of Award. The shares available for issuance under the Plan may
be authorized but unissued shares of Stock or shares of Stock reacquired by the
Company and held in its treasury.
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(b) Changes in Stock. Subject to Section 3(c) hereof, if, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for a different
number or kind of securities of the Company or any successor entity (or a parent
or subsidiary thereof), the Administrator shall make an appropriate or
proportionate adjustment in (i) the maximum number of shares reserved for
issuance under the Plan, including the maximum number of shares that may be
issued in the form of Restricted Stock Awards, (ii) the number and kind of
shares or other securities subject to any then outstanding Awards under the
Plan, (iii) the repurchase price per share subject to each outstanding
Restricted Stock Award, and (iv) the price for each share subject to any then
outstanding Stock Options under the Plan, without changing the aggregate
exercise price (i.e., the exercise price multiplied by the number of Stock
Options) as to which such Stock Options remain exercisable. The adjustment by
the Administrator shall be final, binding and conclusive. No fractional shares
of Stock shall be issued under the Plan resulting from any such adjustment, but
the Administrator in its discretion may make a cash payment in lieu of
fractional shares.
The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan.
(c) Mergers and Other Transactions. In the case of (i) the dissolution or
liquidation of the Company, (ii) the sale of all or substantially all of the
assets of the Company on a consolidated basis to an unrelated person or entity,
(iii) a merger, reorganization or consolidation in which the holders of the
Company's outstanding voting power immediately prior to such transaction do not
own a majority of the outstanding voting power of the surviving or resulting
entity immediately upon completion of such transaction, (iv) the sale of all of
the Stock of the Company to an unrelated person or entity in which the holders
of the Company's outstanding voting power immediately prior to such transaction
do not own a majority of the outstanding voting power of the surviving or
resulting entity immediately upon completion of such transaction, or (v) any
other transaction in which the owners of the Company's outstanding voting power
immediately prior to such transaction do not own at least a majority of the
outstanding voting power of the relevant entity after the transaction (in each
case, a "Transaction"), the Plan and all outstanding Options, Stock Appreciation
Rights and other Awards granted hereunder shall terminate, unless provision is
made in connection with the Transaction for the assumption of Awards, the
continuation of Awards by the Company as survivor or the substitution of such
Awards with new Awards of the successor entity or parent thereof, with
appropriate adjustment as to the number and kind of shares and, if appropriate,
the per share exercise prices, as provided in Section 3(b) above. In the event
of such termination, each grantee shall be permitted to exercise, for a period
of at least 15 days prior to the date of
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such termination, all outstanding Options, Stock Appreciation Rights and other
Awards held by such grantee which are then exercisable or become exercisable
upon the effectiveness of the Transaction. Notwithstanding anything herein to
the contrary, in the event that provision is made in connection with the
Transaction for the assumption or continuation of Awards, or the substitution of
such Awards with new Awards of the successor entity or parent thereof, then,
except as the Administrator may otherwise determine with respect to particular
Awards, any Award so assumed or continued or substituted therefor shall be
deemed vested and exercisable in full upon the date on which the grantee's
employment or service relationship with the Company and its subsidiaries or
successor entity terminates if (i) such termination occurs within eighteen (18)
months after the closing of such Transaction and (ii) such termination is by the
Company or its Subsidiaries or successor entity without Cause (as defined below)
or by the grantee for Good Reason (as defined below). For purposes of this
Section 3(c), the term "Cause" means a vote of the Board of Directors of the
Company or the successor entity, as the case may be, resolving that the grantee
should be dismissed as a result of (i) any material breach by the grantee of any
agreement to which the grantee and the Company are parties, (ii) any act (other
than retirement) or omission to act by the grantee which would reasonably be
likely to have a material adverse effect on the business of the Company or its
subsidiaries or successor entity, as the case may be, or on the grantee's
ability to perform services for the Company or its Subsidiaries or successor
entity, as the case may be, including, without limitation, the conviction of any
crime (other than ordinary traffic violations), or (iii) any material misconduct
or willful and deliberate non-performance of duties by the grantee in connection
with the business or affairs of the Company or its Subsidiaries or successor
entity, as the case may be; and the term "Good Reason" means the occurrence of
any of the following events: (A) a substantial adverse change in the nature or
scope of the grantee's responsibilities, authorities, title, powers, functions,
or duties; (B) a reduction in the grantee's annual base salary except for
across-the-board salary reductions similarly affecting all or substantially all
management employees; or (C) the relocation of the offices at which the grantee
is principally employed to a location more than fifty (50) miles from such
offices.
(d) Substitute Awards. The Administrator may grant Awards under the Plan
in substitution for stock and stock based awards held by employees or other key
persons of another corporation in connection with the merger or consolidation of
the employing corporation with the Company or a Subsidiary or the acquisition by
the Company or a Subsidiary of property or stock of the employing corporation.
The Administrator may direct that the substitute awards be granted on such terms
and conditions as the Administrator considers appropriate in the circumstances.
Any substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time employees of the
Company and its Subsidiaries who are not officers or directors of the Company or
any of its Subsidiaries as are selected from time to time by the Administrator
in its sole discretion.
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SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Administrator may from time to time approve. All Stock Options granted under the
Plan do not qualify as "incentive stock options" as defined in Section 422 of
the Code.
(a) Stock Options Granted to Employees. The Administrator in its
discretion may grant Stock Options to eligible employees of the Company or any
Subsidiary; provided, however, that such employees are neither an officer nor a
director of the Company or any of its Subsidiaries. Stock Options granted
pursuant to this Section 5(a) shall be subject to the following terms and
conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem
desirable. If the Administrator so determines, Stock Options may be granted in
lieu of cash compensation at the optionee's election, subject to such terms and
conditions as the Administrator may establish.
(i) Exercise Price. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall be
determined by the Administrator at the time of grant but shall not be less than
100 percent of the Fair Market Value on the date of grant.
(ii) Option Term. The term of each Stock Option shall be fixed by
the Administrator, but no Stock Option shall be exercisable more than 10 years
after the date the Stock Option is granted.
(iii) Exercisability; Rights of a Stockholder. Stock Options shall
become exercisable at such time or times, whether or not in installments, as
shall be determined by the Administrator at or after the grant date. The
Administrator may at any time accelerate the exercisability of all or any
portion of any Stock Option. An optionee shall have the rights of a stockholder
only as to shares acquired upon the exercise of a Stock Option and not as to
unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in whole or
in part, by giving written notice of exercise to the Company, specifying the
number of shares to be purchased. Payment of the purchase price may be made by
one or more of the following methods to the extent provided in the Option Award
agreement:
(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;
(B) Through the delivery (or attestation to the ownership) of
shares of Stock that have been purchased by the optionee on the open
market or that have been beneficially owned by the optionee for at least
six months and are not then subject to restrictions under any Company
plan. Such surrendered shares shall be valued at Fair Market Value on the
exercise date;
(C) By the optionee delivering to the Company a properly
executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to
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the Company cash or a check payable and acceptable to the Company for the
purchase price; provided that in the event the optionee chooses to pay the
purchase price as so provided, the optionee and the broker shall comply
with such procedures and enter into such agreements of indemnity and other
agreements as the Administrator shall prescribe as a condition of such
payment procedure; or
(D) By the optionee delivering to the Company a promissory
note if the Board has expressly authorized the loan of funds to the
optionee for the purpose of enabling or assisting the optionee to effect
the exercise of his Stock Option; provided that at least so much of the
exercise price as represents the par value of the Stock shall be paid
other than with a promissory note if otherwise required by state law.
Payment instruments will be received subject to collection. The delivery of
certificates representing the shares of Stock to be purchased pursuant to the
exercise of a Stock Option will be contingent upon receipt from the optionee (or
a purchaser acting in his stead in accordance with the provisions of the Stock
Option) by the Company of the full purchase price for such shares and the
fulfillment of any other requirements contained in the Option Award agreement or
applicable provisions of laws. In the event an optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation
method, the number of shares of Stock transferred to the optionee upon the
exercise of the Stock Option shall be net of the number of shares attested to.
(b) Non-transferability of Options. No Stock Option shall be transferable
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee, or by the optionee's legal representative or
guardian in the event of the optionee's incapacity.
SECTION 6. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an
Award entitling the recipient to acquire, at such purchase price as determined
by the Administrator, shares of Stock subject to such restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Conditions may be based on continuing employment and/or achievement of
pre-established performance goals and objectives. The grant of a Restricted
Stock Award is contingent on the grantee executing the Restricted Stock Award
agreement. The terms and conditions of each such agreement shall be determined
by the Administrator, and such terms and conditions may differ among individual
Awards and grantees.
(b) Rights as a Stockholder. Upon execution of a written instrument
setting forth the Restricted Stock Award and payment of any applicable purchase
price, a grantee shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Company until such Restricted Stock
is vested as provided in Section 6(d) below, and the grantee shall be required,
as a condition of the grant, to deliver to the Company a stock power endorsed in
blank.
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(c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award agreement. If a grantee's employment
with the Company and its Subsidiaries terminates for any reason, the Company
shall have the right to repurchase Restricted Stock that has not vested at the
time of termination at its original purchase price, from the grantee or the
grantee's legal representative.
(d) Vesting of Restricted Stock. The Administrator at the time of grant
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or
the attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer be
Restricted Stock and shall be deemed "vested." Except as may otherwise be
provided by the Administrator either in the Award agreement or, subject to
Section 9 below, in writing after the Award agreement is issued, a grantee's
rights in any shares of Restricted Stock that have not vested shall
automatically terminate upon the grantee's termination of employment with the
Company and its Subsidiaries and such shares shall be subject to the Company's
right of repurchase as provided in Section 6(c) above.
(e) Waiver, Deferral and Reinvestment of Dividends. The Restricted Stock
Award agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.
SECTION 7. TAX WITHHOLDING
(a) Payment by Grantee. Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Administrator regarding payment of, any Federal, state, or local taxes of any
kind required by law to be withheld with respect to such income. The Company and
its Subsidiaries shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the grantee. The
Company's obligation to deliver stock certificates to any grantee is subject to
and conditioned on tax obligations being satisfied by the grantee. The Company's
obligation to deliver stock certificates to any grantee is subject to and is
conditioned on tax obligations being satisfied by the grantee.
(b) Payment in Stock. Subject to approval by the Administrator, a grantee
may elect to have the minimum required tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company shares
of Stock owned by the grantee with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due.
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SECTION 8. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.
SECTION 9. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award for the
purpose of satisfying changes in law or for any other lawful purpose, but no
such action shall adversely affect rights under any outstanding Award without
the holder's consent. Nothing in this Section 9 shall limit the Administrator's
authority to take any action permitted pursuant to Section 3(c).
SECTION 10. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Administrator shall otherwise expressly determine in
connection with any Award or Awards. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the foregoing sentence.
SECTION 11. GENERAL PROVISIONS
(a) No Distribution; Compliance with Legal Requirements. The Administrator
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.
(b) Delivery of Stock Certificates. Stock certificates to grantees under
this Plan shall be deemed delivered for all purposes when the Company or a stock
transfer agent of the
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Company shall have mailed such certificates in the United States mail, addressed
to the grantee, at the grantee's last known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(d) Trading Policy Restrictions. Option exercises and other Awards under
the Plan shall be subject to such Company's insider trading policy, as in effect
from time to time.
(e) Loans to Grantees. The Company shall have the authority to make loans
to grantees of Awards hereunder (including to facilitate the purchase of shares)
and shall further have the authority to issue shares for promissory notes
hereunder.
(f) Designation of Beneficiary. Each grantee to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death. Any such designation shall be on a form provided for that purpose by the
Administrator and shall not be effective until received by the Administrator. If
no beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the
grantee's estate.
SECTION 12. EFFECTIVE DATE OF PLAN
This Plan shall become effective on February 5, 2002.
SECTION 13. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed
by, and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS: February 5, 2002.
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