1
1993 LONG-TERM INCENTIVE PLAN
OF
MICHAEL ANTHONY JEWELERS, INC.
1. PURPOSE OF THE PLAN. This 1993 Long-Term Incentive Plan of Michael
Anthony Jewelers, Inc. adopted on this 22nd day of April, 1993, is intended to
enable officers and key employees of the Company and its Subsidiaries to acquire
or increase their ownership of common stock of the Company on reasonable term.
The opportunity so provided is intended to foster in participants an incentive
to put forth maximum effort for the continued success and growth of the Company
and its Subsidiaries, to aid in retaining individuals who put forth such
efforts, and to assist in attracting the best available individuals to the
Company and its Subsidiaries in the future.
2. DEFINITIONS. When used herein, the following terms shall have the
meaning set forth below:
2.1 "AWARD" means an Option, an Option granted in tandem with
an SAR, a Performance Plan Award, a Reload Option, a Restricted Stock
Award, a Restricted Stock Award granted in tandem with an Option, an
SAR or a Stock Bonus Award.
2.2 "AWARD AGREEMENT" means a written agreement in such form
as may be from time to time, hereafter approved by the Committee, which
shall be duly executed by the Company and the Employee and which shall
set forth the terms and conditions of an Award under the Plan.
2.3 "BOARD" means the Board of Directors of Michael Anthony
Jewelers, Inc.
2.4 "CHANGE IN CONTROL" means a change in control of the
Company of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Exchange Act (as in effect on the date the Plan
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is adopted by the Board), whether or not the Company is then subject to
such reporting requirement; provided, that, without limitation, a
Change in Control shall be deemed to have occurred if:
(a) any "person" (as defined in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing forty
percent (40%) or more of the combined voting power of the
Company's then outstanding securities; provided, however, that
a Change in Control shall not be deemed to occur under this
clause (a) by reason of the acquisition of securities by the
Company or an employee benefit plan (or any trust funding such
a plan) maintained by the Company, or by reason of the new
issuance of securities directly by the Company;
(b) during any period of two (2) consecutive years (not
including any period prior to the adoption of this Plan) there
shall cease to be a majority of the Board comprised of
Continuing Directors; or
(c) (i) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity) more than fifty-one percent (51%) of the
combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or (ii) the stockholders of the
Company approve a plan of complete liquidation of the Company
or an agreement for the sale or disposition by the Company of
all or substantially all of the Company's assets.
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2.5 "CODE" means the Internal Revenue Code of 1986, as in
effect at the time of reference, or any successor revenue code which
may hereafter be adopted in lieu thereof, and reference to any specific
provisions of the Code shall refer to the corresponding provisions of
the Code as it may hereafter be amended or replaced.
2.6 "COMMITTEE" means the Stock Option Committee of the Board
or any other committee appointed by the Board which is invested by the
Board with responsibility for the administration of the Plan and whose
members meet the requirements for eligibility to serve as set forth in
Rule 16b-3 and in the Plan.
2.7 "COMPANY" means Michael Anthony Jewelers, Inc.
2.8 "CONTINUING DIRECTORS" means individuals who at the
beginning of any period of two (2) consecutive years (not including any
period prior to the adoption of this Plan) 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 at least a majority of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved.
2.9 "EMPLOYEE STOCKHOLDER" means an Employee who, at the time
an Incentive Stock Option is granted owns, as defined in Section 424 of
the Code, stock possessions more than ten percent (10%) of the total
combined voting power of all classes of stock of: (a) the Company; or
(b) if applicable, a Subsidiary or a Parent.
2.10 "EMPLOYEES" means officers (including officers who are
members of the Board) and other key employees of the Company or any of
its Subsidiaries.
2.11 "ERISA" means the Employee Retirement Income Security Act
of 1974, as in effect at the time of reference, or any successor law
which may hereafter be
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adopted in lieu thereof, and any reference to any specific provisions
of ERISA shall refer to the corresponding provisions of ERISA as it may
hereafter be amended or replaced.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as in effect at the time of reference, or any successor law which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of the Exchange Act shall refer to the corresponding
provisions of the Exchange Act as it may hereafter be amended or
replaced.
2.13. "EXERCISED OPTION" has the meaning ascribed to it in
Section 2.24 hereof.
2.14 "FAIR MARKET VALUE" means, with respect to the Shares,
the closing price of the Shares on the American Stock Exchange or other
national securities exchange, on the last business day prior to the
date on which the value is to be determined, as reported in the Wall
Street Journal or such other source of quotations for, or report of
trading of, the Shares as the Committee may reasonably select from time
to time; provided, however, if the Shares are not then traded on such
an exchange, but are then traded on the over-the-counter market, Fair
Market Value means the mean between the high and low bid and asked
prices for the Shares on the over-the-counter market on the last
business day prior to the date on which the value is to be determined
(or the next preceding day on which sales occurred if there were no
sales on such date); provided further, however, if no sales have
occurred in the over-the-counter market during the three week period
preceding the date on which the value is to be determined, Fair Market
Value means the average
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of the mean between the high and low bid and asked prices for the
Shares on the over-the-counter market for the three (3) month period
ending on the last business day prior to the date on which the value is
to be determined; provided, further, however, if the Shares are
reported in the National Market List of the National Association of
Securities Dealers, Inc. Automated Quotation System, the closing price
shall be substituted above for the mean of the high and the low bid and
asked prices.
2.15 "INCENTIVE STOCK OPTION" means an Option meeting the
requirements and containing the limitations and restrictions set forth
in Section 422 of the Code.
2.16 "NON-QUALIFIED STOCK OPTION" means an Option other than
an Incentive Stock Option.
2.17 "OPTION" means the right to purchase the number of Shares
specified by the Committee, at a price and for a term fixed by the
Committee, in accordance with the Plan, and subject to such other
limitations and restrictions as the Plan and the Committee may impose.
2.18 "PARENT" means any corporation, other than the employer
corporation, is an unbroken chain of corporations ending with the
employer corporation if, at the time of the granting of the Option,
each of the corporations other than the employer corporation owns stock
possession fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
2.19 "PERFORMANCE GOALS" has the meaning ascribed to it in
Section 11 of the Plan.
2.20 "PERFORMANCE PERIOD" has the meaning ascribed to it in
Section 11 of the Plan.
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2.21 "PERFORMANCE PLAN AWARD" means the right to receive
Options, Reload Options, Restricted Stock Awards, SARs, Shares, Stock
Bonus Awards or units (representing such monetary amount as designated
by the Committee and payable in cash or in Shares) pursuant to Section
11 of the Plan, which right is based on, or subject to, in whole or in
part, the achievement of certain performance criteria specified by the
Committee.
2.22 "PLAN" means the 1993 Long-Term Incentive Plan of Michael
Anthony Jewelers, Inc.
2.23 "REGULATION T" means Part 220, chapter II, title 12 of
the Code of Federal Regulations, issued by the Board of Governors of
the Federal Reserve System pursuant to the Exchange Act, as amended
from time to time, or any successor regulation which may hereafter be
adopted in lieu thereof.
2.24 "RELOAD OPTION" means, with respect to an Employee who
exercises an Option or Reload Option (the "Exercised Option") with
Shares, an Incentive Stock Option or Non-Qualified Stock Option to
purchase a number of Shares equal to the number of Shares transferred
to the Company upon exercise of the Exercised Option, on terms similar
to those set forth in the Award Agreement evidencing such Exercised
Option, except that the option price per Share shall equal the Fair
Market Value of the Shares subject to the Reload Option on the date the
Reload Option is granted, and subject to such other terms, limitations
and restrictions as the Plan and the Committee may impose. All
provisions in the Plan applicable to Options shall also apply to Reload
Options.
2.25 "RESTRICTED STOCK AWARD AGREEMENT" means an Award
Agreement executed in connection with a Restricted Stock Award.
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2.26 "RESTRICTED STOCK AWARD" means the right to receive
Shares, but subject to forfeiture and/or other restrictions set forth
in the related Restricted Stock Award Agreement and the Plan.
2.27 "RULE 16B-3" means Rule 16b-3 of the General Rules and
Regulations of the Securities and Exchange Commission as in effect at
the time of reference, or any successor rules or regulations which may
hereafter be adopted in lieu thereof, and any reference to any specific
provisions of Rule 16b-3 shall refer to the corresponding provisions of
Rule 16b-3 as it may hereafter be amended or replaced.
2.28 "SAR" means a stock appreciation right, which is a right
to receive an amount in cash, or Shares, or a combination of cash and
Shares, as determined or approved by the Committee, no greater than the
excess, if any, of (i) the Fair Market Value of a Share on the date the
SAR is exercised, over (ii) the SAR Base Price.
2.29 "SAR BASE PRICE" means the Fair Market Value of a Share
on the date an SAR was granted, or if the SAR was granted in tandem
with an Option (whether or not the Option was granted on a different
date than the SAR), in the Committee's discretion, the option price of
a Share subject to the Option.
2.30 "SHARES" means shares of the Company's $.001 par value
common stock or, if by reason of the adjustment provisions contained
herein, any rights under an Award under the Plan pertain to any other
security, such other security.
2.31 "STOCK BONUS AWARD" means the right to receive Shares as
provided in Section 10 of the Plan.
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2.32 "SUBSIDIARY" OR "SUBSIDIARIES" means any corporation or
corporations other than the employer corporation in an unbroken chain
of corporations beginning with the employer corporation if each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations
in such chain.
2.33 "SUCCESSOR" means the legal representative of the estate
of a deceased Employee or the person or persons who shall acquire the
right to exercise or receive an Award by bequest or inheritance or by
reason of the death of the Employee.
2.34 "TERM" means the period during which a particular Award
may be exercised.
2.35 "WINDOW PERIOD" means the period beginning on the third
business day following the date of release of the financial data
specified in paragraph (e)(1)(ii) of Rule 16b-3 and ending on the
twelfth business day following such date.
3. STOCK SUBJECT TO THE PLAN. There will be reserved for use, upon the
issuance, vesting or exercise of Awards to be granted from time to time under
the Plan, an aggregate of Seven Hundred Fifty Thousand (750,000) Shares, which
Shares may be, in whole or in part, as the Board shall from time to time
determine, authorized but unissued Shares, or issued Shares which shall have
been reacquired by the Company. Any Shares subject to issuance upon exercise of
Options or SARs, or vesting of Performance Plan Awards, but which are not issued
because of a surrender, lapse, expiration, forfeiture or termination of any such
Option, SAR or Performance Plan Award prior to issuance of the Shares shall once
again be available for issuance in satisfaction of Awards. Similarly, any Shares
issued pursuant to a Restricted Stock Award which are subsequently forfeited
pursuant to the terms
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of the related Restricted Stock Award Agreement shall once again be available
for issuance in satisfaction of Awards.
4. ADMINISTRATION OF THE PLAN. The Board shall appoint the Committee,
which shall consist of not less than two (2) disinterested directors as defined
in Rule 16b-3. Subject to the provisions of the Plan, the Committee shall have
full authority, in its discretion, to determine the Employees to whom Awards
shall be granted, the number of Shares to be covered by each of the Awards, and
the terms of any such Award; to amend or cancel Awards (subject to Section 23 of
the Plan), to accelerate the vesting of Awards; to require the cancellation or
surrender of any previously granted awards under this Plan or any other plans of
the Company as a condition to the granting of an Award, to interpret the Plan;
and to prescribe, amend, and, rescind rules and regulations relating to the
Plan, and generally to interpret and determine any and all matters whatsoever
relating to the administration of the Plan and the granting of Awards hereunder.
The Board may from time to time appoint members to the Committee in substitution
for or in addition to members previously appointed and may fill vacancies,
however caused, in the Committee. The Committee shall select one of its members
as its chairman and shall hold its meetings at such times and places as it shall
deem advisable. A majority of its members shall constitute a quorum. Any action
of the Committee may be taken by a written instrument signed by all of the
members, and any action so taken shall be fully as effective as if it had been
taken by a vote of a majority of the members at a meeting duly called and held.
The Committee shall make such rules and regulations for the conduct of its
business as it shall deem advisable and shall appoint a Secretary who shall keep
minutes of its meetings and records of all action taken in writing without a
meeting. No member of the Committee shall be
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liable, in the absence of bad faith, for any act or omission with respect to his
or her service on the Committee.
5. EMPLOYEES TO WHOM AWARDS MAY BE GRANTED. Awards may be granted in
each calendar year or portion thereof while the Plan is in effect to such of the
Employees as the Committee, in its discretion, shall determine. In determining
the Employees to whom Awards shall be granted and the number of Shares to be
issued or subject to purchase or issuance under such Awards, the Committee shall
take into account the recommendations of the Company's management as to the
duties of the respective Employees, their present and potential contributions to
the success of the Company and its Subsidiaries, and such other factors as the
Committee shall deem relevant in connection with accomplishing the purposes of
the Plan. No Award shall be granted to any member of the Committee so long as
his or her membership on the Committee continues or to any member of the Board
who is not also an officer or key employee of the Company or any Subsidiary.
6. Stock Options.
6.1 TYPES OF OPTIONS. Options granted under the Plan may be
(i) Incentive Stock Options, (ii) Non-Qualified Stock Options, (iii) a
combination of the foregoing or (iv) Reload Options. The Award
Agreement shall designate whether an Option is an Incentive Stock
Option or a Non-Qualified Stock Option and separate Award Agreements
shall be issued for each type of Option when a combination of an
Incentive Stock Option and a Non-Qualified Stock Option are granted on
the same date to the same Employee. Any Option which is designated as a
Non-Qualified Stock Option shall not be treated by the Company or the
Employee to whom the Option is granted as an Incentive Stock Option for
federal income tax purposes.
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6.2 OPTION PRICE. The option price per Share of any
Non-Qualified Stock Option granted under the Plan shall be the Fair
Market Value of the Shares covered by the Option on the date the Option
is granted unless the Committee, in its sole discretion, determines to
set the option price at an amount less than or greater than the Fair
Market Value of the Shares on such date. The option price per Share of
any Incentive Stock Option granted under the Plan shall not be less
than the Fair Market Value of the Shares covered by the Option on the
date the Option is granted, Notwithstanding anything herein to the
contrary, the option price per Share of any Incentive Stock Option
granted to an Employee Stockholder shall not be less than one hundred
ten percent (110%) of the Fair Market Value of the Shares covered by
the Option on the date the Option is granted.
6.3 TERM OF OPTIONS. Options granted hereunder shall be
exercisable for a Term of not more than ten (10) years from the date of
grant thereof, but shall be subject to earlier termination as
hereinafter provided. Each Award Agreement issued hereunder shall
specify the Term of the Option, which shall be determined by the
Committee in accordance with its discretionary authority hereunder. No
Option in tandem with an SAR shall be exercisable during the first six
(6) months following the date of grant of the SAR, except that this
limitation shall not apply in the event that it is permissible under
Rule 16b-3 to exercise the Option prior to the expiration of the six
(6) month period.
Notwithstanding anything herein to the contrary, if an
Incentive Stock Option is granted to an Employee Stockholder, then such
Incentive Stock Option shall not be exercisable more than five (5)
years from the date of grant thereof, but shall be subject to earlier
termination as hereinafter provided.
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7. LIMIT ON FAIR MARKET VALUE OF INCENTIVE STOCK OPTIONS. No Employee
may be granted an Incentive Stock Option hereunder to the extent that the
aggregate fair market value (such fair market value being determined as of the
date of grant of the option in question) of the stock with respect to which
incentive stock options are first exercisable by such Employee during any
calendar year (under all such plans of the Employee's employer corporation, its
Parent, if any, and its Subsidiaries, if any) exceeds One Hundred Thousand
Dollars ($100,000). For purposes of the preceding sentence, options shall be
taken into account in the order in which they were granted. Any Option granted
under the Plan which is intended to be an Incentive Stock Option, but which
exceeds the limitation set forth in this Section 7, shall be a Non-Qualified
Stock Option.
8. STOCK APPRECIATION RIGHTS.
8.1 GRANT OF SAR. The Committee, in its discretion, may grant
an Employee an SAR in tandem with an Option or may grant an Employee an
SAR on a stand alone basis. The Committee, in its discretion, may grant
an SAR in tandem with an Option either at the time the Option is
granted or at any time after the Option is granted, but no later than
six (6) months and one (1) day prior to the end of the Term of the
Option, so long as the grant of the SAR is made during the period in
which grants of SARs may be made under the Plan. The Committee, in its
discretion, may grant an SAR in tandem with an Option which is
exercisable either in lieu of, or in addition to, the exercise of the
related Option.
8.2 LIMITATIONS ON EXERCISE. Each SAR granted in tandem with
an Option shall be exercisable to the extent, and only to the extent,
the related Option is exercisable and shall be for such Term as the
Committee may determine (which Term, which is not to
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exceed ten (10) years, may expire prior to the Term of the related
Option). Each SAR granted on a stand alone basis shall be exercisable
to the extent, and for such Term, as the Committee may determine. No
SAR or any related Option shall be exercisable during the first six (6)
months following the date of grant of the SAR, except that this
limitation will not apply in the event it is permissible under Rule
16b-3 to exercise the SAR prior to the expiration of the six (6) month
period. If, and to the extent, an Employee who is subject to Section
16(b) of the Exchange Act is to receive cash in exchange for an SAR,
the SAR and any related Option are exercisable only during a Window
Period and the right of the Employee to request to be paid in cash may
only be made during a Window Period. T The SARs shall be subject to
such other terms and conditions as the Committee, in its d discretion,
shall determine, which are not otherwise inconsistent with the Plan.
The terms and conditions may include Committee approval of the exercise
of the SAR, limitations on the time within which and the extent to
which such SAR shall be exercisable, limitations, if any, on the amount
of appreciation in value which may be recognized with regard to such
SAR, and specification of what portion, if any, of the amount payable
to the Employee upon exercise of such SAR shall be payable in cash and
what portion if any, shall be payable in Shares. If, and tot he extent,
that Shares are issued in satisfaction of amounts payable on exercise
of an SAR, the Shares shall be valued at their Fair Market Value on the
date of exercise.
8.3 SARS IN TANDEM WITH INCENTIVE STOCK OPTIONS. With respect
to SARs granted in tandem with Incentive Stock Options, the following
shall apply:
(a) No SAR shall be exercisable unless the Fair Market
Value of the Shares on the date of exercise exceeds the option
price of the related Incentive Stock Option.
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(b) In no event shall any amounts paid pursuant to the SAR
exceed the difference between the Fair Market Value of the
Shares on the date of exercise and the option price of the
related Incentive Stock Opiton.
8.4 SURRENDER OF OPTION OR SAR GRANTED IN TANDEM. If the Award
Agreement related to the grant of an SAR in tandem with an Option
provides that the SAR can only be exercised in lieu of the related
Option, then, upon exercise of such SAR, the related Option or portion
thereof with respect to which such SAR is exercised shall be deemed
surrendered and shall not thereafter be exercisable, and, similarly,
upon exercise of the Option, the related SAR or portion thereof with
respect to which such Option is exercised shall be deemed surrendered
and shall not thereafter be exercisable. If the Award Agreement related
to the grant of an SAR in tandem with an Option provides that the SAR
can be exercised in addition to the related Option, then, upon exercise
of such SAR, the related Option or portion thereof with respect to
which such SAR is exercised shall not be deemed surrendered and shall
continue to be exercisable and, similarly, upon exercise of the Option,
the related SAR or portion thereof with respect to which such Option is
exercised shall not be deemed surrendered and shall continue to be
exercisable.
9. RESTRICTED STOCK AWARDS. Restricted Stock Awards granted under the
Plan shall be subject to such terms and conditions as the Committee may, in its
discretion, determine and set forth in the related Restricted Stock Award
Agreements. The Committee, in its discretion, may grant an Employee a Restricted
Stock Award on a stand alone basis or in
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tandem with an Option. Restricted Stock Awards shall be granted in accordance
with, and subject to, the provisions set forth below.
9.1 ISSUANCE OF SHARES. Each Restricted Stock Award shall be
evidenced by a Restricted Stock Award Agreement which shall set forth
the number of Shares issuable under the Restricted Stock Award. Subject
to the restrictions in Section 9.3 of the Plan, and subject further to
such other restrictions or conditions established by the Committee, in
its discretion, and set forth in the related Restricted Stock Award
Agreement (such as requiring the Employee to pay an amount equal to the
aggregate par value of the Shares to be issued thereunder), the number
of Shares granted under a Restricted Stock Award shall be issued in the
recipient Employee's name on the date of grant of such Restricted Stock
Award or as soon as reasonably practicable thereunder.
9.2 RIGHT OF RECIPIENT EMPLOYEES. Shares received pursuant to
Restricted Stock Awards shall be duly issued or transferred to the
Employee, and a certificate or certificates for such Shares shall be
issued in the Employee's name. Subject to the restrictions in Section
9.3 of the Plan, and subject further to such other restrictions or
conditions established by the Committee, in its discretion, and set
forth in the related Restricted Stock Award Agreement, the Employee
shall thereupon be a stockholder with respect to all the Shares
represented by such certificate or certificates and shall have the
rights of a stockholder with respect to such Shares, including the
right to vote such Shares and to receive dividends and other
distributions paid with respect to such Shares. In aid of the
restrictions in Section
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9.3 of the Plan and in the related Restricted Stock Award Agreement,
the certificate or certificates for Shares awarded hereunder, together
with a suitably executed stock power signed by such recipient Employee,
shall be held by the Company in its control for the account of such
Employee (i) until the restrictions in Section 9.3 of the plan and in
the related Restricted Stock Award Agreement lapse pursuant to the Plan
or the Restricted Stock Award Agreement, at which time a certificate
for the appropriate number of Shares (free of all restrictions imposed
by the Plan or the Restricted Stock Award Agreement) shall be delivered
to the Employee, or (ii) until such Shares are forfeited to the Company
and canceled as provided by the Plan or the Restricted Stock Award
Agreement.
9.3 RESTRICTIONS. Except as otherwise determined by the
Committee in its sole discretion, each share issued pursuant to a
Restricted Stock Award Agreement shall be subject, in addition to any
other restrictions set forth in the related Restricted Stock Award
Agreement, to the following restrictions until such restrictions have
lapsed pursuant to Section 9.4 of the Plan;
(a) DISPOSITION. The Shares awarded to an Employee and held
by the Company pursuant to Section 9.2 of the Plan, and the right to
vote such Shares or receive dividends on such Shares, may not be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed
of; provided, however, that such Shares may be transferred upon the
death of the Employee to the Employee's Successor. Any transfer or
purported transfer of such Shares in violation of the restrictions
outlined in this Section 9.3 shall be null and void and shall result
in the forfeiture of the Shares transferred or
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purportedly transferred to the Company without notice and without
consideration.
(b) FORFEITURE. The Shares awarded to an Employee and held by
the Company pursuant to Section 9.2 of the Plan shall be forfeited to
the Company without notice and without consideration therefor
immediately upon the termination of the Employee's employment with the
Company and all Subsidiaries of the Company for any reason other than
(i) death, (ii) disability, (iii) retirement, (iv) the Employee's
attainment of age sixty-five (65), (v) Good Reason (as defined in the
related Restricted Stock Award Agreement) if by the Employee, or (vi)
other than for Cause (as defined in the related Restricted Stock Award
Agreement) if by the Company.
9.4 LAPSE OF RESTRICTIONS. Except as otherwise determined by
the Committee in its sole discretion, the restrictions set forth in
Section 9.3 of the Plan on Shares issued under a Restricted Stock Award
shall lapse on, and certificates for the Shares held for the account of
the Employee in accordance with Section 9.2 of the plan hereof shall be
appropriately distributed to the Employee as soon as reasonably
practical after, the earliest of:
(a) the Employee's death;
(b) the termination of the Employee's employment by reason of
the Employee being "disabled" or defined in Section 22(e)(3) of the
Code;
(c) the Employee's early, normal or late retirement pursuant
to the retirement plans of the Company or any of its Subsidiaries;
(d) the Employee's attainment of age sixty-five (65);
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(e) the termination of the Employee's employment by the
Employee for Good Reason (as defined in the related Restricted Stock
Award Agreement) or by the Company other than for Cause (as defined in
the related Restricted Stock Award Agreement); or
(f) (i) the first anniversary of the date of grant with
respect to one-third (1/3) of the Shares originally awarded,
(ii) the second anniversary of the date of grant
with respect to an additional one-third (1/3) of the Shares
originally awarded, and
(iii) the third anniversary of the date of grant with
respect to the balance of the Shares originally awarded.
9.5 SURRENDER OF OPTIONS OR RESTRICTED STOCK GRANTED IN
TANDEM. If the Restricted Stock Award Agreement related to the grant of
a Restricted Stock Award in tandem with an Option provides that the
Option can only be exercised in lieu of the scheduled vesting for he
Restricted Stock Award, then, upon vesting of the Shares subject to the
Restricted Stock Award, the related Option or portion thereof with
respect to which such Restricted Stock Award becomes vested shall be
deemed surrendered and shall not thereafter be exercisable and,
similarly, upon exercise of the Option, the Shares subject to the
related Restricted Stock Award or portion thereof with respect to which
such Option is exercised shall be deemed forfeited to the the Company
and shall be canceled as provided by the Plan or the Restricted Stock
Award Agreement.
10. STOCK BONUS AWARDS. Stock Bonus Awards may be granted under the
Plan with respect to Shares, and shall be granted, subject to the provisions of
the Plan, upon such
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terms and conditions as the Committee may determine in its discretion. The
Committee, in its discretion, may require the Employees to whom Stock Bonus
Awards are granted to pay the Company an amount equal to the aggregate par value
of the Shares to be issued to such Employees. Subject to the Employee delivering
in cash or by check the amounts, if any, required to be paid pursuant to this
Section 10 or pursuant to Section 21 of the Plan (relating to taxes), a
certificate or certificates for such Shares shall be issued in the Employee's
name as soon as reasonably practicable following the date of grant, or if such
payments are required, following the date of such payments. The Company shall
deliver such certificate or certificates to the Employee and the Employee shall
thereupon be a stockholder with respect to all Shares represented by such
certificate or certificates and shall have all the rights of a stockholder with
respect to such Shares.
11. PERFORMANCE PLAN AWARDS.
(a) PERFORMANCE PLAN AWARDS. Performance Plan Awards may be
granted under the Plan in such form as the Committee may from time to
time approve. Performance Plan Awards may be granted alone, in addition
to or in tandem with other Awards under the Plan. Subject to the terms
of the Plan, including the terms of the Plan applicable to any
underlying type of Award that is the subject of a Performance Plan
Award (i.e., an Option, an Option granted in tandem with an SAR,a
Reload Option, a Restricted Stock Award, a Restricted Stock Award
granted in tandem with an Option, an SAR or a Stock Bonus Award, as the
case may be), the Committee shall determine the number of Performance
Plan Awards to be granted to an Employee, the terms and conditions
applicable to any particular Performance Plan Award made to an Employee
and, in the case of a performance Plan Award of units, the monetary
amount represented by each such unit.
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(b) PERFORMANCE GOALS AND PERFORMANCE PERIODS. A Performance
Plan Award shall provide that in order for an Employee to vest, in
whole or in part, in such Performance Plan Award the Company and/or the
Employee must achieve certain individual and/or aggregate performance
criteria ("Performance Goals") over a designated performance period
("Performance Period"). The Performance Goals and Performance Period
shall be established by the Committee, in its sole discretion. The
Committee may also establish a schedule or schedules for any such
Performance Period setting forth the portion of the Performance Plan
Award which will be earned or forfeited based on the degree of
achievement of the Performance Goals actually achieved or exceeded. In
setting Performance Goals the Committee may use such measures as
cumulative or non-cumulative return on equity, earnings growth, revenue
growth or such other individual and/or aggregate measure or measures of
performance in such manner as it deems appropriate. During the
Performance Period, the Committee, except as provided otherwise in the
Award Agreement evidencing the Performance Plan Award, shall have the
authority to adjust upward or downward the Performance Goals in such
manner as it deems appropriate.
(c) PAYMENTS OF UNITS. An employee who has been granted a
Performance Plan Award of units shall be entitled to receive a payment
with respect to such units in an amount equal to the number of units
earned at the conclusion of the respective Performance Period times the
dollar value of each unit. Payment in settlement of such unit shall be
made in cash, in Shares, or in any combination thereof, as the
Committee in its sole discretion shall determine, and shall be made as
soon as practicable following the conclusion of the respective
Performance Period and the calculation of the dollar value of such
units.
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12. CASH PAYMENTS FOR TAXES. The Committee may, in its sole discretion,
provide in an Award Agreement that the Company will make a cash payment to the
Employee covered thereby equal to the aggregate of the amount of federal, state
and local income taxes which such Employee would be required to pay to each such
taxing authority attributable to the realization of taxable income, if any, as a
result of the receipt of Shares pursuant to any Award (other than an Incentive
Stock Option) granted under the Plan. The Committee may, in its discretion
require the Employee to make an election to be taxed immediately under Section
83(b) of the Code as a condition to receiving such payment. In computing the
amount of such payment, it shall be assumed that every Employee granted an Award
under the Plan is subject to tax by each taxing authority at the highest
marginal tax rate in the respective taxing jurisdiction of such Employee
(provided that the highest marginal tax rate for federal income tax purposes
shall be determined under Section 1 of the Code), taking into account the city
and state in which such Employee resides, but giving effect to the tax benefit,
if any, which such Employee may enjoy to the extent that any such tax is
deductible in determining the tax liability of any other taxing jurisdiction
(disregarding the effects of code Section 68 in determining deductibility for
federal income tax purposes). Likewise, the Committee may, in its sole
discretion, provided in an Award Agreement that the Company will make a cash
payment to the Employee covered thereby equal to the amount of excise taxes
(i.e., an "excise tax gross-up payment") which such Employee would be required
to pay pursuant to Section 4999 of the Code as a result of all or any part of
such Employee's Award being treated as an "excess parachute payment" within the
meaning of Section 280G(b) of the Code. In addition to the foregoing, the
Committee may, in its discretion, increase each cash payment due to an Employee
hereunder, such that each Employee who receives Shares and/or an excise tax
gross-up payment pursuant to any Award granted under this Plan shall
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receive such Shares and/or excise tax gross-up payment net of all income and/or
excise taxes imposed on such employee on account of the receipt of such Shares
and/or excise tax gross-up payment.
13. DATE OF GRANT. The date of grant of an Award granted hereunder
shall be the date on which the Committee acts in granting the Award.
14. EXERCISE OF RIGHTS UNDER OPTIONS OR SARS.
14.1 NOTICE OF EXERCISE. An Employee entitled to exercise an
Option or SAR shall do so by delivery of a written notice to that
effect specifying the number of Shares with respect to which the Option
or SAR is being exercised and any other relevant information the
Committee may require. The notice shall be accompanied by payment in
full of the purchase price of any Shares to be purchased, which payment
may be made in cash or, with the Committee's approval (which in the
case of Incentive Stock Options must be given at the time of grant), in
Shares valued at Fair Market Value at the time of exercise or a
combination thereof. No Shares shall be issued upon exercise of an
Option until full payment has been made therefor. An Employee
exercising a SAR of an Option granted in tandem with a SAR may, if the
terms and conditions of the Award so provide, state in the notice of
exercise what percentage of the SAR the Employee desires to be paid in
cash or Shares, in which event the Committee may honor the request so
made or satisfy the SAR in cash or Shares or some combination of each,
as the Committee may determine in its sole discretion. All notices or
requests provided for herein shall be delivered to the Company' s
Secretary, or such other person as the Committee may designate.
14.2 CASHLESS EXERCISE PROCEDURES. The Company, in its sole
discretion, may establish procedures whereby an Employee, subject to
the requirements of Rule 1 6b-3 , Regulation T, federal income tax
laws, and other federal, state and local tax and securities laws,
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can exercise an Option or a portion thereof without making a direct
payment of the option price to the Company; provided, however, that
these cashless exercise procedures shall not apply to Incentive Stock
Options which are outstanding on the date the Company establishes such
procedures unless the application of such procedures to such Options is
permitted pursuant to the Code and the regulations thereunder without
affecting the Options' qualification under Code Section 422 as
Incentive Stock Options. If the Company so elects to establish a
cashless exercise program, the Company shall determine, in its sole
discretion, and from time to time, such administrative procedures and
policies as it deems appropriate and such procedures and policies shall
be binding on any Employee wishing to utilize the cashless exercise
program.
15. AWARD TERMS AND CONDITIONS. Each Award or each agreement setting
forth an Award shall contain such other terms and conditions not inconsistent
herewith as shall be approved by the Committee. For example, an Award Agreement
evidencing an Option may provide for the automatic grant of a Reload Option to
an Employee who exercises an Option with Shares.
16. RIGHTS OF AWARD HOLDER. The holder of an Award shall not have any
of the rights of a stockholder with respect to the Shares subject to purchase or
receipt under the Award, except that (a) an Award holder's rights with respect
to a Restricted Stock Award shall be as prescribed in Section 9.2 and (b)
stockholder rights with respect to any other Award shall rise at the time and to
the extent that one or more certificates for such Shares shall be delivered to
the holder upon the due exercise or grant of the Award.
17. NONTRANSFERABILITY OF AWARDS. An Award shall not be transferable
other than: (a) by will or the laws of descent and distribution, and an Award
subject to exercise may be exercised, during the lifetime of the holder of the
Award, only by the holder or in the event of
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death, the holder's Successor, or in the event of disability, the holder's
personal representative, or (b) pursuant to a qualified domestic relations
order, as defined in the Code or ERISA or the rules thereunder; provided,
however, that an Incentive Stock Option may not be transferred pursuant to a
qualified domestic relations order unless such transfer is otherwise permitted
pursuant to the Code and the regulations thereunder without affecting the
Option' s qualification under Code Section 422 as an Incentive Stock Option.
18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event of changes
in all of the outstanding Shares by reason of stock dividends, stock splits,
reclassifications, recapitalizations, mergers, consolidations, combinations, or
exchanges of shares, separations, reorganizations or liquidations, or similar
events, or in the event of extraordinary cash or non-cash dividends being
declared with respect to the Shares, or similar transactions or events, the
number and class of Shares subject to Awards theretofore granted, applicable
purchase prices and all other applicable provisions, shall, subject to the
provisions of the Plan, be equitably adjusted by the Committee (which adjustment
may, but need not, include payment to the holder of an Option or SAR in cash or
in shares, in an amount equal to the difference between the Price at which such
Option or SAR may be exercised and the then current fair market value of the
Shares subject to such Option or SAR as equitably determined by the Committee).
The foregoing adjustment and the manner of application of the foregoing
provisions shall be determined by the Committee, in its sole discretion. Any
such adjustment may provide for the elimination of any fractional share which
might otherwise become subject to an Award.
19. CHANGE IN CONTROL. Notwithstanding anything to the contrary in the
Plan or any Award Agreement in the case of a Change in Control of the Company,
the Committee may, in its
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discretion, taking into account the purposes of this Plan, determine, on a case
by case basis, that each Award granted under the Plan shall, subject to the
following provisions, terminate ninety (90) days after the occurrence of such
Change in Control but, in the event of any such termination:
(a) An Option or SAR holder ( not including the holder of an Option in
tandem with a Restricted Stock Award) shall have the right, commending at least
five (5) days prior to such Change in Control and subject to any other
limitation on the exercise of such Option or SAR in effect on the date of
exercise, (i) to immediately exercise any Options not in tandem with SARs or
Restricted Stock Awards in full, without regard to any vesting limitations, to
the extent they shall not have been theretofore exercised, and (ii) to exercise
at any time after the sixth (6th) month anniversary of the date of the grant of
the respective SAR (but subject to the restrictions of Rule 16b-3), any SARs or
Options in tandem with SARs in full, without regard to any vesting limitations,
to the extent they shall not have been theretofore exercised, provided, however,
that no SAR or Option in tandem with a SAR shall terminate prior to the end of
the first Window Period Following the occurrence of such Change in Control;
(b) All restrictions on Restricted Stock Awards shall immediately
lapse, certificates for the affected Shares shall be appropriately distributed
and any Options in tandem with Restricted Stock Awards will be deemed to have
been surrendered; and
(c) All vesting limitations with respect to performance Plan Awards
shall be deemed satisfied and any Option, Reload Option, Restricted Stock Award,
SAR, Share or Stock Bonus Award issuable thereunder shall, subject to (a) and
(b) above, be appropriately issued, and any cash payment required to be made
with respect to a unit shall be appropriately made.
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20. FORMS OF AWARDS. Nothing contained in the Plan nor any resolution
adopted or to be adopted by the Board or by the stockholders of the Company
shall constitute the granting of any Award. An Award shall be granted hereunder
only by action taken by the Committee in granting an Award. Whenever the
Committee shall designate an Employee for the receipt of an Award, the Company'
s Secretary, or such other person as the Committee may designate, shall
forthwith send notice thereof to the Employee, in such form as the Committee
shall approve, stating the number of Shares subject to the Award, its Term, and
the other terms and conditions thereof. The notice shall be accompanied by a
written Award Agreement in such form as may from time to time hereafter be
approved by the Committee, which shall have been duly executed by or on behalf
of the Company. If the surrender of previously issued Awards is made a condition
of the grant, the notice shall set forth the pertinent details of such
condition. Execution by the Employee to whom such Award is granted of said Award
Agreement in accordance with the provisions set forth in this Plan shall be a
condition precedent to the exercise or receipt of any Award.
21. TAXES.
21.1 RIGHT TO WITHHOLD REQUIRED TAXES. The Company shall have
the right to require a person entitled to receive Shares pursuant to
the receipt, vesting or exercise of an Award under the Plan to pay the
Company the amount of any taxes which the Company is or will be
required to withhold with respect to such Shares before the certificate
for such Shares is delivered pursuant to the Award. Furthermore, the
Company may elect to deduct such taxes from any other amounts then
payable in cash or in shares or from any other amounts payable any time
thereafter to the Employee. The Company shall also have the right to
deduct from any cash payment payable to a person pursuant to an Award
the amount of any taxes which the Company
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is required by law to withhold with respect to such cash payment. If
the Employee disposes of Shares acquired pursuant to an Incentive Stock
Option in any transaction considered to be a disqualifying disposition
under Sections 42 1 and 422 of the Code, the Employee shall notify the
Company of such transfer and the Company shall have the right to deduct
any taxes required by law to be withheld from any amounts otherwise
payable then or at any time thereafter to the Employee.
21.2 EMPLOYEE ELECTION TO WITHHOLD SHARES. Subject to
Committee approval (which in the case of Incentive Stock Options must
be given at the time of grant), an Employee may elect to satisfy the
tax liability with respect to the exercise of an Option by having the
Company withhold Shares otherwise issuable upon exercise of the Option;
provided, however, that if an Employee is subject to Section 1 6(b) of
the Exchange Act at the time the Option is exercised, such election
must satisfy the requirements of Rule 1 6b-3 .
22. TERMINATION OF THE PLAN. The Plan shall terminate ten (10) years
from the date hereof, and an Award shall not be granted under the Plan after
that date although the terms of any Awards may be amended at any date prior to
the end of its Term in accordance with the Plan. Any Awards outstanding at the
time of termination of the Plan shall continue in full force and effect
according to the terms and conditions of the Award and this Plan.
23. AMENDMENT OF THE PLAN. The Plan may be amended at anytime and from
time to time by the Board, but no amendment without the approval of the
stockholders of the Company shall be made if stockholder approval under Section
422 of the Code or Rule 1 6b-3 would be required. Notwithstanding the
discretionary authority granted to the Committee in Section 4 of the Plan, no
amendment of the Plan or any Award granted under the Plan shall impair any of
the
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rights of any holder, without the holder' s consent, under any Award
theretofore granted under the Plan.
24. DELIVERY OF SHARES ON EXERCISE OR GRANT. Delivery of certificates
for Shares pursuant to the grant or exercise of an Award may be postponed by the
Company for such period as may be required for it with reasonable diligence to
comply with any applicable requirements of any federal, state or local law or
regulation or any administrative or quasi-administrative requirement applicable
to the sale, issuance, distribution or delivery of such Shares. The Committee
may, in its sole discretion, require an Employee to furnish the Company with
appropriate representations and a written investment letter prior to the
exercise of an Award or the delivery of any Shares pursuant to an Award.
25. FEES AND COSTS. The Company shall pay all original issue taxes on
the issuance or exercise of any Award granted under the Plan and all other fees
and expenses necessarily incurred by the Company in connection therewith.
26. EFFECTIVENESS OF THE PLAN. The Plan shall become effective when
approved by the Board. The Plan shall thereafter be submitted to the Company's
stockholders for approval and unless the Plan is approved by the affirmative
votes of the holders of shares having a majority of the voting power of all
shares either (i) represented at a meeting duly held in accordance with Delaware
law within twelve (12) months after being approved by the Board, the Plan and
all Awards made under it shall be void and of no force and effect. In aid of
this provision, any Award granted prior to their approval of the Plan by the
Company's stockholders shall be conditioned upon receipt of such approval.
27. OTHER PROVISIONS. As used in the Plan, and in Awards and other
documents prepared in implementation of the Plan, references to the masculine
pronoun shall be deemed to
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refer to the feminine or neuter, and references in the singular or the plural
shall refer to the plural or the singular, as the identify of the person or
persons or entity or entities being referred to may require. The captions used
in the Plan and in such Awards and other documents prepared in implementation of
the Plan are for convenience only and shall not affect the meaning of any
provision hereof or thereof.
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