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EXHIBIT 10.18
OFFICE CENTRE CORPORATION
1998 STOCK OPTION PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Plan is to give the Company a competitive
advantage in attracting, retaining and motivating officers and employees and to
provide the Company and its subsidiaries with a stock plan providing incentives
more directly linked to the profitability of the Company's businesses and
increases in stockholder value.
For purposes of the Plan, the following terms are defined as
set forth below:
(a) "AFFILIATE" means a corporation or other entity controlled
by the Company and designated by the Committee from time to time as such.
(b) "AWARD" means an award of Stock Appreciation Rights or
Stock Options.
(c) "BOARD" means the Board of Directors of the Company.
(d) "CAUSE" means (1) conviction of a participant for
committing a felony under federal law or the law of the state in which such
action occurred, (2) dishonesty in the course of fulfilling a participant's
employment duties, (3) willful and deliberate failure on the part of a
participant to perform his employment duties in any material respect, (4) breach
on the part of a participant of any employment agreement between such
participant and the Company or any of its Subsidiaries, or (5) such other events
as shall be determined by the Committee. The Committee shall have the sole
discretion to determine whether "Cause" exists, and its determination shall be
final. Notwithstanding the foregoing, if an optionee has an employment agreement
with the Company which provides for a definition of "Cause", then such
definition shall be the definition for purposes of this Plan.
(e) "CHANGE IN CONTROL" and "CHANGE IN CONTROL PRICE" have the
meanings set forth in Sections 8(b) and (c), respectively.
(f) "CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
(g) "COMMISSION" means the Securities and Exchange Commission
or any successor agency.
(h) "COMMITTEE" means the Committee referred to in Section 2.
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(i) "COMMON STOCK" means common stock, par value $.001 per
share, of the Company.
(j) "COMPANY" means Office Centre Corporation, a Delaware
corporation.
(k) "DISABILITY" means permanent and total disability as
determined under Company procedures in effect on the effective date of the Plan
or as otherwise established by the Committee for purposes of the Plan.
Notwithstanding the foregoing, if an optionee has an employment agreement with
the Company which provides for a definition of "Disability", then such
definition shall be the definition for purposes of this Plan.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor thereto.
(m) "FAIR MARKET VALUE" means, as of any given date, the mean
between the highest and lowest reported sales prices of the Common Stock on any
national securities exchange on which the Common Stock is listed or, if not
listed on any such exchange, as quoted on the Nasdaq National Market. If there
is no regular public trading market for such Common Stock, the Fair Market Value
of the Common Stock shall be determined by the Committee in good faith.
(n) "INCENTIVE STOCK OPTION" or "ISO" means any Stock Option
designated as, and qualified as, an "INCENTIVE STOCK OPTION" within the meaning
of Section 422 of the Code.
(o) "NON-EMPLOYEE DIRECTOR" means a member of the Board who
qualifies as a "Non-Employee Director" as defined in Rule 16b-3(b)(3), as
promulgated by the Commission under the Exchange Act, or any successor
definition adopted by the Commission.
(p) "NONQUALIFIED STOCK OPTION" means any Stock Option that
is not an Incentive Stock Option.
(q) "PLAN" means the Office Centre Corporation 1998 Stock
Option Plan, as set forth herein and as hereinafter amended from time to time.
(r) "RULE 16b-3" means Rule 16b-3, as promulgated by the
Commission under Section 16(b) of the Exchange Act, as amended from time to
time.
(s) "STOCK APPRECIATION RIGHT" means a right granted under
Section 6.
(t) "STOCK OPTION" means an option granted under Section 5.
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(u) "SUBSIDIARY" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.
(v) "TERMINATION OF EMPLOYMENT" means the termination of the
participant's employment with the Company and any Subsidiary or Affiliate. A
participant employed by a Subsidiary or an Affiliate shall also be deemed to
incur a Termination of Employment if the Subsidiary or Affiliate ceases to be
such a Subsidiary or an Affiliate, as the case may be, and the participant does
not immediately thereafter become an employee of the Company or another
Subsidiary or Affiliate. Temporary absences from employment because of illness,
vacation or leave of absence and transfers among the Company and it Subsidiaries
and Affiliates shall not be considered Terminations of Employment.
In addition, certain other terms used herein have definitions
given to them in the first place in which they are used.
SECTION 2. ADMINISTRATION
The Plan shall be administered by the Compensation Committee
designated by the Board pursuant to the Company's By-Laws. If at any time there
is no such Compensation Committee, or such Compensation Committee shall fail to
be composed of at least two directors each of whom is both (1) a Non-Employee
Director and (2) an "outside director" within the meaning of Section 162(m)(4)
of the Code, the Plan shall be administered by a Committee selected by the Board
and composed of not less than two individuals, each of whom shall be such a
Non-Employee Director and such an outside director.
The Committee shall have plenary authority to grant Awards
pursuant to the terms of the Plan to officers and employees of the Company and
its Subsidiaries and Affiliates.
Among other things, the Committee shall have the authority,
subject to the terms of the Plan:
(a) To select the officers and employees to whom
Awards may from time to time be granted;
(b) Determine whether and to what extent Incentive
Stock Options, Nonqualified Stock Options, Stock Appreciation
Rights or any combination thereof are to be granted hereunder;
(c) Determine the number of shares of Common Stock to
be covered by each Award granted hereunder;
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(d) Determine the terms and conditions of any Award
granted hereunder (including, but not limited to, the option
price (subject to Section 5(a)), any vesting condition,
restriction or limitation and any acceleration of vesting or
waiver of forfeiture regarding any Award and the shares of
Common Stock relating thereto, based on such factors as the
Committee shall determine; PROVIDED, HOWEVER, that the terms
and conditions of any Award intended to qualify as
"performance-based" compensation as described in Section
162(m)(4)(C) of the Code shall include, but not be limited to,
such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m)(4)(C) of the Code;
(e) Subject to the provisions of Section 9, modify,
amend or adjust the terms and conditions of any Award, at any
time or from time to time; and
(f) Determine to what extent and under what
circumstances Common Stock and other amounts payable with
respect to an Award shall be deferred.
The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan as
it shall from time to time deem advisable, to interpret the terms and provisions
of the Plan and any Award issued under the Plan (and any agreement relating
thereto) and to otherwise supervise the administration of the Plan.
The Committee may act only by a majority of its members then
in office, except that the Committee may (1) authorize the delegation to
designated officers or employees of the Company such of its powers and authority
under the Plan as it deems appropriate (provided that no such authorization may
be made that would cause Awards or other transactions under the Plan to fail to
be exempt from Section 16(b) of the Exchange Act) and (2) authorize any one or
more of the members of the Committee or any designated officer or employee of
the Company to execute and deliver documents on behalf of the Committee.
Any determination made by the Committee or pursuant to
delegated authority pursuant to the provisions of the Plan with respect to any
Award shall be made in the sole discretion of the Committee or such delegate(s)
at the time of the grant of the Award or, unless in contravention of any express
terms of the Plan, at any time thereafter. All decisions made by the Committee
or any appropriately delegated officer(s) or employee(s) pursuant to the
provisions of the Plan shall be final and binding on all persons, including the
Company and Plan participants.
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SECTION 3. COMMON STOCK SUBJECT TO PLAN
(a) OPTIONED STOCK AUTHORIZED. The total number of shares of
Common Stock reserved and available for issuance pursuant to Stock Options under
the Plan shall be 1,500,000 (the "PLAN MAXIMUM"). However, except for purposes
of determining the number of shares available for issuance pursuant to Incentive
Stock Options (which shall not exceed such number), the Plan Maximum shall be
increased by (i) the number of shares of Common Stock used to pay the exercise
price of Stock Options and (ii) the number of Stock Options which have
terminated upon expiration, cancellation, forfeiture or otherwise, subject to
the limitations of Section 3(b) of the Plan. Shares subject to an Award under
the Plan may be authorized and unissued shares or may be treasury shares.
(b) MAXIMUM PARTICIPANT RIGHTS. No Plan participant may
receive, during any fiscal year of the Company, Awards covering an aggregate of
more than 350,000 shares of Common Stock. To the extent required by Section
162(m) of the Code, Common Stock relating to Awards which are cancelled continue
to be counted against the maximum number of shares of Common Stock a Plan
participant may receive and if, after grant of an Award, the Option Price is
reduced, the transaction will be treated as a cancellation of the Award and a
grant of a new Award and both the Award deemed to be cancelled and the Award
deemed to be granted will be counted against the maximum number of shares of
Common Stock a Plan participant may receive.
(c) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. In
the event of any change in corporate capitalization, such as a stock split or a
corporate transaction, such as any merger, consolidation, separation, including
a spin-off, or other distribution of stock or property of the Company, any
reorganization (whether or not such reorganization comes within the definition
of such term in Section 368 of the Code) or any partial or complete liquidation
of the Company, the Committee or Board may make such substitution or adjustments
in the aggregate number and kind of shares reserved for issuance under the Plan,
in the aggregate limit on grants to individuals, in the number, kind and Option
Price of shares subject to outstanding Stock Options and Stock Appreciation
Rights, and/or such other equitable substitution or adjustments as it may
determine to be appropriate in its sole discretion; PROVIDED, HOWEVER, that the
number of shares subject to any Award shall always be a whole number.
SECTION 4. ELIGIBILITY
All officers, directors, employees and consultants of the
Company, its Subsidiaries and Affiliates are eligible to be granted Awards under
the Plan.
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SECTION 5. STOCK OPTIONS
Stock Options may be granted alone or in addition to other
Awards granted under the Plan and may be of two types: Incentive Stock Options
and Nonqualified Stock Options. Any Stock Option granted under the Plan shall be
in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee
Incentive Stock Options, Nonqualified Stock Options or both types of Stock
Options (in each case with or without Stock Appreciation Rights); PROVIDED,
HOWEVER, that an Incentive Stock Option may not be granted to an optionee if the
Fair Market Value at the date of grant of shares with respect to which such
option would first become exercisable in any calendar year, when added to the
Fair Market Value at the date of grant of any other shares with respect to which
an Incentive Stock Option granted to such optionee under the Plan (or any other
incentive stock option plan maintained by the Company, its parent or any
Subsidiary) first becomes exercisable in such calendar year, would exceed
$100,000; AND PROVIDED FURTHER, HOWEVER, that Incentive Stock Options may be
granted only to employees of the Company and its Subsidiaries. To the extent
that any Stock Option is not designated as an Incentive Stock Option or even if
so designated does not qualify as an Incentive Stock Option, it shall constitute
a Nonqualified Stock Option.
Stock Options shall be evidenced by option agreements, the
terms and provisions of which may differ. An option agreement shall indicate on
its face whether it is intended to be an agreement for an Incentive Stock Option
or a Nonqualified Stock Option. The grant of a Stock Option shall occur on the
date the Committee, by resolution, selects an individual to be a participant in
any grant of a Stock Option, determines the number of shares of Common Stock to
be subject to such Stock Option to be granted to such individual and specifies
the terms and provisions of the Stock Option. The Company shall notify a
participant of any grant of a Stock Option, and a written option agreement or
agreements shall be duly executed and delivered by the Company to the
participant. Such agreement or agreements shall become effective upon execution
by the Company and the participant.
Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be interpreted, amended or
altered nor shall any discretion or authority granted under the Plan be
exercised so as to disqualify the Plan under Section 422 of the Code or, without
the consent of the optionee affected, to disqualify any Incentive Stock Option
under such Section 422.
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions as the Committee shall deem desirable:
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(a) OPTION PRICE. The option price per share of Common Stock
purchasable under a Stock Option shall not be less than the Fair Market Value of
the Common Stock subject to the Stock Option on the date of grant; PROVIDED,
HOWEVER, that in the case of an Incentive Stock Option granted to an optionee
who, immediately before the grant of such Incentive Stock Option, owns shares
representing more than 10% of the total combined voting power of all classes of
shares of the Company, its parent or Subsidiary, in no event shall the per share
option price be less than 110% of the Fair Market Value per share of Common
Stock on the date of grant.
(b) OPTION TERM. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable more than
10 years after the date the Stock Option is granted; PROVIDED, HOWEVER, that in
the case of an Incentive Stock Option granted to an optionee who, immediately
before the grant of such Incentive Stock Option, owns shares representing more
than 10% of the total combined voting power of all classes of shares of the
Company, its parent or Subsidiary, in no event shall the Incentive Stock Option
by its terms be exercisable more than five years after the date such Incentive
Stock Option is granted.
(c) EXERCISABILITY. Except as otherwise provided herein, Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee. If the Committee provides
that any Stock Option is exercisable only in installments, the Committee may at
any time waive such installment exercise provisions, in whole or in part, based
on such factors as the Committee may determine. In addition, the Committee may
at any time accelerate the exercisability of any Stock Option.
(d) METHOD OF EXERCISE. Subject to the provisions of this
Section 5, Stock Options may be exercised, in whole or in part, at any time
during the option term by giving written notice of exercise to the Company
specifying the number of shares of Common Stock subject to the Stock Option to
be purchased.
Such notice shall be accompanied by payment in full of the
purchase price by certified or bank check or such other instrument as the
Company may accept. Unless otherwise determined by the Committee, such payment
may also be made in full or in part in the form of unrestricted Common Stock
already owned by the optionee of the same class as the Common Stock subject to
the Stock Option (based on the Fair Market Value of the Common Stock on the date
the Stock Option is exercised); PROVIDED, HOWEVER, that, (i) any Common Stock
used to make such payment shall have been held for at least six months, and (ii)
in the case of an Incentive Stock Option, the right to make payment in the form
of already owned shares of Common Stock may be authorized only at the time the
Stock Option is granted.
The Company may make loans to such participants as the
Committee, in its discretion, may determine (including a participant who is a
director or officer of the Company) in connection with the exercise of Stock
Options in an amount up to the exercise price of the
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Stock Option to be exercised plus any applicable withholding taxes. In no event
may any such loan exceed the Fair Market Value, at the date of exercise, of the
shares covered by the Stock Option, or portion thereof, exercised by the
participant. Such loans shall be subject to such terms and conditions as the
Committee shall determine. Every loan shall comply with all applicable laws,
regulations and rules of the Federal Reserve Board and any other governmental
agency having jurisdiction.
Unless otherwise determined by the Committee, payment for any
shares subject to a Stock Option may also be made by delivering a properly
executed exercise notice to the Company, together with a copy of irrevocable
instructions to a broker to deliver promptly to the Company the amount of sale
or loan proceeds to pay the purchase price, and, if requested, by the amount of
any federal, state, local or foreign withholding taxes. To facilitate the
foregoing, the Company may enter into agreements for coordinated procedures with
one or more brokerage firms.
No shares of Common Stock shall be issued until full payment
therefor has been made. An optionee shall have all of the rights of a
shareholder of the Company holding the class or series of Common Stock that is
subject to such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends), when the optionee has given written
notice of exercise, has paid in full for such shares and, if requested, has
given the representation described in Section 11(a).
(e) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall
be transferable by the optionee other than (1) by will or by the laws of descent
and distribution; (2) in the case of a Nonqualified Stock Option, pursuant to a
qualified domestic relations order (as defined in the Code or title 1 of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder); or (3) as otherwise determined by the Committee (provided that no
such determination may be made that would cause Awards or other transactions
under the Plan to fail to be exempt under Section 16(b) of the Exchange Act).
All Stock Options shall be exercisable, subject to the terms of this Plan,
during the optionee's lifetime, only by the optionee or by the guardian or legal
representative of the optionee, or, in the case of a Nonqualified Stock Option,
its alternative payee pursuant to such qualified domestic relations order, or
the recipient of a transfer of such Stock Option permitted pursuant to clause
(3) of the preceding sentence, it being understood that the terms "holder" and
"optionee" include the guardian and legal representative of the optionee named
in the option agreement and any permitted transferee thereof.
(f) TERMINATION BY REASON OF DEATH. Unless otherwise
determined by the Committee, if an optionee's employment terminates by reason of
death, any Stock Option held by such optionee may thereafter be fully exercised
(whether or not the Stock Option was fully exercisable) by the estate of the
optionee, or by a person who acquired the right to exercise the Stock Option by
bequest or inheritance, or otherwise by reason of the death of the Optionee, for
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a period of one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise
determined by the Committee, if an optionee's employment terminates by reason of
Disability, any Stock Option held by such optionee may thereafter be fully
exercised by the optionee (whether or not the Stock Option was fully
exercisable, unless provided otherwise in the option agreement) for a period of
one year from the date of such termination of employment or until the expiration
of the stated term of such Stock Option, whichever period is the shorter. If
following the optionee's termination of employment by reason of Disability the
optionee dies, the Stock Option may be exercised by the classes of persons
identified in Section 5(f). In the event of termination of employment by reason
of Disability, if an Incentive Stock Option is exercised after the expiration of
the exercise periods that apply for purposes of Section 422 of the Code, such
Stock Option will thereafter be treated as a Nonqualified Stock Option.
(h) OTHER TERMINATION. Unless otherwise determined by the
Committee: (1) if an optionee incurs a Termination of Employment for Cause, all
Stock Options held by such optionee shall thereupon terminate; and (2) if an
optionee incurs a Termination of Employment for any reason other than death,
Disability or Cause, any Stock Option held by such optionee, to the extent then
exercisable, or on such accelerated basis as the Committee may determine, may be
exercised for the lesser of three months from the date of such Termination of
Employment or the balance of such Stock Option's term; PROVIDED, HOWEVER, that
if the optionee dies within such three-month period, any unexercised Stock
Option held by such optionee shall, notwithstanding the expiration of such
three-month period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date of such
death or until the expiration of the stated term of such Stock Option, whichever
period is the shorter. In the event of Termination of Employment, if an
Incentive Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option will
thereafter be treated as a Nonqualified Stock Option.
(i) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other
provision of the Plan, during the 60-day period from and after a Change of
Control (the "EXERCISE PERIOD"), unless the Committee shall determine otherwise
at the time of grant, an optionee shall have the right, whether or not the Stock
Option is fully exercisable and in lieu of the payment of the exercise price for
the shares of Common Stock being purchased under the Stock Option and by giving
notice to the Company, to elect (within the Exercise Period) to surrender all or
part of the Stock Option to the Company and to receive cash, within 30 days of
such notice, in an amount equal to the amount by which the Change in Control
Price per share of Common Stock on the date of such election shall exceed the
exercise price per share of Common Stock under the Stock Option (the "SPREAD")
multiplied by the number of shares of Common Stock granted under the Stock
Option as to which the right granted under this Section 5(i) shall have been
exercised.
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SECTION 6. STOCK APPRECIATION RIGHTS
(a) GRANT AND EXERCISE. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option granted under the
Plan. In the case of a Nonqualified Stock Option, such rights maybe granted
either at or after the time of grant of such Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of grant of
such Stock Option. A Stock Appreciation Right shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option.
A Stock Appreciation Right may be exercised by an optionee in
accordance with Section 6(b) by surrendering the applicable portion of the
related Stock Option in accordance with procedures established by the Committee.
Upon such exercise and surrender, the optionee shall be entitled to receive an
amount determined in the manner prescribed in Section 6(b). Stock Options which
have been so surrendered shall no longer be exercisable to the extent the
related Stock Appreciation Rights have been exercised.
(b) TERMS AND CONDITIONS. Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined by the Committee,
including the following:
(i) Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Stock Options to which
they relate are exercisable in accordance with the provisions of Section 5 and
this Section 6.
(ii) Upon the exercise of a Stock Appreciation Right,
an optionee shall be entitled to receive an amount in cash, shares of Common
Stock or both, equal in value to the excess of the Fair Market Value of one
share of Common Stock as of the date of exercise over the Option Price per share
specified in the related Stock Option multiplied by the number of shares in
respect of which the Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
(iii) Stock Appreciation Rights shall be transferable
only to permitted transferees of the underlying Stock Option in accordance with
Section 5(e).
SECTION 7. DEFERRAL
The Committee may establish procedures whereby participants
may elect to defer the receipt of shares or cash in settlement of Awards for a
specified period or until a specified event.
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SECTION 8. CHANGE IN CONTROL PROVISIONS
(a) IMPACT OF EVENT. Notwithstanding any other provision of
the Plan to the contrary, in the event of a Change in Control, any Stock Options
and Stock Appreciation Rights outstanding as of the date such Change in Control
is determined to have occurred, and which are not then exercisable and vested,
shall become fully exercisable and vested to the full extent of the original
grant.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of the Plan,
a "Change in Control" shall mean the happening of any of the following events:
(1) An acquisition after the effective date of the
Plan by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "PERSON")
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(A) the then outstanding shares of common stock of the Company
(the "OUTSTANDING COMPANY COMMON STOCK") or (B) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of
directors (the "OUTSTANDING COMPANY VOTING SECURITIES");
excluding, however, the following: (i) any acquisition
directly from the Company, other than an acquisition by virtue
of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the
Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any company
controlled by the Company, or (iv) any acquisition by any
company pursuant to a transaction which complies with clauses
(A), (B) and (C) of Subsection (3) of this Section 8(b); or
(2) A change in the composition of the Board such
that the individuals who, as of the effective date of the
Plan, constitute the Board (such Board shall be hereinafter
referred to as the "INCUMBENT BOARD") cease for any reason to
constitute at least a majority of the Board; PROVIDED,
HOWEVER, for purposes of this Section 8(b), that any
individual who becomes a member of the Board subsequent to the
effective date of the Plan, whose election, or nomination for
election by the Company's shareholders, was approved by a vote
of at least a majority of those individuals who are members of
the Board and who were also members of the Incumbent Board (or
who shall be deemed to be such by election pursuant to this
proviso) shall be considered as though such individual were a
member of the Incumbent Board; but, PROVIDED, FURTHER, that
any such individual whose initial assumption of office occurs
as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or
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threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board shall not be so considered as
a member of the Incumbent Board; or
(3) The approval by the shareholders of the Company
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("CORPORATE TRANSACTION") or, if consummation of such
Corporate Transaction is subject, at the time of such approval
by shareholders, to the consent of any government or
governmental agency, obtaining of such consent (either
explicitly or implicitly by consummation); excluding, however,
such a Corporate Transaction pursuant to which (A) all or
substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (other
than the Company, any employee benefit plan (or related trust)
of the Company or such corporation resulting from such
Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the
outstanding voting securities of such corporation entitled to
vote generally in the election of directors except to the
extent that such ownership existed prior to the Corporate
Transaction, and (C) individuals who were members of the
Incumbent Board will constitute at least a majority of the
members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(4) The approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company.
(c) CHANGE IN CONTROL PRICE. For purposes of the Plan, "CHANGE
IN CONTROL PRICE" means the higher of (1) the highest reported sales price,
regular way, of a share of Common Stock in any transaction reported on any
national exchange on which such shares are listed or, if not listed on any such
exchange, as quoted on the Nasdaq National Market during
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the 60-day period prior to and including the date of a Change in Control or (2)
if the Change in Control is the result of a tender or exchange offer or a
Corporate Transaction, the highest price per share of Common Stock paid in such
tender or exchange offer or Corporate Transaction; PROVIDED, HOWEVER, that in
the case of Incentive Stock Options and Stock Appreciation Rights relating to
Incentive Stock Options, the Change in Control Price shall be in all cases the
Fair Market Value of the Common Stock on the date such Incentive Stock Option or
Stock Appreciation Right is exercised. To the extent that the consideration paid
in any such transaction described above consists all or in part of securities or
other noncash consideration, the value of such securities or other noncash
consideration shall be determined in the sole discretion of the Board.
SECTION 9. TERM, AMENDMENT AND TERMINATION
The Plan will terminate on March 11, 2008. Awards outstanding
as of the date of any such termination shall not be affected or impaired by the
termination of the Plan.
The Board may amend, alter, or discontinue the Plan to the
extent it deems appropriate in the best interest of the Company, but no
amendment, alteration or discontinuation shall be made which would (1) impair
the rights of an optionee under a Stock Option or a recipient of a Stock
Appreciation Right theretofore granted without the optionee's or recipient's
consent, except such an amendment which is necessary to cause any Award or
transaction under the Plan to qualify, or to continue to qualify, for the
exemption provided by Rule 16b-3, or (2) disqualify any Award or transaction
under the Plan from the exemption provided by Rule 16b-3. In addition, no such
amendment shall be made without the approval of the Company's stockholders to
the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other
Award theretofore granted, prospectively or retroactively, but no such amendment
shall impair the rights of any holder without the holder's consent except such
an amendment which is necessary to cause any Award or transaction under the Plan
to qualify, or to continue to qualify, for the exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have
authority to amend the Plan to take into account changes in law and tax and
accounting rules as well as other developments, and to grant Awards that qualify
for beneficial treatment under such rules without stockholder approval.
SECTION 10. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an
"unfunded" plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Common Stock or make
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payments; PROVIDED, HOWEVER, that unless the Committee otherwise determines, the
existence of such trusts or other arrangements is consistent with the "unfunded"
status of the Plan.
SECTION 11. GENERAL PROVISIONS
(a) The Committee may require each person purchasing or
receiving shares 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 the
distribution thereof. The certificates for such shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements
made pursuant thereto, the Company shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(1) Quotation or approval for quotation upon notice
of issuance of such shares on the Nasdaq National Market, or
such national securities exchange as may at the time be the
principal market for the Common Stock;
(2) Any registration or other qualification of such
shares of the Company under any state or federal law or
regulation, or the maintaining in effect of any such
registration or other qualification which the Committee shall,
in its absolute discretion upon the advice of counsel, deem
necessary or advisable; and
(3) Obtaining any other consent, approval, or permit
from any state or federal governmental agency which the
Committee shall, in its absolute discretion after receiving
the advice of counsel, determine to be necessary or advisable.
(b) Nothing contained in the Plan shall prevent the Company or
any Subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees.
(c) Adoption of the Plan shall not confer upon any employee
any right to continued employment, nor shall it interfere in any way with the
right of the Company or any Subsidiary or Affiliate to terminate the employment
of any employee at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for federal income tax
purposes with respect to any Award under the Plan, the participant shall pay to
the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Company, withholding obligations may be settled with Common Stock, including
Common Stock that is part of the Award that gives rise to the withholding
requirement. The obligations
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of the Company under the Plan shall be conditional on such payment or
arrangements, and the Company and its Affiliates shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment otherwise due
to the participant. The Committee may establish such procedures as it deems
appropriate, including making irrevocable elections, for the settlement of
withholding obligations with Common Stock.
(e) The Committee shall establish such procedures as it deems
appropriate for a participant to designate a beneficiary to whom any amounts
payable in the event of the participant's death are to be paid or by whom any
rights of the participant, after the participant's death, may be exercised.
(f) In the case of a grant of an Award to any employee of a
Subsidiary of the Company, the Company may, if the Committee so directs, issue
or transfer the shares of Common Stock, if any, covered by the Award to the
Subsidiary, for such lawful consideration as the Committee may specify, upon the
condition or understanding that the Subsidiary will transfer the shares of
Common Stock to the employee in accordance with the terms of the Award specified
by the Committee pursuant to the provisions of the Plan.
(g) Notwithstanding the foregoing, if any right to receive
cash granted pursuant to this Plan would make a Change in Control transaction
ineligible for pooling-of-interests accounting under APB No. 16 that but for the
nature of such grant would otherwise be eligible for such accounting treatment,
the Committee shall have the ability to substitute for such cash Common Stock
with a Fair Market Value equal to the cash that would otherwise be payable
hereunder.
(h) The Plan and all Awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws.
(i) The Committee may grant Awards to employees who are
subject to the tax laws of nations other than the United States, which Awards
may have terms and conditions that differ from other Awards granted under the
Plan for the purposes of complying with foreign tax laws. The Committee may
grant Stock Appreciation Rights to employees without the grant of an
accompanying Stock Option if the employees are subject at the time of grant to
the laws of a jurisdiction that prohibits them from owning common stock. The
Stock Appreciation Rights shall permit the employees to receive cash at the time
of any exercise thereof.
(j) Any transaction effected pursuant to this Plan that is
deemed to be a "DISCRETIONARY TRANSACTION" (as defined in Rule 16b-3) that
occurs within six months of an "opposite way" discretionary transaction (as
described in Rule 16b-3(f) thereunder) is automatically voided and will be
deferred until six months have elapsed from the date of the most recent
"opposite way" discretionary transaction under any Plan of the Company. If any
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provision of the Plan is found not to be in compliance with Delaware or other
applicable law, such provision shall be deemed null and void to the extent
required to permit the Plan to comply with Delaware or such other applicable
law.
SECTION 12. LIMITATIONS APPLICABLE TO PERFORMANCE-BASED COMPENSATION.
Notwithstanding any other provision of this Plan, any Award
intended to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code shall be subject to any additional limitations set
forth in Section 162(m) of the Code (including any amendment to Section 162(m)
of the Code) or any regulations or rulings issued thereunder that are
requirements for qualification as performance-based compensation as described in
Section 162(m)(4)(C) of the Code, and this Plan shall be deemed amended to the
extent necessary to conform to such requirements.
SECTION 13. EFFECTIVE DATE OF PLAN
The Plan shall be effective on March 12, 1998.
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