Exhibit 99-1
Amended and Restated Stock Option Plan and Restricted Stock Plan
of
Republic First Bancorp, Inc.
Amendment and Restatement No. 2
Of
The Stock Option Plan and Restricted Stock Plan
Of
Republic First Bancorp, Inc.
The purpose of the Amendment and Restatement No. 2 of the Stock Option
and Restricted Stock Plan (the "Plan") of the Republic First Bancorp, Inc. (the
"Company") is to promote the interests of the Company by providing incentives to
(i) designated officers and other employees of the Company or a Subsidiary
Corporation (as defined herein), (ii) non-employee members of the Company's
Board of Directors (the "Board") and (iii) independent contractors and
consultants (who may be individuals or entities) who perform services for the
Company, to enable the Company to attract and retain them and to encourage them
to acquire a proprietary interest, or to increase their proprietary interest, in
the Company. The Company believes that the Plan will cause participants to
contribute materially to the growth of the Company, thereby benefitting the
Company's shareholders. For purposes of the Plan, the terms "Parent Corporation"
and "Subsidiary Corporation" shall have the meanings set forth in subsections
(e) and (f) of Section 424 of the Internal Revenue Code of 1986, as amended (the
"Code").
1. Administration
(a) This Plan shall be administered and interpreted by a committee of
the Board (the "Committee") consisting of not less than three persons, all of
whom shall be "Non-Employee Directors" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (a "Committee
Member"). With respect to Eligible Participants (as hereinafter defined), the
Committee shall have the sole authority to determine (i) who is eligible to
receive Grants (as defined in Section 2 below) under the Plan, (ii) the type,
size and terms of each Grant under the Plan (subject to Section 4 below), (iii)
the time when each Grant will be made and the duration of any exercise or
restriction period; (iv) any restrictions on resale applicable to the shares to
be issued or transferred pursuant to the Grant; and (v) any other matters
arising under the Plan. The Committee may, if it so desires, base any of the
foregoing determinations upon the recommendations of management of the Company.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt or amend such rules, regulations, agreements and
instruments as it may deem appropriate for the proper administration of the
Plan. The Committee's interpretations of the Plan and all determinations made by
the Committee pursuant to the powers vested in it hereunder shall be conclusive
and binding on all persons having any interests in the Plan or in any Grants
under the Plan. No person acting under this subsection shall be held liable for
any action or determination made in good faith with respect to the Plan or any
Grant under the Plan.
(b) Each member of the Committee shall be indemnified and held harmless
by the Company against any cost or expense (including counsel fees) reasonably
incurred by him or her, or liability (including any sum paid in settlement of a
claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan, unless arising out of such member's own fraud
or bad faith, to the extent permitted by applicable law. Such indemnification
shall be in addition to any rights of indemnification the members may have as
directors or otherwise
under the Articles of Incorporation or By-Laws of the Company, any agreement of
shareholders or disinterested directors or otherwise.
2. Grants
Grants to Eligible Participants. With respect to Eligible Participants,
incentives under the Plan shall consist of Incentive Stock Options (as defined
in Section 5(b) below), Nonqualified Stock Options (as defined in Section 5(b)
below), Restricted Stock Grants (as defined in Section 6 below) or SARs (as
defined in Section 7 below) (hereinafter collectively referred to as "Grants").
All Grants shall be subject to the terms and conditions set forth herein and to
such other terms and conditions of any nature as long as they are not
inconsistent with the Plan as the Committee deems appropriate and specifies in
writing to the participant (the "Grant Letter"). The Committee shall approve the
form and provisions of each Grant Letter. Grants under any section of the Plan
need not be uniform as among the participants receiving the same type of Grant,
and Grants under two or more sections of the Plan may be combined in one Grant
Letter.
3. Shares Subject to the Plan
(a) The aggregate number of shares of the Common Stock, par value $.01
("Common Stock"), of the Company that may be issued or transferred under the
Plan is 1,400,000, subject to adjustment pursuant to Section 3(b) below. Such
shares may be authorized but unissued shares or reacquired shares. If and to the
extent that options granted under the Plan terminate, expire or are canceled
without having been exercised (including shares canceled as part of an exchange
of Grants), or if any shares of restricted stock are forfeited, the shares
subject to such Grant shall again be available for subsequent Grants under the
Plan.
(b) If any change is made to the Common Stock (whether by reason of
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split, combination of shares, or exchange of shares or any other change in
capital structure made without receipt of consideration), then unless such event
or change results in the termination of all outstanding Grants under the Plan,
the Committee shall preserve the value of the outstanding Grants by adjusting
the maximum number and class of shares issuable under the Plan to reflect the
effect of such event or change in the Company's capital structure, and by making
appropriate adjustments to the number and class of shares, the exercise price of
each outstanding option and otherwise, except that any fractional shares
resulting from such adjustments shall be eliminated by rounding any portion of a
share equal to .500 or greater up, and any portion of a share equal to less than
.500 down, in each case to the nearest whole number.
4. Eligibility for Participation
Officers and other employees of the Company or a Subsidiary
Corporation, non-employee members of the Board who are not members of the
Committee, and independent contractors and consultants who perform services for
the Company shall be eligible to participate in the Plan
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(hereinafter referred to individually as an "Eligible Participant" and
collectively as "Eligible Participants"). Only Eligible Participants who are
officers or other employees of the Company or a Subsidiary Corporation shall be
eligible to receive Incentive Stock Options. All Eligible Participants shall be
eligible to receive Nonqualified Stock Options, Restricted Stock Grants and
SARs. The Committee shall select from among the Eligible Participants those who
will receive Grants (such Eligible Participants are hereinafter referred to as
"Grantees") and shall determine the number of shares of Common Stock subject to
each Grant; provided, however, that the maximum number of shares of Common Stock
which may be subject to Grants awarded to any Grantee shall not exceed
1,400,000. The Committee may, if it so desires, base any such selections or
determinations upon the recommendations of management of the Company. Nothing
contained in the Plan shall be construed to limit in any manner whatsoever the
right of the Company to grant rights or options to acquire Common Stock or
awards of Common Stock otherwise than pursuant to the Plan.
5. Stock Options
(a) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Common Stock that will be subject to each
option.
(b) Type of Option and Option Price.
(1) The Committee may grant options qualifying as incentive
stock options within the meaning of Section 422 of the Code ("Incentive Stock
Options") and other stock options ("Nonqualified Stock Options"), in accordance
with the terms and conditions set forth herein, or may grant any combination of
Incentive Stock Options and Nonqualified Stock Options (hereinafter referred to
collectively as "Stock Options"). The option price per share of an Incentive
Stock Option shall be the fair market value (as defined herein) of a share of
Common Stock on the date of grant. If the Grantee of an Incentive Stock Option
owns Common Stock (as determined under Section 424(d) of the Code) possessing
more than 10% of the total combined voting power of all classes of stock of the
Company or a Parent Corporation or Subsidiary Corporation, the option price per
share in the case of an Incentive Stock Option shall not be less than 110% of
the fair market value of a share of Common Stock on the date of grant and such
option by its terms is not exercisable after the expiration of five (5) years
from the date of grant.
(2) For all valuation purposes under the Plan, the fair market
value of a share of Common Stock shall be determined in accordance with the
following provisions:
(A) If the Common Stock is not at the time listed or
admitted to trading on any stock exchange but is traded in the over-the-counter
market (but not on the Nasdaq National Market segment of The Nasdaq Stock
Market), the fair market value shall be the mean between the last reported bid
and asked prices of one share of Common Stock on the date in question in the
over- the-counter market, as such prices are reported by the National
Association of Securities Dealers through its Nasdaq system or any successor
system. If there are no reported bid and asked prices on
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the date in question, then the mean between the last reported bid and asked
prices on the next preceding date for which such quotations exist shall be
determinative of fair market value. If the Common Stock is traded
over-the-counter on the Nasdaq National Market segment of The Nasdaq Stock
Market, the fair market value shall be the closing selling price of one share of
Common Stock on the date in question as such price is reported by the National
Association of Securities Dealers through such system or any successor system.
If there is no reported closing selling price for the Common Stock on the date
in question, then the closing selling price on the next preceding date for which
such quotation exists shall be determinative of fair market value.
(B) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value shall be
the closing selling price of one share of Common Stock on the date in question
on the stock exchange determined by the Committee to be the primary market for
the Common Stock, as such prices are officially quoted on such exchange. If
there is no reported closing selling price of Common Stock on such exchange on
the date in question, then the fair market value shall be the closing selling
price on the next preceding date for which such quotation exists.
(C) If the Common Stock is at the time neither listed
nor admitted to trading on any stock exchange nor traded in the over-the-counter
market (or, the Committee determines that the value as determined pursuant to
Section 5(b)(2)(A) or (B) above does not reflect fair market value), then the
Committee shall determine fair market value after taking into account such
factors as it deems appropriate.
(c) Exercise Period. The Committee shall determine the option exercise
period of each Stock Option. The exercise period shall not exceed ten years from
the date of grant. Notwithstanding any determinations by the Committee regarding
the exercise period of any Stock Option, all outstanding Stock Options shall be
immediately exercisable upon a Change of Control of the Company (as defined in
Section 9 below).
(d) Vesting of Options and Restrictions on Shares. The vesting period
for Stock Options shall commence on the date of grant and shall end on the date
or dates, determined by the Committee, that shall be specified in the Grant
Letter. The Committee may impose upon the shares of Common Stock issuable upon
the exercise of a Stock Option such restrictions as it deems appropriate and
specifies in the Grant Letter. During any period in which such restrictions
apply, the provisions of Section 6(d) below shall be applicable to such shares,
and the Committee, in such circumstances as it deems equitable, may determine
that all such restrictions shall lapse. Notwithstanding any other provision of
the Plan, all outstanding Stock Options shall become immediately exercisable
upon a Change of Control of the Company (as defined in Section 9 below).
(e) Manner of Exercise. A Grantee may exercise a Stock Option by
delivering a duly completed notice of exercise to the Committee, together with
payment of the option price. Such notice may include instructions authorizing
the Company to deliver the certificates representing the shares of Common Stock
issuable upon the exercise of such Stock Option to any designated
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registered broker or dealer ("Designated Broker"). Such instructions shall
designate the account into which the shares are to be deposited. The Grantee may
tender such notice of exercise, which has been properly executed by the Grantee,
and the aforementioned delivery instructions to any Designated Broker.
(f) Termination of Employment, Disability or Death.
(1) If a Grantee who is an employee ceases to be an employee
(in the case of an Incentive Stock Option) or ceases to be an Eligible
Participant (in the case of a Nonqualified Stock Option) for any reason (other
than, in the case of an individual, the death of such individual) any Stock
Option which is otherwise exercisable by the Grantee shall terminate unless
exercised within three months after the date on which the Grantee ceases to be
an employee or an Eligible Participant, as the case may be (or within such other
period of time, which may be longer or shorter than three months, as may be
specified in the Grant Letter), but in any event no later than the date of
expiration of the option exercise period, except that in the case of an
individual Grantee who is disabled within the meaning of Section 22(e)(3) of the
Code, such period shall be one year rather than three months (except as
otherwise provided in the Grant Letter).
(2) In the event of the death of an individual Grantee while
he or she is an Eligible Participant or within not more than three months after
the date on which the Grantee ceases to be an Eligible Participant (or within
such other period of time, which may be longer or shorter than three months, as
may be specified in the Grant Letter), any Stock Option which was otherwise
exercisable by the Grantee at the date of death may be exercised by the
Grantee's personal representative at any time prior to the expiration of one
year from the date of death, but in any event no later than the date of
expiration of the option exercise period.
(g) Satisfaction of Option Price. The Grantee shall pay the option
price in full at the time of exercise in cash, or, with the consent of the
Committee in its sole discretion, by delivering shares of Common Stock already
owned by the Grantee and having a fair market value on the date of exercise
equal to the option price or a combination of cash and shares of Common Stock;
provided, however, that in lieu of payment in full in such manner, a Grantee may
with the approval of the Board in its sole discretion, be entitled to pay for
the shares purchased upon exercise of the Stock Option by payment to the Company
in cash or by certified or bank check a sum equal at least to the par value of
the Common Stock, with the remainder of the purchase price satisfied by the
issuance of an interest bearing promissory note or notes, in a form and having
terms, including rate of interest and collateral security, satisfactory to the
Board in its sole discretion. The Grantee shall also pay the amount of
withholding tax due, if any, at the time of exercise. Shares of Common Stock
shall not be issued or transferred upon any purported exercise of a Stock Option
until the option price and the withholding obligation are fully paid.
(h) Limits on Incentive Stock Options. Each Grant of an Incentive Stock
Option shall provide that:
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(1) the Stock Option is not transferable by the Grantee,
except, in the case of an individual Grantee, by will or laws of descent and
distribution;
(2) the Stock Option is exercisable only by the Grantee,
except as otherwise provided herein or in the Grant Letter in the event of the
death of an individual Grantee;
(3) the aggregate fair market value of the Common Stock
determined as of the date of the Grant with respect to which Incentive Stock
Options are exercisable for the first time by a Grantee during any calendar year
under the Plan and under any other stock option plan of the Company shall not
exceed $100,000; and
(4) unless the Grantee could otherwise transfer Common Stock
issued pursuant to the Stock Option without incurring liability under Section
16(b) of the Exchange Act at least six months must elapse from the date of
acquisition of the Stock Option until the date of disposition of the Common
Stock issued upon exercise thereof.
6. Restricted Stock Grants
The Committee may issue shares of Common Stock to an Eligible
Participant pursuant to an incentive or long range compensation plan, program or
contract approved by the Committee (a "Restricted Stock Grant"). The following
provisions are applicable to Restricted Stock Grants:
(a) General Requirements. Shares of Common Stock issued pursuant to
Restricted Stock Grants will be issued in consideration for cash or services
rendered having a value, as determined by the Board, at least equal to the par
value thereof. All conditions and restrictions imposed under each Restricted
Stock Grant, and the period of years during which the Restricted Stock Grant
will remain subject to such restrictions, shall be set forth in the Grant Letter
and designated therein as the "Restriction Period". All restrictions imposed
under any Restricted Stock Grant shall lapse on such date or dates as the
Committee may approve until the restrictions have lapsed as to 100% of the
shares, except that upon a Change of Control of the Company, all restrictions on
the transfer of the shares which have not been forfeited prior to such date
shall lapse. In addition, the Committee, in circumstances that it deems
equitable, may determine as to any or all Restricted Stock Grants, that all the
restrictions shall lapse, notwithstanding any Restriction Period.
(b) Number of Shares. The Committee, in its sole discretion, shall
determine the number of shares of Common Stock that will be granted in each
Restricted Stock Grant.
(c) Requirement of Relationship with Company. If the Eligible
Participant's relationship with the Company (as an employee, non-employee member
of the Board, independent contractor or consultant, as the case may be)
terminates during the period designated in the Grant Letter as the Restriction
Period, the Restricted Stock Grant shall terminate as to all shares covered by
the Grant as to which restrictions on transfer have not lapsed, and such shares
shall be immediately returned
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to the Company. The Committee may, in its sole discretion, provide for complete
or partial exceptions to the provisions of this Section 6(c).
(d) Restrictions on Transfer and Legend on Stock Certificate. During
the Restriction Period, an Eligible Participant may not sell, assign, transfer,
pledge or otherwise dispose of the shares of Common Stock to which such
Restriction Period applies except to a Successor Grantee pursuant to Section 8
below. Each certificate representing a share of Common Stock issued or
transferred under a Restricted Stock Grant shall contain a legend giving
appropriate notice of the restrictions in the Grant. The Grantee shall be
entitled to have the legend removed from the stock certificate or certificates
representing any such shares as to which all restrictions have lapsed.
7. Stock Appreciation Rights
(a) General Provisions. The Committee may grant stock appreciation
rights ("SARs") to any Eligible Participant in tandem with any Stock Option, for
all or a portion of the applicable Stock Option, either at the time the Stock
Option is granted or at any time thereafter while the Stock Option remains
outstanding.
(b) Number of SARs. The number of SARs granted to an Eligible
Participant which shall be exercisable during any given period of time shall not
exceed the number of shares of Common Stock which the Eligible Participant may
purchase upon the exercise of the related Stock Option during such period.
(c) Settlement Amount. Upon an Eligible Participant's exercise of some
or all of the Eligible Participant's SARs, the Eligible Participant shall
receive in settlement of such SARs an amount equal to the stock appreciation (as
defined herein) for the number of SARs exercised, payable in cash, Common Stock
or a combination thereof. The "stock appreciation" for a SAR is the difference
between the option price specified for the related Stock Option and the fair
market value of the underlying Common Stock on the date of exercise of the SAR;
provided that the maximum value of any stock appreciation right shall be limited
to the exercise price of the tandem Stock Option with respect to which it is
issued.
(d) Settlement Election. Upon the exercise of any SARs, the Eligible
Participants shall have the right to elect the portions of the settlement amount
that the Eligible Participant desires to receive in cash and shares of Common
Stock, respectively. For purposes of calculating the number of shares of Common
Stock to be received upon settlement, shares of Common Stock shall be valued at
their fair market value on the date of exercise of the SARs. Notwithstanding the
foregoing, the Committee shall have the right (i) to disapprove an Eligible
Participant's election to receive such settlement in whole or in part in cash,
and to require that shares of Common Stock be delivered in lieu of cash or (ii)
to require that settlement be made in cash. If shares of Common Stock are to be
received upon exercise of an SAR, cash shall be delivered in lieu of any
fractional share.
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(e) Exercise. A SAR is exercisable only during the period when the
Stock Option to which it is related is also exercisable. SARs shall be
exercisable only at the same time and to the same extent as, and shall terminate
and no longer be exercisable upon the termination or immediately after the
exercise of, the tandem Stock Options or applicable portion thereof.
8. Transferability of Options and Grants
Only a Grantee (or, in the case of an individual Grantee, his or her
authorized legal representative on behalf of Grantee) may exercise rights under
a Grant. No individual Grantee may transfer those rights except by will or by
the laws of descent and distribution or, in the case of a Grant other than an
Incentive Stock Option and to the extent permitted under Rule 16b-3 of the
Exchange Act and by the Committee in its sole discretion, (a) pursuant to a
qualified domestic relations order as defined under the Code or Title I of ERISA
or the rules thereunder and (b) to a trust for the benefit of a member of the
Grantee's immediate family. Upon the death of an individual Grantee, the
personal representative or other person entitled to succeed to the rights of the
Grantee ("Successor Grantee") may exercise such rights. A Successor Grantee
shall furnish proof satisfactory to the Company of such person's right to
receive the Grant or the Committee Grant under the Grantee's will or under the
applicable laws of descent and distribution.
9. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
when (a) any "person" (as such term is used in Section 13(d) and 14(d) of the
Exchange Act) becomes the "beneficial owner", directly or indirectly, of
securities of the Company representing thirty (30%) percent or more of the
combined voting power of the Company's then outstanding securities or (b) the
Company becomes a subsidiary of another corporation or is merged or consolidated
into another corporation or if substantially all of its assets shall have been
sold to an unaffiliated party or parties unless thereafter (1) directors of the
Company immediately prior thereto continue to constitute at least fifty (50%)
percent of the directors of the surviving entity or purchaser or (2) the
Company's securities continue to represent, or are converted into securities
which represent, more than sixty-six and two thirds (66 2/3%) percent of the
combined voting power of the surviving entity or purchaser, or (c) fifty (50%)
percent or more of the Board is comprised of persons who were not nominated by
the Board for election as directors, or (d) the Board adopts a plan of complete
liquidation of the Company.
10. Certain Corporate Changes
(a) Sale or Exchange of Assets, Dissolution or Liquidation or Merger or
Consolidation Where the Company Does Not Survive. If all or substantially all of
the assets of the Company are to be sold or exchanged, the Company is to be
dissolved or liquidated, or the Company is a party to a merger or consolidation
with another corporation in which the Company will not be the surviving
corporation, then, at least ten days prior to the effective date of such event,
the Company shall give each Grantee with any outstanding Grants written notice
of such event. Each such Grantee shall
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thereupon have the right to exercise in full any installments of such Grants not
previously exercised (whether or not the right to exercise such installments has
accrued pursuant to such Grants), within ten days after such written notice is
sent by the Company. Any installments of such Grants not so exercised shall
thereafter lapse and be of no further force or effect.
(b) Merger or Consolidation Where the Company Survives. If the Company
is a party to a merger or consolidation in which the Company will be the
surviving corporation, then the Committee may, in its sole discretion, elect to
give each Grantee with any outstanding Grants written notice of such event. If
such notice is given, each such Grantee shall thereupon have the right to
exercise in full any installments of such Grants not previously exercised
(whether or not the right to exercise such installments has accrued pursuant to
such Grants), within ten days after such written notice is sent by the Company.
Any installments of such Grants not so exercised shall thereafter lapse and be
of no further force or effect.
11. Shareholder Approval
This Plan is subject to and no options shall be exercisable hereunder
until after approval of this Plan by holders of a majority of the shares of the
stock of the Company present or represented by a proxy in a separate vote at a
duly held meeting of the shareholders of the Company within twelve months after
the date of the adoption of the Plan by the Board. If the Plan is not so
approved by shareholders, the Plan and all Grants hereunder shall terminate and
be of no force or effect.
12. Amendment and Termination of the Plan
(a) Amendment. The Board may amend or terminate the Plan at any time;
provided that the approval of the shareholders of the Company shall be required
in respect of any amendment that (i) materially increases the benefits accruing
to Eligible Participants under the Plan, (ii) increases the aggregate number of
shares of Common Stock that may be issued or transferred under the Plan (other
than by operation of Section 3(b) above), (iii) materially modifies the
requirements as to eligibility for participation in the Plan; or (iv) modifies
the provisions for determining the fair market value of a share of Common Stock.
(b) Termination of Plan. The Plan shall terminate on November 14, 2005
(as set forth in Section 19 below) unless earlier terminated by the Board or
unless extended by the Board with the approval of the shareholders.
(c) Termination and Amendment of Outstanding Grants. A termination or
amendment of the Plan that occurs after a Grant is made shall not result in the
termination or amendment of the Grant unless the Grantee consents or unless the
Committee acts under Section 20(b) below. The termination of the Plan shall not
impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be
terminated or amended under Section 20(b) below or may be amended by agreement
of the Company and the Grantee which is consistent with the Plan.
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13. Funding of the Plan
The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Grants under the Plan. In no event shall
interest be paid or accrued on any Grant, including unpaid installments of
Grants.
14. Rights of Eligible Participants
Nothing in the Plan shall entitle any Eligible Participant or other
person to any claim or right to any Grant under the Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any Eligible Participant
or Grantee any rights to be retained by the Company in any capacity, whether as
an employee, non-employee member of the Board, independent contractor,
consultant or otherwise.
15. Withholding of Taxes
The Company shall have the right to deduct from all Grants paid in cash
any federal, state or local taxes required by law to be withheld with respect to
such Grants paid in cash. In the case of Grants paid in Common Stock, the
Company shall have the right to require the Grantee to pay to the Company the
amount of any taxes which the Company is required to withhold in respect of such
Grants or to take whatever action it deems necessary to protect the interests of
the Company in respect of such tax liabilities, including, without limitation,
withholding a portion of the shares of Common Stock otherwise deliverable
pursuant to the Plan. The Company's obligation to issue or transfer shares of
Common Stock upon the exercise of a Stock Option or SAR or the acceptance of a
Restricted Stock Grant shall be conditioned upon the Grantee's compliance with
the requirements of this section to the satisfaction of the Committee.
16. Agreements with Grantees
Each Grant made under the Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Committee shall approve.
17. Requirements for Issuance of Shares
No Common Stock shall be issued or transferred under the Plan unless
and until all applicable legal requirements have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Stock Option, Restricted Stock Grant or SAR on the Grantee's undertaking in
writing to comply with such restrictions on any subsequent disposition of the
shares of Common Stock issued or transferred thereunder as the Committee shall
deem necessary or advisable as a result of any applicable law, regulation or
official interpretation thereof, and certificates representing such shares may
be legended to reflect any such restrictions.
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18. Headings
The section headings of the Plan are for reference only. In the event
of a conflict between a section heading and the content of a section of the
Plan, the content of the section shall control.
19. Effective Date of the Plan
The Plan shall be effective as of November 14, 1995, subject to the
approval of the Company's shareholders within 12 months after such effective
date.
20. Miscellaneous
(a) Substitute Grants. The Committee may make a Grant to an employee, a
non- employee director, or an independent contractor or consultant of another
corporation, if such person shall become an Eligible Participant by reason of a
corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or a Subsidiary Corporation
and such other corporation. Any such Grant shall be made in substitution for a
stock option or restricted stock grant granted by the other corporation
("Substituted Stock Incentives"), but the terms and conditions of the substitute
Grant may vary from the terms and conditions required by the Plan and from those
of the Substituted Stock Incentives. The Committee shall prescribe the
provisions of the substitute Grants.
(b) Compliance with Law. The Plan, the exercise of Grants and the
obligations of the Company to issue or transfer shares of Common Stock under
Grants shall be subject to all applicable laws and required approvals by any
governmental or regulatory agencies. The Committee (or, in the case of Committee
Grants, the Board) may revoke any Grant if it is contrary to law or modify any
Grant to bring it into compliance with any valid and mandatory government
regulations. The Committee may also adopt rules regarding the withholding of
taxes on payments to Grantees. The Committee may, in its sole discretion, agree
to limit its authority under this section.
(c) Ownership of Stock. A Grantee or Successor Grantee shall have no
rights as a shareholder with respect to any shares of Common Stock covered by a
Grant until the shares are issued or transferred to the Grantee or Successor
Grantee on the stock transfer records of the Company.
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