EXHIBIT 10.1
MANSUR INDUSTRIES INC.
1996 EXECUTIVE INCENTIVE COMPENSATION PLAN
1. PURPOSE. The purpose of this 1996 Executive Incentive
Compensation Plan (the "Plan") is to assist Mansur Industries Inc. (the
"Company") and its subsidiaries in attracting, motivating, retaining and
rewarding high-quality executives and other employees, officers, directors and
independent contractors enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the mutuality of
interests between such persons and the Company's stockholders, and providing
such persons with annual and long term performance incentives to expend their
maximum efforts in the creation of shareholder value. The Plan is also intended
to qualify certain compensation awarded under the Plan for tax deductibility
under Section 162(m) of the Code (as hereafter defined) to the extent deemed
appropriate by the Committee (or any successor committee) of the Board of
Directors of the Company.
2. DEFINITIONS. For purposes of the Plan, the following terms
shall be defined as set forth below, in addition to such terms defined in
Section 1 hereof.
(a) "Annual Incentive Award" means a conditional right granted
to a Participant under Section 8(c) hereof to receive a cash payment,
Stock or other Award, unless otherwise determined by the Committee,
after the end of a specified fiscal year.
(b) "Award" means any Option, SAR (including Limited SAR),
Restricted Stock Deferred Stock, Stock granted as a bonus or in lieu of
another award, Dividend Equivalent, Other Stock-Based Award,
Performance Award or Annual Incentive Award, together with any other
right or interest granted to a Participant under the Plan.
(c) "Beneficiary" means the person, persons, trust or trusts
which have been designated by a Participant in his or her most recent
written beneficiary designation filed with the Committee to receive the
benefits specified under the Plan upon such Participant's death or to
which Awards or other rights are transferred if and to the extent
permitted under Section 10(b) hereof. If, upon a Participant's death,
there is no designated Beneficiary or surviving designated Beneficiary,
then the term Beneficiary means person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive
such benefits.
(d) "Beneficial Owner", "Beneficially Owning" and "Beneficial
Ownership" shall have the meanings ascribed to such terms in Rule 13d-3
under the Exchange Act and any successor to such Rule.
(e) "Board" means the Company's Board of Directors.
(f) "Change in Control" means Change in Control as defined
with related terms in Section 9 of the Plan.
(g) "Change in Control Price" means the amount calculated in
accordance with Section 9(c) of the Plan.
(h) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, including regulations thereunder and successor
provisions and regulations thereto.
(i) "Committee" means a committee designated by the Board to
administer the Plan; provided, however, that the Committee shall
consist solely of at least two directors, each of whom shall be (i) a
"disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act, unless administration of the Plan by "disinterested
persons" is not then required in order for exemptions under Rule 16b-3
to apply to transactions under the Plan, and (ii) an "outside director"
as defined under Section
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162(m) of the Code, unless administration of the Plan by "outside
directors" is not then required in order to qualify for tax
deductibility under Section 162(m) of the Code.
(j) "Corporate Transaction" means a transaction as defined in
Section 9(b) of the Plan.
(k) "Covered Employee" means an Eligible Person who is a
Covered Employee as specified in Section 8(e) of the Plan.
(l) "Deferred Stock" means a right, granted to a Participant
under Section 6(e) hereof, to receive Stock, cash or a combination
thereof at the end of a specified deferral period.
(m) "Director" means a member of the Board.
(n) "Disability" means a permanent and total disability
(within the meaning of Section 22(e) of the Code), as determined by a
medical doctor satisfactory to the Committee.
(o) "Dividend Equivalent" means a right, granted to a
Participant under Section 6(g) hereof, to receive cash, Stock, other
Awards or other property equal in value to dividends paid with respect
to a specified number of shares of Stock, or other periodic payments.
(p) "Effective Date" means the effective date of the Plan,
which shall be the date the Company consummates a registered initial
public offering of its Stock.
(q) "Eligible Person" means each executive officer of the
Company (as defined under the Exchange Act) and other officers,
Directors and employees of the Company or of any subsidiary, and
independent contractors with the Company or any subsidiary. The
foregoing notwithstanding, no Non- Employee Director shall be an
Eligible Person for purposes of receiving any Awards under this Plan
other than Formula Grants of Options granted under Section 6(b)(iv) of
the Plan and Formula Grants of Restricted Stock granted under Section
6(d)(v) of the Plan, and no independent contractor shall be an Eligible
Person for purposes of receiving any Awards other than Options under
Section 6(b) of the Plan. An employee on leave of absence may be
considered as still in the employ of the Company or a subsidiary for
purposes of eligibility for participation in the Plan.
(r) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(s) "Executive Officer" means an executive officer of the
Company as defined under the Exchange Act.
(t) "Fair Market Value" means the fair market value of Stock,
Awards or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by
the Committee, the Fair Market Value of Stock on any business day shall
be (i) if the Stock is listed or admitted for trading on any United
States national securities exchange, or if actual transactions are
otherwise reported on a consolidated transaction reporting system, the
last reported sale price of the Stock on such exchange or reporting
system, as reported in any newspaper of general circulation, (ii) if
the Stock is quoted on the National Association of Securities Dealers
Automated Quotations System, or any similar system of automated
dissemination of quotations of securities prices in common use, the
mean between the closing high bid and low asked quotations for such day
of the Stock on such system, or (iii) if neither clause (i) or (ii) is
applicable, the mean between the high bid and low quotations for the
Stock as reported by the National Quotation Bureau, Incorporated if at
least two securities dealers have inserted both bid and asked questions
for the Stock on at least 5 of the 10 preceding days.
(u) "Formula Grants" means the Formula Grant Options and
Formula Grant Restricted Stock granted to Non-Employee Directors
pursuant to Sections 6(b)(iv) and 6(d)(v) of the Plan.
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(v) "Incentive Stock Option" or "ISO" means any Option
intended to be designated as an incentive stock option within the
meaning of Section 422 of the Code or any successor provision thereto.
(w) "Incumbent Board" means the Board as defined in
Section 9(b) of the Plan.
(x) "Limited SAR" means a right granted to a Participant
under Section 6(c) hereof.
(y) "Non-Employee Director" shall mean a member of the
Board who is not an employee of the Company or any subsidiary.
(z) "Option" means a right granted to a Participant under
Section 6(b) hereof, to purchase Stock or other Awards at a specified
price during specified time periods.
(aa) "Other Stock-Based Awards" means Awards granted to a
Participant under Section 6(h) hereof.
(ab) "Participant" means a person who has been granted an
Award under the Plan which remains outstanding, including a person who
is no longer an Eligible Person.
(ac) "Performance Award" means a right, granted to a Eligible
Person under Section 8 hereof, to receive Awards based upon performance
criteria specified by the Committee.
(ad) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, and shall include a "group" as defined in Section 13(d)
thereof
(ae) (intentionally omitted)
(af) "Restricted Stock" means Stock granted to a Participant
under Section 6(d) hereof, that is subject to certain restrictions and
to a risk of forfeiture.
(ag) "Retire" or "Retirement" means termination of service as
a Director after having attained at least age 62 and having served as a
Director for at least 5 years, other than by reason of death,
Disability or the Director's wilful misconduct or negligence.
(ah) "Rule 16b-3" and "Rule 16a-1(c)(3)" means Rule 16b-3 and
Rule 16a-l(c)(3), as from time to time in effect and applicable to the
Plan and Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.
(ai) "Stock" means the Company's Common Stock, and such other
securities as may be substituted (or resubstituted) for Stock pursuant
to Section 10(c) hereof.
(aj) "Stock Appreciation Rights" or "SAR" means a right
granted to a Participant under Section 6(c) hereof.
3. ADMINISTRATION.
(a) AUTHORITY OF THE COMMITTEE. The Plan shall be administered
by the Committee. The Committee shall have full and final authority, in
each case subject to and consistent with the provisions of the Plan, to
select Eligible Persons to become Participants, grant Awards, determine
the type, number and other terms and conditions of, and all other
matters relating to, Awards, prescribe Award agreements (which need not
be identical for each Participant) and rules and regulations for the
administration of the Plan, construe and interpret the Plan and Award
agreements and correct defects, supply omissions or reconcile
inconsistencies therein, and to make all other decisions and
determinations as the Committee may
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deem necessary or advisable for the administration of the Plan.
(b) MANNER OF EXERCISE OF COMMITTEE AUTHORITY. The Committee
shall exercise sole and exclusive discretion on any matter relating to
a Participant then subject to Section 16 of the Exchange Act with
respect to the Company to the extent necessary in order that
transactions by such Participant shall be exempt under Rule 16b-3 under
the Exchange Act. Any action of the Committee shall be final,
conclusive and binding on all persons, including the Company, its
subsidiaries, Participants, Beneficiaries, transferees under Section
10(b) hereof or other persons claiming rights from or through a
Participant, and stockholders. The express grant of any specific power
to the Committee, and the taking of any action by the Committee, shall
not be construed as limiting any power or authority of the Committee.
The Committee may delegate to officers or managers of the Company or
any subsidiary, or committees thereof, the authority, subject to such
terms as the Committee shall determine, (i) to perform administrative
functions, (ii) with respect to Participants not subject to Section 16
of the Exchange Act, to perform such other functions as the Committee
may determine, and (iii) with respect to Participants subject to
Section 16, to perform such other functions of the Committee as the
Committee may determine to the extent performance of such functions
will not result in the loss of an exemption under Rule 16b-3 otherwise
available for transactions by such persons, in each case to the extent
permitted under applicable law and subject to the requirements set
forth in Section 8(d). The Committee may appoint agents to assist it in
administering the Plan.
(c) LIMITATION OF LIABILITY. The Committee and each member
thereof shall be entitled to, in good faith, rely or act upon any
report or other information furnished to him or her by any executive
officer, other officer or employee of the Company or a subsidiary, the
Company's independent auditors, consultants or any other agents
assisting in the administration of the Plan. Members of the Committee
and any officer or employee of the Company or a subsidiary acting at
the direction or on behalf of the Committee shall not be personally
liable for any action or determination taken or made in good faith with
respect to the Plan, and shall, to the extent permitted by law, be
fully indemnified and protected by the Company with respect to any such
action or determination.
4. STOCK SUBJECT TO PLAN.
(a) OVERALL NUMBER OF SHARES SUBJECT TO AWARDS. Subject to
adjustment as provided in Section 10(c) hereof, the total number of
shares of Stock that may be subject to the granting of Awards under the
Plan at any point in time during the term of the Plan shall be 375,000.
(b) APPLICATION OF LIMITATIONS. The limitation contained in
Section 4(a) shall apply not only to Awards that are settleable by the
delivery of shares of stock but also to Awards relating to shares of
Stock but settleable only in cash (such as cash-only SARs). The
Committee may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in the
case of tandem or substitute awards) and make adjustments if the number
of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award.
5. ELIGIBILITY; PER-PERSON AWARD LIMITATIONS. Awards may be granted
under the Plan only to Eligible Persons. In each fiscal year during any part of
which the Plan is in effect, an Eligible Person may not be granted Awards
relating to more than 250,000 shares of Stock, subject to adjustment as provided
in Section 10(c), under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g),
6(h), 8(b) and 8(c). In addition, the maximum amount that may be earned as a
final Annual Incentive Award or other cash Award in any fiscal year by any one
Participant shall be $1,000,000, and the maximum amount that may be earned as a
final Performance Award or other cash Award in respect of a performance period
by any one Participant shall be $5,000,000.
6. SPECIFIC TERMS OF AWARDS.
(a) GENERAL. Awards may be granted on the terms and conditions
set forth in this Section 6. In addition, the Committee may impose on
any Award or the exercise thereof, at the date of grant or
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thereafter (subject to Section 10(e) ), such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the
Committee shall determine, including terms requiring forfeiture of
Awards in the event of termination of employment by the Participant and
terms permitting a Participant to make Sections relating to his or her
Award. The Committee shall retain full power and discretion to
accelerate, waive or modify, at any time, any term or condition of an
Award that is not mandatory under the Plan. Except in cases in which
the Committee is authorized to require other forms of consideration
under the Plan, or to the extent other forms of consideration must be
paid to satisfy the requirements of Florida law, no consideration other
than services may be required for the grant (but not the exercise) of
any Award.
(b) Options. The Committee is authorized to grant Options
to Participants on the following terms and conditions
(i) EXERCISE PRICE. The exercise price per share of
Stock purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall not be less
than the Fair Market Value of a share of Stock on the date of
grant of such Option except as provided under Section 7(a)
hereof.
(ii) TIME AND METHOD OF EXERCISE. The Committee shall
determine the time or times at which or the circumstances
under which an Option may be exercised in whole or in part
(including based on achievement of performance goals and/or
future service requirements), the time or times at which
Options shall cease to be or become exercisable following
termination of employment or upon other conditions, the
methods by which such exercise price may be paid or deemed to
be paid, the form of such payment, including, without
limitation, cash, Stock, other Awards or awards granted under
other plans of the Company or any subsidiary, or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis), and the
methods by or forms in which Stock will be delivered or deemed
to be delivered to Participants.
(iii) ISOS. The terms of any ISO granted under the
Plan shall comply in all respects with the provisions of
Section 422 of the Code. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to ISOs
(including any SAR in tandem therewith) shall be interpreted,
amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify
either the Plan or any ISO under Section 422 of the Code,
unless the Participant has first requested the change that
will result in such disqualification.
(iv) FORMULA GRANTS OF OPTIONS TO NON-EMPLOYEE
DIRECTORS. Subject to adjustment as provided in the first
sentence of Section 10(c) hereof, each Non-Employee Director
shall receive (A) on the date of his or her appointment as a
Director of the Company, an Option to purchase 2,500 shares of
Stock, and (B) each year, on the day the Company issues its
earnings release for the prior fiscal year, an Option to
purchase 2,500 shares of Stock. Options granted to
Non-Employee Directors pursuant to this Section shall be for a
term of 10 years and shall become exercisable at the rate of
33-1/3% per year commencing on the first anniversary of the
date on which the Option is granted; provided, however, that
the Options shall be fully exercisable in the event that,
while serving as a Director, the NonEmployee Director dies,
suffers a Disability, or Retires. The per share exercise price
of all Options granted to Non-Employee Directors pursuant to
this paragraph (iv) shall be equal to the Fair Market Value of
a share of Stock on the date such Option is granted. Unless
otherwise extended in the sole discretion of the Committee,
the unexercised portion of any Option granted pursuant to this
paragraph (iv) shall become null and void (V) three months
after the date on which such Non-Employee Director ceases to
be a Director of the Company for any reason other than the
Non-Employee Director's wilful misconduct or negligence,
Disability, death or Retirement, (W) immediately in the event
of the Non-Employee Director's wilful misconduct or
negligence, (X) one year after the Non-Employee Director
ceases to be a Director by reason of his Disability, (Y) at
the expiration of its original term, if the Non-Employee
Director ceases to be a Director by reason of his Retirement,
and (Z)
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twelve months after the date of the Non-Employee Director's
death in the event that such death occurs prior to the time
the Option otherwise would become null and void pursuant to
this sentence.
(c) STOCK APPRECIATION RIGHTS. The Committee is authorized
to grant SAR's to Participants on the following terms and conditions:
(i) RIGHT TO PAYMENT. A SAR shall confer on the
Participant to whom it is granted a right to receive, upon
exercise thereof, the excess of (A) the Fair Market Value of
one share of stock on the date of exercise (or, in the case of
a "Limited SAR", the Fair Market Value determined by reference
to the Change in Control Price, as defined under Section 9(c)
hereof), over (B) the grant price of the SAR as determined by
the Committee. The grant price of an SAR shall not be less
than the Fair Market Value of a share of Stock on the date of
grant except as provided under Section 7(a) hereof.
(ii) OTHER TERMS. The Committee shall determine at
the date of grant or thereafter, the time or times at which
and the circumstances under which a SAR may be exercised in
whole or in part (including based on achievement of
performance goals and/or future service requirements), the
time or times at which SARs shall cease to be or become
exercisable following termination of employment or upon other
conditions, the method of exercise, method of settlement, form
of consideration payable in settlement, method by or forms in
which Stock will be delivered or deemed to be delivered to
Participants, whether or not a SAR shall be in tandem or in
combination with any other Award, and any other terms and
conditions of any SAR. Limited SARs that may only be exercised
in connection with a Change in Control or other event as
specified by the Committee may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee may
determine. SARs and Limited SARs may be either freestanding or
in tandem with other Awards.
(d) RESTRICTED STOCK. The Committee is authorized to
grant Restricted Stock to Participants on the following terms and
conditions:
(i) GRANT AND RESTRICTIONS. Restricted Stock shall be
subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee
may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances (including
based on achievement of performance goals and/or future
service requirements), in such installments or otherwise, as
the Committee may determine at the date of grant or
thereafter. In no event shall the restricted period be less
than three years unless the Restricted Stock is subject to
performance conditions in accordance with Section 8 of this
Plan, in which case the restricted period shall not be less
than one year. Except to the extent restricted under the terms
of the Plan and any Award agreement relating to the Restricted
Stock, a Participant granted Restricted Stock shall have all
of the rights of a stockholder, including the right to vote
the Restricted Stock and the right to receive dividends
thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee). During the restricted
period applicable to the Restricted Stock, subject to Section
10(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined or otherwise
encumbered by the Participant.
(ii) FORFEITURE. Except as otherwise determined by
the Committee at the time of the Award, upon termination of a
Participant's employment during the applicable restriction
period, the Participant's Restricted Stock that is at that
time subject to restrictions shall be forfeited and reacquired
by the Company; provided that the Committee may provide, by
rule or regulation or in any Award agreement, or may determine
in any individual case, that restrictions or forfeiture
conditions relating to Restricted Stock shall be waived in
whole or in part in the event of terminations resulting from
specified causes.
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(ii) CERTIFICATES FOR STOCK. Restricted Stock granted
under the Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing
Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates
bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock, that the
Company retain physical possession of the certificates, and
that the Participant deliver a stock power to the Company,
endorsed in blank, relating to the Restricted Stock.
(iv) DIVIDENDS AND SPLITS. As a condition to the
grant of an Award of Restricted Stock, the Committee may
require that any cash dividends paid on a share of Restricted
Stock be automatically reinvested in additional shares of
Restricted Stock or applied to the purchase of additional
Awards under the Plan. Unless otherwise determined by the
Committee, Stock distributed in connection with a Stock split
or Stock dividend, and other property distributed as a
dividend, shall be subject to restrictions and a risk of
forfeiture to the same extent as the Restricted Stock with
respect to which such Stock or other property has been
distributed.
(v) FORMULA GRANTS OF RESTRICTED STOCK TO
NON-EMPLOYEE DIRECTORS. (intentionally omitted)
(e) DEFERRED STOCK. The Committee is authorized to grant
Deferred Stock to Participants, which are rights to receive
Stock, cash, or a combination thereof at the end of a
specified deferral period, subject to the following terms and
conditions:
(i) AWARD AND RESTRICTIONS. Satisfaction of an Award
of Deferred Stock shall occur upon expiration of the deferral
period specified for such Deferred Stock by the Committee (or,
if permitted by the Committee, as elected by the Participant).
In addition, Deferred Stock shall be subject to such
restrictions (which may include a risk of forfeiture) as the
Committee may impose, if any, which restrictions may lapse at
the expiration of the deferral period or at earlier specified
times (including based on achievement of performance goals
and/or future service requirements), separately or in
combination, in installments or otherwise, as the Committee
may determine. In no event shall an Award of Deferred Stock
payable in Stock have a deferral period of less than three
years unless the Award is subject to performance conditions in
accordance with Section 8 of the Plan, in which case the
deferral period shall be for not less than one year. Deferred
Stock may be satisfied by delivery of Stock, cash equal to the
Fair Market Value of the specified number of shares of Stock
covered by the Deferred Stock, or a combination thereof, as
determined by the Committee at the date of grant or
thereafter. Prior to satisfaction of an Award of Deferred
Stock, an Award of Deferred Stock carries no voting or
dividend or other rights associated with share ownership.
(ii) FORFEITURE. Except as otherwise determined by
the Committee, upon termination of a Participant's employment
during the applicable deferral period thereof to which
forfeiture conditions apply (as provided in the Award
agreement evidencing the Deferred Stock), the Participant's
Deferred Stock that is at that time subject to deferral (other
than a deferral at the election of the Participant) shall be
forfeited; provided that the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any
individual case, that restrictions or forfeiture conditions
relating to Deferred Stock shall be waived in whole or in part
in the event of terminations resulting from specified causes,
and the Committee may in other cases waive in whole or in part
the forfeiture of Deferred Stock.
(iii) DIVIDEND EQUIVALENTS. Unless otherwise
determined by the Committee at date of grant, Dividend
Equivalents on the specified number of shares of Stock covered
by an Award of Deferred Stock shall be either (A) paid with
respect to such Deferred Stock at the dividend payment date in
cash or in shares of unrestricted Stock having a Fair Market
Value equal to the amount of such dividends, or (B) deferred
with respect to such Deferred Stock and the amount
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or value thereof automatically deemed reinvested in additional
Deferred Stock, other Awards or other investment vehicles, as
the Committee shall determine or permit the Participant to
elect.
(f) BONUS STOCK AND AWARDS IN LIEU OF OBLIGATIONS. The
Committee is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of Company obligations to pay cash or deliver
other property under the Plan or under other plans or compensatory
arrangements, provided that, in the case of Participants subject to
Section 16 of the Exchange Act, the amount of such grants remains
within the discretion of the Committee to the extent necessary to
ensure that acquisitions of Stock or other Awards are exempt from
liability under Section 16(b) of the Exchange Act. Stock or Awards
granted hereunder shall be subject to such other terms as shall be
determined by the Committee.
(g) DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to a Participant entitling the Participant to
receive cash, Stock, other Awards, or other property equal in value to
dividends paid with respect to a specified number of shares of Stock,
or other periodic payments. Dividend Equivalents may be awarded on a
free-standing basis or in connection with another Award. The Committee
may provide that Dividend Equivalents shall be paid or distributed when
accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to such restrictions
on transferability and risks of forfeiture, as the Committee may
specify.
(h) OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants
such other Awards that may be denominated or payable in, valued in
whole or in part by reference to, or otherwise based on, or related to,
Stock, as deemed by the Committee to be consistent with the purposes of
the Plan, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock,
purchase rights for Stock, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the book value of Stock or
the value of securities of or the performance of specified subsidiaries
or business units. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in the
nature of a purchase right granted under this Section 6(h) shall be
purchased for such consideration, paid for at such times, by such
methods, and in such forms, including, without limitation, cash, Stock,
other Awards or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under the
Plan, may also be granted pursuant to this Section 6(h).
7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
(a) STAND-ALONE, ADDITIONAL, TANDEM, AND SUBSTITUTE AWARDS.
Awards granted under the Plan may, in the discretion of the Committee,
be granted either alone or in addition to, in tandem with, or in
substitution or exchange for, any other Award or any award granted
under another plan of the Company, any subsidiary, or any business
entity to be acquired by the Company or a subsidiary, or any other
right of a Participant to receive payment from the Company or any
subsidiary. Such additional, tandem, and substitute or exchange Awards
may be granted at any time. If an Award is granted in substitution or
exchange for another Award or award, the Committee shall require the
surrender of such other Award or award in consideration for the grant
of the new Award. In addition, Awards may be granted in lieu of cash
compensation, including in lieu of cash amounts payable under other
plans of the Company or any subsidiary, in which the value of Stock
subject to the Award is equivalent in value to the cash compensation
(for example, Deferred Stock or Restricted Stock), or in which the
exercise price, grant price or purchase price of the Award in the
nature of a right that may be exercised is equal to the Fair Market
Value of the underlying Stock minus the value of the cash compensation
surrendered (for example, Options granted with an exercise price
"discounted" by the amount of the cash compensation surrendered).
(b) TERM OF AWARDS. The term of each Award shall be for such
period as may be determined by the Committee; provided that in no event
shall the term of any Option or SAR exceed a period of ten years (or
such shorter term as may be required in respect of an ISO under Section
422 of the Code).
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(c) FORM AND TIMING OF PAVEMENT UNDER AWARDS; DEFERRALS.
Subject to the terms of the Plan and any applicable Award agreement,
payments to be made by the Company or a subsidiary upon the exercise of
an Option or other Award or settlement of an Award may be made in such
forms as the Committee shall determine, including, without limitation,
cash, Stock, other Awards or other property, and may be made in a
single payment or transfer, in installments, or on a deferred basis.
The settlement of any Award may be accelerated, and cash paid in lieu
of Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events (in
addition to a Change in Control). Installment or deferred payments may
be required by the Committee (subject to Section 10(e) of the Plan) or
permitted at the election of the Participant on terms and conditions
established by the Committee. Payments may include, without limitation,
provisions for the payment or crediting of a reasonable interest rate
on installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or
deferred payments denominated in Stock.
(d) EXEMPTIONS FROM SECTION 16(B) LIABILITY. It is the intent
of the Company that this Plan comply in all respects with applicable
provisions of Rule 16b-3 or Rule 16a-l(c)(3) to the extent necessary to
ensure that neither the grant of any Awards to nor other transaction by
a Participant who is subject to Section 16 of the Exchange Act is
subject to liability under Section 16(b) thereof (except for
transactions acknowledged in writing to be non-exempt by such
Participant). Accordingly, if any provision of this Plan or any Award
agreement does not comply with the requirements of Rule 16b-3 or Rule
16a-l(c)(3) as then applicable to any such transaction, such provision
will be construed or deemed amended to the extent necessary to conform
to the applicable requirements of Rule 16b-3 or Rule 16a-l(c)(3) so
that such Participant shall avoid liability under Section 16(b). In
addition, the purchase price of any Award conferring a right to
purchase Stock shall be not less than any specified percentage of the
Fair Market Value of Stock at the date of grant of the Award then
required in order to comply with Rule 16b-3.
8. PERFORMANCE AND ANNUAL INCENTIVE AWARDS.
(a) PERFORMANCE CONDITIONS. The right of a Participant to
exercise or receive a grant or settlement of any Award, and the timing
thereof, may be subject to such performance conditions as may be
specified by the Committee. The Committee may use such business
criteria and other measures of performance as it may deem appropriate
in establishing any performance conditions, and may exercise its
discretion to reduce the amounts payable under any Award subject to
performance conditions, except as limited under Sections 8(b) and 8(c)
hereof in the case of a Performance Award or Annual Incentive Award
intended to qualify under Code Section 162(m).
(b) PERFORMANCE AWARDS GRANTED TO DESIGNATED COVERED
EMPLOYEES. If and to the extent that the Committee determines that a
Performance Award to be granted to an Eligible Person who is designated
by the Committee as likely to be a Covered Employee should qualify as
"performance-based compensation" for purposes of Code Section 162(m),
the grant, exercise and/or settlement of such Performance Award shall
be contingent upon achievement of preestablished performance goals and
other terms set forth in this Section 8(b).
(i) PERFORMANCE GOALS GENERALLY. The performance
goals for such Performance Awards shall consist of one or more
business criteria and a targeted level or levels of
performance with respect to each of such criteria, as
specified by the Committee consistent with this Section 8(b).
Performance goals shall be objective and shall otherwise meet
the requirements of Code Section 162(m) and regulations
thereunder including the requirement that the level or levels
of performance targeted by the Committee result in the
achievement of performance goals being "substantially
uncertain." The Committee may determine that such Performance
Awards shall be granted, exercised and/or settled upon
achievement of any one performance goal or that two or more of
the performance goals must be achieved as a condition to
grant, exercise and/or settlement of such Performance Awards.
Performance goals may differ for Performance Awards granted to
any one Participant or to different Participants.
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(ii) BUSINESS CRITERIA. One or more of the following
business criteria for the Company, on a consolidated basis,
and/or specified subsidiaries or business units of the Company
(except with respect to the total stockholder return and
earnings per share criteria), shall be used exclusively by the
Committee in establishing performance goals for such
Performance Awards: (1) total stockholder return; (2) such
total stockholder return as compared to total return (on a
comparable basis) of a publicly available index such as, but
not limited to, the Standard & Poor's 500 Stock Index or the
S&P Specialty Retailer Index; (3) net income; (4) pretax
earnings; (5) earnings before interest expense, taxes,
depreciation and amortization; (6) pretax operating earnings
after interest expense and before bonuses, service fees, and
extraordinary or special items; (7) operating margin; (8)
earnings per share; (9) growth in earnings per share; (10)
return on equity; (11) return on capital; (12) return on
investment; (13) operating earnings; (14) working capital or
inventory; and (15) ratio of debt to stockholders' equity. One
or more of the foregoing business criteria shall also be
exclusively used in establishing performance goals for Annual
Incentive Awards granted to a Covered Employee under Section
8(c) hereof.
(iii) PERFORMANCE PERIOD; TIMING FOR ESTABLISHING
PERFORMANCE GOALS. Achievement of performance goals in respect
of such Performance Awards shall be measured over a
performance period of up to ten years, as specified by the
Committee. Performance goals shall be established not later
than 90 days after the beginning of any performance period
applicable to such Performance Awards, or at such other date
as may be required or permitted for "performance-based
compensation" under Code Section 162(m).
(iv) PERFORMANCE AWARD POOL. The Committee may
establish a Performance Award pool, which shall be an unfunded
pool, for purposes of measuring Company performance in
connection with Performance Awards. The amount of such
Performance Award pool shall be based upon the achievement of
a performance goal or goals based on one or more of the
business criteria set forth in Section 8(b)(ii) hereof during
the given performance period, as specified by the Committee in
accordance with Section 8(b)(iii) hereof. The Committee may
specify the amount of the Performance Award pool as a
percentage of any of such business criteria, a percentage
thereof in excess of a threshold amount, or as another amount
which need not bear a strictly mathematical relationship to
such business criteria.
(v) SETTLEMENT OF PERFORMANCE AWARDS; OTHER TERMS.
Settlement of such Performance Awards shall be in cash, Stock,
other Awards or other property, in the discretion of the
Committee. The Committee may, in its discretion, reduce the
amount of a settlement otherwise to be made in connection with
such Performance Awards. The Committee shall specify the
circumstances in which such Performance Awards shall be paid
or forfeited in the event of termination of employment by the
Participant prior to the end of a performance period or
settlement of Performance Awards.
(c) ANNUAL INCENTIVE AWARDS GRANTED TO DESIGNATED COVERED
EMPLOYEES. If and to the extent that the Committee determines that an
Annual Incentive Award to be granted to an Eligible Person who is
designated by the Committee as likely to be a Covered Employee should
qualify as "performance-based compensation" for purposes of Code
Section 162(m), the grant, exercise and/or settlement of such Annual
Incentive Award shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 8(c).
(i) ANNUAL INCENTIVE AWARD POOL. The Committee may
establish an Annual Incentive Award pool, which shall be an
unfunded pool, for purposes of measuring Company performance
in connection with Annual Incentive Awards. The amount of such
Annual Incentive Award pool shall be based upon the
achievement of a performance goal or goals based on one or
more of the business criteria set forth in Section 8(b)(ii)
hereof during the given performance period, as specified by
the Committee in accordance with Section 8(b)(iii) hereof. The
Committee may specify the amount of the Annual Incentive Award
pool as a percentage of any such business
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criteria, a percentage thereof in excess of a threshold
amount, or as another amount which need not bear a strictly
mathematical relationship to such business criteria.
(ii) POTENTIAL ANNUAL INCENTIVE AWARDS. Not later
than the end of the 90th day of each fiscal year, or at such
other date as may be required or permitted in the case of
Awards intended to be "performance-based compensation" under
Code Section 162(m), the Committee shall determine the
Eligible Persons who will potentially receive Annual Incentive
Awards, and the amounts potentially payable thereunder, for
that fiscal year, either out of an Annual Incentive Award pool
established by such date under Section 8(c)(i) hereof or as
individual Annual Incentive Awards. In the case of individual
Annual Incentive Awards intended to qualify under Code Section
162(m), the amount potentially payable shall be based upon the
achievement of a performance goal or goals based on one or
more of the business criteria set forth in Section 8(b)(ii)
hereof in the given performance year, as specified by the
Committee; in other cases, such amount shall be based on such
criteria as shall be established by the Committee. In all
cases, the maximum Annual Incentive Award of any Participant
shall be subject to the limitation set forth in Section 5
hereof.
(iii) PAYOUT OF ANNUAL INCENTIVE AWARDS. After the
end of each fiscal year, the Committee shall determine the
amount, if any, of (A) the Annual Incentive Award pool, and
the maximum amount of potential Annual Incentive Award payable
to each Participant in the Annual Incentive Award pool, or (B)
the amount of potential Annual Incentive Award otherwise
payable to each Participant. The Committee may, in its
discretion, determine that the amount payable to any
Participant as a final Annual Incentive Award shall be reduced
from the amount of his or her potential Annual Incentive
Award, including a determination to make no final Award
whatsoever. The Committee shall specify the circumstances in
which an Annual Incentive Award shall be paid or forfeited in
the event of termination of employment by the Participant
prior to the end of a fiscal year or settlement of such Annual
Incentive Award.
(d) WRITTEN DETERMINATIONS. All determinations by the
Committee as to the establishment of performance goals, the amount of
any Performance Award pool or potential individual Performance Awards
and as to the achievement of performance goals relating to Performance
Awards under Section 8(b), and the amount of any Annual Incentive Award
pool or potential individual Annual Incentive Awards and the amount of
final Annual Incentive Awards under Section 8(c), shall be made in
writing in the case of any Award intended to qualify under Code Section
162(m). The Committee may not delegate any responsibility relating to
such Performance Awards or Annual Incentive Awards.
(e) STATUS OF SECTION 8(B) AND SECTION 8(C) AWARDS UNDER CODE
SECTION 162(M). It is the intent of the Company that Performance Awards
and Annual Incentive Awards under Section 8(b) and 8(c) hereof granted
to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Code Section 162(m) and regulations
thereunder shall, if so designated by the Committee, constitute
"qualified performance-based compensation" within the meaning of Code
Section 162(m) and regulations thereunder. Accordingly, the terms of
Sections 8(b), (c), (d) and (e), including the definitions of Covered
Employee and other terms used therein, shall be interpreted in a manner
consistent with Code Section 162(m) and regulations thereunder. The
foregoing notwithstanding, because the Committee cannot determine with
certainty whether a given Participant will be a Covered Employee with
respect to a fiscal year that has not yet been completed, the term
Covered Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards or an Annual
Incentive Award, as likely to be a Covered Employee with respect to
that fiscal year. If any provision of the Plan or any agreement
relating to such Performance Awards or Annual Incentive Awards does not
comply or is inconsistent with the requirements of Code Section 162(m)
or regulations thereunder, such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements.
9. CHANGE IN CONTROL
(a) EFFECT OF "CHANGE IN CONTROL." In the event of a "Change
in Control," as defined in
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Section 9(b), the following provisions shall apply:
(i) Any Award carrying a right to exercise that was
not previously exercisable and vested shall become fully
exercisable and vested as of the time of the Change in Control
and shall remain exercisable and vested for the balance of the
stated term of such Award without regard to any termination of
employment by the Participant, subject only to applicable
restrictions set forth in Section 10(a) hereof;
(ii) Any optionee who holds an Option shall be
entitled to elect, during the 60-day period immediately
following a Change in Control, in lieu of acquiring the shares
of Stock covered by such Option, to receive, and the Company
shall be obligated to pay, in cash the excess of the Change in
Control Price over the exercise price of such Option,
multiplied by the number of shares of Stock covered by such
Option; provided, however, that no optionee who is subject to
Section 16 with respect to the Company at the time of the
Change in Control shall be entitled to make such an election
if the acquisition of the right to make such election would
represent a non-exempt purchase under Section 16(b) by such
optionee;
(iii) Limited SARs (and other SARs if so provided by
their terms) shall become exercisable for amounts, in cash,
determined by reference to the Change in Control Price.
(iv) The restrictions, deferral of settlement, and
forfeiture conditions applicable to any other Award granted
under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control, except
to the extent of any waiver by the Participant and subject to
applicable restrictions set forth in Section 10(a) hereof; and
(v) With respect to any such outstanding Award
subject to achievement of performance goals and conditions
under the Plan, such performance goals and other conditions
will be deemed to be met if and to the extent so provided by
the Committee in the Award agreement relating to such Award.
(b) DEFINITION OF "CHANGE IN CONTROL" A "Change in
Control" shall be deemed to have occurred upon:
(i) An acquisition by any Person of Beneficial
Ownership of the shares of Common Stock of the Company then
outstanding (the "Company Common Stock Outstanding") or the
voting securities of the Company then outstanding entitled to
vote generally in the election of directors (the "Company
Voting Securities Outstanding") if such acquisition of
Beneficial Ownership results in the Person's Beneficially
Owning 25% or more of the Company Common Stock outstanding or
25% or more of the combined voting power of the Company Voting
Securities Outstanding; or
(ii) The approval by the stockholders of the Company
of a reorganization, merger, consolidation, complete
liquidation or dissolution of the Company, sale or disposition
of all or substantially all of the assets of the Company, or
similar corporate transaction (in each case referred to in
this Section 9(b) as a "Corporate Transaction") or, if
consummation of such Corporate Transaction is subject, at the
time of such approval by stockholders, to the consent of any
government or governmental agency, the obtaining of such
consent (either explicitly or implicitly); provided, however,
that any merger, consolidation, sale, disposition or other
similar transaction to or with one or more Participants or
entities controlled by one or more Participants shall not
constitute a Corporate Transaction in respect of such
Participant(s); or
(iii) A change in the composition of the Board such
that the individuals who, as of the Effective Date, 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,
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however, for purposes of this Section 9(b), that any
individual who becomes a member of the Board subsequent to the
Effective Date whose election, or nomination for election by
the Company's stockholders, 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 deemed to
be such pursuant to this proviso) shall be considered as
though such individual were a member of the Incumbent Board;
and, provided, further, that any such individual whose initial
assumption of office occurs as a result of either an actual or
threatened election contest subject to Rule 14a-11 of
Regulation 14A under the Exchange Act, including any successor
to such Rule, or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Board shall in no event be considered as a member of the
Incumbent Board.
Notwithstanding the provisions set forth in subparagraphs (i)
and (ii) of this Section 9(b), the following shall not constitute a
Change in Control for purposes of the Plan: (1) any acquisition by or
consummation of a Corporate Transaction with any entity that was a
subsidiary of the Company immediately prior to the transaction or an
employee benefit plan (or related trust) sponsored or maintained by the
Company or an entity that was a subsidiary of the Company immediately
prior to the transaction if, immediately after such transaction
(including consummation of all related transactions,the surviving
entity is controlled by no Person other than such subsidiary, employee
benefit plan (or related trust) and/or other Persons who controlled the
Company immediately prior to such transaction; or (2) any acquisition
or consummation of a Corporate Transaction following which more than
50% of, respectively, the shares then outstanding of common stock of
the corporation resulting from such acquisition or Corporate
Transaction and the combined voting power of the voting securities then
outstanding of such corporation entitled to vote generally in the
election of directors is then Beneficially Owned, directly or
indirectly, by all or substantially all of the individuals and entities
who were Beneficial Owners, respectively, of the Company Common Stock
Outstanding and Company Voting Securities Outstanding immediately prior
to such acquisition or Corporate Transaction in substantially the same
proportions as their ownership, immediately prior to such acquisition
or Corporate Transaction, of the Company Common Stock Outstanding and
Company Voting Securities Outstanding, as the case may be.
(c) DEFINITION OF "CHANGE IN CONTROL PRICE." The "Change
in Control Price" means an
amount in cash equal to the higher of (i) the amount of cash and fair
market value of property that is the highest price per share paid
(including extraordinary dividends) in any Corporate Transaction
triggering the Change in Control under Section 9(b)(ii) hereof or any
liquidation of shares following a sale of substantially all assets of
the Company, or (ii) the highest Fair Market Value per share at any
time during the 60-day period preceding and 60-day period following the
Change in Control.
10. GENERAL PROVISIONS.
(a) COMPLIANCE WITH LEGAL AND OTHER REQUIREMENTS. The Company
may, to the extent deemed necessary or advisable by the Committee,
postpone the issuance or delivery of Stock or payment of other benefits
under any Award until completion of such registration or qualification
of such Stock or other required action under any federal or state law,
rule or regulation, listing or other required action with respect to
any stock exchange or automated quotation system upon which the Stock
or other Company securities are listed or quoted, or compliance with
any other obligation of the Company, as the Committee may consider
appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject
to such other conditions as it may consider appropriate in connection
with the issuance or delivery of Stock or payment of other benefits in
compliance with applicable laws, rules, and regulations, listing
requirements, or other obligations. The foregoing notwithstanding, in
connection with a Change in Control, the Company shall take or cause to
be taken no action, and shall undertake or permit to arise no legal or
contractual obligation, that results or would result in any
postponement of the issuance or delivery of Stock or payment of
benefits under any Award or the imposition of any other conditions on
such issuance, delivery or payment, to the extent that such
postponement or other condition would represent a greater burden on a
Participant than existed on the 90th day preceding the Change in
Control.
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(b) LIMITS ON TRANSFERABILITY; BENEFICIARIES. No Award or
other right or interest of a Participant under the Plan, including any
Award or right which constitutes a derivative security as generally
defined in Rule 16a-l(c) under the Exchange Act, shall be pledged,
hypothecated or otherwise encumbered or subject to any lien, obligation
or liability of such Participant to any party (other than the Company
or a subsidiary), or assigned or transferred by such Participant
otherwise than by will or the laws of descent and distribution or to a
Beneficiary upon the death of a Participant, and such Awards or rights
that may be exercisable shall be exercised during the lifetime of the
Participant only by the Participant or his or her guardian or legal
representative, except that Awards and other rights (other than ISOs
and SARs in tandem therewith) may be transferred to one or more
Beneficiaries or other transferees during the lifetime of the
Participant, and may be exercised by such transferees in accordance
with the terms of such Award, but only if and to the extent such
transfers and exercises are permitted by the Committee pursuant to the
express terms of an Award agreement (subject to any terms and
conditions which the Committee may impose thereon, and further subject
to any prohibitions or restrictions on such transfers pursuant to Rule
16b-3). A Beneficiary, transferee, or other person claiming any rights
under the Plan from or through any Participant shall be subject to all
terms and conditions of the Plan and any Award agreement applicable to
such Participant, except as otherwise determined by the Committee, and
to any additional terms and conditions deemed necessary or appropriate
by the Committee.
(c) ADJUSTMENTS. In the event that any dividend or other
distribution (whether in the form of cash, Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or
event affects the Stock such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement
of the rights of Participants under the Plan, then the Committee shall,
in such manner as it may deem equitable, adjust any or all of (i) the
number and kind of shares of Stock which may be delivered in connection
with Awards granted thereafter, (ii) the number and kind of shares of
Stock by which annual per-person Award limitations are measured under
Section 5 hereof, (iii) the number and kind of shares of Stock subject
to or deliverable in respect of outstanding Awards and (iv) the
exercise price, grant price or purchase price relating to any Award
and/or make provision for payment of cash or other property in respect
of any outstanding Award. In addition, the Committee is authorized to
make adjustments in the terms and conditions of, and the criteria
included in, Awards (including Performance Awards and performance
goals, and Annual Incentive Awards and any Annual Incentive Award pool
or performance goals relating thereto) in recognition of unusual or
nonrecurring events (including, without limitation, events described in
the preceding sentence, as well as acquisitions and dispositions of
businesses and assets) affecting the Company, any subsidiary or any
business unit, or the financial statements of the Company or any
subsidiary, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions
or in view of the Committee's assessment of the business strategy of
the Company, any subsidiary or business unit thereof, performance of
comparable organizations, economic and business conditions, personal
performance of a Participant, and any other circumstances deemed
relevant; provided that no such adjustment shall be authorized or made
if and to the extent that such authority or the making of such
adjustment would cause Options, SARs, Performance Awards granted under
Section 8(b) hereof or Annual Incentive Awards granted under Section
8(c) hereof to Participants designated by the Committee as Covered
Employees and intended to qualify as "performance-based compensation"
under Code Section 162(m) and the regulations thereunder to otherwise
fail to qualify as "performance-based compensation" under Code Section
162(m) and regulations thereunder.
(d) TAXES. The Company and any subsidiary is authorized to
withhold from any Award granted, any payment relating to an Award under
the Plan, including from a distribution of Stock, or any payroll or
other payment to a Participant, amounts of withholding and other taxes
due or potentially payable in connection with any transaction involving
an Award, and to take such other action as the Committee may deem
advisable to enable the Company and Participants to satisfy obligations
for the payment of withholding taxes and other tax obligations relating
to any Award. This authority shall include authority to withhold or
receive Stock or other property and to make cash payments in respect
thereof in satisfaction of a Participant's tax obligations, either on a
mandatory or elective basis in the discretion of the
A-14
Committee.
(e) CHANGES TO THE PLAN AND AWARDS. The Board may amend,
alter, suspend, discontinue or terminate the Plan or the Committee's
authority to grant Awards under the Plan without the consent of
stockholders or Participants, except that any amendment or alteration
to the Plan shall be subject to the approval of the Company's
stockholders not later than the annual meeting next following such
Board action if such amendment represents a material change to the Plan
or such stockholder approval is required by any federal or state law or
regulation (including, without limitation, Rule 16b-3 or Code Section
162(m) ) or the rules of any stock exchange or automated quotation
system on which the Stock may then be listed or quoted, and the Board
may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided that,
without the consent of an affected Participant, no such Board action
may materially and adversely affect the rights of such Participant
under any previously granted and outstanding Award. The Committee may
waive any conditions or rights under, or amend, alter, suspend,
discontinue or terminate any Award theretofore granted and any Award
agreement relating thereto, except as otherwise provided in the Plan;
provided that, without the consent of an affected Participant, no such
Committee action may materially and adversely affect the rights of such
Participant under such Award. Notwithstanding anything in the Plan to
the contrary, if any right under this Plan would cause a transaction to
be ineligible for pooling of interest accounting that would, but for
the right hereunder, be eligible for such accounting treatment, the
Committee may modify or adjust the right so that pooling of interest
accounting shall be available, including the substitution of Stock
having a Fair Market Value equal to the cash otherwise payable
hereunder for the right which caused the transaction to be ineligible
for pooling of interest accounting. Notwithstanding anything hereto to
the contrary, the provisions of Section 6(b)(iv) and Section 6(d)(v) of
this Plan which govern formula grants of Options and Restricted Stock
to Non-Employee Directors, shall not be amended more than once every
six months other than to comport with changes to the Code or the rules
promulgated thereunder or the Employee Retirement Income Security Act
of 1974, as amended, or the rules promulgated thereunder, or with rules
promulgated by the Securities and Exchange Commission, unless such
limit on amendments is not required under Rule 16b-3 or other
applicable law.
(f) LIMITATION ON RIGHTS CONFERRED UNDER PLAN. Neither the
Plan nor any action taken hereunder shall be construed as (i) giving
any Eligible Person or Participant the right to continue as an Eligible
Person or Participant or in the employ of the Company or a subsidiary;
(ii) interfering in any way with the right of the Company or a
subsidiary to terminate any Eligible Person's or Participant's
employment at any time, (iii) giving an Eligible Person or Participant
any claim to be granted any Award under the Plan or to be treated
uniformly with other Participants and employees, or (iv) conferring on
a Participant any of the rights of a stockholder of the Company unless
and until the Participant is duly issued or transferred shares of Stock
in accordance with the terms of an Award.
(g) UNFUNDED STATUS OF AWARDS; CREATION OF TRUSTS. The Plan is
intended to constitute an "unfunded" plan for incentive and deferred
compensation. With respect to any payments not yet made to a
Participant or obligation to deliver Stock pursuant to an Award,
nothing contained in the Plan or any Award shall give any such
Participant any rights that are greater than those of a general
creditor of the Company; provided that the Committee may authorize the
creation of trusts and deposit therein cash, Stock, other Awards or
other property, or make other arrangements to meet the Company's
obligations under the Plan. Such trusts or other arrangements shall be
consistent with the "unfunded" status of the Plan unless the Committee
otherwise determines with the consent of each affected Participant. The
trustee of such trusts may be authorized to dispose of trust assets and
reinvest the proceeds in alternative investments, subject to such terms
and conditions as the Committee may specify and in accordance with
applicable law.
(h) NONEXCLUSIVITY OF THE PLAN. Neither the adoption of the
Plan by the Board nor its submission to the stockholders of the Company
for approval shall be construed as creating any limitations on the
power of the Board or a committee thereof to adopt such other incentive
arrangements as it may deem desirable including incentive arrangements
and awards which do not qualify under Code Section 162(m).
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(i) PAYMENTS IN THE EVENT OF FORFEITURES; FRACTIONAL SHARES.
Unless otherwise determined by the Committee, in the event of a
forfeiture of an Award with respect to which a Participant paid cash or
other consideration, the Participant shall be repaid the amount of such
cash or other consideration. No fractional shares of Stock shall be
issued or delivered pursuant to the Plan or any Award. The Committee
shall determine whether cash, other Awards or other property shall be
issued or paid in lieu of such fractional shares or whether such
fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
(j) GOVERNING LAW. The validity, construction and effect of
the Plan, any rules and regulations under the Plan, and any Award
agreement shall be determined in accordance with the laws of the State
of Florida without giving effect to principles of conflicts of laws,
and applicable federal law.
(k) AWARDS UNDER PREEXISTING PLANS. Upon approval of the Plan
by stock-holders of the Company, as required under Section 10(1)
hereof, no further Awards shall be granted under any Preexisting Plan.
(l) PLAN EFFECTIVE DATE AND STOCKHOLDER APPROVAL; TERMINATION
OF PLAN. The Plan shall become effective on the Effective Date, subject
to subsequent approval by stockholders of the Company eligible to vote
in the election of directors, by a vote sufficient to meet the
requirements of Code Section 162(m) and 422, Rule 16b-3 under the
Exchange Act, applicable NASDAQ requirements, and other laws,
regulations, and obligations of the Company applicable to the Plan.
Awards may be granted subject to stockholder approval, but may not be
exercised or otherwise settled in the event stockholder approval is not
obtained. The Plan shall terminate at such time as no shares of Common
Stock remain available for issuance under the Plan and the Company has
no further rights or obligations with respect to outstanding Awards
under the Plan.
(m) AGREEMENT WITH UNDERWRITER. The Company will agree with
the Underwriter of the Company's initial public offering that for a
13-month period immediately following the effective date of this Plan,
the Company will not, without the consent of the Underwriter, adopt or
propose to adopt any plan or arrangement permitting the grant, issue or
sale of any shares of its Common Stock or issue, sell or offer for sale
any of its Common Stock, or grant any option for its Common Stock which
shall: (x) have an exercise price per share of Common Stock less than
(a) the initial public offering price of the Common Stock offered in
this Prospectus or (b) the fair market value of the Common Stock on the
date of grant; or (y) be granted to any direct or indirect beneficial
holder of more than 10% of the issued and outstanding Common Stock of
the Company. No option or other right to acquire Common Stock granted,
issued or sold during the 13-month period immediately following the
effective date of this Plan shall permit (a) the payment with any form
of consideration other than cash, (b) payment of less than the full
purchase or exercise price for such shares of Common Stock or other
securities of the Company on or before the date of issuance, or (c) the
existence of stock appreciation rights, phantom options or similar
arrangements.
A-16