EXHIBIT 10.2
THE VINCAM GROUP, INC.
LONG TERM INCENTIVE PLAN
1998
SECTION 1. PURPOSE. The purpose of this Long Term Incentive Plan (the
"Plan") of The Vincam Group, Inc. (together with any successor thereto, the
"Corporation") is (i) to promote the identity of interests between shareholders,
directors, employees and consultants of the Corporation by encouraging and
creating significant ownership of Common Stock of the Corporation by directors,
officers and other salaried employees of the Corporation and its subsidiaries;
(ii) to enable the Corporation to attract and retain qualified directors,
officers, employees and consultants who contribute to the Corporation's success
by their ability, ingenuity and industry; and (iii) to provide meaningful
long-term incentive opportunities for directors, officers, employees and
consultants who are responsible for the success of the Corporation and who are
in a position to make significant contributions toward its objectives.
SECTION 2. DEFINITIONS. In addition to the terms defined elsewhere in
the Plan, the following shall be defined terms under the Plan:
2.01 "Award" means any Performance Award, Option, Stock Appreciation
Right, Restricted Stock, Deferred Stock, Dividend Equivalent or Other
Stock-Based Award or any other right or interest relating to Shares or cash,
granted to a Participant under the Plan.
2.02 "Award Agreement" means any written agreement, contract or other
instrument or document evidencing an Award.
2.03 "Board" means the Board of Directors of the Corporation.
2.04 "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
2.05 "Committee" means the Stock Option Committee of the Board, or such
other Board committee as may be designated by the Board to administer the Plan,
or any subcommittee of either; provided, however, that the Committee and any
subcommittee thereof, shall consist of two or more directors, each of whom is a
"nonemployee director" within the meaning of Rule 16b-3 under the Exchange Act
and an "outside director" as defined for purposes of Section 162(m) of the Code.
2.06 "Corporation" is defined in Section 1.
2.07 "Covered Employee" has the same meaning as set forth in section
162(m) of the Code, and successor provisions.
2.08 "Deferred Stock" means a right, granted to a Participant under
Section 6.05, to receive Shares at the end of a specified deferral period.
2.09 "Dividend Equivalent" means a right, granted to a Participant
under Section 6.03, to receive cash, Shares, other Awards or other property
equal in value to dividends paid with respect to a specified number of Shares.
2.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time. References to any provision of the Exchange Act shall
be deemed to include successor provisions thereto and regulations thereunder.
2.11 "Fair Market Value" means, with respect to Shares, Awards or other
property, the fair market value of such Shares, Awards or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. Unless otherwise determined by the Committee, the Fair
Market Value of Shares as of any date shall be the closing sales price on that
date of a Share as reported on the stock exchange or automated stock quotation
system on which Shares may be listed or quoted; provided, that if there were no
sales on the valuation date but there were sales on dates within a reasonable
period both before and after the valuation date, the Fair Market Value is the
weighted average of the closing prices on the nearest date before and the
nearest date after the valuation date (the "Average"). The Average is to be
weighted inversely by the respective numbers of trading days between the selling
dates and the valuation date.
2.12 "Incentive Stock Option" means an Option that is intended to meet
the requirements of Section 422 of the Code.
2.13 "Non-Qualified Stock Option" means an Option that is not intended
to be an Incentive Stock Option.
2.14 "Option" means a right, granted to a Participant under Section
6.06, to purchase Shares, other Awards or other property at a specified price
during specified time periods. An Option may be either an Incentive Stock Option
or a Non-Qualified Stock Option.
2.15 "Other Stock-Based Award" means a right, granted to a Participant
under Section 6.08, that relates to or is valued by reference to Shares.
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2.16 "Participant" means a person who, as a director, officer, employee
or consultant of the Corporation or any Subsidiary, has been granted an Award
under the Plan.
2.17 "Performance Award" means a right, granted to a Participant under
Section 6.02, to receive cash, Shares, other Awards or other property the
payment of which is contingent upon achievement of certain performance goals
specified by the Committee.
2.18 "Performance-Based Restricted Stock" means Restricted Stock that
is subject to a risk of forfeiture if specified performance criteria are not met
within the restriction period.
2.19 "Plan" is defined in Section 1.
2.20 "Restricted Stock" means Shares, granted to a Participant under
Section 6.04, that are subject to certain restrictions and to a risk of
forfeiture.
2.21 "Rule 16b-3 " means Rule 16b-3, as from time to time amended and
applicable to Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.
2.22 "Shares" means the Common Stock, $.001 par value, of the
Corporation and such other securities of the Corporation as may be substituted
for Shares or such other securities pursuant to Section 9.
2.23 "Stock Appreciation Right" means a right, granted to a Participant
under Section 6.07, to be paid an amount measured by the appreciation in the
Fair Market Value of Shares from the date of grant to the date of exercise of
the right, with payment to be made in cash, Shares, other Awards or other
property as specified in the Award or determined by the Committee.
2.24 "Subsidiary" means any corporation (other than the Corporation)
with respect to which the Corporation owns, directly or indirectly, 50% or more
of the total combined voting power of all classes of stock. In addition, any
other related entity may be designated by the Board as a Subsidiary, provided
such entity could be considered as a subsidiary according to generally accepted
accounting principles.
2.25 "Year" means a calendar year.
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SECTION 3. ADMINISTRATION.
3.01 AUTHORITY OF THE COMMITTEE. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select and designate Participants;
(ii) to designate Subsidiaries;
(iii) to determine the type or types of Awards to be granted to each
Participant;
(iv) to determine the number of Awards to be granted, the number of
Shares to which an Award will relate, the terms and conditions of any
Award granted under the Plan (including, but not limited to, any
exercise price, grant price or purchase price, the applicable
performance goals, the certification of achievement of such goals prior
to the settlement of an Award, any restriction or condition, any
schedule for lapse of restrictions or conditions relating to
transferability or forfeiture, exercisability or settlement of an
Award, and waivers or accelerations thereof and waiver of performance
conditions relating to an Award, based in each case on such
considerations as the Committee shall determine) and all other matters
to be determined in connection with an Award;
(v) to determine whether, to what extent and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid,
in cash, Shares, other Awards or other property, or an Award may be
canceled, forfeited or surrendered;
(vi) to determine whether, to what extent and under what circumstances
cash, Shares, other Awards or other property payable with respect to an
Award will be deferred either automatically, at the election of the
Committee or at the election of the Participant;
(vii) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(viii) to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary
or advisable to administer the Plan;
(ix) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and
any Award, rules and regulations, Award Agreement or other instrument
hereunder; and
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(x) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
3.02 MANNER OF EXERCISE OF COMMITTEE AUTHORITY. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Committee
shall have sole discretion in exercising such authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive and
binding on all persons, including the Corporation, Subsidiaries, Participants,
any person claiming any rights under the Plan from or through any Participant
and shareholders. 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. A memorandum signed by all members of
the Committee shall constitute the act of the Committee without the necessity,
in such event, to hold a meeting. The Committee may establish other rules
governing meetings of the Committee, and the Committee may delegate to officers
or managers of the Corporation or any Subsidiary the authority, subject to such
terms as the Committee shall determine, to perform administrative functions
under the Plan.
3.03 LIMITATION OF LIABILITY. Each member of the Committee shall be
entitled to, in good faith, rely or act upon any report or other information
furnished to him by any officer or other employee of the Corporation or any
Subsidiary, the Corporation's independent certified public accountants or any
executive compensation consultant or other professional retained by the
Corporation to assist in the administration of the Plan. No member of the
Committee, nor any officer or employee of the Corporation acting on behalf of
the Committee, shall be personally liable for any action, determination or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee and any officer or employee of the Corporation acting
on their behalf shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action, determination or
interpretation.
SECTION 4. SHARES SUBJECT TO THE PLAN. Subject to adjustment as
provided in Section 9, the total number of Shares reserved and available for
Awards under the Plan shall be 900,000. For purposes of this Section 4, the
number of and time at which Shares shall be deemed to be subject to Awards and
therefore counted against the number of Shares reserved and available under the
Plan shall be the earliest date at which the Committee can reasonably estimate
the number of Shares to be distributed in settlement of an Award or with respect
to which payments will be made; provided, however, that the Committee may adopt
procedures for the counting of Shares relating to any Award for which the number
of Shares to be distributed or with respect to which payment will be made cannot
be fixed at the date of grant to ensure appropriate counting, avoid double
counting (in the case
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of tandem or substitute awards), and provide for adjustments in any case in
which the number of Shares actually distributed or with respect to which
payments are actually made differs from the number of Shares previously counted
in connection with such Award.
If any Shares to which an Award relates are forfeited or the Award is
settled or terminates without a distribution of Shares (whether or not cash,
other Awards or other property is distributed with respect to such Award), any
Shares counted against the number of Shares reserved and available under the
Plan with respect to such Award shall, to the extent of any such forfeiture,
settlement or termination, again be available for Awards under the Plan.
SECTION 5. ELIGIBILITY. Awards may be granted only to individuals who
are directors, officers, employees or consultants of the Corporation or a
Subsidiary.
SECTION 6. SPECIFIC TERMS OF AWARDS.
6.01 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 thereafter (subject to Section
11.02), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including without
limitation the acceleration of vesting of any Awards or terms requiring
forfeiture of Awards in the event of termination of service as a director or
employment by the Participant. Except as provided in Sections 7.03 or 7.04, only
services may be required as consideration for the grant of any Award.
6.02 PERFORMANCE AWARDS. Subject to the provisions of Section 7.01 and
7.02, the Committee is authorized to grant Performance Awards to Participants on
the following terms and conditions:
(i) AWARD AND CONDITIONS. A Performance Award shall confer upon the
Participant rights, valued as determined by the Committee and payable
to, or exercisable by, the Participant to whom the Performance Award is
granted, in whole or in part, as determined by the Committee,
conditioned upon the achievement of performance criteria determined by
the Committee.
(ii) OTHER TERMS. A Performance Award may be denominated in Shares and
may be payable in cash, Shares, other Awards or other property, and
have such other terms as shall be determined by the Committee.
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6.03 DIVIDEND EQUIVALENTS. The Committee is authorized to grant
Dividend Equivalents to Participants. The Committee may provide that Dividend
Equivalents shall be paid or distributed when accrued or shall be deemed to have
been reinvested in additional Shares or Awards, or otherwise reinvested.
6.04 RESTRICTED STOCK. The Committee is authorized to grant Restricted
Stock to Participants on the following terms and conditions:
(i) ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to
such restrictions on transferability and other restrictions as the
Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends
thereon), which restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments, or
otherwise as the Committee shall determine.
(ii) FORFEITURE. Performance-Based Restricted Stock shall be forfeited
unless preestablished performance criteria specified by the Committee
are met during the applicable restriction period. Except as otherwise
determined by the Committee, upon termination of employment (as
determined under criteria established by the Committee) during the
applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the
Corporation; provided, however, 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 will be waived in whole or in part in the event of
terminations resulting from specified causes.
(iii) CERTIFICATES OF SHARES. 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, such certificates shall bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such
Restricted Stock, the Corporation shall retain physical possession of
the certificates, and the Participant shall deliver a stock power to
the Corporation, endorsed in blank, relating to the Restricted Stock.
(iv) DIVIDENDS. Unless otherwise determined by the Committee, cash
dividends paid on Performance-Based Restricted Stock shall be
automatically reinvested in additional shares of Performance-Based
Restricted Stock and cash dividends paid on other Restricted Stock
shall be paid to the Participant. Dividends reinvested in
Performance-Based Restricted Stock and Shares 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.
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6.05 DEFERRED STOCK. The Committee is authorized to grant Deferred
Stock to Participants, on the following terms and conditions:
(i) AWARD AND RESTRICTIONS. Delivery of Shares will occur upon
expiration of the deferral period specified for 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 as the Committee may impose, which restrictions may lapse
at the expiration of the deferral period or at earlier specified times,
separately or in combination, in installments, or otherwise, as the
Committee shall determine.
(ii) FORFEITURE. Except as otherwise determined by the Committee, upon
termination of employment (as determined under criteria established by
the Committee) during the applicable deferral period or portion thereof
(as provided in the Award Agreement evidencing the Deferred Stock), all
Deferred Stock that is at that time subject to deferral (other than a
deferral at the election of the Participant) shall be forfeited;
provided, however, 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 will 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.
6.06 OPTIONS. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
(i) EXERCISE PRICE. The exercise price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that,
except as provided in Section 7.03, such exercise price shall be not
less than the Fair Market Value of a Share on the date of grant of such
Option.
(ii) TIME AND METHOD OF EXERCISE. The Committee shall determine the
time or times at which an Option may be exercised in whole or in part,
the methods by which such exercise price may be paid or deemed to be
paid, the form of such payment, including, without limitation, cash,
Shares, other Awards or awards issued under other Corporation plans or
other property (including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as through
"cashless exercise" arrangements), and the methods by which Shares will
be delivered or deemed to be delivered to Participants. Options shall
expire not later than ten years after the date of grant.
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(iii) INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the provisions
of Section 422 of the Code, including but not limited to requirements
related to aggregate maximum fair market value of underlying Shares,
minimum exercise prices, Option duration and the requirement that no
Incentive Stock Option shall be granted more than ten years after the
effective date of the Plan. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to Incentive Stock
Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be exercised, so as to
disqualify either the Plan or any Incentive Stock Option under Section
422 of the Code. In the event a Participant voluntarily disqualifies an
Option as an Incentive Stock Option, the Committee may, but shall not
be obligated to, make such additional Awards or pay bonuses as the
Committee shall deem appropriate to reflect the tax savings to the
Corporation which result from such disqualification.
6.07 STOCK APPRECIATION RIGHTS. The Committee is authorized to grant
Stock Appreciation Rights to Participants on the following terms and conditions:
(i) RIGHT TO PAYMENT. A Stock Appreciation Right 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 on the
date of exercise (or, if the Committee shall so determine in the case
of any such right, other than one related to an Incentive Stock Option,
the Fair Market Value of one Share at any time during a specific period
before or after the date of exercise) over (B) the grant price of the
Stock Appreciation Right as determined by the Committee as of the date
of grant of the Stock Appreciation Right, which, except as provided in
Section 7.03, shall be not less than the Fair Market Value of one Share
on the date of grant.
(ii) OTHER TERMS. The Committee shall determine the time or times at
which a Stock Appreciation Right may be exercised in whole or in part,
the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or
deemed to be delivered to Participants, and any other terms and
conditions of any Stock Appreciation Right. Stock Appreciation Rights
shall expire not later than ten years after the date of grant.
6.08 OTHER STOCK-BASED AWARDS. The Committee is authorized to grant to
Participants such other Awards that are denominated or payable in, valued in
whole or in part by reference to or otherwise based on or related to, Shares, as
deemed by the Committee to be consistent with the purposes of the Plan,
including without limitation, Shares awarded purely as a "bonus" and not subject
to any restrictions or conditions, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Shares, purchase rights and Awards
valued by reference to the book
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value of Shares or the value of securities of or the performance of
specified Subsidiaries. The Committee shall determine the terms and conditions
of such Awards, which may include performance criteria. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 6.08 shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
other Awards or other property, as the Committee shall determine.
SECTION 7. CERTAIN PROVISIONS APPLICABLE TO AWARDS.
7.01 PERFORMANCE-BASED AWARDS. Performance Awards, Performance-Based
Restricted Stock and certain Other Stock-Based Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of Section 162(m) and the regulations thereunder. Until otherwise
determined by the Committee, the performance goal shall be the attainment of
preestablished amounts of annual net income of the Corporation.
The payout of any such Award to a Covered Employee may be reduced, but
not increased, based on the degree of attainment of other performance criteria
or otherwise at the discretion of the Committee.
7.02 MAXIMUM YEARLY AWARDS. A maximum of 600,000 Shares (or the
equivalent Fair Market Value thereof with respect to Awards valued in whole or
in part by reference to or otherwise based on or related to Shares) may be made
subject to Performance Awards, Performance-Based Restricted Stock and Other
Stock-Based Awards subject to performance criteria in any Year. The maximum
payout of such Awards in any Year may not exceed 150% of the amount thereof, or
900,000 Shares in the aggregate and 225,000 Shares in the case of any
Participant. A maximum of 600,000 Shares may be made subject to Options and
Stock Appreciation Rights in any Year. No Participant may receive Awards
covering or representing more than 50% of the maximum number of Shares which may
be made subject to such types of Awards in any Year. Notwithstanding the
foregoing, awards of Options granted in connection with an employee's initial
employment with the Corporation or a Subsidiary shall not count toward or be
subject to such limitations. The Share amounts in this Section 7.02 are subject
to (i) adjustment by the Committee under Section 9 and (ii) the Plan maximum
under Section 4.
7.03 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 for any other
Award granted under the Plan or any award granted under any other plan of the
Corporation, any Subsidiary or any business entity to be acquired by the
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Corporation or a Subsidiary or any other right of a Participant to receive
payment from the Corporation or any Subsidiary. If an Award is granted
in substitution 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. Awards granted in addition to or in tandem with other Awards or awards
may be granted either as of the same time as or a different time from the grant
of such other Awards or awards. The per Share exercise price of any Option,
grant price of any Stock Appreciation Right or purchase price of any other Award
conferring a right to purchase Shares:
(i) Granted in substitution for an outstanding Award or award shall be
not less than the lesser of the Fair Market Value of a Share at the
date such substitute award is granted or such Fair Market Value at that
date reduced to reflect the Fair Market Value at that date of the Award
or award required to be surrendered by the Participant as a condition
to receipt of the substitute Award; or
(ii) Retroactively granted in tandem with an outstanding Award or award
shall be not less than the lesser of the Fair Market Value of a Share
at the date of grant of the later Award or the date of grant of the
earlier Award or award.
7.04 EXCHANGE PROVISIONS. The Committee may at any time offer to
exchange or buy out any previously granted Award for a payment in cash, Shares,
other Awards (subject to Section 7.03) or other property based on such terms and
conditions as the Committee shall determine and communicate to the Participant
at the time that such offer is made.
7.05 TERM OF AWARDS. The term of each Award shall be for such period as
may be determined by the Committee; provided, however, that in no event shall
the term of any Option or a Stock Appreciation Right granted in tandem therewith
exceed a period of ten years from the date of its grant (or such shorter period
as may be applicable under Section 422 of the Code).
7.06 FORM OF PAYMENT UNDER AWARDS. Subject to the terms of the Plan and
any applicable Award Agreement, payments to be made by the Corporation or a
Subsidiary upon the grant or exercise of an Award may be made in such forms as
the Committee shall determine, including without limitation, cash, Shares, other
Awards or other property, and may be made in a single payment or transfer, in
installments or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in
Shares.
7.07 LOAN PROVISIONS. With the consent of the Committee, and subject to
compliance with the federal and state laws and other binding obligations or
provisions applicable to the Corporation,
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the Corporation may make, guarantee or arrange for, a loan or loans to
a Participant with respect to the exercise of any Option or other payment in
connection with any Award, including the payment by a Participant of any or all
federal, state or local income or other taxes due in connection with any Award.
Subject to such limitations, the Committee shall have full authority to decide
whether to make a loan or loans hereunder and to determine the amount, terms and
provisions of any such loan or loans, including the interest rate to be charged
in respect of any such loan or loans, whether the loan or loans are to be with
or without recourse against the borrower, the terms on which the loan is to be
repaid and conditions, if any, under which the loan or loans may be forgiven.
Nothing in this Section shall be construed as implying that the Committee shall
or will offer such loans.
SECTION 8. GENERAL RESTRICTIONS APPLICABLE TO AWARDS.
8.01 RESTRICTIONS UNDER RULE 16B-3.
8.01.1 SIX-MONTH HOLDING PERIOD. Unless a Participant could
otherwise transfer an equity security, derivative security or Shares
issued upon exercise of a derivative security granted under the Plan
without incurring liability under Section 16(b) of the Exchange Act,
(i) an equity security issued under the Plan, other than an equity
security issued upon exercise or conversion of a derivative security
granted under the Plan, shall be held for at least six months from the
date of acquisition, and (ii), with respect to a derivative security
issued under the Plan, at least six months shall elapse from the date
of acquisition of the derivative security to the date of disposition of
the derivative security (other than upon exercise or conversion) or its
underlying equity security; and (iii) any Award in the nature of a
Stock Appreciation Right must be held for six months from the date of
grant to the date of cash settlement.
8.01.2 NONTRANSFERABILITY. Awards which constitute derivative
securities (including any option, stock appreciation right or similar
right) shall not be transferable by a Participant except by will or the
laws of descent and distribution (except pursuant to a beneficiary
designation authorized under Section 8.02) or, if then permitted under
Rule 16b-3, pursuant to a qualified domestic relations order as defined
under the Code or Title I of the Employee Retirement Income Security
Act of 1974, as amended, or the rules thereunder, and, in the case of
an Incentive Stock Option or, if then required by Rule 16b-3, any other
derivative security granted under the Plan, shall be exercisable during
the lifetime of a Participant only by such Participant or his guardian
or legal representative.
8.01.3 COMPLIANCE WITH RULE L6B-3. It is the intent of the
Corporation that this Plan comply in all respects with Rule 16b-3 in
connection with any Award granted to a person who is subject to Section
16 of the Exchange Act. Accordingly, if any provision of this Plan
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or any Award Agreement does not comply with the requirements of Rule
l6b-3 as then applicable to any such person, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements with respect to such person.
8.02 LIMITS ON TRANSFER OF AWARDS; BENEFICIARIES. No right or interest
of a Participant in any Award shall be pledged, encumbered or hypothecated to or
in favor of any party (other than the Corporation or a Subsidiary), or shall be
subject to any lien, obligation or liability of such Participant to any party
(other than the Corporation or a Subsidiary). Unless otherwise determined by the
Committee (subject to the requirements of Section 8.01.2), no Award subject to
any restriction shall be assignable or transferable by a Participant otherwise
than by will or the laws of descent and distribution (except to the Corporation
under the terms of the Plan); provided, however, that a Participant may, in the
manner established by the Committee, designate a beneficiary or beneficiaries to
exercise the rights of the Participant, and to receive any distribution, with
respect to any Award, upon the death of the Participant. A beneficiary,
guardian, legal representative 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 or
agreement applicable to such, except to the extent the Plan and such Award
Agreement or agreement otherwise provide with respect to such persons, and to
any additional restrictions deemed necessary or appropriate by the Committee.
8.03 REGISTRATION AND LISTING COMPLIANCE. The Corporation shall not be
obligated to deliver any Award or distribute any Shares with respect to any
Award in a transaction subject to regulatory approval, registration or any other
applicable requirement of federal or state law, or subject to a listing
requirement under any listing or similar agreement between the Corporation and
any national securities exchange or automatic stock quotation system, until such
laws, regulations and contractual obligations of the Corporation have been
complied with in full, although the Corporation shall be obligated to use its
best efforts to obtain any such approval and comply with such requirements as
promptly as practicable.
8.04 SHARE CERTIFICATES. All certificates for Shares delivered under
the Plan pursuant to any Award or the exercise thereof shall be subject to such
stop-transfer order and other restrictions as the Committee may deem advisable
under applicable federal or state laws, rules and regulations thereunder and the
rules of any national securities exchange or automated stock quotation system on
which Shares are listed or quoted. The Committee may cause a legend or legends
to be placed on any such certificates to make appropriate reference to such
restrictions or any other restrictions that may be applicable to Shares,
including under the terms of the Plan or any Award Agreement. In addition,
during any period in which Awards or Shares are subject to restrictions under
the terms of the Plan or any Award Agreement, or during any period during which
delivery or receipt of an
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Award or Shares has been deferred by the Committee or a Participant, the
Committee may require the Participant to enter into an agreement providing that
certificates representing Shares issuable or issued pursuant to an Award shall
remain in the physical custody of the Corporation or such other person as the
Committee may designate.
SECTION 9. ADJUSTMENT PROVISIONS. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase or
share exchange or other similar corporate transaction or event, affects the
Shares 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 which may thereafter be
issued in connection with Awards, (ii) the number and kind of Shares issued or
issuable in respect of outstanding Awards and (iii) the vesting, exercisability,
exercise price, grant price or purchase price relating to any Award or, if
deemed appropriate, make provision for a cash payment with respect to any
outstanding Award; provided, however, in each case that, with respect to
Incentive Stock Options, no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422(b)(1) of the
Code. In addition, the Committee is authorized to make adjustments in the terms
and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence) affecting the Corporation or any Subsidiary or the
financial statements of the Corporation or any Subsidiary, or in response to
changes in applicable laws, regulations or accounting principles.
SECTION 10. CHANGE OF CONTROL PROVISIONS.
10.01 ACCELERATION OF VESTING AND CASH-OUT RIGHTS. In the event of a
"Change of Control," as defined in Section 10.02:
(i) The performance criteria of fifty percent (50%), or one hundred
percent (100%) in the case of a Participant who is a non-employee
director of the Company, of each Participant's Performance Awards,
Performance-Based Restricted Stock and Other Stock-Based Awards shall
be deemed fully achieved and fifty percent (50%), or one hundred
percent (100%) in the case of a Participant who is a non-employee
director of the Company, of all such Awards shall be deemed fully
earned and vested, subject only to the restrictions on dispositions of
equity securities set forth in Section 8.01 and legal restrictions on
the issuance of Shares set forth in Section 8.04. In the case of
Participants other than non-employee directors of the Company, the
other fifty percent (50%) of such Participant's
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Performance Awards, Performance-Based Restricted Stock and Other
Stock-Based Awards shall remain subject to all relevant restrictions,
limitations, terms and conditions that applied to such Award prior to
the Change of Control;
(ii) Fifty percent (50%), or one hundred percent (100%) in the case of
a Participant who is a non-employee director of the Company, of each
Participant's Options, Stock Appreciation Rights or other Awards in the
nature of rights that may be exercised which were not previously
exercisable shall become fully exercisable, subject only to the
restrictions on dispositions of equity securities set forth in Section
8.01 and legal restrictions on the issuance of Shares set forth in
Section 8.04. In the case of Participants other than non-employee
directors of the Company, the other fifty percent (50%) of such
Participant's Options, Stock Appreciation Rights or other Awards in the
nature of rights that may be exercised shall remain subject to all
relevant restrictions, limitations, terms and conditions that applied
to such Award prior to the Change of Control;
(iii) The restrictions, deferral limitations and forfeiture conditions
applicable to fifty percent (50%), or one hundred percent (100%) in the
case of a Participant who is a non-employee director of the Company, of
each Participant's other Awards granted under the Plan shall lapse and
such Awards shall be deemed fully vested, subject only to the
restrictions on dispositions of equity securities set forth in Section
8.01 and legal restrictions on the issuance of Shares set forth in
Section 8.04. In the case of Participants other than non-employee
directors of the Company, the other fifty percent (50%) of such
Participant's other Awards granted under the Plan shall remain subject
to all relevant restrictions, limitations, terms and conditions that
applied to such Award prior to the Change of Control; and
(iv) Fifty percent (50%), or one hundred percent (100%) in the case of
a Participant who is a non-employee director of the Company, of each
Participant's outstanding Performance Awards, Dividend Equivalents or
Stock Appreciation Rights, to the extent that such Performance Award,
Dividend Equivalent Right or Stock Appreciation Right is payable in
cash, shall be canceled and each such Participant holding any such
Award shall be paid in cash therefor. In the case of Participants other
than non-employee directors of the Company, the other fifty percent
(50%) of such Participant's outstanding Performance Awards, Dividend
Equivalents or Stock Appreciation Rights that are payable in cash shall
remain subject to all relevant restrictions, limitations, terms and
conditions that applied to such Award prior to the Change of Control.
Where the value of any such canceled Award must be calculated by
reference to Shares or the market price thereof, such Award shall be
valued on the basis of the "Change of Control Price" (as defined in
Section 10.03) as of the date that the Change of Control occurs, or
such other date as the Committee may determine prior to
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the Change of Control; provided however, that this Section 10.01(iv)
shall not apply in the case of any Award if the cancellation of and
payment for such Award would cause the Participant to incur actual
short-swing profits liability under Section 16(b) of the Exchange Act.
Notwithstanding anything contained herein to the contrary, in the event
of a Change of Control that is intended to be accounted for as a "pooling of
interests," and with respect to which the independent auditors for the
Corporation issue an opinion to the Corporation that, but for the application of
the provisions set forth in this Section 10.01 in connection with such Change of
Control, the Change of Control would qualify for pooling of interests accounting
treatment, the provisions set forth in this Section 10.01 shall be of no force
and effect.
10.02 CHANGE OF CONTROL. For purposes of Section 10, a "Change of
Control" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (other
than Carlos A. Saladrigas, Jose M. Sanchez, any affiliate or immediate
family member of either or any group comprised of any combination of
the foregoing) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than 50% of either
(a) the then outstanding shares of Common Stock of the Corporation (the
"Outstanding Corporation Common Stock") or (b) the combined voting
power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the
"Outstanding Corporation Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change of Control:
(a) any acquisition by the Corporation or any of its subsidiaries, (b)
any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any of its subsidiaries
or (c) any acquisition by any corporation with respect to which,
following such acquisition, more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities 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 the
beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior
to such acquisition in substantially the same proportions as their
ownership, immediately prior to such acquisition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities,
as the case may be; or
(ii) Individuals who, as of the effective date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board;
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provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or
threatened solicitation to which Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act applies or other actual or
threatened solicitation of proxies or consents; or
(iii) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities immediately
prior to such reorganization, merger or consolidation do not, following
such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of, respectively, the then
outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation resulting
from such reorganization, merger or consolidation in substantially the
same proportions as their ownership, immediately prior to such
reorganization, merger or consolidation of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case
may be; or
(iv) Approval by the shareholders of the Corporation of (a) a complete
liquidation or dissolution of the Corporation or (b) the sale or other
disposition of all or substantially all of the assets of the
Corporation, other than to a corporation, with respect to which
following such sale or other disposition, more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities 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 the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale
or other disposition, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be. The term
"the sale or other disposition of all or substantially all of the
assets of the Corporation" shall mean a sale or other disposition
transaction or series of related transactions involving assets of the
Corporation or of any direct or indirect subsidiary of the Corporation
(including the stock of any direct or indirect subsidiary of the
Corporation) in which the value of the assets or stock
17
being sold or otherwise disposed of (as measured by the purchase price
being paid therefor or by such other method as the Board determines is
appropriate in the case where there is no readily ascertainable
purchase price) constitutes more than two-thirds of the fair market
value of the Corporation (as herein defined). The "fair market value of
the Corporation" shall be the aggregate market value of the then
Outstanding Corporation Common Stock (on a fully diluted basis) plus
the aggregate market value of the Corporation's other outstanding
equity securities. The aggregate market value of the shares of
Outstanding Corporation Common Stock shall be determined by multiplying
the number of shares of Outstanding Corporation Common Stock (on a
fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction or
series of related transactions (the "Transaction Date") by the average
closing price of the shares of Outstanding Corporate Common Stock for
the ten trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of the
Corporation shall be determined in a manner similar to that prescribed
in the immediately preceding sentence for determining the aggregate
market value of the shares of Outstanding Corporation Common Stock or
by such other method as the Board shall determine is appropriate.
10.03 CHANGE OF CONTROL PRICE. For purposes of this Section 10, "Change
of Control Price" means the higher of (i) the average closing price, as reported
on the Nasdaq National Market, or any other exchange or trading system on which
the Shares are then primarily listed or traded for the ten trading days
immediately preceding the Change of Control, and (ii) the highest price paid or
offered in any transaction related to a Change of Control of the Corporation.
SECTION 11. CHANGES TO THE PLAN AND AWARDS.
11.01 CHANGES TO THE PLAN. The Board may amend, alter, suspend,
discontinue or terminate the Plan without the consent of shareholders or
Participants, except that any such amendment, alteration, suspension,
discontinuation or termination shall be subject to the approval of the
Corporation's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automatic stock quotation system on which the
Shares may be listed or quoted, or if the Board in its discretion determines
that obtaining such shareholder approval is for any reason advisable; provided,
however, that, without the consent of an affected Participant, no amendment,
alteration, suspension, discontinuation or termination of the Plan may impair
the rights of such Participant under any Award theretofore granted to him.
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11.02 CHANGES TO AWARDS. 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; provided, however,
that, without the consent of an affected Participant, no such amendment,
alteration, suspension, discontinuation or termination of any Award may impair
the rights of such Participant under such Award.
SECTION 12. GENERAL PROVISIONS.
12.01 NO RIGHTS TO AWARDS. No Participant or employee shall have any
claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants and employees.
12.02 NO SHAREHOLDER RIGHTS. No Award shall confer on any Participant
any of the rights of shareholder of the Corporation unless and until Shares are
duly issued or transferred to the Participant in accordance with the terms of
the Award.
12.03 TAX WITHHOLDING. The Corporation or any Subsidiary is authorized
to withhold from any Award granted, any payment relating to an Award under the
Plan, including from a distribution of Shares, or any payroll or other payment
to a Participant, amounts of withholding and other taxes due with respect
thereto, its exercise or any payment thereunder, and to take such other action
as the Committee may deem necessary or advisable to enable the Corporation and
Participants to satisfy obligations for the payment of withholding taxes and
other tax liabilities relating to any Award. This authority shall include
authority to withhold or receive Shares or other property and to make cash
payments in respect thereof in satisfaction of Participant's tax obligations.
12.04 NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan or any
Award Agreement shall confer, and no grant of an Award shall be construed as
conferring, upon any employee any right to continue in the employ of the
Corporation or any Subsidiary or to interfere in any way with the right of the
Corporation or any Subsidiary to terminate his or her employment at any time or
increase or decrease his or her compensation from the rate in existence at the
time of granting of an Award.
12.05 UNFUNDED STATUS OF AWARDS. 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 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 Corporation; provided, however,
that the Committee may authorize the creation of trusts or make other
arrangements to meet the Corporation's obligations under the Plan to deliver
cash, Shares, other Awards or other property pursuant to any award, which trusts
or other arrangements shall be consistent with the "unfunded"
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status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.
12.06 OTHER COMPENSATORY ARRANGEMENTS. The Corporation or any
Subsidiary shall be permitted to adopt other or additional compensation
arrangements (which may include arrangements which relate to Awards), and such
arrangements may be either generally applicable or applicable only in specific
cases.
12.07 FRACTIONAL SHARES. No fractional Shares 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
fractional Shares or whether such fractional Shares or any rights thereto shall
be forfeited or otherwise eliminated.
12.08 GOVERNING LAW. The validity, construction and effect of the Plan,
any rules and regulations relating to 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.
SECTION 13. EFFECTIVE DATE. The Plan shall become effective on May 21,
1998, provided however, that, on such date or within one year after such date,
the Plan shall have been approved by the affirmative vote of the holders of a
majority of the Shares present or represented and entitled to vote (and the
affirmative vote of a majority of the Shares voting) at a meeting of the
Corporation's shareholders, or any adjournment thereof or by the written consent
of the holders of a majority of the Shares entitled to vote.
As adopted by the Board of Directors as of March 9, 1998.
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