Exhibit 99.1
COVISTA COMMUNICATIONS, INC.
2001 EQUITY INCENTIVE PLAN
SECTION I. PURPOSE
The purpose of the Covista Communications, Inc. 2001 Equity Incentive Plan
(the "Plan") is to promote the best interests of Covista Communications, Inc.
(together with any successor thereto, the "Company") and its shareholders by
providing key employees and consultants of the Company and its Affiliates (as
defined below), and members of the Company's Board of Directors who are not
employees of the Company, with an opportunity to acquire a, or increase their,
proprietary interest in the Company. It is intended that the Plan will promote
continuity of management and increased incentive and personal interest in the
welfare of the Company by those key employees and consultants who are primarily
responsible for shaping and carrying out the long-range plans of the Company and
securing the Company's continued growth and financial success. Also, by
encouraging stock ownership by directors, the Company seeks to attract and
retain on its Board of Directors persons of exceptional competence and to
furnish an added incentive for them to continue their association with the
Company.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the respective meanings
set forth below:
(a) "Affiliate" shall mean any entity that, directly or through
one or more intermediaries, is controlled by, controls, or is under common
control with, the Company.
(b) "Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock or Performance Share or other award granted under the Plan.
(c) "Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award granted under the Plan.
(d) "Change in Control" will be deemed to have occurred if: (i)
any entity not affiliated with the Company or any Affiliate is or becomes the
beneficial owner of securities of the Company representing at least 50% of the
combined voting power of the Company's then outstanding voting securities; (ii)
there is consummated any business combination of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's capital stock would be converted into cash, securities
or other property, other than a merger of the Company in which the holders of
the Company's capital stock immediately prior to the merger have the same
proportionate ownership of capital stock of the surviving corporation
immediately after the merger, or any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the consolidated assets of the Company; or (iii) the shareholders of the
Company approve any plan for the liquidation or dissolution of the Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(f) "Commission" shall mean the Securities and Exchange
Commission.
(g) "Committee" shall mean the Compensation Committee of the Board
of Directors of the Company (or any other committee thereof designated by such
Board to administer the Plan) consisting of not less than two Independent
Directors, each of whom shall qualify as a "non-employee director" within the
meaning of Rule 16b-3 and as an "outside director" under Section 162(m)(4)(C) of
the Code or any successor provisions thereto.
(h) "Consultant" shall mean any consultant or advisor to the
Company, any Subsidiary or any Affiliate who is not otherwise an employee of the
Company or any Affiliate who is responsible for or contributes to the
management, growth or profitability of the business of the Company or any
Affiliate, as determined by the Committee in its discretion.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
(j) "Fair Market Value" shall mean, with respect to any property
(including, without limitation, any Shares or other securities), the fair market
value of such property determined by such methods or procedures as shall be
established from time to time by the Committee.
(k) "Incentive Stock Option" shall mean an option granted under
Section 6(a) of the Plan that is intended to meet the requirements of Section
422 of the Code (or any successor provision thereto).
(l) "Independent Director" shall mean any member of the Company's
Board of Directors who is not an employee of the Company or of any Affiliate.
(m) "Key Employee" shall mean any officer or other key employee of
the Company or of any Affiliate who is responsible for or contributes to the
management, growth or profitability of the business of the Company or any
Affiliate, as determined by the Committee in its discretion.
(n) "Non-Qualified Stock Option" shall mean an option granted
under Section 6(a) of the Plan that is not intended to be an Incentive Stock
Option.
(o) "Option" shall mean an Incentive Stock Option or a Non-
Qualified Stock Option.
(p) "Participant" shall mean a Key Employee, Consultant or
Independent Director designated to be granted an Award under the Plan.
(q) "Performance Period" shall mean, in relation to Performance
Shares, any period for which a performance goal or goals have been established.
(r) "Performance Share" shall mean any right granted under Section
6(d) of the Plan that will be paid out as a Share (which, in specified
circumstances, may be a Share of Restricted Stock).
(s) "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or political subdivision thereof.
(t) "Released Securities" shall mean Shares of Restricted Stock
with respect to which all applicable restrictions have expired, lapsed or been
waived.
-2-
(u) "Restricted Securities" shall mean Awards of Restricted Stock
or other Awards under which issued and outstanding Shares are held subject to
certain restrictions pursuant to the Plan or an Award Agreement.
(v) "Restricted Stock" shall mean any Share granted under Section
6(c) of the Plan or, in specified circumstances, a Share paid in connection with
a Performance Share under Section 6(d) of the Plan.
(w) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission under the Exchange Act, or any successor rule or regulation thereto.
(x) "Shares" shall mean shares of Common Stock of the Company,
$.05 par value, and such other securities or property as may become subject to
Awards pursuant to an adjustment made under Section 4(b) of the Plan.
(y) "Stock Appreciation Right" shall mean any right granted under
Section 5(c) of the Plan.
SECTION 3. ADMINISTRATION
The Plan shall be administered by the Committee; provided, however, that if
at any time the Committee shall not be in existence, the functions of the
Committee as specified in the Plan shall be exercised by the Board of Directors
of the Company (the "Board") and all references to the Committee herein shall
include the Board. To the extent permitted by applicable law, the Board may
delegate to another committee of the Board or to one or more senior officers of
the Company any or all of the authority and responsibility of the Committee with
respect to the Plan, other than with respect to Participants who are subject to
Section 16 of the Exchange Act. To the extent that the Board has delegated to
such other committee or one or more officers the authority and responsibility of
the Committee, all references to the Committee herein shall include such other
committee or one or more officers.
Subject to the terms of the Plan and applicable laws and without limitation
by reason of enumeration, the Committee shall have full discretionary power and
authority to: (i) designate Participants; (ii) determine the type or types of
Awards to be granted to each Participant under the Plan; (iii) determine the
number of Shares to be covered by (or with respect to which payments, rights or
other matters are to be calculated in connection with) Awards granted to
Participants; (iv) determine the terms and conditions of any Award granted to a
Participant; (v) determine whether, to what extent and under what circumstances
Awards granted to Participants may be settled or exercised in cash, Shares,
other securities, other Awards or other property, and the method or methods by
which Awards may be settled, exercised, cancelled, forfeited or suspended; (vi)
determine whether, to what extent and under what circumstances cash, Shares,
other Awards and other amounts payable with respect to an Award granted to
Participants under the Plan shall be deferred either automatically or at the
election of the holder thereof or of the Committee; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan (including, without limitation, any Award Agreement); (viii)
establish, amend, suspend or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
and (ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.
Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
-3-
Plan or any Award shall be within the sole discretion of the Committee,
may be made at any time or from time to time, and shall be final, conclusive and
binding upon all Persons, including the Company, any Affiliate, any Participant,
any holder or beneficiary of any Award, any shareholder and any employee of the
Company or of any Affiliate.
SECTION 4. SHARES AVAILABLE FOR AWARD
(a) Shares Available. Subject to adjustment as provided in
Section 4(b):
(i) Number of Shares Available. The number of Shares
with respect to which Awards may be granted under the Plan shall be
900,000, subject to the limitations set forth in Section 6(c)(i) and
subject to the other provisions of this Section 4. If, after the
effective date of the Plan, any Shares covered by an Award granted
under the Plan, or to which any Award relates, are forfeited or if
an option otherwise terminates, expires or is cancelled prior to the
delivery of all of the Shares or of other consideration issuable or
payable pursuant to such Award, then the number of Shares counted
against the number of Shares available under the Plan in connection
with the grant of such Award, to the extent of any such forfeiture,
termination, expiration or cancellation, shall again be available
for granting of additional Awards under the Plan.
(ii) Accounting for Awards. The number of Shares
covered by an Award under the Plan, or to which such Award relates,
shall be counted on the date of grant of such Award against the
number of Shares available for granting Awards under the Plan.
(iii) Sources of Shares Deliverable Under Awards. Any
Shares delivered pursuant to an Award may consist, in whole or in
part, of authorized and unissued Shares and/or treasury Shares.
(b) Adjustments. In the event that the Committee shall
determine that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, 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 benefits or
potential benefits intended to be made available under the Plan, then the
Committee may, in such manner as it may deem equitable, adjust any or all of (i)
the number and type of Shares subject to the Plan and which thereafter may be
made the subject of Awards under the Plan; (ii) the number and type of Shares
subject to outstanding Awards; and (iii) the grant, purchase or exercise price
with respect to any Award, or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding Award; provided, however, in each case,
that with respect to Awards of Incentive Stock Options no such adjustment shall
be authorized to the extent that such authority would cause the Plan to violate
Section 422(b) of the Code (or any successor provision thereto); and provided
further that the number of Shares subject to any Award payable or denominated in
Shares shall always be a whole number.
-4-
SECTION 5. ELIGIBILITY
Any Key Employee, including any executive officer or employee-director of
the Company or of any Affiliate, and any Consultant or Independent Director,
shall be eligible to be designated a Participant.
SECTION 6. AWARDS
(a) OPTION AWARDS. The Committee is hereby authorized to grant
Options to Key Employees, Consultants and Independent Directors upon the terms
and conditions set forth below and such additional terms and conditions, in
either case not inconsistent with the provisions of the Plan, as the Committee
shall determine in its discretion; provided, however, that Consultants and
Independent Directors may not be granted Incentive Stock Options.
(i) EXERCISE PRICE. The exercise price per share of an
Option granted pursuant to this Section 6(a) shall be determined by
the Committee; provided, however, that such exercise price shall
not be less than 100% of the Fair Market Value of a Share on the
date of grant of an Incentive Stock Option and 50% of such fair
market value of a Non-Qualified Stock Option.
(ii) OPTION TERM. The term of each Option shall be fixed
by the Committee; provided, however, that in no event shall the
term of any Option exceed a period of ten years from the date of
its grant.
(iii) EXERCISABILITY AND METHOD OF EXERCISE. An Option
shall become exercisable in such manner and within such period or
periods and in such installments or otherwise as shall be
determined by the Committee; provided, however, that regardless of
any other exercise or vesting period specified in any Award
Agreement with respect to any Option, each Option granted under the
Plan shall become immediately exercisable in full for the remainder
of the Option term automatically upon the occurrence of a Change in
Control. The Committee also shall determine the method or methods
by which, and the form or forms, including, without limitation,
cash, Shares, other securities, other Awards, other property or any
combination thereof, having a Fair Market Value on the exercise
date equal to the relevant exercise price, in which payment of the
exercise price with respect to any Option may be made or deemed to
have been made.
(iv) 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 (or any successor provision thereto) and
any regulations promulgated thereunder. Notwithstanding any provision in the
Plan to the contrary, no Incentive Stock Option may be granted hereunder after
the tenth anniversary of the adoption of the Plan by the Board.
(b) STOCK APPRECIATION RIGHTS. The Committee is hereby authorized
to grant Stock Appreciation Rights to Key Employees, Consultants and Independent
Directors. Subject to the terms of the Plan and any applicable Award Agreement,
a Stock Appreciation Right granted under the Plan shall confer on the holder
thereof a right to receive, upon exercise thereof, the excess of (i) the Fair
Market Value of one Share on the date of exercise over (ii) the grant price of
the Stock Appreciation Right as specified by the Committee, which shall not be
-5-
less than 100% of the Fair Market Value of one Share on the date of grant of the
Stock Appreciation Right. Subject to the terms of the Plan, the grant price,
term, methods of exercise, methods of settlement (including whether the
Participant will be paid in cash, Shares, other securities, other Awards, or
other property or any combination thereof), and any other terms and conditions
of any Stock Appreciation Right shall be as determined by the Committee in its
discretion; provided, however, that regardless of any other exercise or vesting
period specified in any Award Agreement with respect to any Stock Appreciation
Right, each Stock Appreciation Right granted under the Plan shall become
immediately exercisable in full for the remainder of the Stock Appreciation
Right term automatically upon the occurrence of a Change in Control. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.
(c) RESTRICTED STOCK AWARDS.
(i) ISSUANCE. The Committee is hereby authorized to grant
Awards of Restricted Stock to Key Employees, Consultants and Independent
Directors; provided, however, that the aggregate number of Shares of Restricted
Stock granted under the Plan to all Participants as a group shall not exceed
90,000 Shares of the total number of Shares available for Awards under Section
4(a)(i), subject to Section 4(a)(ii) and the other provisions of Section 4.
(ii) RESTRICTIONS. Shares of Restricted Stock granted to
Participants shall be subject to such restrictions as the Committee may impose
in its discretion (including, without limitation, any limitation on the right to
vote a Share of Restricted Stock or the right to receive any dividend or other
right or property), which restrictions may lapse separately or in combination at
such time or times, in such installments or otherwise, as the Committee may deem
appropriate in its discretion; provided, however, that regardless of any other
vesting or restriction period specified in any Award Agreement with respect to
any Restricted Stock, each Share of Restricted Stock granted under the Plan
shall become a Released Security automatically upon the occurrence of a Change
in Control.
(iii) REGISTRATION. Any Restricted Stock granted under the Plan
to a Participant may be evidenced in such manner as the Committee may deem
appropriate in its discretion, including, without limitation, book-entry
registration or issuance of a stock certificate or certificates. In the event
any stock certificate is issued in respect of Shares of Restricted Stock granted
under the Plan to a Participant, such certificate shall be registered in the
name of the Participant and shall bear an appropriate legend (as determined by
the Committee) referring to the terms, conditions and restrictions applicable to
such Restricted Stock.
(iv) PAYMENT OF RESTRICTED STOCK. At the end of the applicable
restriction period relating to Restricted Stock granted to a Participant, one or
more stock certificates for the appropriate number of Shares of Released
Securities, free of restrictions imposed under the Plan and the Award Agreement,
shall be delivered to the Participant or, if the Participant received stock
certificates representing the Restricted Stock at the time of grant, the legends
placed on such certificates shall be removed.
(v) FORFEITURE. Except as otherwise determined by the Committee
in its discretion, upon termination of employment or consultancy of a
Participant (as determined under criteria established by the Committee in its
discretion) for
-6-
any reason during the applicable restriction period, all Shares of Restricted
Stock still subject to restriction under the Plan or an Award Agreement shall be
forfeited by the Participant; provided, however, that the Committee may, when it
finds that a waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect to Shares of
Restricted Stock held by a Participant.
(d) PERFORMANCE SHARE AWARDS.
(i) ISSUANCE. The Committee is hereby authorized to grant
Awards of Performance Shares to Key Employees, Consultants and Independent
Directors.
(ii) PERFORMANCE GOALS AND OTHER TERMS. The Committee
shall determine in its discretion the Performance Period, the performance goal
or goals to be achieved during any Performance Period, the proportion of
payments, if any, to be made for performance between the minimum and full
performance levels, the restrictions applicable to Shares of Restricted Stock
received upon payment of Performance Shares (if Performance Shares are paid in
such manner), and any other terms, conditions and rights relating to a grant of
Performance Shares; provided, however, that regardless of any other requirements
or restrictions specified in any Award Agreement with respect to any Performance
Share, each Performance Share granted under the Plan shall become immediately
payable in full (assuming the maximum performance goal and any other
requirements have been fully satisfied) automatically upon the occurrence of a
Change in Control. Performance goals established by the Committee may be based
on one or more measures such as return on shareholders' equity, earnings or any
other standard or standards deemed relevant by the Committee, measured
internally or relative to other organizations and before or after extraordinary
items.
(iii) RIGHTS AND BENEFITS DURING THE PERFORMANCE PERIOD. The
Committee may provide that, during a Performance Period, a Participant shall be
paid cash amounts, with respect to each Performance Share held by such
Participant, in the same manner, at the same time, and in the same amount paid,
as a cash dividend on a Share. Participants shall have no voting rights with
respect to Performance Shares held by them.
(iv) ADJUSTMENTS WITH RESPECT TO PERFORMANCE SHARES. Any
other provision of the Plan to the contrary notwithstanding, the Committee may
in its discretion at any time or from time to time adjust performance goals (up
or down) and minimum or full performance levels (and any intermediate levels and
proportion of payments related thereto), adjust the manner in which performance
goals are measured, or shorten any Performance Period or waive in whole or in
part any or all remaining restrictions with respect to Shares of Restricted
Stock issued in payment of Performance Shares, if the Committee determines that
conditions, including but not limited to, changes in the economy, changes in
competitive conditions, changes in laws or governmental regulations, changes in
generally accepted accounting principles, changes in the Company's accounting
policies, acquisitions or dispositions by the Company or its Affiliates, or the
occurrence of other unusual, unforeseen or extraordinary events, so warrant.
(v) PAYMENT OF PERFORMANCE SHARES. As soon as is reasonably
practicable following the end of the applicable Performance Period, one or more
certificates representing the number of Shares equal to the number of
Performance Shares payable shall be registered in the name of and delivered to
the Participant; provided, however, that any Shares of Restricted Stock payable
in connection with Performance Shares shall, pending the expiration, lapse, or
-7-
waiver of the applicable restrictions, be evidenced in the manner as set forth
in Section 6(c)(iii) hereof.
(e) Other Awards.
(i) OTHER STOCK-BASED AWARDS. Other awards, valued in
whole or in part by reference to, or otherwise based on, Shares may be granted
either alone or in addition to or in conjunction with other Awards for such
consideration, if any, and in such amounts and having such terms and conditions
as the Committee may determine.
(ii) OTHER BENEFITS. The Committee shall have the right to
provide types of benefits under the Plan in addition to those specifically
listed if the committee believes that such benefits would further the purposes
for which the Plan was established.
(f) GENERAL.
(i) NO CONSIDERATION FOR AWARDS. Awards shall be granted
to Participants for no cash consideration unless otherwise determined by the
Committee.
(ii) AWARD AGREEMENTS. Each Award granted under the Plan
shall be evidenced by an Award Agreement in such form or forms (consistent with
the terms of the Plan) as shall have been approved by the Committee.
(iii) AWARDS MAY BE GRANTED SEPARATELY OR TOGETHER. Awards
to Participants under the Plan may be granted either alone or in addition to, in
tandem with, or in substitution for, any other Award or any award granted under
any other plan of the Company or any Affiliate. Awards granted in addition to,
or in tandem with, other Awards, or in addition to, or in tandem with, awards
granted under any other plan of the Company or any Affiliate, may be granted
either at the same time as or at a different time from the grant of such other
Awards or awards.
(iv) FORMS OF PAYMENT UNDER AWARDS. Subject to the terms of
the Plan and of any applicable Award Agreement, payments or transfers to be made
by the Company or an Affiliate upon the grant, exercise or payment of an Award
to a Participant may be made in such form or forms as the Committee shall
determine, and may be made in a single payment or transfer, in installments, or
on a deferred basis, in each case in accordance with rules and procedures
established by the Committee in its discretion. Such rules and procedures may
include, without limitation, provision for the payment or crediting of interest
on installment or deferred payments.
(v) LIMITS ON TRANSFER OF AWARDS. No Award (other than
Released Securities), and no right under any such Award, shall be assignable,
alienable, saleable or transferable by a Participant otherwise than by will or
by the laws of descent and distribution (or, in the case of an Award of
Restricted Securities, to the Company); provided, however, that a Participant at
the discretion of the Committee may be entitled, in the manner established by
the Committee, (A) to designate a beneficiary or beneficiaries to exercise his
or her rights, and to receive any property distributable, with respect to any
Award upon the death of the Participant or (B) to transfer any Award. No Award
(other than Released Securities), and no right under any such Award, may be
pledged, alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate.
-8-
(vi) TERM OF AWARDS. Except as otherwise provided in the
Plan, the term of each Award shall be for such period as may be determined by
the Committee.
(vii) SHARE CERTIFICATES; REPRESENTATION. In addition to the
restrictions imposed pursuant to Section 6(c) and Section 6(d) hereof, all
certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the Commission, the NASDAQ National Market
or any stock exchange or other market upon which such Shares are then listed or
traded, and any applicable federal or state securities laws, rules and
regulations and the Committee may cause a legend or legends to be placed on any
such certificates to make appropriate reference to such restrictions. The
Committee may require each Participant or other Person who acquires Shares under
the Plan by means of an Award originally made to a Participant to represent to
the Company in writing that such Participant or other Person is acquiring the
Shares without a view to the distribution thereof.
(viii) WAIVER OF CONDITIONS. The Committee may in whole or in
part, waive any conditions or other restrictions with respect to any award.
SECTION 7. AMENDMENT AND TERMINATION OF THE PLAN; CORRECTION OF DEFECTS AND
OMISSIONS
(a) AMENDMENTS TO AND TERMINATION OF THE PLAN. The Board may at
any time amend, alter, suspend, discontinue or terminate the Plan; provided,
however, that shareholder approval of any amendment of the Plan shall also be
obtained if otherwise required by: (i) the Code or any rules promulgated
thereunder (in order to allow for Incentive Stock Options to be granted under
the Plan); (ii) the quotation or listing requirements of the NASDAQ National
Market or any securities exchange or market on which the Shares are then traded
or listed (in order to maintain the quotation or the listing of the Shares
thereon); or (iii) the amendment proposes to increase the number of shares
available under the Plan. To the extent permitted by applicable law and subject
to such shareholder approval as may be required above, the Committee may also
amend the Plan, provided that any such amendments shall be reported to the
Board. Termination of the Plan shall not affect the rights of Participants with
respect to Awards previously granted to them, and all unexpired Awards shall
continue in force and effect after termination of the Plan except as they may
lapse or be terminated by their own terms and conditions.
(b) CORRECTION OF DEFECTS, OMISSIONS AND INCONSISTENCIES. The
Committee may in its discretion correct any defect, supply any omission or
reconcile any inconsistency in any Award or Award Agreement in the manner and to
the extent it shall deem desirable to carry the Plan into effect.
SECTION 8. GENERAL PROVISIONS
(a) NO RIGHTS TO AWARDS. No Key Employee, Consultant, Independent
Director, Participant or other Person shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Key Employees, Consultants, Independent Directors, Participants or holders or
beneficiaries of Awards under the Plan. The terms and conditions of Awards need
not be the same with respect to each Participant.
-9-
(b) WITHHOLDING. No later than the date as of which an amount
first becomes includable in the gross income of a Participant for federal income
tax purposes with respect to any Award under the Plan, the Participant shall pay
to the Company, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local or foreign taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Committee, withholding obligations arising with respect to Awards to
Participants under the Plan may be settled with Shares previously owned by the
Participant; provided, however, that the Participant may not settle such
obligations with Shares that are part of, or are received upon exercise of, the
Award that gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and
the Company and any Affiliate shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participant. The Committee may establish such procedures as it deems
appropriate for the settling of withholding obligations with Shares.
(c) NO LIMIT ON OTHER COMPENSATION ARRANGEMENTS. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other or additional compensation arrangements, and such
arrangements may be either generally applicable or applicable only in specific
cases.
(d) RIGHTS AND STATUS OF RECIPIENTS OF AWARDS. The grant of an
Award shall not be construed as giving a Participant the right to be retained in
the employ of or as a consultant to the Company or any Affiliate. Further, the
Company or any Affiliate may at any time dismiss a Participant from employment
or consultancy, free from any liability, or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award Agreement. Except for
rights accorded under the Plan and under any applicable Award Agreement,
Participants shall have no rights as holders of Shares as a result of the
granting of Awards hereunder.
(e) UNFUNDED STATUS OF THE PLAN. Unless otherwise determined by
the Committee, the Plan shall be unfunded and shall not create (or be construed
to create) a trust or a separate fund or funds. The Plan shall not establish
any fiduciary relationship between the Company or the Committee and any
Participant or other Person. To the extent Person holds any right by virtue of
a grant under the Plan, such right (unless otherwise determined by the
Committee) shall be no greater than the right of an unsecured general creditor
of the Company.
(f) GOVERNING LAW. The validity, construction and effect of the
Plan and any rules and regulations relating to the Plan shall be determined in
accordance with the internal laws of the State of New Jersey and applicable
federal law.
(g) SEVERABILITY. If any provision of the Plan or any Award
Agreement or any Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction, or as to any Person or Award, or would
disqualify the Plan, any Award Agreement or any Award under any law deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent
of the Plan, any Award Agreement or the Award, such provision shall be stricken
as to such jurisdiction, Person or Award, and the remainder of the Plan, any
such Award Agreement and any such Award shall remain in full force and effect.
-10-
(h) NO FRACTIONAL SHARES. No fractional Shares or other
securities shall be issued or delivered pursuant to the Plan, any Award
Agreement or any Award, and the Committee shall determine (except as otherwise
provided in the Plan) whether cash, other securities or other property shall be
paid or transferred in lieu of any fractional Shares or other securities, or
whether such fractional Shares or other securities or any rights thereto shall
be cancelled, terminated or otherwise eliminated.
(i) HEADINGS. Headings are given to the Sections and subsections
of the Plan solely as a convenience to facilitate reference. Such headings
shall not be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
SECTION 9. EFFECTIVE DATE OF THE PLAN
The Plan shall be effective on the date the Plan is adopted by the Board,
subject, however, to the approval of the Plan by the Company's shareholders
within (12) months following the date of adoption of the Plan by the Board.
SECTION 10. TERM OF THE PLAN
No Award shall be granted under the Plan following the tenth anniversary of
its effective date. However, unless otherwise expressly provided in the Plan or
in an applicable Award Agreement, any Award theretofore granted may extend
beyond such date and, to the extent set forth in the Plan, the authority of the
Committee to amend, alter, adjust, suspend, discontinue or terminate any such
Award, or to waive any conditions or restrictions with respect to any such
Award, and the authority of the Board to amend the Plan, shall extend beyond
such date.