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EXHIBIT 10.8
AMERIPATH HOLDINGS, INC. AND ITS SUBSIDIARIES
2003 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. PURPOSE. The purpose of the AmeriPath Holdings, Inc. and
its Subsidiaries 2003 Stock Option and Restricted Stock Purchase Plan (the
"PLAN") is to promote the interests of AmeriPath Holdings, Inc., a Delaware
corporation (the "COMPANY"), and its Subsidiaries and the interests of the
Company's stockholders by providing an opportunity to selected employees and
other persons providing services for the Company or any Subsidiary thereof as of
the date of the adoption of the Plan or at any time thereafter to purchase
Common Stock of the Company. By encouraging such stock ownership, the Company
seeks to attract, retain and motivate such employees and other persons and to
encourage such employees and other persons to devote their best efforts to the
business and financial success of the Company and its Subsidiaries. It is
intended that this purpose will be effected by the granting of "non-qualified
stock options" and/or "incentive stock options" to acquire the Common Stock of
the Company and/or by the granting of rights to purchase the Common Stock of the
Company on a "restricted stock" basis. Under the Plan, the Administrator (as
hereinafter defined) shall have the authority (in its sole discretion) to grant
"incentive stock options" within the meaning of Section 422(b) of the Code (as
hereinafter defined), "non-qualified stock options" as described in Treasury
Regulation Section 1.83-7 or any successor regulation thereto, or "restricted
stock" awards.
Section 2. DEFINITIONS. For purposes of the Plan, the following terms
used herein shall have the following meanings, unless a different meaning is
clearly required by the context:
2.1. "ADMINISTRATOR" or "COMMITTEE" shall mean the committee or
committees of the Board of Directors referred to in Section 5 hereof; PROVIDED,
that if no such committee or committees are appointed by the Board of Directors,
the Administrator and the Committee shall be the Board of Directors and the
Board of Directors shall have all of the authority and obligations of the
Administrator and Committee under the Plan.
2.2. "AWARD" shall mean an award of the right to purchase Common
Stock granted under the provisions of Section 7 of the Plan.
2.3. "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
2.4 "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
2.5. "COMMON STOCK" shall mean the Common Stock, $.01 par value, of
the Company.
2.6. "EMPLOYEE" shall mean (i) with respect to an ISO, any person,
including, without limitation, an officer of the Company, who, at the time an
ISO is granted to such person hereunder, is employed by the Company or any
Parent or Subsidiary of the Company, and (ii) with respect to a Non-Qualified
Option and/or an Award, any person employed by, or
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performing services for, the Company or any Parent or Subsidiary of the Company,
including, without limitation, officers, directors and consultants.
2.7. "ISO" shall mean an Option granted to a Participant pursuant
to the Plan that constitutes and shall be treated as an "incentive stock option"
as defined in Section 422(b) of the Code.
2.8. "NON-QUALIFIED OPTION" shall mean an Option granted to a
Participant pursuant to the Plan that is intended to be, and qualifies as, a
"non-qualified stock option" as described in Treasury Regulation Section 1.83-7
or any successor regulation thereto and that shall not constitute or be treated
as an ISO.
2.9. "OPTION" shall mean any ISO or Non-Qualified Option granted to
a Participant pursuant to the Plan.
2.10. "PARTICIPANT" shall mean any Employee to whom an Award and/or
an Option is granted under the Plan.
2.11. "PARENT" of the Company shall have the meaning set forth in
Section 424(e) of the Code.
2.12. "SUBSIDIARY" of the Company shall have the meaning set forth
in Section 424(f) of the Code.
Section 3. ELIGIBILITY. Awards and/or Options may be granted to any
Employee. The Administrator shall have the sole authority to select the persons
to whom Awards and/or Options are to be granted hereunder, and to determine
whether a person is to be granted a Non-Qualified Option, an ISO or an Award or
any combination thereof. No person shall have any right to participate in the
Plan. Any person selected by the Administrator for participation during any one
period will not by virtue of such participation have the right to be selected as
a Participant for any other period.
Section 4. COMMON STOCK SUBJECT TO THE PLAN.
4.1. NUMBER OF SHARES. The total number of shares of Common Stock
for which Options and/or Awards may be granted under the Plan shall not exceed
in the aggregate 7,668,736 shares of Common Stock (subject to adjustment as
provided in Section 8 hereof). The Company, during the term of this Plan, will
at all times reserve and keep available such number of shares of Common Stock as
shall be sufficient to satisfy the requirements of the Plan.
4.2. REISSUANCE. The shares of Common Stock that may be subject to
Options and/or Awards granted under the Plan may be either authorized and
unissued shares or shares reacquired at any time and now or hereafter held as
treasury stock as the Administrator may determine. In the event that any
outstanding Option expires or is terminated for any reason, the shares allocable
to the unexercised portion of such Option may again be subject to an Option
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and/or Award granted under the Plan, subject, in the case of ISO's, to any
limitation required by the Code. If any shares of Common Stock issued or sold
pursuant to an Award or the exercise of an Option shall have been repurchased by
the Company, then such shares may again be subject to an Option and/or Award
granted under the Plan.
4.3. SPECIAL ISO LIMITATIONS.
(a) The aggregate fair market value (determined as of the date an
ISO is granted) of the shares of Common Stock with respect to which ISOs are
exercisable for the first time by an Employee during any calendar year (under
all incentive stock option plans of the Company or any Parent or Subsidiary of
the Company) shall not exceed $100,000.
(b) No ISO shall be granted to an Employee who, at the time the
ISO is granted, owns (actually or constructively under the provisions of Section
424(d) of the Code) stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Parent or Subsidiary of the
Company, unless (i) the option price is at least 110% of the fair market value
(determined as of the time the ISO is granted) of the shares of Common Stock
subject to the ISO and (ii) the ISO by its terms is not exercisable more than
five years from the date it is granted.
4.4. LIMITATIONS NOT APPLICABLE TO NON-QUALIFIED OPTIONS OR AWARDS.
Notwithstanding any other provision of the Plan, the provisions of Sections
4.3(a) and (b) shall not apply, nor shall be construed to apply, to any
Non-Qualified Option or Award granted under the Plan.
Section 5. ADMINISTRATION OF THE PLAN.
5.1. ADMINISTRATION. (a) Subject to the proviso in Section 2.1
hereof, the Plan may be administered by one or more committees of the Board of
Directors each consisting of no less than two persons. To the extent that the
Board of Directors determines it desirable to qualify transactions hereunder as
exempt under Rule l6b-3 of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), each member of the Administrator administering the Plan as to
such transactions shall be a "Non-Employee Director" within the meaning of Rule
l6b-3 promulgated under the Exchange Act. To the extent that the Board of
Directors determines it desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, each member of the Administrator administering the Plan as to such Options
shall be an "outside director" within the meaning of Treasury regulation Section
I, l62-27(e)(3). The Administrator shall be appointed from time to time by, and
shall serve at the pleasure of, the Board of Directors.
(b) No member of the Board of Directors or the Administrator shall
be liable for any action, omission or determination relating to the Plan, and
the Company shall indemnify (to the extent permitted under Delaware law and the
bylaws of the Company) and hold harmless each member of the Board of Directors,
the Administrator and each other employee of the Company to whom any duty or
power relating to the administration or interpretation of the Plan
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has been delegated against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the approval of
the Board of Directors or the Administrator) arising out of any action, omission
or determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such director or employee in bad
faith and without reasonable belief that it was in the best interests of the
Company.
5.2. GRANT OF OPTIONS/AWARDS.
(a) OPTIONS. The Administrator shall have the sole authority and
discretion under the Plan (i) to select the Employees who are to be granted
Options hereunder; (ii) to designate whether any Option to be granted hereunder
is to be an ISO or a Non-Qualified Option; (iii) to establish the number of
shares of Common Stock that may be subject to each Option; (iv) to determine the
time and the conditions subject to which Options may be exercised in whole or in
part; (v) to determine the amount (not less than the par value per share) and
the form of the consideration that may be used to purchase shares of Common
Stock upon exercise of any Option (including, without limitation, the
circumstances under which issued and outstanding shares of Common Stock owned by
a Participant may be used by the Participant to exercise an Option); (vi) to
impose restrictions and/or conditions with respect to shares of Common Stock
acquired upon exercise of an Option; (vii) to determine the circumstances under
which shares of Common Stock acquired upon exercise of any Option may be subject
to repurchase by the Company; (viii) to determine the circumstances and
conditions subject to which shares acquired upon exercise of an Option may be
sold or otherwise transferred, including, without limitation, the circumstances
and conditions subject to which a proposed sale of shares of Common Stock
acquired upon exercise of an Option may be subject to the Company's right of
first refusal (as well as the terms and conditions of any such right of first
refusal); (ix) to establish a vesting provision for any Option relating to the
time when (or the circumstances under which) the Option may be exercised by a
Participant, including, without limitation, vesting provisions that may be
contingent upon (A) the Company's meeting specified financial goals, (B) a
change of control of the Company or (C) the occurrence of other specified
events; (x) to accelerate the time when outstanding Options may be exercised,
PROVIDED, HOWEVER, that any ISOs shall be deemed "accelerated" within the
meaning of Section 424(h) of the Code; and (xi) to establish any other terms,
restrictions and/or conditions applicable to any Option not inconsistent with
the provisions of the Plan.
(b) AWARDS. The Administrator shall have the sole authority and
discretion under the Plan (i) to select the Employees who are to be granted
Awards hereunder; (ii) to determine the amount to be paid by a Participant to
acquire shares of Common Stock pursuant to an Award, which amount may be equal
to, more than, or less than the fair market value of such shares on the date the
Award is granted (but in no event less than the par value of such shares); (iii)
to determine the time or times and the conditions subject to which Awards may be
made; (iv) to determine the time or times and the conditions subject to which
the shares of Common Stock subject to an Award are to become vested and no
longer subject to repurchase by the Company; (v) to establish transfer
restrictions and the terms and conditions on which any such transfer
restrictions with respect to shares of Common Stock acquired pursuant to an
Award shall
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lapse; (vi) to establish vesting provisions with respect to any shares of Common
Stock subject to an Award, including, without limitation, vesting provisions
which may be contingent upon (A) the Company's meeting specified financial
goals, (B) a change of control of the Company or (C) the occurrence of other
specified events; (vii) to determine the circumstances under which shares of
Common Stock acquired pursuant to an Award may be subject to repurchase by the
Company; (viii) to determine the circumstances and conditions subject to which
any shares of Common Stock acquired pursuant to an Award may be sold or
otherwise transferred, including, without limitation, the circumstances and
conditions subject to which a proposed sale of shares of Common Stock acquired
pursuant to an Award may be subject to the Company's right of first refusal (as
well as the terms and conditions of any such right of first refusal); (ix) to
determine the form of consideration that may be used to purchase shares of
Common Stock pursuant to an Award (including, without limitation, the
circumstances under which issued and outstanding shares of Common Stock owned by
a Participant may be used by the Participant to purchase the Common Stock
subject to an Award); (x) to accelerate the time at which any or all
restrictions imposed with respect to any shares of Common Stock subject to an
Award will lapse; and (xi) to establish any other terms, restrictions and/or
conditions applicable to any Award not inconsistent with the provisions of the
Plan.
5.3. INTERPRETATION. The Administrator shall be authorized to
interpret the Plan and may, from time to time, adopt such rules and regulations,
not inconsistent with the provisions of the Plan, as it may deem advisable to
carry out the purposes of the Plan.
5.4. FINALITY. The interpretation and construction by the
Administrator of any provision of the Plan, any Option and/or Award granted
hereunder or any agreement evidencing any such Option and/or Award shall be
final and conclusive upon all parties.
5.5. EXPENSES. ETC. All expenses and liabilities incurred by the
Administrator in the administration of the Plan shall be borne by the Company.
The Administrator may employ attorneys, consultants, accountants or other
persons in connection with the administration of the Plan. The Company, and its
officers and directors, shall be entitled to rely upon the advice, opinions or
valuations of any such persons. No member of the Administrator shall be liable
for any action, determination or interpretation taken or made in good faith with
respect to the Plan or any Option and/or Award granted hereunder.
Section 6. TERMS AND CONDITIONS OF OPTIONS.
6.1. ISOs. The terms and conditions of each ISO granted under the
Plan shall be specified by the Administrator and shall be set forth in an ISO
agreement between the Company and the Participant in such form as the
Administrator shall approve. The terms and conditions of each ISO shall be such
that each ISO issued hereunder shall constitute and shall be treated as an
"incentive stock option" as defined in Section 422(b) of the Code. The terms and
conditions of any ISO granted hereunder need not be identical to those of any
other ISO granted hereunder.
The terms and conditions of each ISO shall include the following:
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(a) The option price shall be fixed by the Administrator but shall
in no event be less than 100% (or 110% in the case of an Employee referred to in
Section 4.3(b) hereof) of the fair market value of the shares of Common Stock
subject to the ISO on the date the ISO is granted. For purposes of the Plan, the
fair market value per share of Common Stock as of any day shall mean the average
of the closing prices of sales of shares of Common Stock on all national
securities exchanges on which the Common Stock may at the time be listed or, if
there shall have been no sales on any such day, the average of the highest bid
and lowest asked prices on all such exchanges at the end of such day, or, if on
any day the Common Stock shall not be so listed, the average of the
representative bid and asked prices quoted in the NASDAQ system as of 3:30 p.m.,
New York time, on such day, or, if on any day the Common Stock shall not be
quoted in the NASDAQ system, the average of the high and low bid and asked
prices on such day in the over-the-counter market as reported by National
Quotation Bureau Incorporated, or any similar successor organization. If at any
time the Common Stock is not listed on any national securities exchange or
quoted in the NASDAQ system or the over-the-counter market, the fair market
value of the shares of Common Stock subject to an Option on the date the ISO is
granted shall be the fair market value thereof determined in good faith by the
Board of Directors.
(b) ISOs, by their terms, shall not be transferable otherwise than
by will or the laws of descent and distribution, and, during a Participant's
lifetime, an ISO shall be exercisable only by the Participant.
(c) The Administrator shall fix the term of all ISOs granted
pursuant to the Plan (including, without limitation, the date on which such ISO
shall expire and terminate); PROVIDED, HOWEVER, that such term shall in no event
exceed ten (10) years from the date on which such ISO is granted (or, in the
case of an ISO granted to an Employee referred to in Section 4.3(b) hereof, such
term shall in no event exceed five (5) years from the date on which such ISO is
granted). Each ISO shall be exercisable in such amount or amounts, under such
conditions and at such times or intervals or in such installments as shall be
determined by the Administrator in its sole discretion.
(d) To the extent that the Company or any Parent or Subsidiary of
the Company is required to withhold any Federal, state or local taxes in respect
of any compensation income realized by any Participant as a result of any
"disqualifying disposition" of any shares of Common Stock acquired upon exercise
of an ISO granted hereunder, the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the Board of
Directors, in its sole discretion.
(e) The terms and conditions of each ISO may include the following
provisions:
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(i) In the event a Participant's employment by the Company or any
Parent or Subsidiary of the Company shall be terminated for cause, the
unexercised portion of any ISO held by such Participant at that time may only be
exercised within one month after the date on which the Participant ceased to be
so employed, and only to the extent that the Participant could have otherwise
exercised such ISO as of the date on which he ceased to be so employed.
(ii) In the event a Participant's employment by the Company or any
Parent or Subsidiary of the Company shall terminate for any reason other than
(x) a termination specified in clause (i) above or (y) by reason of the
Participant's death or "disability" (within the meaning of Section 22(e)(3) of
the Code), the unexercised portion of any ISO held by such Participant at that
time may only be exercised within three months after the date on which the
Participant ceased to be so employed, and only to the extent that the
Participant could have otherwise exercised such ISO as of the date on which he
ceased to be so employed.
(iii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis by
reason of his "disability" (within the meaning of Section 22(e)(3) of the Code),
the unexercised portion of any ISO held by such Participant at that time may
only be exercised within one year after the date on which the Participant ceased
to be so employed, and only to the extent that the Participant could have
otherwise exercised such ISO as of the date on which he ceased to be so
employed.
(iv) In the event a Participant shall die while in the employ of
the Company or a Parent or Subsidiary of the Company (or within a period of one
year after ceasing to be an Employee by reason of his "disability" (within the
meaning of Section 22(e)(3) of the Code)), the unexercised portion of any ISO
held by such Participant at the time of his death may only be exercised within
one year after the date of such Participant's death and only to the extent that
the Participant could have otherwise exercised such ISO at the time of his
death. In such event, the executor or administrator of the Participant's estate,
or any person or persons who shall have acquired the ISO directly from the
Participant by bequest or inheritance, may exercise such ISO.
6.2. NON-QUALIFIED OPTIONS. The terms and conditions of each
Non-Qualified Option granted under the Plan shall be specified by the
Administrator, in its sole discretion, and shall be set forth in a written
option agreement between the Company and the Participant in such form as the
Administrator shall approve. The terms and conditions of each Non-Qualified
Option will be such (and each Non-Qualified Option agreement shall expressly so
state) that each Non-Qualified Option issued hereunder shall not constitute nor
be treated as an "incentive stock option" as defined in Section 422(b) of the
Code, but will be a "non-qualified stock option" for Federal, state and local
income tax purposes. The terms and conditions of any Non-Qualified Option
granted hereunder need not be identical to those of any other Non-Qualified
Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall
include the following:
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(a) The option (exercise) price shall be fixed by the
Administrator and may be equal to, more than or less than the fair market value
of the shares of Common Stock subject to the Non-Qualified Option on the date
such Non-Qualified Option is granted as determined in good faith by the
Administrator.
(b) The Administrator shall fix the term of all Non-Qualified
Options granted pursuant to the Plan (including, without limitation, the date on
which such Non-Qualified Option shall expire and terminate). Each Non-Qualified
Option shall be exercisable in such amount or amounts, under such conditions
(including, without limitation, provisions governing the rights to exercise such
Non-Qualified Option), and at such times or intervals or in such installments as
shall be determined by the Administrator in its sole discretion.
(c) Non-Qualified Options shall not be transferable otherwise than
by will or the laws of descent and distribution, and during a Participant's
lifetime a Non-Qualified Option shall be exercisable only by the Participant.
(d) The terms and conditions of each Non-Qualified Option may
include the following provisions:
(i) In the event a Participant's employment by the Company or any
Parent or Subsidiary of the Company shall be terminated for cause, the
unexercised portion of any Non-Qualified Option held by such Participant at
that time may only be exercised within one month after the date on which
the Participant ceased to be an Employee, and only to the extent that the
Participant could have otherwise exercised such Non-Qualified Option as of
the date on which he ceased to be an Employee.
(ii) In the event a Participant's employment by the Company or any
Parent or Subsidiary of the Company shall be terminated by the Participant
for any reason other than (x) a termination specified in clause (iii) below
or (y) by reason of the Participant's death or "disability" (within the
meaning of Section 22(e)(3) of the Code), the unexercised portion of any
Non-Qualified Option held by such Participant at that time may only be
exercised within three months after the date on which the Participant
ceased to be an Employee, and only to the extent that the Participant could
have otherwise exercised such Non-Qualified Option as of the date on which
he ceased to be an Employee.
(iii) In the event that a Participant's employment by the Company or
any Parent or Subsidiary of the Company shall be terminated (x) by the
Company or any Parent or Subsidiary thereof other than as specified in
clause (i) above and other than by reason of the Participant's death or
"disability" (within the meaning of Section 22(e)(3) of the Code) or (y) by
the Participant for reasons specified in the Non-Qualified Option as
constituting "Good Reason", the unexercised portion of any Non-Qualified
Option held by such Participant at that time may only be exercised within
six months after the date on which the Participant ceased to be an
Employee, and only to the extent that the Participant could have otherwise
exercised such Non-Qualified Option as of the date on which he ceased to be
an Employee.
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(iv) In the event a Participant shall cease to be an Employee of
the Company or any Parent or Subsidiary of the Company by reason of his
"disability" (within the meaning of Section 22(e)(3) of the Code), the
unexercised portion of any Non-Qualified Option held by such Participant at
that time may only be exercised within one year after the date on which the
Participant ceased to be an Employee, and only to the extent that the
Participant could have otherwise exercised such Non-Qualified Option as of
the date on which he ceased to be an Employee.
(v) In the event a Participant shall die while an Employee of the
Company or a Parent or Subsidiary of the Company (or within a period of one
year after ceasing to be an Employee by reason of his "disability" (within
the meaning of Section 22(e)(3) of the Code)), the unexercised portion of
any Non-Qualified Option held by such Participant at the time of his death
may only be exercised within one year after the date of such Participant's
death, and only to the extent that the Participant could have otherwise
exercised such Non-Qualified Option at the time of his death. In such
event, such Non-Qualified Option may be exercised by the executor or
administrator of the Participant's estate or by any person or persons who
shall have acquired the Non-Qualified Option directly from the Participant
by bequest or inheritance.
(e) To the extent that the Company is required to withhold any
Federal, state or local taxes in respect of any compensation income realized by
any Participant in respect of a Non-Qualified Option granted hereunder or in
respect of any shares of Common Stock acquired upon exercise of a Non-Qualified
Option, the Company shall deduct from any payments of any kind otherwise due to
such Participant the aggregate amount of such Federal, state or local taxes
required to be so withheld or, if such payments are insufficient to satisfy such
Federal, state or local taxes, or if no such payments are due or to become due
to such Participant, then, such Participant will be required to pay to the
Company, or make other arrangements satisfactory to the Company regarding
payment to the Company of, the aggregate amount of any such taxes. All matters
with respect to the total amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Administrator, in its sole
discretion.
Section 7. TERMS AND CONDITIONS OF AWARDS. The terms and conditions of
each Award granted under the Plan shall be specified by the Administrator, in
its sole discretion, and shall be set forth in a written agreement between the
Participant and the Company, in such form as the Administrator shall approve.
The terms and provisions of any Award granted hereunder need not be identical to
those of any other Award granted hereunder.
The terms and conditions of each Award may include the following:
(a) The amount to be paid by a Participant to acquire the shares
of Common Stock pursuant to an Award shall be fixed by the Administrator and may
be equal to, more than or less than the fair market value of the shares of
Common Stock subject to the Award on the date the Award is granted (but in no
event less than the par value of such shares).
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(b) Each Award shall contain such vesting provisions, such
transfer restrictions and such other restrictions and conditions as the
Administrator, in its sole discretion, may determine, including, without
limitation, the circumstances under which the Company shall have the right and
option to repurchase shares of Common Stock acquired pursuant to an Award.
(c) Stock certificates representing Common Stock acquired pursuant
to an Award shall bear a legend referring to any restrictions imposed on such
Stock and such other matters as the Administrator may determine.
(d) To the extent that the Company is required to withhold any
Federal, state or local taxes in respect of any compensation income realized by
the Participant in respect of an Award granted hereunder, in respect of any
shares acquired pursuant to an Award, or in respect of the vesting of any such
shares of Common Stock, then the Company shall deduct from any payments of any
kind otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld, or if such payments are
insufficient to satisfy such Federal, state or local taxes, or if no such
payments are due or to become due to such Participant, then such Participant
will be required to pay to the Company, or make other arrangements satisfactory
to the Company regarding payment to the Company of, the aggregate amount of any
such taxes. All matters with respect to the total amount of taxes to be withheld
in respect of any such compensation income shall be determined by the
Administrator, in its sole discretion.
Section 8. ADJUSTMENTS.
(a) In the event that, after the adoption of the Plan by the Board
of Directors, the outstanding shares of the Company's Common Stock shall be
increased or decreased or changed into or exchanged for a different number or
kind of shares of stock or other securities of the Company or of another entity
in each such case through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in Common Stock, the
Administrator shall, subject to the provisions of Section 8(c) below if the
circumstances therein specified are applicable, appropriately adjust (i) the
number of shares of Common Stock (and the option price per share) subject to the
unexercised portion of any outstanding Option (to the nearest possible full
share); PROVIDED, HOWEVER, that the limitations of Section 424 of the Code shall
apply with respect to adjustments made to ISOs, (ii) the number of shares of
Common Stock to be acquired pursuant to an Award which have not become vested,
and (iii) the number of shares of Common Stock for which Options and/or Awards
may be granted under the Plan, as set forth in Section 4.1 hereof, and such
adjustments shall be effective and binding for all purposes of the Plan.
(b) If any capital reorganization or reclassification of the
capital stock of the Company or any consolidation or merger of the Company with
another entity, or the sale of all or substantially all its assets to another
entity, shall be effected in such a way that holders of Common Stock shall be
entitled to receive stock, securities or assets with respect to or in exchange
for Common Stock, then, subject to the provisions of Section 8(c) below if the
circumstances therein specified are applicable, each holder of an Option shall
thereafter have the
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right to purchase, upon the exercise of the Option in accordance with the terms
and conditions specified in the option agreement governing such Option and in
lieu of the shares of Common Stock immediately theretofore receivable upon the
exercise of such Option, such shares of stock, securities or assets (including,
without limitation, cash) as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Common Stock equal to the
number of shares of such Common Stock immediately theretofore so receivable had
such reorganization, reclassification, consolidation, merger or sale not taken
place.
(c) Notwithstanding Sections 8(a) and 8(b) hereof, in the event of
(i) any offer to holders of the Company's Common Stock generally relating to the
acquisition of all or substantially all of their shares, including, without
limitation, through purchase, merger or otherwise, or (ii) any proposed
transaction generally relating to the acquisition of substantially all of the
assets or business of the Company (herein sometimes referred to as an
"Acquisition"), the Board of Directors may, in its sole discretion, cancel any
outstanding Options (PROVIDED, HOWEVER, that the limitations of Section 424 of
the Code shall apply with respect to adjustments made to ISOs) and pay or
deliver, or cause to be paid or delivered, to the holder thereof an amount in
cash or securities having a value (as determined by the Board of Directors
acting in good faith) equal to the product of (A) the number of shares of Common
Stock (the "OPTION SHARES") that, as of the date of the consummation of such
Acquisition, the holder of such Option had become entitled to purchase (and had
not purchased) multiplied by (B) the amount, if any, by which (1) the formula or
fixed price per share paid to holders of shares of Common Stock pursuant to such
Acquisition exceeds (2) the option price applicable to such Option Shares.
Section 9. EFFECT OF THE PLAN ON EMPLOYMENT RELATION SHIP. Neither the
Plan nor any Option and/or Award granted hereunder to a Participant shall be
construed as conferring upon such Participant any right to continue in the
employ of (or otherwise provide services to) the Company or any Subsidiary or
Parent thereof, or limit in any respect the right of the Company or any
Subsidiary or Parent thereof to terminate such Participant's employment or other
relationship with the Company or any Subsidiary or Parent, as the case may be,
at any time.
Section 10. AMENDMENT OF THE PLAN. The Board of Directors may amend
the Plan from time to time as it deems desirable; PROVIDED, HOWEVER, that,
without the approval of the holders of a majority of the outstanding voting
capital stock of the Company entitled to vote thereon or consent thereto, the
Board of Directors may not amend the Plan (i) to increase (except for increases
due to adjustments in accordance with Section 8 hereof) the aggregate number OF
shares of Common Stock for which Options and/or Awards maybe granted hereunder,
(ii) to decrease the minimum exercise price specified by the Plan in respect of
ISOs or (iii) to change the class of Employees eligible to receive ISOs under
the Plan.
Section 11. TERMINATION OF THE PLAN. The Board of Directors may
terminate the Plan at any time. Unless the Plan shall theretofore have been
terminated by the Board of Directors, the Plan shall terminate ten years after
the date of its initial adoption by the Board of Directors. No Option and/or
Award may be granted hereunder after termination of the Plan. The termination or
amendment of the Plan shall not alter or impair any rights or obligations under
any Option and/or Award theretofore granted under the Plan.
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Section 12. EFFECTIVE DATE OF THE PLAN. The Plan shall be effective as
of March 27, 2003, the date on which the Plan was adopted by the Board of
Directors and approved by the requisite holders of outstanding Common Stock of
the Company.
Section 13. GOVERNING LAW. The provisions of the Plan shall be
governed by and interpreted in accordance with the laws of the State of New
York.
* * * *