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Exhibit 10.3
METABOLIX, INC.
2006 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the Metabolix, Inc. 2006 Stock Option and Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
officers, employees, Non-Employee Directors and other key persons (including
consultants and prospective employees) of Metabolix, Inc. (the "Company") and
its Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a
direct stake in the Company's welfare will assure a closer identification of
their interests with those of the Company and its stockholders, thereby
stimulating their efforts on the Company's behalf and strengthening their desire
to remain with the Company.
The following terms shall be defined as set forth below:
"ACT" means the Securities Act of 1933, as amended, and the rules and
regulations thereunder.
"AWARD" or "AWARDS," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Cash-based Awards and Dividend Equivalent
Rights.
"AWARD AGREEMENT" means a written or electronic agreement setting forth the
terms and provisions applicable to an Award granted under the Plan. Each Award
Agreement is subject to the terms and conditions of the Plan.
"BOARD" means the Board of Directors of the Company.
"CASH-BASED AWARD" means an Award entitling the recipient to receive a
cash-denominated payment.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"COMMITTEE" means the compensation committee of the Board or a similar
committee performing the functions of the compensation committee and which is
comprised of not less than two Non-Employee Directors who are independent.
"COVERED EMPLOYEE" means an employee who is a "Covered Employee" within the
meaning of Section 162(m) of the Code.
"DEFERRED STOCK AWARD" means an Award of phantom stock units to a grantee.
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"DIVIDEND EQUIVALENT RIGHT" means an Award entitling the grantee to receive
credits based on cash dividends that would have been paid on the shares of Stock
specified in the Dividend Equivalent Right (or other award to which it relates)
if such shares had been issued to and held by the grantee.
"EFFECTIVE DATE" means the date on which the Plan is approved by
stockholders as set forth in Section 20.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"FAIR MARKET VALUE" of the Stock on any given date means the fair market
value of the Stock determined in good faith by the Committee; provided, however,
that if the Stock is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ"), NASDAQ National System
or a national securities exchange, the determination shall be made by reference
to market quotations. If there are no market quotations for such date, the
determination shall be made by reference to the last date preceding such date
for which there are market quotations; provided further, however, that if the
date for which Fair Market Value is determined is the first day when trading
prices for the Stock are reported on NASDAQ or on a national securities
exchange, the Fair Market Value shall be the "Price to the Public" (or
equivalent) set forth on the cover page for the final prospectus relating to the
Company's Initial Public Offering.
"INCENTIVE STOCK OPTION" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"INITIAL PUBLIC OFFERING" means the consummation of the first fully
underwritten, firm commitment public offering pursuant to an effective
registration statement under the Act covering the offer and sale by the Company
of its equity securities, or such other event as a result of or following which
the Stock shall be publicly held.
"NON-EMPLOYEE DIRECTOR" means a member of the Board who is not also an
employee of the Company or any Subsidiary.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not an
Incentive Stock Option.
"OPTION" or "STOCK OPTION" means any option to purchase shares of Stock
granted pursuant to Section 5.
"PERFORMANCE-BASED AWARD" means any Restricted Stock Award, Deferred Stock
Award or Cash-based Award granted to a Covered Employee that is intended to
qualify as "performance-based compensation" under Section 162(m) of the Code and
the regulations promulgated thereunder.
"PERFORMANCE CRITERIA" means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals for an
individual for a Performance Cycle. The Performance Criteria (which shall be
applicable to the organizational level specified
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by the Committee, including, but not limited to, the Company or a unit,
division, group, or Subsidiary of the Company) that will be used to establish
Performance Goals are limited to the following: earnings before interest, taxes,
depreciation and amortization, net income (loss) (either before or after
interest, taxes, depreciation and/or amortization), changes in the market price
of the Stock, economic value-added, funds from operations or similar measure,
sales or revenue, mergers, acquisitions, financing, corporate partnering or
strategic transactions, operating income (loss), cash flow (including, but not
limited to, operating cash flow and free cash flow), return on capital, assets,
equity, or investment, stockholder returns, return on sales, gross or net profit
levels, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings (loss) per share of Stock, sales or
market shares and number of customers, branding establishment or awareness,
technical or product development advances, research and development and/or
engineering milestones, and achievement of corporate collaborative agreement
milestones, any of which may be measured either in absolute terms or as compared
to any incremental increase or as compared to results of a peer group.
"PERFORMANCE CYCLE" means one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a grantee's right to and the payment of a Restricted Stock Award,
Deferred Stock Award or Cash-based Award.
"PERFORMANCE GOALS" means, for a Performance Cycle, the specific goals
established in writing by the Committee for a Performance Cycle based upon the
Performance Criteria.
"RESTRICTED STOCK AWARD" means an Award entitling the recipient to acquire,
at such purchase price (which may be zero) as determined by the Committee,
shares of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant.
"SALE EVENT" shall mean (i) the dissolution or liquidation of the Company,
(ii) the sale of all or substantially all of the assets of the Company on a
consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding shares of Stock are
converted into or exchanged for securities of the successor entity and the
holders of the Company's outstanding voting power immediately prior to such
transaction do not own a majority of the outstanding voting power of the
successor entity immediately upon completion of such transaction, or (iv) the
sale of all of the Stock of the Company to an unrelated person or entity.
"SALE PRICE" means the value as determined by the Committee of the
consideration payable, or otherwise to be received by stockholders, per share of
Stock pursuant to a Sale Event.
"SECTION 409A" means Section 409A of the Code and the regulations and other
guidance promulgated thereunder.
"STOCK" means the Common Stock, par value $0.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
"STOCK APPRECIATION RIGHT" means an Award entitling the recipient to
receive shares of Stock having a value equal to the excess of the Fair Market
Value of the Stock on the date of
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exercise over the exercise price of the Stock Appreciation Right multiplied by
the number of shares of Stock with respect to which the Stock Appreciation Right
shall have been exercised.
"SUBSIDIARY" means any corporation or other entity (other than the Company)
in which the Company has at least a 50 percent interest, either directly or
indirectly.
"TEN PERCENT OWNER" means an employee who owns or is deemed to own (by
reason of the attribution rules of Section 424(d) of the Code) more than 10
percent of the combined voting power of all classes of stock of the Company or
any parent or subsidiary corporation.
"UNRESTRICTED STOCK AWARD" means an Award of shares of Stock free of any
restrictions.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT GRANTEES AND
DETERMINE AWARDS
(a) Committee. The Plan shall be administered by the Committee.
(b) Powers of Committee. The Committee shall have the power and authority
to grant Awards consistent with the terms of the Plan, including the power and
authority:
(i) to select the individuals to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock
Awards, Cash-based Awards and Dividend Equivalent Rights, or any combination of
the foregoing, granted to any one or more grantees;
(iii) to determine the number of shares of Stock to be covered by any
Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual Awards and
grantees, and to approve the form of written instruments evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of all or
any portion of any Award;
(vi) subject to the provisions of Section 5(a)(ii), to extend at any
time the period in which Stock Options may be exercised; and
(vii) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and provisions of
the Plan and any Award (including related written instruments); to make all
determinations it deems advisable for the administration of the Plan; to decide
all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
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All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan grantees.
(c) Delegation of Authority to Grant Awards. The Committee, in its
discretion, may delegate to the Chief Executive Officer of the Company, or other
officers of the Company as permitted by applicable law, all or part of the
Committee's authority and duties with respect to the granting of Awards, to
individuals who are (i) not subject to the reporting and other provisions of
Section 16 of the Exchange Act or (ii) not Covered Employees. Any such
delegation by the Committee shall include a limitation as to the amount of
Awards that may be granted during the period of the delegation and shall contain
guidelines as to the determination of the exercise price of any Stock Option or
Stock Appreciation Right, the conversion ratio or price of other Awards and the
vesting criteria. The Committee may revoke or amend the terms of a delegation at
any time but such action shall not invalidate any prior actions of the
Committee's delegate or delegates that were consistent with the terms of the
Plan.
(d) Award Agreement. Awards under the Plan shall be evidenced by Award
Agreements that set forth the terms, conditions and limitations for each Award
which may include, without limitation, the term of an Award, the provisions
applicable in the event employment or service terminates, and the Company's
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.
(e) Indemnification. Neither the Board nor the Committee, nor any member of
either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Committee (and any delegate
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys' fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under the Company's articles or bylaws or
any directors' and officers' liability insurance coverage which may be in effect
from time to time and/or any indemnification agreement between such individual
and the Company.
(f) Foreign Award Recipients. Notwithstanding any provision of the Plan to
the contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan;
(ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise procedures and other
terms and procedures, to the extent the Committee determines such actions to be
necessary or advisable (and such subplans and/or modifications shall be attached
to this Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in Section 3(a)
hereof; and (v) take any action, before or after an Award is made, that the
Committee determines to be necessary or advisable to obtain approval or comply
with any local governmental regulatory exemptions or approvals. Notwithstanding
the foregoing, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate the Exchange Act
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or any other applicable United States securities law, the Code, or any other
applicable United States governing statute or law.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
(a) Stock Issuable. The maximum number of shares of Stock reserved and
available for issuance under the Plan (subject to adjustment as provided in
Section 3(b)) shall be 2,500,000 shares plus on each January 1, beginning in
2007, an additional number of shares equal to 4.5% of the outstanding number of
shares of Stock on the immediately preceding December 31; provided that the
maximum aggregate number of shares of Stock reserved and available for issuance
under the Plan and under the Company's 1995 Stock Plan and 2005 Option Plan may
not exceed 25% of the total number of outstanding shares of Stock; and provided
further that not more than 10,000,000 shares shall be issued under the Plan.
Without limiting the generality of the foregoing, not more than 10,000,000
shares shall be issued in the form of Incentive Stock Options under the Plan.
For purposes of this limitation, the shares of Stock underlying any Awards under
the Plan that are forfeited, canceled, held back upon exercise of an Option or
settlement of an Award to cover the exercise price or tax withholding,
reacquired by the Company prior to vesting, satisfied without the issuance of
Stock or otherwise terminated (other than by exercise) shall be added back to
the shares of Stock available for issuance under the Plan. Subject to such
overall limitations, shares of Stock may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Stock Options or
Stock Appreciation Rights with respect to no more than 750,000 shares of Stock
may be granted to any one individual grantee during any one calendar year
period. The shares available for issuance under the Plan may be authorized but
unissued shares of Stock or shares of Stock reacquired by the Company.
(b) Changes in Stock. Subject to Section 3(c) hereof, if, as a result of
any reorganization, recapitalization, reclassification, stock dividend, stock
split, reverse stock split or other similar change in the Company's capital
stock, the outstanding shares of Stock are increased or decreased or are
exchanged for a different number or kind of shares or other securities of the
Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares
of Stock or other securities, or, if, as a result of any merger or
consolidation, sale of all or substantially all of the assets of the Company,
the outstanding shares of Stock are converted into or exchanged for securities
of the Company or any successor entity (or a parent or subsidiary thereof), the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan, (ii) the number
of Stock Options or Stock Appreciation Rights that can be granted to any one
individual grantee and the maximum number of shares that may be granted under a
Performance-based Award, (iii) the number and kind of shares or other securities
subject to any then outstanding Awards under the Plan, (iv) the repurchase
price, if any, per share subject to each outstanding Restricted Stock Award, (v)
the price for each share subject to any then outstanding Stock Options and Stock
Appreciation Rights under the Plan, without changing the aggregate exercise
price (i.e., the exercise price multiplied by the number of Stock Options and
Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation
Rights remain exercisable, and (vi) the number of Stock Options automatically
granted to Non-Employee Directors. The Committee shall also adjust the number of
shares subject to outstanding Awards and the exercise price and the terms of
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outstanding Awards to take into consideration, extraordinary dividends,
acquisitions or dispositions of stock or property to the extent necessary to
avoid distortion in the value of Awards. The adjustment by the Committee shall
be final, binding and conclusive. No fractional shares of Stock shall be issued
under the Plan resulting from any such adjustment, but the Committee in its
discretion may make a cash payment in lieu of fractional shares.
No adjustment shall be made under this Section 3(b) in the case of an
Option or Stock Appreciation Right, without the consent of the grantee, if it
would constitute a modification, extension or renewal of the Option within the
meaning of Section 424(h) of the Code or a modification of the Option or Stock
Appreciation Right such that the Option or Stock Appreciation Right becomes
treated as "nonqualified deferred compensation" subject to Section 409A.
(c) Mergers and Other Transactions. In the case of a Sale Event, the
parties to such Sale Event shall provide for the assumption or continuation of
Awards by the successor entity, or the substitution of such Awards with new
Awards of the successor entity or parent thereof, with appropriate adjustment as
to the number and kind of shares and, if appropriate, the per share exercise
prices, as such parties shall agree (after taking into account any acceleration
hereunder). If the parties to such Sale Event do not provide for such
assumption, continuation or substitution, then subject to the consummation of
such Sale Event, all Options and Stock Appreciation Rights that are not
exercisable immediately prior to the effective time of the Sale Event shall
become fully exercisable as of the effective time of the Sale Event and all
other Awards shall become fully vested and nonforfeitable as of the effective
time of the Sale Event, except as the Committee may otherwise specify with
respect to particular Awards in the relevant Award documentation, and Awards
with conditions and restrictions relating to the attainment of performance goals
may become vested and nonforfeitable in connection with such Sale Event in the
Committee's discretion. In addition, if Awards are not assumed, continued or
substituted, then upon the effective time of the Sale Event, the Plan and all
outstanding Awards will terminate. In the event of such termination, each
grantee shall be permitted, within a specified period of time prior to the
consummation of the Sale Event as determined by the Committee, to exercise all
outstanding Options and Stock Appreciation Rights held by such grantee,
including any that may become exercisable upon the consummation of the Sale
Event; provided, however, that the exercise of Options and Stock Appreciation
Rights not exercisable prior to the Sale Event shall be subject to the
consummation of the Sale Event.
Notwithstanding anything to the contrary in this Section 3(c), in the event
of a Sale Event pursuant to which holders of the Stock of the Company will
receive upon consummation thereof a cash payment for each share surrendered in
the Sale Event, the Company shall have the right, but not the obligation, to
make or provide for a cash payment to the grantees holding Options and Stock
Appreciation Rights, in exchange for the cancellation thereof, in an amount
equal to the difference between (A) the Sale Price times the number of shares of
Stock subject to outstanding Options and Stock Appreciation Rights (to the
extent then exercisable at prices not in excess of the Sale Price) and (B) the
aggregate exercise price of all such outstanding Options and Stock Appreciation
Rights.
(d) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or
other key persons
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of another corporation in connection with the merger or consolidation of the
employing corporation with the Company or a Subsidiary or the acquisition by the
Company or a Subsidiary of property or stock of the employing corporation. The
Committee may direct that the substitute awards be granted on such terms and
conditions as the Committee considers appropriate in the circumstances. Any
substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).
SECTION 4. ELIGIBILITY
Grantees under the Plan will be such full or part-time officers and other
employees, Non-Employee Directors and key persons (including consultants and
prospective employees) of the Company and its Subsidiaries as are selected from
time to time by the Committee in its sole discretion.
SECTION 5. STOCK OPTIONS
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. To the extent that any Option
does not qualify as an Incentive Stock Option, it shall be deemed a
Non-Qualified Stock Option.
(a) Stock Options Granted to Employees and Key Persons. The Committee in
its discretion may grant Stock Options to eligible employees and key persons of
the Company or any Subsidiary. Stock Options granted pursuant to this Section
5(a) shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable. If the Committee so determines,
Stock Options may be granted in lieu of cash compensation at the optionee's
election, subject to such terms and conditions as the Committee may establish.
(i) Exercise Price. The exercise price per share for the Stock covered
by a Stock Option granted pursuant to this Section 5(a) shall be determined by
the Committee at the time of grant but shall not be less than 100 percent of the
Fair Market Value on the date of grant. In the case of an Incentive Stock Option
that is granted to a Ten Percent Owner, the option price of such Incentive Stock
Option shall be not less than 110 percent of the Fair Market Value on the grant
date.
(ii) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten years after
the date the Stock Option is granted. In the case of an Incentive Stock Option
that is granted to a Ten Percent Owner, the term of such Stock Option shall be
no more than five years from the date of grant.
(iii) Exercisability; Rights of a Stockholder. Stock Options shall
become exercisable at such time or times, whether or not in installments, as
shall be determined by the Committee at or after the grant date. The Committee
may at any time accelerate the
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exercisability of all or any portion of any Stock Option. An optionee shall have
the rights of a stockholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in whole or in
part, by giving written notice of exercise to the Company, specifying the number
of shares to be purchased. Payment of the purchase price may be made by one or
more of the following methods to the extent provided in the Option Award
Agreement:
(A) In cash, by certified or bank check or other instrument
acceptable to the Committee;
(B) Through the delivery (or attestation to the ownership) of
shares of Stock that have been purchased by the optionee on the open market
or that are beneficially owned by the optionee and are not then subject to
restrictions under any Company plan. Such surrendered shares shall be
valued at Fair Market Value on the exercise date. To the extent required to
avoid variable accounting treatment under FAS 123R or other applicable
accounting rules, such surrendered shares shall have been owned by the
optionee for at least six months; or
(C) At the discretion of the Committee, in accordance with a
cashless exercise program established with a securities brokerage firm and
approved by the Committee; provided that in the event the optionee chooses
to pay the purchase price as so provided, the optionee and the broker shall
comply with such procedures and enter into such agreements of indemnity and
other agreements as the Committee shall prescribe as a condition of such
payment procedure.
Payment instruments will be received subject to collection. The transfer to the
optionee on the records of the Company or of the transfer agent of the shares of
Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of the full
purchase price for such shares and the fulfillment of any other requirements
contained in the Option Award Agreement or applicable provisions of laws
(including the satisfaction of any withholding taxes that the Company is
obligated to withhold with respect to the optionee). In the event an optionee
chooses to pay the purchase price by previously-owned shares of Stock through
the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of
shares attested to. In the event that the Company establishes, for itself or
using the services of a third party, an automated system for the exercise of
Stock Options, such as a system using an internet website or interactive voice
response, then the paperless exercise of Stock Options may be permitted through
the use of such an automated system.
(v) Annual Limit on Incentive Stock Options. To the extent required
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the shares
of Stock with respect to which Incentive Stock Options granted under this Plan
and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar
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year shall not exceed $100,000 or such other limit in effect from time to time
under the Code. To the extent that any Stock Option exceeds this limit, it shall
constitute a Non-Qualified Stock Option.
(b) Stock Options Granted to Non-Employee Directors.
(i) Automatic Grant of Options.
(A) Each person who is a Non-Employee Director on the effective
date of the Initial Public Offering shall be granted a Non-Qualified Stock
Option to acquire 20,000 shares of Stock, less the number of shares subject
to outstanding Stock Options held by such Director on such effective date.
Each such Option shall be fully vested and exercisable from the date of
grant.
(B) Each Non-Employee Director who is first elected to serve as a
Director after the Initial Public Offering shall be granted, on the fifth
business day after his election, a Non-Qualified Stock Option to acquire
20,000 shares of Stock. Each such Option shall be fully vested and
exercisable from the date of grant.
(C) Each Non-Employee Director who is serving as a Director of
the Company on the fifth business day after each annual meeting of
stockholders, beginning with the 2007 annual meeting, shall automatically
be granted on such day a Non-Qualified Stock Option to acquire 10,000
shares of Stock. Each such Option shall be vest and become exercisable one
year after the date of grant.
(D) The exercise price per share for the Stock covered by a Stock
Option granted under this Section 5(b) shall be equal to the Fair Market
Value of the Stock on the date the Stock Option is granted.
(E) The Committee, in its discretion, may grant additional
Non-Qualified Stock Options to Non-Employee Directors. Any such grant may
vary among individual Non-Employee Directors.
(ii) Exercise; Termination.
(A) Unless otherwise determined by the Committee, an Option
granted under Section 5(b)(E) shall be exercisable in full as of the grant
date. An Option issued under this Section 5(b) shall not be exercisable
after the expiration of ten years from the date of grant.
(B) Options granted under this Section 5(b) may be exercised only
by written notice to the Company specifying the number of shares to be
purchased. Payment of the full purchase price of the shares to be purchased
may be made by one or more of the methods specified in Section 5(a)(iv). An
optionee shall have the rights of a stockholder only as to shares acquired
upon the exercise of a Stock Option and not as to unexercised Stock
Options.
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SECTION 6. STOCK APPRECIATION RIGHTS
(a) Exercise Price of Stock Appreciation Rights. The exercise price of a
Stock Appreciation Right shall not be less than 100 percent of the Fair Market
Value of the Stock on the date of grant (or more than the Stock Option exercise
price per share, if the Stock Appreciation Right was granted in tandem with a
Stock Option).
(b) Grant and Exercise of Stock Appreciation Rights. Stock Appreciation
Rights may be granted by the Committee in tandem with, or independently of, any
Stock Option granted pursuant to Section 5 of the Plan. In the case of a Stock
Appreciation Right granted in tandem with a Non-Qualified Stock Option, such
Stock Appreciation Right may be granted either at or after the time of the grant
of such Option. In the case of a Stock Appreciation Right granted in tandem with
an Incentive Stock Option, such Stock Appreciation Right may be granted only at
the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.
(c) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the applicable
portion of any related Option shall be surrendered.
SECTION 7. RESTRICTED STOCK AWARDS
(a) Nature of Restricted Stock Awards. The Committee shall determine the
restrictions and conditions applicable to each Restricted Stock Award at the
time of grant. Conditions may be based on continuing employment (or other
service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Stock Award is contingent on the
grantee executing the Restricted Stock Award Agreement. The terms and conditions
of each such Award Agreement shall be determined by the Committee, and such
terms and conditions may differ among individual Awards and grantees.
(b) Rights as a Stockholder. Upon execution of the Restricted Stock Award
Agreement and payment of any applicable purchase price, a grantee shall have the
rights of a stockholder with respect to the voting of the Restricted Stock,
subject to such conditions contained in the Restricted Stock Award Agreement.
Unless the Committee shall otherwise determine, (i) uncertificated Restricted
Stock shall be accompanied by a notation on the records of the Company or the
transfer agent to the effect that they are subject to forfeiture until such
Restricted Stock are vested as provided in Section 7(d) below, and (ii)
certificated Restricted Stock shall remain in the possession of the Company
until such Restricted Stock is vested as
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provided in Section 7(d) below, and the grantee shall be required, as a
condition of the grant, to deliver to the Company such instruments of transfer
as the Committee may prescribe.
(c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock Award Agreement. Except as may otherwise be
provided by the Committee either in the Award Agreement or, subject to Section
17 below, in writing after the Award Agreement is issued, if any, if a grantee's
employment (or other service relationship) with the Company and its Subsidiaries
terminates for any reason, any Restricted Stock that has not vested at the time
of termination shall be repurchased by the Company for the price paid by the
grantee (if any) or, if no purchase price was paid by the grantee, shall
automatically and without any requirement of notice to such grantee from or
other action by or on behalf of, the Company be deemed to have been reacquired
by the Company from such grantee or such grantee's legal representative
simultaneously with such termination of employment (or other service
relationship), and thereafter shall cease to represent any ownership of the
Company by the grantee or rights of the grantee as a stockholder. Following such
repurchase or deemed reacquisition of unvested Restricted Stock that are
represented by physical certificates, a grantee shall surrender such
certificates to the Company upon request without consideration.
(d) Vesting of Restricted Stock. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company's right of repurchase or forfeiture shall
lapse. Subsequent to such date or dates and/or the attainment of such
pre-established performance goals, objectives and other conditions, the shares
on which all restrictions have lapsed shall no longer be Restricted Stock and
shall be deemed "vested." Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's rights in any shares of Restricted
Stock that have not vested shall automatically terminate upon the grantee's
termination of employment (or other service relationship) with the Company and
its Subsidiaries and such shares shall be subject to the provisions of Section
7(c) above.
SECTION 8. DEFERRED STOCK AWARDS
(a) Nature of Deferred Stock Awards. The Committee shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time
of grant. Conditions may be based on continuing employment (or other service
relationship) and/or achievement of pre-established performance goals and
objectives. The grant of a Deferred Stock Award is contingent on the grantee
executing the Deferred Stock Award Agreement. The terms and conditions of each
such Award Agreement shall be determined by the Committee, and such terms and
conditions may differ among individual Awards and grantees. At the end of the
deferral period, the Deferred Stock Award, to the extent vested, shall be paid
to the grantee in the form of shares of Stock.
(b) Election to Receive Deferred Stock Awards in Lieu of Compensation. The
Committee may, in its sole discretion, permit a grantee to elect to receive a
portion of future cash compensation otherwise due to such grantee in the form of
a Deferred Stock Award. Any such election shall be made in writing and shall be
delivered to the Company no later than the date
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specified by the Committee and in accordance with Section 409A and such other
rules and procedures established by the Committee. The Committee shall have the
sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Committee deems appropriate. Any such deferred compensation shall be
converted to a fixed number of phantom stock units based on the Fair Market
Value of Stock on the date the compensation would otherwise have been paid to
the grantee but for the deferral.
(c) Rights as a Stockholder. During the deferral period, a grantee shall
have no rights as a stockholder; provided, however, that the grantee may be
credited with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Committee may determine.
(d) Termination. Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's right in all Deferred Stock Awards
that have not vested shall automatically terminate upon the grantee's
termination of employment (or cessation of service relationship) with the
Company and its Subsidiaries for any reason.
SECTION 9. UNRESTRICTED STOCK AWARDS
Grant or Sale of Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at par value or such higher purchase price determined
by the Committee) an Unrestricted Stock Award under the Plan. Unrestricted Stock
Awards may be granted in respect of past services or other valid consideration,
or in lieu of cash compensation due to such grantee.
SECTION 10. CASH-BASED AWARDS
(a) Grant of Cash-based Awards. The Committee may, in its sole discretion,
grant Cash-based Awards to any grantee in such number or amount and upon such
terms, and subject to such conditions, as the Committee shall determine at the
time of grant. The Committee shall determine the maximum duration of the
Cash-based Award, the amount of cash to which the Cash-based Award pertains, the
conditions upon which the Cash-based Award shall become vested or payable, and
such other provisions as the Committee shall determine. Each Cash-based Award
shall specify a cash-denominated payment amount, formula or payment ranges as
determined by the Committee. Payment, if any, with respect to a Cash-based Award
shall be made in accordance with the terms of the Award and may be made in cash
or in shares of Stock, as the Committee determines.
SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
(a) Performance-based Awards. Any employee or other key person providing
services to the Company and who is selected by the Committee may be granted one
or more Performance-based Awards in the form of a Restricted Stock Award,
Deferred Stock Award or Cash-based Award payable upon the attainment of
Performance Goals that are established by the Committee and relate to one or
more of the Performance Criteria, in each case on a specified date or dates or
over any period or periods determined by the Committee. The Committee shall
define in an objective fashion the manner of calculating the Performance
Criteria it selects to use
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for any Performance Period. Depending on the Performance Criteria used to
establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may adjust or modify
the calculation of Performance Goals for such Performance Period in order to
prevent the dilution or enlargement of the rights of an individual (i) in the
event of, or in anticipation of, any unusual or extraordinary corporate item,
transaction, event or development, (ii) in recognition of, or in anticipation
of, any other unusual or nonrecurring events affecting the Company, or the
financial statements of the Company, or (iii) in response to, or in anticipation
of, changes in applicable laws, regulations, accounting principles, or business
conditions provided however, that the Committee may not exercise such discretion
in a manner that would increase the Performance-based Award granted to a Covered
Employee. Each Performance-based Award shall comply with the provisions set
forth below.
(b) Grant of Performance-based Awards. With respect to each
Performance-based Award granted to a Covered Employee, the Committee shall
select, within the first 90 days of a Performance Cycle (or, if shorter, within
the maximum period allowed under Section 162(m) of the Code) the Performance
Criteria for such grant, and the Performance Goals with respect to each
Performance Criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-based
Award will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets. The
Performance Criteria established by the Committee may be (but need not be)
different for each Performance Cycle and different Performance Goals may be
applicable to Performance-based Awards to different Covered Employees.
(c) Payment of Performance-based Awards. Following the completion of a
Performance Cycle, the Committee shall meet to review and certify in writing
whether, and to what extent, the Performance Goals for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle. The
Committee shall then determine the actual size of each Covered Employee's
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.
(d) Maximum Award Payable. The maximum Performance-based Award payable to
any one Covered Employee under the Plan for a Performance Cycle is 750,000
Shares (subject to adjustment as provided in Section 3(b) hereof) or
$10,000,000, in the case of a Performance-based Award that is a Cash-based
Award.
SECTION 12. DIVIDEND EQUIVALENT RIGHTS
(a) Dividend Equivalent Rights. A Dividend Equivalent Right may be granted
hereunder to any grantee as a component of another Award or as a freestanding
award. The terms and conditions of Dividend Equivalent Rights shall be specified
in the Award Agreement. Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional shares of Stock, which may thereafter accrue additional
equivalents. Any such reinvestment shall be at Fair Market Value on the date of
reinvestment or such other price as may then apply under a dividend reinvestment
plan
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sponsored by the Company, if any. Dividend Equivalent Rights may be settled in
cash or shares of Stock or a combination thereof, in a single installment or
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other Award.
(b) Interest Equivalents. Any Award under this Plan that is settled in
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.
(c) Termination. Except as may otherwise be provided by the Committee
either in the Award Agreement or, subject to Section 17 below, in writing after
the Award Agreement is issued, a grantee's rights in all Dividend Equivalent
Rights or interest equivalents granted as a component of another Award that has
not vested shall automatically terminate upon the grantee's termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.
SECTION 13. TRANSFERABILITY OF AWARDS
(a) Transferability. Except as provided in Section 13(b) below, during a
grantee's lifetime, his or her Awards shall be exercisable only by the grantee,
or by the grantee's legal representative or guardian in the event of the
grantee's incapacity. No Awards shall be sold, assigned, transferred or
otherwise encumbered or disposed of by a grantee other than by will or by the
laws of descent and distribution. No Awards shall be subject, in whole or in
part, to attachment, execution, or levy of any kind, and any purported transfer
in violation hereof shall be null and void.
(b) Committee Action. Notwithstanding Section 13(a), the Committee, in its
discretion, may provide either in the Award Agreement regarding a given Award or
by subsequent written approval that the grantee (who is an employee or director)
may transfer his or her Awards (other than any Incentive Stock Options) to his
or her immediate family members, to trusts for the benefit of such family
members, or to partnerships in which such family members are the only partners,
provided that the transferee agrees in writing with the Company to be bound by
all of the terms and conditions of this Plan and the applicable Award.
(c) Family Member. For purposes of Section 13(b), "family member" shall
mean a grantee's child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the grantee's household (other than a
tenant of the grantee), a trust in which these persons (or the grantee) have
more than 50 percent of the beneficial interest, a foundation in which these
persons (or the grantee) control the management of assets, and any other entity
in which these persons (or the grantee) own more than 50 percent of the voting
interests.
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(d) Designation of Beneficiary. Each grantee to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee's
death. Any such designation shall be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee. If no
beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the
grantee's estate.
SECTION 14. TAX WITHHOLDING
(a) Payment by Grantee. Each grantee shall, no later than the date as of
which the value of an Award or of any Stock or other amounts received thereunder
first becomes includable in the gross income of the grantee for Federal income
tax purposes, pay to the Company, or make arrangements satisfactory to the
Committee regarding payment of, any Federal, state, or local taxes of any kind
required by law to be withheld by the Company with respect to such income. The
Company and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
grantee. The Company's obligation to deliver evidence of book entry (or stock
certificates) to any grantee is subject to and conditioned on tax withholding
obligations being satisfied by the grantee.
(b) Payment in Stock. Subject to approval by the Committee, a grantee may
elect to have the Company's minimum required tax withholding obligation
satisfied, in whole or in part, by (i) authorizing the Company to withhold from
shares of Stock to be issued pursuant to any Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due, or (ii) transferring to the Company
shares of Stock owned by the grantee with an aggregate Fair Market Value (as of
the date the withholding is effected) that would satisfy the withholding amount
due.
SECTION 15. ADDITIONAL CONDITIONS APPLICABLE TO NONQUALIFIED DEFERRED
COMPENSATION UNDER SECTION 409A.
In the event any Stock Option or Stock Appreciation Right under the Plan is
materially modified and deemed a new grant at a time when the Fair Market Value
exceeds the exercise price, or any other Award is otherwise determined to
constitute "nonqualified deferred compensation" within the meaning of Section
409A (a "409A Award"), the following additional conditions shall apply and shall
supersede any contrary provisions of this Plan or the terms of any agreement
relating to such 409A Award.
(a) Exercise and Distribution. Except as provided in Section 15(b) hereof,
no 409A Award shall be exercisable or distributable earlier than upon one of the
following:
(i) Specified Time. A specified time or a fixed schedule set forth in
the written instrument evidencing the 409A Award.
(ii) Separation from Service. Separation from service (within the
meaning of Section 409A) by the 409A Award grantee; provided, however, that if
the 409A Award grantee is a "key employee" (as defined in Section 416(i) of the
Code without regard to paragraph (5) thereof) and any of the Company's Stock is
publicly traded on an established securities market or
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otherwise, exercise or distribution under this Section 15(a)(ii) may not be made
before the date that is six months after the date of separation from service.
(iii) Death. The date of death of the 409A Award grantee.
(iv) Disability. The date the 409A Award grantee becomes disabled
(within the meaning of Section 15(c)(ii) hereof).
(v) Unforeseeable Emergency. The occurrence of an unforeseeable
emergency (within the meaning of Section 15(c)(iii) hereof), but only if the net
value (after payment of the exercise price) of the number of shares of Stock
that become issuable does not exceed the amounts necessary to satisfy such
emergency plus amounts necessary to pay taxes reasonably anticipated as a result
of the exercise, after taking into account the extent to which the emergency is
or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the grantee's other assets (to the extent such
liquidation would not itself cause severe financial hardship).
(vi) Change in Control Event. The occurrence of a Change in Control
Event (within the meaning of Section 15(c)(i) hereof), including the Company's
acceleration of vesting of such grant upon a Change in Control Event or
termination of the Plan or any 409A Award granted hereunder within 12 months of
the Change in Control Event.
(b) No Acceleration. A 409A Award may not be accelerated or exercised prior
to the time specified in Section 15(a) hereof, except in the case of one of the
following events:
(i) Domestic Relations Order. The 409A Award may permit the
acceleration of the exercise or distribution time or schedule to an individual
other than the grantee as may be necessary to comply with the terms of a
domestic relations order (as defined in Section 414(p)(1)(B) of the Code).
(ii) Conflicts of Interest. The 409A Award may permit the acceleration
of the exercise or distribution time or schedule as may be necessary to comply
with the terms of a certificate of divestiture (as defined in Section 1043(b)(2)
of the Code).
(iii) Change in Control Event. The Committee may exercise the
discretionary right to accelerate the vesting of such 409A Award upon a Change
in Control Event or to terminate the Plan or any 409A Award granted thereunder
within 12 months of the Change in Control Event and cancel the 409A Award for
compensation.
(c) Definitions. Solely for purposes of this Section 15 and not for other
purposes of the Plan, the following terms shall be defined as set forth below:
(i) "Change in Control Event" means the occurrence of a change in the
ownership of the Company, a change in effective control of the Company, or a
change in the ownership of a substantial portion of the assets of the Company
(as defined in Section 1.409A-3(g) of the proposed regulations promulgated under
Section 409A by the Department of the Treasury on September 29, 2005 or any
subsequent guidance).
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(ii) "Disabled" means a grantee who (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than 12 months, or (ii) is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a period of not
less than three months under an accident and health plan covering employees of
the Company or its Subsidiaries.
(iii) "Unforeseeable Emergency" means a severe financial hardship to
the grantee resulting from an illness or accident of the grantee, the grantee's
spouse, or a dependent (as defined in Section 152(a) of the Code) of the
grantee, loss of the grantee's property due to casualty, or similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the grantee.
SECTION 16. TRANSFER, LEAVE OF ABSENCE, ETC.
Except as required by law or set forth in an Award Agreement, Awards
granted under the Plan shall not be affected by any change of an Award holder's
status within or among the Company and its Subsidiaries so long as the Award
holder continues to be an employee, director or consultant of the Company or any
Subsidiary. Accordingly, for purposes of the Plan, the following events shall
not be deemed a termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 17. AMENDMENTS AND TERMINATION
The Board may, at any time, amend or discontinue the Plan and the Committee
may, at any time, amend or cancel any outstanding Award for the purpose of
satisfying changes in law or for any other lawful purpose, but no such action
shall adversely affect rights under any outstanding Award without the holder's
consent. Except as provided in Section 3(b) or 3(c), in no event may the
Committee exercise its discretion to reduce the exercise price of outstanding
Stock Options or Stock Appreciation Rights or effect repricing through
cancellation and re-grants. Any material Plan amendments (other than amendments
that curtail the scope of the Plan), including any Plan amendments that (i)
increase the number of shares reserved for issuance under the Plan, (ii) expand
the type of Awards available under, materially expand the eligibility to
participate in, or materially extend the term of, the Plan, or (iii) materially
change the method of determining Fair Market Value, shall be subject to approval
by the Company stockholders entitled to vote at a meeting of stockholders. In
addition, to the extent determined by the Committee to be required by the Code
to ensure that Incentive Stock Options granted under the Plan are qualified
under Section 422 of the Code or to ensure that compensation earned under Awards
qualifies as performance-based compensation under Section 162(m) of the Code,
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Plan amendments shall be subject to approval by the Company stockholders
entitled to vote at a meeting of stockholders. Nothing in this Section 17 shall
limit the Committee's authority to take any action permitted pursuant to Section
3(c).
SECTION 18. STATUS OF PLAN
With respect to the portion of any Award that has not been exercised and
any payments in cash, Stock or other consideration not received by a grantee, a
grantee shall have no rights greater than those of a general creditor of the
Company unless the Committee shall otherwise expressly determine in connection
with any Award or Awards. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the Company's obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
foregoing sentence.
SECTION 19. GENERAL PROVISIONS
(a) No Distribution. The Committee may require each person acquiring Stock
pursuant to an Award to represent to and agree with the Company in writing that
such person is acquiring the shares without a view to distribution thereof.
(b) Delivery of Stock Certificates. Stock certificates to grantees under
this Plan shall be deemed delivered for all purposes when the Company or a stock
transfer agent of the Company shall have mailed such certificates in the United
States mail, addressed to the grantee, at the grantee's last known address on
file with the Company. Uncertificated Stock shall be deemed delivered for all
purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by electronic mail (with proof of receipt) or by United
States mail, addressed to the grantee, at the grantee's last known address on
file with the Company, notice of issuance and recorded the issuance in its
records (which may include electronic "book entry" records). Notwithstanding
anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel (to
the extent the Board deems such advice necessary or advisable), that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authorities and, if applicable, the
requirements of any exchange on which the shares of Stock are listed, quoted or
traded. All Stock certificates delivered pursuant to the Plan shall be subject
to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal, state or foreign jurisdiction,
securities or other laws, rules and quotation system on which the Stock is
listed, quoted or traded. The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to
the terms and conditions provided herein, the Board may require that an
individual make such reasonable covenants, agreements, and representations as
the Board, in its discretion, deems necessary or advisable in order to comply
with any such laws, regulations, or requirements. The Committee shall have the
right to require any individual to comply with any timing or other restrictions
with respect to the settlement or exercise of any Award, including a
window-period limitation, as may be imposed in the discretion of the Committee.
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(c) Stockholder Rights. Until Stock is deemed delivered in accordance with
Section 19(b), no right to vote or receive dividends or any other rights of a
stockholder will exist with respect to shares of Stock to be issued in
connection with an Award, notwithstanding the exercise of a Stock Option or any
other action by the grantee with respect to an Award.
(d) Other Compensation Arrangements; No Employment Rights. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(e) Trading Policy Restrictions. Option exercises and other Awards under
the Plan shall be subject to such Company's insider trading policy and
procedures, as in effect from time to time.
(f) Forfeiture of Awards under Sarbanes-Oxley Act. If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, then any grantee who is one of the
individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any
Award received by such individual under the Plan during the 12-month period
following the first public issuance or filing with the United States Securities
and Exchange Commission, as the case may be, of the financial document embodying
such financial reporting requirement.
SECTION 20. EFFECTIVE DATE OF PLAN
This Plan shall become effective upon approval by the holders of a majority
of the votes cast at a meeting of stockholders at which a quorum is present. No
grants of Stock Options and other Awards may be made hereunder after the tenth
anniversary of the Effective Date and no grants of Incentive Stock Options may
be made hereunder after the tenth anniversary of the date the Plan is approved
by the Board.
SECTION 21. GOVERNING LAW
This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles.
DATE APPROVED BY BOARD OF DIRECTORS:
DATE APPROVED BY STOCKHOLDERS:
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