Exhibit 10.4
ACCPAC INTERNATIONAL, INC.
1998 STOCK INCENTIVE PLAN
I. PURPOSE.
The purpose of the ACCPAC INTERNATIONAL, INC. 1998 Stock Incentive Plan is
to promote the growth and profitability of ACCPAC INTERNATIONAL, INC. (the
"Company") and its subsidiaries and to provide officers and key employees
of the Company and its subsidiaries with an incentive to achieve long-term
corporate objectives, to attract and retain key employees of outstanding
competence, and to provide such key employees with an opportunity to
acquire an equity interest in the Company.
Options granted hereunder may be either Incentive Stock Options (as defined
under Section 422 of the Code) or Nonstatutory Stock Options, at the
discretion of the Committee and as reflected in the terms of the written
option agreement
II. DEFINITIONS.
The following terms shall have the meaning shown:
2.1 "Board" shall mean the Board of Directors of the Company.
2.2 "Code" shall mean the Internal Revenue Code of 1986, as the same shall
be amended from time to time.
2.3 "Committee" shall mean the Stock Option and Compensation Committee of
the Board, having at least two (2) members and consisting of directors
appointed to the Committee by the Board, none of whom shall be
eligible to participate in the Plan and each of whom shall otherwise
qualify as a "Non-Employee Director" within the meaning of Rule 16b-3
under the Securities Exchange Act of 1934, as amended, or any
successor rule, promulgated by the Securities and Exchange Commission.
2.4 "Common Stock" shall mean the Company's Common Stock, par value $.01
per share.
2.5 "Continuing Director" shall mean (a) any member of the Board, while
such person is a member of the Board, who was a member of the Board on
January 7, 1998, the date of the adoption of the Plan, or (b) any
member of the Board, while such person is a member of the Board, if
such person's nomination or election to the Board was recommended or
made by a majority of the Continuing Directors.
2.6 "Fair Market Value" shall mean the value of a share of Common Stock on
a particular date, determined as follows:
(a) If the Common Stock is listed or admitted to trading on such
date on the New York Stock Exchange, the closing sales price
of the Common Stock
on such date as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange;
or
(b) If the Common Stock is not listed or admitted to trading on
the New York Stock Exchange but is listed or admitted to
trading on another national exchange, the closing sales price
of the Common Stock on such date as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on such national
exchange; or
(c) If the Common Stock is not listed or admitted to trading on
any national exchange, the mean of the closing bid and asked
prices (or, if available, the high and low sales prices) of a
share on such date in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc.
Automatic Quotation Systems, the National Quotation Bureau or
such other system then in use with regard to the Common Stock
or, if on such date the stock of the Company is publicly
traded but not quoted by any such system, the mean of the
closing bid and asked prices of the Common Stock on such date
as furnished by a professional market maker making a market in
the Common Stock; or
(d) If in (a), (b) or (c) above, as applicable, there were no
sales on such date reported as provided above, but a public
market exists, the last sale price on the most recent prior day
on which a sale of the Common Stock took place; or
(e) If no public market exists for the Common Stock, the fair market
value as determined by the Committee.
2.7 "ISOs" shall mean stock options which at the time granted qualify as
incentive stock options under Section 422 of the Code granted by the
Company or any Subsidiary.
2.8 "Nonstatutory Options" shall mean stock options which at the time
granted are not intended to qualify as ISOs.
2.9 "Options" shall mean any rights to purchase shares of Common Stock
granted pursuant to Article IV of this Plan including both ISOs and
Nonstatutory Options.
2.10 "Parent" shall mean any corporation which, on the date of
determination, qualifies as a parent corporation of the Company under
Section 424(e) of the Code, or any similar provision hereafter
enacted.
2.11 "Plan" shall mean this ACCPAC INTERNATIONAL, INC. 1998 Stock
Incentive Plan, as the same shall be amended from time to time.
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2.12 "SARs" shall mean stock appreciation rights granted pursuant to
Article V of the Plan.
2.13 "Subsidiary" shall mean any corporation which, on the date of
determination, qualifies as a subsidiary corporation of the Company
under Section 424(f) of the Code, or any similar provision hereafter
enacted.
2.14 "Ten Percent Stockholder" shall mean any stockholder who at the time
an ISO is granted owns (within the meaning of Section 424(d) of the
Code) more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Subsidiary.
III. GENERAL.
3.1 Administration.
(a) The Plan shall be administered by the Committee; provided
that, prior to the Committee being constituted, the Board
shall function as the Committee for all purposes under the
Plan. The Committee shall have full authority to interpret
the Plan and all Options and SARs granted hereunder; to
establish, amend, and rescind rules for carrying out the Plan;
to administer the Plan; to select employees to participate in
the Plan; to grant Options and SARs under the Plan; to
determine the terms, exercise price and form of exercise
payment for each Option and SAR granted under the Plan; to
determine whether each Option granted under the Plan shall be
intended to qualify as an ISO; and to make all other
determinations and to take all such steps in connection with
the Plan, the Options and the SARs as the Committee, in its
discretion, deems necessary or desirable. The Committee shall
not be bound to any standards of uniformity or similarity of
action, interpretation or conduct in the discharge of its
duties hereunder, regardless of the apparent similarity of the
matters coming before it. Its determination shall be binding
on all parties, including Optionees and any other holders of
any Options.
(b) Any employee may hold more than one Option or SAR under the
Plan and under any other plan pursuant to which stock options,
stock appreciation rights or other incentives may be granted,
issued or paid.
(c) The Committee may designate any employees of the Company or
professional advisors to assist the Committee in the
administration of the Plan, and may grant authority to such
persons to execute agreements or other documents on behalf of
the Committee. The Committee may employ such legal counsel,
consultants and agents as it may deem desirable for the
administration of the Plan, and may rely upon any opinion
received from any such counsel or consultant and any
computation received from any such consultant or agent.
Expenses
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incurred by the Committee in the engagement of such counsel,
consultant or agent shall be paid by the Company.
(d) No member or former member of the Committee or of the Board
shall be liable for any action or determination made in good
faith with respect to the Plan or any Option or SAR granted
under it. To the maximum extent permitted by applicable law,
each member or former member of the Committee or of the Board
shall be indemnified and held harmless by the Company against
any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the
approval of the Company) arising out of any act or omission to
act in connection with the Plan unless arising out of such
member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of
indemnification the members or former members may have as
directors under applicable law or under the certificate of
incorporation or by-laws of the Company.
(e) The Committee shall select one of its members as a Chairman
and shall adopt such rules and regulations as it shall deem
appropriate concerning the holding of its meetings and the
transaction of its business. Any member of the Committee may
be removed at anytime either with or without cause by
resolution adopted by the Board, and any vacancy on the
Committee may at any time be filled by resolution adopted by
the Board.
(f) All determinations by the Committee shall be made by the
affirmative vote of a majority of its members. Any such
determination may be made at a meeting duly called and held at
which a majority of the members of the Committee were in
attendance in person or through telephonic communication. Any
determination set forth in writing and signed by all of the
members of the Committee shall be as fully effective as if it
had been made by a majority vote of the members at a meeting
duly called and held.
IV. OPTIONS.
4.1 No Grants to Outside Directors.
Directors of the Company who are not also employees of the Company or
a Subsidiary shall in no event be eligible to be granted Options or
SARs under this Plan.
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4.2 Terms and Conditions.
The grant of an Option shall be evidenced by a written option
agreement in a form approved by the Committee. Such Option shall be
subject to the following express terms and conditions and to such
other terms and conditions, not
inconsistent with the terms of this Plan, which the Committee may deem
appropriate.
(a) Terms of Options.
The term of each Option shall be for such period as the Committee
shall determine, but for not more than ten (10) years from the
date of grant thereof; PROVIDED, HOWEVER, that in the case of an
ISO granted to any individual who, at the time of grant is a Ten
Percent Stockholder, such period shall not exceed five (5) years
from the date of grant.
(b) Exercise Price.
The exercise price per share for the Common Stock covered by any
Option (the "Exercise Price") shall be determined by the
Committee and shall not be less than the Fair Market Value (or in
the case of an Option granted to a Ten Percent Stockholder, 110
percent of the Fair Market Value) of one (1) share of Common
Stock (but in no event less than the par value) on the date the
Option is granted. The aggregate Fair Market Value (determined at
the time the ISO is granted) of the shares of Common Stock
(together with all other stock of the Company and all stock of
any Parent or Subsidiary) with respect to which ISOs may first
become exercisable by an individual optionee during any calendar
year, under all stock option plans of the Company and of its
Parents and Subsidiaries, shall not exceed $100,000.
(c) Exercise of Options.
An Option may be exercised from time to time by written notice by
the optionee of his intent to exercise the Option with respect to
a specified number of shares. Alternatively, the Company may
provide for exercise of an optionee's Option by delivery of an
irrevocable notice of exercise signed by the optionee,
accompanied by payment in full of the Exercise Price by the
optionee's broker and an irrevocable instruction to the Company
to deliver the shares of Common Stock issuable upon exercise of
the Option promptly to the optionee's broker for the optionee's
account, provided that at the time of such exercise the optionee
is not subject to Section 16(b) of the Securities Exchange Act of
1934 (the "Exchange Act"), or that such exercise would not
subject the optionee to liability under such Section 16(b)
pursuant to Securities and Exchange Commission Rule 16b-3 or any
successor rule or regulation of the
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Commission. In either case, the specified number of shares
will be issued and transferred to the optionee upon receipt by
the Company of (i) such notice and (ii) payment in full for
such shares.
(d) Payment of Exercise Price Upon Exercise.
The medium for payment of the Exercise Price for the shares of
Common Stock with respect to which an Option shall be exercised
shall be determined by the Committee and specified in each option
agreement and may include payment in (i) cash (or by certified or
bank check), (ii) whole shares of Common Stock already owned by
the optionee, valued at their Fair Market Value on the date
immediately preceding the date of exercise, (iii) a combination
of cash (or certified or bank check) and Common Stock equal to
the Exercise Price or (iv) such other form of consideration as
the Committee may, in it sole discretion, determine to be
acceptable.
(e) Exercise Period; Termination of Employment.
(1) NO EXERCISE WITHIN ONE YEAR OF GRANT. The
Committee shall have the discretion to determine when each
Option granted hereunder shall become exercisable, and to
prescribe any vesting schedule limiting the exercisability
of such Options as it may deem appropriate. Unless the
Committee affirmatively determines otherwise, no Option
shall become exercisable prior to the date which is one (1)
year after the date on which the Option was granted.
(2) BY REASON OF THE PARTICIPANT'S DEATH. If the optionee dies
while an employee of the Company or a Subsidiary, all
outstanding Options granted to the optionee and not
exercised by the optionee prior to death shall,
notwithstanding any vesting schedule or period of
non-exercisability imposed on such Options pursuant to
Paragraph 4.2(e) of this Plan, without any further action of
the Committee, immediately become exercisable in full,
effective as of the death of the optionee by the estate or
by the person given authority to exercise such Options by
his will or by operation of law for a period of one (1) year
from the date of the optionee's death; PROVIDED, HOWEVER,
that no Option may be exercised more than ten (10) years
from the date of grant or the date such Option expires by
its terms.
In the event an Option is exercised by the executor or
administrator of a deceased optionee, or by the person or
persons to whom the Option has been transferred by the
Optionee's will or the applicable laws of descent and
distribution, the Company shall be under no obligation to
deliver stock thereunder unless and until the Company is
satisfied that the person or persons exercising the Option
is or are the duly appointed executor(s) or administrator(s)
of the deceased optionee or the person to whom the
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Option has been transferred by the optionee's will or by
the applicable laws of descent and distribution.
(3) BY REASON OF THE PARTICIPANT'S RETIREMENT OR DISABILITY. If
an optionee retires at or after age 65 (or, at his early
retirement date as defined in any retirement plan of the
Company or a Subsidiary which is qualified under Section 401
ET SEQ. of the Code), all outstanding Options not exercised
by the optionee prior to the termination of his employment
shall, unless otherwise specified in his option agreement,
remain exercisable (to the extent that the optionee was
entitled to exercise them at the date of such age 65
retirement or early retirement) for a period of three (3)
months after termination of employment. If an optionee
terminates due to disability, all outstanding Options not
exercised by the Optionee prior to the termination of
employment shall, unless otherwise specified in his option
agreement, remain exercisable (to the extent that the
optionee was entitled to exercise them at the date of such
termination ) for a period of one (1) year from the date of
termination of the optionee's employment. Notwithstanding
anything in the foregoing to the contrary, no Option may be
exercised more than ten (10) years after the date of grant
thereof. As used in this subsection, the term "disability"
shall refer to a condition causing an employee to be unable
to engage in any substantially gainful activity by reason of
any medically determinable physical or mental impairment
which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12)
months.
(4) BY REASON OF OTHER SEPARATION FROM SERVICE. Upon any
termination of employment not governed by Section 4.2(e)(2)
or (3) thereof, all outstanding Options not exercised by the
optionee prior to the termination of his employment shall
terminate on the date his employment terminates; PROVIDED,
HOWEVER, that the Committee may, in its discretion, extend
the period for exercise up to a date not more than ninety
(90) days following such termination of employment in the
case of an ISO, and not more than one year following such
termination of employment in the case of all other Options.
The assignment of any optionee from the Company to a
Subsidiary or from a Subsidiary to the Company or from one
Subsidiary to another Subsidiary shall not be considered a
termination of employment.
For purposes of this Agreement, the employment of an
optionee shall be treated as continuing intact while the
optionee is on military leave, sick leave or other bona fide
leave of absence (such as temporary employment with the
Government) if the period of such leave does not exceed
ninety (90) days, or if longer, so long as the optionee's
right to reemployment with the Company or a Subsidiary is
guaranteed either by statute or by contract. Where the
period of leave exceeds ninety (90) days and where the
optionee's right to re-employment is not guaranteed either
by statute or by contract, the employment relationship shall
be deemed to have terminated on the ninety-first (91st) day
of such leave.
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4.3 Designation of Options.
Each Option shall be designated in the written option agreement as
either an ISO or a Nonstatutory Option.
4.4 Incentive Stock Options.
Each provision of the Plan and of each written option agreement
relating to an Option designated as an ISO shall be construed so that
such Option qualifies as an ISO, and any provision that cannot be so
construed shall be disregarded.
4.5 Waiver of Restrictions on Exercisability Upon a Change in Control.
(a) The Committee may, in its sole discretion, determine that
any option agreement to be executed with respect to Options
to be granted to an individual under the Plan shall, or that any
existing option agreement (or agreements) executed with respect
to all or any portion of Options previously granted to the
individual under this Plan shall be amended to, include a
provision stating that if, during the period of one (1) year
ending on the first anniversary of the effective date of any
Change of Control Transaction,
(1) the optionee's employment with the Company or any
Subsidiary shall be terminated without just cause (relating
to the specific optionee) on the part of the Company; or
(2) the optionee's aggregate annual compensation shall be
materially reduced,
then the Options granted to the optionee (or the relevant portion
thereof) shall, notwithstanding any vesting schedule or period of
non-exercisability imposed on such Options pursuant to Paragraph
4.2(e) of this Plan, and without any further action of the
Company or the Committee, immediately become exercisable in full,
effective as of the date of such change in the optionee's
employment status.
(b) For purposes of this Paragraph, a "Change of Control
Transaction" shall be deemed to have occurred if more than
thirty (30%) percent of the aggregate voting power of all
classes of outstanding securities of the Company ordinarily
entitled to vote in elections of directors shall be acquired
(whether by direct purchase, exchange upon merger or
otherwise) by another corporation or other person or group
without the prior consent (evidenced by a resolution adopted
at a duly called meeting of the Board or by a written
statement of action) of a majority of the Continuing
Directors. "Group" shall mean persons who act in concert as
described in Section 14(d)(2) of the Securities Exchange Act
of 1934, as amended. In addition, any transfer or sale of
substantially all the assets of the Company shall constitute a
"Change of Control Transaction."
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(c) The Committee may, in its sole discretion, determine at any
time that all or any portion of Options granted to an
individual under the Plan shall, notwithstanding any
restrictions on exercisability imposed pursuant to Paragraph
4.2(e), become immediately exercisable in full.
4.6 Tax Gross-Ups.
The Committee may, in its sole discretion, award to any optionee tax
gross-up rights, which entitle the optionee to cash payments from the
Company at such time as income and/or exercise tax liability arises
with respect to the exercise of Options granted hereunder. Such tax
gross-up rights may be granted coincident with or after the date of
grant of the related Option.
V. STOCK APPRECIATION RIGHTS.
5.1 Grant of SARs.
The Committee may, in its sole discretion, from time to time grant
SARs to optionees in connection with (but not separately from) any
Option granted under this Plan. Holders of SARs shall be entitled to
receive upon exercise thereof, in cash or Common Stock as provided in
Paragraph 5.3(c), the difference between the Fair Market Value of the
Common Stock underlying the Option on the day preceding the exercise
date and the Exercise Price of the Option. SARs may be granted with
respect to all or part of the common Stock issuable upon exercise of a
particular Option, except as otherwise expressly provided herein.
5.2 Related Options.
SARs shall entitle the holder of the related Option, upon exercise, in
whole or in part, of the SARs, to receive payment in the amount and
form determined pursuant to Paragraph 5.3(c). SARs may be exercised
only to the extent that the related Option has not been exercised.
The exercise of SARs shall result in a pro rata surrender of the
related Option to the extent that the SARs have been exercised.
5.3 Terms and Conditions.
The grant of SARs shall be evidenced by a written option agreement in
a form approved by the Committee. Such SARs shall be subject to the
following express terms and conditions and to such other terms and
conditions, not inconsistent with the terms of the Plan, which the
Committee may deem appropriate.
(a) SARs shall be exercisable at such time or times and to the
extent, but only to the extent, that the Option to which they
relate shall be exercisable.
(b) SARs (and any Option related thereto) shall in no event be
exercisable during the first year after the date of grant and
such rights shall not be transferable other than by will or by
the laws of descent and distribution
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and shall be exercisable during the optionee's lifetime only by
the optionee.
(c) Upon exercise of SARs, the holder thereof shall be entitled to
receive an amount equal in value to the difference between the
per share Exercise Price of the Option and the Fair Market
Value per share of Common Stock on the day preceding the
exercise date, multiplied by the number of shares in respect
of which the SARs shall have been exercised. Such amount
shall be paid in the form of (i) cash, (ii) shares of Common
Stock with a Fair Market Value on the day preceding the
exercise date equal to such amount or (iii) a combination of
cash and shares of Common Stock, all as determined by the
Committee.
(d) In no event shall an SAR be exercisable at a time when the
Exercise Price of the related Option is greater than the Fair
Market Value of the shares of the Common Stock issuable upon
exercise of such Option.
VI. AGGREGATE LIMITATION ON SHARES OF COMMON STOCK.
6.1 Number of Shares of Common Stock.
(a) Shares of Common Stock which may be issued pursuant to Options
or SARs granted under the Plan may be either authorized and
unissued shares of Common Stock or authorized and issued
shares of Common Stock held by the Company as treasury stock.
The aggregate number of shares of Common Stock reserved and
available for issuance under Options and SARs granted under
this Plan shall be 750 shares of Common Stock, subject to such
adjustments as may be made pursuant to Paragraph 7.8.
(b) For purposed of Paragraph 6.1(a), in addition to shares of
Common Stock actually issued pursuant to the exercise of
Options granted under the Plan, there shall be deemed to have
been issued under the Plan a number of shares of Common Stock
equal to the SARs which have been exercised, except that to
the extent that SARs are settled by the actual delivery of
shares of Common Stock, the number of shares deemed to have
been issued under the Plan pursuant to the exercise of SARs
shall be reduced.
(c) Any shares of Common Stock subject to an option which for any
reason either terminates unexercised or expires, except by
reason of the exercise of a related SAR, shall again be
available for issuance under the Plan.
VII. MISCELLANEOUS.
7.1 General Restrictions.
Any Option or SAR granted under this Plan shall be subject to the
requirement that, if at any time the Committee shall determine that
any listing or registration of the shares of Common Stock, or any
consent or
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approval of any governmental body, or any other agreementor
consent, is necessary or desirable as a condition of the granting
of an award or issuance of Common Stock or cash in satisfaction
thereof, such award may not be consummated unless such requirement
is satisfied in a manner acceptable to the Committee.
7.2 Non-Assignability.
(a) Except as provided in this subparagraph (a), Nonstatutory
options granted under the Plan may not be transferred other
than by will or the laws of descent and distribution or
pursuant to Title I of the Employee Retirement Income Security
Act, or the rules thereunder. Notwithstanding the foregoing,
any presently outstanding Nonstatutory options, or
Nonstatutory options granted in the future, may be transferred
by the option holder to members of his other immediate family,
or to one or more trusts for the benefit of such family
members, or partnerships in which such family members are the
only partners, provided that any such transfer shall be
permitted only if: (1) the optionholder does not receive any
consideration for such transfer, (2) written notice of such
proposed transfer and the details thereof shall have been
furnished to the Committee, and (3) the Nonstatutory stock
option agreement with respect to the options being transferred
(including any amendments thereof) which shall have been
approved by the Committee, expressly permits such transfer.
Any Nonstatutory options transferred to such immediate family
members, trusts or partnership will continue to be subject to
the same terms and conditions that were applicable to such
options immediately prior to their transfer. Any transfer in
violation of this paragraph shall be void and of no effect.
As used herein, the term "family members" shall mean the
optionee's spouse, children and grandchildren.
(b) No ISO or SAR granted under this Plan shall be assignable or
transferable except by will or by the laws of descent and
distribution.
7.3 Withholding Taxes.
(a) The Committee shall have the right to require participating
employees to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax
requirements prior to the delivery of any shares of Common
Stock under the Plan. If an employee sells, transfers,
assigns or otherwise disposes of shares of Common Stock
acquired upon the exercise of an ISO within two (2) years
after the date on which the ISO was granted or within one (1)
year after the receipt of the shares of Common Stock by the
employee, the employee shall promptly notify the Company of
such disposition and the Company shall have the right to
require the employee to remit to the Company the amount
necessary to satisfy any federal, state and local tax
withholding requirements imposed by reason of such disposition.
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(b) The Company shall have the right to withhold from payments
made in cash to an employee (or his permitted transferee)
under the terms of the Plan, an amount sufficient to satisfy
any federal, state and local withholding tax requirements.
(c) Amounts to which the Company is entitled pursuant to
Paragraph 7.3(a) or (b) may be paid at the election of the
employee and with the approval of the Committee, either (i) in
cash, withheld from the employee's salary or other compensation
payable by the Company (or any Parent or Subsidiary), or (ii) in
shares of Common Stock otherwise issuable to the employee upon
exercise of an Option or SAR that have a Fair Market Value on the
date on which the amount of tax to be withheld is determined (the
"Tax Date") equal to the amount of tax the Company is entitled to
withhold. An optionee's election to have withheld shares of
Common Stock that are otherwise issuable shall be in writing,
shall be irrevocable upon approval by the Committee, and shall be
delivered to the Company prior to the Tax Date with respect to
the exercise of an Option or SAR and, if the participant is
subject to the short-swing profit rules of Section 16(b) of the
Securities Exchange Act of 1934, as amended, shall be delivered
to the Company at least six (6) months prior to such Tax Date.
7.4 Investment Representation.
Each Option or SAR agreement may provide, upon demand by the Company,
that the optionee or recipient shall deliver to the Company at the
time of any exercise of any Option or SAR a written representation
that the shares to be acquired are to be acquired for investment and
not for resale or with a view to the distribution thereof. Upon such
demand, delivery of such representation prior to delivery of any
shares shall be a condition precedent to the right of the employee or
such other person to purchase any shares.
7.5 No Right to Employment.
Nothing in this Plan or any agreement entered into pursuant to it
shall confer upon any participating employee the right to continue in
the employment of the Company or a Parent or Subsidiary or affect any
right which the Company or a Parent or Subsidiary may have to
terminate the employment of such participating employee.
7.6 Non-Uniform Determinations.
The Committee's determinations under this Plan (including without
limitation its determinations of the persons to receive Options or
SARs, the form amount and timing of such awards and the terms and
provisions of such awards) need not be uniform and may be made by it
selectively among persons who receive, or are
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eligible to receive, awards under this Plan, whether or not such
persons are similarly situated.
7.7 No Rights as Stockholders.
Employees granted Options or SARs under this Plan shall have no rights
as stockholders of the Company (or of a Parent or Subsidiary) as
applicable with respect thereto unless and until certificates for
shares of Common Stock are issued to them.
7.8 Adjustments of Stock.
(a) Recapitalization.
In the event of changes in the Common Stock due to a change in
capitalization, such as a stock dividend, stock split, or the
exchange of the Common Stock in the whole or in part for another
class of shares of the Company, there shall be a proportionate
adjustment in the number and kind of shares with respect to which
Options may be granted under the Plan, including any shares
subject to Option or SARs, and of the Option price stated in any
Option or SAR; PROVIDED, HOWEVER, that the Board may determine in
its discretion that no such adjustment shall be made unless the
aggregate effect of such change, or a series of such changes, in
capitalization is to increase or decrease the number of
outstanding shares of Common Stock by 5% or more; PROVIDED,
FURTHER, that any fractional shares resulting from such
adjustment shall be eliminated. The computation by the Board of
any such adjustment shall be conclusive.
(b) Merger or Consolidation.
In the event of a consolidation or merger in which the Company is
not the surviving corporation, or in the event of complete
liquidation of the Company, all outstanding Options and SARs
shall thereupon terminate, provided the Board shall, at least
twenty (20) days prior to the effective date of any such
corporate event, either (a) make all outstanding Options
immediately exercisable or (b) arrange to have the surviving
corporation grant to the optionees replacement options on terms
which the Board determines to be fair and reasonable.
7.9 Amendment or Termination of the Plan.
The Committee, without further approval of the stockholders, but with
the approval of the Board, may at any time terminate this Plan or any
part thereof and may from time to time amend this Plan as it may deem
advisable; PROVIDED, HOWEVER, that without stockholder approval, the
Committee may not amend the Plan in any manner that would, absent
stockholder approval, disqualify the Plan for coverage under Rule
16b-3 of the Securities and Exchange Commission, or
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any successor rule or regulation adopted by the Commission,
including an amendment which would (i) increase the aggregate
number of shares of Common Stock which may be issued under this
plan (other than increases permitted under Paragraph 7.8),
(ii) extend the term of this Plan, (iii) extend the period during
which an Option or SAR may be exercised. The termination or
amendment of this Plan shall not, without the consent of the
employee, affect such employee's rights under an award previously
granted.
7.10 Term of Plan.
Unless previously terminated pursuant to Paragraph 7.9, the Plan shall
terminate on January 7, 2008 the tenth (10th) anniversary of the date
on which the Plan became effective, and no Options or SARs may be
granted on or after such date.
VIII. EFFECTIVE DATE OF THE PLAN
The effective date of this Plan shall be January 7, 1998, the date on
which the Plan was adopted by the Board and the stockholders of the
Company.
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