Exhibit 10.0
MCY .COM, INC.
AMENDED AND RESTATED 1999 STOCK INCENTIVE PLAN
ARTICLE 1.
PURPOSE AND ADOPTION OF THE PLAN
1.1. PURPOSE. The purpose of the MCY.com, Inc. 1999 Stock Incentive
Plan (hereinafter referred to as the "Plan") is to assist in attracting and
retaining highly competent key employees, non-employee directors and consultants
and to act as an incentive in motivating selected key employees, non-employee
directors and consultants of MCY.com, Inc. and its Subsidiaries (as defined
below) to achieve long-term corporate objectives.
1.2. ADOPTION AND TERM. The Plan was originally approved by the Board
of Directors (hereinafter referred to as the "Board") and Sharholders of
MCY.com, Inc. (hereinafter referred to as the "Company"), to be effective as of
August 2, 1999 (the "Effective Date"). The Plan, as amended and restated as set
forth herein, was approved by the Board of Directors and Shareholders of the
Company on September 17, 1999. The Plan, as amended and restated, shall remain
in effect until terminated by action of the Board; provided, however, that no
Incentive Stock Option (as defined below) may be granted hereunder after the
tenth anniversary of the Effective Date and the provisions of Articles VII and
VIII with respect to performance-based awards to "covered employee" under
Section 162(m) of the Code (as defined below) shall expire as of the fifth
anniversary of the Effective Date.
ARTICLE II.
DEFINITIONS
For the purposes of this Plan, capitalized terms shall have the
following meanings:
2. 1. AWARD means any grant to a Participant of one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in Article VI,
Stock Appreciation Rights described in Article VI, Restricted Shares described
in Article VII and Performance Awards described in Article VIII.
2.2. AWARD AGREEMENT means a written agreement between the Company and
a Participant or a written notice from the Company to a Participant specifically
setting forth the terms and conditions of an Award granted under the Plan.
2.3. AWARD PERIOD means, with respect to an Award, the period of time
set forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.4. BENEFICIARY means an individual, trust or estate who or which, by
a written designation of the Participant filed with the Company or by operation
of law, succeeds to the
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rights and obligations of the Participant under the Plan and an Award Agreement
upon the Participant's death.
2.5. BOARD means the Board of Directors of the Company.
2.6. CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
(a) The acquisition in one or more transactions by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person") of beneficial ownership (within the meaning of
Rule l3d-3 promulgated under the Exchange Act) of shares or other securities (as
defined in Section 3(a)(10) of the Exchange Act) representing 30% or more of
either (i) the Outstanding Common Stock or (ii) the Company Voting Securities;
provided, however, that a Change in Control as defined in this clause (a) shall
not be deemed to occur in connection with any acquisition by the Company, an
employee benefit plan of the Company or any Person who immediately prior to the
Effective Date is a holder of Outstanding Common Stock or Company Voting
Securities (a "Current Stockholder") so long as such acquisition does not result
in any Person other than the Company, such employee benefit plan or such Current
Stockholder beneficially owning shares or securities representing 30% or more of
either the Outstanding Common Stock or Company Voting Securities; or
(b) Deleted.
(c) Approval by the stockholders of the Company of a
reorganization, merger, consolidation or similar transaction (a "Reorganization
Transaction"), in each case, unless, immediately following such Reorganization
Transaction, more than 50% of, respectively, the outstanding shares of common
stock (or similar equity security) of the corporation or other entity resulting
from or surviving such Reorganization Transaction and the combined voting power
of the securities of such corporation or other entity entitled to vote generally
in the election of directors, is then beneficially owned, directly or
indirectly, by the individuals and entities who were the respective beneficial
owners of the Outstanding Common Stock and the Company Voting Securities
immediately prior to such Reorganization Transaction in substantially the same
proportions as their ownership of the Outstanding Common Stock and Company
Voting Securities immediately prior to such Reorganization Transaction; or
(d) Approval by the stockholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company to a
corporation or other entity, unless, with respect to such corporation or other
entity, immediately following such sale or other disposition more than 50% of,
respectively, the outstanding shares of common stock (or similar equity
security) of such corporation or other entity and the combined voting power of
the securities of such corporation or other entity entitled to vote generally in
the election of directors, is then beneficially owned, directly or indirectly,
by the individuals and entities who were the respective beneficial owners of the
Outstanding Common Stock and the Company Voting Securities immediately prior to
such sale or disposition in substantially the same proportions as their
ownership of the Outstanding
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Common Stock and Company Voting Securities immediately prior to such sale or
disposition.
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2.7 CODE means the Internal Revenue Code of 1986, as amended.
References to a section of the Code include that section and any comparable
section or sections of any future legislation that amends, supplements or
supersedes said section.
2.8 COMMITTEE means the committee established in accordance with
Section 3.1.
2. 9. COMPANY means MCY.com, Inc., a Delaware corporation, and its
successors.
2.10 COMMON STOCK means Common Stock of the Company, par value $0.001
per share.
2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding securities of the Company entitled to vote generally in the election
of directors of the Company.
2.12. DATE OF GRANT means the date designated by the Committee as the
date as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
2.13. EFFECTIVE DATE shall have the meaning given to such term in
Section 1.2.
2.14. EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.15. EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Committee in the related Award Agreement as the
amount to be subtracted from the Fair Market Value on the date of exercise in
order to determine the amount of the payment to be made to the Participant, as
further described in Section 6.2(b).
2.16. FAIR MARKET VALUE means, as of any applicable date: (i) if the
Common Stock is listed on a national securities exchange or is authorized for
quotation on The Nasdaq National Market System ("NMS"), the closing price,
regular way, of the Common Stock on such exchange or NMS, as the case may be, on
such date or if no sale of the Common Stock shall have occurred on such date, on
the next preceding date on which there was such a reported sale; or (ii) if the
Common Stock is not listed for trading on a national securities exchange or
authorized for quotation on NMS, the closing bid price as reported by The Nasdaq
SmallCap Market on such date, or if no such price shall have been reported for
such date, on the next preceding date for which such price was so reported; or
(iii) if the Common Stock is not listed for trading on a national securities
exchange or authorized for quotation on NMS or The Nasdaq SmallCap Market (if
applicable), the last reported bid price published in the "pink sheets" or
displayed on the National Association of Securities Dealers, Inc. ("NASD")
Electronic Bulletin Board, as the case may be; or (iv) if the Common Stock is
not listed for trading on a national securities exchange, is not authorized for
quotation on NMS or The Nasdaq SmallCap Market and is not published in the "pink
sheets" or displayed on the NASD Electronic Bulletin Board, the fair market
value of the Common Stock as determined in good faith by the Committee.
2.17 INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of
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the Code.
2.18. MERGER means any merger, reorganization, consolidation, share
exchange, transfer of assets or other transaction having similar effect
involving the Company.
2.19. NON-EMPLOYEE DIRECTOR means a member of the Board who (i) is not
currently an officer or otherwise employed by the Company or a parent or a
subsidiary of the Company, (ii) does not receive compensation directly or
indirectly from the Company or a parent or a subsidiary of the Company for
services rendered as a consultant or in any capacity other than as a director,
except for an amount for which disclosure would not be required pursuant to Item
404(a) of Regulation S-K, (iii) does not possess an interest in any other
transaction for which disclosure would be required pursuant to Item 404(a) of
Regulation S-K, and (iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K.
2.20. NON-EMPLOYEE DIRECTOR OPTION means a stock option granted to a
Non-Employee Director in accordance with Section 6.1 (a).
2.21. NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.22. OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.23. OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.24. PARTICIPANT means a person designated to receive an Award under
the Plan in accordance with Section 5. 1.
2.25. PERFORMANCE AWARDS means Awards granted in accordance with
Article VIII.
2.26. PLAN means the MCY.com, Inc. Amended and Restated 1999 Stock
Incentive Plan as described herein, as the same may be amended from time to
time.
2.27 PURCHASE PRICE, with respect to Options, shall have the meaning
set forth in Section 6.1(b).
2.28 RESTRICTED SHARES means Common Stock subject to restrictions
imposed in connection with Awards granted under Article VII.
2.29. RETIREMENT means early or normal retirement under a pension plan
or arrangement of the Company or one of its Subsidiaries in which the
Participant participates.
2.30. STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article VI.
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2.31. SUBSIDIARY means MCY Music World, Inc. or any other subsidiary of
the Company within the meaning of Section 424(f) of the Code.
2.32. TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion. In the case of a consultant who is not an employee of the
Company or a Subsidiary, Termination of Employment shall mean voluntary or
involuntary termination of the consulting relationship for any reason. In the
case of a Non-Employee Director, Termination of Employment shall mean voluntary
or involuntary termination, non-election, removal or other act which results in
such Non-Employee Director no longer serving in such capacity.
ARTICLE III.
ADMINISTRATION
3.1. COMMITTEE. The Plan shall be administered by a committee of the
Board (the "Committee") comprised of at least one person. The Committee shall
have exclusive and final authority in each determination, interpretation or
other action affecting the Plan and its Participants. The Committee shall have
the sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, and to take such steps in connection with
the Plan and Awards granted hereunder as it may deem necessary or advisable. The
Committee may, subject to compliance with applicable legal requirements, with
respect to Participants who are not subject to Section 16(b) of the Exchange
Act, delegate such of its powers and authority under the Plan as it deems
appropriate to designated officers or employees of the Company. In addition, the
Board may exercise any of the authority conferred upon the Committee hereunder.
In the event of any such delegation of authority or exercise of authority by the
Board, references in the Plan to the Committee shall be deemed to refer to the
delegate of the Committee or the Board, as the case may be.
ARTICLE IV.
SHARES
4.1. NUMBER OF SHARES ISSUABLE. The total number of shares initially
authorized to be issued under the Plan, as amended and retated, shall be
15,000,000 shares of Common Stock. The number of shares available for issuance
under the Plan shall be subject to adjustment in accordance with Section 9.7.
The shares to be offered under the Plan shall be authorized and unissued shares
of Common Stock, or issued shares of Common Stock which will have been
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reacquired by the Company.
4.2. SHARES SUBJECT TO TERMINATED AWARDS. Shares of Common Stock
covered by any unexercised portions of terminated Options (including canceled
Options) granted under Article VI, shares of Common Stock forfeited as provided
in Section 7.2(a) and shares of Common Stock subject to any Award that are
otherwise surrendered by a Participant may be subject to new Awards under the
Plan. Shares of Common Stock subject to Options, or portions thereof, that have
been surrendered in connection with the exercise of Stock Appreciation Rights
shall not be available for subsequent Awards under the Plan, but shares of
Common Stock issued in payment of such Stock Appreciation Rights shall not be
charged against the number of shares of Common Stock available for the grant of
Awards hereunder.
ARTICLE V.
PARTICIPATION
5.1. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such key
employees, consultants, and non-employee directors of the Company and its
Subsidiaries, whether or not members of the Board, as the Committee, in its sole
discretion, may designate from time to time. The Committee's designation of a
Participant in any year shall not require the Committee to designate such person
to receive Awards in any other year. The designation of a Participant to receive
an Award under one portion of the Plan does not require the Committee to include
such Participant under other portions of the Plan. The Committee shall consider
such factors as it deems pertinent in selecting Participants and in determining
the types and amounts of their respective Awards.
ARTICLE VI.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6. 1. OPTION AWARDS.
(a) GRANT OF OPTIONS. The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participants to purchase shares of
Common Stock from the Company in such numbers, at such prices, and on such terms
and subject to such conditions, not inconsistent with the terms of the Plan, as
may be established by the Committee. The terms of any Option granted under the
Plan shall be set forth in an Award Agreement.
(b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each
share of Common Stock which may be purchased upon exercise of any Option granted
under the Plan shall be determined by the Committee.
(c) DESIGNATION OF OPTIONS. Except as otherwise expressly
provided in the Plan, the Committee may designate, at the time of the grant of
an Option, such Option as an Incentive Stock Option or a Non-Qualified Stock
Option; provided, however, that an Option may
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be designated as an Incentive Stock Option only if the applicable Participant is
an employee of the Company or a Subsidiary on the Date of Grant.
(d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant
may be granted Incentive Stock Options under the Plan (or any other plans of the
Company and its Subsidiaries) that would result in Incentive Stock Options to
purchase shares of Common Stock with an aggregate Fair Market Value (measured on
the Date of Grant) of more than $100,000 first becoming exercisable by such
Participant in any one calendar year.
(e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of
an Option pursuant to Section 9.4 shall have no rights as a stockholder with
respect to the shares of Common Stock covered by an Option until that
Participant or transferee shall have become the holder of record of any such
shares, and no adjustment shall be made with respect to any such shares of
Common Stock for dividends in cash or other property or distributions of other
rights on the Common Stock for which the record date is prior to the date on
which that Participant or transferee shall have become the holder of record of
any shares covered by such Option; provided, however, that Participants are
entitled to share adjustments to reflect capital changes under Section 9.7.
6.2. STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHT AWARDS. The Committee is
authorized to grant to any Participant one or more Stock Appreciation Rights.
Such Stock Appreciation Rights may be granted either independent of or in tandem
with Options granted to the same Participant. Stock Appreciation Rights granted
in tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Options; provided, however, that: (i) any Option covering any share of
Common Stock shall expire and not be exercisable upon the exercise of any Stock
Appreciation Right with respect to the same share, (ii) any Stock Appreciation
Right covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any Option with respect to the same share, and (iii) an
Option and a Stock Appreciation Right covering the same share of Common Stock
may not be exercised simultaneously. Upon exercise of a Stock Appreciation Right
with respect to a share of Common Stock, the Participant shall be entitled to
receive an amount equal to the excess, if any, of (A) the Fair Market Value of a
share of Common Stock on the date of exercise over (B) the Exercise Price of
such Stock Appreciation Right established in the Award Agreement, which amount
shall be payable as provided in Section 6.2(c).
(b) EXERCISE PRICE. The Exercise Price established for any
Stock Appreciation Right granted under this Plan shall be determined by the
Committee, but in the case of Stock Appreciation Rights granted in tandem with
Options shall not be less than the Purchase Price of the related Options. Upon
exercise of Stock Appreciation Rights, the number of shares issuable upon
exercise under any related Options shall automatically be reduced by the number
of shares of Common Stock represented by such Options which are surrendered as a
result of the exercise of such Stock Appreciation Rights.
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(c) PAYMENT OF INCREMENTAL VALUE. Any payment that may become
due from the Company by reason of a Participant's exercise of a Stock
Appreciation Right may be paid to the Participant as determined by the Committee
(i) all in cash, (ii) all in Common Stock, or (iii) in any combination of cash
and Common Stock. In the event that all or a portion of the payment is to be
made in Common Stock, the number of shares of Common Stock to be delivered in
satisfaction of such payment shall be determined by dividing the amount of such
payment or portion thereof by the Fair Market Value on the date of exercise. No
fractional share of Common Stock shall be issued to make any payment in respect
of Stock Appreciation Rights; if any fractional share would otherwise be
issuable, the combination of cash and Common Stock payable to a Participant
shall be adjusted as directed by the Committee to avoid the issuance of any
fractional share.
6.3. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) CONDITIONS ON EXERCISE. An Award Agreement with respect to
Options and/or Stock Appreciation Rights may contain such waiting periods,
exercise dates and restrictions on exercise (including, but not limited to,
periodic installments) as may be determined by the Committee at the time of
grant.
(b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options
and Stock Appreciation Rights shall terminate after the first to occur of the
following events:
(i) Expiration of the Option or Stock Appreciation
Right as provided in the related Award Agreement; or
(ii) Termination of the Award as provided in Section
6.3(e), following the applicable Participant's Termination of Employment; or
(iii) In the case of an Incentive Stock Option, ten
years from the Date of Grant; or
(iv) Solely in the case of a Stock Appreciation Right
granted in tandem with an Option, upon the expiration of the related Option.
(c) ACCELERATION OF EXERCISE TIME. The Committee, in its sole
discretion, shall have the right (but shall not in any case be obligated),
exercisable at any time after the Date of Grant, to permit the exercise of any
Option or Stock Appreciation Right prior to the time such Option or Stock
Appreciation Right would otherwise become exercisable under the terms of the
related Award Agreement.
(d) EXTENSION OF EXERCISE TIME. In addition to the extensions
permitted under Section 6.3(e) in the event of Termination of Employment, the
Committee, in its sole discretion, shall have the right (but shall not in any
case be obligated), exercisable on or at any time after the Date of Grant, to
permit the exercise of any Option or Stock, Appreciation Right after its
expiration date described in Section 6.3(e), subject, however, to the
limitations described in
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Sections 6.3(b)(i), (iii) and (iv).
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(e) EXERCISE OF OPTIONS OR STOCK APPRECIATION RIGHTS UPON
TERMINATION OF EMPLOYMENT.
(i) TERMINATION OF VESTED OPTIONS AND STOCK
APPRECIATION RIGHTS UPON TERMINATION OF EMPLOYMENT.
(A) TERMINATION. In the event of
Termination of Employment of a Participant other than by reason of death,
disability or Retirement, the right of the Participant to exercise any Option or
Stock Appreciation Right shall terminate unless exercised within a period of
three months from the date on which the Employee ceased to be so employed,
unless the exercise period is extended by the Committee in accordance with
Section 6.3(d).
(B) DISABILITY OR RETIREMENT. In the event
of a Participant's Termination of Employment by reason of disability or
Retirement, the right of the Participant to exercise any Option or Stock
Appreciation Right which he or she was entitled to exercise upon Termination of
Employment (or which became exercisable at a later date pursuant to Section
6.3(e)(ii) shall terminate one year after the date of such Termination of
Employment, unless the exercise period is extended by the Committee in
accordance with Section 6.3(d). In no event, however, may any Option or Stock
Appreciation Right be exercised later than the date of expiration of the Option
determined pursuant to Section 6.3(b)(i), (iii) or (iv).
(C) DEATH. In the event of the death of a
Participant while employed by the Company or a Subsidiary or within any
additional period of time from the date of the Participant's Termination of
Employment and prior to the expiration of any Option or Stock Appreciation Right
as provided pursuant to Section 6.3(e)(i)(B) or Section 6.3(d) above, to the
extent the right to exercise the Option or Stock Appreciation Right was accrued
as of the date of such Termination of Employment and had not expired during such
additional period, the right of the Participant's Beneficiary to exercise the
Option or Stock Appreciation Right shall terminate one year after the date of
the Participant's death (but in no event more than one year from the date of the
Participant's Termination of Employment by reason of disability or Retirement),
unless the exercise period is extended by the Committee in accordance with
Section 6.3(d). In no event, however, may any Option or Stock Appreciation Right
be exercised later than the date of expiration of the Option determined pursuant
to Section 6.3(b)(i), (iii) or (iv).
(ii) TERMINATION OF UNVESTED OPTIONS OR STOCK
APPRECIATION RIGHTS UPON TERMINATION OF EMPLOYMENT. Subject to Section 6.3(c),
to the extent the right to exercise an Option or a Stock Appreciation Right, or
any portion thereof, has not accrued as of the date of Termination of
Employment, such right shall expire at the date of such Termination of
Employment. Notwithstanding the foregoing, the Committee, in its sole discretion
and under such terms as it deems appropriate, may permit, for a Participant who
terminates employment by reason of Retirement and who will continue to render
significant services to the Company or one of its Subsidiaries after his or her
Termination of Employment, the continued vesting of his or her Options and Stock
Appreciation Rights during the period in which that individual continues to
render such services.
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6.4. EXERCISE PROCEDURES. Each Option and Stock Appreciation Right
granted under the Plan shall be exercised by written notice to the Company which
must be received by the officer or employee of the Company designated in the
Award Agreement at or before the close of business on the expiration date of the
Award. The Purchase Price of shares purchased upon exercise of an option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the
Award Agreement; PROVIDED, HOWEVER, that the Committee may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a)
shares of Common Stock (which may include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Common Stock
or (c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by a Participant, shares of
Common Stock may be issued directly to the Participant's broker or dealer upon
receipt of an irrevocable written notice of exercise from the Participant). In
the event that any shares of Common Stock shall be transferred to the Company to
satisfy all or any part of the Purchase Price, the part of the Purchase Price
deemed to have been satisfied by such transfer of shares of Common Stock shall
be equal to the product derived by multiplying the Fair Market Value as of the
date of exercise times the number of shares of Common Stock transferred to the
Company. The Participant may not transfer to the Company in satisfaction of the
Purchase Price any fractional share of Common Stock. Any part of the Purchase
Price paid in cash upon the exercise of any Option shall be added to the general
funds of the Company and may be used for any proper corporate purpose. Unless
the Committee shall otherwise determine, any shares of Common Stock transferred
to the Company as payment of all or part of the Purchase Price upon the exercise
of any Option shall be held as treasury shares.
6.5. CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all Options
and Stock Appreciation Rights outstanding on the date of such Change in Control
shall become immediately and fully exercisable. The provisions of this Section
6.5 shall not be applicable to any Options or Stock Appreciation Rights granted
to a Participant if any Change in Control results from such Participant's
beneficial ownership (within the meaning of Rule l3d-3 under the Exchange Act)
of Common Stock or Company Voting Securities.
ARTICLE VII.
RESTRICTED SHARES
7.1. RESTRICTED SHARE AWARDS. The Committee may grant to any
Participant an Award of such number of shares of Common Stock on such terms,
conditions and restrictions, whether based on performance standards, periods of
service, retention by the Participant of ownership of purchased or designated
shares of Common Stock or other criteria, as the Committee shall establish. With
respect to performance-based Awards of Restricted Shares intended to qualify for
deductibility under Section 162(m) of the Code, performance targets will include
specified levels of one or more of operating income, return or investment,
return on stockholders' equity, earnings before interest, taxes, depreciation
and amortization and/or earnings per share. The
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terms of any Restricted Share Award granted under this Plan shall be set forth
in an Award Agreement which shall contain provisions determined by the Committee
and not inconsistent with this Plan.
(a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the
Date of Grant of a Restricted Share Award by the Committee, the Company shall
cause to be transferred on the books of the Company or its agent, shares of
Common Stock, registered on behalf of the Participant, evidencing the Restricted
Shares covered by the Award, subject to forfeiture to the Company as of the Date
of Grant if an Award Agreement with respect to the Restricted Shares covered by
the Award is not duly executed by the Participant and timely returned to the
Company. All shares of Common Stock covered by Awards under this Article VII
shall be subject to the restrictions, terms and conditions contained in the Plan
and the applicable Award Agreements entered into by the appropriate
Participants. Until the lapse or release of all restrictions applicable to an
Award of Restricted Shares the share certificates representing such Restricted
Shares may be held in custody by the Company, its designee, or, if the
certificates bear a restrictive legend, by the Participant. Upon the lapse or
release of all restrictions with respect to an Award as described in Section 7.1
(d), one or more share certificates, registered in the name of the Participant,
for an appropriate number of shares as provided in Section 7.1 (d), free of any
restrictions set forth in the Plan and the related Award Agreement (however
subject to any restrictions that may be imposed by law) shall be delivered to
the Participant.
(b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of a
Restricted Share Award and subject to execution of the related Award Agreement
as provided in Section 7.1 (a), and except as otherwise provided in such Award
Agreement, the Participant shall become a stockholder of the Company with
respect to all shares subject to the Award Agreement and shall have all of the
rights of a stockholder, including, but not limited to, the right to vote such
shares and the right to receive dividends; provided, however, that any shares of
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be
subject to the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.1 (a).
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted
Shares may be assigned or transferred (other than by will or the laws of descent
and distribution or to an inter vivos trust with respect to which the
Participant is treated as the owner under Sections 671 through 677 of the Code),
pledged or sold prior to the lapse of the restrictions applicable thereto.
(d) DELIVERY OF SHARES UPON VESTING. Upon expiration or
earlier termination of the forfeiture period without a forfeiture and the
satisfaction of or release from any other conditions prescribed by the
Committee, or at such earlier time as provided under the provisions of Section
7.3, the restrictions applicable to the Restricted Shares shall lapse. As
promptly as administratively feasible thereafter, subject to the requirements of
Section 9.5, the Company shall deliver to the Participant or, in case of the
Participant's death, to the Participant's Beneficiary, one or more share
certificates for the appropriate number of shares of Common Stock, free of all
such restrictions, except for any restrictions that may be imposed by law.
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7.2. TERMS OF RESTRICTED SHARES.
(a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections
7.2(b) and 7.3, Restricted Shares shall be forfeited and returned to the Company
and all rights of the Participant with respect to such Restricted Shares shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary as an employee until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set forth in the
Award Agreement. The Committee shall determine the forfeiture period (which may,
but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.
(b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything
contained in this Article VII to the contrary, the Committee may, in its sole
discretion, waive the forfeiture period and any other conditions set forth in
any Award Agreement under appropriate circumstances (including the death,
disability or Retirement of the Participant or a material change in
circumstances arising after the date of an Award) and subject to such terms and
conditions (including forfeiture of a proportionate number of the Restricted
Shares) as the Committee shall deem appropriate.
7.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificates for such shares in accordance with Section 7.1 (d).
ARTICLE VII.
PERFORMANCE AWARDS
8.1. PERFORMANCE AWARDS.
(a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE
AMOUNTS. The Committee may grant Performance Awards to Participants. A
Performance Award shall consist of the right to receive a payment (measured by
the Fair Market Value of a specified number of shares of Common Stock, increases
in such Fair Market Value during the Award Period and/or a fixed cash amount)
contingent upon the extent to which certain predetermined performance targets
have been met during an Award Period. Performance Awards may be made in
conjunction with, or in addition to, Restricted Share Awards made under Article
VII. The Award Period shall be two or more fiscal or calendar years as
determined by the Committee. The Committee, in its discretion and under such
terms as it deems appropriate, may permit newly eligible employees, such as
those who are promoted or newly hired, to receive Performance Awards after an
Award Period has commenced.
(b) PERFORMANCE TARGETS. The performance targets may include such goals
related to the performance of the Company and/or the performance of a
Participant as may be established by the Committee in its discretion. In the
case of Performance Awards intended to
14
qualify for deductibility under Section 162(m) of the Code, the targets will
include specified levels of one or more of operating income, return on
investment, return on stockholders' equity, earnings before interest, taxes,
depreciation and amortization and/or earnings per share. The performance targets
established by the Committee may vary for different Award Periods and need not
be the same for each Participant receiving a Performance Award in an Award
Period. Except to the extent inconsistent with the performance-based
compensation exception under Section 162(m) of the Code, in the case of
Performance Awards granted to employees to whom such section is applicable, the
Committee, in its discretion, but only under extraordinary circumstances as
determined by the Committee, may change any prior determination of performance
targets for any Award Period at any time prior to the final determination of the
value of a related Performance Award when events or transactions occur to cause
such performance targets to be an inappropriate measure of achievement.
(c) EARNING PERFORMANCE AWARDS. The Committee, on or as soon
as practicable after the Date of Grant, shall prescribe a formula to determine
the percentage of the applicable Performance Award to be earned based upon the
degree of attainment of performance targets.
(d) PAYMENT OF EARNED PERFORMANCE AWARDS. Payments of earned
Performance Awards shall be made in cash or shares of Common Stock or a
combination of cash and shares of Common Stock, in the discretion of the
Committee. The Committee, in its sole discretion, may provide such terms and
conditions with respect to the payment of earned Performance Awards as it may
deem desirable.
8.2. TERMS OF PERFORMANCE AWARDS.
(a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below
or in Section 8.3, in the case of a Participant's Termination of Employment
prior to the end of an Award Period, the Participant will not have earned any
Performance Awards for that Award Period.
(b) RETIREMENT. If a Participant's Termination of Employment
is because of Retirement prior to the end of an Award Period, the Participant
will not be paid any Performance Award, unless the Committee, in its sole and
exclusive discretion, determines that an Award should be paid. In such a case,
the Participant shall be entitled to receive a pro-rata portion of his or her
Award as determined under subsection (d) of this Section 8.2.
(c) DEATH OR DISABILITY. If a Participant's Termination of
Employment is due to death or to disability (as determined in the sole and
exclusive discretion of the Committee) prior to the end of an Award Period, the
Participant or the Participant's personal representative shall be entitled to
receive a pro-rata share of his or her Award as determined under subsection (d)
of this Section 8.2.
(d) PRO-RATA PAYMENT. The amount of any payment to be made to
a ant whose employment is terminated by Retirement, death or disability (under
the circumstances described
15
in subsections (b) and (c)) will be the amount determined by multiplying (i) the
amount of the Performance Award that would have been earned through the end of
the Award Period had such employment not been terminated by (ii) a fraction, the
numerator of which is the number of whole months such Participant was employed
during the Award Period, and the denominator of which is the total number of
months of the Award Period. Any such payment made to a Participant whose
employment is terminated prior to the end of an Award Period shall be made at
the end of such Award Period, unless otherwise determined by the Committee in
its sole discretion. Any partial payment previously made or credited to a
deferred account for the benefit of a Participant in accordance with Section 8.
1 (d) of the Plan shall be subtracted from the amount otherwise determined as
payable as provided in this Section 8.2(d).
(e) OTHER EVENTS. Notwithstanding anything to the contrary in
this Article VIII, the Committee may, in its sole and exclusive discretion,
determine to pay all or any portion of a Performance Award to a Participant who
has terminated employment prior to the end of an Award Period under certain
circumstances (including the death, disability or Retirement of the Participant
or a material change in circumstances arising after the Date of Grant), subject
to such terms and conditions as the Committee shall deem appropriate.
8.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in
the applicable Award Agreement, in the event of a Change in Control, all
Performance Awards for all Award Periods shall immediately become fully payable
to all Participants and shall be paid to Participants within thirty (30) days
after such Change in Control.
ARTICLE IX.
TERMS APPLICABLE TO ALL AWARDS GRANTED UNDER THE PLAN
9.1. PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan the terms of which are contrary
to any of the provisions of the Plan. In the event any provision of any Award
granted under the Plan shall conflict with any term in the Plan as constituted
on the Date of Grant of such Award, the term in the Plan as constituted on the
Date of Grant of such Award shall control. Except as provided in Section 9.3 and
Section 9.7, the terms of any Award granted under the Plan may not be changed
after the Date of Grant of such Award so as to materially decrease the value of
the Award without the express written approval of the holder.
9.2. AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or the Participant shall have received and acknowledged notice of the
Award authorized by the Committee expressly granting the Award to such person
and containing provisions setting forth the terms of the Award.
9.3. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of
16
that Award) after its Date of Grant except by express written agreement between
the Company and such Participant, provided that any such change (a) may not be
inconsistent with the terms of the Plan, and (b) shall be approved by the
Committee.
9. 4. LIMITATION ON TRANSFER. Except as provided in Section 7.1(c) in
the case of Restricted Shares, a Participant's rights and interest under the
Plan may not be assigned or transferred other than by will or the laws of
descent and distribution and, during the lifetime of a Participant, only the
Participant personally (or the Participant's personal representative) may
exercise rights under the Plan. The Participant's Beneficiary may exercise the
Participant's rights to the extent they are exercisable under the Plan following
the death of the Participant. Notwithstanding the foregoing, the Committee may
grant Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.
9. 5. TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment of cash
or issuance of shares upon exercise or vesting of an Award unless indemnified to
its satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee and shall be
payable by the Participant at such time as the Committee determines in
accordance with the following rules:
(a) The Participant shall have the right to elect to meet his
or her withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, the Fair Market Value of which is equal to the amount of
withholding taxes due, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii)
by a combination of withholding such shares and paying cash.
(b) The Committee shall have the discretion as to any Award to
cause the Company to pay to tax authorities for the benefit of the applicable
Participant, or to reimburse such Participant for, the individual taxes which
are due on the grant, exercise or vesting of any Award or the lapse of any
restriction on any Award (whether by reason of such Participant's filing of an
election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise
tax under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.
(c) In the case of Participants who are subject to Section 16
of the Exchange Act, the Committee may impose such limitations and restrictions
as it deems necessary or appropriate with respect to the delivery or withholding
of shares of Common Stock to meet tax
17
withholding obligations.
9. 6. SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the Participant approve.
9. 7 ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares, the
number and kind of shares available for Awards subsequently granted under the
Plan and the maximum number of shares in respect of which Awards can be made to
any Participant in any calendar year shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.
(b) MERGER. After any Merger in which the Company is the
surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of an Option or receipt of any other Award to receive
(subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award prior to
such Merger, the number and class of shares or other securities to which such
Participant would have been entitled pursuant to the terms of the Merger if, at
the time of the Merger, such Participant had been the holder of record of a
number of shares of Common Stock equal to the number of shares of Common Stock
receivable or exercisable pursuant to such Award. Comparable rights shall accrue
to each Participant in the event of successive Mergers of the character
described above. In the event of a Merger in which the Company is not the
surviving corporation, the surviving, continuing, successor or purchasing
corporation, as the case may be (the "Acquiring Corporation), will either assume
the Company's rights and obligations under outstanding Award Agreements or
substitute awards in respect of the Acquiring Corporation's stock for
outstanding Awards, provided, however, that if the Acquiring Corporation does
not assume or substitute for such outstanding Awards, the Board shall provide
prior to the Merger that any unexercisable and/or unvested portion of the
outstanding Awards shall be immediately exercisable and vested as of a date
prior to such merger or consolidation, as the Board so determines. The exercise
and/or vesting of any Award that was permissible solely by reason of this
Section 9.7(b) shall be conditioned upon the consummation of the Merger. Any
Options which are neither assumed by the Acquiring Corporation not exercised as
of the date of the Merger shall terminate effective as of the effective date of
the Merger.
(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES.
After any merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the provisions of
the Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the merger whose shares of stock subject to the
old options may no longer be issued following the merger. The manner of
application of the foregoing provisions to such options and any appropriate
adjustments shall be determined by the Committee in its sole discretion. Any
such adjustments may provide for the
18
elimination of any fractional shares which might otherwise become subject to any
Options.
9.8 NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
9.9. AWARDS NOT INCLUDED FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
9.10. GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of New York and construed
in accordance therewith.
9.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
9.12. CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions had
been used in the Plan.
9.13. SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan, such Award and every other Award at any time granted under the Plan
shall remain in full force and effect.
9.14. AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board shall have complete power and
authority to amend the Plan at any time without the authorization or approval of
the Company's stockholders, unless the amendment (i) materially increases the
benefits accruing to Participants under the Plan, (ii) materially increases the
aggregate number of securities that may be issued under the Plan or (iii)
materially modifies the requirements as to eligibility for participation in the
Plan, but in each case only to the extent then required by the Code or
applicable law, or deemed necessary or advisable by the Board. No termination or
amendment of the Plan may, without the consent of the Participant to whom any
Award shall theretofore have been granted under the Plan, materially adversely
affect the right of such individual under such Award.
19
(b) TERMINATION. The Board shall have the right and the power
to terminate the Plan at any time. No Award shall be granted under the Plan
after the termination of the Plan, but the termination of the Plan shall not
have any other effect and any Award outstanding at the time of the termination
of the Plan may be exercised after termination of the Plan at any time prior to
the expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not been terminated.