EXHIBIT 10.4
As amended through
January 21, 2005
TIME WARNER INC.
1999 STOCK PLAN
1. PURPOSES OF THE PLAN.
The Plan is intended to encourage ownership of Shares by Key Employees
and directors of and certain consultants to the Company or its Affiliates in
order to attract and retain such people, to motivate them to work for the
benefit of the Company or an Affiliate, and to provide an additional incentive
for them to promote the success of the Company or of an Affiliate. The Plan
provides for the granting of ISOs and Non-Qualified Options and awards of
Stock Purchase Rights and Restricted Stock Units.
2. DEFINITIONS.
Unless otherwise specified or unless the context otherwise requires,
the following terms, as used in this Time Warner Inc. 1999 Stock Plan,
have the following meanings:
"Administrator" means the Board of Directors, unless it has
delegated power to act on its behalf to the Committee, in which
case the Administrator means the Committee.
"Affiliate", with respect to ISOs, means a corporation which, for
purposes of Section 424 of the Code, is a parent or subsidiary of
the Company, direct or indirect, and, with respect to
Non-Qualified Options, means any corporation, company or other
entity whose financial results are consolidated with those of the
Company in accordance with U.S. generally accepted accounting
principles, all as determined by the Administrator.
"Board of Directors" means the Board of Directors of the Company.
"Change in Control" means either a Corporate Change in Control or
a Transactional Change in Control.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Committee" means the Compensation Committee of the Board of
Directors, or its successor, or such other committee of the Board
of Directors to which the Board of Directors has delegated power
to act under or pursuant to the provisions of the Plan or a
subcommittee of the Compensation Committee established by the
Compensation Committee.
"Common Stock" means shares of the Company's common stock, $.01
par value per share.
"Company" means (i) with respect to the periods prior to January
11, 2001, America Online, Inc., a Delaware corporation and (ii)
with respect to periods on and after January 11, 2001, Time
Warner Inc., a Delaware corporation named AOL Time Warner Inc.
prior to October 16, 2003.
"Corporate Change in Control" means the happening of any of the
following events:
(1) the acquisition by any individual, entity or group (an
"Entity"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 30% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition
by virtue of the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or
exchanged was itself acquired directly from the Company), (B) any
acquisition by the Company, or (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or by any corporation controlled by the Company; or
(2) a change in the composition of the Board of Directors since
October 28, 1999, such that the individuals who, as of such date,
constituted the Board of Directors (the "Incumbent Board") cease
for any reason to constitute at least a majority of such Board;
provided that any individual who becomes a director of the
Company subsequent to October 28, 1999 whose election, or
nomination for election by the Company's stockholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed a member of the
Incumbent Board; and provided further, that any individual who
was initially elected as a director of the Company as a result of
an actual or threatened election contest, as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any person or Entity other than the
Board shall not be deemed a member of the Incumbent Board.
"Disability" or "Disabled" means permanent and total disability
as defined in Section 22(e)(3) of the Code.
"Fair Market Value" of a Share of Common Stock means:
(1) If the Common Stock is listed on a national securities
exchange or traded in the over-the-counter market and sales
prices are regularly reported for the
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Common Stock, the average of the high and low sales prices of a
share of the Common Stock on the New York Stock Exchange or other
comparable reporting system for the applicable date, or if the
applicable date is not a trading day, the trading day immediately
preceding the applicable date;
(2) If the Common Stock is not traded on a national securities
exchange but is traded on the over-the-counter market, if sales
prices are not regularly reported for the Common Stock for the
trading day referred to in clause (1), and if bid and asked
prices for the Common Stock are regularly reported, the mean
between the bid and the asked price for the Common Stock at the
close of trading in the over-the-counter market on the applicable
date, or if the applicable date is not a trading day, on the
trading day immediately preceding the applicable date; and
(3) If the Common Stock is neither listed on a national
securities exchange nor traded in the over-the-counter market,
such value as the Administrator, in good faith, shall determine.
"Involuntary Employment Action" shall mean any change in the
terms and conditions of the Participant's employment with the
Company or any successor, without cause (as defined herein), to
such extent that:
(1) the Participant shall fail to be vested with power, authority
and resources analogous to the Participant's title and/or office
prior to the Change in Control, or
(2) the Participant shall lose any significant duties or
responsibilities attending such office, or
(3) there shall occur a reduction in the Participant's base
compensation, or
(4) the Participant's employment with the Company, or its
successor, is terminated without cause (as defined herein).
"ISO" means an option meant to qualify as an incentive stock
option under Section 422 of the Code.
"Key Employee" means an employee of the Company or of an
Affiliate (including, without limitation, an employee who is also
serving as an officer or director of the Company or of an
Affiliate), designated by the Administrator to be eligible to be
granted one or more Options, Stock Purchase Rights or Restricted
Stock Units under the Plan; provided however, that Key Employee
shall not include any person who: (i) is not on the payroll of
the Company or an Affiliate as a full-time or part-time employee
or (ii) directly or indirectly provides services to the Company
or an Affiliate pursuant to a contractual or other arrangement,
written or otherwise between the Company or an Affiliate and
either that person or a third party, which does not designate
such person as an employee (regardless of whether a government
agency, court or other entity subsequently determines that such
person is an employee of the Company or an Affiliate for purposes
of
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employment taxes or for any other purpose). Anything in the prior
sentence to the contrary notwithstanding, a person who is
providing services pursuant to a contractual or other arrangement
may be eligible for participation in the Plan as a consultant who
is designated by the Administrator in accordance with Paragraph 5
of the Plan.
"Non-Qualified Option" means an option which is not intended to
qualify as an ISO.
"Option" means an ISO or Non-Qualified Option granted under the
Plan.
"Option Agreement" means an agreement between the Company and a
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.
"Participant" means a Key Employee, director or consultant of the
Company or of an Affiliate to whom one or more Options, Stock
Purchase Rights or Restricted Stock Units are granted under the
Plan. As used herein, "Participant" shall include "Participant's
Survivors" where the context requires.
"Plan" means this Time Warner Inc. 1999 Stock Plan.
"Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Paragraph 14 below.
"Restricted Stock Purchase Agreement" means a written agreement
between the Company and a Participant evidencing the terms and
restrictions applying to stock purchased under a Stock Purchase
Right, in such form as the Administrator shall approve.
"Restricted Stock Unit" means the right to receive Shares
pursuant to Paragraph 15 of the Plan, as evidenced by a
Restricted Stock Units Agreement.
"Restricted Stock Units Agreement" means a written agreement
between the Company and a Participant evidencing the terms and
restrictions applying to the grant of a Restricted Stock Unit, in
such form as the Administrator shall approve.
"Shares" means shares of the Common Stock as to which Options or
Stock Purchase Rights or Restricted Stock Units have been or may
be granted under the Plan or any shares of capital stock into
which the Shares are changed or for which they are exchanged
within the provisions of Paragraph 3 of the Plan. The Shares
issued upon exercise of Options or Stock Purchase Rights or
payment with respect to Restricted Stock Units granted under the
Plan may be authorized and unissued shares or shares held by the
Company in its treasury, or both.
"Stock Purchase Right" means the right to purchase Common Stock
pursuant to Paragraph 14 of the Plan, as evidenced by a
Restricted Stock Purchase Agreement.
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"Survivors" means a deceased Participant's legal representatives
and/or any person or persons who acquired the Participant's
rights to an Option. Stock Purchase Right or Restricted Stock
Unit by will or by the laws of descent and distribution.
"Transactional Change in Control" shall mean any of the following
transactions to which the Company is a party:
(1) a reorganization, recapitalization, merger or consolidation
(a "Corporate Transaction") of the Company, unless securities
representing 60% or more of either the outstanding shares of
common stock or the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors of the Company or the corporation resulting from such
Corporate Transaction (or the parent of such corporation) are
held subsequent to such transaction by the person or persons who
were the beneficial holders of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior
to such Corporate Transaction, in substantially the same
proportions as their ownership immediately prior to such
Corporate Transaction; or
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Company.
To "Vest" means that you have obtained a contingent right to
exercise, purchase or receive Shares pursuant to a defined number
of your awards hereunder, as defined by and subject to the terms
and conditions set forth in the pertinent Agreement and this
Plan. Unless and until your award Vests pursuant to the terms of
the pertinent Agreement and this Plan, as well as the vesting
schedule included in your notice of grant, you have not obtained
any such right to exercise, purchase or receive Shares pursuant
to any of your unvested awards (except as may be provided in
Paragraphs 12 and 13 of this Plan and in the pertinent
Agreement).
3. SHARES SUBJECT TO THE PLAN.
The number of Shares which may be issued from time to time pursuant to this
Plan shall be 100,000,000 or the equivalent of such number of Shares after the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Paragraph 18 of the Plan. No more than 5%
of such number of Shares may be issued in connection with grants of Stock
Purchase Rights or Restricted Stock Units.
If an Option ceases to be "outstanding", in whole or in part, the Shares
which were subject to such Option shall be available for the granting of other
Options under the Plan. Any Option shall be treated as "outstanding" until such
Option is exercised in full, or terminates or expires under the provisions of
the Plan, or by agreement of the parties to the pertinent Option Agreement.
Shares that have actually been issued under the Plan upon exercise of an Option
or a Stock Purchase Right or delivery of Shares pursuant to a Restricted Stock
Unit shall not be
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returned to the Plan and shall not become available for the granting of other
Options, Stock Purchase Rights or Restricted Stock Units under the Plan.
4. ADMINISTRATION OF THE PLAN.
Subject to the provisions of the Plan, the Administrator is authorized to:
a. Interpret the provisions of the Plan or of any Option, Option
Agreement, Stock Purchase Right, Restricted Stock Purchase Agreement,
Restricted Stock Unit or Restricted Stock Units Agreement and to make
all rules and determinations which it deems necessary or advisable for
the administration of the Plan;
b. Determine which employees of the Company or of an Affiliate shall be
designated as Key Employees and which of the Key Employees, directors
and consultants shall be granted Options, Stock Purchase Rights or
Restricted Stock Units;
c. Determine the number of Shares for which an Option, Options, Stock
Purchase Rights or Restricted Stock Units shall be granted, provided,
however, that in no event shall Options, Stock Purchase Rights or
Restricted Stock Units to purchase more than 4,000,000 Shares be
granted to any Participant in any fiscal year;
d. Specify the terms and conditions upon which an Option, Options, Stock
Purchase Rights or Restricted Stock Units may be granted; and
e. Award Options, Stock Purchase Rights or Restricted Stock Units to
Participants who are foreign nationals or employed or located outside
the United States, or both, on such terms and conditions, including
imposing conditions on the exercise or Vesting of Options, Stock
Purchase Rights or Restricted Stock Units, different from those
applicable to Options, Stock Purchase Rights or Restricted Stock Units
granted to Participants employed or located in the United States as
may, in the judgment of the Administrator, be necessary or desirable
in order to recognize differences in local law, tax policy or customs;
provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Option, Stock Purchase
Right or Restricted Stock Units granted under it shall be final, unless
otherwise determined by the Board of Directors, if the Administrator is the
Committee. The Administrator's determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, Options, Stock Purchase Rights or Restricted Stock Units under the Plan
(whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Administrator shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Option Agreements, Restricted Stock Purchase
Agreements or Restricted Stock Units Agreements as to (a) the persons to receive
Options, Stock Purchase Rights or Restricted Stock Units under the
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Plan, (b) the terms and provisions of Options, Stock Purchase Rights or
Restricted Stock Units under the Plan, and (c) whether a termination of service
with the Company and any Affiliate has occurred.
No member of the Board of Directors or the Administrator shall be liable
for any action or determination made in good faith with respect to the Plan or
any Option.
5. ELIGIBILITY FOR PARTICIPATION.
The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time an Option,
Stock Purchase Right or Restricted Stock Unit is granted. Members of the
Company's Board of Directors who are not employees of the Company or of an
Affiliate may receive Options, Stock Purchase Rights or Restricted Stock Units
pursuant to Paragraph 6, Subparagraph A (f), but only pursuant thereto.
Notwithstanding any of the foregoing provisions, the Administrator may authorize
the grant of an Option, Stock Purchase Right, or Restricted Stock Unit to a
person not then a Key Employee, director or consultant of the Company or of an
Affiliate. The actual grant of such Option, Stock Purchase Right or Restricted
Stock Unit, however, shall be conditioned upon such person becoming eligible to
become a Participant at or prior to the time of the execution of the Option
Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units
Agreement evidencing such Option, Stock Purchase Right or Restricted Stock Unit,
as applicable. ISOs may be granted only to Key Employees. Non-Qualified Options
may be granted to any Key Employee, director or consultant of the Company or an
Affiliate. Stock Purchase Rights and Restricted Stock Units shall be granted
only in connection with the hiring or retention of a Key Employee. The granting
of any Option, Stock Purchase Right or Restricted Stock Unit to any individual
shall neither entitle that individual to, nor disqualify him or her from,
participation in any other grant of Options, Stock Purchase Rights or Restricted
Stock Unit.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto. The Option
Agreements shall be subject to at least the following terms and conditions:
A. Non-Qualified Options: Each Option intended to be a Non-Qualified
Option shall be subject to the terms and conditions which the
Administrator determines to be appropriate and in the best interest of
the Company, subject to the following minimum standards for any such
Non-Qualified Option:
a. Option Price: The option price (per share) of the Shares covered
by each Option shall be determined by the Administrator but shall
not be less than
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one hundred percent (100%) of the Fair Market Value (per share)
of the Shares on the date of grant of the Option.
b. Each Option Agreement shall state the number of Shares to which
it pertains;
c. Each Option Agreement shall state the date or dates on which it
first is exercisable and the date after which it may no longer be
exercised, and may provide that the Option rights Vest or become
exercisable in installments over a period of months or years, or
upon the occurrence of certain conditions or the attainment of
stated goals or events; and
d. Exercise of any Option may be conditioned upon the Participant's
execution of a stock purchase agreement in form satisfactory to
the Administrator providing for certain protections for the
Company and its other stockholders, including requirements that:
i. The Participant's or the Participant's Survivors' right to
sell or transfer the Shares may be restricted; and
ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and must
also acknowledge that the Shares will bear legends noting
any applicable restrictions.
e. Limitation on Grant of Non-Qualified Options: No Non-Qualified
Option shall be granted after the date provided in Paragraph 24
of this Plan.
f. Directors' Options: Each director of the Company who is not an
employee of the Company or any Affiliate, upon first being
elected or appointed to the Board of Directors, shall be granted
a Non-Qualified Option to purchase 8,000 Shares; provided,
however, that the Administrator shall be entitled to grant an
Option for such higher number of Shares as may be appropriate (as
determined by the Board of Directors) for recruitment purposes.
Each director of the Company who is not an employee of the
Company or any Affiliate on January 18, 2001, shall be granted on
such date a Non-Qualified Option to purchase 52,000 Shares as an
initial grant for joining the Board of Directors. For the annual
meeting of stockholders in 2002, on the date following the annual
meeting of stockholders of the Company, giving effect to the
election of any director or directors at such annual meeting of
stockholders, each director who is not an employee of the Company
or any Affiliate and who has served at least six months as a
director shall be granted a Non-Qualified Option to purchase
40,000 Shares. Beginning with the annual meeting of stockholders
in 2003, on the date following the annual meeting of stockholders
of the Company each year, giving effect to the election of any
director or directors at such annual meeting of stockholders,
each director who is not an employee of
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the Company or any Affiliate and who has served at least six
months as a director shall be granted a Non-Qualified Option to
purchase 8,000 Shares. Each Option granted pursuant to this
Paragraph 6(A)(f) shall (i) have an exercise price equal to the
Fair Market Value (per share) of the Shares on the date of grant
of the Option, (ii) have a term of ten (10) years, and (iii) Vest
in installments of 25% annually over a four-year period and on
the date of a meeting of stockholders at which directors are
elected if the director does not stand for re-election or is not
re-elected at such meeting, unless a different vesting schedule
is established by the Administrator in the applicable Option
Agreement. The Board of Directors may amend this Paragraph
6(A)(f) to increase, reduce, eliminate, or institute option
grants for Board, Committee or other individual or collective
service under this Plan.
B. ISOs: Each Option intended to be an ISO shall so state and shall be
issued only to a Key Employee and be subject to at least the following
terms and conditions, with such additional restrictions or changes as
the Administrator determines are appropriate but not in conflict with
Section 422 of the Code and relevant regulations and rulings of the
Internal Revenue Service:
a. Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A)
above, except clauses (a) and (f) thereunder.
b. Option Price: Immediately before the Option is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:
i. Ten percent (10%) or less of the total combined voting power
of all classes of stock of the Company or an Affiliate, the
Option price per share of the Shares covered by each Option
shall not be less than one hundred percent (100%) of the
Fair Market Value per share of the Shares on the date of the
grant of the Option.
ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered
by each Option shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date of
grant.
c. Term of Option: For Participants who own
i. Ten percent (10%) or less of the total combined voting power
of all classes of stock of the Company or an Affiliate, each
Option shall terminate ten (10) years from the date of the
grant or at such earlier time as the Option Agreement may
provide.
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ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, each Option shall terminate five (5) years from
the date of the grant or at such earlier time as the Option
Agreement may provide.
d. Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of Options which may be exercisable in any
calendar year (under this or any other ISO plan of the Company or
an Affiliate) so that the aggregate Fair Market Value (determined
at the time each ISO is granted) of the stock with respect to
which ISOs are exercisable for the first time by the Participant
in any calendar year does not exceed one hundred thousand dollars
($100,000), provided that this subparagraph (d) shall have no
force or effect if its inclusion in the Plan is not necessary for
Options issued as ISOs to qualify as ISOs pursuant to Section
422(d) of the Code.
e. Limitation on Grant of ISOs: No ISOs shall be granted after the
date provided in Paragraph 24 of this Plan.
f. To the extent that an Option which is intended to be an ISO fails
to so qualify, it shall be treated as a Non-Qualified Option.
7. EXERCISE OF OPTIONS AND ISSUANCE OF SHARES.
An Option (or any part or installment thereof) shall be exercised in
accordance with procedures established by the Company by giving written notice
to the Company at its principal executive office address, or such other address
as the Company shall determine, together with provision for payment of the full
purchase price in accordance with this Paragraph for the Shares as to which the
Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such written notice shall be signed by the person
exercising the Option, shall state the number of Shares with respect to which
the Option is being exercised and shall contain any representation required by
the Plan or the Option Agreement. Payment of the purchase price for the Shares
as to which such Option is being exercised shall be made (a) in United States
dollars in cash or by check, or (b) at the discretion of the Administrator,
through delivery of shares of Common Stock having a Fair Market Value equal as
of the date of the exercise to the cash exercise price of the Option, or (c) at
the discretion of the Administrator, by delivery of the grantee's personal
recourse note bearing interest payable not less than annually at no less than
100% of the applicable Federal rate, as defined in Section 1274(d) of the Code,
or (d) at the discretion of the Administrator, in accordance with a cashless
exercise program established with a securities brokerage firm, and approved by
the Administrator, or (e) at the discretion of the Administrator, through such
other method of payment approved by the Administrator, or (f) at the discretion
of the Administrator, by any combination of (a), (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Administrator shall accept only such payment
on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In
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determining what constitutes "reasonably promptly," it is expressly understood
that the delivery of the Shares may be delayed by the Company in order to comply
with any law or regulation (including, without limitation, state securities or
"blue sky" laws) which requires the Company to take any action with respect to
the Shares prior to their issuance. The Shares shall, upon delivery, be
evidenced by an appropriate certificate or certificates for fully paid,
non-assessable Shares.
The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 21) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6(B)(d).
The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) if any amendment is materially adverse to the Participant, any
such amendment shall be made only with the consent of the Participant to whom
the Option was granted, or in the event of the death of the Participant, the
Participant's Survivors, and (iii) any such amendment of any ISO shall be made
only after the Administrator, after consulting with counsel for the Company,
determines whether such amendment would constitute a "modification" of any
Option which is an ISO (as that term is defined in Section 424(h) of the Code)
or would cause any adverse tax consequences for the holder of such ISO.
8. RIGHTS AS A STOCKHOLDER.
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option, except after due
exercise of the Option and tender of the full purchase price for the Shares
being purchased pursuant to such exercise (and satisfaction of such other
conditions for the transfer of Shares as may be required pursuant to the Option)
and registration of the Shares in the Company's share register in the name of
the Participant. No Participant to whom a Stock Purchase Right has been granted
shall have rights as a stockholder with respect to any Shares covered by such
Stock Purchase Right, except after tender of the full purchase price for the
Shares being purchased (and satisfaction of such other conditions for the
transfer of Shares as may be required pursuant to the Stock Purchase Right) and
registration of the Shares in the Company's share register in the name of the
purchaser. Once the Stock Purchase Right is exercised, the purchaser shall have
the rights equivalent to those of a stockholder, and shall be a stockholder when
his or her purchase is entered upon the records of the duly authorized transfer
agent of the Company. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Stock Purchase Right is
exercised, except as provided in Paragraph 18 of this Plan. No Participant to
whom a Restricted Stock Unit has been granted shall have rights as a stockholder
with respect to any Shares covered by such Restricted Stock Unit until the
registration of the Shares in the Company's share register in the name of the
Participant has occurred.
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9. ASSIGNABILITY AND TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS AND
RESTRICTED STOCK UNITS.
By its terms, an Option, Stock Purchase Right or Restricted Stock Unit
granted to a Participant shall not be transferable by the Participant other than
(i) by will or by the laws of descent and distribution, or (ii) as otherwise
determined by the Administrator and set forth in the applicable Option
Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units
Agreement. The designation of a beneficiary of an Option by a Participant shall
not be deemed a transfer prohibited by this Paragraph. Except as provided above,
an Option or Stock Purchase Right shall be exercisable, and a Restricted Stock
Unit may be held, during the Participant's lifetime, only by such Participant
(or by his or her legal representative) and shall not be assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise) and shall not
be subject to execution, attachment or similar process. Any attempted transfer,
assignment, pledge, hypothecation or other disposition of any Option, Stock
Purchase Right or Restricted Stock Unit or of any rights granted thereunder
contrary to the provisions of this Plan, or the levy of any attachment or
similar process upon an Option, Stock Purchase Right or Restricted Stock Unit,
shall be null and void.
10. EFFECT OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH OR
DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, in the
event of a termination of service (whether as an employee, director or
consultant) with the Company or an Affiliate before the Participant has
exercised all Options, the following rules apply:
a. A Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination
"for cause", Disability, or death for which events there are special
rules in Paragraphs 11, 12, and 13, respectively), may exercise any
Option granted to him or her to the extent that the Option is
exercisable on the date of such termination of service, but only
within such term as the Administrator has designated in the pertinent
Option Agreement. An Option that is not exercisable on the date of
termination of service is canceled on such date and may not be
exercised. An Option that is exercisable on the date of termination of
service, but not exercised within the term as the Administrator has
designated in the pertinent Option Agreement is canceled and may not
be exercised thereafter.
b. Except as provided in Paragraph 12, in no event may an Option
Agreement provide, if the Option is intended to be an ISO, that the
time for exercise be later than three (3) months after the
Participant's termination of employment.
c. The provisions of this Paragraph, and not the provisions of Paragraph
12 or 13, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director status
or consultancy, provided, however, in the case of a Participant's
Disability or death within three (3) months after the termination of
employment, director status or consultancy, the Participant or the
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Participant's Survivors may exercise the Option within one (1) year
after the date of the Participant's termination of employment, but in
no event after the date of expiration of the term of the Option.
d. Notwithstanding anything herein to the contrary, if subsequent to a
Participant's termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an
Option, the Board of Directors determines that, either prior or
subsequent to the Participant's termination, the Participant engaged
in conduct which would constitute "cause" (as defined in Paragraph 11
below), then such Participant shall forthwith cease to have any right
to exercise any Option, whether or not such Option was previously
exercisable.
e. A Participant to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of
temporary disability (any disability other than a permanent and total
Disability as defined in Paragraph 2 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment, director status or
consultancy with the Company or with an Affiliate, except to the
extent that the Administrator so determines as Company policy or to
the extent that the Option Agreement may otherwise expressly provide.
f. Except as required by law or as set forth in the pertinent Option
Agreement, Options granted under the Plan shall not be affected by any
change of a Participant's status within or among the Company and any
Affiliates, so long as the Participant continues to be a Key Employee,
director or consultant of the Company or any Affiliate.
11. EFFECT OF TERMINATION OF SERVICE "FOR CAUSE".
Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated for
"cause" prior to the time that all his or her outstanding Options have been
exercised:
a. All outstanding and unexercised Options as of the time the Participant
is notified his or her service is terminated for "cause" will
immediately be forfeited.
b. For purposes of this Plan, except as otherwise provided in the
pertinent Option Agreement, Restricted Stock Purchase Agreement or
Restricted Stock Units Agreement, "cause" shall include (and is not
limited to) dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the existence
of "cause" will be conclusive on the Participant and the Company.
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c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service but prior to the exercise of an Option, that either prior or
subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause," then the right to exercise any
Option is forfeited.
d. Any definition in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of "cause"
for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to such Participant.
12. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY.
Except as otherwise provided in the pertinent Option Agreement, a
Participant who terminates his or her employment, directorship or consultancy
with the Company or an Affiliate by reason of Disability may exercise any Option
granted to such Participant:
a. To the extent exercisable but not exercised on the date of such
cessation; and
b. In the event rights to exercise the Option Vest periodically, to the
extent of a pro rata portion of any additional rights as would have
Vested had the Participant not terminated his or her employment,
directorship or consultancy by reason of such Disability, prior to the
end of the Vesting period which next ends following the date of such
termination. The proration shall be based upon the number of days of
such Vesting period prior to the date of such termination.
Except as otherwise provided in the pertinent Option Agreement, a Disabled
Participant may exercise such rights only within the period ending one (1) year
after the date of the Participant's termination of employment, directorship or
consultancy, as the case may be, notwithstanding that the Participant might have
been able to exercise the Option as to some or all of the Shares on a later date
if the Participant had not become disabled and had continued to be an employee,
director or consultant or, if earlier, within the originally prescribed term of
the Option.
The Company shall make the determination both of whether Disability has
occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Company, the cost of which examination shall be paid for by the
Company.
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13. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:
a. To the extent exercisable but not exercised on the date of death; and
b. In the event rights to exercise the Option Vest periodically, to the
extent of a pro rata portion of any additional rights which would have
Vested had the Participant not died prior to the end of the Vesting
period which next ends following the date of death. The proration
shall be based upon the number of days of such Vesting period prior to
the Participant's death.
Except as otherwise provided in the pertinent Option Agreement, if the
Participant's Survivors wish to exercise the Option, they must take all
necessary steps to exercise the Option within one (1) year after the date of
Participant's termination of employment, directorship or consultancy, as the
case may be, notwithstanding that the decedent might have been able to exercise
the Option as to some or all of the Shares on a later date if he or she had not
died and had continued to be an employee, director or consultant or, if earlier,
within the originally prescribed term of the Option.
14. STOCK PURCHASE RIGHTS.
a. Rights to Purchase. Stock Purchase Rights may be issued either alone,
in addition to, or in tandem with other awards granted under the Plan.
After the Administrator determines that it will offer Stock Purchase
Rights under the Plan, it shall advise the offeree in writing, by
means of an Agreement, of the terms, conditions and restrictions
related to the offer, including the number of Shares that the offeree
shall be entitled to purchase, the price to be paid (which shall not
be less than the par value of the Shares), and the time within which
the offeree must accept such offer, which shall in no event exceed six
(6) months from the date upon which the Administrator made the
determination to grant the Stock Purchase Right. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the
form determined by the Administrator.
b. Repurchase Option. Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary
termination of the purchaser's employment with the Company for any
reason (including death or Disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall
be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at a rate determined by the
Administrator.
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c. Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Administrator in its sole
discretion. In addition, the provisions of Restricted Stock Purchase
Agreements need not be the same with respect to each purchaser.
15. RESTRICTED STOCK UNITS.
a. Grant. Restricted Stock Units may be granted either alone, in addition
to, or in tandem with other awards granted under the Plan. After the
Administrator determines that it will grant Restricted Stock Units
under the Plan, it shall advise the Participant in writing, by means
of an Agreement, of the terms, conditions and restrictions related to
the award, including the number of Shares subject to the Restricted
Stock Unit.
b. Forfeiture Provisions. Unless the Administrator determines otherwise,
the Restricted Stock Units Agreement shall provide that the Restricted
Stock Unit shall be forfeited upon the voluntary or involuntary
termination of the Participant's employment with the Company for any
reason (including death or Disability).
c. Other Provisions. The Restricted Stock Units Agreement shall contain
such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.
In addition, the provisions of Restricted Stock Units Agreements need
not be the same with respect to each Participant.
16. PURCHASE FOR INVESTMENT.
Unless the offering and sale of the Shares to be issued upon the particular
exercise of or delivery pursuant to an Option, Stock Purchase Right or
Restricted Stock Unit shall have been effectively registered under the
Securities Act of 1933, as now in force or hereafter amended (the "1933 Act"),
the Company shall be under no obligation to issue the Shares covered by such
exercise unless and until the following conditions have been fulfilled:
a. The person(s) who exercise(s) or is to receive Shares pursuant to such
Option, Stock Purchase Right or Restricted Stock Unit shall warrant to
the Company, prior to the receipt of such Shares, that such person(s)
are acquiring such Shares for their own respective accounts, for
investment, and not with a view to, or for sale in connection with,
the distribution of any such Shares, in which event the person(s)
acquiring such Shares shall be bound by the provisions of the
following legend which shall be endorsed upon the certificate(s)
evidencing their Shares issued pursuant to such exercise of such
grant:
"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including
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a pledgee, unless (1) either (a) a Registration Statement with
respect to such shares shall be effective under the Securities
Act of 1933, as amended, or (b) the Company shall have received
an opinion of counsel satisfactory to it that an exemption from
registration under such Act is then available, and (2) there
shall have been compliance with all applicable state securities
laws."
b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be issued upon
such particular exercise in compliance with the 1933 Act without
registration thereunder.
The Company may delay issuance of the Shares until completion of any action
or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws.)
17. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
Upon the dissolution or liquidation of the Company, all Options, Stock
Purchase Rights and Restricted Stock Units granted under this Plan which as of
such date shall not have been exercised will terminate and become null and void;
provided, however, that if the rights of a Participant or a Participant's
Survivors have not otherwise terminated and expired, (i) the Participant or the
Participant's Survivors will have the right immediately prior to such
dissolution or liquidation (A) to exercise any Option or Stock Purchase Right to
the extent that the Option or Stock Purchase Right is exercisable as of the date
immediately prior to such dissolution or liquidation and (B) to receive Shares
pursuant to any Vested and outstanding Restricted Stock Unit; and (ii) if a
Change in Control shall have occurred within the twelve months immediately prior
to the date of such dissolution or liquidation, such Participant or such
Participant's Survivors will have the right immediately prior to such
dissolution or liquidation to exercise any Option, Stock Purchase Right or
receive Shares pursuant to any Restricted Stock Unit then outstanding whether or
not such Option, Stock Purchase Right or Restricted Stock Unit is Vested and/or
exercisable as of such date.
18. ADJUSTMENTS.
Upon the occurrence of any of the following events, the adjustments as
hereinafter provided shall be made, unless otherwise specifically provided in a
pertinent Option Agreement, Restricted Stock Purchase Agreement or Restricted
Stock Units Agreement:
A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) 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 Common Stock, the number of Shares deliverable upon
the exercise of an Option or Stock Purchase Right or pursuant to a Restricted
Stock Unit may be appropriately increased or decreased proportionately, and
appropriate adjustments may be made in the purchase price per share to reflect
such subdivision, combination
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or stock dividend. The number of Shares subject to options to be granted (i)
pursuant to Paragraph 3 or to directors pursuant to Paragraph 6(A)(f) shall also
be proportionately adjusted upon the occurrence of such events, except as the
Administrator shall otherwise determine in its sole discretion or (ii) pursuant
to Paragraph 4(c) shall also be proportionately adjusted upon the occurrence of
such events.
B. Corporate Changes in Control. In the event of a Corporate Change in
Control,
i. Each Option, Stock Purchase Right or Restricted Stock Unit outstanding
as of the date such Corporate Change in Control is determined to have occurred,
and which is not then exercisable or Vested by reason of Vesting requirements,
shall automatically accelerate the Vesting so that the Option, Stock Purchase
Right or Restricted Stock Unit shall become fully Vested and, where applicable,
shall become fully exercisable and, in the case of Restricted Stock Units,
Shares shall be transferred to the Participant, on the first to occur of (x) the
date the Option, Stock Purchase Right or Restricted Stock Unit becomes Vested
and, if applicable, exercisable under its original terms (with respect only to
such Options, Stock Purchase Rights or Restricted Stock Units as otherwise would
Vest during such one-year period under their terms), (y) the first anniversary
of the date such Corporate Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action; and
ii. The Options or Stock Purchase Rights so accelerated shall remain so
exercisable until the earlier of the original expiration date of the Option or
Stock Purchase Right and the earlier termination of the Option or Stock Purchase
Right in accordance with the Plan and the applicable Agreement.
C. Transactional Changes in Control. In the event of a Transactional Change
in Control,
i. Each Option, Stock Purchase Right or Restricted Stock Unit outstanding
as of the date such Transactional Change in Control is determined to have
occurred shall be: (a) assumed by the successor corporation (or its parent) or
replaced with a comparable option, stock purchase right or restricted stock unit
with respect to shares of the capital stock of the successor corporation (or its
parent) on an equitable basis, (b) terminated upon written notice to the
Participants stating that (i), in the case of Options and Stock Purchase Rights,
all such Options or Stock Purchase Rights (for purposes of this Subparagraph all
Options or Stock Purchase Rights then outstanding shall be deemed to be
exercisable) must be exercised within a specified number of days (which shall
not be less than 15 days) from the date such notice is given, at the end of
which period the Options or Stock Purchase Rights shall terminate and (ii) in
the case of Restricted Stock Units, that Shares shall be delivered to the
Participant pursuant to such awards within 15 days after the date such notice is
given, or (c) terminated in exchange for a cash payment equal to (i), in the
case of Options and Stock Purchase Rights, the excess of the Fair Market Value
of the shares subject to such Options or Stock Purchase Rights (for purposes of
this Subparagraph all Options then outstanding shall be deemed to be
exercisable) over the exercise price thereof and (ii) in the case of Restricted
Stock Units, the Fair Market Value of the Shares subject to such Restricted
Stock Units. The determination of which of the treatments set
18
forth in clauses (a), (b) and (c) above to provide and of comparability under
clause (a) above shall be made by the Administrator and its determinations shall
be final, binding and conclusive.
ii. The Vesting of each Option, Stock Purchase Right or Restricted Stock
Unit that is assumed or replaced in connection with a Transactional Change in
Control shall automatically accelerate so that the Option, Stock Purchase Right
or Restricted Stock Unit shall become fully Vested and, where applicable, shall
become fully exercisable, and, in the case of Restricted Stock Units, Shares
shall be transferred to the Participant, on the first to occur of (x) the date
the Option, Stock Purchase Right or Restricted Stock Unit becomes Vested and, if
applicable, exercisable under its original terms (with respect only to such
Options, Stock Purchase Rights or Restricted Stock Units as otherwise would Vest
during such one-year period under their terms), (y) the first anniversary of the
date such Transactional Change in Control is determined to have occurred, and
(z) the occurrence of an Involuntary Employment Action. The Options or Stock
Purchase Rights so accelerated shall remain so exercisable until the earlier of
the original expiration date of the Option or Stock Purchase Right and the
earlier termination of the Option or Stock Purchase Right in accordance with the
Plan and the applicable Agreement.
D. Corporate Transaction. In the event of a Corporate Transaction that does
not constitute a Transactional Change in Control or in the event of a similar
event, pursuant to which securities of the Company or of another corporation or
entity are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising an Option or Stock Purchase Right or becoming Vested
under a Restricted Stock Unit shall be entitled to receive (where applicable,
for the purchase price paid upon such exercise) the securities which would have
been received if such Option or Stock Purchase Right had been exercised, or such
Restricted Stock Unit had become Vested, prior to such Corporate Transaction.
E. Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to Subparagraph A, B, C, or D with respect to ISOs shall be made
only after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
"modification" of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.
19. ISSUANCES OF SECURITIES.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Options, Stock Purchase
Rights or Restricted Stock Units. Except as expressly provided herein, no
adjustments shall be made for dividends paid in cash or in property (including
without limitation, securities) of the Company.
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20. FRACTIONAL SHARES.
No fractional shares shall be issued under the Plan and the person
exercising such right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.
21. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to
give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.
22. WITHHOLDING.
In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or regulation to be withheld from the
Participant's salary, wages or other remuneration in connection with the
exercise of an Option or a Disqualifying Disposition (as defined in Paragraph
23) or the Vesting of Shares issued pursuant to Stock Purchase Rights or the
delivery of Shares pursuant to Restricted Stock Units, the Company may deduct
from any amounts due to the Participant, such as compensation or reimbursements,
or may require that the Participant advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company's Common Stock or a promissory note, is authorized
by the Administrator (and permitted by law), provided, however, that with
respect to persons subject to Section 16 of the 1934 Act, any such withholding
arrangement shall be in compliance with any applicable provisions of Rule 16b-3
promulgated under Section 16 of the 1934 Act. For purposes hereof, the fair
market value of the shares withheld for purposes of payroll withholding shall be
determined in the manner provided in Paragraph 2 above, as of the most recent
practicable date prior to the date of exercise. If the fair market value of the
shares withheld is less than the amount of payroll withholdings required, the
Participant may be required to advance the difference in cash to the Company or
the Affiliate employer. The Administrator in its discretion may condition the
exercise of an Option for less than the then Fair Market Value on the
Participant's payment of such additional withholding.
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23. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any sale) of such shares before the
later of (a) two years after the date the Key Employee was granted the ISO, or
(b) one year after the date the Key Employee acquired Shares by exercising the
ISO. If the Key Employee has died before such stock is sold, these holding
period requirements do not apply and no Disqualifying Disposition can occur
thereafter.
24. TERMINATION OF THE PLAN.
Unless sooner terminated by the Board of Directors, the Plan shall
terminate on October 28, 2009, and no Options, Stock Purchase Rights or
Restricted Stock Units shall thereafter be granted under the Plan. All Options,
Stock Purchase Rights or Restricted Stock Units granted under the Plan prior to
that date shall remain in effect until such Options, Stock Purchase Rights or
Restricted Stock Units shall have been exercised, paid out or terminated in
accordance with the terms and provisions of the Plan and the applicable
Agreements. The Board of Directors may terminate the Plan at any time; provided,
however, that any such termination will not materially impair any rights under
any Option, Stock Purchase Right or Restricted Stock Unit theretofore made under
the Plan without the consent of the Participant.
25. AMENDMENT OF THE PLAN AND AGREEMENTS.
The Plan may be amended by the stockholders of the Company. The Plan may
also be amended by the Board of Directors or the Administrator, including,
without limitation, to the extent necessary to qualify any or all outstanding
Options granted under the Plan or Options to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, for as long as the Company has a class of stock registered pursuant to
Section 12 of the 1934 Act and to the extent necessary to qualify the shares
issuable upon exercise of any outstanding Options granted, or Options to be
granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any
amendment approved by the Administrator which the Administrator determines is of
a scope that requires stockholder approval shall be subject to obtaining such
stockholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, materially adversely affect his or her
rights under an Option, Stock Purchase Right or Restricted Stock Unit previously
granted to him or her. With the consent of the Participant affected, the
Administrator may amend outstanding Option Agreements, Restricted Stock Purchase
Agreements or Restricted Stock Units Agreements in a manner which may be
materially adverse to the Participant but which is not inconsistent with the
Plan. In the discretion of the Administrator, outstanding Option Agreements,
Restricted Stock Purchase Agreements or Restricted Stock Units Agreements may be
amended by the Administrator in a manner which is not materially adverse to the
Participant.
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26. EMPLOYMENT OR OTHER RELATIONSHIP.
Nothing in this Plan or any Option Agreement, Restricted Stock Purchase
Agreement or Restricted Stock Units Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.
All Options, Stock Purchase Rights and Restricted Stock Units shall
constitute a special incentive payment to the Participant and shall not be taken
into account in computing the amount of salary or compensation of the
Participant for the purpose of determining any benefits under any pension,
retirement, profit-sharing, bonus, life insurance or other benefit plan of the
Company or under any agreement between the Company and the Participant, unless
such plan or agreement specifically provides otherwise.
27. GOVERNING LAW.
With respect to Options and Stock Purchase Rights granted prior to January
18, 2001, this Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, the Company's state of incorporation and, except
as otherwise provided in the pertinent Option Agreement or Restricted Stock
Purchase Agreement, the United States District Court for the Eastern District of
Virginia shall have exclusive jurisdiction over any and all disputes between a
Participant and the Company related to or arising out of Options or Restricted
Stock Purchase Rights granted under this Plan. With respect to Options, Stock
Purchase Rights and Restricted Stock Units granted on or after January 18, 2001,
this Plan shall be governed by and construed in accordance with the laws of the
State of New York and, except as otherwise provided in the pertinent Option
Agreement, Restricted Stock Purchase Agreement or Restricted Stock Units
Agreement, any and all disputes between a Participant and the Company related to
or arising out of Options, Stock Purchase Rights or Restricted Stock Units
granted under this Plan shall be brought only in a state or federal court of
competent jurisdiction sitting in Manhattan, New York.