Exhibit 4.1
As adopted on August 8, 2001
WORLDWIDE PETROMOLY, INC.
STOCK INCENTIVE PLAN
ARTICLE 1
GENERAL
1.1 ESTABLISHMENT, PURPOSE. This Plan establishes the Company's Stock
Incentive Plan. This Plan has been designed to promote the Company's long-term
growth and profitability by providing eligible persons with incentives to
improve stockholder value, and thereby to attract, retain, and motivate the best
available persons for positions of substantial responsibility.
1.2 DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to such terms in Appendix A hereto.
1.3 TYPES OF AWARDS. Awards may be made in the form of:
Section 2.3 Options, which provide Participants with the
long-term right to purchase Shares.
Section 2.4 Equity Units (aka SARs), which provide
Participants with a right to receive the appreciation
on Common Stock between the award date and the
exercise date.
Section 2.6 Restricted Shares, which provide Participants with
a short-term right to purchase or receive Shares,
subject to certain restrictions.
Section 2.7 Deferred Shares, which provide Participants with
the opportunity to defer compensation with respect to
vested Awards.
Section 2.8 Other Stock-Based Awards.
Section 2.9 Non-Stock Awards, in the form of cash bonuses and
credits to deferred compensation accounts.
1.4 PERSONS ELIGIBLE FOR AWARDS.
1.4.1 General Rule. Directors, Officers, Employees, or Consultants
are eligible for Awards, subject to the restrictions set forth in Section 2.7.1
hereto regarding the eligibility of Employees to make deferred compensation
elections.
1.4.2 No Employment Rights. This Plan shall not confer upon any
Participant any right to continue in an employment, service, or consulting
relationship with the Company, nor shall it affect in any way a Participant's
right or the Company's right to terminate his or her employment, service, or
consulting relationship at any time, with or without Cause.
1.5 ADMINISTRATION.
1.5.1 General. This Plan shall be administered by the Board until
the Board shall appoint the members of the Committee pursuant to Section 1.5.2
below; thereafter, it shall be administered by the Committee, but the Board may
act in lieu of the Committee on any matter within the Committee's discretion or
authority and may eliminate the Committee at any time in its discretion.
1.5.2 Committee Members. If created, the Committee shall consist of
not less than two Directors. The members of the Committee shall be appointed by,
and serve at the pleasure of, the Board. To the extent required for transactions
under this Plan to qualify for the exemptions available under Rule 16b-3, all
actions relating to Awards to persons subject to Section 16 of the Securities
Act shall be taken by the Board unless each person who serves on the Committee
is a "non-employee director" within the meaning of Rule 16b-3, or such actions
are taken by a sub-committee of the Committee (or the Board) comprised solely of
"non-employee directors." Furthermore, all actions relating to Awards to Named
Executives shall be made by a sub-committee of the Committee (or the Board)
comprised solely of "outside directors" within the meaning of Section 162(m) of
the Code.
1.5.3 Powers of the Committee. Subject to the provisions of this
Plan, the Committee shall have full authority and discretion to take any actions
that it may deem necessary or advisable for the administration of this Plan,
including (a) selecting individual recipients for Awards, making Awards, and
documenting such Awards through Award Agreements, (b) determining the Fair
Market Value of the Common Stock, (c) prescribing administrative forms to be
used under this Plan, (d) construing and interpreting the terms of this Plan and
any Award Agreements; (e) modifying Awards to Participants who are foreign
nationals or employed outside of the United States in order to recognize
differences in local law, tax policies or customs; and (f) requiring that stock
certificates evidencing Shares issued pursuant to this Plan bear a legend
setting forth applicable restrictions on transferability.
1.5.4 Committee Action. Actions of the Committee shall be taken by
a vote of a majority of its members. Any action may be taken by a written
instrument signed by a majority of the Committee members, and action so taken
shall be fully as effective as if it had been taken by a vote at a meeting.
1.5.5 Committee Determinations Final. The determination of the
Committee on all matters relating to this Plan or any Award Agreement shall be
final, binding and conclusive.
1.5.6 No Liability of Committee Member. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to this Plan or any Award.
1.6 SHARES AVAILABLE FOR AWARDS. Subject to Section 1.7 hereof, the
maximum number of shares of the Company's Common Stock which may be transferred
pursuant to Awards granted under this Plan is twenty million (20,000,000)
Shares. These Shares may be authorized but unissued Common Stock, authorized and
issued Common Stock held in the Company's treasury, Common Stock acquired by the
Company for the purposes of this Plan, or Common Stock held in a grantor trust
established by the Company.
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1.7 ADJUSTMENTS FOR CHANGES IN CAPITALIZATION. Subject to any required
action by the Company's stockholders, the number of Shares covered by each
outstanding Award, the number of Shares available for Awards, the number of
Shares that may be subject to Awards to any one Participant, and the price per
Share covered by each such outstanding Award shall be proportionately adjusted
for any increase or decrease in the number of issued Shares resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of Common Stock, or any other increase or decrease in the
number of issued Shares effected without receipt of consideration by the Company
other than the conversion of any convertible securities. Such adjustments shall
be made by the Committee, whose determination in that respect shall be final.
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 an Award. After any adjustment made
pursuant to this Section 1.7, the number of Shares subject to each outstanding
Award shall be rounded to the nearest whole number.
1.8 NO LIMIT ON SHARES SUBJECT TO AWARD. Any Award made to a
Participant during the term of this Plan may be granted with respect to a number
of Shares up to the full number of Shares specified herein, provided, however,
that no Awards may be made to any one Employee in excess of five million
(5,000,000) Shares during any calendar year.
ARTICLE 2
AWARDS
2.1 AGREEMENTS EVIDENCING AWARDS. Each Award granted under this Plan
(except an Award of unrestricted stock) shall be evidenced by a written Award
Agreement, which shall contain such provisions as the Committee in its
discretion deems necessary or desirable, including (a) a requirement that the
Participant become party to a Stockholders Agreement in connection with being
granted an Award and again as a condition for receiving Shares pursuant to an
Award, (b) the Participant's acknowledgement that such Shares are acquired for
investment purposes only, (c) a right of first refusal exercisable by the
Company, (d) a call right exercisable by the Company, and (e) a provision
allowing the Participant to designate a beneficiary to his or her interest in
any Award and the Shares granted by the Award. By accepting an Award pursuant to
this Plan, a Participant agrees that the Award shall be subject to all of the
terms and provisions of this Plan and the applicable Award Agreement.
2.2 ACQUIRING STOCKHOLDER RIGHTS. A Participant shall not have any of
the rights of a Company stockholder with respect to Shares subject to an Award
until such person has: (a) if required by the Committee or by the applicable
Award Agreement to which such Shares are subject, become party to any
Stockholders Agreement reasonably required by the Committee pursuant to Section
2.1 hereto; and (b) been issued a stock certificate by the Company for such
Shares.
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2.3 OPTION AWARDS. The Committee may grant Incentive Stock Options and
Non-Incentive Stock Options to purchase Shares in such amounts and subject to
such terms and conditions, as the Committee shall determine in its discretion,
subject to the provisions of this Plan. ISOs may only be granted to a person who
is an Employee on the date of grant.
2.3.1 ISO $100,000 Limitation. To the extent that the aggregate
Fair Market Value of Shares (determined as of the grant date of the Option) with
respect to which Options designated as ISOs are exercisable for the first time
by an Optionee during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as
NQSOs. For this purpose, ISOs shall be taken into account in the order in which
they were granted, and the Fair Market Value of the Shares subject to an ISO
shall be determined as of the date of the Option's grant.
2.3.2 Term. Each Award Agreement shall set forth the periods during
which the Options evidenced thereby shall be exercisable, as determined by the
Committee in its discretion. No ISO (or an Equity Unit granted in connection
with an ISO) shall be exercisable more than 10 years after the date of grant.
The term of an ISO granted to an Employee who is a Ten Percent Holder on the
grant date shall not exceed 5 years.
2.3.3 Exercise Price. Each Award Agreement with respect to an
Option shall set forth the Option Exercise Price the Optionee must pay to
exercise the Option. The Option Exercise Price per Share shall be determined by
the Committee in its discretion, subject to the following special rules:
(a) General Option Rules. In no event shall the Option
Exercise Price be less than the par value of a Share.
(b) ISO Rules. If an ISO is granted to an Employee who at the
time of grant is a Ten Percent Holder, the per Share Option Exercise Price shall
be no less than 110% of the Fair Market Value per Share on the date of grant. If
an ISO is granted to any other Employee, the per Share Option Exercise Price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
(c) NQSO Rules. The per Share Option Exercise Price shall be
no less than (i) 110% of the Fair Market Value per Share on the date of grant if
required by Applicable Laws for a grant to a person who is a Ten Percent Holder
at the time of grant, and (ii) 85% of the Fair Market Value per Share on the
date of grant, but only if required by Applicable Laws, for a grant to any other
eligible person. In all other cases, the per Share Option Exercise Price shall
be no less than 50% of the percentage of Fair Market Value per Share.
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(d) Named Executives. The per Share Option Exercise Price
shall be no less than 100% of the Fair Market Value on the date of grant if (i)
the Optionee is a Named Executive at the time of the grant of such Option, and
(ii) the grant is intended to qualify as performance-based compensation under
Section 162(m) of the Code.
2.3.4 Exercise of Option. Subject to the provisions of this Article
2, the Committee shall determine the times, circumstances, and conditions under
which an Option shall be exercisable, and shall specify this in the applicable
Award Agreement. Once an Option becomes exercisable it shall remain exercisable
until expiration, cancellation, or termination of the Award. An Option shall be
exercised by the filing of a written notice with the Company, on such form and
in such manner as the Committee shall prescribe. The number of Shares thereafter
available under the Option and this Plan shall be decreased by the number of
Shares as to which the Option is exercised.
2.3.5 Minimum Exercise Requirements. An Option must be exercised
for a whole number of Shares. The Committee may require in an Award Agreement
that an Option be exercised as to a minimum number of Shares, provided that such
requirement shall not prevent an Optionee from exercising an Option with respect
to the full number of Shares as to which the Option is then exercisable.
2.3.6 Methods of Payment upon Exercise. Payment of the Option
Exercise Price and any applicable withholding taxes shall be accompanied by a
properly executed exercise notice, together with such other documentation as the
Committee shall require. Unless otherwise provided in an Award Agreement, the
Company will accept payment of the Option Exercise Price by any of the following
methods: (a) cash; (b) certified or official bank check (or the equivalent
thereof acceptable to the Company); (c) delivery of a promissory note by the
Optionee with such recourse, interest, security and redemption provisions as the
Committee determines to be appropriate; (d) cancellation of Company indebtedness
to the Participant exercising the Option; or (e) any combination of the
foregoing methods of payment or, at the discretion of the Committee and to the
extent permitted by law, by such other provision as the Committee may from time
to time prescribe. In addition, the Committee may provide in an Award Agreement
for the payment of the Option Exercise Price on a cashless basis, by stating in
the exercise notice the number of Shares the Optionee elects to purchase
pursuant to such exercise (in which case the Optionee shall receive a number of
Shares equal to the number the Optionee would have received upon such exercise
for cash less such number of Shares as shall then have a Fair Market Value in
the aggregate equal to the Option Exercise Price due in respect of such
exercise). The Committee may, in its discretion and for any reason, refuse to
accept a particular form of consideration (other than cash or a certified or
official bank check) at the time of any Option exercise.
2.3.7 Delivery of Shares. Promptly after receiving payment of the
full Option Exercise Price and any Consents that may be required pursuant to
Section 4.7.2 hereto, the Committee shall deliver to the Optionee, a certificate
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or certificates for the Shares for which the Award has been exercised. If the
method of payment employed upon the exercise of the Option so requires, and if
Applicable Laws permit, an Optionee may direct the Company to deliver the
certificate(s) to the Optionee's stockbroker.
2.3.8 Additional Options. The Committee may in its discretion
include in any Award Agreement with respect to an Option (the "Original Option")
a provision awarding an Additional Option to any Optionee who delivers Shares in
partial or full payment of the Option Exercise Price of the Original Option. The
Additional Option shall be for a number of Shares equal to the number of Shares
so delivered, shall have an Option Exercise Price equal to the Fair Market Value
of a Share on the date of exercise of the Original Option, and shall have an
expiration date no later than the expiration date of the Original Option. In the
event that an Award Agreement provides for the grant of an Additional Option,
such Award Agreement shall also provide that the Option Exercise Price of the
Original Option be no less than the Fair Market Value of a Share on its date of
grant, and that any Shares that are delivered pursuant to Section 2.3.6(e)
hereto in payment of such Option Exercise Price shall have been held for at
least 6 months.
2.3.9 Reverse Vesting. The Committee may allow, at its discretion,
for a Participant to exercise unvested Options in accordance with this Section
2.3, in which case the Shares issued pursuant to Section 2.3.7 hereto shall be
Restricted Shares having the same vesting restrictions as the unvested Options.
A Participant wishing to exercise unvested Options for Restricted Shares shall
make a request to the Committee in writing specifying the number of unvested
Options he or she wishes to exercise for Restricted Shares. The Committee will
thereafter notify the Participant of its decision within 30 days.
2.3.10 Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash or Shares an Option based on such terms and
conditions as the Committee shall establish and communicate to the Optionee at
the time that such offer is made.
2.4 EQUITY UNITS.
2.4.1 Grants. The Committee may grant Equity Units to Participants,
in such amounts and subject to such terms and conditions as the Committee shall
determine in its discretion, subject to the provisions of this Plan. Equity
Units may be granted in connection with Options or independently, but an Equity
Unit granted in connection with an ISO only may be granted at the same time the
ISO is granted.
2.4.2 Pricing Limits. The pricing restrictions applicable to
Options under Section 2.3 hereto shall also apply to the exercise price of
Equity Units granted under this Plan; provided that in the case of Equity Units
not granted in connection with an Option, the exercise price for Equity Units
may be any price (including no price) determined by the Committee.
2.4.3 Exercise of Equity Units. An Equity Unit related to an Option
will be exercisable at such time or times, and to the extent, that the related
Option is exercisable. An Equity Unit granted independent of any other Award
will be exercisable pursuant to the terms of the Award Agreement granting the
Equity Unit.
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2.4.4 Effect on Available Shares. Upon the exercise of an Option in
connection with which an Equity Unit has been granted, the number of Shares
subject to the Equity Unit shall be correspondingly reduced by the number of
Shares with respect to which the Option is exercised.
2.4.5 Calculation of Payment Amount. Unless the Committee otherwise
provides, upon exercise of an Equity Unit and the attendant surrender of an
exercisable portion of any related Award, the Participant will be entitled to
receive payment of an amount equal to (a) the excess of the Fair Market Value of
a Share on the date of exercise of the Equity Unit over (b) the exercise price
of such right as set forth in the Award Agreement (or over the Option Exercise
Price if the Equity Unit is granted in connection with an Option), multiplied by
(c) the number of Shares with respect to which the Equity Unit is exercised.
2.4.6 Form and Terms of Payment. The Committee, in its discretion,
will determine whether to pay the amount determined under Section 2.4.5 hereto
solely in cash, solely in Shares (valued at Fair Market Value on the date of
exercise of the Equity Unit), or partly in such Shares and partly in cash,
subject to such other terms and conditions as the Committee may impose in the
Award Agreement.
2.4.7 Limited Equity Units. The Committee may grant Equity Units
exercisable only on or in respect of a Change of Control, or any other specified
event. Such limited Equity Units may relate to or operate in tandem or
combination with or substitution for Options, or other Equity Units or on a
stand-alone basis, and may be payable in cash or Shares based on the spread
between the exercise price of such right as set forth in the Award Agreement (or
Option Exercise Price if the Equity Unit is granted in connection with an Option
to which the Equity Unit relates) and a price based on or equal to the Fair
Market Value of the Shares granted under such Option during a specified period,
or a price related to consideration payable to stockholders generally in
connection with the event.
2.5 TERMINATION OF DIRECTOR, EMPLOYMENT OR CONSULTANT RELATIONSHIP.
2.5.1 Committee Determinations. The Committee may in its discretion
determine (a) whether any leave of absence (including a disability absence)
constitutes a termination of Continuous Service, and (b) the impact, if any, of
any such leave of absence on Awards theretofore made under this Plan. The
Committee shall have the right to determine whether the termination of a
Participant's service to the Company is a dismissal for Cause and the date of
termination in such case, which date the Committee may retroactively deem to be
the date of the action that is cause for dismissal.
2.5.2 Effect of Termination on Options and Equity Units. Except to
the extent otherwise provided in the applicable Award Agreement, an Option or
Equity Unit may be exercised at any time during a Participant's Continuous
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Service or within 90 days thereafter; provided that (a) if the Committee
determines that the Participant's Continuous Service terminates due to Cause,
the Participant's Option or Equity Unit shall lapse immediately and the
Participant shall return to the Company any payments received under dividend
equivalent rights pursuant to Section 2.11 hereto, extending back to the date
the Committee determines that Cause existed; (b) if a Participant dies while an
Option or Equity Unit remains exercisable, the Option or Equity Unit may be
exercised at any time within 12 months following the Participant's death by the
Participant's estate or by a person who acquired the right to exercise the
Option or Equity Unit by bequest or inheritance, but only to the extent the
Participant was entitled to exercise the Option or Equity Unit at the time of
his or her death, and (c) no Option or Equity Unit shall be exercisable after
expiration of its term or to an extent greater than the Participant was entitled
to exercise it when the Participant's Continuous Service terminated.
2.5.3 Termination of Award. To the extent that the Participant is
not entitled to exercise an Option or Equity Unit at the time of his or her
termination of Continuous Service, or if the Participant does not exercise the
Option or Equity Unit within the time specified in the applicable Award
Agreement, the Award shall terminate in full and in the case of Options, no
rights thereunder may be exercised, and in all other cases, no payment will be
made with respect thereto.
2.6 RESTRICTED STOCK AWARDS.
2.6.1 Awards. The Committee may award Restricted Shares to
Participants, in such amounts, and subject to such terms and conditions as the
Committee shall determine in its discretion, subject to the provisions of this
Plan. The purchase price, if any, of Restricted Shares shall be determined by
the Committee. A Participant shall have no rights with respect to a Restricted
Stock Award unless the Participant accepts the Award within the time period the
Committee specifies by executing the Award Agreement prescribed by the Committee
and, if applicable, pays the purchase price for the Restricted Shares by any
method that is both listed in Section 2.3.6 and acceptable to the Company.
2.6.2 Issuance of Award. The Company shall issue in the
Participant's name a certificate or certificates for the appropriate number of
Shares upon the Participant's exercise of the Restricted Stock Award pursuant to
the terms of the applicable Award Agreement and this Plan.
2.6.3 Plan and Regulatory Exceptions. Any certificate issued
evidencing Restricted Shares shall remain in the Company's possession until
those Shares are free of restrictions, except as otherwise determined by the
Committee.
2.6.4 Deferral Elections. The Participant may elect in accordance
with Section 2.7.1 hereto, with the Committee's consent, to exchange Restricted
Shares for an equivalent Deferred Share Award under Section 2.7 hereto (or a
deferred compensation provision under another Company plan), but subject to such
vesting restrictions as the Committee may prescribe.
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2.6.5 Forfeiture. During the 120 days following termination of the
Participant's Continuous Service for any reason, the Company shall have the
right to repurchase Shares to which restrictions on transferability apply, in
exchange for which the Company shall repay to the Participant the lesser of the
amount paid by the Participant for such Shares or the Fair Market Value of such
Shares at the time of repurchase by the Company.
2.7 DEFERRED SHARES.
2.7.1 Deferral Elections. The Committee may permit any Director,
Consultant, or Employee to irrevocably elect to receive the credits described in
Section 2.7.2 below in lieu of fees, salary, or other income from the Company
that the Participant earns after the election; provided that Employees will only
be permitted to make deferral elections if the Committee determines they are
members of a select group of management or highly compensated employees (within
the meaning of the Employee Retirement Income Security Act of 1974). Any
election pursuant to this Section 2.7.1 shall be made before the Participant
becomes legally entitled to the fees, salary, or other income being deferred;
provided that (a) a deferral election with respect to Restricted Shares of
previously Deferred Shares must be made more than 12 months before a
Participant's Restricted Shares vest or Deferred Shares are scheduled to be
distributed to a Participant pursuant to this Section 2.7; and provided further
that (b) the Committee will honor an election made within 12 months of a
scheduled vesting date (or distribution date for Deferred Shares) if the
Participant consents in the election to irrevocably forfeit 5% of the Restricted
or Deferred Shares to which the Participant would otherwise be entitled.
2.7.2 Deferred Share Credits and Earnings. The Committee shall
establish an internal Plan account for each Participant who makes an election
under Section 2.7.1 hereto. At the end of each calendar year thereafter (or such
more frequent periods as the Committee may direct or approve), the Committee
shall credit the Participant's account with a number of Deferred Shares having a
Fair Market Value on that date equal to the compensation deferred during the
year, and any cash dividends paid during the year on Deferred Shares previously
credited to the Participant's account. The Committee shall hold each
Participant's Deferred Shares until distribution is required pursuant to Section
2.7.4 hereto.
2.7.3 Rights to Deferred Shares. Except as provided in Section
2.6.4 hereto, a Participant shall at all times be 100% vested in his or her
right to any Deferred Shares and any associated cash earnings. A Participant's
right to Deferred Shares shall at all times constitute an unsecured promise of
the Company to pay benefits as they come due.
2.7.4 Distributions of Deferred Shares and Earnings. The Committee
shall distribute a Participant's Deferred Shares in five substantially equal
annual installments in real Shares commencing as of the first day of the
calendar year beginning after the Participant's Continuous Service terminates,
provided that the Committee will honor a Participant's election of a different
time and manner of distribution if the election is made on a form approved by
the Committee pursuant to Section 2.6.4 hereto. Fractional shares shall not be
distributed, and instead shall be paid out in cash.
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2.7.5 Hardship Withdrawals. A Participant may apply to the
Committee for an immediate distribution of all or a portion of his or her
Deferred Shares on account of hardship. The hardship must result from a sudden
and unexpected illness or accident of the Participant or dependent, casualty
loss of property, or other similar conditions beyond the control of the
Participant. School expenses or residence purchases, for example, will not be
considered hardships. Distributions will not be made to the extent a hardship
could be relieved through insurance or by liquidation of the Participant's
nonessential assets. The amount of any distribution hereunder shall be limited
to the amount necessary to relieve the Participant's financial hardship. The
determination of whether a Participant has a qualifying hardship and the amount
to be distributed, if any, shall be made by the Committee in its discretion. The
Committee may require evidence of the purpose and amount of the need, and may
establish such application or other procedures as it deems appropriate.
2.8 OTHER STOCK-BASED AWARDS. The Board may grant stock-based Awards
other than those specified in Sections 2.3 (Options), 2.4 (Equity Units), 2.6
(Restricted Stock Awards), and 2.7 (Deferred Shares) hereto (including the grant
of unrestricted shares), which the Committee may grant to Participants, and in
such amounts and subject to such terms and conditions as the Committee shall
determine, subject to the provisions of this Plan. Examples of types of Awards
not specified in this Plan include Stock Unit Awards and Performance Share
Awards.
2.9 NON-STOCK AWARDS. The Committee may grant Awards payable only in
cash pursuant to the provisions hereof.
2.10 NON-TRANSFERABILITY.
2.10.1 General. Except as set forth in Section 2.10.3 below, Awards
may not be sold, pledged, assigned, hypothecated, transferred, or otherwise
encumbered or disposed of other than by will or by the laws of descent or
distribution, and except as specifically provided in this Plan or the applicable
Award Agreement. Furthermore, unless the applicable Award Agreement provides
otherwise, additional Shares or other property distributed to the Participant in
respect of Awards, as dividends or otherwise, shall be subject to the same
restrictions applicable to such Award. An Award may be exercised, during the
lifetime of the Participant, only by such Participant or a transferee permitted
by Section 2.10.3 below.
2.10.2 Special Rule for Beneficiaries. The designation of a
beneficiary by a Participant will not constitute a transfer.
2.10.3 Limited Transferability Rights.
(a) Awards Other than ISOs. Unless otherwise specifically
authorized by the Committee, any Participant may transfer Awards (other than
ISOs, except as permitted by Section 422 of the Code) either by gift to
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Immediate Family, or by instrument to an inter vivos or testamentary trust in
which the Awards (other than ISOs, except as permitted by Section 422 of the
Code) are to be passed, upon the death of the grantor, to beneficiaries who are
Immediate Family (or otherwise approved by the Committee).
(b) ISOs. ISOs are transferable only by will or by the laws
of descent and distribution, and during the Participant's lifetime, may only be
exercised by the Participant.
2.11 GRANT OF DIVIDEND EQUIVALENT RIGHTS. The Committee may award
dividend equivalent rights entitling the Participant to receive amounts equal to
the ordinary dividends that would be paid on Shares subject to an unexercised
Award as if such Shares were then outstanding. In the event such a provision is
included in an Award Agreement, the Committee shall determine whether such
payments shall be made in cash, in Shares, or in another form, whether they
shall be conditioned upon the exercise of the Award to which they relate, the
time or times at which they shall be made, and such other terms and conditions
as the Committee shall deem appropriate.
ARTICLE 3
TAXES
3.1 TAX WITHHOLDING.
3.1.1 General. As a condition of the transfer of Shares pursuant to
this Plan, the Participant shall make such arrangements as the Committee may
require for the satisfaction of any federal, state, local, or foreign
withholding tax obligations that may arise in connection with an Award or the
issuance of Shares. The Company shall not be required to issue any Shares until
such obligations are satisfied. If the Committee allows the withholding or
surrender of Shares to satisfy a Participant's tax withholding obligations, the
Committee need not allow Shares to be withheld in an amount that exceeds the
minimum statutory withholding rates, including payroll taxes.
3.1.2 Default Rule. An Employee, in the absence of any other
arrangement, shall be deemed to have directed the Company to withhold or collect
from his or her compensation an amount sufficient to satisfy such tax
withholding obligations from the next payroll payment otherwise payable after
the date of the exercise of an Award.
3.1.3 Cashless Withholding. If permitted by the Committee, a
Participant may satisfy his or her minimum statutory tax withholding obligations
by surrendering to the Company Shares (which may be Shares already owned or
subject to the Award) that have a Fair Market Value equal to the amount required
to be withheld.
3.2 REQUIREMENT OF NOTIFICATION OF ELECTION UNDER SECTION 83(B) OF THE
CODE. A Participant who elects under Section 83(b) of the Code to include in
gross income unvested Awards in the year of transfer shall notify the Company of
such election within 10 days of filing that election with the Internal Revenue
Service.
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3.3 REQUIREMENT OF NOTIFICATION UPON DISQUALIFYING DISPOSITION UNDER
SECTION 421(B) OF THE CODE. If a Participant disposes of Shares issued pursuant
to the exercise of an ISO under the circumstances described in Section 421(b) of
the Code (relating to disqualifying dispositions), the Participant shall notify
the Company of such disposition within 10 days.
ARTICLE 4
MISCELLANEOUS
4.1 AMENDMENT AND TERMINATION OF PLAN; MODIFICATION OF AWARDS.
4.1.1 Amendments to Plan. The Board may at any time amend, alter,
suspend, or discontinue this Plan, but no amendment, alteration, suspension or
discontinuation (other than an adjustment pursuant to Section 1.7 hereto) shall
be made that would materially and adversely affect the rights of any Participant
under any outstanding Award, without his or her written consent.
4.1.2 Stockholder Approval. Stockholder approval of any amendment
shall be obtained to the extent necessary to comply with (a) Section 422 of the
Code relating to ISOs unless the Board decides that continued qualification
under Section 422 of the Code is not desired, or (b) other Applicable Laws or
regulations.
4.1.3 Modification of Awards. The Committee may modify an Award,
accelerate the rate at which an Award may be exercised, extend or renew
outstanding Shares under an Award, or cancel outstanding Shares under an Award
and substitute new Shares for them. Without the written consent of the
Participant, no such change shall materially reduce the Participant's rights or
materially increase the Participant's obligations as determined by the
Committee.
4.2 ADJUSTMENTS UPON CORPORATE DISSOLUTION, MERGER AND OTHER SPECIAL
TRANSACTIONS.
4.2.1 Change of Control.
(a) General Rule. In the event of a Change of Control and
unless otherwise provided in the applicable Award Agreement, any Awards that are
Options or Equity Units shall accelerate and become immediately exercisable, all
other Awards shall become fully vested and the Shares underlying the Awards
shall be distributed to the Participant immediately before consummation of the
Change of Control, unless more than 90 days beforehand the Participant has
executed and delivered to the Committee an election pursuant to Section 2.6.4
hereto, directing that his or her Shares be distributed in installments over a
period longer than 10 years and not commencing more than 2 years after the
Change of Control, in which case the Committee shall make distributions in
12
accordance with the Participant's election). In each case covered by the
preceding sentence, any repurchase right of the Company applicable to any Shares
shall lapse on consummation of the Change of Control. To the extent that an
Option or Equity Unit is not exercised prior to consummation of a Change of
Control in which the Award is not being assumed or substituted, the Award shall
terminate upon such consummation.
(b) Special Rule for Termination of Employees. In the event a
Participant who holds a Transferred Award is Involuntarily Terminated in
connection with, or within 12 months following consummation of, a Change of
Control, then any Transferred Award held by the terminated Participant at the
time of termination shall accelerate and become exercisable, and any repurchase
right of the Company applicable to any Shares shall lapse. The acceleration of
vesting and lapse of repurchase rights provided for in the previous sentence
shall occur immediately prior to the effective date of the Participant's
termination.
4.2.2 Golden Parachute Limitation. In the event that the vesting,
acceleration or lapse of a repurchase right provided for in Section 4.2.1 hereto
(a) constitutes a "parachute payment" within the meaning of Section 280G of the
Code, and (b) as a result of Section 4.2.1 hereto would be subject to the excise
tax imposed by Section 4999 of the Code (or any corresponding provisions of
state income tax law), then the Company shall make any gross-up payments that is
necessary to hold the Participant harmless from the excise taxes payable under
Section 4999 of the Code; provided that this Section 4.2.2 shall be null and
void with respect to a particular Participant to the extent necessary or
appropriate pursuant to any agreement entered into between the Company
(including any Affiliate) and the Participant. Any determination required under
this Section shall be made in writing by the Company's independent accountants,
whose determination shall be conclusive and binding for all purposes on the
Company and any affected Participant.
4.3 NATURE OF PAYMENTS.
4.3.1 Consideration. Issuances of Shares and cash payments pursuant
to this Plan are in consideration of past services for the Company and the
payment of exercise prices.
4.3.2 Awards Separate from Salary. Awards a Participant receives
under this Plan shall be in addition to salary and other compensation payable to
the Participant, but shall not be taken into account for 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.
4.4 NON-UNIFORM DETERMINATIONS. The Committee's determinations under
this Plan need not be uniform. The Committee shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Award Agreements, as to (a) the persons to receive
awards under this Plan, (b) the terms and provisions of awards under this Plan,
and (c) the treatment of leaves of absence pursuant to Section 2.5.1 hereto.
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4.5 EFFECTIVE DATE AND TERM OF PLAN.
4.5.1 Adoption. Subject to Section 4.8 hereto, this Plan became
effective on the Effective Date.
4.5.2 Termination. Unless sooner terminated by the Board, ISOs may
not be granted under this Plan after the 10th anniversary of the Effective Date.
4.6 SUBSTITUTION OF OPTIONS. Notwithstanding any inconsistent
provisions or limits under this Plan, in the event the Company acquires (whether
by purchase, merger, or otherwise) all or substantially all of the outstanding
capital stock or assets of another corporation, or in the event of any
reorganization or other transaction qualifying under Section 424 of the Code,
the Committee may, in accordance with the provisions of that Section, substitute
Options under this Plan for options issued under a plan of the acquired company,
provided (a) the excess of the aggregate Fair Market Value of the shares subject
to an Option immediately after the substitution over the aggregate exercise
price of such Shares is not more than the similar excess immediately before such
substitution and (b) the new option does not give persons additional benefits,
including a longer exercise period.
4.7 CONDITIONS INCIDENT TO ISSUANCE OF SHARES.
4.7.1 Representations and Warranties. As a condition to the
exercise of an Award, the Committee may require the person exercising the Award
to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by law.
4.7.2 Consents. If the Committee shall at any time determine that
any Consent is necessary or desirable as a condition of, or in connection with,
the granting of any Award under this Plan, the issuance or purchase of Shares or
other rights hereunder, or the taking of any other action hereunder (each such
action being hereinafter referred to as a "Plan Action"), then such Plan Action
shall not be taken until the Consent has been done or obtained to the full
satisfaction of the Committee.
4.7.3 No Obligation to Issue Shares. The Company shall not be
obligated, and shall have no liability for failure, to issue or deliver any
Shares under this Plan unless such issuance or delivery would comply with
Applicable Laws, with such compliance determined by the Committee in
consultation with the Company's legal counsel.
4.8 STOCKHOLDER APPROVAL. The Board shall seek stockholder approval of
this Plan and any ISOs issued under it within 12 months before or after the
Effective Date. If stockholder approval is not obtained, the Plan and any Awards
shall remain in full force and effect, subject to (I) the treatment of any ISOs
as NQSOs, and (II) the granting of no further ISOs.
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4.9 INFORMATION AND DOCUMENTS TO OPTIONEES AND PURCHASERS. If required
by Applicable Laws, the Company shall provide financial statements no less than
annually to each Participant who has an Award or holds Shares acquired pursuant
to this Plan.
4.10 SECTION HEADINGS. Section headings do not define or limit the
contents of the sections.
4.11 GOVERNING LAW AND LITIGATION EXPENSES. This Plan shall be
interpreted, administered and otherwise subject to the laws of the State of
Georgia (disregarding choice-of-law provisions). The Company shall reimburse a
Participant for reasonable legal fees and expenses that the Participant incurs
in order to enforce or defend his or her rights under this Plan, but only if the
Participant receives a judgment or settlement substantially in the Participant's
favor. Reimbursements that are due under this Section 4.11 shall be paid
promptly.
4.12 SEVERABILITY. Every provision of this Plan is intended to be
severable. Any illegal or invalid term shall not affect the validity or legality
of the remaining terms of this Plan.
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WORLDWIDE PETROMOLY, INC.
STOCK INCENTIVE PLAN
------------
APPENDIX A: DEFINITIONS
------------
"ADDITIONAL OPTION" means an Option issued by the Company in exchange
for Shares delivered by an Optionee as full or partial payment of the Option
Exercise Price of an Original Option pursuant to Section 2.3.8 of this Plan.
"AFFILIATE" means an entity other than a Subsidiary which, together
with the Company, is under common control of a third person or entity.
"APPLICABLE LAWS" means the legal or Stock Exchange requirements
governing the Plan and Awards, including Section 422 of the Code.
"AWARD" means any award made pursuant to Section 2 of this Plan,
including Options, Equity Units, Restricted Shares, and Deferred Shares, other
stock-based Awards, and non-stock Awards.
"AWARD AGREEMENT" means any written document setting forth the terms
and conditions of an Award, as prescribed by the Committee.
"BENEFICIAL OWNER" has the meaning set forth in Rule 13d-3 under the
Securities Act.
"BOARD" means the Board of Directors of the Company.
"CAUSE" means a Participant's termination by the Company (or
resignation in lieu thereof) when "Cause" to terminate exists. "Cause" shall
have the meaning explicitly set forth in any then-effective written employment
or consulting agreement between the Participant and the Company. In all other
cases, "Cause" includes, but it is not limited to: (i) the Participant's
commission of a willful act of fraud or dishonesty, the purpose or effect of
which materially and adversely affects the Company; (ii) the Participant's
conviction of a felony or any violation of any federal or state securities law
(whether by plea of nolo contendere or otherwise) or the Participant's being
enjoined from violating any federal or state securities law or being determined
to have violated any such law; (iii) the Participant's engaging in willful or
reckless misconduct or gross negligence in connection with any property or
activity of the Company; (iv) the Participant's repeated and intemperate use of
alcohol or illegal drugs after written notice from the Board or the Committee
that such use, if continued, would result in the termination of the
Participant's employment or consulting relationship with the Company; (v) the
Participant's material breach of any of its obligations to the Company (other
than by reason of physical or mental illness, injury, or condition) that is or
could reasonably be expected to result in material harm to the Company; (vi) the
Participant's failure or refusal to perform any material duty or responsibility
under any written employment or consulting agreement with the Company (other
than by reason of physical or mental illness, injury, or condition); or (vii)
the Participant's breach any covenant to the Company relating to noncompetition,
nonsolicitation, nondisclosure of proprietary information or surrender of
records, inventions or patents. The determination as to whether a Participant is
being terminated for Cause shall be made in good faith by the Board or the
Committee and shall be final and binding on the Participant. The foregoing
definition does not in any way limit the Company's ability to terminate a
Participant's employment or consulting relationship at any time, and, for the
purposes of this definition, the term "Company" includes any Subsidiary, parent,
Affiliate, or successor thereto, if appropriate.
"CHANGE OF CONTROL" means a change in control of the Company of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A under the Exchange Act, whether or not the
Company is subject to the Exchange Act at such time, including any of the
following events:
(i) Acquisition of Controlling Interest. Any Person becomes the
Beneficial Owner, directly or indirectly, of securities of the Company
representing a majority of the combined voting power of or equity interest in
the Company in connection with a merger or otherwise. In applying the preceding
sentence, (i) securities acquired directly from the Company or its Parent,
Subsidiaries, or Affiliates by or for the Person shall not be taken into
account, and (ii) an agreement to vote securities shall be disregarded unless
the Plan Administrator reasonably determines that its ultimate purpose is to
cause what otherwise would be a Change in Control or to replace one or more
Directors or members of senior management (other than pursuant to a
recommendation adopted by an at least two-thirds vote of the Company's board of
directors).
(ii) Change in Board Control. Individuals who constituted the Board
when this Plan was adopted (or their approved replacements, as defined in the
next sentence) cease for any reason to constitute a majority of the Board. A new
Director shall be considered an "approved replacement" Director if his or her
election (or nomination for election) was approved by a vote of at least
two-thirds of the Directors then still in office who either were Directors when
this Plan was adopted or were themselves approved replacement Directors, but in
either case excluding any Director whose initial assumption of office occurred
as a result of an actual or threatened solicitation of proxies or consents by or
on behalf of any Person other than the Board.
(iii) Merger Approved. The stockholders of the Company approve a merger
or consolidation of the Company with any other corporation or entity or any
other form of business combination pursuant to which the outstanding stock of
the Company is exchanged for cash, securities or other property paid, issued or
caused to be issued by the surviving or acquiring corporation or entity unless
the stockholders immediately before the merger or consolidation would continue
to own equity securities that represent (either by remaining outstanding or by
being converted into equity securities of the surviving entity) at least a
majority of the combined voting power of or equity interest in the Company or
such surviving or acquiring entity corporation immediately after such merger or
consolidation. If such a merger or consolidation is canceled, it shall cease to
be a Change of Control with as much retroactive effect as the Plan Administrator
determines to be practicable.
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(iv) Sale of Assets. The stockholders of the Company approve an
agreement for the sale, transfer or lease by the Company of all, or
substantially all, of the Company's assets. If such a sale or disposition is
canceled, it shall cease to be a Change of Control with as much retroactive
effect as the Plan Administrator determines to be practicable.
(v) Liquidation or Dissolution. The stockholders of the Company approve
a plan or proposal for liquidation or dissolution of the Company. If such a
liquidation or dissolution is canceled, it shall cease to be a Change of Control
with as much retroactive effect as the Plan Administrator determines to be
practicable.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means one or more committees or subcommittees of the Board
appointed to administer this Plan in accordance with Section 1.5 of this Plan,
or the Board itself, when it is acting in place of the Committee.
"COMMON STOCK" means the Company's common stock.
"COMPANY" means Worldwide Petromoly, Inc.
"CONSENT" with respect to any Plan Action means (i) any listings,
registrations, or qualifications on any Stock Exchange or under any federal,
state or local law, rule, or regulation, (ii) any written agreements and
representations by the Participant with respect to the disposition of Shares, or
with respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration, or
qualification or to obtain an exemption from the requirement that any such
listing, qualification, or registration be made, and (iii) any consents,
clearances and approvals in respect of a Plan Action by any governmental or
other regulatory bodies.
"CONSULTANT" means any person, including an advisor, who is compensated
by the Company or any Parent, Subsidiary, or Affiliate for consulting services.
"CONTINUOUS SERVICE" means uninterrupted service as a Director,
Employee or Consultant. Continuous Service shall not be considered interrupted
(unless an Award Agreement otherwise specifies) in the case of: (i) any approved
or legally-mandated leave of absence, provided that such leave is for a period
of not more than 90 days, unless reemployment upon the expiration of such leave
is guaranteed by contract or statute, or unless provided otherwise pursuant to
Company policy; (ii) changes in status from Director, Employee, or Consultant to
any other aforementioned position with the Company (including changes to
advisory or emeritus status); or (iii) in the case of transfers between
locations of the Company or between the Company, its Parents, Subsidiaries,
Affiliates, or their respective successors.
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"DEFERRED SHARES" means shares of Common Stock credited under Section
2.7.2 of this Plan.
"DIRECTOR" means a member of the Board, as well as a member of the
board of directors of a Parent, Subsidiary, or Affiliate.
"EFFECTIVE DATE" means the date on which the Board approves the Plan
(i.e. August 8, 2001).
"EMPLOYEE" means any person employed by the Company or any Parent,
Subsidiary, or Affiliate, as determined by the Committee. An outside Director is
not an Employee.
"EQUITY UNIT" means the right to receive appreciation in value of
Common Stock pursuant to Section 2.4 of this Plan.
"EXPIRATION DATE" means the date on which an Award expires pursuant to
the Award Agreement.
"FAIR MARKET VALUE" means the fair market value of the Common Stock, as
determined by the Committee in good faith on such basis as it deems appropriate
and applied consistently with respect to the Participants. Whenever possible,
the determination of Fair Market Value shall be based upon the closing price for
the Shares as reported on Nasdaq or in the Wall Street Journal for the
applicable date.
"IMMEDIATE FAMILY" means any natural or adopted child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
"INCENTIVE STOCK OPTION" means an Option that is intended to qualify
for special federal income tax treatment pursuant to Sections 421 and 422 of the
Code, and which is so designated in the applicable Award Agreement. Any Option
that is not specifically designated as an ISO shall not be an ISO. Any Option
that is not an ISO is referred to herein as a "NQSO."
"INVOLUNTARILY TERMINATED" means that a Participant's Continuous
Service terminated under the following circumstances: (i) termination without
Cause by the Company or a Subsidiary, Parent, Affiliate, or successor thereto,
as appropriate; or (ii) voluntary termination by the Participant within 60 days
following (A) a material reduction in the Participant's job responsibilities
(however, a mere change in title alone or reassignment following a Change of
Control to a position that is substantially similar to the position held prior
to the Change of Control shall not constitute a material reduction in job
responsibilities), (B) relocation by the Company or a Subsidiary, Parent,
Affiliate, or successor thereto, as appropriate, of the Participant's work site
to a facility or location more than 50 miles from the Participant's principal
work site for the Company at the time of the Change of Control, or (C) a
reduction in Participant's then-current total compensation by at least 10%,
other than as a result of an across-the-board reduction in the compensation of
all other Employees, Directors, or Consultants in positions similar to the
Participant's position by the same percentage amount.
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"ISO" means Incentive Stock Option.
"MANAGEMENT ACTION" means any event, circumstance, or transaction
occurring during the 6-month period following a Potential Change of Control that
results from the action of a Management Group.
"MANAGEMENT GROUP" means any entity or group that includes, is
affiliated with, or is wholly or partly controlled by one or more executive
officers of the Company in office before a Potential Change of Control.
"NAMED EXECUTIVE" means any individual who, on the last day of the
Company's fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer), as determined under the
Securities Act's executive compensation disclosure rules.
"NON-QUALIFIED STOCK OPTION" means an Option not intended to qualify as
an ISO, as designated in the applicable Award Agreement.
"NQSO" means Non-Qualified Stock Option.
"OPTION" means a stock option granted pursuant to Section 2.3 of this
Plan.
"OPTIONEE" means a Participant who receives an Option.
"OPTION EXERCISE PRICE" means the price for the Shares to be issued by
the Company upon an exercise of an Option by an Optionee.
"ORIGINAL OPTION" has the meaning given to such term in Section 2.3.8
of this Plan.
"PARENT" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code, or any successor provision.
"PARTICIPANT" means any holder of one or more Awards, or the Shares
issuable or issued upon exercise of such Awards, under this Plan.
"PERFORMANCE SHARE AWARD" means an Award granting a right to receive
Shares contingent on the achievement of performance or other objectives during a
specified period.
"PERSON" has the meaning given in Section 3(a)(9) of the Securities
Act, as modified and used in Section 13(d) of that Act, and shall include a
"group," as defined in Rule 13d-5 promulgated thereunder. However, a person
shall not include: (i) the Company or any of its Subsidiaries; (ii) a trustee or
A-5
other fiduciary holding securities under this Plan or the employee benefit plan
of any of the Company's Subsidiairies; (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities; or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of shares of the Company.
"PLAN" means this Worldwide Petromoly, Inc. Stock Incentive Plan.
"PLAN ACTION" has the meaning given to such term in Section 4.7.2 of
this Plan.
"POTENTIAL CHANGE OF CONTROL" means any of the following has occurred
during the term of this Plan and all Awards issued under this Plan, excluding
any event that is Management Action:
(i) Agreement Signed. The Company enters into an agreement that will
result in a Change of Control.
(ii) Notice of Intent to Seek Change of Control. The Company or any
Person publicly announces an intention to take or to consider taking actions
that will result in a Change of Control.
(iii) Board Declaration. With respect to this Plan, the Board adopts a
resolution declaring that a Potential Change of Control has occurred.
"RESTRICTED SHARES" means Shares subject to restrictions imposed
pursuant to Section 2.6 of this Plan.
"RESTRICTED STOCK AWARD" means an Award granted pursuant to Section 2.6
of this Plan.
"RULE 16B-3" means Rule 16b-3 promulgated under the Securities Act, as
amended from time to time, or any successor provision.
"SECURITIES ACT" means the Securities Exchange Act of 1934, as amended.
"SHARE" means a share of Common Stock.
"STOCK EXCHANGE" means any stock exchange or consolidated stock price
reporting system on which prices for the Common Stock are quoted at any given
time.
"STOCKHOLDERS AGREEMENT" means any stockholders agreement adopted by
the Company.
"STOCK UNIT AWARD" means an Award granting the right to receive Shares
in the future.
"SUBSIDIARY" means a "subsidiary corporation," whether now or hereafter
existing, as defined in Section 424(f) of the Code, or any successor provision.
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"SUCCESSOR CORPORATION" means the corporation resulting after a Change
of Control.
"TEN PERCENT HOLDER" means a Person who owns stock representing more
than 10% of the voting power of all classes of stock of the Company or any
Parent or Subsidiary (as such ownership may be determined for purposes of
Section 422(b)(6) of the Code).
"TRANSFERRED AWARD" means an Award assumed or substituted for another
award by a Successor Corporation pursuant to Section 4.2 of this Plan.
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