Exhibit 10.4
DATA SYSTEMS & SOFTWARE INC.
1994 STOCK INCENTIVE PLAN
SECTION 1. Purpose. The purposes of this Data Systems &
Software Inc. 1994 Incentive Plan is to provide incentive to employees
(including officers) of, and consultants to, Data Systems & Software Inc. (the
"Company") and its Affiliates (as hereinafter defined), to encourage such
individuals to remain in the employ of, or to continue to provide services to,
the Company and its Affiliates and to attract to the Company and its Affiliates
individuals of experience and ability.
SECTION 2. Definitions. As used in the Plan, the following
terms shall have the meanings set forth below:
"Affiliate" shall mean (i) any entity that, directly or
indirectly, is controlled by the Company and (ii) any entity in which the
Company has a significant equity interest, in either case as determined by the
Committee.
"Award" shall mean any Option, Stock Appreciation Right,
Restricted Stock Award, Performance Award or Other Stock-Based Award.
"Award Agreement" shall mean any written agreement, contract
or other instrument or document evidencing any Award, which may, but need not,
be executed or acknowledged by a Participant.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Committee" shall mean a committee of the Board designated by
the Board to administer the Plan and composed of not less than the minimum
number of persons from time to time required by Rule 16b-3, each of whom, to the
extent necessary to comply with Rule 16b-3 only, is a "disinterested person"
within the meaning of Rule 16b-3.
"Company" shall mean Data Systems & Software Inc., together
with any successor thereto.
"Consultant" shall mean a consultant who performs services to
the Company.
"Disability" shall mean the condition of an Employee who is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than twelve (12) months, all within the meaning of Section 22(e)(3) of
the Code.
"Employee" shall mean an employee of the Company or of any
Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" shall mean the fair market value of the
property or other item being valued, as determined by the Committee in its sole
discretion.
"Incentive Stock Option" shall mean a right to purchase Shares
from the Company that is granted under Section 6 of the Plan and that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
"Non-Qualified Stock Option" shall mean a right to purchase
Shares from the Company that is granted under Section 6 of the Plan and that is
not intended to be an Incentive Stock Option.
"Option" shall mean an Incentive Stock Option or a
Non-Qualified Stock Option and shall include a Restoration Option.
"Other Stock-Based Award" shall mean any right granted under
Section 10 of the Plan.
"Participant" shall mean any Employee or Consultant selected
by the Committee to receive an Award under the Plan.
"Performance Award" shall mean any right granted under Section
9 of the Plan.
"Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
"Plan" shall mean this Data Systems & Software Inc. 1994 Stock
Incentive Plan.
"Restoration Option" shall mean an Option granted pursuant to
Section 6(e) of the Plan.
"Restricted Stock" shall mean any Share granted under Section
8 of the Plan. "Restricted Stock Unit" shall mean any unit granted under Section
8 of the Plan.
"Rule 16b-3" shall mean Rule 16b-3 as promulgated and
interpreted by the SEC under the Exchange Act, or any successor rule or
regulation thereto as in effect from time to time.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto and shall include the Staff thereof.
"Shares" shall mean the Common Stock, par value $.01, of the
Company, or such other securities of the Company as may be designated by the
Committee from time to time.
"Stock Appreciation Right" shall mean any right granted under
Section 7 of the Plan.
"Substitute Awards" shall mean Awards granted in assumption
of, or in substitution for, outstanding awards previously granted by a company
acquired by the Company or with which the Company combines.
SECTION 3. Administration. (a) The Plan shall be administered
by the Committee. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to
Participants; (iii) determine the number of Shares to be covered by, or with
respect to which payments, rights, or other matters are to be calculated in
connection with, Awards; (iv) determine the terms and conditions of any Award;
(v) determine whether, to what extent, and under what circumstances Awards may
be settled or exercised in cash, Shares, other securities, other Awards or other
property, or cancelled, forfeited, or suspended and the method or methods by
which Awards may be settled, exercised, cancelled, forfeited, or suspended; (vi)
determine whether, to what extent, and under what circumstances cash, Shares,
other securities, other Awards, other property, and other amounts payable with
respect to an Award shall be deferred either automatically or at the election of
the holder thereof or of the Committee; (vii) interpret and administer the Plan
and any instrument or agreement relating to, or Award made under the Plan;
(viii) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (ix) make any other determination and take any other action
that the Committee deems necessary or desirable for the administration of the
Plan.
(b) Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant and any
holder or beneficiary of any Award.
(c) Notwithstanding the foregoing, the Board may authorize the
Chief Executive Officer of Data Systems & Software Inc. (provided that he is
also a member of the Board) to grant Options to Employees pertaining up to an
aggregate of 90,000 Shares, subject to the provisions of the Plan. The Chief
Executive Officer as so appointed by the Board shall administer the Plan with
respect to the Options such officer has granted. With respect to the Options
granted by the Chief Executive Officer pursuant to such authority, all
references to the Committee in this Plan shall include the Chief Executive
Officer acting pursuant to such authority.
SECTION 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in
Section 4(b), the number of Shares with respect to which Awards may be granted
under the Plan shall be 1,600,000. If, after the effective date of the Plan, any
Shares covered by an Award granted under the Plan, or to which such an Award
relates, are forfeited, or if an Award is settled for cash or otherwise
terminates or is cancelled without the delivery of Shares, then the Shares
covered by such Award, or to which such Award relates, or the number of Shares
otherwise counted against the aggregate number of Shares with respect to which
Awards may be granted, to the extent of any such settlement, forfeiture,
termination or cancellation, shall again be, or shall become, Shares with
respect to which Awards may be granted. In the event that any Option or other
Award granted hereunder is exercised through the delivery of Shares, the number
of Shares available for Awards under the Plan shall be increased by the number
of Shares surrendered, to the extent permissible under Rule 16b-3.
Notwithstanding the foregoing (and subject to adjustment as provided in Section
4(b)), no more than 500,000 Shares shall be available for Awards of Restricted
Stock and Restricted Stock Units.
(b) Adjustments. In the event that the Committee determines
that any dividend or other distribution (whether in the form of cash, Shares,
other securities, or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number of Shares or other securities of the Company (or number and kind
of other securities or property) with respect to which Awards may be granted,
(ii) the number of Shares or other securities of the Company (or number and kind
of other securities or property) subject to outstanding Awards, and (iii) the
grant or exercise price with respect to any Award or, if deemed appropriate,
make provision for a cash payment to the holder of an outstanding Award;
provided, in each case, that with respect to Awards of Incentive Stock Options
no such adjustment shall be authorized to the extent that such authority would
cause the Plan to violate Section 422(b)(1) of the Code, as from time to time
amended.
(c) Substitute Awards. Any Shares underlying Substitute Awards
shall not, except in the case of Shares with respect to which Substitute Awards
are granted to Participants who are officers or directors of the Company for
purposes of Section 16 of the Exchange Act or any successor section thereto, be
counted against the Shares available for Awards under the Plan.
SECTION 5. Eligibility. Any Employee, including any officer or
employee-director of the Company or any Affiliate, or any Consultant, who is not
a member of the Committee, shall be eligible to be designated a Participant.
SECTION 6. Stock Options.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Options shall be granted, the number of Shares to be covered by each
Option, the option price therefor and the conditions and limitations applicable
to the exercise of the Option. The Committee shall have the authority to grant
Incentive Stock Options, or to grant Non-Qualified Stock Options, or to grant
both types of options. In the case of Incentive Stock Options, the terms and
conditions of such grants shall be subject to and comply with such rules as may
be prescribed by Section 422 of the Code, as from time to time amended, and any
regulations implementing such statute.
(b) Exercise Price. The Committee shall establish the exercise
price at the time each Option is granted, which price, except in the case of
Options that are Incentive Stock Options or Substitute Awards, shall not be less
than 85% of the per Share Fair Market Value on the date of grant.
(c) Exercise. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may, in its sole
discretion, specify in the applicable Award Agreement or thereafter. The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal or
state securities laws, as it may deem necessary or advisable.
(d) Payment. No Shares shall be delivered pursuant to any
exercise of an Option until payment in full of the option price therefor is
received by the Company. Such payment may be made in cash, or its equivalent,
or, if and to the extent permitted by the Committee, by exchanging Shares owned
by the optionee (which are not the subject of any pledge or other security
interest), or by a combination of the foregoing, provided that the combined
value of all cash and cash equivalents and the Fair Market Value of any such
Shares so tendered to the Company as of the date of such tender is at least
equal to such option price.
(e) Restoration Options. In the event that any Participant
delivers Shares in payment of the exercise price of any Option granted hereunder
in accordance with Section 6(d), the Committee shall have the authority to grant
or provide for the automatic grant of a Restoration Option to such Participant.
The grant of a Restoration Option shall be subject to the satisfaction of such
conditions or criteria as the Committee in its sole discretion shall establish
from time to time. A Restoration Option shall entitle the holder thereof to
purchase a number of Shares equal to the number of such Shares so delivered upon
exercise of the original Option and, in the discretion of the Committee, the
number of Shares, if any, tendered to the Company to satisfy any withholding tax
liability arising in connection with the exercise of the original Option. A
Restoration Option shall have a per share exercise price of not less than 100%
of the per Share Fair Market Value on the date of grant of such Restoration
Option, a term not longer than the remaining term of the original Option at the
time of exercise thereof, and such other terms and conditions as the Committee
in its sole discretion shall determine.
SECTION 7. Stock Appreciation Rights.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Stock Appreciation Rights shall be granted, the number of Shares to be
covered by each Stock Appreciation Right Award, the grant price thereof and the
conditions and limitations applicable to the exercise thereof. Stock
Appreciation Rights may be granted in tandem with another Award, in addition to
another Award, or freestanding and unrelated to another Award. Stock
Appreciation Rights granted in tandem with or in addition to an Award may be
granted either at the same time as the Award or at a later time. Stock
Appreciation Rights shall not be exercisable earlier than six months after
grant, and except for Stock Appreciation Rights which are Substitute Awards,
shall have an exercise price of not less than 100% of the Fair Market Value of
the Shares on the date of grant or, in the case of a Stock Appreciation Right
granted in tandem with or in addition to another Award, at the time of grant of
such related Award.
(b) Exercise and Payment. A Stock Appreciation Right shall
entitle the Participant to receive an amount equal to the excess of the Fair
Market Value of a Share on the date of exercise of the Stock Appreciation Right
over the grant price thereof, provided that the Committee may for administrative
convenience determine that, with respect to any Stock Appreciation Right which
is not related to an Incentive Stock Option and which can only be exercised for
cash during limited periods of time in order to satisfy the conditions of Rule
16b-3, the exercise of such Stock Appreciation Right for cash during such
limited period shall be deemed to occur for all purposes hereunder on the day
during such limited period on which the Fair Market Value of the Shares is the
highest. Any such determination by the Committee may be changed by the Committee
from time to time and may govern the exercise of Stock Appreciation Rights
granted prior to such determination as well as Stock Appreciation Rights
thereafter granted. The Committee shall determine whether a Stock Appreciation
Right shall be settled in cash, Shares or a combination of cash and Shares.
(c) Other Terms and Conditions. Subject to the terms of the
Plan and any applicable Award Agreement, the Committee shall determine, at or
after the grant of a Stock Appreciation Right, the term, methods of exercise,
methods and form of settlement, and any other terms and conditions of any Stock
Appreciation Right. Any such determination by the Committee may be changed by
the Committee from time to time and may govern the exercise of Stock
Appreciation Rights granted or exercised prior to such determination as well as
Stock Appreciation Rights granted or exercised thereafter. The Committee may
impose such conditions or restrictions on the exercise of any Stock Appreciation
Right as it shall deem appropriate.
SECTION 8. Restricted Stock and Restricted Stock Units.
(a) Grant. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom Shares of Restricted Stock and Restricted Stock Units shall be granted,
the number of Shares of Restricted Stock and/or the number of Restricted Stock
Units to be granted to each Participant, the duration of the period during
which, and the conditions under which, the Restricted Stock and Restricted Stock
Units may be forfeited to the Company, and the other terms and conditions of
such Awards.
(b) Transfer Restrictions. Shares of Restricted Stock and
Restricted Stock Units may not be sold, assigned, transferred, pledged or
otherwise encumbered, except, in the case of Restricted Stock, as provided in
the Plan or the applicable Award Agreements. Certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and deposited by such Participant, together with a stock power endorsed in
blank, with the Company. Upon the lapse of the restrictions applicable to such
Shares of Restricted Stock, the Company shall deliver such certificates to the
Participant or the Participant's legal representative.
(c) Payment. Each Restricted Stock Unit shall have a value
equal to the Fair Market Value of a Share. Restricted Stock Units shall be paid
in cash, Shares, other securities or other property, as determined in the sole
discretion of the Committee, upon the lapse of the restrictions applicable
thereto, or otherwise in accordance with the applicable Award Agreement.
Dividends paid on any Shares of Restricted Stock may be paid directly to the
Participant, or may be reinvested in additional Shares of Restricted Stock or in
additional Restricted Stock Units, as determined by the Committee in its sole
discretion.
SECTION 9. Performance Awards.
(a) Grant. The Committee shall have sole and complete
authority to determine the Participants who shall receive a "Performance Award",
which shall consist of a right which is (i) denominated in cash or Shares, (ii)
valued, as determined by the Committee, in accordance with the achievement of
such performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
(b) Terms and Conditions. Subject to the terms of the Plan and
any applicable Award Agreement, the Committee shall determine the performance
goals to be achieved during any performance period, the length of any
performance period, the amount of any Performance Award and the amount and kind
of any payment or transfer to be made pursuant to any Performance Award.
(c) Payment of Performance Awards. Performance Awards may be
paid in a lump sum or in installments following the close of the performance
period or, in accordance with procedures established by the Committee, on a
deferred basis.
SECTION 10. Other Stock-Based Awards.
(a) General. The Committee shall have authority to grant to
eligible Participants an "Other Stock-Based Award", which shall consist of any
right which is (i) not an Award described in Sections 6 through 9 above and (ii)
an Award of Shares or an Award denominated or payable in, valued in whole or in
part by reference to, or otherwise based on or related to, Shares (including,
without limitation, securities convertible into Shares), as deemed by the
Committee to be consistent with the purposes of the Plan; provided that any such
rights must comply, to the extent deemed desirable by the Committee, with Rule
16b-3 and applicable law. Subject to the terms of the Plan and any applicable
Award Agreement, the Committee shall determine the terms and conditions of any
such Other Stock-Based Award. Except in the case of an Other Stock-Based Award
that is a Substitute Award, the price at which securities may be purchased
pursuant to any Other Stock-Based Award granted under this Plan, or the
provision, if any, of any such Award that is analogous to the purchase or
exercise price, shall not be less than 85% of the Fair Market Value of the
securities to which such Award relates on the date of grant.
(b) Dividend Equivalents. In the sole and complete discretion
of the Committee, an Award, whether made as an Other Stock-Based Award under
this Section 10 or as an Award granted pursuant to Sections 6 through 9 hereof,
may provide the Participant with dividends or dividend equivalents, payable in
cash, Shares, other securities or other property on a current or deferred basis.
SECTION 11. Amendment and Termination.
(a) Amendments to the Plan. The Board may amend, alter,
suspend, discontinue, or terminate the Plan or any portion thereof at any time;
provided that no such amendment, alteration, suspension, discontinuation or
termination shall be made without stockholder approval if such approval is
necessary to comply with any tax or regulatory requirement, including for these
purposes any approval requirement which is a prerequisite for exemptive relief
from Section 16(b) of the Exchange Act. Notwithstanding anything to the contrary
herein, the Committee may amend the Plan in such manner as may be necessary so
as to have the Plan conform with local rules and regulations in any jurisdiction
outside the United States.
(b) Amendments to Awards. The Committee may waive any
conditions or rights under, amend any terms of, or alter, suspend, discontinue,
cancel or terminate, any Award theretofore granted, prospectively or
retroactively; provided that any such waiver, amendment, alteration, suspension,
discontinuance, cancellation or termination that would impair the rights of any
Participant or any holder or beneficiary of any Award theretofore granted shall
not to that extent be effective without the consent of the affected Participant,
holder or beneficiary.
(c) Adjustment of Awards Upon the Occurrence of Certain
Unusual or Nonrecurring Events. The Committee is hereby authorized to make
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4(b) hereof) affecting the Company, any
Affiliate, or the financial statements of the Company or any Affiliate, or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan.
(d) Cancellation. Any provision of this Plan or any Award
Agreement to the contrary notwithstanding, the Committee may cause any Award
granted hereunder to be cancelled in consideration of a cash payment or
alternative Award made to the holder of such cancelled Award equal in value to
the Fair Market Value of such cancelled Award.
SECTION 12. General Provisions.
(a) Transferability.
(i) Except as is specifically provided for in
any Award approved by the Committee or as
otherwise specifically permitted by the
Committee each Award and each right under
any Award, shall be exercisable only by the
Participant during the Participant's
lifetime, or if permissible under applicable
law, by the Participant's guardian or legal
representative or by the transferee
receiving such Award pursuant to a qualified
domestic relations order ("QDRO"), as
determined by the Committee.
(ii) Except as specifically provided for in any
Award approved by the Committee or otherwise
specifically permitted by the Committee,
except as may be no Award that constitutes a
"derivative security", for purposes of
Section 16 of the Exchange Act, may be
assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by a
Participant otherwise than by will or by the
laws of descent and distribution or pursuant
to a QDRO, and any such purported
assignment, alienation, pledge, attachment,
sale, transfer or encumbrance shall be void
and unenforceable against the Company or any
Affiliate; provided, however that the
designation of a beneficiary shall not
constitute an assignment, alienation,
pledge, attachment, sale, transfer or
encumbrance.
(b) No Rights to Awards. No Participant shall have any claim
to be granted any Award, and there is no obligation for uniformity of treatment
of Participants, or holders or beneficiaries of Awards. The terms and conditions
of Awards need not be the same with respect to each recipient.
(c) Share Certificates. All certificates for Shares or other
securities of the Company or any Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange or automated quotation system upon which such
Shares or other securities are then listed, and any applicable Federal or state
laws, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(d) Delegation. Subject to the terms of the Plan and
applicable law, the Committee may delegate to one or more officers or managers
of the Company or any Affiliate, or to a committee of such officers or managers,
the authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to, or to cancel, modify or waive rights with respect
to, or to alter, discontinue, suspend, or terminate Awards held by Participants
who are not officers or directors of the Company for purposes of Section 16 of
the Exchange Act, or any successor section thereto, or who are otherwise not
subject to such Section.
(e) Withholding. A participant may be required to pay to the
Company or any Affiliate and the Company or any Affiliate shall have the right
and is hereby authorized to withhold from any Award, from any payment due or
transfer made under any Award or under the Plan or from any compensation or
other amount owing to a Participant the amount (in cash, Shares, other
securities, other Awards or other property) of any applicable withholding taxes
in respect of an Award, its exercise, or any payment or transfer under an Award
or under the Plan and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
The Committee may provide for additional cash payments to holders of Awards to
defray or offset any tax arising from the grant, vesting, exercise or payments
of any Award.
(f) Award Agreements. Each Award hereunder shall be evidenced
by an Award Agreement which shall be delivered to the Participant and shall
specify the terms and conditions of the Award and any rules applicable thereto,
including but no limited to the effect on such Award of the death, retirement or
other termination of employment of a Participant and the effect, if any, of a
change in control of the Company.
(g) No Limit on Other Compensation Arrangements. Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other compensation arrangements, which may, but need
not, provide for the grant of options, restricted stock, Shares and other types
of Awards provided for hereunder (subject to shareholder approval if such
approval is required), and such arrangements may be either generally applicable
or applicable only in specific cases.
(h) No Right to Employment. The grant of an Award shall not be
construed as giving a Participant the right to be retained in the employ of the
Company or any Affiliate. Further, the Company or an Affiliate may at any time
dismiss a Participant from employment, free from any liability or any claim
under the Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
(i) No Rights as Stockholder. Subject to the provisions of the
applicable Award, no Participant or holder or beneficiary of any Award shall
have any rights as a stockholder with respect to any Shares to be distributed
under the Plan until he or she has become the holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted Stock
hereunder, the applicable Award shall specify if and to what extent the
Participant shall not be entitled to the rights of a stockholder in respect of
such Restricted Stock.
(j) Governing Law. The validity, construction, and effect of
the Plan and any rules and regulations relating to the Plan and any Award
Agreement shall be determined in accordance with the laws of the State of New
York.
(k) Severability. If any provision of the Plan or any Award is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform the applicable laws, or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.
(l) Other Laws. The Committee may refuse to issue or transfer
any Shares or other consideration under an Award if, acting in its sole
discretion, it determines that the issuance or transfer of such Shares or such
other consideration might violate any applicable law or regulation or entitle
the Company to recover the same under Section 16(b) of the Exchange Act, and any
payment tendered to the Company by a Participant, other holder or beneficiary in
connection with the exercise of such Award shall be promptly refunded to the
relevant Participant, holder or beneficiary. Without limiting the generality of
the foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of the U.S.
federal securities laws.
(m) No Trust or Fund Created. Neither the Plan nor any Award
shall create or be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the
Company or any Affiliate.
(n) No Fractional Shares. No fractional Shares shall be issued
or delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities, or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional Shares
or any rights thereto shall be cancelled, terminated, or otherwise eliminated.
(o) Conformity to Securities Laws. It is the intent of the
Company that the Plan shall comply in all respects with applicable provisions of
Rule 16b-3 under the Exchange Act, so that any Award granted to a Participant or
other transaction incident thereto by a Participant who is subject to the
reporting requirements of Section 16(a) of the Exchange Act shall not result in
short-swing profit liability under Section 16(b) (except for any transaction
exempted under alternative Exchange Act rules or intended by such Participant to
be a non-exempt transaction). Accordingly, if any provision of this Plan or any
agreement relating to an Award does not comply with such requirements of Rule
16b-3 as then applicable to any such transaction so that the Participant would
be subject to Section 16(b) liability, such provision shall be construed or
deemed amended to the extent necessary to conform to such requirements, and the
Participant shall be deemed to have consented to such construction or amendment.
(p) Headings. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
SECTION 13. Term of the Plan.
(a) Effective Date. The Plan shall be effective as of the date
of its approval by the stockholders of the Company.
(b) Expiration Date. No Award shall be granted under the Plan
after December 31, 2008; provided that the authority for grant of Restoration
Options hereunder in accordance with Section 6(e) shall continue, subject to the
provisions of Section 4, as long as any Option granted hereunder remains
outstanding. Unless otherwise expressly provided in the Plan or in an applicable
Award Agreement, any Award granted hereunder may, and the authority of the Board
or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any
such Award or to waive any conditions or rights under any such Award shall,
continue after December 31, 2008.
[As amended by the Board of Directors on August 8, 1995 and approved by the
stockholders at the Annual Meeting on September 22, 1995 and as amended by the
Board of Directors on May 17, 2001 and approved by the stockholders on June 21,
2001 and as amended by the Board of Directors on December 21, 2004 and subject
to approval by the stockholders at an annual meeting to be held on December 16,
2004]