VERINT SYSTEMS INC. STOCK INCENTIVE COMPENSATION PLAN
Amended as of December 12, 2002
(formerly Comverse Infosys, Inc. Stock Option Plan)
1. Purpose.
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The purpose of this Stock Incentive Compensation Plan (the "Plan") is to
induce key personnel, including employees, directors, independent contractors,
and other persons rendering valued services, to remain in the employ or service
of Verint Systems Inc. (the "Company"), and its present and future subsidiary
corporations, sister and parent corporations, and other affiliated companies
(each of which is hereinafter referred to as an "Affiliate"), to attract new
personnel and to encourage such personnel to secure or increase on reasonable
terms their stock ownership in the Company. The Board of Directors of the
Company (the "Board") believes that the granting of options (the "Options"),
stock appreciation rights (the "SARs"), restricted stock and deferred stock
awards (collectively, the Options, the SARs, restricted stock and deferred stock
are referred to as "Awards") under the Plan will promote continuity of
management and increased incentive and personal interest in the welfare of the
Company by those who are or may become primarily responsible for shaping and
carrying out the long range plans of the Company and securing its continued
growth and financial success. Options granted hereunder are intended to be
either (a) "incentive stock options" (which term, when used herein, shall have
the meaning ascribed thereto by the provisions of Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code")) or (b) options which are not
incentive stock options or (c) a combination thereof, as determined by the
Committee (the "Committee") (referred to in Section 5 hereof) at the time of the
grant thereof.
2. Effective Date of the Plan.
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The Plan became effective on September 10, 1996, by resolution of the
Board, subject to ratification of the Plan by the vote of the holders of a
majority of the outstanding shares of the common stock of the Company present in
person or by proxy at the 1996 Annual Meeting of Shareholders of the Company.
The Plan was amended on May 5, 1999, February 1, 2001, and by this amendment on
April 19, 2002.
3. Stock Subject to Plan.
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Five million (5,000,000) of the authorized but unissued shares of the
Company's common stock, par value $.001 per share (the "Common Stock") are
hereby reserved for issuance pursuant to Awards granted hereunder; provided,
however, that the number of shares so reserved may from time to time be reduced
to the extent that a corresponding number of issued and outstanding shares of
the Common Stock are purchased by the Company and set aside for issuance
pursuant to Awards. If any Awards expire or terminate for any reason without
having been exercised in full, the outstanding shares subject thereto shall
again be available for the purposes of the Plan.
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4. Administration.
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The Plan shall be administered by the Committee referred to in Section 5
hereof. If a Committee shall not be so established, the Board shall perform the
duties and functions ascribed herein to the Committee. Subject to the express
provisions of the Plan, the Committee shall have complete authority, in its
discretion, to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, to determine the terms and provisions of the
respective Award agreements (which need not be identical), to determine the
individuals (the "Participants") to whom and the times and the prices at which
Awards shall be granted, to establish the option periods, the number of shares
of the Common Stock to be subject to each Award, whether each Award shall be
exercisable or otherwise vest immediately or in installments and, if in
installments, the time and size thereof, whether each Option shall be an
incentive stock option or an Option which is not an incentive stock option, and
to make all other determinations necessary or advisable for the administration
of the Plan. In making such determinations, the Committee may take into account
the nature of the services rendered by the respective Participants, their
present and potential contributions to the success of the Company and the
Subsidiaries and such other factors as the Committee, in its discretion, shall
deem relevant. The Committee's determination on all of the matters referred to
in this Section 4 shall be conclusive.
5. Committee.
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The Committee shall consist of at least three individuals who may, but need
not, be members of the Board and all of whom shall be "disinterested persons"
within the meaning of Rule 16b-3(c)(2)(i) promulgated under the Securities
Exchange Act of 1934, as amended (the "34 Act"). The Committee shall be
appointed by the Board, which may at any time and from time to time remove any
member of the Committee, with or without cause, appoint additional members of
the Committee and fill vacancies, however caused, in the Committee. A majority
of the members of the Committee shall constitute a quorum. All determinations of
the Committee shall be made by a majority of its members. Any decision or
determination of the Committee reduced to writing and signed by all of the
members of the Committee shall be fully as effective as if it had been made at a
meeting duly called and held. If at any time no Committee has been appointed,
the Board shall act as the Committee.
6. Eligibility.
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A. An Option that is an incentive stock option may be granted only to
key employees of the Company or an Affiliate.
B. An Option that is not an incentive stock option and other Awards
may be granted to key employees of the Company or an Affiliate,
non-employee directors and to independent contractors rendering services to
the Company or an Affiliate.
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7. Options. Options give a Participant the right to purchase a specified number
of shares of Common Stock, Deferred Stock or Restricted Stock (as selected by
the Committee) from the Company for a specified time period at a fixed price.
Options granted to Participants who are Employees may be either incentive stock
options or Options not intended to qualify as incentive stock options. Option
granted to Participants who are not employees shall be Options not intended to
qualify as incentive stock options. The grant of Options shall be subject to the
following terms and conditions:
A. The initial per share option price of any Option which is an
incentive stock option shall not be less than the Fair Market Value,
defined below, of a share of the Common Stock on the date of grant;
provided, however, that, in the case of a Participant who owns more than
10% of the total combined voting power of the Common Stock at the time an
incentive stock option is granted to him, the initial per share option
price shall not be less than 110% of the fair market value of the Common
Stock.
B. The initial per share option price of any Option which is not an
incentive stock option shall not be less than $0.001.
C. Participants shall be granted Options for such term as the
Committee shall determine, not in excess of ten (10) years from the date of
the granting thereof; provided, however, that in the case of a Participant
who owns more than 10% of the total combined voting power of the Common
Stock at the time an Option which is an incentive stock option is granted
to him, the term with respect to such Option shall not be in excess of five
(5) years from the date of the granting thereof.
D. The aggregate fair market value (determined at the date of grant)
of the shares of the Common Stock for which any Participant may be granted
incentive stock options which are exercisable for the first time in any
calendar year (whether under the terms of the Plan or any other stock
option plan of the Company) shall not exceed $100,000. To the extent that
any Option which is intended to be an incentive stock option fails to
satisfy the requirements of this Section, the Option shall be treated as an
Option which is not an incentive stock option. This Section shall be
applied by taking Options into account in the order in which they are
granted.
E. For the purposes hereof, the "Fair Market Value" of a share of the
Common Stock on any date shall be equal to (i) in the case of Options
granted effective upon completion of an initial public offering of the
Common Stock, the initial public offering price of such Common Stock, and
(ii) in all other cases, the closing sale price of a share of the Common
Stock as published by a national securities exchange on which the shares of
the Common Stock are traded on such date or, if there is no sale of the
Common Stock on such date, the average of the bid and asked prices on such
exchange at the close of trading on such date or, if the shares of the
Common Stock are not listed on a national securities exchange on such date,
the closing price in the over the counter market, or if the Common Stock is
not traded on a national securities exchange or the over the counter
market, the fair market value of a share of the Common Stock on such date
as shall be determined in good faith by the Committee in compliance with
Section 422(b)(4) of the Code and the applicable regulations promulgated
thereunder.
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F. Options granted to employees of and consultants to the Company or
any Affiliate shall become exercisable at such times and in such
installments as the Committee shall determine at the time of the grant
thereof.
G. Except as hereinbefore otherwise set forth, or as set forth in the
applicable Award agreement, an Option may be exercised either in whole or
in part at any time or from time to time.
H. An Option may be exercised only by a written notice of intent to
exercise such Option with respect to a specified number of shares of the
Common Stock and payment to the Company of the amount of the option price
for the number of shares of the Common Stock so specified (such amount
being the "Exercise Price") in accordance with this Section 7.H. The
Exercise Price may be paid in cash or, in the discretion of the Committee,
(i) by delivery of shares of Common Stock then owned by the Participant,
(ii) by the withholding of shares of Common Stock for which an Option is
exercisable, (iii) to the extent permitted by law, by delivering to the
Company an executed promissory note (or such other form of indebtedness) on
such terms and conditions as the Committee shall determine in its sole
discretion, or (iv) by a combination of these methods. In addition, at the
discretion of the Committee, payment may also be made by delivering a
properly executed exercise notice to the Company together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds to pay the Exercise Price. To facilitate
the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms and, if necessary to effectuate
such agreements, the Committee may waive the delivery of any notices or
instructions required to be delivered by a Participant under this Section;
provided that such Participant complies with the procedures established by
any such brokerage firm for the exercise of Options pursuant to any such
agreement. The Committee may prescribe any other method of paying the
Exercise Price that it determines to be consistent with applicable law and
the purposes of the Plan, including, without limitation, in lieu of the
exercise of an Option by delivery of shares of Common Stock then owned by a
Participant, providing the Company with a notarized statement attesting to
the number of shares owned, where, upon verification by the Company, the
Company would issue to the Participant only the number of incremental
shares to which the Participant is entitled upon exercise of the Option. In
determining which methods a Participant may utilize to pay the Exercise
Price, the Committee may consider such factors as it deems appropriate. If
the Committee determines that all or any portion of the payment of the
Exercise Price may be made in kind by the delivery of shares of the Common
Stock having a Fair Market Value (as determined in the manner set forth in
paragraph E of Section 7 hereof) on the date of delivery equal to the
portion of the Exercise Price so paid; any such determination shall not
result in other than "fixed" accounting for purposes of the Company's
financial accounting."
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I. No Option intended to qualify as an incentive stock option shall be
transferable otherwise than by will or the laws of descent and distribution
and, during the lifetime of the Participant, shall be exercisable only by
the Participant. Upon the death of a Participant, the person to whom the
rights have passed by will or by the laws of descent and distribution may
exercise an Option intended to qualify as an incentive stock option only in
accordance with this Section 7.
8. Deferred Stock.
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An Award of Deferred Stock is an agreement by the Company to deliver to the
recipient a specified number of shares of Common Stock at the end of a specified
deferral period or periods. Such an Award shall be subject to the following
terms and conditions:
A. Deferred Stock Awards shall be evidenced by Deferred Stock
agreements. Such agreements shall conform to the requirements of the Plan
and may contain such other provisions as the Committee shall deem
advisable.
B. Upon determination of the number of shares of Deferred Stock to be
awarded to a Participant, the Committee shall direct that the same be
credited to the Participant's account on the books of the Company but that
issuance and delivery of the same shall be deferred until the date or dates
provided in Section 8(E) hereof. Prior to issuance and delivery hereunder
the Participant shall have no rights as a stockholder with respect to any
shares of Deferred Stock credited to the Participant's account.
C. Amounts equal to any dividends declared during the Deferral Period
with respect to the number of shares covered by a Deferred Stock Award will
be paid to the Participant currently, or deferred and deemed to be
reinvested in additional Deferred Stock, or otherwise reinvested on such
terms as are determined at the time of the Award by the Committee, in its
sole discretion, and specified in the Deferred Stock agreement.
D. The Committee may condition the grant of an Award of Deferred Stock
or the expiration of the Deferral Period upon the Participant's achievement
of one or more performance goal(s) specified in the Deferred Stock
agreement. If the Participant fails to achieve the specified performance
goal(s), either the Committee shall not grant the Deferred Stock Award to
the Participant or the Participant shall forfeit the Award and no Common
Stock shall be transferred to him pursuant to the Deferred Stock Award.
Unless otherwise determined by the Committee at the time of an Award,
dividends paid during the Deferral Period on Deferred Stock subject to a
performance goal shall be reinvested in additional Deferred Stock and the
lapse of the Deferral Period for such Deferred Stock shall be subject to
the performance goal(s) previously established by the Committee.
E. The Deferred Stock agreement shall specify the duration of the
Deferral Period taking into account termination of employment on account of
death, disability, retirement or other cause. The Deferral Period may
consist of one or more installments. At the end of the Deferral Period or
any installment thereof the shares of Deferred Stock applicable to such
installment credited to the account of a Participant shall be issued and
delivered to the Participant (or, where appropriate, the Participant's
legal representative) in accordance with the terms of the Deferred Stock
agreement. The Committee may, in its sole discretion, accelerate the
delivery of all or any part of a Deferred Stock Award or waive the deferral
limitations for all or any part of a Deferred Stock Award.
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9. Restricted Stock.
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A. An Award of Restricted Stock is a grant by the Company of a
specified number of shares of Common Stock to the Participant, which shares
are subject to forfeiture upon the happening of specified events. Such an
Award shall be subject to the following terms and conditions:
B. Restricted Stock shall be evidenced by Restricted Stock agreements.
Such agreements shall conform to the requirements of the Plan and may
contain such other provisions as the Committee shall deem advisable.
C. Upon determination of the number of shares of Restricted Stock to
be granted to the Participant, the Committee shall direct that a
certificate or certificates representing the number of shares of Common
Stock be issued to the Participant with the Participant designated as the
registered owner. The certificate(s) representing such shares shall be
legended as to sale, transfer, assignment, pledge or other encumbrances
during the restriction period and deposited by the Participant, together
with a stock power endorsed in blank, with the Company, to be held in
escrow during the restriction period.
D. Unless otherwise determined by the Committee at the time of an
Award, during the restriction period the Participant shall have the right
to receive dividends from and to vote the shares of Restricted Stock.
E. The Committee may condition the grant of an Award of Restricted
Stock or the expiration of the restriction period upon the Participant's
achievement of one or more performance goal(s) specified in the Restricted
Stock Agreement. If the Employee fails to achieve the specified performance
goal(s), either the Committee shall not grant the Restricted Stock to the
Participant or the Participant shall forfeit the Award of Restricted Stock
and the Common Stock shall be forfeited to the Company. K. The Restricted
Stock agreement shall specify the duration of the restriction period and
the performance, employment or other conditions (including termination of
employment on account of death, disability, retirement or other cause)
under which the Restricted Stock may be forfeited to the Company. At the
end of the restriction period the restrictions imposed hereunder shall
lapse with respect to the number of shares of Restricted Stock as
determined by the Committee, and the legend shall be removed and such
number of shares delivered to the Participant (or, where appropriate, the
Participant's legal representative). The Committee may, in its sole
discretion, modify or accelerate the vesting and delivery of shares of
Restricted Stock.
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10. Stock Appreciation Rights.
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SARs are rights to receive a payment in cash, Common Stock, Restricted
Stock or Deferred Stock (as selected by the Committee) equal to the increase in
the Fair Market Value of a specified number of shares of Common Stock from the
date of grant of the SAR to the date of exercise. The grant of SARs shall be
subject to the following terms and conditions:
A. SARs shall be evidenced by SAR agreements. Such agreements shall
conform to the requirements of the Plan and may contain such other
provisions as the committee shall deem advisable. A SAR may be granted in
tandem with all or a portion of a related Option under the Plan ("Tandem
SAR"), or may be granted separately ("Freestanding SAR"). A Tandem SAR may
be granted either at the time of the grant of the Option or at any time
thereafter during the term of the Option and shall be exercisable only to
the extent that the related Option is exercisable. In no event shall any
SAR be exercisable within the first six (6) months of its grant.
B. The base price of a Tandem SAR shall be the option price under the
related Option. The base price of a Freestanding SAR shall be not less than
100% of the Fair Market Value of the Common Stock, as determined by the
Committee, on the date of grant of the Freestanding SAR.
C. A SAR shall entitle the recipient to receive a payment equal to the
excess of the Fair Market Value of the shares of Common Stock covered by
the SAR on the date of exercise over the base price of the SAR. Such
payment may be in cash, shares of Common Stock, shares of Deferred Stock,
shares of Restricted Stock or any combination, as the Committee shall
determine. Upon exercise of a Tandem SAR as to some or all of the shares of
Common Stock covered by the grant, the related Option shall be canceled
automatically to the extent of the number of shares of Common Stock covered
by such exercise, and such shares shall no longer be available for purchase
under the Option pursuant to Section 7. Conversely, if the related Option
is exercised as to some or all of the shares of Common Stock covered by the
Award, the related Tandem SAR, if any, shall be canceled automatically to
the extent of the number of shares of Common Stock covered by the Option
exercise.
D. SARs shall be subject to the same terms and conditions applicable
to Options as stated in Section 7 above.
11. Transferability of Awards.
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Except as provided above, Awards may not be pledged, assigned or
transferred for any reason during the Participant's lifetime, and any attempt to
do so shall be void and the relevant Award shall be forfeited. The Committee may
grant Awards (except Incentive Stock Options) that are transferable by the
Participant during his or her lifetime, but such Awards shall be transferable
only to the extent specifically provided in the agreement entered into with the
Participant. The transferee of the Participant shall, in all cases, be subject
to the provisions of the agreement between the Company and the Participant.
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12. Termination of Employment.
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A. Except as otherwise determined by the Committee, in the event a
Participant leaves the employ or service of the Company or any Affiliate
for any reason other than death, retirement or disability (as such term is
defined in Section 22(e) of the Code), whether voluntarily or otherwise,
each Award theretofore granted to him which shall not have expired or
otherwise been canceled shall, to the extent it is exercisable on the date
of such termination of employment or service and to the extent it shall not
have theretofore been exercised or become unexercisable, terminate upon the
earlier to occur of (i) the expiration of a period of ninety (90) days
after such termination of employment or service or (ii) the date specified
in said Award.
B. In the event a Participant's employment or service with the Company
or any Affiliate terminates by reason of his death, each Award theretofore
granted to him which shall not have expired or otherwise been canceled
shall, to the extent it is exercisable on the date of such Participant's
death and to the extent it shall not have theretofore been exercised or
become unexercisable, terminate upon the earlier to occur of (i) the
expiration of a period of one year after such Participant's death or (ii)
the date specified in said Award.
C. In the event a Participant's employment or service with the Company
or any Affiliate terminates by reason of his retirement, whether
voluntarily or as may be required by any pension plan, or by reason of his
disability (as such term is defined in Section 22(e) of the Code), each
Award theretofore granted to him which shall not have expired or otherwise
been canceled shall become immediately exercisable in full and shall, to
the extent it shall not have theretofore been exercised or become
unexercisable, terminate upon the earlier to occur of (i) the expiration of
ninety (90) days after the date of such Participant's retirement or
disability or (ii) the date specified in said Award.
D. The Committee or the Board may in its discretion extend the period
during which an Option held by any employee of or consultant to the Company
or any Affiliate may be exercised to such period, not to exceed three years
following the termination of a Participant's employment or service with the
Company or any Affiliate, as the Committee or the Board may determine to be
appropriate in any particular instance.
13. Adjustments Upon a Change in Control
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A. Except as otherwise provided in an applicable agreement, upon the
occurrence of a Change in Control (other than a Hostile Change of Control),
the Committee may elect to provide that all outstanding Options and Stock
Appreciation Rights shall immediately vest and become exercisable, each
Deferral Period and restriction period shall immediately lapse or all
shares of Deferred Stock subject to outstanding Awards shall be issued and
delivered to the Participant. In the event of a Hostile Change in Control,
each of the foregoing actions shall occur automatically upon the occurrence
of such Hostile Change in Control. At any time before a Change in Control,
the Committee may, without the consent of any Participant, (i) require the
entity effecting the Change in Control or a parent or subsidiary of such
entity to assume each outstanding Award or substitute an equivalent option
therefor or (ii) terminate and cancel all outstanding Awards upon the
Change in Control and pay the Participant cash equal to the product of (x)
the difference between the Fair Market Value of Common Stock on the date of
the Change in Control and the exercise price of such Option and (y) the
number of shares of Common Stock subject to such Award. For the purposes of
this Section, an Award shall be considered assumed if, following the
merger, the award confers the right to purchase, for each share of Common
Stock subject to the Award immediately prior to the merger, the
consideration (whether stock, cash, or other securities or property)
received in the merger by holders of Common Stock for each share held on
the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or its parent, the Committee may, with the consent of
the successor corporation, provide for the consideration to be received
upon the exercise of the Award, for each share of Common Stock subject to
the Award, to be solely common stock of the successor corporation or its
parent equal in fair market value to the per share consideration received
by holders of Common Stock in the merger.
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B. "Change in Control" means (i) the Board (or, if approval of the
Board is not required as a matter of law, the shareholders of the Company)
shall approve (a) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to which
shares of Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of Common
Stock immediately prior to the merger have the same proportionate ownership
of common stock of the surviving corporation immediately after the merger,
or (b) any sale, lease, exchange or other transfer (on one transaction or a
series of related transactions) of all, or substantially all, the assets of
the Company or (c) the adoption of any plan or proposal for the liquidation
or dissolution of the Company; (ii) any person (as such term is defined in
Section 13(d) of the 1934 Act), corporation or other entity other than the
Company shall make a tender offer or exchange offer to acquire any Common
Stock (or securities convertible into Common Stock) for cash, securities or
any other consideration, provided that (a) at least a portion of such
securities sought pursuant to the offer in question is acquired and (b)
after consummation of such offer, the person, corporation or other entity
in question is the "beneficial owner" (as such term is defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 20% or more of the
outstanding shares of Common Stock (calculated as provided in paragraph (d)
of such Rule 13d-3 in the case of rights to acquire Common Stock); (iii)
during any period of two consecutive years, individuals who at the
beginning of such period constituted the entire Board ceased for any reason
to constitute a majority thereof unless the election, or the nomination for
election by the Company's stockholders, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who
were directors at the beginning of the period; or (iv) the occurrence of
any other event the Committee determines shall constitute a "Change in
Control" hereunder.
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C. "Hostile Change in Control" means any Change in Control described
in Section 13(B) above that is not approved or recommended by the Board.
14. Adjustment of Number of Shares.
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A. In the event that a dividend shall be declared upon the Common
Stock payable in shares of the Common Stock, the number of shares of the
Common Stock then subject to any Award and the number of shares of the
Common Stock reserved for issuance in accordance with the provisions of the
Plan but not yet covered by an Award shall be adjusted by adding to each
share the number of shares which would be distributable thereon if such
share had been outstanding on the date fixed for determining the
shareholders entitled to receive such stock dividend. In the event that the
outstanding shares of the Common Stock shall be changed into or exchanged
for a different number or kind of shares of stock or other securities of
the Company or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, sale of assets,
merger or consolidation, then, there shall be substituted for each share of
the Common Stock then subject to any Award and for each share of the Common
Stock reserved for issuance in accordance with the provisions of the Plan
but not yet covered by an Award, the number and kind of shares of stock or
other securities into which each outstanding share of the Common Stock
shall be so changed or for which each such share shall be exchanged;
provided, however, that, in the event of a merger or consolidation in which
the Company is not the surviving corporation or of a sale by the Company of
all or substantially all of its assets to a corporation not controlled by
the Company (within the meaning of Section 1563(a)(1) of the Code)
immediately prior to such transaction, the Board determines, in its
discretion, that such change or exchange cannot be effected or would be
inappropriate, then, each Option theretofore granted to a Participant which
shall not have expired or otherwise been canceled shall become immediately
exercisable in full and shall terminate upon the later to occur of (i) the
expiration of thirty (30) days following notice to the Participant by the
Company of such merger, consolidation or sale, or (ii) the date of such
merger, consolidation or sale.
B. In the event that there shall be any change, other than as
specified in this Section 14, in the number or kind of outstanding shares
of the Common Stock, or of any stock or other securities into which the
Common Stock shall have been changed, or for which it shall have been
exchanged, then, if the Committee shall, in its sole discretion, determine
that such change equitably requires an adjustment in the number or kind of
shares then subject to any Award and the number or kind of shares reserved
for issuance in accordance with the provisions of the Plan but not yet
covered by an Award, such adjustment shall be made by the Committee and
shall be effective and binding for all purposes of the Plan and of each
Award agreement entered into in accordance with the provisions of the Plan.
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C. In the case of any substitution or adjustment in accordance with
the provisions of this Section 14, the option price in each stock option
agreement for each share covered thereby prior to such substitution or
adjustment shall be the option price for all shares of stock or other
securities which shall have been substituted for such share or to which
such share shall have been adjusted in accordance with the provisions of
this Section 14. No adjustment or substitution provided for in this Section
14 shall require the Company to sell a fractional share under any stock
option agreement.
15. Purchase for Investment and Waivers.
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Unless the shares to be issued upon the exercise of an Option or other
Award by a Participant shall be registered prior to the issuance thereof under
the Securities Act of 1933, as amended, such Participant shall, as a condition
of the Company's obligation to issue such shares, be required to give a
representation in writing that he is acquiring such shares for his own account
as an investment and not with a view to, or for sale in connection with, the
distribution of any thereof.
16. Amendment of Plan.
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The Board may at any time make such modifications of the Plan as it shall
deem advisable; provided, however, that (i) the provisions hereof relating to
the receipt of Options by directors of the Company who are not employees of the
Company or any Affiliate, the exercise price and terms and conditions of the
exercise thereof may not be amended more than once in any period of six (6)
months, except as may be required to comply with changes in the Code or other
applicable law, and (ii) the Board may not without further approval of
shareholders representing a majority of the voting power present in person or by
proxy at any special or annual meeting of shareholders increase the number of
shares of the Common Stock as to which Options may be granted under the Plan (as
adjusted in accordance with the provisions of Section 14 hereof), or change the
class of persons eligible to participate in the Plan or change the manner of
determining the option prices which would result in a decrease in the price of
Options or other Awards, or extend the period during which Awards may be granted
or exercised. Except as otherwise provided in Section 17 hereof, no termination
or amendment of the Plan may, without the consent of the Participant to whom any
Option shall theretofore have been granted, adversely affect the rights of such
Participant under such Option.
17. Expiration and Termination of the Plan.
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The Plan shall terminate on March 10, 2012 or at such earlier time as the
Board may determine. Awards may be granted under the Plan at any time and from
time to time prior to its termination. Any Awards outstanding under the Plan at
the time of the termination of the Plan shall remain in effect until such Awards
shall have been exercised or shall have expired in accordance with its terms.
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18. Awards Granted in Connection with Acquisitions.
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In the event that the Committee determines that, in connection with the
acquisition by the Company of another corporation which shall become an
Affiliate of the Company (such corporation being hereinafter referred to as an
"Acquired Affiliate"), Awards may be granted hereunder to key employees of an
Acquired Affiliate in exchange for then outstanding options to purchase
securities of the Acquired Affiliate, such Awards may be granted at such option
prices, may be exercisable immediately or at any time or times either in whole
or in part, may be granted without the requirement that the Participant enter
into an agreement with the Company that he will remain in the employ or service
of the Company or an Affiliate for any required period of time and may contain
such other provisions not inconsistent with the Plan, or the requirement set
forth in Section 16 hereof that certain amendments to the Plan must be approved
by the shareholders of the Company, as the Committee, in its discretion, shall
deem appropriate at the time of the granting of such Awards.
19. Withholding.
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A. In connection with the transfer of shares of Common Stock as a
result of the exercise or vesting of an Award or upon any other event that
would subject the Participant to taxation, the Company shall have the right
to require the Participant to pay an amount in cash or to retain or sell
without notice, or to demand surrender of, shares of Common Stock in value
sufficient to cover any tax, including any Federal, state or local income
tax, required by any governmental entity to be withheld or otherwise
deducted and paid with respect to such transfer ("Withholding Tax"), and to
make payment (or to reimburse itself for payment made) to the appropriate
taxing authority of an amount in cash equal to the amount of such
Withholding Tax, remitting any balance to the employee. For purposes of
this Section 19, the value of shares of Common Stock so retained or
surrendered shall be the Fair Market Value on the date that the amount of
the Withholding Tax is to be determined (the "Tax Date"), and the value of
shares of Common Stock so sold shall be the actual net sale price per share
(after deduction of commissions) received by the Company.
B. Notwithstanding the foregoing, the Participant shall be entitled to
satisfy the obligation to pay any Withholding Tax, in whole or in part, by
providing the Company with funds sufficient to enable the Company to pay
such Withholding Tax or by requiring the Company to retain or to accept
upon delivery thereof shares of Common Stock (other than unvested
Restricted Stock) sufficient in value (determined in accordance with the
last sentence of the preceding paragraph) to cover the amount of such
Withholding Tax. Each election by a Participant to have shares retained or
to deliver shares for this purpose shall be subject to the following
restrictions: (i) the election must be in writing and made on or prior to
the Tax Date; and (ii) the election shall be subject to the disapproval of
the Committee.
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C. In the event of the death of a Participant, an additional condition
of exercising any Option or other Award shall be the delivery to the
Company of such tax waivers and other documents as the Committee shall
determine.
20. General.
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A. For purposes of this Plan, transfer of employment between the
Company and its Affiliates shall not be deemed termination of employment.
B. With respect to Holders subject to Section 16 of the 1934 Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Committee.
C. Without amending the Plan, Awards may be granted to Participants
who are foreign nationals or employed outside the United States or both, on
such terms and conditions different from those specified in the Plan as
may, in the judgment of the Committee, be necessary or desirable to further
the purpose of the Plan.
D. To the extent that Federal laws (such as the 1934 Act, or the Code)
do not otherwise control, the Plan and all determinations made and actions
taken pursuant hereto shall be governed by the corporate law of the State
of Delaware and construed accordingly. The Plan is not intended to be an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").