Exhibit 10.1
AMERICAN STATES WATER COMPANY
2003 NON-EMPLOYEE DIRECTORS STOCK PLAN
Amended and Restated Effective as of
January 27, 2009
TABLE OF CONTENTS
Page
SECTION 1. GENERAL DESCRIPTION........................................................................1
SECTION 2. DEFINITIONS................................................................................1
SECTION 3. EFFECTIVE DATE; DURATION...................................................................3
SECTION 4. STOCK OPTION AWARDS........................................................................3
4.1 Annual Award...................................................................................3
4.2 Maximum Number of Shares. .....................................................................4
4.3 Option Price. .................................................................................4
4.4 Option Period and Exercisability. .............................................................4
4.5 Termination of Directorship. ..................................................................4
4.6 Option Agreements. ............................................................................5
4.7 Dividend Equivalent Credits to Option Dividend Equivalent Accounts. ...........................5
SECTION 5. STOCK UNITS AWARDS.........................................................................5
5.1 2003 Awards....................................................................................5
5.2 Annual Award...................................................................................6
5.3 Crediting of Dividend Equivalents to Stock Unit Accounts.......................................6
5.4 Units and Other Amounts Vest Immediately.......................................................6
5.5 Distribution of Benefits.......................................................................6
SECTION 6. CHANGES IN CAPITAL STRUCTURE...............................................................7
6.1 Adjustments 7
6.2 Corporate Transactions-Assumptions or Terminations of Awards 8
6.3 Option Termination 8
SECTION 7. SHARES SUBJECT TO THE PLAN; SHARES LIMITS
7.1 Shares Available for Issuance. ................................................................9
7.2 Share Limits; Cut Backs. ......................................................................9
7.3 Fractional Shares; Minimum Issue. .............................................................9
SECTION 8. ADMINISTRATION.............................................................................9
8.1 The Administrator..............................................................................9
8.2 Committee Action...............................................................................9
8.3 Rights and Duties; Delegation and Reliance; Decisions Binding.................................10
SECTION 9. AMENDMENT AND TERMINATION; STOCKHOLDER APPROVAL...........................................10
9.1 Amendment and Termination.....................................................................10
9.2 Stockholder Approval..........................................................................11
SECTION 10. MISCELLANEOUS.............................................................................11
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TABLE OF CONTENTS
(continued)
Page
10.1 Limitation on Participants' Rights............................................................11
10.2 Beneficiaries.................................................................................11
10.3 Non-Transferability...........................................................................12
10.4 Obligations Binding Upon Successors...........................................................12
10.5 Governing Law; Severability...................................................................12
10.6 Compliance with Laws..........................................................................12
10.7 Limitations on Rights Associated with Units...................................................13
10.8 Plan Construction.............................................................................13
10.9 Headings Not Part of Plan.....................................................................13
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AMERICAN STATES WATER COMPANY
2003 NON-EMPLOYEE DIRECTORS STOCK PLAN
Section 1. General Description
The American States Water Company 2003 Non-Employee Directors Stock
Plan (the "Plan") provides for grants of stock units and stock options to
non-employee directors. The purposes of the Plan are (a) to attract, motivate
and retain eligible directors of the Company by providing to them supplemental
stock-based compensation and (b) to encourage eligible directors to increase
their stock ownership in the Company. The Plan is amended and restated in its
entirety effective as of January 27, 2009.
Section 2. Definitions
Whenever the following terms are used in this Plan they shall have the
meaning specified below unless the context clearly indicates to the contrary:
"Account or Accounts" means the Participant's Stock Unit Account or
Option Dividend Equivalent Account, as the context requires.
"Award Units" means Stock Units credited pursuant to Sections 5.1 and
5.2 and any Dividend Equivalents credited thereon pursuant to Section 5.3.
"Board" means the Board of Directors of the Company.
"Cause" has the same meaning as determined under Section 304 of the
California Corporations Code or any successor thereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock of the Company, subject to
adjustment pursuant to Section 6.
"Committee" means the Board or a Committee of the Board acting under
delegated authority from the Board.
"Company" means American States Water Company, a California
corporation, and its successors and assigns.
"Dividend Equivalent" means (a), with respect to a Participant's Option
Dividend Equivalent Account, the amount of cash dividends or other cash
distributions paid by the Company on that number of shares of Common Stock that
is equal to the number of shares subject to each outstanding Option held by the
Participant as of the applicable measurement date for the dividend or other
distribution, which amount shall be allocated as Stock Units credited to the
Participant's Option Dividend Equivalent Account pursuant to Section 4.7; and
(b), with respect to a Participant's Stock Unit Account, the amount of cash
dividends or other cash distributions paid by the Company on that number of
shares of Common Stock that is equal to the number of Stock Units then credited
to the Participant's Stock Unit Account as of the applicable measurement date
for the dividend or other distribution, which amount shall be allocated as
additional Stock Units to the Participant's Stock Unit Account pursuant to
Section 5.3.
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"Distribution Subaccount" means a subaccount of a Non-Employee
Director's Option Dividend Equivalent Account established to separately account
for Dividend Equivalents credited in the form of Stock Units with respect to
each outstanding Option.
"Effective Date" means May 20, 2003, subject to shareholder approval at
the 2004 annual meeting of shareholders.
"Eligible Non-Employee Director" means each Non-Employee Director who
first becomes a Non-Employee Director on or after the date of the 2003 Annual
Meeting and each other Non-Employee Director who notifies the Company in writing
of his or her election to waive all benefits under the Retirement Plan in
exchange for participation in the Stock Unit Award feature under Section 5.2(a)
of this Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Fair Market Value" on any date means (1) if the stock is listed or
admitted to trade on a national securities exchange, the closing price of the
stock on the Composite Tape, as published in the Western Edition of The Wall
Street Journal, of the principal national securities exchange on which the stock
is so listed or admitted to trade, on such date, or, if there is no trading of
the stock on such date, then the closing price of the stock as quoted on such
Composite Tape on the next preceding date on which there was trading in such
shares; (2) if the stock is not listed or admitted to trade on a national
securities exchange, the last price for the stock on such date, as furnished by
the National Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National Market Reporting System or a similar organization if the NASD is no
longer reporting such information; (3) if the stock is not listed or admitted to
trade on a national securities exchange and is not reported on the National
Market Reporting System, the mean between the bid and asked price for the stock
on such date, as furnished by the NASD or a similar organization; or (4) if the
stock is not listed or admitted to trade on a national securities exchange, is
not reported on the National Market Reporting System and if bid and asked prices
for the stock are not furnished by the NASD or a similar organization, the value
as established by the Committee at such time for purposes of this Plan.
"Grant Date" means the date on which an Option is granted pursuant to
Section 4.
"Non-Employee Director" means a member of the Board who is not an
officer or employee of the Company or a subsidiary.
"Option or Nonqualified Stock Option" means an option to purchase a
number of shares of Common Stock granted to Non-Employee Directors pursuant to
Section 4.1.
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"Option Dividend Equivalent Account" means the bookkeeping account
maintained by the Company on behalf of each Participant that is credited with
Dividend Equivalents in accordance with Section 4.7, and includes each
Distribution Subaccount.
"Participant" means any person who has been granted an Option or Award
Units under this Plan.
"Plan" means the American States Water Company 2003 Non-Employee
Directors Stock Plan.
"Retirement" means a retirement or resignation by a Non-Employee
Director who either (a) has attained age 65 and has provided at least five years
service as a member of the Board or (b) is required to retire from service on
the Board and not seek reelection or nomination pursuant to the Company's
director retirement policy.
"Retirement Plan" means the Company's Amended and Restated Retirement
Plan for Non-Employee Directors of American States Water Company.
"Securities Act" means the Securities Act of 1933, as amended.
"Stock" means a share of Common Stock.
"Stock Unit or Unit" means a non-voting unit of measurement which is
deemed for bookkeeping and payment purposes to represent one outstanding share
of Common Stock of the Company solely for purposes of determining benefits under
this Plan, established pursuant to the grant of Award Units under Sections 5.1
and 5.2, or in respect of Dividend Equivalents under Section 4.7 or Section 5.3,
and payable solely in a share of Stock, on a one-for-one basis.
"Stock Unit Account" means the bookkeeping account maintained by the
Company on behalf of each Participant that is credited with Award Units and
Dividend Equivalents in accordance with Section 5.
"2003 Annual Meeting" means the Company's 2003 annual meeting of
stockholders.
Section 3. Effective Date; Duration
The effective date of the Plan is May 20, 2003, subject to approval of
the Company's stockholders at their 2004 annual meeting. No awards may be
granted under the Plan after May 19, 2013. The Plan shall continue in effect
until all matters relating to Options, Stock Units and the administration of the
Plan have been completed and all payments of benefits have been made.
Section 4. Stock Option Awards
4.1 Annual Award.
(a) On the date of each annual meeting of stockholders in the
years 2003 through 2006, each Non-Employee Director in office
immediately following the annual meeting shall be granted, without
further action by the Committee, a Nonqualified Stock Option to
purchase shares of Common Stock. Each Non-Qualified Stock Option
granted pursuant to this Section 4.1(a) in 2003 and 2004 shall be an
option to purchase 1000 shares and each Nonqualified Stock Option
granted pursuant to this Section 4.1(a) in 2005 and 2006 shall be an
option to purchase 3000 shares.
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(b) If any person who was not a Non-Employee Director at the
immediately preceding annual meeting of stockholders at which a grant
is made pursuant to Section 4.1(a) becomes a Non-Employee Director
within six months following such annual meeting, then such Non-Employee
Director shall be granted, without any further action by the Committee,
a Nonqualified Stock Option to purchase that number of shares of Common
Stock granted to Non-Employee Directors at the immediately preceding
annual meeting, the Grant Date of which shall be the date the person
takes office; provided, however, that no such grant shall be made after
May 1, 2007.
4.2 Maximum Number of Shares. Annual grants that would otherwise exceed
the maximum number of shares allotted for issuance under the Plan contained in
Section 7.1 shall be prorated within such limitation pursuant to Section 7.2.
4.3 Option Price. The exercise price per share of the Stock covered by
each Option granted pursuant to this Section 4 shall be 100% of the Fair Market
Value of the Stock on the Grant Date. The exercise price of any Option granted
under this Section 4 shall be paid in full at the time of each purchase in cash,
by electronic funds transfer, or by check or in shares of Stock valued at their
Fair Market Value on the date the Participant exercises the Option, or partly in
such shares and partly in cash, provided that any such shares used in payment
that were previously acquired by the Participant from the Company upon exercise
of an Option or otherwise shall have been owned by the Participant at least six
months prior to the date of exercise. The Company shall not be obligated to
deliver shares of Stock unless and until it receives full payment of the
exercise price therefor and any related conditions of the Option have been
satisfied.
4.4 Option Period and Exercisability. Each Option granted under this
Section 4 and all rights or obligations thereunder shall expire 10 years after
the Grant Date and shall be subject to earlier termination as provided below.
Each Option shall be fully exercisable upon the Grant Date.
4.5 Termination of Directorship.
(a) If a Non-Employee Director's services as a member of the
Board terminate for any reason other than Cause, then any Option
granted pursuant to this Section 4 held by such Participant shall
remain exercisable for the period of time set forth in the option
agreement evidencing his or her Option.
(b) If a Non-Employee Director's services as a member of the
Board terminate for Cause, all unexercised Options shall terminate on
the date of termination of services.
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4.6 Option Agreements. Each Option granted to a Non-Employee Director
shall be evidenced by an agreement in a form approved by the Committee and shall
contain the terms and conditions consistent with the Plan as approved by the
Committee relating to the Option.
4.7 Dividend Equivalent Credits to Option Dividend Equivalent Accounts.
(a) As of each dividend record date from the date of grant of
an Option to the earlier of (1) the third anniversary of the date of
grant of such Option or (2) the Participant's termination of service
for Cause, regardless of whether the Option has been partially or fully
exercised, a Participant's Option Dividend Equivalent Account shall be
credited with Stock Units in an amount equal to the Dividend
Equivalents representing dividends payable as of such dividend record
date on a number of shares equal to the aggregate number of shares
originally subject to such Option divided by the then Fair Market Value
of a share of Common Stock on the dividend record date. The Dividend
Equivalents attributable to each Option granted to a Participant shall
be credited to a separate Distribution Subaccount established for such
Participant.
(b) Stock Units credited to the Participant's Distribution
Subaccount with respect to an Option shall become payable to the
Participant upon the earlier to occur of (1) the date of the
Non-Employee Director's termination of service as a director of the
Company or (2) three years from the Grant Date.
(c) Stock Units credited to a Non-Employee Director's Option
Dividend Equivalent Account shall at all times be fully vested and
non-forfeitable and shall be distributed in an equivalent whole number
of shares of Stock. Any fractional share interests shall be accumulated
and paid in cash on the distribution date.
Section 5. Stock Units Awards
5.1 2003 Awards
(a) Continuing Eligible Non-Employee Directors. As of the date
of the 2003 Annual Meeting, the Stock Unit Account of each person who
is continuing in office as an Eligible Non-Employee Director
immediately following such meeting shall be credited with a number of
Stock Units equal to (1) $15,000, multiplied by (2) the lesser of (i)
the Non-Employee Director's years of prior Board service or (ii) 10,
divided by (3) the Fair Market Value of a share of Common Stock on the
last trading date prior to the 2003 Annual Meeting.
(b) New Non-Employee Directors. As of the date of the 2003
Annual Meeting, the Stock Unit Account of each person who first becomes
a Non-Employee Director at the 2003 Annual Meeting shall be credited
with a number of Stock Units equal to (1) the amount of the
then-current annual retainer divided by (2) the Fair Market Value of a
share of Common Stock on the last trading date prior to the 2003 Annual
Meeting.
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5.2 Annual Award.
(a) As of the date of each annual meeting of stockholders
commencing in 2009, the Stock Unit Account of each Eligible
Non-Employee Director in office immediately following the annual
meeting shall be credited with a number of Stock Units equal to (1) two
times the amount of the then-current annual retainer payable by the
Company for services rendered as a director for such year, divided by
(2) the Fair Market Value of Common Stock on the last trading date
prior to such annual meeting.
(b) Annual grants that would otherwise exceed the maximum
number of shares allotted for issuance under the Plan contained in
Section 7.1 shall be prorated within such limitation pursuant to
Section 7.2.
5.3 Crediting of Dividend Equivalents to Stock Unit Accounts.
(a) As of each dividend record date, an Eligible Non-Employee
Director's Stock Unit Account shall be credited with additional Stock
Units in an amount equal to the Dividend Equivalents representing
dividends payable as of such dividend record date on a number of shares
equal to the aggregate number of Units credited to the Participant's
Stock Unit Account divided by the Fair Market Value of a share of
Common Stock on the dividend record date.
(b) Stock Units credited in respect of Dividend Equivalents
shall be paid in Stock at the same time and the same manner as the
Stock Units to which they relate.
5.4 Units and Other Amounts Vest Immediately. All Units or other
amounts credited to an Eligible Non-Employee Director's Stock Unit Account shall
be at all times fully vested and not subject to a risk of forfeiture.
5.5 Distribution of Benefits.
(a) Notwithstanding anything herein to the contrary, the
portion of a Non-Employee Director's Stock Unit Account attributable to
Stock Units granted pursuant to Section 5.1 or 5.2(a) (and any Dividend
Equivalents attributable to such Stock Units) shall be distributed in
accordance with this Section 5.5(a).
(1) Commencement of Benefits Distribution. Subject to
the terms of this Section 5.5(a) and Section 6, each Eligible
Non-Employee Director shall be entitled to receive a
distribution of his or her Stock Unit Account in the form of
shares of Stock upon his or her termination of service as a
director of the Company.
(2) Manner of Distribution. Upon an Eligible
Non-Employee Director's termination of service as a director
of the Company, the Company shall, subject to Section 7.2,
deliver to the Participant (or his or her Beneficiary, as
applicable) a number of shares of Stock equal to the number of
Stock Units (as adjusted pursuant to Section 6, if applicable)
to which the Participant is then entitled under the terms of
Section 5.5(a). Such distribution shall be made in a lump sum
as soon as administratively practicable, but no later than 30
days, following the Participant's termination of service.
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(b) Notwithstanding anything herein to the contrary, the
portion of a Non-Employee Director's Stock Unit Account attributable to
Stock Units granted pursuant to Section 5.2(b) (and any Dividend
Equivalents attributable to such Stock Units) shall be distributed in
accordance with this Section 5.5(b).
(1) Commencement of Benefits Distribution. With
respect to each grant of Stock Units to a Non-Employee
Director, the Non-Employee Director shall be entitled to
receive one-third of such Stock Units (including Dividend
Equivalents applicable to such Stock Units) on each of the
first, second and third anniversaries of such grant in the
form of shares of Stock. Notwithstanding the foregoing, if a
Non-Employee Director terminates service as a director of the
Company prior to the complete distribution of his or her Stock
Unit Account, such Non-Employee Director shall be entitled to
receive a distribution of his or her Stock Unit Account in the
form of shares of Stock.
(2) Manner of Distribution. Upon the first, second,
and third anniversaries of the date of grant of Stock Units to
a Non-Employee Director (or if earlier, the Non-Employee
Director's termination of service as a director of the
Company), the Company shall, subject to Section 7.2, deliver
to the Participant (or his or her Beneficiary, as applicable)
a number of shares of Stock equal to the number of Stock Units
(as adjusted pursuant to Section 6, if applicable) to which
the Participant is then entitled under the terms of Section
5.5(b). Such distribution shall be made in a lump sum as soon
as administratively practicable, but no later than 30 days,
following the applicable anniversary of the grant (or, if
earlier, the Participant's termination of service).
Section 6. Changes in Capital Structure.
6.1 Adjustments. Upon (or, as may be necessary to effect the
adjustment, immediately prior to): any reclassification, recapitalization, stock
split (including a stock split in the form of a stock dividend) or reverse stock
split; any merger, combination, consolidation, or other reorganization; any
spin-off, split-up, or similar extraordinary dividend distribution in respect of
the Common Stock; or any exchange of Common Stock or other securities of the
Corporation, or any similar, unusual or extraordinary corporate transaction in
respect of the Common Stock; then the Committee shall equitably and
proportionately adjust (1) the number and type of shares of Common Stock (or
other securities) that thereafter may be made the subject of awards (including
the specific share limits, maximums and numbers of shares set forth elsewhere in
this Plan), (2) the number, amount and type of shares of Common Stock (or other
securities or property) subject to any outstanding awards, (3) the grant,
purchase, or exercise price of any outstanding awards, and/or (4) the
securities, cash or other property deliverable upon exercise or payment of any
outstanding awards, in each case to the extent appropriate to preclude the
enlargement or dilution of rights and benefits under such awards.
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It is intended that, if possible, any adjustments contemplated by the
preceding paragraph be made in a manner that satisfies applicable legal, tax
(including, without limitation and as applicable in the circumstances, Section
424 of the Code, Section 409A of the Code and Section 162(m) of the Code) and
accounting (so as to not trigger any charge to earnings with respect to such
adjustment) requirements.
Without limiting the generality of Section 8.3, any good faith
determination by the Committee pursuant to this Section 6.1 shall be conclusive
and binding on all persons.
6.2 Corporate Transactions-Assumption or Termination of Awards. Upon
the occurrence of any of the following: any merger, combination, consolidation,
or other reorganization; any exchange of Common Stock or other securities of the
Corporation; a sale of all or substantially all the business, stock or assets of
the Corporation; a dissolution of the Corporation; or any other event in which
the Corporation does not survive (or does not survive as a public company in
respect of its Common Stock); then the Committee may make provision for a cash
payment in settlement of, or for the assumption, substitution or exchange of any
or all outstanding share-based awards or the cash, securities or property
deliverable to the holder of any or all outstanding share-based awards, based
upon, to the extent relevant under the circumstances, the distribution or
consideration payable to holders of the Common Stock upon or in respect of such
event.
The Committee may adopt such valuation methodologies for outstanding
awards as it deems reasonable in the event of a cash or property settlement and,
in the case of options or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the exercise or base
price of the award.
In any of the events referred to in this Section 6.2, the Committee may
take such action contemplated by this Section 6.2 prior to such event (as
opposed to on the occurrence of such event) to the extent that the Committee
deems the action necessary to permit the participant to realize the benefits
intended to be conveyed with respect to the underlying shares.
Without limiting the generality of Section 8.3, any good faith
determination by the Committee pursuant to its authority under this Section 6.2
shall be conclusive and binding on all persons.
6.3 Option Termination. To the extent that any vested Option is not
exercised prior to (i) a dissolution of the Company or (ii) a merger or other
corporate event, and no provision is made for the assumption, conversion,
substitution or exchange of the Option, the Option shall terminate upon the
occurrence of such event.
Section 7. Shares Subject To The Plan; Share Limits
7.1 Shares Available for Issuance. Subject to adjustment under Section
6, the aggregate number of shares of Stock that may be issued or delivered under
the Plan shall not exceed 250,000 shares. Stock delivered by the Company under
the Plan shall be shares of authorized and unissued shares of Stock and/or
previously issued Stock held as treasury shares and shall be fully paid and
non-assessable when issued. Shares issuable on exercise of Options or payment of
Stock Units shall be reserved for issue, and to the extent that awards terminate
or expire without payment in shares, the shares will be available for subsequent
grants or accretions. Subject to adjustment under Section 6, the aggregate
number of Stock Units that may be issued or delivered under the Plan is 118,000.
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7.2 Share Limits; Cut Backs. If any grant of an Option or the award or
crediting of Stock Units would cause the sum of the shares of Stock previously
issued and shares issuable under outstanding awards under the Plan to exceed the
maximum number of shares authorized under the Plan, the Company shall prorate
among the Non-Employee Directors the grant of new Options or award of Stock
Units and allocate the number of remaining shares available for issuance first
to the grant of Options and second toward the award of Award Units. If and for
so long as no available share authorization remains, no additional Options shall
be granted or Stock Units credited and cash shall be paid in lieu of dividend
equivalents under Sections 4.7 and 5.3 for such duration.
7.3 Fractional Shares; Minimum Issue. Fractional share interests may be
accumulated but shall not be issued. Cash will be paid or transferred in lieu of
any fractional share interests that remain upon a final distribution under the
Plan. No fewer than 100 shares may be purchased on exercise of an Option at any
one time unless the number purchased is the total number at the time available
for purchase under the Option.
Section 8. Administration
8.1 The Administrator.
The Administrator of this Plan shall be the Board as a whole or a
Committee as appointed from time to time by the Board to serve as administrator
of this Plan. The participating members of any Committee so acting shall
include, as to decisions in respect of participants who are subject to Section
16 of the Exchange Act, only those members who are Non-Employee Directors (as
defined in Rule 16b-3 promulgated under the Exchange Act). Members of the
Committee shall not receive any additional compensation for administration of
this Plan.
8.2 Committee Action.
A member of the Committee shall not vote or act upon any matter which
relates solely to himself or herself as a Participant in this Plan. Action of
the Committee with respect to the administration of this Plan shall be taken
pursuant to a majority vote or (assuming compliance with Section 8.1) by
unanimous written consent of its members.
8.3 Rights and Duties; Delegation and Reliance; Decisions Binding.
Subject to the limitations of this Plan, the Committee shall be charged
with the general administration of this Plan and the responsibility for carrying
out its provisions, and shall have powers necessary to accomplish those
purposes, including, but not by way of limitation, the following:
(a) To construe and interpret this Plan;
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(b) To resolve any questions concerning the amount of benefits
payable to a Participant (except that no member of the Committee shall
participate in a decision relating solely to his or her own benefits);
(c) To make adjustments under Section 6 and all other
determinations required by this Plan;
(d) To maintain all the necessary records for the
administration of this Plan; and
(e) To make and publish forms, rules and procedures for the
administration of this Plan.
The determination of the Committee made in good faith as to any
disputed question or controversy and the Committee's determination of benefits
payable to Participants, including decisions as to adjustments under Section 6,
shall be conclusive and binding for all purposes of this Plan. In performing its
duties, the Committee shall be entitled to rely on information, opinions,
reports or statements prepared or presented by: (i) officers or employees of the
Company whom the Committee believes to be reliable and competent as to such
matters; and (ii) counsel (who may be employees of the Company), independent
accountants and other persons as to matters which the Committee believes to be
within such persons' professional or expert competence. The Committee shall be
fully protected with respect to any action taken or omitted by it in good faith
pursuant to the advice of such persons. The Committee may delegate ministerial,
bookkeeping and other non-discretionary functions to individuals who are
officers or employees of the Company.
Section 9. Amendment and Termination; Stockholder Approval
9.1 Amendment and Termination. Subject to Section 9.2, the Board shall
have the right to amend this Plan in whole or in part from time to time or may
at any time suspend or terminate this Plan; provided, however, that, except as
contemplated by Section 6, no amendment or termination shall cancel or otherwise
adversely affect in any way, without his or her written consent, any
Participant's rights with respect to Stock Units credited to his or her Accounts
or Options granted; and provided further that neither Section 4 nor any other
provision of the Plan or an award shall be amended to permit the reduction (by
amendment, substitution, cancellation and regrant or other means) of the
exercise price of any Option without prior stockholder approval. Any amendments
authorized hereby shall be stated in an instrument in writing, and all
Participants shall be bound by such amendment. Changes contemplated by Section 6
shall not be deemed to constitute changes or amendments for purposes of this
Section 9.1.
9.2 Stockholder Approval. The Plan, any grant, election, action,
crediting or vesting prior to stockholder approval, shall be subject to approval
of the Plan by the stockholders of the Company and, to the extent required under
applicable law or listing agency rule, required by the provisions of Section
9.1, or deemed necessary or advisable by the Board, any amendment to the Plan
shall be subject to stockholder approval.
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Section 10. Miscellaneous
10.1 Limitation on Participants' Rights. Participation in this Plan
shall not give any person the right to continue to serve as a member of the
Board or any rights or interests other than as expressly provided herein. This
Plan shall create only a contractual obligation on the part of the Company as to
such amounts and shall not be construed as creating a trust or fiduciary
relationship between the Company, the Board, the Committee, and any Participant
or other person. This Plan, in and of itself, has no assets. Participants shall
have only the rights of a general unsecured creditor of the Company with respect
to amounts credited and benefits payable, if any, on their Accounts, and rights
no greater than the right to receive the Common Stock (or equivalent value as a
general unsecured creditor) with respect to Accounts. Participants shall not be
entitled to receive actual dividends or to vote Shares until after delivery of a
certificate representing the Shares.
10.2 Beneficiaries.
(a) Beneficiary Designation. Upon forms provided by the
Company each Non-Employee Director may designate in writing the
Beneficiary or Beneficiaries (as defined in Section 10.2(b)) whom such
Non-Employee Director desires to receive any amounts payable under the
Plan after his or her death. Beneficiary designation forms shall be
effective on the date that the form is received by the Corporate
Secretary. A Non-Employee Director may from time to time change his or
her designated Beneficiary or Beneficiaries without the consent of such
Beneficiary or Beneficiaries by filing a new designation in writing
with the Corporate Secretary. However, if a married Non-Employee
Director wishes to designate a person other than his or her spouse as
Beneficiary, such designation shall be consented to in writing by the
spouse. The Non-Employee Director may change any election designating a
Beneficiary or Beneficiaries without any requirement of further spousal
consent if the spouse's consent so provides. Notwithstanding the
foregoing, spousal consent shall not be necessary if it is established
that the required consent cannot be obtained because the spouse cannot
be located or because of other circumstances prescribed by the
Committee. The Company and the Committee may rely on the Non-Employee
Director's designation of a Beneficiary or Beneficiaries last filed in
accordance with the terms of the Plan.
(b) Definition of Beneficiary. A Participant's "Beneficiary"
or "Beneficiaries" shall be the person, persons, trust or trusts (or
similar entity) designated by the Participant or, in the absence of a
designation, entitled by will or the laws of descent and distribution
to receive the Participant's benefits under this Plan in the event of
the Participant's death, and shall mean the Participant's executor or
administrator if no other Beneficiary is identified and able to act
under the circumstances.
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10.3 Non-Transferability. A Participant's rights and interests under
the Plan in respect of Options and Stock Units, including amounts payable or
Stock deliverable under or in respect thereof, may not be assigned, pledged, or
transferred except:
(a) in the event of a Participant's death, to a designated
beneficiary as provided in Section 10.2(b) above, or in the absence of
such designation, by will or the laws of descent and distribution; or
(b) in the case of Options, with the consent of the Committee
evidenced in writing or by duly adopted resolution, to certain persons
or entities related to the Participant, including but not limited to
members of the Participant's immediate family, charitable institutions,
or trusts or other entities whose beneficiaries or beneficial owners
are members of the Participant's immediate family and/or charitable
institutions, pursuant to such conditions and procedures as the
Committee may establish. Any permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it that
the transfer is being made for essentially estate and/or tax planning
purposes or a gratuitous or donative basis and without consideration
(other than nominal consideration or in exchange for an interest in a
qualified transferee) and only if such transfer would not adversely
affect the Company's eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended, the offering of shares issuable
under the Plan by the Company.
The above exercise and transfer restrictions shall not apply to transfers to the
Company or transfers pursuant to a court order.
10.4 Obligations Binding Upon Successors.
Obligations of the Company under this Plan shall be binding upon
successors of the Company.
10.5 Governing Law; Severability.
The validity of this Plan and any agreements entered into under the
Plan or any of its provisions shall be construed, administered and governed in
all respects under the laws of the State of California. If any provisions of
this Plan shall be held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions hereof shall continue to be fully
effective.
10.6 Compliance with Laws.
This Plan and the offer, issuance and delivery of shares of Common
Stock and/or the payment of benefits under this Plan are subject to compliance
with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities law) and to such approvals by any
listing, agency or any regulatory or governmental authority as may, in the
opinion of counsel for the Company, be necessary or advisable in connection
therewith. Any securities delivered under this Plan shall be subject to prior
registration or such restrictions as the Company may deem necessary or desirable
to assure compliance with all applicable legal requirements, and the person
acquiring such securities shall, if requested by the Company, provide such
assurances and representations to the Company as it may reasonably request to
assure such compliance.
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10.7 Limitations on Rights Associated with Units. A Non-Employee
Director's Accounts shall be a memorandum account on the books of the Company.
The Units credited to a Non-Employee Director's Accounts shall be used solely as
a device for the determination of the number of shares of Stock to be
distributed to the Participant in accordance with this Plan following his or her
termination of service as a director of the Company. The Units shall not be
treated as property or as a trust fund of any kind. No Participant shall be
entitled to any voting or other stockholder rights with respect to Units
credited under this Plan. The number of Units credited to a Participant's
Accounts shall be subject to adjustment in accordance with Section 6 and the
terms of this Plan.
10.8 Plan Construction.
It is the intent of the Company that transactions pursuant to this Plan
satisfy and be interpreted in a manner that satisfies the applicable conditions
for exemption under Rule 16b-3 promulgated under the Exchange Act ("Rule 16b-3")
so that, to the extent consistent therewith, the crediting of Units and the
payment of Stock as well as grants of Options will be entitled to the benefits
of Rule 16b-3 or other exemptive rules under Section 16 of the Exchange Act and
will not be subjected to avoidable liability thereunder.
10.9 Headings Not Part of Plan.
Headings and subheadings in this Plan are inserted for reference only
and are not to be considered in the construction of the provisions hereof.
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