EXHIBIT 4.1
Approved by Board of Directors on July 11, 2002
Approved by Stockholders on July 15, 2002
Share Numbers are Adjusted for Stock Dividend Paid July 29, 2002
GL ENERGY AND EXPLORATION, INC.
2002 Equity Performance Plan
Section 1. Purpose; Definitions.
1.1. Purpose. The purpose of the GL Energy and Exploration, Inc. 2002
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Equity Performance Plan ("Plan") is to enable the Company to offer to its
employees, officers, directors and consultants whose past, present and/or
potential contributions to the Company and its Subsidiaries have been, are or
will be important to the success of the Company, an opportunity to acquire a
proprietary interest in the Company. The various types of long-term incentive
awards that may be provided under the Plan will enable the Company to respond to
changes in compensation practices, tax laws, accounting regulations and the size
and diversity of its businesses.
1.2. Definitions. For purposes of the Plan, the following terms shall
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be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder, or such other document as may be determined by the Committee,
setting forth the terms and conditions of an award under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(d) "Committee" means the Stock Option Committee of the Board
or any other committee of the Board that the Board may designate to administer
the Plan or any portion thereof. If no Committee is so designated, then all
references in this Plan to "Committee" shall mean the Board.
(e) "Common Stock" means the Common Stock of the Company, no
par value.
(f) "Company" means GL Energy and Exploration Inc., a
corporation organized under the laws of the State of Delaware.
(g) "Deferred Stock" means Common Stock to be received under
an award made pursuant to Section 8, below, at the end of a specified deferral
period.
(h) "Disability" means physical or mental impairment as
determined under procedures established by the Committee for purposes of the
Plan.
(i) "Effective Date" means the date set forth in Section 12.1,
below.
(j) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, means, as
of any given date: (i) if the Common Stock is listed on a national securities
exchange or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, the
last sale price of the Common Stock in the principal trading market for the
Common Stock on such date, as reported by the exchange or Nasdaq, as the case
may be; (ii) if the Common Stock is not listed on a national securities exchange
or quoted on the Nasdaq National Market or Nasdaq SmallCap Market, but is traded
in the over-the-counter market, the closing bid price for the Common Stock on
such date, as reported by the OTC Bulletin Board or the National Quotation
Bureau, Incorporated or similar publisher of such quotations; and (iii) if the
fair market value of the Common Stock cannot be determined pursuant to clause
(i) or (ii) above, such price as the Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under
the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after such age which may be
designated by the Committee as "retirement age" for any particular Holder. If no
age is designated, it shall be 65.
(o) "Other Stock-Based Award" means an award under Section 9,
below, that is valued in whole or in part by reference to, or is otherwise based
upon, Common Stock.
(p) "Parent" means any present or future "parent corporation"
of the Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means the GL Energy and Exploration Inc. 2002
Equity Performance Plan, as hereinafter amended from time to time.
(r) "Repurchase Value" shall mean the Fair Market Value in the
event the award to be settled under Section 2.2(h) or repurchased under Section
10.2 is comprised of shares of Common Stock and the difference between Fair
Market Value and the Exercise Price (if lower than Fair Market Value) in the
event the award is a Stock Option or Stock Appreciation Right; in each case,
multiplied by the number of shares subject to the award.
(s) "Restricted Stock" means Common Stock received under an
award made pursuant to Section 7, below, that is subject to restrictions under
said Section 7.
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(t) "SAR Value" means the excess of the Fair Market Value (on
the exercise date) over the exercise price that the participant would have
otherwise had to pay to exercise the related Stock Option, multiplied by the
number of shares for which the Stock Appreciation Right is exercised.
(u) "Stock Appreciation Right" means the right to receive from
the Company, on surrender of all or part of the related Stock Option, without a
cash payment to the Company, a number of shares of Common Stock equal to the SAR
Value divided by the Fair Market Value (on the exercise date).
(v) "Stock Option" or "Option" means any option to purchase
shares of Common Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 5.3 of the Plan.
(x) "Subsidiary" means any present or future "subsidiary
corporation" of the Company, as such term is defined in Section 424(f) of the
Code.
(y) "Vest" means to become exercisable or to otherwise obtain
ownership rights in an award.
Section 2. Administration.
2.1. Committee Membership. The Plan shall be administered by the
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Board or a Committee. Committee members shall serve for such term as the Board
may in each case determine, and shall be subject to removal at any time by the
Board. The Committee members, to the extent possible and deemed to be
appropriate by the Board, shall be "non-employee directors" as defined in Rule
16b-3 promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), and "outside directors" within the meaning of Section 162(m)
of the Code.
2.2. Powers of Committee. The Committee shall have full authority to
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award, pursuant to the terms of the Plan: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock
Reload Options and/or (vi) Other Stock-Based Awards. For purposes of
illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):
(a) to select the officers, employees, directors and
consultants of the Company or any Subsidiary to whom Stock Options, Stock
Appreciation Rights, Restricted Stock, Deferred Stock, Reload Stock Options
and/or Other Stock-Based Awards may from time to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but not
limited to, number of shares, share exercise price or types of consideration
paid upon exercise of such options, such as other securities of the Company or
other property, any restrictions or limitations, and any vesting, exchange,
surrender, cancellation, acceleration, termination, exercise or forfeiture
provisions, as the Committee shall determine);
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(c) to determine any specified performance goals or such other
factors or criteria which need to be attained for the vesting of an award
granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction with or
apart from other equity awarded under this Plan and cash and non-cash awards
made by the Company or any Subsidiary outside of this Plan;
(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish, including
the payment or crediting of interest on deferred amounts denominated in cash and
of dividend equivalents on deferred amounts denominated in Common Stock;
(f) to determine the extent and circumstances under which
Common Stock and other amounts payable with respect to an award hereunder shall
be deferred that may be either automatic or at the election of the Holder;
(g) to substitute (i) new Stock Options for previously granted
Stock Options, which previously granted Stock Options have higher option
exercise prices and/or contain other less favorable terms, and (ii) new awards
of any other type for previously granted awards of the same type, which
previously granted awards are upon less favorable terms; and
(h) to make payments and distributions with respect to awards
(i.e., to "settle" awards) through cash payments in an amount equal to the
Repurchase Value.
2.3. Interpretation of Plan.
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(a) Committee Authority. Subject to Section 11, below, the
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Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable to interpret the terms and provisions of the
Plan and any award issued under the Plan (and to determine the form and
substance of all agreements relating thereto), and to otherwise supervise the
administration of the Plan. Subject to Section 11, below, all decisions made by
the Committee pursuant to the provisions of the Plan shall be made in the
Committee's sole discretion and shall be final and binding upon all persons,
including the Company, its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
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contrary notwithstanding, no term or provision of the Plan relating to Incentive
Stock Options (including but not limited to Stock Reload Options or Stock
Appreciation rights granted in conjunction with an Incentive Stock Option) or
any Agreement providing for Incentive Stock Options shall be interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be so exercised, so as to disqualify the Plan under Section 422 of the Code or,
without the consent of the Holder(s) affected, to disqualify any Incentive Stock
Option under such Section 422.
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Section 3. Stock Subject to Plan.
3.1. Number of Shares. The total number of shares of Common Stock
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reserved and available for issuance under the Plan shall be 6,000,000 shares.
Shares of Common Stock under the Plan ("Shares") may consist, in whole or in
part, of authorized and unissued shares or treasury shares. If any shares of
Common Stock that have been granted pursuant to a Stock Option cease to be
subject to a Stock Option, or if any shares of Common Stock that are subject to
any Stock Appreciation Right, Restricted Stock award, Deferred Stock award,
Reload Stock Option or Other Stock-Based Award granted hereunder are forfeited
or any such award otherwise terminates without a payment being made to the
Holder in the form of Common Stock, such shares shall again be available for
distribution in connection with future grants and awards under the Plan. If a
Holder pays the exercise price of a Stock Option by surrendering any previously
owned shares and/or arranges to have the appropriate number of shares otherwise
issuable upon exercise withheld to cover the withholding tax liability
associated with the Stock Option exercise, then the number of shares available
under the Plan shall be increased by the lesser of (i) the number of such
surrendered shares and shares used to pay taxes; and (ii) the number of shares
purchased under such Stock Option.
3.2. Adjustment Upon Changes in Capitalization, Etc. In the event of
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any merger, reorganization, consolidation, common stock dividend payable on
shares of Common Stock, Common Stock split or reverse split, combination or
exchange of shares of Common Stock, or other extraordinary or unusual event
which results in a change in the shares of Common Stock of the Company as a
whole, the Committee shall determine, in its sole discretion, whether such
change equitably requires an adjustment in the terms of any award (including
number of shares subject to the award and the exercise price) or the aggregate
number of shares reserved for issuance under the Plan. Any such adjustments will
be made by the Committee, whose determination will be final, binding and
conclusive.
Section 4. Eligibility.
Awards may be made or granted to employees, officers, directors and
consultants who are deemed to have rendered or to be able to render significant
services to the Company or its Subsidiaries and who are deemed to have
contributed or to have the potential to contribute to the success of the
Company. No Incentive Stock Option shall be granted to any person who is not an
employee of the Company or a Subsidiary at the time of grant. Notwithstanding
the foregoing, an award may be made or granted to a person in connection with
his hiring or retention, or at any time on or after the date he reaches an
agreement (oral or written) with the Company with respect to such hiring or
retention, even though it may be prior to the date the person first performs
services for the Company or its Subsidiaries; provided, however, that no portion
of any such award shall vest prior to the date the person first performs such
services.
Section 5. Stock Options.
5.1. Grant and Exercise. Stock Options granted under the Plan may be
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of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options.
Any Stock Option granted under the Plan shall contain such terms, not
inconsistent with this Plan, or with respect to Incentive Stock Options, not
inconsistent with the Plan and the Code, as the Committee may from time to time
approve. The Committee shall have the authority to grant Incentive Stock Options
or Non-Qualified Stock Options, or both types of Stock Options which may be
granted alone or in addition to other awards granted under the Plan. To the
extent that any Stock Option intended to qualify as an Incentive Stock Option
does not so qualify, it shall constitute a separate Nonqualified Stock Option.
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5.2. Terms and Conditions. Stock Options granted under the Plan shall
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be subject to the following terms and conditions:
(a) Option Term. The term of each Stock Option shall be fixed
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by the Committee; provided, however, that an Incentive Stock Option may be
granted only within the ten-year period commencing from the Effective Date and
may only be exercised within ten years of the date of grant (or five years in
the case of an Incentive Stock Option granted to an optionee who, at the time of
grant, owns Common Stock possessing more than 10% of the total combined voting
power of all classes of voting stock of the Company ("10% Stockholder").
(b) Exercise Price. The exercise price per share of Common
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Stock purchasable under a Stock Option shall be determined by the Committee at
the time of grant (but not less than par, the par value of a share of Common
Stock).
(c) Exercisability. Stock Options shall be exercisable at such
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time or times and subject to such terms and conditions as shall be determined by
the Committee and as set forth in Section 10, below. If the Committee provides,
in its discretion, that any Stock Option is exercisable only in installments,
i.e., that it vests over time, the Committee may waive such installment exercise
provisions at any time at or after the time of grant in whole or in part, based
upon such factors as the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
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exercise and waiting period provisions are applicable in a particular case,
Stock Options may be exercised in whole or in part at any time during the term
of the Option by giving written notice of exercise to the Company specifying the
number of shares of Common Stock to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, which shall be in cash or,
if provided in the Agreement, either in shares of Common Stock (including
Restricted Stock and other contingent awards under this Plan) or partly in cash
and partly in such Common Stock, or such other means which the Committee
determines are consistent with the Plan's purpose and applicable law. Cash
payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that
the Company shall not be required to deliver certificates for shares of Common
Stock with respect to which an Option is exercised until the Company has
confirmed the receipt of good and available funds in payment of the purchase
price thereof (except that, in the case of an exercise arrangement approved by
the Committee and described in the last sentence of this paragraph, payment may
be made as soon as practicable after the exercise). Payments in the form of
Common Stock shall be valued at the Fair Market Value on the date prior to the
date of exercise. Such payments shall be made by delivery of stock certificates
in negotiable form that are effective to transfer good and valid title thereto
to the Company, free of any liens or encumbrances. Subject to the terms of the
Agreement, the Committee may, in its sole discretion, at the request of the
Holder, deliver upon the exercise of a Nonqualified Stock Option a combination
of shares of Deferred Stock and Common Stock; provided, however, that,
notwithstanding the provisions of Section 8 of the Plan, such Deferred Stock
shall be fully vested and not subject to forfeiture. A Holder shall have none of
the rights of a Stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of the
Option. The Committee may permit a Holder to elect to pay the Exercise Price
upon the exercise of a Stock Option by irrevocably authorizing a third party to
sell shares of Common Stock (or a sufficient portion of the shares) acquired
upon exercise of the Stock Option and remit to the Company a sufficient portion
of the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.
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(e) Transferability. Except as may be set forth in the next
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sentence of this Section or in the Agreement, no Stock Option shall be
transferable by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the Holder's
lifetime, only by the Holder (or, to the extent of legal incapacity or
incompetency, the Holder's guardian or legal representative). Notwithstanding
the foregoing, a Holder, with the approval of the Committee, may transfer a
Stock Option (i) (A) by gift, for no consideration, or (B) pursuant to a
domestic relations order, in either case, to or for the benefit of the Holder's
"Immediate Family" (as defined below), or (ii) to an entity in which the Holder
and/or members of Holder's Immediate Family own more than fifty percent of the
voting interest, in exchange for an interest in that entity, subject to such
limits as the Committee may establish and the execution of such documents as the
Committee may require, and the transferee shall remain subject to all the terms
and conditions applicable to the Stock Option prior to such transfer. The term
"Immediate Family" shall mean any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, any person sharing the Holder's
household (other than a tenant or employee), a trust in which these persons have
more than fifty percent beneficial interest, and a foundation in which these
persons (or the Holder) control the management of the assets.
(f) Termination by Reason of Death. If a Holder's employment
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by the Company or a Subsidiary terminates by reason of death, any Stock Option
held by such Holder, unless otherwise determined by the Committee and set forth
in the Agreement, shall thereupon automatically terminate, except that the
portion of such Stock Option that has vested on the date of death may thereafter
be exercised by the legal representative of the estate or by the legatee of the
Holder under the will of the Holder, for a period of one year (or such other
greater or lesser period as the Committee may specify in the Agreement) from the
date of such death or until the expiration of the stated term of such Stock
Option, whichever period is shorter.
(g) Termination by Reason of Disability. If a Holder's
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employment by the Company or any Subsidiary terminates by reason of Disability,
any Stock Option held by such Holder, unless otherwise determined by the
Committee and set forth in the Agreement, shall thereupon automatically
terminate, except that the portion of such Stock Option that has vested on the
date of termination may thereafter be exercised by the Holder for a period of
one year (or such other greater or lesser period as the Committee may specify in
the Agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is shorter.
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(h) Other Termination. Subject to the provisions of Section
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13.3, below, and unless otherwise determined by the Committee and set forth in
the Agreement, if such Holder's employment or retention by, or association with,
the Company or any Subsidiary terminates for any reason other than death or
Disability, the Stock Option shall thereupon automatically terminate, except
that if the Holder's employment is terminated by the Company or a Subsidiary
without cause or due to Normal Retirement, then the portion of such Stock Option
that has vested on the date of termination of employment may be exercised for
the lesser of three months after termination of employment or the balance of
such Stock Option's term.
(i) Additional Incentive Stock Option Limitation. In the case
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of an Incentive Stock Option, the aggregate Fair Market Value (on the date of
grant of the Option) with respect to which Incentive Stock Options become
exercisable for the first time by a Holder during any calendar year (under all
such plans of the Company and its Parent and Subsidiaries) shall not exceed
$100,000.
(j) Buyout and Settlement Provisions. The Committee may at any
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time, in its sole discretion, offer to repurchase a Stock Option previously
granted, based upon such terms and conditions as the Committee shall establish
and communicate to the Holder at the time that such offer is made.
5.3. Stock Reload Option. If a Holder tenders shares of Common Stock
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to pay the exercise price of a Stock Option ("Underlying Option") and/or
arranges to have a portion of the shares otherwise issuable upon exercise
withheld to pay the applicable withholding taxes, then the Holder may receive,
at the discretion of the Committee, a new Stock Reload Option to purchase that
number of shares of Common Stock equal to the number of shares tendered to pay
the exercise price and the withholding taxes (but only if such tendered shares
were held by the Holder for at least six months). Stock Reload Options may be
any type of option permitted under the Code and will be granted subject to such
terms, conditions, restrictions and limitations as may be determined by the
Committee from time to time. Such Stock Reload Option shall have an exercise
price equal to the Fair Market Value as of the date of exercise of the
Underlying Option. Unless the Committee determines otherwise, a Stock Reload
Option may be exercised commencing one year after it is granted and shall expire
on the date of expiration of the Underlying Option to which the Reload Option is
related.
Section 6. Stock Appreciation Rights.
6.1. Grant and Exercise. The Committee may grant Stock Appreciation
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Rights to participants who have been or are being granted Stock Options under
the Plan as a means of allowing such participants to exercise their Stock
Options without the need to pay the exercise price in cash. In the case of a
Nonqualified Stock Option, a Stock Appreciation Right may be granted either at
or after the time of the grant of such Nonqualified Stock Option. In the case of
an Incentive Stock Option, a Stock Appreciation Right may be granted only at the
time of the grant of such Incentive Stock Option.
6.2. Terms and Conditions. Stock Appreciation Rights shall be subject
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to the following terms and conditions:
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(a) Exercisability. Stock Appreciation Rights shall be
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exercisable as shall be determined by the Committee and set forth in the
Agreement, subject to the limitations, if any, imposed by the Code with respect
to related Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
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and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
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exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the applicable
portion of the related Stock Option. Upon such exercise and surrender, the
Holder shall be entitled to receive a number of shares of Common Stock equal to
the SAR Value divided by the Fair Market Value on the date the Stock
Appreciation Right is exercised.
(d) Shares Affected Upon Plan. The granting of a Stock
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Appreciation Right shall not affect the number of shares of Common Stock
available under for awards under the Plan. The number of shares available for
awards under the Plan will, however, be reduced by the number of shares of
Common Stock acquirable upon exercise of the Stock Option to which such Stock
Appreciation Right relates.
Section 7. Restricted Stock.
7.1. Grant. Shares of Restricted Stock may be awarded either alone or
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in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom, and the time or times at which, grants
of Restricted Stock will be awarded, the number of shares to be awarded, the
price (if any) to be paid by the Holder, the time or times within which such
awards may be subject to forfeiture ("Restriction Period"), the vesting schedule
and rights to acceleration thereof and all other terms and conditions of the
awards.
7.2. Terms and Conditions. Each Restricted Stock award shall be
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subject to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
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represented by a stock certificate or certificates registered in the name of the
Holder to whom such Restricted Stock shall have been awarded. During the
Restriction Period, certificates representing the Restricted Stock and any
securities constituting Retained Distributions (as defined below) shall bear a
legend to the effect that ownership of the Restricted Stock (and such Retained
Distributions) and the enjoyment of all rights appurtenant thereto are subject
to the restrictions, terms and conditions provided in the Plan and the
Agreement. Such certificates shall be deposited by the Holder with the Company,
together with stock powers or other instruments of assignment, each endorsed in
blank, which will permit transfer to the Company of all or any portion of the
Restricted Stock and any securities constituting Retained Distributions that
shall be forfeited or that shall not become vested in accordance with the Plan
and the Agreement.
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(b) Rights of Holder. Restricted Stock shall constitute issued
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and outstanding shares of Common Stock for all corporate purposes. The Holder
will have the right to vote such Restricted Stock, to receive and retain all
regular cash dividends and other cash equivalent distributions as the Board may
in its sole discretion designate, pay or distribute on such Restricted Stock and
to exercise all other rights, powers and privileges of a holder of Common Stock
with respect to such Restricted Stock, with the exceptions that (i) the Holder
will not be entitled to delivery of the stock certificate or certificates
representing such Restricted Stock until the Restriction Period shall have
expired and unless all other vesting requirements with respect thereto shall
have been fulfilled; (ii) the Company will retain custody of the stock
certificate or certificates representing the Restricted Stock during the
Restriction Period; (iii) other than regular cash dividends and other cash
equivalent distributions as the Board may in its sole discretion designate, pay
or distribute, the Company will retain custody of all distributions ("Retained
Distributions") made or declared with respect to the Restricted Stock (and such
Retained Distributions will be subject to the same restrictions, terms and
conditions as are applicable to the Restricted Stock) until such time, if ever,
as the Restricted Stock with respect to which such Retained Distributions shall
have been made, paid or declared shall have become vested and with respect to
which the Restriction Period shall have expired; (iv) a breach of any of the
restrictions, terms or conditions contained in this Plan or the Agreement or
otherwise established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock and any
Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
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Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions (i) all
or part of such Restricted Stock shall become vested in accordance with the
terms of the Agreement, subject to Section 10, below, and (ii) any Retained
Distributions with respect to such Restricted Stock shall become vested to the
extent that the Restricted Stock related thereto shall have become vested,
subject to Section 10, below. Any such Restricted Stock and Retained
Distributions that do not vest shall be forfeited to the Company and the Holder
shall not thereafter have any rights with respect to such Restricted Stock and
Retained Distributions that shall have been so forfeited.
Section 8. Deferred Stock.
8.1. Grant. Shares of Deferred Stock may be awarded either alone or
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in addition to other awards granted under the Plan. The Committee shall
determine the eligible persons to whom and the time or times at which grants of
Deferred Stock will be awarded, the number of shares of Deferred Stock to be
awarded to any person, the duration of the period ("Deferral Period") during
which, and the conditions under which, receipt of the shares will be deferred,
and all the other terms and conditions of the awards.
8.2. Terms and Conditions. Each Deferred Stock award shall be subject
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to the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period (or
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the Additional Deferral Period referred to in Section 8.2 (d) below, where
applicable), share certificates shall be issued and delivered to the Holder, or
his legal representative, representing the number equal to the shares covered by
the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
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Stock shall not have any rights of a Stockholder by virtue of such award until
the expiration of the applicable Deferral Period and the issuance and delivery
of the certificates representing such Common Stock. The shares of Common Stock
issuable upon expiration of the Deferral Period shall not be deemed outstanding
by the Company until the expiration of such Deferral Period and the issuance and
delivery of such Common Stock to the Holder.
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(c) Vesting; Forfeiture. Upon the expiration of the Deferral
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Period with respect to each award of Deferred Stock and the satisfaction of any
other applicable restrictions, terms and conditions all or part of such Deferred
Stock shall become vested in accordance with the terms of the Agreement, subject
to Section 10, below. Any such Deferred Stock that does not vest shall be
forfeited to the Company and the Holder shall not thereafter have any rights
with respect to such Deferred Stock.
(d) Additional Deferral Period. A Holder may request to, and
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the Committee may at any time, defer the receipt of an award (or an installment
of an award) for an additional specified period or until a specified event
("Additional Deferral Period"). Subject to any exceptions adopted by the
Committee, such request must generally be made at least one year prior to
expiration of the Deferral Period for such Deferred Stock award (or such
installment).
Section 9. Other Stock-Based Awards.
Other Stock-Based Awards may be awarded, subject to limitations under
applicable law, that are denominated or payable in, valued in whole or in part
by reference to, or otherwise based on or related to, shares of Common Stock, as
deemed by the Committee to be consistent with the purposes of the Plan,
including, without limitation, purchase rights, shares of Common Stock awarded
which are not subject to any restrictions or conditions, convertible or
exchangeable debentures, or other rights convertible into shares of Common Stock
and awards valued by reference to the value of securities of or the performance
of specified Subsidiaries. Other Stock-Based Awards may be awarded either alone
or in addition to or in tandem with any other awards under this Plan or any
other plan of the Company. Each other Stock-Based Award shall be subject to such
terms and conditions as may be determined by the Committee.
Section 10. Accelerated Vesting and Exercisability.
10.1. Non-Approved Transactions. If any "person" (as such term is used
-------------------------
in Sections 13(d) and 14(d) of the Exchange Act of 1934, as amended ("Exchange
Act")), is or becomes the "beneficial owner" (as referred in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing more than 50% of the combined voting power of the Company's then
outstanding securities in one or more transactions, and the Board does not
authorize or otherwise approve such acquisition, then the vesting periods of any
and all Stock Options and other awards granted and outstanding under the Plan
shall be accelerated and all such Stock Options and awards will immediately and
entirely vest, and the respective holders thereof will have the immediate right
to purchase and/or receive any and all Common Stock subject to such Stock
Options and awards on the terms set forth in this Plan and the respective
agreements respecting such Stock Options and awards.
11
10.2. Approved Transactions. The Committee may, in the event of an
----------------------
acquisition of substantially all of the Company's assets or at least 50% of the
combined voting power of the Company's then outstanding securities in one or
more transactions (including by way of merger or reorganization) which has been
approved by the Company's Board of Directors, (i) accelerate the vesting of any
and all Stock Options and other awards granted and outstanding under the Plan,
and (ii) require a Holder of any award granted under this Plan to relinquish
such award to the Company upon the tender by the Company to Holder of cash in an
amount equal to the Repurchase Value of such award.
Section 11. Amendment and Termination.
The Board may at any time, and from time to time, amend alter, suspend
or discontinue any of the provisions of the Plan, but no amendment, alteration,
suspension or discontinuance shall be made that would impair the rights of a
Holder under any Agreement theretofore entered into hereunder, without the
Holder's consent.
Section 12. Term of Plan.
12.1. Effective Date. The Plan shall be effective as of July 11, 2002,
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subject to the approval of the Plan by the Company's stockholders within one
year after the Effective Date. Any awards granted under the Plan prior to such
approval shall be effective when made (unless otherwise specified by the
Committee at the time of grant), but shall be conditioned upon, and subject to,
such approval of the Plan by the Company's stockholders and no awards shall vest
or otherwise become free of restrictions prior to such approval.
12.2. Termination Date. Unless terminated by the Board, this Plan
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shall continue to remain effective until such time as no further awards may be
granted and all awards granted under the Plan are no longer outstanding.
Notwithstanding the foregoing, grants of Incentive Stock Options may be made
only during the ten year period following the Effective Date.
Section 13. General Provisions.
13.1. Written Agreements. Each award granted under the Plan shall be
-------------------
confirmed by, and shall be subject to the terms of, the Agreement executed by
the Company and the Holder, or such other document as may be determined by the
Committee. The Committee may terminate any award made under the Plan if the
Agreement relating thereto is not executed and returned to the Company within 10
days after the Agreement has been delivered to the Holder for his or her
execution.
13.2. Unfunded Status of Plan. The Plan is intended to constitute an
------------------------
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Holder by the Company, nothing contained herein shall
give any such Holder any rights that are greater than those of a general
creditor of the Company.
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13.3. Employees.
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(a) Engaging in Competition With the Company; Solicitation of
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Customers and Employees; Disclosure of Confidential Information. If a Holder's
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employment with the Company or a Subsidiary is terminated for any reason
whatsoever, and within 12 months after the date thereof such Holder either (i)
accepts employment with any competitor of, or otherwise engages in competition
with, the Company or any of its Subsidiaries, (ii) solicits any customers or
employees of the Company or any of its Subsidiaries to do business with or
render services to the Holder or any business with which the Holder becomes
affiliated or to which the Holder renders services or (iii) discloses to anyone
outside the Company or uses any confidential information or material of the
Company or any of its Subsidiaries in violation of the Company's policies or any
agreement between the Holder and the Company or any of its Subsidiaries, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Shares that was realized or obtained by such
Holder at any time during the period beginning on the date that is six months
prior to the date such Holder's employment with the Company is terminated. In
such event, Holder agrees to remit to the Company, in cash, an amount equal to
the difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Shares if the Shares were sold during
such six month period) and the price the Holder paid the Company for such
Shares.
(b) Termination for Cause. The Committee may, if a Holder's
----------------------
employment with the Company or a Subsidiary is terminated for cause, annul any
award granted under this Plan to such employee and, in such event, the
Committee, in its sole discretion, may require such Holder to return to the
Company the economic value of any Shares that was realized or obtained by such
Holder at any time during the period beginning on that date that is six months
prior to the date such Holder's employment with the Company is terminated. In
such event, Holder agrees to remit to the Company, in cash, an amount equal to
the difference between the Fair Market Value of the Shares on the date of
termination (or the sales price of such Shares if the Shares were sold during
such six month period) and the price the Holder paid the Company for such
Shares.
(c) No Right of Employment. Nothing contained in the Plan or
----------------------
in any award hereunder shall be deemed to confer upon any Holder who is an
employee of the Company or any Subsidiary any right to continued employment with
the Company or any Subsidiary, nor shall it interfere in any way with the right
of the Company or any Subsidiary to terminate the employment of any Holder who
is an employee at any time.
13.4. Investment Representations; Company Policy. The Committee may
--------------------------------------------
require each person acquiring shares of Common Stock pursuant to a Stock Option
or other award under the Plan to represent to and agree with the Company in
writing that the Holder is acquiring the shares for investment without a view to
distribution thereof. Each person acquiring shares of Common Stock pursuant to a
Stock Option or other award under the Plan shall be required to abide by all
policies of the Company in effect at the time of such acquisition and thereafter
with respect to the ownership and trading of the Company's securities.
13.5. Additional Incentive Arrangements. Nothing contained in the Plan
---------------------------------
shall prevent the Board from adopting such other or additional incentive
arrangements as it may deem desirable, including, but not limited to, the
granting of Stock Options and the awarding of Common Stock and cash otherwise
than under the Plan; and such arrangements may be either generally applicable or
applicable only in specific cases.
13
13.6. Withholding Taxes. Not later than the date as of which an amount
-----------------
must first be included in the gross income of the Holder for Federal income tax
purposes with respect to any Stock Option or other award under the Plan, the
Holder shall pay to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any Federal, state and local taxes of any
kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be
settled with Common Stock, including Common Stock that is part of the award that
gives rise to the withholding requirement. The obligations of the Company under
the Plan shall be conditioned upon such payment or arrangements and the Company
or the Holder's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Holder from the Company or any Subsidiary.
13.7. Governing Law. The Plan and all awards made and actions taken
--------------
thereunder shall be governed by and construed in accordance with the laws of the
State of Delaware (without regard to choice of law provisions); provided,
however, that all matters relating to or involving corporate law shall be
governed by the laws of the State of Delaware.
13.8. Other Benefit Plans. Any award granted under the Plan shall not
-------------------
be deemed compensation for purposes of computing benefits under any retirement
plan of the Company or any Subsidiary and shall not affect any benefits under
any other benefit plan now or subsequently in effect under which the
availability or amount of benefits is related to the level of compensation
(unless required by specific reference in any such other plan to awards under
this Plan).
13.9. Non-Transferability. Except as otherwise expressly provided in
-------------------
the Plan or the Agreement, no right or benefit under the Plan may be alienated,
sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
13.10. Applicable Laws. The obligations of the Company with respect to
----------------
all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any governmental
agencies as may be required, including, without limitation, the Securities Act
of 1933 (the "Securities Act"), as amended, and (ii) the rules and regulations
of any securities exchange on which the Common Stock may be listed.
13.11. Conflicts. If any of the terms or provisions of the Plan or an
---------
Agreement conflict with the requirements of Section 422 of the Code, then such
terms or provisions shall be deemed inoperative to the extent they so conflict
with such requirements. Additionally, if this Plan or any Agreement does not
contain any provision required to be included herein under Section 422 of the
Code, such provision shall be deemed to be incorporated herein and therein with
the same force and effect as if such provision had been set out at length herein
and therein. If any of the terms or provisions of any Agreement conflict with
any terms or provisions of the Plan, then such terms or provisions shall be
deemed inoperative to the extent they so conflict with the requirements of the
Plan. Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision had
been set out at length therein.
14
13.12. Non-Registered Stock. The shares of Common Stock to be
----------------------
distributed under this Plan have not been, as of the Effective Date, registered
under the Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to register the
Common Stock or to assist the Holder in obtaining an exemption from the various
registration requirements, or to list the Common Stock on a national securities
exchange or any other trading or quotation system, including the Nasdaq National
Market and Nasdaq SmallCap Market.
15
Plan Amendments
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Date Approved Initials of
by Attorney
Date Approved Stockholders, Sections Description of Effecting
by Board if necessary Amended Amendments Amendment
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16