EXHIBIT 10.1
UNION DENTAL HOLDINGS, INC.
2007 /08 EQUITY COMPENSATION PLAN
ARTICLE I
PURPOSE
The purpose of this UNION DENTAL HOLDINGS, INC., 2007/08 EQUITY COMPENSATION
PLAN (the "Plan") is to enhance the profitability and value of UNION DENTAL
HOLDINGS, INC. ( the "Company") for the benefit of its stockholders by enabling
the Company (i) to offer employees and consultants of the Company and its
Affiliates stock based incentives and other equity interests in the Company,
thereby creating a means to raise the level of stock ownership by employees and
consultants in order to attract, retain and reward such employees and
consultants and strengthen the mutuality of interests between employees or
consultants and the Company's stockholders and (ii) to offer equity based awards
to non-employee directors thereby attracting, retaining and rewarding such
non-employee directors and strengthening the mutuality of interests between
non-employee directors and the Company's stockholders.
ARTICLE I1
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" shall mean, other than the Company, each of the following:
(i) any Subsidiary; (ii) any Parent; (iii) any corporation, trade or business
(including, without limitation, a partnership or limited liability company)
which is directly or indirectly controlled fifty percent (50%) or more (whether
by ownership of stock, assets or an equivalent ownership interest or voting
interest) by the Company or one of its Affiliates; and (iv) any other entity,
approved by the Committee as an Affiliate under the Plan, in which the Company
or any of its Affiliates has a material equity interest.
2.2 "Award" shall mean any award under this Plan of any Stock Option, Stock
Appreciation Right Registered Stock or Restricted Stock. All Awards shall be
confirmed by, and subject to the terms of, a written agreement executed by the
Company and the Participant.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Cause" shall mean, with respect to a Participant's Termination of
Employment or Termination of Consultancy, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced, thereafter:
(i) in the case where there is no employment agreement, consulting agreement,
change in control agreement or similar agreement in effect between the Company
or an Affiliate and the Participant at the time of the grant of the Award (or
where there is such an agreement but it does not define "cause" (or words of
like import)), termination due to a Participant's dishonesty, fraud,
insubordination, willful misconduct, refusal to perform services (for any reason
other than illness or incapacity) or materially unsatisfactory performance of
his or her duties for the Company as determined by the Committee in its sole
discretion; or (ii) in the case where there is an employment agreement,
consulting agreement, change in control agreement or similar agreement in effect
between the Company or an Affiliate and the Participant at the time of the grant
of the Award that defines "cause" (or words of like import), as defined under
such agreement; provided, however, that with regard to any agreement that
conditions "cause" on occurrence of a change in control, such definition of
"cause" shall not apply until a change in control actually takes place and then
only with regard to a termination thereafter. With respect to a Participant's
Termination of Directorship, Cause shall mean an act or failure to act that
constitutes "cause" for removal of a director under applicable state corporate
law.
2.5 "Change in Control" shall have the meaning set forth in Article XI.
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2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision and any Treasury regulation thereunder.
2.7 "Committee" shall mean a committee of the Board that may be appointed
from time to time by the Board. To the extent determined appropriate by the
Board, or to the extent required under Rule 16b-3 and Section 162(m) of the
Code, such committee shall consist of two or more non-employee directors, each
of whom shall be a non-employee director as defined in Rule 16b-3 and an outside
director as defined under Section 162(m) of the Code. To the extent that no
Committee exists which has the authority to administer the Plan, the functions
of the Committee shall be exercised by the Board. If for any reason the
appointed Committee does not meet the requirements of Rule 16b-3 or Section
162(m) of the Code, such noncompliance with the requirements of Rule 16b-3 or
Section 162(m) of the Code shall not affect the validity of the awards, grants,
interpretations or other actions of the Committee. Notwithstanding the
foregoing, with respect to the application of the Plan to non-employee
directors, Committee shall mean the Board.
2.8 "Common Stock" shall mean the Company's common stock, $.0001par value
per share, of the Company.
2.9 "Company" shall mean Union Dental Holdings, Inc., a Florida
corporation.
2.10 "Consultant" shall mean any advisor or consultant to the Company or an
Affiliate who is eligible pursuant to Article V to be granted Awards under this
Plan.
2.11 Disability" shall mean total and permanent disability, as defined in
Section 22(e)(3) of the Code.
2.12 "Eligible Employees" shall mean the employees of the Company and its
Affiliates who are eligible pursuant to Article V to be granted Awards under
this Plan. Notwithstanding the foregoing, with respect to the grant of Incentive
Stock Options, Eligible Employees shall mean the employees of the Company, its
Subsidiaries and its Parents who are eligible pursuant to Article V to be
granted Stock Options under the Plan.
2.13 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.14 "Fair Market Value" for purposes of this Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, 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, based on reasonable methods set forth under Section
422 of the Code and the regulations thereunder including. For purposes of the
grant of any Award, the applicable date shall be the date on which the Award is
granted or, in the case of a Stock Appreciation Right, the date a notice of
exercise is received by the Committee or, if the sale of Common Stock shall not
have been reported or quoted on such date, the first day prior thereto on which
the sale of Common Stock was reported or quoted.
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2.15 "Good Reason" with respect to a Participant's Termination of
Employment or Termination of Consultancy shall mean (i) in the case where there
is no employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define "Good Reason" (or words of like import)), or
where "Good Reason" is not otherwise determined by the Committee at grant, or,
if no rights of the Participant are reduced, thereafter, a voluntary termination
due to "good reason," as the Committee, in its sole discretion, decides to treat
as a Good Reason termination, or (ii) in the case where there is an employment
agreement, consulting agreement, change in control agreement or similar
agreement in effect between the Company or an Affiliate and the Participant at
the time of the grant of the Award that defines "good reason" (or words of like
import), as defined under such agreement; provided, however, that with regard to
any agreement that conditions "good reason" on occurrence of a change in
control, such definition of "good reason" shall not apply until a change in
control actually takes place and then only with regard to a termination
thereafter.
2.16 "Incentive Stock Option" shall mean any Stock Option awarded under
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code.
2.17 "Limited Stock Appreciation Right" shall mean an Award of a limited
Tandem Stock Appreciation Right or a Non-Tandem Stock Appreciation Right made
pursuant to Section 8.5 of this Plan.
2.18 "Non-Qualified Stock Option" shall mean any Stock Option awarded under
this Plan that is not an Incentive Stock Option.
2.19 "Non-Tandem Stock Appreciation Right" shall mean a Stock Appreciation
Right entitling a Participant to receive an amount in cash or Common Stock (as
determined by the Committee in its sole discretion) equal to the excess of: (i)
the Fair Market Value of a share of Common Stock as of the date such right is
exercised, over (ii) the aggregate exercise price of such right.
2.20 "Parent" shall mean any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.21 "Participant" shall mean the following persons to whom an Award has
been made pursuant to this Plan: Eligible Employees of, and Consultants to, the
Company and its Affiliates and non-employee directors of the Company; provided,
however, that non-employee directors shall be Participants for purposes of the
Plan solely with respect to Awards pursuant to Article IX.
2.22 "Restricted Stock" shall mean an award of shares of Common Stock under
the Plan that is subject to restrictions under Article VII.
2.23 "Restriction Period" shall have the meaning set forth in Subsection
7.3(a) with respect to Restricted Stock for Eligible Employees.
2.24 "Retirement" with respect to a Participant's Termination of Employment
or Termination of Consultancy, shall mean a Termination of Employment or
Termination of Consultancy without Cause from the Company by a Participant who
has attained (i) at least age sixty-five (65); or (ii) such earlier date after
age fifty-five (55) as may be approved by the Committee with regard to such
Participant. With respect to a Participant's Termination of Directorship,
Retirement shall mean the failure to stand for reelection or the failure to be
reelected after a Participant has attained age sixty-five (65).
2.25 "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.
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2.26 "Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.
2.27 "Stock Appreciation Right" shall mean the right pursuant to an Award
granted under Article VIII. A Tandem Stock Appreciation Right shall mean the
right to surrender to the Company all (or a portion) of a Stock Option in
exchange for an amount in cash or stock equal to the excess of (i) the Fair
Market Value, on the date such Stock Option (or such portion thereof) is
surrendered, of the Common Stock covered by such Stock Option (or such portion
thereof), over (ii) the aggregate exercise price of such Stock Option (or such
portion thereof). A Non-Tandem Stock Appreciation Right shall mean the right to
receive an amount in cash or stock equal to the excess of (x) the Fair Market
Value of a share of Common Stock on the date such right is exercised, over (y)
the aggregate exercise price of such right, other than on surrender of a Stock
Option.
2.28 "Stock Option" or "Option" shall mean any Option to purchase shares of
Common Stock granted to Eligible Employees or Consultants pursuant to Article VI
or non-employee directors pursuant to Article IX.
2.29 "Subsidiary" shall mean any corporation that is defined as a
subsidiary corporation in Section 424(f) of the Code.
2.30 "Ten Percent Stockholder" shall mean a person owning Common Stock of
the Company possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, its Subsidiaries and/or its
Parents in the manner provided under Section 422 of the Code.
2.31 "Termination of Consultancy" shall mean, with respect to an
individual, that the individual is no longer acting as a Consultant to the
Company or an Affiliate. In the event an entity shall cease to be an Affiliate,
there shall be deemed a Termination of Consultancy of any individual who is not
otherwise a Consultant of the Company or another Affiliate at the time the
entity ceases to be an Affiliate. In the event that a Consultant becomes an
Eligible Employee upon the termination of his consultancy, the Committee, in its
sole and absolute discretion, may determine that no Termination of Consultancy
shall be deemed to occur until such time as such Consultant is no longer a
Consultant or an Eligible Employee.
2.32 "Termination of Directorship" shall mean, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company.
2.33 "Termination of Employment," except as provided in the next sentence,
shall mean (i) a termination of service (for reasons other than a military or
personal leave of absence granted by the Company) of a Participant from the
Company and its Affiliates; or (ii) when an entity which is employing a
Participant ceases to be an Affiliate, unless the Participant thereupon becomes
employed by the Company or another Affiliate. In the event that an Eligible
Employee becomes a Consultant upon the termination of his employment, the
Committee, in its sole and absolute discretion, may determine that no
Termination of Employment shall be deemed to occur until such time as such
Eligible Employee is no longer an Eligible Employee or a Consultant. The
Committee may otherwise define Termination of Employment in the Option grant or,
if no rights of the Participant are reduced, may otherwise define Termination of
Employment thereafter, including, but not limited to, defining Termination of
Employment with regard to entities controlling, under common control with or
controlled by the Company rather than just the Company and its Affiliates and/or
entities that provide substantial services to the Company or its Affiliates to
which the Participant has transferred directly from the Company or its
Affiliates at the request of the Company.
2.34 "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.
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ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered and interpreted by the
Committee or if no Committee, by the Board of Directors.
3.2 AWARDS. The Committee shall have full authority to:
(a) to select the Eligible Employees and Consultants to whom Stock Options,
Stock Appreciation Rights, Restricted Stock or Registered Stock may from
time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options, Stock
Appreciation Rights, Restricted Stock, Registered Stock or any combination
thereof are to be granted hereunder to one or more Eligible Employees or
Consultants;
(c) to determine, in accordance with the terms of this Plan, the number of
shares of Common Stock to be covered by each Award to an Eligible Employee
or Consultant granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms
of this Plan, of any Award granted hereunder to an Eligible Employee or
Consultant (including, but not limited to, the exercise or purchase price
(if any), any restriction or limitation, any vesting schedule or
acceleration thereof, or any forfeiture restrictions or waiver thereof,
regarding any Stock Option or other Award, and the shares of Common Stock
relating thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e) Intentionally Deleted.
(f) Intentionally Deleted.
(g) to modify, extend or renew a Stock Option, subject to Article XII
hereof, provided, however, that if a Stock Option is modified, extended or
renewed and thereby deemed to be the issuance of a new Stock Option under
the Code or the applicable accounting rules, the exercise price of such
Stock Option may continue to be the original exercise price even if less
than the Fair Market Value of the Common Stock at the time of such
modification, extension or renewal;
(h) to determine whether a Stock Option is an Incentive Stock Option or
Non-Qualified Stock Option, whether a Stock Appreciation Right is a Tandem
Stock Appreciation Right or Non-Tandem Stock Appreciation Right or whether
an Award is intended to satisfy Section 162(m) of the Code;
(i) to determine whether to require an Eligible Employee or Consultant, as
a condition of the granting of any Award, to not sell or otherwise dispose
of shares acquired pursuant to the exercise of an Option or as an Award for
a period of time as determined by the Committee, in its sole discretion,
following the date of the acquisition of such Option or Award; and
(j) Intentionally Deleted.
(k) to grant Awards under the Plan as a conversion from, and replacement
of, comparable stock options, stock appreciation rights or restricted stock
held by employees of another entity who become Eligible Employees of, or
Consultants to, the Company or an Affiliate as the result of a merger or
consolidation of the employing entity with the Company or an Affiliate, or
as the result of the acquisition by the Company of property or stock of the
employing corporation. The Company may direct that replacement Awards be
granted on such terms and conditions as the Committee considers appropriate
in the circumstances, including, without limitation, that Non-Qualified
Stock Options shall be granted in lieu of Incentive Stock Options.
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3.3 GUIDELINES. Subject to the terms and conditions of the Plan, the
Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing this Plan and perform
all acts, including the delegation of its administrative responsibilities, as it
shall, from time to time, deem advisable; to construe and interpret the terms
and provisions of this Plan and any Award issued under this Plan (and any
agreements relating thereto); and to otherwise supervise the administration of
this Plan. The Committee may correct any defect, supply any omission or
reconcile any inconsistency in this Plan or in any agreement relating thereto in
the manner and to the extent it shall deem necessary to carry this Plan into
effect, but only to the extent any such action would be permitted under the
applicable provisions of Rule 16b-3 (if any) and the applicable provisions of
Section 162(m) of the Code (if any). The Committee may adopt special guidelines
and provisions for persons who are residing in, or subject to the taxes of,
countries other than the United States to comply with applicable tax and
securities laws. If ,or to the extent applicable, this Plan is intended to
comply with Section 162(m) of the Code and the applicable requirements of Rule
16b-3 and shall be limited, construed and interpreted in a manner so as to
comply therewith.
3.4 DECISIONS FINAL. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective heirs, executors, administrators,
successors and assigns. The Committee shall not be bound to any standards of
uniformity or similarity of action, interpretation or conduct in the discharge
of its duties hereunder, regardless of the apparent similarity of the matters
coming before it.
3.5 RELIANCE ON COUNSEL. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advice of such counsel.
3.6 PROCEDURES. If the Committee is appointed, the Board may designate one
of the members of the Committee as chairman and the Committee shall hold
meetings, subject to the By-Laws of the Company, at such times and places as it
shall deem advisable. A majority of the Committee members shall constitute a
quorum. All determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by all
Committee members in accordance with the By-Laws of the Company shall be fully
effective as if it had been made by a vote at a meeting duly called and held.
The Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
3.7 DESIGNATION OF CONSULTANTS--LIABILITY.
(a) The Committee may designate employees of the Company and professional
advisors to assist the Committee in the administration of the Plan and may
grant authority to employees to execute agreements or other documents on
behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely upon
any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Committee or Board in the engagement of any such counsel, consultant
or agent shall be paid by the Company. The Committee, its members and any
person designated pursuant to paragraph (a) above shall not be liable for
any action or determination made in good faith with respect to the Plan.
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To the maximum extent permitted by applicable law, no officer of the
Company or member or former member of the Committee or of the Board shall be
liable for any action or determination made in good faith with respect to the
Plan or any Award granted under it. To the maximum extent permitted by
applicable law and the Certificate of Incorporation and By-Laws of the Company
and to the extent not covered by insurance, each employee of the Company and
member or former member of the Committee or of the Board shall be indemnified
and held harmless by the Company against any cost or expense (including
reasonable fees of counsel reasonably acceptable to the Company) or liability
(including any sum paid in settlement of a claim with the approval of the
Company), and advanced amounts necessary to pay the foregoing at the earliest
time and to the fullest extent permitted, arising out of any act or omission to
act in connection with the Plan, except to the extent arising out of such
officer's, member's or former member's own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
employees, officers, directors or members or former officers, directors or
members may have under applicable law or under the Certificate of Incorporation
or By-Laws of the Company or Affiliate. Notwithstanding anything else herein,
this indemnification will not apply to the actions or determinations made by an
individual with regard to Awards granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 SHARES. (a) GENERAL LIMITATION. The aggregate number of shares of
Common Stock which may be issued or used for reference purposes under this Plan
or with respect to which other Awards may be granted shall not exceed seven (7)
million shares (subject to any increase or decrease pursuant to Section 4.2)
which may be either authorized and unissued Common Stock or Common Stock held in
or acquired for the treasury of the Company.
If any Option or Stock Appreciation Right granted under this Plan expires,
terminates or is canceled for any reason without having been exercised in full
or, with respect to Options, the Company repurchases any Option pursuant to
Section 6.3(f), the number of shares of Common Stock underlying the repurchased
Option, and/or the number of shares of Common Stock underlying any unexercised
Stock Appreciation Right or Option shall again be available for the purposes of
Awards under the Plan. If a Tandem Stock Appreciation Right or a Limited Stock
Appreciation Right is granted in tandem with an Option, such grant shall only
apply once against the maximum number of shares of Common Stock which may be
issued under this Plan. In determining the number of shares of Common Stock
available for Awards other than Awards of Incentive Stock Options, if Common
Stock has been delivered or exchanged by a Participant as full or partial
payment to the Company for the exercise price or for withholding taxes, in
connection with the exercise of a Stock Option or the number shares of Common
Stock otherwise deliverable has been reduced for full or partial payment for the
exercise price or for withholding taxes, the number of shares of Common Stock
delivered, exchanged or reduced shall again be available for purposes of Awards
under this Plan.
In the event Awards are granted to employees or Consultants pursuant to
Section 3.2(l), the aggregate number of shares of Common Stock available under
the Plan for Awards other than Incentive Stock Options shall be increased by the
number of shares of Common Stock which may be issued or used for reference with
respect to those Awards granted pursuant to Section 3.2(l). The maximum number
of shares of Common Stock which may be issued under this Plan with respect to
Incentive Stock Options shall not be increased (subject to any increase or
decrease pursuant to Section 4.2).
4.2 CHANGES.
(a) The existence of the Plan and the Awards granted hereunder shall not
affect in any way the right or power of the Board or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
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reorganization or other change in the Company's capital structure or its
business, any merger or consolidation of the Company or its Affiliates, any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting Common Stock, the dissolution or liquidation of the Company or
its Affiliates, any sale or transfer of all or part of its assets or
business or any other corporate act or proceeding.
(b) In the event of any such change in the capital structure or business of
the Company by reason of any stock dividend or distribution, stock split or
reverse stock split, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares, distribution
with respect to its outstanding Common Stock or capital stock other than
Common Stock, sale or transfer of all or part of its assets or business,
reclassification of its capital stock, or any similar change affecting the
Company's capital structure or business and the Committee determines an
adjustment is appropriate under the Plan, then the aggregate number and
kind of shares which thereafter may be issued under this Plan, the number
and kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Option or other Awards granted under this Plan
and the purchase price thereof shall be appropriately adjusted consistent
with such change in such manner as the Committee may deem equitable to
prevent substantial dilution or enlargement of the rights granted to, or
available for, Participants under this Plan or as otherwise necessary to
reflect the change, and any such adjustment determined by the Committee
shall be binding and conclusive on the Company and all Participants and
employees and their respective heirs, executors, administrators, successors
and assigns.
(c) Fractional shares of Common Stock resulting from any adjustment in
Options or Awards pursuant to Section 4.2(a) or (b) shall be aggregated
until, and eliminated at, the time of exercise by rounding-down for
fractions less than one-half (1/2) and rounding-up for fractions equal to
or greater than one-half (1/2). No cash settlements shall be made with
respect to fractional shares eliminated by rounding. Notice of any
adjustment shall be given by the Committee to each Participant whose Option
or Award has been adjusted and such adjustment (whether or not such notice
is given) shall be effective and binding for all purposes of the Plan.
(d) In the event of a merger or consolidation in which the Company is not
the surviving entity or in the event of any transaction that results in the
acquisition of substantially all of the Company's outstanding Common Stock
by a single person or entity or by a group of persons and/or entities
acting in concert, or in the event of the sale or transfer of all of the
Company's assets (all of the foregoing being referred to as "Acquisition
Events"), then the Committee may, in its sole discretion, terminate all
outstanding Options and Stock Appreciation Rights of Eligible Employees and
Consultants, effective as of the date of the Acquisition Event, by
delivering notice of termination to each such Participant at least twenty
(20) days prior to the date of consummation of the Acquisition Event;
provided, that during the period from the date on which such notice of
termination is delivered to the consummation of the Acquisition Event, each
such Participant shall have the right to exercise in full all of his or her
Options and Stock Appreciation Rights that are then outstanding (without
regard to any limitations on exercisability otherwise contained in the
Option or Award Agreements) but contingent on occurrence of the Acquisition
Event, and, provided that, if the Acquisition Event does not take place
within a specified period after giving such notice for any reason
whatsoever, the notice and exercise shall be null and void.
(e) If an Acquisition Event occurs, to the extent the Committee does not
terminate the outstanding Options and Stock Appreciation Rights pursuant to
this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
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4.3 PURCHASE PRICE. Notwithstanding any provision of this Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
ARTICLE V
ELIGIBILITY
5.1 All employees of and Consultants to the Company and its Affiliates are
eligible to be granted Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock and Registered Stock, subject to any filing requirements, under
this Plan. All employees of the Company, its Subsidiaries and its Parents are
eligible to be granted Incentive Stock Options under the Plan. Eligibility under
this Plan shall be determined by the Committee.
ARTICLE VI
STOCK OPTION GRANTS
6.1 OPTIONS. Each Stock Option granted hereunder shall be one of two types:
(i) an Incentive Stock Option intended to satisfy the requirements of Section
422 of the Code or (ii) a Non-Qualified Stock Option.
6.2 GRANTS. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options (in each case with or without Stock Appreciation
Rights). The Committee shall have the authority to grant to any Consultant one
or more Non-Qualified Stock Options (with or without Stock Appreciation Rights).
To the extent that any Stock Option does not qualify as an Incentive Stock
Option (whether because of its provisions or the time or manner of its exercise
or otherwise), such Stock Option or the portion thereof which does not qualify,
shall constitute a separate Non-Qualified Stock Option. Notwithstanding any
other provision of this Plan to the contrary or any provision in an agreement
evidencing the grant of a Stock Option to the contrary, any Stock Option granted
to an Eligible Employee of an Affiliate (other than an Affiliate which is a
Parent or a Subsidiary) or to any Consultant shall be a Non-Qualified Stock
Option.
6.3 TERMS OF OPTIONS. Options granted under this Plan shall be subject to
the following terms and conditions, shall be subject to Section 3.2 hereof and
the other provisions of this Plan, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:
(a) OPTION PRICE. The option price per share of Common Stock purchasable
under an Incentive Stock Option shall be determined by the Committee at the
time of grant but shall not be less than 100% of the Fair Market Value of
the share of Common Stock at the time of grant; provided, however, if an
Incentive Stock Option is granted to a Ten Percent Stockholder, the
purchase price shall be no less than 110% of the Fair Market Value of the
Common Stock. The purchase price of shares of Common Stock subject to a
Non-Qualified Stock Option shall be determined by the Committee.
Notwithstanding the foregoing, if an Option is modified, extended or
renewed and, thereby, deemed to be the issuance of a new Option under the
Code, the exercise price of an Option may continue to be the original
exercise price even if less than the Fair Market Value of the Common Stock
at the time of such modification, extension or renewal.
(b) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted, provided, however, the term of
an Incentive Stock Option granted to a Ten Percent Stockholder may not
exceed five (5) years.
9
(c) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by
the Committee at grant. If the Committee provides, in its discretion, that
any Stock Option is exercisable subject to certain limitations (including,
without limitation, that it is exercisable only in installments or within
certain time periods), the Committee may waive such limitations on the
exercisability at any time at or after grant in whole or in part
(including, without limitation, that the Committee may waive the
installment exercise provisions or accelerate the time at which Options may
be exercised), based on such factors, if any, as the Committee shall
determine, in its sole discretion.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise and
waiting period provisions apply under subsection (c) above, Stock Options
may be exercised in whole or in part at any time during the Option term, 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 in such form, or such other
arrangement for the satisfaction of the purchase price, as the Committee
may accept. To the extent determined by the Committee in its sole
discretion at or after grant, payment in full or in part may be made as
follows: (i) in cash or by check, bank draft or money order payable to the
order of the Company; (ii) if the Common Stock is traded on a national
securities exchange, the Nasdaq Stock Market, Inc. or quoted on a national
quotation system sponsored by the National Association of Securities
Dealers, through a "cashless exercise" procedure whereby the Participant
delivers irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the purchase price, (iii) in the form of Common
Stock owned by the Participant for at least 6 months (and for which the
Participant has good title free and clear of any liens and encumbrances) or
(iv) in the form of Restricted Stock; provided, however, that in each case,
such payment is based on the Fair Market Value of the Common Stock on the
payment date as determined by the Committee (without regard to any
forfeiture restrictions applicable to such Restricted Stock). No shares of
Common Stock shall be issued until payment, as provided herein, therefor
has been made or provided for. If payment in full or in part has been made
in the form of Restricted Stock, an equivalent number of shares of Common
Stock issued on exercise of the Option shall be subject to the same
restrictions and conditions, during the remainder of the Restriction
Period, applicable to the Restricted Stock surrendered therefor.
(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock
with respect to which Incentive Stock Options are exercisable for the first
time by an Eligible Employee during any calendar year under the Plan and/or
any other stock option plan of the Company or any Subsidiary or Parent
exceeds $100,000, such Options shall be treated as Options which are not
Incentive Stock Options. In addition, if an Eligible Employee does not
remain employed by the Company, any Subsidiary or Parent at all times from
the time the Option is granted until three (3) months prior to the date of
exercise (or such other period as required by applicable law), such Option
shall be treated as an Option which is not a Non-Qualified Stock Option.
Should the foregoing provision not be necessary in order for the Stock
Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Committee may amend the Plan accordingly,
without the necessity of obtaining the approval of the stockholders of the
Company.
(f) BUY OUT AND SETTLEMENT PROVISIONS. The Committee may at any time on
behalf of the Company offer to buy out an Option previously granted, based
on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time that such offer is made
10
(g) FORM, MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the
terms and conditions and within the limitations of the Plan, an Option
shall be evidenced by such form of agreement or grant as is approved by the
Committee, and the Committee may modify, extend or renew outstanding
Options granted under the Plan (provided that the rights of a Participant
are not reduced without his consent), or accept the surrender of
outstanding Options (up to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the
extent not theretofore exercised).
(h) DEFERRED DELIVERY OF COMMON SHARES. The Committee may in its discretion
permit Participants to defer delivery of Common Stock acquired pursuant to
a Participant's exercise of an Option in accordance with the terms and
conditions established by the Committee.
(i) OTHER TERMS AND CONDITIONS. Options may contain such other provisions,
which shall not be inconsistent with any of the foregoing terms of the
Plan, as the Committee shall deem appropriate including, without
limitation, permitting "reloads" such that the same number of Options are
granted as the number of Options exercised, shares used to pay for the
exercise price of Options or shares used to pay withholding taxes
("Reloads"). With respect to Reloads, the exercise price of the new Stock
Option shall be the Fair Market Value on the date of the "reload" and the
term of the Stock Option shall be the same as the remaining term of the
Options that are exercised, if applicable, or such other exercise price and
term as determined by the Committee
6.4 TERMINATION OF EMPLOYMENT. The following rules apply with regard to
Options upon the Termination of Employment or Termination of Consultancy of a
Participant:
(a) TERMINATION BY REASON OF DEATH. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of death, any Stock
Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant's estate are
reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any time
within a period of one (1) year from the date of such death, but in no
event beyond the expiration of the stated term of such Stock Option.
(b) TERMINATION BY REASON OF DISABILITY. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of Disability, any
Stock Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant are reduced,
thereafter, may be exercised, to the extent exercisable at the
Participant's termination, by the Participant (or the legal representative
of the Participant's estate if the Participant dies after termination) at
any time within a period of one (1) year from the date of such termination,
but in no event beyond the expiration of the stated term of such Stock
Option.
(c) TERMINATION BY REASON OF RETIREMENT. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of Retirement, any
Stock Option held by such Participant, unless otherwise determined by the
Committee at grant, or, if no rights of the Participant are reduced,
thereafter, shall be fully vested and may thereafter be exercised by the
Participant at any time within a period of one (1) year from the date of
such termination, but in no event beyond the expiration of the stated term
of such Stock Option; provided, however, that, if the Participant dies
within such exercise period, any unexercised Stock Option held by such
11
Participant shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one (1) year (or such
other period as the Committee may specify at grant or, if no rights of the
Participant's estate are reduced, thereafter) from the date of such death,
but in no event beyond the expiration of the stated term of such Stock
Option.
(d) INVOLUNTARY TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
If a Participant's Termination of Employment or Termination of Consultancy
is by involuntary termination without Cause or for Good Reason, any Stock
Option held by such Participant, unless otherwise determined by the
Committee at grant or, if no rights of the Participant are reduced,
thereafter, may be exercised, to the extent exercisable at termination, by
the Participant at any time within a period of ninety (90) days from the
date of such termination, but in no event beyond the expiration of the
stated term of such Stock Option.
(e) TERMINATION WITHOUT GOOD REASON. If a Participant's Termination of
Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of Employment
or Termination of Consultancy by the Company for Cause (without regard to
any notice or cure period requirements), any Stock Option held by such
Participant, unless otherwise determined by the Committee at grant or, if
no rights of the Participant are reduced, thereafter, may be exercised, to
the extent exercisable at termination, by the Participant at any time
within a period of thirty (30) days from the date of such termination, but
in no event beyond the expiration of the stated term of such Stock Option.
(f) OTHER TERMINATION. Unless otherwise determined by the Committee at
grant or, if no rights of the Participant are reduced, thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Option held by such Participant shall
thereupon terminate and expire as of the date of termination, provided that
(unless the Committee determines a different period upon grant or, if no
rights of the Participant are reduced, thereafter) in the event the
termination is for Cause or is a voluntary termination without Good Reason
within ninety (90) days after occurrence of an event which would be grounds
for Termination of Employment or Termination of Consultancy by the Company
for Cause (without regard to any notice or cure period requirement), any
Stock Option held by the Participant at the time of occurrence of the event
which would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause shall be deemed to have terminated and
expired upon occurrence of the event which would be grounds for Termination
of Employment or Termination of Consultancy by the Company for Cause.
ARTICLE VII
STOCK AWARDS
7.1 STOCK AWARDS. Shares of Restricted Stock or Registered Stock may be
issued to Eligible Employees or Consultants either alone or 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 or
Registered Stock will be made, the number of shares to be awarded, the price (if
any) to be paid by the recipient (subject to Section 7.2), the time or times
within which such Awards may be subject to forfeiture, the vesting schedule and
rights to acceleration thereof, and all other terms and conditions of the
Awards.
12
7.2 AWARDS AND CERTIFICATES. The prospective Participant selected to
receive a Stock Award shall not have any rights with respect to such Award,
unless and until such Participant has delivered a fully executed copy of the
applicable agreement evidencing the Award (the "Stock Award Agreement") to the
Company and has otherwise complied with the applicable terms and conditions of
such Award. Further, such Award shall be subject to the following conditions:
(a) PURCHASE PRICE. The purchase price of Restricted Stock and Registered
Stock shall be fixed by the Committee. Subject to Section 4.3, the purchase
price for shares of Restricted Stock or Registered Stock may not be less
than the par value of the Common Stock unless permitted otherwise by
applicable law.
(b) ACCEPTANCE. Stock Awards must be accepted within a period of sixty (60)
days (or such shorter period as the Committee may specify at grant) after
the Award date, by executing a Stock Award Agreement and by paying whatever
price (if any) the Committee has designated thereunder.
(c) LEGEND. If the Company should issue to a Plan Participant restricted
shares of common stock, the Company may place an appropriate restrictive
legend on the Shares so issued.
(d) CUSTODY. The Committee may require that any stock certificates
evidencing restricted shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Participant shall have delivered a duly signed
stock power, endorsed in blank, relating to the Common Stock covered by
such Award.
7.3 RESTRICTIONS AND CONDITIONS ON RESTRICTED STOCK AWARDS. The shares of
Restricted Stock awarded pursuant to this Plan shall be subject to Article X and
the following restrictions and conditions:
(a) RESTRICTION PERIOD; VESTING AND ACCELERATION OF VESTING. The
Participant shall not be permitted to Transfer shares of Restricted Stock
awarded under this Plan during a period set by the Committee (the
"Restriction Period") commencing with the date of such Award, as set forth
in the Restricted Stock Award agreement and such agreement shall set forth
a vesting schedule and any events which would accelerate vesting of the
shares of Restricted Stock. Within these limits, based on service, or other
criteria determined by the Committee, the Committee may provide for the
lapse of such restrictions in installments in whole or in part, or may
accelerate the vesting of all or any part of any Restricted Stock Award.
(b) RIGHTS AS STOCKHOLDER. Except as provided in this subsection (b) and
subsection (a) above and as otherwise determined by the Committee, the
Participant shall have, with respect to the shares of Restricted Stock, all
of the rights of a holder of shares of Common Stock of the Company
including, without limitation, the right to receive any dividends, the
right to vote such shares and, subject to and conditioned upon the full
vesting of shares of Restricted Stock, the right to tender such shares.
Notwithstanding the foregoing, the payment of dividends shall be deferred
until, and conditioned upon, the expiration of the applicable Restriction
Period, unless the Committee, in its sole discretion, specifies otherwise
at the time of the Award.
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(c) LAPSE OF RESTRICTIONS. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to such
Restriction Period, the certificates for such shares shall be delivered to
the Participant. All legends shall be removed from said certificates at the
time of delivery to the Participant except as otherwise required by
applicable law.
(d) TERMINATION OF EMPLOYMENT OR TERMINATION OF CONSULTANCY FOR RESTRICTED
STOCK. Subject to the applicable provisions of the Restricted Stock Award
agreement and this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the relevant Restriction
Period, all Restricted Stock still subject to restriction will vest or be
forfeited in accordance with the terms and conditions established by the
Committee at grant or thereafter.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 TANDEM STOCK APPRECIATION RIGHTS. Stock Appreciation Rights may be
granted in conjunction with all or part of any Stock Option (a "Reference Stock
Option") granted under this Plan ("Tandem Stock Appreciation Rights"). In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Reference Stock Option. In the case of an
Incentive Stock Option, such rights may be granted only at the time of the grant
of such Reference Stock Option.
8.2 TERMS AND CONDITIONS OF TANDEM STOCK APPRECIATION RIGHTS. Tandem Stock
Appreciation Rights shall be subject to such terms and conditions, not
inconsistent with the provisions of this Plan, as shall be determined from time
to time by the Committee, including Article X and the following:
(a) TERM. A Tandem Stock Appreciation Right or applicable portion thereof
granted with respect to a Reference Stock Option shall terminate and no
longer be exercisable upon the termination or exercise of the Reference
Stock Option, except that, unless otherwise determined by the Committee, in
its sole discretion, at the time of grant, a Tandem Stock Appreciation
Right granted with respect to less than the full number of shares covered
by the Reference Stock Option shall not be reduced until and then only to
the extent the exercise or termination of the Reference Stock Option causes
the number of shares covered by the Tandem Stock Appreciation Right to
exceed the number of shares remaining available and unexercised under the
Reference Stock Option.
(b) EXERCISABILITY. Tandem Stock Appreciation Rights shall be exercisable
only at such time or times and to the extent that the Reference Stock
Options to which they relate shall be exercisable in accordance with the
provisions of Article VI and this Article VIII.
(c) METHOD OF EXERCISE. A Tandem Stock Appreciation Right may be exercised
by an optionee by surrendering the applicable portion of the Reference
Stock Option. Upon such exercise and surrender, the Participant shall be
entitled to receive an amount determined in the manner prescribed in this
Section 8.2. Stock Options which have been so surrendered, in whole or in
part, shall no longer be exercisable to the extent the related Tandem Stock
Appreciation Rights have been exercised.
(d) PAYMENT. Upon the exercise of a Tandem Stock Appreciation Right a
Participant shall be entitled to receive up to, but no more than, an amount
in cash and/or Common Stock (as chosen by the Committee in its sole
14
discretion) equal in value to the excess of the Fair Market Value of one
share of Common Stock over the option price per share specified in the
Reference Stock Option multiplied by the number of shares in respect of
which the Tandem Stock Appreciation Right shall have been exercised, with
the Committee having the right to determine the form of payment.
(e) DEEMED EXERCISE OF REFERENCE STOCK OPTION. Upon the exercise of a
Tandem Stock Appreciation Right, the Reference Stock Option or part thereof
to which such Stock Appreciation Right is related shall be deemed to have
been exercised for the purpose of the limitation set forth in Article IV of
the Plan on the number of shares of Common Stock to be issued under the
Plan.8.3 NON-TANDEM STOCK APPRECIATION RIGHTS. Non-Tandem Stock
Appreciation Rights may also be granted without reference to any Stock
Options granted under this Plan.
8.4 TERMS AND CONDITIONS OF NON-TANDEM STOCK APPRECIATION RIGHTS.
Non-Tandem Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of this Plan, as shall be
determined from time to time by the Committee, including Article X and the
following:
(a) TERM. The term of each Non-Tandem Stock Appreciation Right shall be
fixed by the Committee, but shall not be greater than ten (10) years after
the date the right is granted.
(b) EXERCISABILITY. Non-Tandem Stock Appreciation Rights shall be
exercisable at such time or times and subject to such terms and conditions
as shall be determined by the Committee at grant. If the Committee
provides, in its discretion, that any such right is exercisable subject to
certain limitations (including, without limitation, that it is exercisable
only in installments or within certain time periods), the Committee may
waive such limitation on the exercisability at any time at or after grant
in whole or in part (including, without limitation, that the Committee may
waive the installment exercise provisions or accelerate the time at which
rights may be exercised), based on such factors, if any, as the Committee
shall determine, in its sole discretion.
(c) METHOD OF EXERCISE. Subject to whatever installment exercise and
waiting period provisions apply under subsection (b) above, Non-Tandem
Stock Appreciation Rights may be exercised in whole or in part at any time
during the option term, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to be
exercised.
(d) PAYMENT. Upon the exercise of a Non-Tandem Stock Appreciation Right a
Participant shall be entitled to receive, for each right exercised, up to,
but no more than, an amount in cash and/or Common Stock (as chosen by the
Committee in its sole discretion) equal in value to the excess of the Fair
Market Value of one share of Common Stock on the date the right is
exercised over the Fair Market Value of one (1) share of Common Stock on
the date the right was awarded to the Participant.
8.5 LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon a Change in Control
(to the extent provided in an Award agreement granting such Limited Stock
Appreciation Rights) or the occurrence of such other event as the Committee may,
in its sole discretion, designate at the time of grant or thereafter. Upon the
exercise of Limited Stock Appreciation Rights, except as otherwise provided in
an Award agreement, the Participant shall receive in cash or Common Stock, as
determined by the Committee, an amount equal to the amount (1) set forth in
Section 8.2(d) with respect to Tandem Stock Appreciation Rights or (2) set forth
in Section 8.4(d) with respect to Non-Tandem Stock Appreciation Rights.
15
8.6 TERMINATION OF EMPLOYMENT OR TERMINATION OF CONSULTANCY. The following
rules apply with regard to Stock Appreciation Rights upon the Termination of
Employment or Termination of Consultancy of a Participant:
(a) TERMINATION BY DEATH. If a Participant's Termination of Employment or
Termination of Consultancy is by reason of death, any Stock Appreciation
Right held by such Participant, unless otherwise determined by the
Committee at grant or if no rights of the Participant's estate are reduced,
thereafter, may be exercised, to the extent exercisable at the
Participant's death, by the legal representative of the estate, at any time
within a period of one (1) year from the date of such death or until the
expiration of the stated term of such Stock Appreciation Right, whichever
period is the shorter.
(b) TERMINATION BY REASON OF DISABILITY. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of Disability, any
Stock Appreciation Right held by such participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant
are reduced, thereafter, may be exercised, to the extent exercisable at the
Participant's termination, by the Participant (or the legal representative
of the Participant's estate if the Participant dies after termination) at
any time within a period of one (1) year from the date of such termination
or until the expiration of the stated term of such Stock Appreciation
Right, whichever period is the shorter.
(c) TERMINATION BY REASON OF RETIREMENT. If a Participant's Termination of
Employment or Termination of Consultancy is by reason of Retirement, any
Stock Appreciation Right held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant
are reduced, thereafter, shall be fully vested and may thereafter be
exercised by the Participant at any time within a period of one (1) year
from the date of such termination or until the expiration of the stated
term of such right, whichever period is the shorter; provided, however,
that, if the Participant dies within such one (1) year period, any
unexercised Non-Tandem Stock Appreciation Right held by such Participant
shall thereafter be exercisable, to the extent to which it was exercisable
at the time of death, for a period of one (1) year (or such other period as
the Committee may specify at grant or if no rights of the Participant are
reduced, thereafter) from the date of such death or until the expiration of
the stated term of such right, whichever period is the shorter.
(d) INVOLUNTARY TERMINATION WITHOUT CAUSE OR TERMINATION FOR GOOD REASON.
If a Participant's Termination of Employment or Termination of Consultancy
is by involuntary termination without Cause or for Good Reason, any Stock
Appreciation Right held by such participant, unless otherwise determined by
the Committee at grant or if no rights of the participant are reduced,
thereafter, may be exercised, to the extent exercisable at termination, by
the Participant at any time within a period of ninety (90) days from the
date of such termination or until the expiration of the stated term of such
right, whichever period is shorter.
(e) TERMINATION WITHOUT GOOD REASON. If a Participant's Termination of
Employment or Termination of Consultancy is voluntary but without Good
Reason and occurs prior to, or more than ninety (90) days after, the
occurrence of an event which would be grounds for Termination of Employment
or Termination of Consultancy by the Company for Cause (without regard to
any notice or cure period requirements), any Stock Appreciation Right held
by such Participant, unless greater or lesser exercise rights are provided
by the Committee at the time of grant or, if no rights of the participant
16
are reduced, thereafter, may be exercised, to the extent exercisable at
termination, by the Participant at any time within a period of thirty (30)
days from the date of such termination, but in no event beyond the
expiration of the stated term of such Stock Appreciation Right.
(f) OTHER TERMINATION. Unless otherwise determined by the Committee at
grant, or, if no rights of the Participant are reduced thereafter, if a
Participant's Termination of Employment or Termination of Consultancy is
for any reason other than death, Disability, Retirement, Good Reason,
involuntary termination without Cause or voluntary termination as provided
in subsection (e) above, any Stock Appreciation Right held by such
Participant shall thereupon terminate or expire as of the date of
termination, provided, that (unless the Committee determines a different
period upon grant, or, if no rights of the Participant are reduced,
thereafter) in the event the termination is for Cause or is a voluntary
termination as provided in subsection (e) above, within ninety (90) days
after occurrence of an event which would be grounds for Termination of
Employment or Termination of Consultancy by the Company for Cause (without
regard to any notice or cure period requirement), any Stock Appreciation
Right held by the Participant at the time of the occurrence of the event
which would be grounds for Termination of Employment or Termination of
Consultancy by the Company for Cause shall be deemed to have terminated and
expired upon occurrence of the event which would be grounds for Termination
of Employment or Termination of Consultancy by the Company for Cause.
ARTICLE IX
INTENTIONALLY DELETED.
ARTICLE X
NON-TRANSFERABILITY
Except as provided in the last sentence of this Article X, no Stock Option
or Stock Appreciation Right granted to an Employee or Consultant shall be
Transferable by the Participant otherwise than by will or by the laws of descent
and distribution. All Stock Options and all Stock Appreciation Rights granted to
an Employee or Consultant shall be exercisable, during the Participant's
lifetime, only by the Participant. Tandem Stock Appreciation Rights shall be
Transferable, to the extent permitted above, only with the underlying Stock
Option. Shares of Restricted Stock under Article VII may not be Transferred
prior to the date on which shares are issued, or, if later, the date on which
any applicable restriction lapses. No Award shall, except as otherwise
specifically provided by law or herein, be Transferable in any manner, and any
attempt to Transfer any such Award shall be void, and no such Award shall in any
manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Award, nor
shall it be subject to attachment or legal process for or against such person.
All Stock Options granted to non-employee directors shall be Transferable solely
to such non-employee director's principal employer (other than the Company or an
Affiliate) at the time of grant if the terms of such non-employee director's
employment so require. Notwithstanding the foregoing, the Committee may
determine at the time of grant or thereafter, that a Non-Qualified Stock Option
that is otherwise not transferable pursuant to this Article X is transferable in
whole or part and in such circumstances, and under such conditions, as specified
by the Committee.
17
ARTICLE XI
CHANGE IN CONTROL PROVISIONS
11.1 BENEFITS. In the event of a Change in Control of the Company (as
defined below), except as otherwise provided by the Committee upon the grant of
an Award, each Participant shall have the following benefits:
(a) Unless otherwise provided in the applicable award agreement, all
outstanding Options and the related Tandem Stock Appreciation Rights and
Non-Tandem Stock Appreciation Rights of such Participant granted prior to
the Change in Control shall be fully vested and immediately exercisable in
their entirety. The Committee, in its sole discretion, may provide for the
purchase of any such Stock Options by the Company for an amount of cash
equal to the excess of the Change in Control Price (as defined below) of
the shares of Common Stock covered by such Stock Options, over the
aggregate exercise price of such Stock Options. For purposes of this
Section 11.1, "Change in Control Price" shall mean the higher of (i) the
highest price per share of Common Stock paid in any transaction related to
a Change in Control of the Company, or (ii) the highest Fair Market Value
per share of Common Stock at any time during the sixty (60) day period
preceding a Change in Control.
(b) Unless otherwise provided in the applicable award agreement, the
restrictions to which any shares of Restricted Stock of such Participant
granted prior to the Change in Control are subject shall lapse as if the
applicable Restriction Period had ended upon such Change in Control.
(c) Notwithstanding anything else herein, the Committee may, in its sole
discretion, provide for accelerated vesting of an Award (other than a grant
to a non-employee director pursuant to Article IX hereof), upon a
Termination of Employment during the Pre-Change in Control Period. Unless
otherwise determined by the Committee, the "Pre-Change in Control Period"
shall mean the one hundred eighty (180) day period prior to a Change in
Control.
11.2 CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred:
(a) upon any "person" as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, any trustee or other fiduciary
holding securities under any employee benefit plan of the Company, or any
company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of Common Stock of
the Company, becoming the owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing forty percent (40%) or more of the combined voting power of
the Company's then outstanding securities (including, without limitation,
securities owned at the time of any increase in ownership);
(b) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors, and any new
director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this section) or a director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board of Directors of the Company whose election by the Board of
Directors or nomination for election by the Company's stockholders was
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approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the two-year period or
whose election or nomination for election was previously so approved, cease
for any reason to constitute at least a majority of the Board of Directors;
(c) upon the merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger
or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar
transaction) in which no person (other than those covered by the exceptions
in (a) above) acquires more than forty percent (40%) of the combined voting
power of the Company's then outstanding securities shall not constitute a
Change in Control of the Company; or
(d) upon the stockholder's of the Company approval of a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets other than
the sale of all or substantially all of the assets of the Company to a
person or persons who beneficially own, directly or indirectly, at least
fifty percent (50%) or more of the combined voting power of the outstanding
voting securities of the Company at the time of the sale.
ARTICLE XII
TERMINATION OR AMENDMENT OF THE PLAN
12.1 TERMINATION OR AMENDMENT. Notwithstanding any other provision of this
Plan, the Board may at any time, and from time to time, amend, in whole or in
part, any or all of the provisions of the Plan, or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Awards granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, without the approval of the stockholders of the Company, if
and to the extent required by the applicable provisions of Rule 16b-3 or, if and
to the extent required, under the applicable provisions of Section 162(m) of the
Code, or with regard to Incentive Stock Options, Section 422 of the Code, no
amendment may be made which would (i) except as permitted in Section 4.1(a),
increase the aggregate number of shares of Common Stock that may be issued under
this Plan; (ii) increase the maximum individual Participant limitations for a
fiscal year under Section 4.1(b); (iii) change the classification of employees,
Consultants, and non-employee directors eligible to receive Awards under this
Plan; (iv) decrease the minimum option price of any Stock Option; (v) extend the
maximum option period under Section 6.3; (vi) change any rights under the Plan
with regard to non-employee directors; or (vii) require stockholder approval in
order for the Plan to continue to comply with the applicable provisions, if any,
of Rule 16b-3, Section 162(m) of the Code, any applicable state law, or, with
regard to Incentive Stock Options, Section 422 of the Code. The Committee may
amend the terms of any Award theretofore granted, prospectively or
retroactively, but, subject to Article IV above or as otherwise specifically
provided herein, no such amendment or other action by the Committee shall impair
the rights of any holder without the holder's consent.
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ARTICLE XIII
UNFUNDED PLAN
This Plan is intended to constitute an "unfunded" plan for incentive
compensation. With respect to any payments as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any rights that are
greater than those of a general creditor of the Company.
ARTICLE XIV
GENERAL PROVISIONS
14.1 LEGEND. The Committee may require each person receiving shares
pursuant to an Award under the Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer. All certificates for shares
of Common Stock delivered under the Plan shall be subject to such stock transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Common Stock is then listed or any
national securities association system upon whose system the Common Stock is
then quoted, any applicable federal or state securities law, and any applicable
corporate law, and the Committee may cause a legend or legends to be put on any
such certificates to make appropriate reference to such restrictions.
14.2 OTHER PLANS. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
14.3 NO RIGHT TO EMPLOYMENT/DIRECTORSHIP. Neither this Plan nor the grant
of any Award hereunder shall give any Participant or other employee any right
with respect to continuance of employment by the Company or any Affiliate, nor
shall there be a limitation in any way on the right of the Company or any
Affiliate by which an employee is employed to terminate his employment at any
time. Neither this Plan nor the grant of any Award hereunder shall impose any
obligations on the Company to retain any Participant as a director nor shall it
impose on the part of any Participant any obligation to remain as a director of
the Company.
14.4 WITHHOLDING OF TAXES. The Company shall have the right to deduct from
any payment to be made to a Participant, or to otherwise require, prior to the
issuance or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld. Upon the vesting of Restricted Stock, or upon
making an election under Code Section 83(b), a Participant shall pay all
required withholding to the Company. The Committee may permit any such
withholding obligation with regard to any Participant to be satisfied by
reducing the number of shares of Common Stock otherwise deliverable or by
delivering shares of Common Stock already owned. Any fraction of a share of
Common Stock required to satisfy such tax obligations shall be disregarded and
the amount due shall be paid instead in cash by the Participant.
14.5 LISTING AND OTHER CONDITIONS.
(a) Intentionally Deleted.
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(b) If at any time counsel to the Company shall be of the opinion that any
sale or delivery of shares of Common Stock pursuant to an Award is or may
in the circumstances be unlawful or result in the imposition of excise
taxes on the Company under the statutes, rules or regulations of any
applicable jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to maintain
any qualification or registration under the Securities Act of 1933, as
amended, or otherwise with respect to shares of Common Stock or Awards, and
the right to exercise any Option shall be suspended until, in the opinion
of said counsel, such sale or delivery shall be lawful or will not result
in the imposition of excise taxes on the Company.
14.6 GOVERNING LAW. This Plan shall be governed and construed in accordance
with the laws of the state of incorporation of the Company (regardless of the
law that might otherwise govern under applicable principles of conflict of
laws).
14.7 CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply. To the
extent applicable, the Plan shall be limited, construed and interpreted in a
manner so as to comply with the applicable requirements of Rule 16b-3 and
Section 162(m) of the Code; however, noncompliance with Rule 16b-3 or Section
162(m) of the Code shall have no impact on the effectiveness of a Stock Option
granted under the Plan.
14.8 OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor 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.
14.9 COSTS. The Company shall bear all expenses included in administering
this Plan, including expenses of issuing Common Stock pursuant to any Awards
hereunder.
14.10 NO RIGHT TO SAME BENEFITS. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.
14.11 DEATH/DISABILITY. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require the agreement of the transferee to be bound by all of
the terms and conditions of the Plan.
14.12 SECTION 16(b) OF THE EXCHANGE ACT. All elections and transactions
under the Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan and the transaction of business thereunder.
14.13 SEVERABILITY OF PROVISIONS. If any provision of the Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and enforced
as if such provisions had not been included.
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14.14 HEADINGS AND CAPTIONS. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
ARTICLE XV
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the date the Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
ARTICLE XVI
NAME OF PLAN
This Plan shall be known as the UNION DENTAL HOLDINGS, INC. 2007/08 EQUITY
COMPENSATION PLAN. This Plan was duly approved by the Company's Board of
Directors and executed as of the 24th day of September 2007.
/s/George Green
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George Green, pres
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