Exhibit 10(h)(4)
THE COMTECH TELECOMMUNICATIONS CORP.
2000 STOCK INCENTIVE PLAN
AMENDED AND RESTATED
(EFFECTIVE OCTOBER 15, 2002)
TABLE OF CONTENTS
Page
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ARTICLE I PURPOSE..............................................................1
ARTICLE II DEFINITIONS.........................................................1
2.1 "Acquisition Event"................................................1
2.2 "Affiliate"........................................................1
2.3 "Award"............................................................1
2.4 "Board"............................................................2
2.5 "Cause"............................................................2
2.6 "Change in Control"................................................2
2.7 "Code".............................................................2
2.8 "Committee"........................................................2
2.9 "Common Stock".....................................................2
2.10 "Company"..........................................................3
2.11 "Consultant".......................................................3
2.12 "Detrimental Activity".............................................3
2.13 "Disparagement"....................................................3
2.14 "Disability".......................................................4
2.15 "Effective Date"...................................................4
2.16 "Eligible Employee"................................................4
2.17 "Exchange Act".....................................................4
2.18 "Family Member"....................................................4
2.19 "Fair Market Value"................................................4
2.20 "Foreign Jurisdiction".............................................5
2.21 "Incentive Stock Option"...........................................5
2.22 "Limited Stock Appreciation Right".................................5
2.23 "Non-Employee Director"............................................5
2.24 "Non-Qualified Stock Option".......................................5
2.25 "Non-Tandem Stock Appreciation Right"..............................5
2.26 "Other Stock-Based Award"..........................................5
2.27 "Parent"...........................................................5
2.28 "Participant"......................................................5
2.29 "Performance Criteria".............................................5
2.30 "Performance Cycle"................................................5
2.31 "Performance Goal".................................................5
2.32 "Performance Period"...............................................6
2.33 "Performance Share"................................................6
2.34 "Performance Unit".................................................6
2.35 "Plan".............................................................6
2.36 "Reference Stock Option"...........................................6
2.37 "Restricted Stock".................................................6
2.38 "Restriction Period"...............................................6
2.39 "Retirement".......................................................6
2.40 "Rule 16b-3".......................................................6
2.41 "Section 162(m) of the Code".......................................6
2.42 "Securities Act"...................................................6
2.43 "Stock Appreciation Right" or "SAR"................................6
2.44 "Stock Option" or "Option".........................................6
2.45 "Subsidiary".......................................................6
2.46 "Tandem Stock Appreciation Right"..................................7
2.47 "Ten Percent Stockholder"..........................................7
2.48 "Termination of Consultancy".......................................7
2.49 "Termination of Directorship"......................................7
2.50 "Termination of Employment"........................................7
2.51 "Transfer".........................................................7
ARTICLE III ADMINISTRATION.....................................................7
3.1 The Committee......................................................7
3.2 Grants of Awards...................................................8
3.3 Guidelines.........................................................9
3.4 Decisions Final....................................................9
3.5 Reliance on Counsel................................................9
3.6 Procedures.........................................................9
3.7 Designation of Consultants/Liability..............................10
ARTICLE IV SHARE AND OTHER LIMITATIONS........................................11
4.1 Shares............................................................11
4.2 Changes...........................................................12
4.3 Minimum Purchase Price............................................14
4.4 Assumption of Awards..............................................14
ARTICLE V ELIGIBILITY.........................................................14
5.1 General Eligibility...............................................14
5.2 Incentive Stock Options...........................................14
5.3 Non-Employee Directors............................................14
ARTICLE VI STOCK OPTIONS......................................................14
6.1 Stock Options.....................................................14
6.2 Grants............................................................14
6.3 Terms of Stock Options............................................15
ARTICLE VII STOCK APPRECIATION RIGHTS.........................................17
7.1 Tandem Stock Appreciation Rights..................................17
7.2 Terms and Conditions of Tandem Stock Appreciation Rights..........17
7.3 Non-Tandem Stock Appreciation Rights..............................19
7.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights......19
7.5 Limited Stock Appreciation Rights.................................20
ARTICLE VIII RESTRICTED STOCK.................................................20
8.1 Awards of Restricted Stock........................................20
8.2 Awards and Certificates...........................................21
8.3 Restrictions and Conditions on Restricted Stock Awards............21
ARTICLE IX PERFORMANCE SHARES.................................................23
9.1 Award of Performance Shares.......................................23
9.2 Terms and Conditions..............................................23
ARTICLE X PERFORMANCE UNITS...................................................24
10.1 Awards of Performance Units.......................................24
10.2 Terms and Conditions..............................................25
ARTICLE XI OTHER STOCK-BASED AWARDS...........................................27
11.1 Other Awards......................................................27
11.2 Terms and Conditions..............................................27
ARTICLE XII NON-TRANSFERABILITY AND TERMINATION OF EMPLOYMENT/CONSULTANCY....28
12.1 Non-Transferability...............................................28
12.2 Termination of Employment or Termination of Consultancy...........28
ARTICLE XIII NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS........................30
13.1 Stock Options.....................................................30
13.2 Grants............................................................30
13.3 Non-Qualified Stock Options.......................................31
13.4 Terms of Stock Options............................................31
13.5 Termination of Directorship.......................................32
13.6 Acceleration of Exercisability....................................32
13.7 Changes...........................................................32
ARTICLE XIV CHANGE IN CONTROL PROVISIONS......................................33
14.1 Benefits..........................................................33
14.2 Change in Control.................................................34
ARTICLE XV TERMINATION OR AMENDMENT OF PLAN...................................35
ARTICLE XVI UNFUNDED PLAN.....................................................36
16.1 Unfunded Status of Plan...........................................36
ARTICLE XVII GENERAL PROVISIONS...............................................36
17.1 Legend............................................................36
17.2 Other Plans.......................................................36
17.3 Right to Employment/Consultancy...................................37
17.4 Withholding of Taxes..............................................37
17.5 Listing and Other Conditions......................................37
17.6 Governing Law.....................................................38
17.7 Construction......................................................38
17.8 Other Benefits....................................................38
17.9 Costs.............................................................38
17.10 No Right to Same Benefits......................................38
17.11 Death/Disability...............................................38
17.12 Section 16(b) of the Exchange Act..............................38
17.13 Severability of Provisions.....................................38
17.14 Headings and Captions..........................................38
ARTICLE XVIII EFFECTIVE DATE OF PLAN..........................................39
ARTICLE XIX TERM OF PLAN......................................................39
THE COMTECH TELECOMMUNICATIONS CORP.
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2000 STOCK INCENTIVE PLAN
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AMENDED AND RESTATED
(EFFECTIVE OCTOBER 15, 2002)
ARTICLE I
PURPOSE
The purpose of The Comtech Telecommunications Corp. 2000 Stock Incentive
Plan is to enhance the profitability and value of the Company for the benefit of
its stockholders by enabling the Company: (i) to offer employees of and
Consultants to 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 individuals and strengthen the mutuality of interests between such
individuals and the Company's stockholders; and (ii) to make equity based awards
to Non-Employee Directors, thereby creating a means to attract, retain and
reward such Non-Employee Directors and strengthen the mutuality of interests
between Non-Employee Directors and the Company's stockholders.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Acquisition Event" has the meaning set forth in Section 4.2(d).
2.2 "Affiliate" means 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 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 in which
the Company or any of its Affiliates has a material equity interest and
which is designated as an "Affiliate" by resolution of the Committee.
2.3 "Award" means any award under this Plan of any: (i) Stock
Option; (ii) Stock Appreciation Right; (iii) Restricted Stock; (iv)
Performance Share;
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(v) Performance Unit; (vi) Other Stock-Based Award; or (vii) other award
providing benefits similar to (i) through (vi) designed to meet the
requirements of a Foreign Jurisdiction.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means, with respect to a Participant's Termination of
Employment or Termination of Consultancy: (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 commission of a fraud or a felony in
connection with his or her duties as an employee of the Company or an
Affiliate, willful misconduct or any act of disloyalty, dishonesty, fraud,
breach of trust or confidentiality as to the Company or an Affiliate or
any other act which is intended to cause or may reasonably be expected to
cause economic or reputational injury to the Company or an Affiliate; 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 Delaware law.
2.6 "Change in Control" has the meaning set forth in Article XIII or
Article XIV, as applicable.
2.7 "Code" means 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.
2.8 "Committee" means: (a) with respect to the application of this
Plan to Eligible Employees and Consultants, a committee or subcommittee of
the Board appointed from time to time by the Board, which committee or
subcommittee shall consist of two or more non-employee directors, each of
whom is intended to be, to the extent required by Rule 16b-3, a
"non-employee director" as defined in Rule 16b-3 and, to the extent
required by Section 162(m) of the Code and any regulations thereunder, an
"outside director" as defined under Section 162(m) of the Code; provided,
however, that if and to the extent that no Committee exists which has the
authority to administer this Plan, the functions of the Committee shall be
exercised by the Board and all references herein to the Committee shall be
deemed to be references to the Board; and (b) with respect to the
application of this Plan to Non-Employee Directors, the Board.
2.9 "Common Stock" means the common stock, $.10 par value per share,
of the Company.
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2.10 "Company" means Comtech Telecommunications Corp., a Delaware
corporation, and its successors by operation of law.
2.11 "Consultant" means any advisor or consultant to the Company or
its Affiliates.
2.12 "Detrimental Activity" means (a) the disclosure to anyone
outside the Company or its Affiliates, or the use in any manner other than
in the furtherance of the Company's or its Affiliate's business, without
written authorization from the Company, of any confidential information or
proprietary information, relating to the business of the Company or its
Affiliates, acquired by a Participant prior to the Participant's
Termination; (b) activity while employed that results, or if known could
result, in the Participant's Termination that is classified by the Company
as a Termination for Cause; (c) any attempt, directly or indirectly, to
solicit, induce or hire (or the identification for solicitation,
inducement or hire) any non-clerical employee of the Company or its
Affiliates to be employed by, or to perform services for, the Participant
or any person or entity with which the Participant is associated
(including, but not limited to, due to the Participant's employment by,
consultancy for, equity interest in, or creditor relationship with such
person or entity) or any person or entity from which the Participant
receives direct or indirect compensation or fees as a result of such
solicitation, inducement or hire (or the identification for solicitation,
inducement or hire) without, in all cases, written authorization from the
Company; (d) any attempt, directly or indirectly, to solicit in a
competitive manner any current or prospective customer of the Company or
its Affiliates without, in all cases, written authorization from the
Company; (e) the Participant's Disparagement, or inducement of others to
do so, of the Company or its Affiliates or their past and present
officers, directors, employees or products; (f) without written
authorization from the Company, the rendering of services for any
organization, or engaging, directly or indirectly, in any business, which
is competitive with the Company or its Affiliates, or which organization
or business, or the rendering of services to such organization or
business, is otherwise prejudicial to or in conflict with the interests of
the Company or its Affiliates, or (g) breach of any agreement between the
Participant and the Company or an Affiliate (including, without
limitation, any employment agreement or non-competition or
non-solicitation agreement). Unless otherwise determined by the Committee
at grant, Detrimental Activity shall not be deemed to occur after the end
of the one-year period following the Participant's Termination. For
purposes of subsections (a), (c), (d) and (f) above, the Chief Executive
Officer and the General Counsel of the Company shall each have authority
to provide the Participant with written authorization to engage in the
activities contemplated thereby and no other person shall have authority
to provide the Participant with such authorization.
2.13 "Disparagement" means making comments or statements to the
press, the Company's or its Affiliates' employees, consultants or any
individual or entity with whom the Company or its Affiliates has a
business relationship which would adversely affect in any manner: the
conduct of the business of the Company or its Affiliates (including,
without limitation, any products or business plans or prospects), or the
business reputation of the Company or its Affiliates, or any of their
products, or their past or present officers, directors or employees.
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2.14 "Disability" means, with respect to an Eligible Employee,
Consultant or Non-Employee Director, a permanent and total disability, as
determined by the Committee in its sole discretion, provided that in no
event shall any disability that is not a permanent and total disability,
as defined in Section 22(e)(3) of the Code, shall be treated as a
Disability. A Disability shall only be deemed to occur at the time of the
determination by the Committee of the Disability.
2.15 "Effective Date" means the effective date of this Plan as
defined in Article XVIII.
2.16 "Eligible Employee" means each employee of the Company or an
Affiliate.
2.17 "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also be a
reference to any successor provision.
2.18 "Family Member" 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 employee's household (other than a tenant or employee),
a trust in which these persons have more than 50% of the beneficial
interest, a foundation in which these persons (or the employee) control
the management of assets, and any other entity in which these persons (or
the employee) own more than 50% of the voting interests.
2.19 "Fair Market Value" means, unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder, as
of any date, the last sales price for the Common Stock on the applicable
date: (i) as reported on the principal national securities exchange on
which it is then traded or the Nasdaq Stock Market, Inc. or (ii) if not
traded on any such national securities exchange or the Nasdaq Stock
Market, Inc. as quoted on an automated quotation system sponsored by the
National Association of Securities Dealers, Inc. If the Common Stock is
not readily tradable on a national securities exchange, the Nasdaq Stock
Market, Inc. or any automated quotation system sponsored by the National
Association of Securities Dealers, Inc., its Fair Market Value shall be
set in good faith by the Committee. Notwithstanding anything herein to the
contrary, "Fair Market Value" means the price for Common Stock set by the
Committee in good faith based on reasonable methods set forth under
Section 422 of the Code and the regulations thereunder including, without
limitation, a method utilizing the average of prices of the Common Stock
reported on the principal national securities exchange on which it is then
traded during a reasonable period designated by the Committee. For
purposes of the grant of any Stock Option, the applicable date shall be
the date for which the last sales price is available at the time of grant.
For purposes of the conversion of a Performance Unit to shares of Common
Stock for reference purposes, the applicable date shall be the date
determined by the Committee in accordance with Section 10.1. For purposes
of the exercise of any Stock Appreciation Right, the applicable date shall
be the
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date a notice of exercise is received by the Committee or, if not a day on
which the applicable market is open, the next day that it is open.
2.20 "Foreign Jurisdiction" means any jurisdiction outside of the
United States including, without limitation, countries, states, provinces
and localities.
2.21 "Incentive Stock Option" means any Stock Option awarded to an
Eligible Employee under this Plan intended to be and designated as an
"Incentive Stock Option" within the meaning of Section 422 of the Code.
2.22 "Limited Stock Appreciation Right" means an Award of a limited
Tandem Stock Appreciation Right or a Non-Tandem Stock Appreciation Right
made pursuant to Section 7.5 of this Plan.
2.23 "Non-Employee Director" means a director of the Company who is
not an active employee of the Company or an Affiliate and who is not an
officer, director or employee of the Company or any Affiliate.
2.24 "Non-Qualified Stock Option" means any Stock Option awarded
under this Plan that is not an Incentive Stock Option.
2.25 "Non-Tandem Stock Appreciation Right" means 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.
2.26 "Other Stock-Based Award" means an Award of Common Stock and
other Awards made pursuant to Article XI that are valued in whole or in
part by reference to, or are payable in or otherwise based on, Common
Stock, including, without limitation, an Award valued by reference to
performance of an Affiliate.
2.27 "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.28 "Participant" means any Eligible Employee or Consultant to whom
an Award has been made under this Plan and each Non-Employee Director of
the Company; provided, however, that a Non-Employee Director shall be a
Participant for purposes of the Plan solely with respect to awards of
Stock Options pursuant to Article XIII.
2.29 "Performance Criteria" has the meaning set forth in Exhibit A.
2.30 "Performance Cycle" has the meaning set forth in Section 10.1.
2.31 "Performance Goal" means the objective performance goals
established by the Committee in accordance with Section 162(m) of the Code
and based on one or more Performance Criteria.
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2.32 "Performance Period" has the meaning set forth in Section 9.1.
2.33 "Performance Share" means an Award made pursuant to Article IX
of this Plan of the right to receive Common Stock or, as determined by the
Committee in its sole discretion, cash of an equivalent value at the end
of the Performance Period or thereafter.
2.34 "Performance Unit" means an Award made pursuant to Article X of
this Plan of the right to receive a fixed dollar amount, payable in cash
or Common Stock (or a combination of both) as determined by the Committee
in its sole discretion, at the end of a specified Performance Cycle or
thereafter.
2.35 "Plan" means The Comtech Telecommunications Corp. 2000 Stock
Incentive Plan.
2.36 "Reference Stock Option" has the meaning set forth in Section
7.1.
2.37 "Restricted Stock" means an Award of shares of Common Stock
under this Plan that is subject to restrictions under Article VIII.
2.38 "Restriction Period" has the meaning set forth in Section
8.3(a) with respect to Restricted Stock.
2.39 "Retirement" means a Termination of Employment or Termination
of Consultancy without Cause by a Participant at or after age 65 or such
earlier date after age 50 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 at or after a Participant has attained age 65
or, with the consent of the Board, before age 65 but after age 50.
2.40 "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act as then in effect or any successor provisions.
2.41 "Section 162(m) of the Code" means Section 162(m) of the Code
and any Treasury regulations thereunder.
2.42 "Securities Act" means the Securities Act of 1933, as amended.
Any reference to any section of the Securities Act shall also be a
reference to any successor provision.
2.43 "Stock Appreciation Right" or "SAR" means the right pursuant to
an Award granted under Article VII.
2.44 "Stock Option" or "Option" means any option to purchase shares
of Common Stock granted to Eligible Employees or Consultants under Article
VI or to Non-Employee Directors under Article XIII.
2.45 "Subsidiary" means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
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2.46 "Tandem Stock Appreciation Right" means a Stock Appreciation
Right entitling the holder to surrender to the Company all (or a portion)
of a Stock Option in exchange for 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, 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).
2.47 "Ten Percent Stockholder" means a person owning stock
possessing more than 10% of the total combined voting power of all classes
of stock of the Company, its Subsidiaries or its Parent.
2.48 "Termination of Consultancy" means, with respect to a
Consultant, that the Consultant 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 to 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.
2.49 "Termination of Directorship" means, with respect to a
Non-Employee Director, that the Non-Employee Director has ceased to be a
director of the Company.
2.50 "Termination of Employment" means: (i) a termination of
employment (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 otherwise is, or 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.
2.51 "Transfer" means anticipate, alienate, attach, sell, assign,
pledge, encumber, charge, hypothecate or otherwise transfer and
"Transferred" has a correlative meaning.
ARTICLE III
ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted by
the Committee. 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
7
of Rule 16b-3 and Section 162(m) of the Code shall not affect the validity
of Awards, grants, interpretations or other actions of the Committee.
3.2 Grants of Awards. The Committee shall have full authority to
grant to Eligible Employees and Consultants, pursuant to the terms of this
Plan: (i) Stock Options; (ii) Tandem Stock Appreciation Rights and
Non-Tandem Stock Appreciation Rights; (iii) Restricted Stock; (iv)
Performance Shares; (v) Performance Units; (vi) Other Stock-Based Awards;
and (vii) other awards providing benefits similar to (i) through (vi)
designed to meet the requirements of Foreign Jurisdictions. All Awards
shall be granted by, confirmed by, and subject to the terms of, a written
agreement executed by the Company and the Participant. In particular, the
Committee shall have the authority:
(a) to select the Eligible Employees and Consultants to whom
Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Awards, including
any combination of two or more Awards, 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
granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of this Plan, of any Award granted hereunder
(including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions or waiver
thereof, regarding any 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) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or Restricted Stock
under Section 6.3(d) or, with respect to Stock Options granted to
Non-Employee Directors, Section 13.4(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans (which shall bear interest at the
rate the Committee shall provide) to Eligible Employees and
Consultants in order to exercise Stock Options under this Plan or to
purchase Awards under this Plan (including shares of Common Stock);
(g) 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;
(h) to determine whether to require an Eligible Employee or
Consultant, as a condition of the granting of any Award, not to sell
or otherwise dispose of shares of Common Stock acquired pursuant to
the exercise of an
8
Option or 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;
(i) to modify, extend or renew an Award, subject to Article XV
herein, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under
the Code or the applicable accounting rules, the exercise price of
an Award 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; and
(j) to 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 such offer is made.
3.3 Guidelines. Subject to Article XV hereof, 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 effectuate the purpose and intent of this Plan. The Committee
may adopt special guidelines and provisions for persons who are residing
in, or subject to, the taxes of, Foreign Jurisdictions to comply with
applicable tax and securities laws and may impose any limitations and
restrictions that it deems necessary to comply with the applicable tax and
securities laws of such Foreign Jurisdictions. 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 this 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.
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 shall
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
9
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 the Committee members in accordance with the By-Laws of the Company,
shall be fully as 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 this Plan and may grant authority to officers 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 this
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 in the engagement of any
such counsel, consultant or agent shall be paid by the Company. The
Committee, its members and any employee of the Company designated
pursuant to paragraph (a) above shall not be liable for any action
or determination made in good faith with respect to this Plan. To
the maximum extent permitted by applicable law, no officer of the
Company or member or former member of the Committee shall be liable
for any action or determination made in good faith with respect to
this Plan or any Award granted under it. To the maximum extent
permitted by applicable law or the Certificate of Incorporation or
By-Laws of the Company and to the extent not covered by insurance,
each officer and member or former member of the Committee 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 this 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 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
any 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.
10
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 Awards may be granted shall
not exceed 1,350,000 shares of Common Stock (subject to any increase
or decrease pursuant to Section 4.2) with respect to all types of
Awards, plus 882,935 shares of Common Stock relating to outstanding
awards assumed by this Plan under Section 4.4 for a total of
2,232,935 shares of Common Stock. The shares of Common Stock
available under this Plan may be either authorized and unissued
Common Stock or Common Stock held in or acquired for the treasury of
the Company. If any Stock 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 Stock
Options, the Company repurchases any Stock Option, the number of
shares of Common Stock underlying such unexercised or repurchased
Stock Option or any unexercised Stock Appreciation Right shall again
be available for the purposes of Awards under this Plan. If any
shares of Restricted Stock, Performance Shares or Performance Units
awarded under this Plan to a Participant are forfeited or
repurchased by the Company for any reason, the number of forfeited
or repurchased shares of Restricted Stock, Performance Shares or
Performance Units shall again be available for the purposes of
Awards under this Plan. If a Tandem Stock Appreciation Right is
granted or a Limited Stock Appreciation Right is granted in tandem
with a Stock 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 exchanged by a Participant as full or
partial payment of exercise price or withholding taxes, or if the
number shares of Common Stock otherwise deliverable has been reduced
for the payment of exercise price or withholding taxes, the number
of shares of Common Stock exchanged as payment for the payment of
exercise price or withholding taxes, or reduced, shall again be
available for purposes of Awards under this Plan.
(b) Individual Participant Limitations. (i) The maximum number
of shares of Common Stock subject to any Award of Stock Options,
Stock Appreciation Rights, Performance Shares or shares of
Restricted Stock for which the grant of such Award or the lapse of
the relevant Restriction Period is subject to the attainment of
Performance Goals in accordance with Section 8.3(a)(ii) herein which
may be granted under this Plan during any fiscal year of the Company
to each Eligible Employee or Consultant shall be 100,000 shares per
type of Award (subject to any increase or decrease pursuant to
Section 4.2), provided that the maximum number of shares of Common
Stock for all types of
11
Awards does not exceed 100,000 during any fiscal year of the
Company. If a Tandem Stock Appreciation Right is granted or a
Limited Stock Appreciation Right is granted in tandem with a Stock
Option, it shall apply against the Eligible Employee's or
Consultant's individual share limitations for both Stock
Appreciation Rights and Stock Options.
(ii) There are no annual individual Eligible Employee or
Consultant share limitations on Restricted Stock for which the
grant of such Award or the lapse of the relevant Restriction
Period is not subject to attainment of Performance Goals in
accordance with Section 8.3(a)(ii) hereof.
(iii) The maximum value at grant of Performance Units
which may be granted under this Plan during any fiscal year of
the Company to each Eligible Employee or Consultant shall be
$100,000. Each Performance Unit shall be referenced to one
share of Common Stock and shall be charged against the
available shares under this Plan at the time the unit value
measurement is converted to a referenced number of shares of
Common Stock in accordance with Section 10.1.
(iv) The individual Participant limitations set forth in
this Section 4.1(b) shall be cumulative; that is, to the
extent that shares of Common Stock for which Awards are
permitted to be granted to an Eligible Employee or a
Consultant during a fiscal year are not covered by an Award to
such Eligible Employee or Consultant in a fiscal year, the
number of shares of Common Stock available for Awards to such
Eligible Employee or Consultant shall automatically increase
in the subsequent fiscal years during the term of the Plan
until used.
4.2 Changes.
(a) The existence of this 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, reorganization or other change in the
Company's capital structure or its business, any merger or
consolidation of the Company or any Affiliate, any issue of bonds,
debentures, preferred or prior preference stock ahead of or
affecting Common Stock, the dissolution or liquidation of the
Company or any Affiliate, any sale or transfer of all or part of the
assets or business of the Company or any Affiliate or any other
corporate act or proceeding.
(b) Subject to the provisions of Section 4.2(d), in the event
of any such change in the capital structure or business of the
Company by reason of any stock split, reverse stock split, stock
dividend, combination or reclassification of shares,
recapitalization, or other change in the capital structure of the
Company, merger, consolidation, spin-off, reorganization, partial or
complete liquidation, issuance of rights or warrants to purchase any
Common Stock or securities convertible into
12
Common Stock, or any other corporate transaction or event having an
effect similar to any of the foregoing and effected without receipt
of consideration by the Company, 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 Stock 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, and any such adjustment determined by the Committee
in good faith shall be final, 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 and rounding-up
for fractions equal to or greater than one-half. 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 Award has been adjusted and such
adjustment (whether or not such notice is given) shall be effective
and binding for all purposes of this 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 or substantially 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 Stock Options and Stock
Appreciation Rights, effective as of the date of the Acquisition
Event, by delivering notice of termination to each Participant at
least 30 days prior to the date of consummation of the Acquisition
Event, in which case 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 Stock Options and Stock
Appreciation Rights that are then outstanding (without regard to any
limitations on exercisability otherwise contained in the Stock
Option or Award Agreements), but any such exercise shall be
contingent upon and subject to the 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 pursuant thereto shall be
null and void.
If an Acquisition Event occurs but the Committee does not terminate
the outstanding Stock Options and Stock Appreciation Rights pursuant to
this Section 4.2(d), then the provisions of Section 4.2(b) shall apply.
13
4.3 Minimum 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.
4.4 Assumption of Awards. Awards that were granted prior to the
Effective Date under the (i) Comtech Telecommunications Corp. 1982
Incentive Stock Option Plan (the "1982 Plan"), and (ii) Comtech
Telecommunications Corp. 1993 Incentive Stock Option Plan, as amended (the
"1993 Plan"), shall be transferred and assumed by this Plan as of the
Effective Date. Notwithstanding the foregoing, such Awards shall continue
to be governed by the terms of the applicable agreement in effect prior to
the Effective Date.
ARTICLE V
ELIGIBILITY
5.1 General Eligibility. All Eligible Employees and Consultants and
prospective employees of and Consultants to the Company and its Affiliates
are eligible to be granted Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, Performance Units, Other
Stock-Based Awards and awards providing benefits similar to each of the
foregoing designed to meet the requirements of Foreign Jurisdictions under
this Plan. Eligibility for the grant of an Award and actual participation
in this Plan shall be determined by the Committee in its sole discretion.
The vesting and exercise of Awards granted to a prospective employee or
Consultant are conditioned upon such individual actually becoming an
Eligible Employee or Consultant.
5.2 Incentive Stock Options. All Eligible Employees of the Company,
its Subsidiaries and its Parent (if any) are eligible to be granted
Incentive Stock Options under this Plan. Eligibility for the grant of an
Award and actual participation in this Plan shall be determined by the
Committee in its sole discretion.
5.3 Non-Employee Directors. Non-Employee Directors are only eligible
to receive an Award of Stock Options in accordance with Article XIII of
the Plan.
ARTICLE VI
STOCK OPTIONS
6.1 Stock 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). To the extent that any Stock Option does not qualify
as an Incentive Stock Option (whether
14
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. The
Committee shall have the authority to grant any Consultant one or more
Non-Qualified Stock Options (with or without Stock Appreciation Rights).
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) shall be a
Non-Qualified Stock Option.
6.3 Terms of Stock Options. Stock Options granted under this Plan
shall be subject to the following terms and conditions, 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) Exercise Price. The exercise price per share of Common
Stock purchasable under an Incentive Stock Option or a Stock Option
intended to be "performance-based" for purposes of Section 162(m) of
the Code 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, that
if an Incentive Stock Option is granted to a Ten Percent
Stockholder, the exercise price shall be no less than 110% of the
Fair Market Value of the Common Stock. The exercise price per share
of Common Stock purchasable under a Non-Qualified Stock Option shall
be determined by the Committee.
(b) Stock Option Term. The term of each Stock Option shall be
fixed by the Committee; provided, however, that no Stock Option
shall be exercisable more than 10 years after the date such Stock
Option is granted; and further provided that the term of an
Incentive Stock Option granted to a Ten Percent Stockholder shall
not exceed 5 years.
(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 such Stock
Option 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, waiver of the installment exercise
provisions or acceleration of the time at which such Stock Option
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 and from time to time during the Stock Option term by giving
written notice of exercise to the Committee specifying the number of
shares to be purchased. Such notice shall be
15
accompanied by payment in full of the purchase price 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; or (iii) on such other terms and conditions as may be
acceptable to the Committee (including, without limitation, the
relinquishment of Stock Options or by payment in full or in part in
the form of Common Stock owned by the Participant for a period of at
least 6 months or such other period as may be required to avoid an
accounting charge against the Company's earnings (and for which the
Participant has good title free and clear of any liens and
encumbrances) based on the Fair Market Value of the Common Stock on
the payment date as determined by the Committee). No shares of
Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.
(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 this Plan and/or any other stock option plan of
the Company, any Subsidiary or any Parent exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options. In
addition, if an Eligible Employee does not remain employed by the
Company, any Subsidiary or any Parent at all times from the time an
Incentive Stock Option is granted until 3 months prior to the date
of exercise thereof (or such other period as required by applicable
law), such Stock Option shall be treated as a Non-Qualified Stock
Option. Should any provision of this Plan 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 this Plan accordingly, without the necessity of obtaining the
approval of the stockholders of the Company.
(f) Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the
limitations of this Plan, Stock Options shall be evidenced by such
form of agreement or grant as is approved by the Committee, and the
Committee may (i) modify, extend or renew outstanding Stock Options
granted under this Plan (provided that the rights of a Participant
are not reduced without his consent), and (ii) accept the surrender
of outstanding Stock Options (up to the extent not theretofore
exercised) and authorize the granting of new Stock Options in
substitution therefor (to the extent not theretofore exercised).
(g) Other Terms and Conditions. Stock Options may contain such
other provisions, which shall not be inconsistent with any of the
terms of this Plan, as the Committee shall deem appropriate
including, without limitation, permitting "reloads" such that the
same number of Stock Options are granted as
16
the number of Stock Options exercised, shares used to pay for the
exercise price of Stock 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 Stock Options that are exercised, if
applicable, or such other exercise price and term as determined by
the Committee.
(h) Detrimental Activity. Unless otherwise determined by the
Committee at grant, (i) in the event the Participant engages in
Detrimental Activity prior to any exercise of the Stock Option, all
Stock Options (whether vested or unvested) held by the Participant
shall thereupon terminate and expire, (ii) as a condition of the
exercise of a Stock Option, the Participant shall be required to
certify (or shall be deemed to have certified) at the time of
exercise in a manner acceptable to the Company that the Participant
is in compliance with the terms and conditions of the Plan and that
the Participant has not engaged in, and does not intend to engage
in, any Detrimental Activity, and (iii) in the event the Participant
engages in Detrimental Activity during the one year period following
the later of (x) Participant's Termination of Employment or (y) the
date the Stock Option is exercised, that any Stock Options shall be
immediately forfeited (whether or not then vested) and the Company
shall be entitled to recover from the Participant at any time within
one year after the later of (x) or (y), and the Participant shall
pay over to the Company, an amount equal to any gain realized as a
result of the exercise of any Stock Options (whether at the time of
exercise or thereafter).
ARTICLE VII
STOCK APPRECIATION RIGHTS
7.1 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. Consultants shall not be eligible for a grant of Tandem
Stock Appreciation Rights granted in conjunction with all or part of an
Incentive Stock Option.
7.2 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 XII 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
17
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 VII.
(c) Method of Exercise. A Tandem Stock Appreciation Right may
be exercised by a Participant 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 7.2. 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 discretion at grant, or thereafter if no
rights of a Participant are reduced) 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.
(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 this Plan on the number of
shares of Common Stock to be issued under this Plan.
(f) Detrimental Activity. Unless otherwise determined by the
Committee at grant, (i) in the event the Participant engages in
Detrimental Activity prior to any exercise of Tandem Stock
Appreciation Rights, all Tandem Stock Appreciation Rights (whether
vested or unvested) held by the Participant shall thereupon
terminate and expire, (ii) as a condition of the exercise of a
Tandem Stock Appreciation Right, the Participant shall be required
to certify (or shall be deemed to have certified) at the time of
exercise in a manner acceptable to the Company that the Participant
is in compliance with the terms and conditions of the Plan and that
the Participant has not engaged in, and does not intend to engage
in, any Detrimental Activity, and (iii) in the event the Participant
engages in Detrimental Activity during the one year period following
the later of
18
(x) Participant's Termination of Employment or (y) the date the
Tandem Stock Appreciation Right is exercised, that any Tandem Stock
Appreciation Rights shall be immediately forfeited (whether or not
then vested) and the Company shall be entitled to recover from the
Participant at any time within one year after the later of (x) or
(y), and the Participant shall pay over to the Company, an amount
equal to any gain realized as a result of the exercise (whether at
the time of exercise or thereafter).
7.3 Non-Tandem Stock Appreciation Rights. Non-Tandem Stock
Appreciation Rights may also be granted without reference to any Stock
Option granted under this Plan.
7.4 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 XII 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, waiver of the installment exercise
provisions or acceleration of 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 and from time to 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 at grant, or thereafter if no rights of a Participant are
reduced) 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 share of Common Stock on the date the
right was awarded to the Participant.
19
(e) Detrimental Activity. Unless otherwise determined by the
Committee at grant, (i) in the event the Participant engages in
Detrimental Activity prior to any exercise of Non-Tandem Stock
Appreciation Rights, all Non-Tandem Stock Appreciation Rights
(whether vested or unvested) held by the Participant shall thereupon
terminate and expire, (ii) as a condition of the exercise of a
Tandem Stock Appreciation Right, the Participant shall be required
to certify (or shall be deemed to have certified) at the time of
exercise in a manner acceptable to the Company that the Participant
is in compliance with the terms and conditions of the Plan and that
the Participant has not engaged in, and does not intend to engage
in, any Detrimental Activity, and (iii) in the event the Participant
engages in Detrimental Activity during the one year period following
the later of (x) Participant's Termination of Employment or (y) the
date the Non-Tandem Stock Appreciation Right is exercised, that any
Non-Tandem Stock Appreciation Rights shall be immediately forfeited
(whether or not then vested) and the Company shall be entitled to
recover from the Participant at any time within one year after the
later of (x) or (y), and the Participant shall pay over to the
Company, an amount equal to any gain realized as a result of the
exercise (whether at the time of exercise or thereafter).
7.5 Limited Stock Appreciation Rights. The Committee may, in its
sole discretion, grant a Tandem Stock Appreciation Right or a Non-Tandem
Stock Appreciation Right as a Limited Stock Appreciation Right. Limited
Stock Appreciation Rights may be exercised only upon the occurrence of a
Change in Control or 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 (i) set forth in Section 7.2(d) with respect to Tandem Stock
Appreciation Rights, or (ii) set forth in Section 7.4(d) with respect to
Non-Tandem Stock Appreciation Rights, as applicable.
ARTICLE VIII
RESTRICTED STOCK
8.1 Awards of Restricted Stock. Shares of Restricted Stock may be
issued to Eligible Employees or Consultants either alone or in addition to
other Awards granted under this Plan. The Committee shall determine the
eligible persons to whom, and the time or times at which, grants of
Restricted Stock will be made, the number of shares to be awarded, the
price (if any) to be paid by the recipient (subject to Section 8.2), 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. The Committee may condition the grant or
vesting of Restricted Stock upon the attainment of specified performance
goals, including established Performance Goals in accordance with Section
162(m) of the Code, or such other factors as the Committee may determine,
in its sole discretion.
20
8.2 Awards and Certificates. An Eligible Employee or Consultant
selected to receive Restricted Stock shall not have any rights with
respect to such Award, unless and until such Participant has delivered to
the Company a fully executed copy of the applicable Award agreement
relating thereto 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
shall be fixed by the Committee. Subject to Section 4.3, the
purchase price for shares of Restricted Stock may be zero to the
extent permitted by applicable law, and, to the extent not so
permitted, such purchase price may not be less than par value.
(b) Acceptance. Awards of Restricted Stock must be accepted
within a period of 90 days (or such shorter period as the Committee
may specify at grant) after the Award date by executing a Restricted
Stock Award agreement and by paying whatever price (if any) the
Committee has designated thereunder.
(c) Legend. Each Participant receiving shares of Restricted
Stock shall be issued a stock certificate in respect of such shares
of Restricted Stock, unless the Committee elects to use another
system, such as book entries by the transfer agent, as evidencing
ownership of shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall bear an
appropriate legend referring to the terms, conditions, and
restrictions applicable to such Award, substantially in the
following form:
"The anticipation, alienation, attachment, sale, transfer,
assignment, pledge, encumbrance or charge of the shares of stock
represented hereby are subject to the terms and conditions
(including forfeiture) of The Comtech Telecommunications Corp. 2000
Stock Incentive Plan (the "Plan") and an Agreement entered into
between the registered owner and the Company dated _______. Copies
of such Plan and Agreement are on file at the principal office of
the Company."
(d) Custody. The Committee may require that any stock
certificates evidencing such shares be held in custody by the
Company until the restrictions thereon shall have lapsed and that,
as a condition to the grant of such Award of Restricted Stock, the
Participant shall have delivered a duly signed stock power, endorsed
in blank, relating to the Common Stock covered by such Award.
8.3 Restrictions and Conditions on Restricted Stock Awards. Shares
of Restricted Stock awarded pursuant to this Plan shall be subject to
Article XII and the following restrictions and conditions:
(a) Restriction Period; Vesting and Acceleration of Vesting.
(i) The Participant shall not be permitted to Transfer shares of
Restricted Stock awarded under this Plan during the period or
periods set by the Committee (the "Restriction Period") commencing
on the date of such Award, as set forth in the
21
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, attainment of Performance Goals pursuant to Section
8.3(a)(ii) below and/or such other factors or criteria as the
Committee may determine in its sole discretion, 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 and/or waive the deferral limitations for all
or any part of any Restricted Stock Award.
(ii) Objective Performance Goals, Formulae or Standards.
If the grant of shares of Restricted Stock or the lapse of
restrictions is based on the attainment of Performance Goals, the
Committee shall establish the Performance Goals and the applicable
vesting percentage of the Restricted Stock Award applicable to each
Participant or class of Participants in writing prior to the
beginning of the applicable fiscal year or at such later date as
otherwise determined by the Committee and while the outcome of the
Performance Goals are substantially uncertain. Such Performance
Goals may incorporate provisions for disregarding (or adjusting for)
changes in accounting methods, corporate transactions (including,
without limitation, dispositions and acquisitions) and other similar
type events or circumstances. With regard to a Restricted Stock
Award that is intended to comply with Section 162(m) of the Code, to
the extent any such provision would create impermissible discretion
under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The
applicable Performance Goals shall be based on one or more of the
Performance Criteria set forth in Exhibit A hereto.
(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. The Committee
may, in its sole discretion, determine at the time of grant that the
payment of dividends shall be deferred until, and conditioned upon,
the expiration of the applicable Restriction Period.
(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) Detrimental Activity. Unless otherwise determined by the
Committee at grant, each Award of Restricted Stock shall provide
that in the event the Participant engages in Detrimental Activity
prior to, or during the one year period following the later of
Termination of Employment or any vesting of
22
Restricted Stock, the Committee may direct (at any time within one
year thereafter) that all unvested Restricted Stock shall be
immediately forfeited to the Company and that the Participant shall
pay over to the Company an amount equal to the gain realized at the
time of vesting of any Restricted Stock.
ARTICLE IX
PERFORMANCE SHARES
9.1 Award of Performance Shares. Performance Shares may be awarded
either alone or in addition to other Awards granted under this Plan. The
Committee shall, in its sole discretion, determine the Eligible Employees
and Consultants to whom and the time or times at which such Performance
Shares shall be awarded, the duration of the period (the "Performance
Period") during which, and the conditions under which, a Participant's
right to Performance Shares will be vested and the other terms and
conditions of the Award in addition to those set forth in Section 9.2.
Each Performance Share awarded shall be referenced to one share of
Common Stock. Except as otherwise provided herein, the Committee shall
condition the right to payment of any Performance Share Award upon the
attainment of objective Performance Goals established pursuant to Section
9.2(c) below and such other non-performance based factors or criteria as
the Committee may determine in its sole discretion.
9.2 Terms and Conditions. A Participant selected to receive
Performance Shares shall not have any rights with respect to such Awards,
unless and until such Participant has delivered a fully executed copy of a
Performance Share Award agreement evidencing the Award to the Company and
has otherwise complied with the following terms and conditions:
(a) Earning of Performance Share Award. At the expiration of
the applicable Performance Period, the Committee shall determine the
extent to which the Performance Goals established pursuant to
Section 9.2(c) are achieved and the percentage of each Performance
Share Award that has been earned.
(b) Payment. Following the Committee's determination in
accordance with subsection (a) above, shares of Common Stock or, as
determined by the Committee in its sole discretion, the cash
equivalent of such shares shall be delivered to the Participant, in
an amount equal to such Participant's earned Performance Share
Award. Notwithstanding the foregoing, except as may be set forth in
the agreement covering the Award, the Committee may, in its sole
discretion and in accordance with Section 162(m) of the Code, award
an amount less than the earned Performance Share Award and/or
subject the payment of all or part of any Performance Share Award to
additional vesting and forfeiture conditions as it deems
appropriate.
(c) Objective Performance Goals, Formulae or Standards. The
Committee shall establish the objective Performance Goals for the
earning of
23
Performance Shares based on a Performance Period applicable to each
Participant or class of Participants in writing prior to the
beginning of the applicable Performance Period or at such later date
as permitted under Section 162(m) of the Code and while the outcome
of the Performance Goals are substantially uncertain. Such
Performance Goals may incorporate, if and only to the extent
permitted under Section 162(m) of the Code, provisions for
disregarding (or adjusting for) changes in accounting methods,
corporate transactions (including, without limitation, dispositions
and acquisitions) and other similar type events or circumstances. To
the extent any such provision would create impermissible discretion
under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect. The
applicable Performance Goals shall be based on one or more of the
Performance Criteria set forth in Exhibit A hereto.
(d) Dividends and Other Distributions. At the time of any
Award of Performance Shares, the Committee may, in its sole
discretion, award an Eligible Employee or Consultant the right to
receive the cash value of any dividends and other distributions that
would have been received as though the Eligible Employee or
Consultant had held each share of Common Stock referenced by the
earned Performance Share Award from the last day of the first year
of the Performance Period until the actual distribution to such
Participant of the related share of Common Stock or cash value
thereof. Such amounts, if awarded, shall be paid to the Participant
as and when the shares of Common Stock or cash value thereof are
distributed to such Participant and, at the discretion of the
Committee, may be paid with interest from the first day of the
second year of the Performance Period until such amounts and any
earnings thereon are distributed. The applicable rate of interest
shall be determined by the Committee in its sole discretion;
provided, however, that for each fiscal year or part thereof, the
applicable interest rate shall not be greater than a rate equal to
the four-year U.S. Government Treasury rate on the first day of each
applicable fiscal year.
(e) Detrimental Activity. Unless otherwise determined by the
Committee at grant, each Award of Performance Shares shall provide
that in the event the Participant engages in Detrimental Activity
prior to, or during the one year period following the later of
Termination of Employment or any vesting of Performance Shares, the
Committee may direct (at any time within one year thereafter) that
all unvested Performance Shares shall be immediately forfeited to
the Company and that the Participant shall pay over to the Company
an amount equal to the gain realized at the time of vesting of any
Performance Shares.
ARTICLE X
PERFORMANCE UNITS
10.1 Awards of Performance Units. Performance Units may be awarded
either alone or in addition to other Awards granted under this Plan. The
Committee shall, in its
24
sole discretion, determine the Eligible Employees to whom and the time or
times at which such Performance Units shall be awarded, the duration of
the period (the "Performance Cycle") during which, and the conditions
under which, a Participant's right to Performance Units will be vested and
the other terms and conditions of the Award in addition to those set forth
in Section 10.2.
Performance Units shall be awarded in a dollar amount determined by
the Committee and shall be converted for purposes of calculating growth in
value to a referenced number of shares of Common Stock based on the Fair
Market Value of shares of Common Stock at the close of trading on the
first business day following the announcement of the annual financial
results of the Company for the fiscal year of the Company immediately
preceding the fiscal year of the commencement of the relevant Performance
Cycle, provided that the Committee may provide that the minimum price for
such conversion shall be the Fair Market Value on the date of grant.
Each Performance Unit shall be referenced to one share of Common
Stock. Except as otherwise provided herein, the Committee shall condition
the right to payment of any Performance Unit Award upon the attainment of
objective Performance Goals established pursuant to Section 10.2(a) and
such other non-performance based factors or criteria as the Committee may
determine in its sole discretion. The cash value of any fractional
Performance Unit Award subsequent to conversion to shares of Common Stock
shall be treated as a dividend or other distribution under Section 10.2(e)
to the extent any portion of the Performance Unit Award is earned.
10.2 Terms and Conditions. The Performance Units awarded pursuant to
this Article 10 shall be subject to the following terms and conditions:
(a) Performance Goals. The Committee shall establish the
objective Performance Goals for the earnings of Performance Units
based on a Performance Cycle applicable to each Participant or class
of Participants in writing prior to the beginning of the applicable
Performance Cycle or at such later date as permitted under Section
162(m) of the Code and while the outcome of the Performance Goals
are substantially uncertain. Such Performance Goals may incorporate,
if and only to the extent permitted under Section 162(m) of the
Code, provisions for disregarding (or adjusting for) changes in
accounting methods, corporate transactions (including, without
limitation, dispositions and acquisitions) and other similar type
events or circumstances. To the extent any such provision would
create impermissible discretion under Section 162(m) of the Code or
otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect. The applicable Performance Goals shall be
based on one or more of the Performance Criteria set forth in
Exhibit A hereto.
(b) Vesting. At the expiration of the Performance Cycle, the
Committee shall determine and certify in writing the extent to which
the Performance Goals have been achieved, and the percentage of the
Performance Units of each Participant that have vested.
25
(c) Payment. Subject to the applicable provisions of the Award
agreement and this Plan, at the expiration of the Performance Cycle,
cash and/or shares of Common Stock (as the Committee may determine
in its sole discretion at grant, or thereafter if no rights of a
Participant are reduced) shall be delivered to the Participant in
payment of the vested Performance Units covered by the Performance
Unit Award. Notwithstanding the foregoing, except as may be set
forth in the agreement covering the Award, the Committee may, in its
sole discretion, and to the extent applicable and permitted under
Section 162(m) of the Code, award an amount less than the earned
Performance Unit Award and/or subject the payment of all or part of
any Performance Unit Award to additional vesting and forfeiture
conditions as it deems appropriate.
(d) Accelerated Vesting. Based on service, performance and/or
such other factors or criteria, if any, as the Committee may
determine, the Committee may, at or after grant, accelerate the
vesting of all or any part of any Performance Unit Award and/or
waive the deferral limitations for all or any part of such Award.
(e) Dividends and Other Distributions. At the time of any
Award of Performance Units, the Committee may, in its sole
discretion, award an Eligible Employee or Consultant the right to
receive the cash value of any dividends and other distributions that
would have been received as though the Eligible Employee or
Consultant had held each share of Common Stock referenced by the
earned Performance Unit Award from the last day of the first year of
the Performance Cycle until the actual distribution to such
Participant of the related share of Common Stock or cash value
thereof. Such amounts, if awarded, shall be paid to the Participant
as and when the shares of Common Stock or cash value thereof are
distributed to such Participant and, at the discretion of the
Committee, may be paid with interest from the first day of the
second year of the Performance Cycle until such amounts and any
earnings thereon are distributed. The applicable rate of interest
shall be determined by the Committee in its sole discretion;
provided, however, that for each fiscal year or part thereof, the
applicable interest rate shall not be greater than a rate equal to
the four-year U.S. Government Treasury rate on the first day of each
applicable fiscal year.
(f) Detrimental Activity. Unless otherwise determined by the
Committee at grant, each Award of Performance Units shall provide
that in the event the Participant engages in Detrimental Activity
prior to, or during the one year period following the later of
Termination of Employment or any vesting of Performance Units, the
Committee may direct (at any time within one year thereafter) that
all unvested Performance Units shall be immediately forfeited to the
Company and that the Participant shall pay over to the Company an
amount equal to the gain realized at the time of vesting of any
Performance Units which had vested in the period referred to above.
26
ARTICLE XI
OTHER STOCK-BASED AWARDS
11.1 Other Awards. Other Stock-Based Awards may be granted either
alone or in addition to or in tandem with Stock Options, Stock
Appreciation Rights, Restricted Stock, Performance Shares or Performance
Units.
Subject to the provisions of this Plan, the Committee shall have
authority to determine the persons to whom and the time or times at which
such Awards shall be made, the number of shares of Common Stock to be
awarded pursuant to such Awards, and all other conditions of the Awards.
The Committee may also provide for the grant of Common Stock under such
Awards upon the completion of a specified performance period.
11.2 Terms and Conditions. Other Stock-Based Awards made pursuant to
this Article XI shall be subject to the following terms and conditions:
(a) Non-Transferability. Subject to the applicable provisions
of the Award agreement and this Plan, shares of Common Stock subject
to Awards made under this Article XI may not be Transferred prior to
the date on which the shares are issued, or, if later, the date on
which any applicable restriction, performance or deferral period
lapses.
(b) Dividends. Unless otherwise determined by the Committee at
the time of Award, subject to the provisions of the Award agreement
and this Plan, the recipient of an Award under this Article XI shall
be entitled to receive, currently or on a deferred basis, dividends
or dividend equivalents with respect to the number of shares of
Common Stock covered by the Award, as determined at the time of the
Award by the Committee, in its sole discretion.
(c) Vesting. Any Award under this Article XI and any Common
Stock covered by any such Award shall vest or be forfeited to the
extent so provided in the Award agreement, as determined by the
Committee, in its sole discretion.
(d) Waiver of Limitation. The Committee may, in its sole
discretion, waive in whole or in part any or all of the limitations
imposed hereunder (if any) with respect to any or all of an Award
under this Article XI.
(e) Price. Common Stock or Other Stock-Based Awards issued on
a bonus basis under this Article XI may be issued for no cash
consideration; Common Stock or Other Stock-Based Awards purchased
pursuant to a purchase right awarded under this Article XI shall be
priced as determined by the Committee. Subject to Section 4.3, the
purchase price of shares of Common Stock or Other Stock-Based Awards
may be zero to the extent permitted by applicable law, and, to the
extent not so permitted, such purchase price may not be less than
par value. The purchase of shares of Common Stock or Other
Stock-
27
Based Awards may be made on either an after-tax or pre-tax basis, as
determined by the Committee; provided, however, that if the purchase
is made on a pre-tax basis, such purchase shall be made pursuant to
a deferred compensation program established by the Committee, which
will be deemed a part of this Plan.
(f) Detrimental Activity. Other Stock-Based Awards under this
Article XI and any Common Stock covered by any such Award shall be
forfeited in the event the Participant engages in Detrimental
Activity under such conditions set forth by the Committee in the
Award agreement.
ARTICLE XII
NON-TRANSFERABILITY AND TERMINATION
OF EMPLOYMENT/CONSULTANCY
12.1 Non-Transferability. No Stock Option, Stock Appreciation Right,
Performance Unit, Performance Share or Other Stock-Based Award 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 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 VIII may not be Transferred prior
to the date on which shares are issued, or, if later, the date on which
any applicable restriction, performance or deferral period 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. 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 Section 12.1 is transferable to a Family
Member in whole or in part and in such circumstances, and under such
conditions, as specified by the Committee. A Non-Qualified Stock Option
that is transferred to a Family Member pursuant to the preceding sentence
may not be subsequently transferred otherwise than by will or by the laws
of descent and distribution.
12.2 Termination of Employment or Termination of Consultancy. The
following rules apply with regard to the Termination of Employment or
Termination of Consultancy of a Participant:
(a) Rules Applicable to Stock Options and Stock Appreciation
Rights. Unless otherwise determined by the Committee at grant or, if
no rights of the Participant are reduced, thereafter:
(i) Termination by Reason of Death, Disability or
Retirement. If a Participant's Termination of Employment or
Termination of Consultancy is by
28
reason of death, Disability or Retirement, all Stock Options and
Stock Appreciation Rights held by such Participant may be exercised,
to the extent exercisable at the Participant's Termination of
Employment or Termination of Consultancy, by the Participant (or, in
the case of death, by the legal representative of the Participant's
estate) at any time within a period of one year from the date of
such Termination of Employment or Termination of Consultancy, but in
no event beyond the expiration of the stated terms of such Stock
Options and Stock Appreciation Rights; provided, however, that, in
the case of Retirement, if the Participant dies within such exercise
period, all unexercised Stock Options and Non-Tandem Stock
Appreciation Rights held by such Participant shall thereafter be
exercisable, to the extent to which they were exercisable at the
time of death, for a period of one year from the date of such death,
but in no event beyond the expiration of the stated term of such
Stock Options and Non-Tandem Stock Appreciation Rights.
(ii) Involuntary Termination Without Cause. If a
Participant's Termination of Employment or Termination of
Consultancy is by involuntary termination without Cause, all Stock
Options and Stock Appreciation Rights held by such Participant may
be exercised, to the extent exercisable at Termination of Employment
or Termination of Consultancy, by the Participant at any time within
a period of 90 days from the date of such Termination of Employment
or Termination of Consultancy, but in no event beyond the expiration
of the stated term of such Stock Options and Stock Appreciation
Rights.
(iii) Voluntary Termination. If a Participant's
Termination of Employment or Termination of Consultancy is voluntary
(other than a voluntary termination described in Section
12.2(a)(iv)(B) below), all Stock Options and Stock Appreciation
Rights held by such Participant may be exercised, to the extent
exercisable at Termination of Employment or Termination of
Consultancy, by the Participant at any time within a period of 30
days from the date of such Termination of Employment or Termination
of Consultancy, but in no event beyond the expiration of the stated
terms of such Stock Options and Stock Appreciation Rights.
Notwithstanding the foregoing, effective for Stock Options and Stock
Appreciation Rights granted on or after October 19, 2000, if a
Participant's Termination of Employment or Termination of
Consultancy is voluntary, all Stock Options and Stock Appreciation
Rights held by such Participant shall thereupon terminate and expire
as of the date of such Termination of Employment or Termination of
Consultancy.
(iv) Termination for Cause. If a Participant's
Termination of Employment or Termination of Consultancy (A) is for
Cause or (B) is a voluntary termination (as provided in subsection
(iii) above) within 90 days after an event which would be grounds
for a Termination of Employment or Termination of Consultancy for
Cause, all Stock Options and Stock Appreciation Rights held by such
Participant shall thereupon terminate and expire as of the date of
such Termination of Employment or Termination of Consultancy.
29
(b) Rules Applicable to 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.
(c) Rules Applicable to Performance Shares and Performance
Units. Subject to the applicable provisions of the Award agreement
and this Plan, upon a Participant's Termination of Employment or
Termination of Consultancy for any reason during the Performance
Period, the Performance Cycle or other period or restriction as may
be applicable for a given Award, the Performance Shares or
Performance Units in question will vest (to the extent applicable
and to the extent permissible under Section 162(m) of the Code) or
be forfeited in accordance with the terms and conditions established
by the Committee at grant or thereafter.
(d) Rules Applicable to Other Stock-Based Awards. Subject to
the applicable provisions of the Award agreement and this Plan, upon
a Participant's Termination of Employment or Termination of
Consultancy for any reason during any period or restriction as may
be applicable for a given Award, the Other Stock-Based Awards in
question will vest or be forfeited in accordance with the terms and
conditions established by the Committee at grant or thereafter.
ARTICLE XIII
NON-EMPLOYEE DIRECTOR STOCK OPTION GRANTS
13.1 Stock Options. The terms of this Article XIII shall apply only
to Stock Options granted to Non-Employee Directors.
13.2 Grants. Without further action by the Board or the stockholders
of the Company, each Non-Employee Director shall, subject to the terms of
the Plan, be granted:
(a) Stock Options to purchase 3,000 shares of Common Stock as
of the date the Non-Employee Director begins service as a
Non-Employee Director on the Board, provided that the Non-Employee
Director began service on or after the Effective Date; and
(b) In addition to Stock Options granted pursuant to (a)
above, Stock Options: (i) to purchase 5,000 shares of Common Stock
as of the August 1 of each year, commencing August 1, 2002, provided
he or she has not, as of such day, experienced a Termination of
Directorship and provided further that he or she has been a
Non-Employee Director for at least six months as of such August 1
date; and (ii) to purchase 1,500 shares of Common Stock as of
November 1, 2001.
30
13.3 Non-Qualified Stock Options. Stock Options granted under this
Article XIII shall be Non-Qualified Stock Options.
13.4 Terms of Stock Options. Stock Options granted under this
Article XIII shall be subject to the following terms and conditions, and
shall be in such form and contain such additional terms and conditions,
not inconsistent with the terms of this Plan, as the Board shall deem
desirable:
(a) Stock Option Price. The Stock Option price per share of
Common Stock purchasable under a Stock Option shall equal 100% of
the Fair Market Value of the share of Common Stock at the time of
grant.
(b) Stock Option Term. The term of each Stock Option shall be
ten (10) years.
(c) Exercisability. Stock Options granted to Non-Employee
Directors pursuant to Section 13.2 shall vest and become exercisable
on the first anniversary of date of grant, provided that the Stock
Option may become vested only during the continuance of his or her
service as a director of the Company.
(d) Method of Exercise. Subject to whatever waiting period
provisions apply under subsection (c) above, Stock Options may be
exercised in whole or in part at any time and from time to time
during the Stock Option term, by giving written notice of exercise
to the Company specifying the number of shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price
as follows: (i) in cash or by check, bank draft or money order
payable to the Company; (ii) if the Common Stock is traded on a
national securities exchange, 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; or (iii) such other arrangement for the
satisfaction of the purchase price, as the Board may accept. If and
to the extent determined by the Board in its sole discretion at or
after grant, payment in full or in part may also be made in the form
of Common Stock owned by the Participant for at least 6 months (or
such other period as may be required to avoid an accounting charge
against the Company's earnings) (and for which the Participant has
good title free and clear of any liens and encumbrances) based on
the Fair Market Value of the Common Stock on the payment date. No
shares of Common Stock shall be issued until payment, as provided
herein, therefor has been made or provided for.
(e) Form, Modification, Extension and Renewal of Stock
Options. Subject to the terms and conditions and within the
limitations of the Plan, a Stock Option shall be evidenced by such
form of agreement or grant as is approved by the Board, and the
Board may modify, extend or renew outstanding Stock Options granted
under the Plan (provided that the rights of a Participant are not
reduced without his consent).
31
13.5 Termination of Directorship. The following rules apply with
regard to Stock Options upon the Termination of Directorship:
(a) Termination of Directorship by Reason of Death, Disability
or Otherwise Ceasing to be a Director. Except as otherwise provided
herein, upon the Termination of Directorship by reason of death,
disability, resignation, failure to stand for reelection or failure
to be reelected or otherwise, all outstanding Stock Options
exercisable and not exercised shall remain exercisable to the extent
exercisable on such date of Termination of Directorship by the
Participant or, in the case of death, by the Participant's estate or
by the person given authority to exercise such Stock Options by his
or her will or by operation of law, at any time prior to the
expiration of the stated term of such Stock Option.
(b) Cancellation of Options. Except as provided in Section
13.6, no Stock Options that were not exercisable as of the date of
Termination of Directorship shall thereafter become exercisable upon
a Termination of Directorship for any reason or no reason
whatsoever, and such Stock Options shall terminate and become null
and void upon a Termination of Directorship. If a Non-Employee
Director's Termination of Directorship is for Cause, all Stock
Options held by the Non-Employee Director shall thereupon terminate
and expire as of the date of termination.
13.6 Acceleration of Exercisability. All Stock Options granted to a
Non-Employee Director and not previously exercisable shall become fully
exercisable upon such Director's death, and all Stock Options granted to
Non-Employee Directors and not previously exercisable shall become fully
exercisable immediately upon a Change in Control (as defined in Section
14.2).
13.7 Changes.
(a) The Awards to a Non-Employee Director shall be subject to
Sections 4.2(a), (b) and (c) of the Plan and this Section 13.7, but
shall not be subject to Section 4.2(d).
(b) If the Company shall not be the surviving corporation in
any merger or consolidation, or if the Company is to be dissolved or
liquidated, then, unless the surviving corporation assumes the Stock
Options or substitutes new Stock Options which are determined by the
Board in its sole discretion to be substantially similar in nature
and equivalent in terms and value for Stock Options then
outstanding, upon the effective date of such merger, consolidation,
liquidation or dissolution, any unexercised Stock Options shall
expire without additional compensation to the holder thereof;
provided, that, the Board shall deliver notice to each Non-Employee
Director at least 30 days prior to the date of consummation of such
merger, consolidation, dissolution or liquidation which would result
in the expiration of the Stock Options and during the period from
the date on which such notice of termination is delivered to the
consummation of the merger, consolidation, dissolution or
liquidation, such Participant shall have the
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right to exercise in full, effective as of such consummation, all
Stock Options that are then outstanding (without regard to
limitations on exercise otherwise contained in the Stock Options)
but contingent on occurrence of the merger, consolidation,
dissolution or liquidation, and, provided that, if the contemplated
transaction does not take place within a 90 day period after giving
such notice for any reason whatsoever, the notice, accelerated
vesting and exercise shall be null and void and, if and when
appropriate, new notice shall be given as aforesaid.
ARTICLE XIV
CHANGE IN CONTROL PROVISIONS
14.1 Benefits. In the event of a Change in Control of the Company,
except as otherwise provided by the Committee upon the grant of an Award,
the Participant shall be entitled to the following benefits:
(a) Except to the extent provided in the applicable Award
agreement, the Participant's employment agreement with the Company
or an Affiliate, as approved by the Committee, or other written
agreement approved by the Committee (as such agreement may be
amended from time to time), (i) Awards granted and not previously
exercisable shall become exercisable upon a Change in Control, (ii)
restrictions to which any shares of Restricted Stock granted prior
to the Change in Control are subject shall lapse upon a Change in
Control, and (iii) the conditions required for vesting of any
unvested Performance Units and/or Performance Shares shall be deemed
to be satisfied upon a Change in Control.
(b) The Committee, in its sole discretion, may provide for the
purchase of any Stock Option by the Company or an Affiliate 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 14.1, 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.
(c) Notwithstanding anything to the contrary herein, unless
the Committee provides otherwise at the time a Stock Option is
granted hereunder or thereafter, no acceleration of exercisability
shall occur with respect to such Stock Options if the Committee
reasonably determines in good faith, prior to the occurrence of the
Change in Control, that the Stock Options shall be honored or
assumed, or new rights substituted therefor (each such honored,
assumed or substituted stock option hereinafter called an
"Alternative Option"), by a Participant's employer (or the parent or
a subsidiary of such employer) immediately following the Change in
Control, provided that any such Alternative Option must meet the
following criteria:
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(i) the Alternative Option must be based on stock which
is traded on an established securities market, or which will
be so traded within 30 days of the Change in Control;
(ii) the Alternative Option must provide such
Participant with rights and entitlements substantially
equivalent to or better than the rights, terms and conditions
applicable under such Stock Option, including, but not limited
to, an identical or better exercise schedule; and
(iii) the Alternative Option must have economic value
substantially equivalent to the value of such Stock Option
(determined at the time of the Change in Control).
For purposes of Incentive Stock Options, any assumed or
substituted Stock Option shall comply with the requirements of
Treasury Regulation ss. 1.425-1 (and any amendments thereto).
(d) Notwithstanding anything else herein, the Committee may,
in its sole discretion, provide for accelerated vesting of an Award
or accelerated lapsing of restrictions on shares of Restricted Stock
at any time.
14.2 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 30% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of two (2) 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
term is 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 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;
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(c) upon a 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 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 50% 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 stockholders 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 or disposition of all or
substantially all of the assets of the Company to a person or
persons who beneficially own, directly or indirectly, at least 50%
or more of the combined voting power of the outstanding voting
securities of the Company at the time of the sale.
ARTICLE XV
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the
Committee may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of this Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XVII), 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 shareholders of the Company in accordance with the laws of the
State of Delaware, to the extent required by the applicable provisions of Rule
16b-3 or Section 162(m) of the Code, or, to the extent applicable to Incentive
Stock Options, Section 422 of the Code, no amendment may be made which would (i)
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
or Consultants eligible to receive Awards under this Plan; (iv) decrease the
minimum option price of any Stock Option or Stock Appreciation Right; (v) extend
the maximum option period under Section 6.3; (vi) materially alter the
Performance Criteria for the Award of Restricted Stock, Performance Units or
Performance Shares as set forth in Exhibit A; or (vii) require stockholder
approval in order for this Plan to continue to comply with the applicable
provisions of Section 162(m) of the Code or, to the extent applicable to
Incentive Stock Options, Section 422 of the Code. In no event may this Plan be
amended without the approval of the stockholders of the Company in accordance
35
with the applicable laws of the State of Delaware to increase the aggregate
number of shares of Common Stock that may be issued under this Plan, decrease
the minimum exercise price of any Stock Option or Stock Appreciation Right, or
to make any other amendment that would require stockholder approval under the
rules of any exchange or system on which the Company's securities are listed or
traded at the request of the Company.
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.
ARTICLE XVI
UNFUNDED PLAN
16.1 Unfunded Status of Plan. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred 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 XVII
GENERAL PROVISIONS
17.1 Legend. The Committee may require each person receiving shares
pursuant to an Award under this 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 this
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 Stock is then listed or any national securities association
system upon whose system the 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.
17.2 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.
36
17.3 Right to Employment/Consultancy. Neither this Plan nor the
grant of any Award hereunder shall give any Participant or other employee
or Consultant any right with respect to continuance of employment or
Consultancy by the Company or any Affiliate, nor shall they be a
limitation in any way on the right of the Company or any Affiliate by
which an employee is employed or a Consultant is retained to terminate his
employment or Consultancy at any time.
17.4 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.
Any such withholding obligation with regard to any Participant may
be satisfied, subject to the consent of the Committee, 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.
17.5 Listing and Other Conditions.
(a) As long as the Common Stock is listed on a national
securities exchange or system sponsored by a national securities
association, the issue of any shares of Common Stock pursuant to an
Award shall be conditioned upon such shares being listed on such
exchange or system. The Company shall have no obligation to issue
such shares unless and until such shares are so listed, and the
right to exercise any Stock Option with respect to such shares shall
be suspended until such listing has been effected.
(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 or otherwise with respect to
shares of Common Stock or Awards, and the right to exercise any
Stock 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.
(c) Upon termination of any period of suspension under this
Section 17.5, any Award affected by such suspension which shall not
then have expired or terminated shall be reinstated as to all shares
available before such suspension and as to shares which would
otherwise have become available during the period of such
suspension, but no such suspension shall extend the term of any
Stock Option.
37
17.6 Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law
that might otherwise govern under applicable Delaware principles of
conflict of laws).
17.7 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.
17.8 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.
17.9 Costs. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock
pursuant to any Awards hereunder.
17.10 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.
17.11 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 that the agreement of the transferee
to be bound by all of the terms and conditions of this Plan.
17.12 Section 16(b) of the Exchange Act. All elections and
transactions under this Plan by persons subject to Section 16 of the
Exchange Act involving shares of Common Stock are intended to comply with
any applicable exemptive 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 this Plan
and the transaction of business thereunder.
17.13 Severability of Provisions. If any provision of this Plan
shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provisions had not been
included.
17.14 Headings and Captions. The headings and captions herein are
provided for reference and convenience only, shall not be considered part
of this Plan, and shall not be employed in the construction of this Plan.
38
ARTICLE XVIII
EFFECTIVE DATE OF PLAN
The Plan shall become effective upon adoption by the Board (i.e., October
19, 1999), subject to the approval of this Plan by the stockholders of the
Company in accordance with the requirements of the laws of the State of Delaware
or such later date as provided in the adopting resolution.
ARTICLE XIX
TERM OF PLAN
No Award shall be granted pursuant to this Plan on or after the tenth
anniversary of the earlier of the date this Plan is adopted or the date of
stockholder approval, but Awards granted prior to such tenth anniversary may
extend beyond that date.
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EXHIBIT A
PERFORMANCE CRITERIA
Performance Goals established for purposes of conditioning the grant of an
Award of Restricted Stock based on performance or the vesting of
performance-based Awards of Restricted Stock, Performance Units and/or
Performance Shares shall be based on one or more of the following performance
criteria ("Performance Criteria"): (i) the attainment of certain target levels
of, or a specified percentage increase in, revenues, income before income taxes
and extraordinary items, net income, earnings before income tax, earnings before
interest, taxes, depreciation and amortization or a combination of any or all of
the foregoing; (ii) the attainment of certain target levels of, or a percentage
increase in, after-tax or pre-tax profits including, without limitation, that
attributable to continuing and/or other operations; (iii) the attainment of
certain target levels of, or a specified increase in, operational cash flow;
(iv) the achievement of a certain level of, reduction of, or other specified
objectives with regard to limiting the level of increase in, all or a portion
of, the Company's bank debt or other long-term or short-term public or private
debt or other similar financial obligations of the Company, which may be
calculated net of such cash balances and/or other offsets and adjustments as may
be established by the Committee; (v) the attainment of a specified percentage
increase in earnings per share or earnings per share from continuing operations;
(vi) the attainment of certain target levels of, or a specified increase in
return on capital employed or return on invested capital; (vii) the attainment
of certain target levels of, or a percentage increase in, after-tax or pre-tax
return on stockholders' equity; (viii) the attainment of certain target levels
of, or a specified increase in, economic value added targets based on a cash
flow return on investment formula; (ix) the attainment of certain target levels
in the fair market value of the shares of the Company's common stock; and (x)
the growth in the value of an investment in the Company's common stock assuming
the reinvestment of dividends. For purposes of item (i) above, "extraordinary
items" shall mean all items of gain, loss or expense for the fiscal year
determined to be extraordinary or unusual in nature or infrequent in occurrence
or related to a corporate transaction (including, without limitation, a
disposition or acquisition) or related to a change in accounting principle, all
as determined in accordance with standards established by Opinion No. 30 of the
Accounting Principles Board.
In addition, such Performance Criteria may be based upon the attainment of
specified levels of Company (or subsidiary, division or other operational unit
of the Company) performance under one or more of the measures described above
relative to the performance of other corporations. To the extent permitted under
Code Section 162(m), but only to the extent permitted under Code Section 162(m)
(including, without limitation, compliance with any requirements for stockholder
approval), the Committee may: (i) designate additional business criteria on
which the Performance Criteria may be based or (ii) adjust, modify or amend the
aforementioned business criteria.