2002 Omnibus Securities and Incentive Plan - Biopure Corp.
BIOPURE CORPORATION
2002 OMNIBUS SECURITIES AND INCENTIVE PLAN
AS AMENDED AND RESTATED
2003
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TABLE OF CONTENTS
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ARTICLE I PURPOSE ............................................................A-1
ARTICLE II DEFINITIONS........................................................A-1
ARTICLE III EFFECTIVE DATE OF PLAN............................................A-4
ARTICLE IV ADMINISTRATION.....................................................A-5
Section 4.1. Composition of Committee....................................A-5
Section 4.2. Powers......................................................A-5
Section 4.3. Additional Powers...........................................A-5
Section 4.4. Committee Action............................................A-5
ARTICLE V STOCK SUBJECT TO PLAN AND LIMITATIONS THEREON.......................A-5
Section 5.1. Stock Grant and Award Limits................................A-5
ARTICLE VI ELIGIBILITY FOR AWARDS; TERMINATION OF EMPLOYMENT,
DIRECTOR STATUS OR CONSULTANT STATUS.............................A-6
Section 6.1. Eligibility.................................................A-6
Section 6.2. Termination of Employment...................................A-6
Section 6.3. Termination of Director Status..............................A-7
Section 6.4. Termination of Consultant Status............................A-7
Section 6.5. Special Termination Rules...................................A-8
Section 6.6. Other Awards................................................A-8
ARTICLE VII OPTIONS ..........................................................A-8
Section 7.1. Option Period...............................................A-8
Section 7.2. Limitations on Exercise of Option...........................A-8
Section 7.3. Special Limitations on Incentive Stock Options..............A-9
Section 7.4. Option Agreement............................................A-9
Section 7.5. Option Price and Payment....................................A-9
Section 7.6. Shareholder Rights and Privileges..........................A-10
Section 7.7. Options and Rights in Substitution for Stock
Options Granted by Other Corporations....................A-10
ARTICLE VIII RESTRICTED STOCK AWARDS.........................................A-10
Section 8.1. Restriction Period to be Established by Committee..........A-10
Section 8.2. Other Terms and Conditions.................................A-10
Section 8.3. Payment for Restricted Stock...............................A-11
Section 8.4. Restricted Stock Award Agreements..........................A-11
ARTICLE IX UNRESTRICTED STOCK AWARDS.........................................A-11
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ARTICLE X PERFORMANCE UNIT AWARDS............................................A-11
Section 10.1. Terms and Conditions.......................................A-11
Section 10.2. Payments...................................................A-11
ARTICLE XI PERFORMANCE SHARE AWARDS..........................................A-11
Section 11.1. Terms and Conditions.......................................A-11
Section 11.2. Shareholder Rights and Privileges..........................A-11
ARTICLE XII DISTRIBUTION EQUIVALENT RIGHT AWARDS.............................A-12
Section 12.1. Terms and Conditions.......................................A-12
Section 12.2. Interest Equivalents.......................................A-12
ARTICLE XIII RECAPITALIZATION OR REORGANIZATION..............................A-12
Section 13.1. Adjustments to Common Stock................................A-12
Section 13.2. Recapitalization...........................................A-12
Section 13.3. Change of Control..........................................A-12
Section 13.4. Other Events...............................................A-13
Section 13.5. Powers Not Affected........................................A-13
Section 13.6. No Adjustment for Certain Awards...........................A-13
ARTICLE XIV AMENDMENT AND TERMINATION OF PLAN................................A-13
ARTICLE XV MISCELLANEOUS.....................................................A-14
Section 15.1. No Right to Award..........................................A-14
Section 15.2. No Rights Conferred........................................A-14
Section 15.3. Other Laws; Withholding....................................A-14
Section 15.4. No Restriction on Corporate Action.........................A-14
Section 15.5. Restrictions on Transfer...................................A-14
Section 15.6. Section 162(m).............................................A-15
Section 15.7. Other Plans................................................A-15
Section 15.8. Limits of Liability........................................A-15
Section 15.9. Governing Law..............................................A-15
Section 15.10. Severability of Provisions...............................A-15
Section 15.11. No Funding...............................................A-15
Section 15.12. Headings.................................................A-15
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BIOPURE CORPORATION
2002 OMNIBUS SECURITIES AND INCENTIVE PLAN
ARTICLE I
PURPOSE
The purpose of this Biopure Corporation 2002 Omnibus Securities and
Incentive Plan (the "Plan") is to benefit the shareholders of Biopure
Corporation, a Delaware corporation (the "Company"), by assisting the Company to
attract, retain and provide incentives to employees and directors of, and
non-employee consultants to, the Company and its Affiliates, and to align the
interests of such employees, directors and non-employee consultants with those
of the Company's shareholders. Accordingly, the Plan provides for the granting
of Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock
Awards, Unrestricted Stock Awards, Performance Share Awards, Performance Unit
Awards, Distribution Equivalent Right Awards or any combination of the
foregoing, as may be best suited to the circumstances of the particular
Employee, Director or Consultant as provided herein.
ARTICLE II
DEFINITIONS
The following definitions shall be applicable throughout the Plan unless
the context otherwise requires:
"Affiliate" shall mean any person or entity which, at the time of
reference, directly, or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, the Company.
"Award" shall mean, individually or collectively, any Option, Restricted
Stock Award, Unrestricted Stock Award, Performance Share Award, Performance Unit
Award or Distribution Equivalent Right Award.
"Award Agreement" shall mean a written agreement between the Company and
the Holder with respect to an Award.
"Board" shall mean the Board of Directors of the Company.
"Cause" with reference to an Employee or a Director shall mean (a) an act
or acts of material personal dishonesty taken by, or committed at the request
of, an Employee or Director, intended to result in the personal enrichment of
the Employee or Director at the expense of the Company, or any of its
Affiliates, (b) repeated willful violations by an Employee under the terms of
his or her employment or repeated willful failures by a Director to serve in
good faith as a Board member, in either case which have not been cured within
thirty (30) days after written notice has been given by the Board to the
Employee or Director, or (c) the conviction of an Employee or Director of a
felony.
"Change of Control" shall mean (i) the consummation of (x) any
consolidation, reorganization, merger or share exchange of the Company in which
the Company is not the continuing or surviving corporation or pursuant to which
shares of the Company's Common Stock would be converted into cash, securities or
other property, other than a merger or share exchange of the Company in which
the holders of the Company's Common Stock immediately prior to the merger
continue to represent at least fifty percent (50%) of the combined voting power
of the surviving corporation or its parent corporation immediately after the
merger or share exchange, or (y) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all, or substantially
all, of the assets of the Company, or
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(ii) the shareholders of the Company shall approve any plan or proposal for
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange Act), including any "group"
(as defined in Section 13(d)(3) of the Exchange Act) (which shall not include
the Company, any subsidiary of the Company or any employee benefit plan of the
Company or of any subsidiary of the Company) shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of fifty percent (50%)
or more of the Company's outstanding Common Stock, or (iv) within any
twenty-four (24) month period beginning on or after the Effective Date, the
persons who were directors of the Company immediately before the beginning of
such period (the "Incumbent Directors") shall cease (for any reason other than
death, disability or retirement) to constitute at least a majority of the Board
or the board of directors of any successor to the Company, provided that, any
director who was not a director as of the Effective Date shall be deemed to be
an Incumbent Director if such director was elected to the Board by, or on the
recommendation of or with the approval of, at least two-thirds of the directors
who then qualified as Incumbent Directors either actually or by prior operation
of this definition.
"Code" shall mean the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to any section and any regulation under such section.
"Committee" shall mean not less than two (2) members of the Board who are
selected by the Board as provided in Section 4.1.
"Common Stock" shall mean the Class A Common Stock, par value $0.01 per
share, of the Company.
"Company" shall mean Biopure Corporation, a Delaware corporation, and any
successor thereto.
"Consultant" shall mean any individual who is neither an Employee nor a
Director who is engaged by the Company or an Affiliate to perform consulting
services therefor.
"Director" shall mean a member of the Board or a member of the Board of
Directors of an Affiliate, in either case, who is not an Employee.
"Distribution Equivalent Right Award" shall mean an Award granted under
Article XII of the Plan which entitles the Holder to receive bookkeeping
credits, cash payments and/or Common Stock distributions equal in amount to the
distributions that would have been made to the Holder had the Holder held a
specified number of shares of Common Stock during the period that the Holder
held the Distribution Equivalent Right.
"Distribution Equivalent Right Award Agreement" shall mean a written
agreement between the Company and a Holder with respect to a Distribution
Equivalent Right Award.
"Effective Date" shall mean April 3, 2002.
"Employee" shall mean any person employed by the Company or an Affiliate.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" shall mean, as of any specified date, the average of
the reported high and low sales prices of the Common Stock on the stock exchange
composite tape on that date, or if no sales prices are reported on that date, on
the last preceding date on which such prices of the Common Stock are so
reported. If the Common Stock is traded over-the-counter at the time a
determination of its fair market
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value is required to be made hereunder, its fair market value shall be deemed to
be equal to the average between the reported high and low or closing bid and
asked prices of Common Stock on the most recent date on which Common Stock was
publicly traded. In the event Common Stock is not publicly traded at the time a
determination of this value is required to be made hereunder, the determination
of its fair market value shall be made by the Committee in such manner as it
deems appropriate.
"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 Holder's
household (other than a tenant or the Holder), a trust in which such persons
have more than fifty percent (50%) of the beneficial interest, a foundation in
which such persons (or the Holder) control the management of assets, and any
other entity in which such persons (or the Holder) own more than fifty percent
(50%) of the voting interests.
"Good Reason" shall mean: (a) the reduction of an Employee's Base Salary,
(b) the material adverse change, without his or her consent, of an Employee's
title, authority, duties or responsibilities from those immediately prior to the
Change of Control, or (c) the material breach by the Company of any material
terms of the Employee's employment which has not been cured within thirty (30)
days after a notice has been given by the Employee to the Company.
"Holder" shall mean an Employee, Director or Consultant who has been
granted an Award.
"Incentive Stock Option" shall mean an Option which is an "incentive stock
option" within the meaning of Section 422 of the Code.
"Non-Qualified Stock Option" shall mean an Option which is not an Incentive
Stock Option.
"Option" shall mean an Award granted under Article VII of the Plan of an
option to purchase shares of Common Stock and includes both Incentive Stock
Options and Non-Qualified Stock Options.
"Option Agreement" shall mean a written agreement between the Company and a
Holder with respect to an Option.
"Performance Share Award" shall mean an Award granted under Article XI of
the Plan under which, upon the satisfaction of predetermined individual or
Company performance goals and/or objectives, shares of Common Stock are paid to
the Holder.
"Performance Share Award Agreement" shall mean a written agreement between
the Company and a Holder with respect to a Performance Share Award.
"Performance Unit" shall mean a Unit awarded to a Holder pursuant to a
Performance Unit Award.
"Performance Unit Award" shall mean an Award granted under Article X of the
Plan under which, upon the satisfaction of predetermined individual or Company
performance goals and/or objectives, a cash payment shall be paid to the Holder,
based on the number of Units awarded to the Holder.
"Performance Unit Award Agreement" shall mean a written agreement between
the Company and a Holder with respect to a Performance Unit Award.
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"Plan" shall mean this Biopure Corporation 2002 Omnibus Securities and
Incentive Plan, as amended from time to time.
"Restricted Stock Award" shall mean an Award granted under Article VIII of
the Plan of shares of Common Stock, the transferability of which by the Holder
shall be subject to Transfer Restrictions.
"Restricted Stock Award Agreement" shall mean a written agreement between
the Company and a Holder with respect to a Restricted Stock Award.
"Restriction Period" shall mean the period of time for which shares of
Common Stock subject to a Restricted Stock Award shall be subject to forfeiture
and Transfer Restrictions, as set forth in the applicable Restricted Stock Award
Agreement.
"Ten Percent Shareholder" shall mean an Employee who, at the time an Option
is granted to him or her, owns more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any parent corporation
or subsidiary corporation thereof (both as defined in Section 424 of the Code),
within the meaning of Section 422(b)(6) of the Code.
"Total and Permanent Disability" shall mean the inability of an individual
to provide meaningful service for the Company due to a medically determinable
physical or mental impairment, which service is reasonably consistent with the
individual's past service for the Company, training and experience. Such
determination of total and permanent disability shall be made by the Committee.
Notwithstanding the foregoing, if an individual qualifies for Federal Social
Security disability benefits or for payments under a long-term disability income
plan of the Company or the Affiliate which employs such individual, based upon
his physical or mental condition, such individual shall be deemed to suffer from
a Total and Permanent Disability hereunder. For Holders of Incentive Stock
Options, the term shall have the meaning set forth in Section 22(e)(3) of the
Code.
"Transfer Restrictions" shall mean restrictions on the transferability of
shares of Common Stock awarded to an Employee, Director or Consultant under the
Plan pursuant to a Restricted Stock Award Agreement.
"Units" shall mean bookkeeping units, each of which represents such
monetary amount as shall be designated by the Committee in each Performance Unit
Award Agreement.
"Unrestricted Stock Award" shall mean an Award granted under Article IX of
the Plan of shares of Common Stock which are not subject to Transfer
Restrictions.
"Unrestricted Stock Award Agreement" shall mean a written agreement between
the Company and a Holder with respect to an Unrestricted Stock Award.
ARTICLE III
EFFECTIVE DATE OF PLAN
The Plan was originally made effective as of the Effective Date. The Plan
shall be effective, as amended and restated, as of April 2, 2003, provided that
the Plan is approved by the shareholders of the Company on or within twelve (12)
months of such date ("Date of Approval").
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ARTICLE IV
ADMINISTRATION
SECTION 4.1. Composition of Committee. The Plan shall be administered by
the Committee, which shall be (i) appointed by the Board, and (ii) constituted
so as to permit applicable Awards under the Plan to constitute
"performance-based compensation" for purposes of Section 162(m) of the Code and
applicable interpretive authority thereunder.
SECTION 4.2. Powers. Subject to the provisions of the Plan, the Committee
shall have the sole authority, in its discretion, to determine which individuals
shall receive an Award, the time or times when such Award shall be made, what
type of Award shall be granted, the size of the Award and the number of shares
of Common Stock which may be issued under such Award, as applicable. In making
such determinations the Committee may take into account the nature of the
services rendered by the respective individuals, their present and potential
contribution to the Company's (or the Affiliate's) success and such other
factors as the Committee in its discretion shall deem relevant.
SECTION 4.3. Additional Powers. The Committee shall have such additional
powers as are delegated to it under the other provisions of the Plan. Subject to
the express provisions of the Plan, the Committee is authorized to construe the
Plan and the respective Award Agreements executed hereunder, to prescribe such
rules and regulations relating to the Plan as it may deem advisable to carry out
the intent of the Plan, and to determine and amend, subject to the provisions of
Article XIV, (including but not limited to cashing out Awards, extending the
exercise period of Options and accelerating the vesting of Awards) the terms,
restrictions and provisions of each Award, including such terms, restrictions
and provisions as shall be requisite in the judgment of the Committee to cause
designated Options to qualify as Incentive Stock Options, and to make all other
determinations necessary or advisable for administering the Plan. The Committee
may correct any defect or supply any omission or reconcile any inconsistency in
any Award Agreement in the manner and to the extent it shall deem expedient to
carry it into effect. Other than as set forth in Article XIII, the Committee may
not reduce the price of any outstanding Options. The determinations of the
Committee on the matters referred to in this Article IV shall be conclusive.
SECTION 4.4 Committee Action. In the absence of specific rules to the
contrary, action by the Committee shall require the consent of a majority of the
members of the Committee, expressed either orally at a meeting of the Committee
or in writing in the absence of a meeting.
ARTICLE V
STOCK SUBJECT TO PLAN AND LIMITATIONS THEREON
SECTION 5.1. Stock Grant and Award Limits. The Committee may from time to
time grant Awards to one or more Employees, Directors and/or Consultants
determined by it to be eligible for participation in the Plan in accordance with
the provisions of Article VI. Subject to Article XIII, (i) the aggregate number
of shares of Common Stock that may be issued under the Plan shall not exceed two
million two hundred thousand (2,200,000) shares plus any shares remaining unsold
under the Biopure Corporation 1999 Omnibus Securities and Incentive Plan and the
1998 Stock Option Plan, which plans are terminated effective on the Date of
Approval, and (ii) the aggregate number of shares of Common Stock that may be
issued under the Plan as Incentive Stock Options, shall not exceed two million
two hundred thousand (2,200,000) shares. Shares shall be deemed to have been
issued under the Plan solely to the extent actually issued and delivered
pursuant to an Award. To the extent that an Award lapses or the rights of its
Holder terminate, any shares of Common Stock subject to such Award shall again
be available for the grant of a new Award. Notwithstanding any provision in the
Plan to the contrary, the maximum number of shares of Common Stock that may be
subject to Awards of Options under Article
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VII granted to any one Employee during any calendar year shall be five hundred
thousand (500,000) shares (subject to adjustment in the same manner as provided
in Article XIII with respect to shares of Common Stock subject to Awards then
outstanding), and, with respect to Awards (other than Options) that are intended
to qualify as "performance-based compensation" (within the meaning of Section
162(m) of the Code), the maximum number of shares of Common Stock that may be
subject to any such Award during any calendar year shall be 500,000 shares
(subject to adjustment in the same manner as provided in Article XIII with
respect to shares of Common Stock subject to Awards then outstanding) and, in
the case of any such Award that is payable in cash, the maximum amount that may
be paid pursuant to any such Award during any calendar year shall be $2 million.
The limitation set forth in the preceding sentence shall be applied in a manner
which shall permit compensation generated in connection with Awards to
constitute "performance-based" compensation for purposes of Section 162(m) of
the Code, including, but not limited to, counting against such maximum number of
shares, to the extent required under Section 162(m) of the Code and applicable
interpretive authority thereunder, any shares subject to Awards that are
canceled or deemed repriced for purposes of Section 162(m) of the Code.
(a) Stock Offered. The stock to be offered pursuant to the grant of
an Award may be authorized but unissued Common Stock, Common Stock purchased on
the open market or Common Stock previously issued and outstanding and reacquired
by the Company.
ARTICLE VI.
ELIGIBILITY FOR AWARDS; TERMINATION OF
EMPLOYMENT, DIRECTOR STATUS OR CONSULTANT STATUS
SECTION 6.1. Eligibility. Awards made under the Plan may be granted solely
to persons who, at the time of grant, are Employees, Directors or Consultants.
An Award may be granted on more than one occasion to the same Employee, Director
or Consultant, and, subject to the limitations set forth in the Plan, such Award
may include a Non-Qualified Stock Option, a Restricted Stock Award, an
Unrestricted Stock Award, a Performance Share Award, a Performance Unit Award,
Distribution Equivalent Right Award, any combination thereof or, solely for
Employees, an Incentive Stock Option.
SECTION 6.2. Termination of Employment. Except to the extent inconsistent
with the terms of the applicable Award Agreement and/or the provisions of
Section 6.5, the following terms and conditions shall apply with respect to the
termination of an Employee's employment with the Company or an Affiliate, as
applicable, for any reason, including, without limitation, retirement upon or
after attaining age sixty-five (65), Total and Permanent Disability or death.
(a) Options that are not vested at termination of employment shall
lapse.
(b) The Employee's rights, if any, to exercise any then exercisable
Options shall terminate:
(1) If such termination is for a reason other than the
Employee's retirement upon or after attaining age sixty-five (65),
Total and Permanent Disability or death, on the earlier of (i) ninety
(90) days after the date of such termination of employment and (ii)
the expiration date of the Options; or
(2) If such termination is on account of the Employee's
retirement upon or after attaining age sixty-five (65) or on account
of the Employee's Total and Permanent Disability or death, on the
earlier of (i) one (1) year after the date of such termination of
employment and (ii) the expiration date of the Options.
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Upon such applicable date the Employee (and such Employee's estate,
designated beneficiary or other legal representative) shall forfeit any rights
or interests in or with respect to any such Options.
(c) If an Employee's employment with the Company or an Affiliate, as
applicable, terminates for any reason prior to the actual or deemed satisfaction
and/or lapse of the restrictions, terms and conditions applicable to an Award of
Restricted Stock, such Restricted Stock shall immediately be canceled, and the
Employee (and such Employee's estate, designated beneficiary or other legal
representative) shall forfeit any rights or interests in and with respect to any
such Restricted Stock. The immediately preceding sentence to the contrary
notwithstanding, the Committee, in its sole discretion, may determine, prior to
or within thirty (30) days after the date of such termination of employment,
that all or a portion of any such Employee's Restricted Stock shall not be so
canceled and forfeited.
SECTION 6.3. Termination of Director Status. Except to the extent
inconsistent with the terms of the applicable Award Agreement and/or the
provisions of Section 6.5, the following terms and conditions shall apply with
respect to the termination of a Director's status as a Director of the Company
or an Affiliate, as applicable:
(a) Options that are not vested at termination of Director status
shall lapse.
(b) If such termination is for a reason other than death, any then
exercisable Options shall remain exercisable for their full term except as set
forth in (c) below.
(c) If such termination is on account of the Director's death, or if
the Director shall die after termination of Director status and before any
Options have been exercised in full, the Options may be exercised by the
Director's estate, designated beneficiary or other legal representative until
the earlier of (i) one (1) year after the date of death and (ii) the expiration
date of the Options.
Upon such applicable date the Director (and such Director's estate,
designated beneficiary or other legal representatives) shall forfeit any rights
or interests in or with respect to any such Options.
(d) If the Director's status as a Director with the Company or an
Affiliate, as applicable, terminates for any reason prior to the actual or
deemed satisfaction and/or lapse of the restrictions, terms and conditions
applicable to an Award of Restricted Stock, such Restricted Stock shall
immediately be canceled, and the Director (and such Director's estate,
designated beneficiary or other legal representative) shall forfeit any rights
or interests in and with respect to any such Restricted Stock. The immediately
preceding sentence to the contrary notwithstanding, the Committee, in its sole
discretion, may determine, prior to or within thirty (30) days after the date of
such termination of the Director's status as a Director, that all or a portion
of any such Director's Restricted Stock shall not be so canceled and forfeited.
SECTION 6.4. Termination of Consultant Status. Except to the extent
inconsistent with the terms of the applicable Award Agreement and/or the
provisions of Section 6.5, the following terms and conditions shall apply with
respect to the termination of a Holder's status as a Consultant, for any reason:
(a) Options that are not vested at termination of Consultant status
shall lapse.
(b) The Consultant's rights, if any, to exercise any then exercisable
Options shall terminate:
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(1) If such termination is for a reason other than the
Consultant's death, on the earlier of (i) ninety (90) days after the
date of such termination and (ii) the expiration date of the Options;
or
(2) If such termination is on account of the Consultant's death,
on the earlier of (i) one (1) year after the date of the Consultant's
death and (ii) the expiration date of the Options.
(c) If the status of a Holder as a Consultant terminates for any
reason prior to the actual or deemed satisfaction and/or lapse of the
restrictions, terms and conditions applicable to an Award of Restricted Stock,
such Restricted Stock shall immediately be canceled, and the Consultant (and
such Consultant's estate, designated beneficiary or other legal representative)
shall forfeit any rights or interests in and with respect to any such Restricted
Stock. The immediately preceding sentence to the contrary notwithstanding, the
Committee, in its sole discretion, may determine, prior to or within thirty (30)
days after the date of such termination of such a Holder's status as a
Consultant, that all or a portion of any such Consultant's Restricted Stock
shall not be so canceled and forfeited.
SECTION 6.5. Special Termination Rules.
(a) If a Holder's employment with, status as a Director with or
status as a Consultant with the Company or an Affiliate shall terminate, and if
within ninety (90) days of such termination such Holder shall become an
Employee, a Director or a Consultant, such Holder's rights with respect to any
Award or portion thereof granted thereto prior to the date of such termination
may be preserved if and to the extent determined by the Committee in its sole
discretion.
(b) If a Holder's employment with, status as a Director with or
status as a Consultant with the Company or any Affiliate shall terminate and the
Holder, during the period of time he is permitted to exercise Options under the
provisions of the Plan (as set forth above in Sections 6.2, 6.3 or 6.4), is
unable to sell Common Stock because of the likelihood of a violation of Rule
10b-5 of the Exchange Act, which determination shall be made in the sole
discretion of the Holder, the exercise period of the Options shall be
automatically extended for a further ninety (90) days from the date the Options
would otherwise lapse as determined pursuant to Sections 6.2, 6.3 or 6.4 above;
provided, however, that Options may not be exercised after their expiration
date.
(c) In connection with any termination of employment or status as a
Director or Consultant, the Committee has full power and authority to extend the
term, accelerate vesting, extend the exercise period or to amend any other
provisions of any Award, as it may determine in its sole discretion.
SECTION 6.6. Other Awards. Forfeiture provisions relating to other Awards
shall be set forth in the Award Agreement.
ARTICLE VII
OPTIONS
SECTION 7.1. Option Period. The term of each Option shall be as specified
in the Option Agreement.
SECTION 7.2. Limitations on Exercise of Option. An Option shall be
exercisable in whole or in such installments and at such times as specified in
the Option Agreement.
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SECTION 7.3. Special Limitations on Incentive Stock Options. To the extent
that the aggregate Fair Market Value (determined at the time the respective
Incentive Stock Option is granted) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by an individual
during any calendar year under all plans of the Company and any parent
corporation or subsidiary corporation thereof (both as defined in Section 424 of
the Code) which provide for the grant of Incentive Stock Options exceeds One
Hundred Thousand Dollars ($100,000)(or such other individual limit as may be in
effect under the Code on the date of grant), such Incentive Stock Options shall
be treated as Non-Qualified Stock Options. The Committee shall determine, in
accordance with applicable provisions of the Code, Treasury Regulations and
other administrative pronouncements, which of a Holder's Options, which were
intended by the Committee to be Incentive Stock Options when granted to the
Holder, will not constitute Incentive Stock Options because of such limitation
and shall notify the Holder of such determination as soon as practicable after
such determination. No Incentive Stock Option shall be granted to an Employee
if, at the time the Option is granted, such Employee is a Ten Percent
Shareholder, unless (i) at the time such Incentive Stock Option is granted the
Option price is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock subject to the Option, and (ii) such Incentive Stock Option
by its terms is not exercisable after the expiration of five (5) years from the
date of grant.
SECTION 7.4. Option Agreement. Each Option shall be evidenced by an Option
Agreement in such form and containing such provisions not inconsistent with the
provisions of the Plan as the Committee from time to time shall approve,
including, but not limited to, provisions to qualify an Option as an Incentive
Stock Option. An Option Agreement may provide for the payment of the Option
price, in whole or in part, by the delivery of a number of shares of Common
Stock (plus cash if necessary) having a Fair Market Value equal to such Option
price. Each Option Agreement shall, solely to the extent inconsistent with the
provisions of Section 6.2, 6.3 or 6.4, as applicable, specify the effect of
termination of employment, Director status or Consultant status on the
exercisability of the Option. Moreover, an Option Agreement may provide for a
"cashless exercise" of the Option whereby the Holder, by a properly-executed
written notice, directs (i) an immediate market sale of all or a portion of the
shares of Common Stock to which he is entitled upon exercise, (ii) the delivery
of the shares of Common Stock from the Company directly to a brokerage firm and
(iii) the delivery of the Option price from sale proceeds from the brokerage
firm directly to the Company. An Option Agreement may also include provisions
relating to (i) subject to the provisions hereof, accelerated vesting of
Options, (ii) tax matters (including provisions covering any applicable Employee
wage withholding requirements and requiring additional "gross-up" payments to
Holders to meet any excise taxes or other additional income tax liability
imposed as a result of a payment upon a Change of Control resulting from the
operation of the Plan or of such Option Agreement) and (iii) any other matters
not inconsistent with the terms and provisions of the Plan that the Committee
shall in its sole discretion determine. The terms and conditions of the Option
Agreements need not be identical.
SECTION 7.5. Option Price and Payment. The price at which a share of Common
Stock may be purchased upon exercise of an Option shall be determined by the
Committee, but such Option price (i) in the case of an Option that is an
Incentive Stock Option or that is intended to constitute performance-based
compensation within the meaning of Section 162(m) of the Code, shall not be less
than the Fair Market Value of a share of Common Stock on the date such Option is
granted and (ii) shall be subject to adjustment as provided in Article XIII. The
Option or portion thereof may be exercised by delivery of an irrevocable notice
of exercise to the Company. The Option price for the Option or portion thereof
shall be paid in full in the manner prescribed by the Committee. Separate stock
certificates shall be issued by the Company for those shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option and for those
shares of Common Stock acquired pursuant to the exercise of a Non-Qualified
Stock Option.
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The Holder must notify the Committee to the extent the Holder disposes of
Common Stock acquired pursuant to the exercise of an Incentive Stock Option less
than two years after the Incentive Stock Option was granted or less than one
year after exercise.
SECTION 7.6. Shareholder Rights and Privileges. The Holder of an Option
shall be entitled to all the privileges and rights of a shareholder of the
Company solely with respect to such shares of Common Stock as have been
purchased under the Option and for which certificates of stock have been
registered in the Holder's name.
SECTION 7.7. Options and Rights in Substitution for Stock Options Granted
by Other Corporations. Options may be granted under the Plan from time to time
in substitution for stock options held by individuals employed by entities who
become Employees as a result of a merger or consolidation of the employing
entity with the Company or any Affiliate, or the acquisition by the Company or
an Affiliate of the assets of the employing entity, or the acquisition by the
Company or an Affiliate of stock of the employing entity with the result that
such employing entity becomes an Affiliate.
ARTICLE VIII
RESTRICTED STOCK AWARDS
SECTION 8.1. Restriction Period to be Established by Committee. At the time
a Restricted Stock Award is made, the Committee shall establish the Restriction
Period applicable to such Award. Each Restricted Stock Award may have a
different Restriction Period, in the discretion of the Committee. The
Restriction Period applicable to a particular Restricted Stock Award shall not
be changed except as permitted by Section 8.2 or Article XIV.
SECTION 8.2. Other Terms and Conditions. Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by a stock certificate registered in
the name of the Holder of such Restricted Stock Award. If provided for under the
Restricted Stock Award Agreement, the Holder shall have the right to vote Common
Stock subject thereto and to enjoy all other shareholder rights, except that (i)
the Holder shall not be entitled to delivery of the stock certificate until the
Restriction Period shall have expired, (ii) the Company shall retain custody of
the stock during the Restriction Period, (iii) the Holder may not sell,
transfer, pledge, exchange, hypothecate or otherwise dispose of the stock during
the Restriction Period, (iv) the Holder shall be entitled to receive dividends
on the Common Stock during the Restriction Period and (v) a breach of the terms
and conditions established by the Committee pursuant to the Restricted Stock
Award Agreement shall cause a forfeiture of the Restricted Stock Award. At the
time of such Award, the Committee may, in its sole discretion, prescribe
additional terms and conditions or restrictions relating to Restricted Stock
Awards, including, but not limited to, rules pertaining to the effect of
termination of employment, Director status or Consultant status prior to
expiration of the Restriction Period, solely to the extent inconsistent with the
provisions of Section 6.2, 6.3 or 6.4, as applicable. Such additional terms,
conditions or restrictions shall, to the extent inconsistent with the provisions
of Section 6.2, 6.3, or 6.4, as applicable, be set forth in a Restricted Stock
Award Agreement made in conjunction with the Award. Such Restricted Stock Award
Agreement may also include provisions relating to (i) subject to the provisions
hereof, accelerated vesting of Awards, including but not limited to accelerated
vesting upon the occurrence of a Change of Control, (ii) tax matters (including
provisions covering any applicable Employee wage withholding requirements and
requiring additional "gross-up" payments to Holders to meet any excise taxes or
other additional income tax liability imposed as a result of a Change of Control
payment resulting from the operation of the Plan or of such Restricted Stock
Award Agreement) and (iii) any other matters not inconsistent with the terms and
provisions of the Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Restricted Stock
Agreements need not be identical.
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SECTION 8.3. Payment for Restricted Stock. The Committee shall determine
the amount and form of any payment for Common Stock received pursuant to a
Restricted Stock Award, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Common Stock received
pursuant to a Restricted Stock Award, except to the extent otherwise required by
law.
SECTION 8.4. Restricted Stock Award Agreements. At the time any Award is
made under this Article VIII, the Company and the Holder shall enter into a
Restricted Stock Award Agreement setting forth each of the matters contemplated
hereby and such other matters as the Committee may determine to be appropriate.
ARTICLE IX
UNRESTRICTED STOCK AWARDS
Pursuant to the terms of the applicable Unrestricted Stock Award Agreement,
a Holder may be awarded (or sold at a discount) shares of Common Stock which are
not subject to Transfer Restrictions, in consideration for past services
rendered thereby to the Company or an Affiliate or for other valid
consideration.
ARTICLE X
PERFORMANCE UNIT AWARDS
SECTION 10.1. Terms and Conditions. The Committee shall set forth in the
applicable Performance Unit Award Agreement the performance goals and objectives
(and the period of time to which such goals and objectives shall apply) which
the Holder and/or the Company would be required to satisfy before becoming
entitled to payment pursuant to Section 10.2, the number of Units awarded to the
Holder and the dollar value assigned to each such Unit.
SECTION 10.2. Payments. The Holder of a Performance Unit shall be entitled
to receive a cash payment equal to the dollar value assigned to such Unit under
the applicable Performance Unit Award Agreement if the Holder and/or the Company
satisfy (or partially satisfy, if applicable under the applicable Performance
Unit Award Agreement) the performance goals and objectives set forth in such
Performance Unit Award Agreement.
ARTICLE XI
PERFORMANCE SHARE AWARDS
SECTION 11.1. Terms and Conditions. The Committee shall set forth in the
applicable Performance Share Award Agreement the performance goals and
objectives (and the period of time to which such goals and objectives shall
apply) which the Holder and/or the Company would be required to satisfy before
becoming entitled to the receipt of shares of Common Stock pursuant to such
Holder's Performance Share Award and the number of shares of Common Stock
subject to such Performance Share Award.
SECTION 11.2. Shareholder Rights and Privileges. The Holder of a
Performance Share Award shall have no rights as a shareholder of the Company
until such time, if any, as the Holder actually receives shares of Common Stock
pursuant to the Performance Share Award.
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ARTICLE XII
DISTRIBUTION EQUIVALENT RIGHT AWARDS
SECTION 12.1. Terms and Conditions. The Committee shall set forth in the
applicable Distribution Equivalent Right Award Agreement the terms and
conditions, if any, including whether the Holder is to receive credits currently
in cash, is to have such credits reinvested (at Fair Market Value determined as
of the date of reinvestment) in additional shares of Common Stock or is to be
entitled to choose among such alternatives. Distribution Equivalent Right Awards
may be settled in cash or in shares of Common Stock, as set forth in the
Applicable Distribution Equivalent Right Award Agreement. A Distribution
Equivalent Right Award may, but need not be, awarded as a component of another
Award, where, if so awarded, such Distribution Equivalent Right Award shall
expire or be forfeited by the Holder under the same conditions as under such
other Award.
SECTION 12.2. Interest Equivalents. The Distribution Equivalent Right Award
Agreement for a Distribution Equivalent Right Award may provide for the
crediting of interest on a Distribution Right Award to be settled in cash at a
future date, at a rate set forth in the applicable Distribution Equivalent Right
Award Agreement, on the amount of cash payable thereunder.
ARTICLE XIII
RECAPITALIZATION OR REORGANIZATION
SECTION 13.1. Adjustments to Common Stock. The shares with respect to which
Awards may be granted are shares of Common Stock as presently constituted;
provided, however, that if, and whenever, prior to the expiration or
distribution to the Holder of an Award theretofore granted, the Company shall
effect a subdivision or consolidation of shares of Common Stock or the payment
of a stock dividend on Common Stock without receipt of consideration by the
Company, the number of shares of Common Stock with respect to which such Award
may thereafter be exercised or satisfied, as applicable, (i) in the event of an
increase in the number of outstanding shares, shall be proportionately
increased, and the purchase price per share shall be proportionately reduced,
and (ii) in the event of a reduction in the number of outstanding shares, shall
be proportionately reduced, and the purchase price per share shall be
proportionately increased.
SECTION 13.2. Recapitalization. If the Company recapitalizes or otherwise
changes its capital structure, thereafter upon any exercise or satisfaction, as
applicable, of a previously granted Award, the Holder shall be entitled to
receive (or entitled to purchase, if applicable) under such Award, in lieu of
the number of shares of Common Stock then covered by such Award, the number and
class of shares of stock and securities to which the Holder would have been
entitled pursuant to the terms of the recapitalization if, immediately prior to
such recapitalization, the Holder had been the holder of record of the number of
shares of Common Stock then covered by such Award.
SECTION 13.3. Change of Control. Except to the extent otherwise provided in
the applicable Award Agreement, in the event of the occurrence of a Change of
Control, and within one year following the Change of Control (a) an Employee's
employment is terminated by the Company without Cause or by the Employee with
Good Reason or (b) a Director is removed from the Board without the approving
vote of a majority of the directors in office immediately prior to the Change of
Control, outstanding Awards of the Employee or Director, as the case may be,
shall immediately vest and become exercisable and/or required employment or
Board membership periods with the Company or an Affiliate and/or performance
goals and/or objectives shall be deemed to have been fully satisfied, as
applicable. The Committee, in its discretion by unanimous action, may determine
that upon the occurrence of a Change of Control, each Award outstanding
hereunder shall terminate within a specified number of days after notice to the
Holder, and such Holder shall receive, (i) with respect to Awards which are
Performance Units or Distribution
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Equivalent Rights (which Distribution Equivalent Rights, pursuant to the
applicable Distribution Equivalent Right Award Agreement, are to be settled in
cash), cash in an amount equal to the amount of cash that would otherwise have
been payable thereunder assuming that all of the applicable performance goals
and objectives set forth in the applicable Performance Unit Award Agreement had
been fully satisfied, and (ii) with respect to each share of Common Stock
subject to such Award, cash in an amount equal to the excess of (A) the greater
of (I) the Fair Market Value of such share of Common Stock immediately prior to
the occurrence of such Change of Control or (II) the value of the consideration
to be received in connection with such Change of Control for one share of Common
Stock, over (B) the exercise price per share, if applicable, of one share of
Common Stock. If the consideration offered to shareholders of the Company in any
transaction described in this Section 13.3 consists of anything other than cash,
the Committee shall determine the fair cash equivalent of the portion of the
non-cash consideration offered. The provisions contained in this Section 13.3
shall not terminate any rights of the Holder to further payments pursuant to any
other agreement with the Company following the occurrence of a Change of
Control. The provisions contained in this Section 13.3 do not apply to
Consultants.
SECTION 13.4. Other Events. In the event of changes to the outstanding
Common Stock by reason of recapitalization, reorganization, mergers,
consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of the grant of any Award and not
otherwise provided for under this Article XIII, any outstanding Awards and any
Award Agreements evidencing such Awards shall be subject to adjustment by the
Committee in its discretion as to the number and price of shares of Common Stock
or other consideration subject to such Awards. In the event of any such change
to the outstanding Common Stock, the aggregate number of shares available under
the Plan may be appropriately adjusted by the Committee, the determination of
which shall be conclusive.
SECTION 13.5. Powers Not Affected. The existence of the Plan and the Awards
granted hereunder shall not affect in any way the right or power of the Board or
of the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change of the Company's capital
structure or business, any merger or consolidation of the Company, any issue of
debt or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.
SECTION 13.6. No Adjustment for Certain Awards. Except as hereinabove
expressly provided, the issuance by the Company of shares of stock of any class
or securities convertible into shares of stock of any class, for cash, property,
labor or services, upon direct sale, upon the exercise of rights or warrants to
subscribe therefor or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any case whether or not
for fair value, shall not affect previously granted Awards, and no adjustment by
reason thereof shall be made with respect to the number of shares of Common
Stock subject to Awards theretofore granted or the purchase price per share, if
applicable.
ARTICLE XIV
AMENDMENT AND TERMINATION OF PLAN
The Board in its discretion may terminate the Plan at any time with respect
to any shares for which Awards have not theretofore been granted. The Board
shall have the right to alter or amend the Plan and the Committee shall have the
right to amend any Awards, or any part hereof or thereof, from time to time.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1. No Right to Award. Neither the adoption of the Plan by the
Company nor any action of the Board or the Committee shall be deemed to give an
Employee, Director or Consultant any right to an Award except as may be
evidenced by an Award Agreement duly executed on behalf of the Company, and then
solely to the extent and on the terms and conditions expressly set forth
therein.
SECTION 15.2. No Rights Conferred. Nothing contained in the Plan shall (i)
confer upon any Employee any right with respect to continuation of employment
with the Company or any Affiliate, (ii) interfere in any way with the right of
the Company or any Affiliate to terminate the employment of an Employee at any
time, (iii) confer upon any Director any right with respect to continuation of
such Director's membership on the Board, (iv) interfere in any way with the
right of the Company or an Affiliate to terminate a Director's membership on the
Board at any time, (v) confer upon any Consultant any right with respect to
continuation of his or her consulting engagement with the Company or any
Affiliate, or (vi) interfere in any way with the right of the Company or an
Affiliate to terminate a Consultant's consulting engagement with the Company or
an Affiliate at any time.
SECTION 15.3. Other Laws; Withholding. The Company shall not be obligated
to issue any Common Stock pursuant to any Award granted under the Plan at any
time when the shares covered by such Award have not been registered under the
Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the Committee deems applicable and, in the opinion
of legal counsel of the Company, there is no exemption from the registration
requirements of such laws, rules or regulations available for the issuance and
sale of such shares. No fractional shares of Common Stock shall be delivered,
nor shall any cash in lieu of fractional shares be paid. The Company shall have
the right to deduct in cash (whether under this Plan or otherwise) in connection
with all Awards any taxes required by law to be withheld and to require any
payments required to enable it to satisfy its withholding obligations. In the
case of any Award satisfied in the form of shares of Common Stock, no shares
shall be issued unless and until arrangements satisfactory to the Company shall
have been made to satisfy any tax withholding obligations applicable with
respect to such Award. Subject to such terms and conditions as the Committee may
impose, the Company shall have the right to retain, or the Committee may,
subject to such terms and conditions as it may establish from time to time,
permit Holders to elect to tender Common Stock or have the Company withhold
shares of Common Stock to satisfy, in whole or in part, the employer's minimum
statutory withholding (based on minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to such
supplemental taxable income).
SECTION 15.4. No Restriction on Corporate Action. Nothing contained in the
Plan shall be construed to prevent the Company or any Affiliate from taking any
corporate action which is deemed by the Company or such Affiliate to be
appropriate or in its best interest, whether or not such action would have an
adverse effect on the Plan or any Award made under the Plan. No Employee,
Director, Consultant, beneficiary or other person shall have any claim against
the Company or any Affiliate as a result of any such action.
SECTION 15.5. Restrictions on Transfer. No Award under the Plan or any
Award Agreement and no rights or interests herein or therein, shall or may be
assigned, transferred, sold, exchanged, encumbered, pledged or otherwise
hypothecated or disposed of by a Holder except (i) by will or by the laws of
descent and distribution, or (ii) except for an Incentive Stock Option, by gift
to any Family Member of the Holder. An Award may be exercisable during the
lifetime of the Holder only by such Holder or by the Holder's guardian or legal
representative unless it has been transferred by gift to a Family Member of the
Holder, in which case it shall be exercisable solely by such transferee.
Notwithstanding any such transfer, the Holder shall continue to be subject to
the withholding
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requirements provided for under Section 15.3 hereof. The transferee shall be
subject to all terms of the Plan. The transferee may not transfer the Award.
SECTION 15.6. Section 162(m). It is intended that the Plan shall comply
fully with and meet all the requirements of Section 162(m) of the Code so that
Awards hereunder which are made to Holders who are "covered employees" (as
defined in Section 162(m) of the Code) shall constitute "performance-based"
compensation within the meaning of Section 162(m) of the Code. The performance
criteria to be utilized under the Plan for such purposes shall consist of
objective tests based on one or more of the following: earnings or earnings per
share, cash flow, customer satisfaction, revenues, financial return ratios (such
as return on equity and/or return on assets), market performance, shareholder
return and/or value, operating profits, EBITDA, net profits, profit returns and
margins, stock price, credit quality, sales growth, market share, comparisons to
peer companies (on a company-wide or divisional basis), working capital and/or
individual or aggregate employee performance. If any provision of the Plan would
disqualify the Plan or would not otherwise permit the Plan to comply with
Section 162(m) as so intended, such provision shall be construed or deemed
amended to conform to the requirements or provisions of Section 162(m).
SECTION 15.7. Other Plans. No Award, payment or amount received hereunder
shall be taken into account in computing an Employee's salary or compensation
for the purposes of determining any benefits under any pension, retirement, life
insurance or other benefit plan of the Company or any Affiliate, unless such
other plan specifically provides for the inclusion of such Award, payment or
amount received.
SECTION 15.8. Limits of Liability. Any liability of the Company with
respect to an Award shall be based solely upon the contractual obligations
created under the Plan and the Award Agreement. Neither the Company nor any
member of the Committee shall have any liability to any party for any action
taken or not taken, in good faith, in connection with or under the Plan.
SECTION 15.9. Governing Law. Except as otherwise provided herein, the Plan
shall be construed in accordance with the laws of the State of Delaware.
SECTION 15.10. Severability of Provisions. If any provision of the Plan is
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of the Plan, and the Plan shall be construed and
enforced as if such invalid or unenforceable provision had not been included in
the Plan.
SECTION 15.11. No Funding. The Plan shall be unfunded. The Company shall
not be required to establish any special or separate fund or to make any other
segregation of funds or assets to ensure the payment of any Award.
SECTION 15.12. Headings. Headings used throughout the Plan are for
convenience only and shall not be given legal significance.
------------------------
Adopted by the Board of Directors on January 15, 2002
Amended and Restated on April 2, 2003 to increase the number of shares available
for issuance.
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