2003 Equity Incentive Award Plan - CancerVax Corp.
CANCERVAX CORPORATION
2003 EQUITY INCENTIVE AWARD PLAN
ARTICLE 1
PURPOSE
1.1 GENERAL. The purpose of the CancerVax Corporation 2003 Equity
Incentive Award Plan (the "Plan") is to promote the success and enhance the
value of CancerVax Corporation (the "Company") by linking the personal interests
of the members of the Board, employees, officers, and executives of the Company
and any Subsidiary, to those of Company stockholders and by providing such
individuals with an incentive for outstanding performance to generate superior
returns to Company stockholders. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the
services of members of the Board, employees, officers, and executives of the
Company upon whose judgment, interest, and special effort the successful conduct
of the Company's operation is largely dependent.
ARTICLE 2
DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. The following words and phrases shall have the
following meanings:
(a) "Award" means an Option, a Restricted Stock award, a
Stock Appreciation Right award, a Performance Share award, a Dividend
Equivalents award, a Stock Payment award, a Deferred Stock award, or a
Performance-Based Award granted to a Participant pursuant to the Plan.
(b) "Award Agreement" means any written agreement,
contract, or other instrument or document evidencing an Award.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" unless otherwise defined in an employment or
services agreement between the Participant and the Company or a Subsidiary,
means dishonesty, fraud, misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Board, and its determination shall be conclusive and binding.
(e) "Change of Control" means and includes each of the
following:
(1) the acquisition, directly or indirectly, by any
"person" or "group" (as those terms are defined in Sections 3(a)(9), 13(d) and
14(d) of the Exchange Act and the rules thereunder) of "beneficial ownership"
(as determined pursuant to Rule 13d-3 under the Exchange Act) of securities
entitled to vote generally in the election of directors ("voting securities") of
the Company that represent 40% or more of the combined voting power of the
Company's then outstanding voting securities, other than
(A) an acquisition by a trustee or other
fiduciary holding securities
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under any employee benefit plan (or related trust) sponsored or maintained by
the Company or any person controlled by the Company or by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any person
controlled by the Company, or
(B) an acquisition of voting securities by
the Company or a corporation owned, directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of the
stock of the Company, or
(C) an acquisition of voting securities
pursuant to a transaction described in clause (3) below that would not be a
Change of Control under clause (3);
Notwithstanding the foregoing, neither of the
following events shall constitute an "acquisition" by any person or group for
purposes of this subsection (e): an acquisition of the Company's securities by
the Company which causes the Company's voting securities beneficially owned by a
person or group to represent 40% or more of the combined voting power of the
Company's then outstanding voting securities; provided, however, that if a
person or group shall become the beneficial owner of 40% or more of the combined
voting power of the Company's then outstanding voting securities by reason of
share acquisitions by the Company as described above and shall, after such share
acquisitions by the Company, become the beneficial owner of any additional
voting securities of the Company, then such acquisition shall constitute a
Change of Control; or
(2) during any period of two consecutive years,
individuals who, at the beginning of such period, constitute the Board together
with any new director(s) (other than a director designated by a person who shall
have entered into an agreement with the Company to effect a transaction
described in clauses (1) or (3) of this subsection (e)) whose election by the
Board 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 a majority thereof; or
(3) the consummation by the Company (whether directly
involving the Company or indirectly involving the Company through one or more
intermediaries) of (x) a merger, consolidation, reorganization, or business
combination or (y) a sale or other disposition of all or substantially all of
the Company's assets or (z) the acquisition of assets or stock of another
entity, in each case other than a transaction
(A) which results in the Company's voting
securities outstanding immediately before the transaction continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the Company or the person that, as a result of the transaction,
controls, directly or indirectly, the Company or owns, directly or indirectly,
all or substantially all of the Company's assets or otherwise succeeds to the
business of the Company (the Company or such person, the "Successor Entity"))
directly or indirectly, at least a majority of the combined voting power of the
Successor Entity's outstanding voting securities immediately after the
transaction, and
(B) after which no person or group
beneficially owns voting
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securities representing 40% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated
for purposes of this clause (B) as beneficially owning 40% or more of combined
voting power of the Successor Entity solely as a result of the voting power held
in the Company prior to the consummation of the transaction; or
(4) the Company's stockholders approve a liquidation
or dissolution of the Company.
The Committee shall have full and final authority, which shall
be exercised in its discretion, to determine conclusively whether a Change of
Control of the Company has occurred pursuant to the above definition, and the
date of the occurrence of such Change of Control and any incidental matters
relating thereto.
(f) "Code" means the Internal Revenue Code of 1986, as
amended.
(g) "Committee" means the committee of the Board
described in Article 12.
(h) "Covered Employee" means an Employee who is, or could
be, a "covered employee" within the meaning of Section 162(m) of the Code.
(i) "Deferred Stock" means a right to receive a specified
number of shares of Stock during specified time periods pursuant to Article 8.
(j) "Disability" means, for purposes of this Plan, that
the Participant qualifies to receive long-term disability payments under the
Company's long-term disability insurance program, as it may be amended from time
to time.
(k) "Dividend Equivalents" means a right granted to a
Participant pursuant to Article 8 to receive the equivalent value (in cash or
Stock) of dividends paid on Stock.
(l) "Employee" means any officer or other employee (as
defined in accordance with Section 3401(c) of the Code) of the Company or any
Subsidiary.
(m) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(n) "Fair Market Value" shall mean, as of any date, the
value of Stock determined as follows:
(1) If the Stock is listed on any established
stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market
trading day prior to the date of determination, as reported in The Wall
Street Journal or such other source as the Committee deems reliable;
(2) If the Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean of the closing
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bid and asked prices for the Stock on the date prior to the date of
determination as reported in The Wall Street Journal or such other
source as the Committee deems reliable; or
(3) In the absence of an established market for
the Stock, the Fair Market Value thereof shall be determined in good
faith by the Committee.
(o) "Good Reason" means the occurrence of any of the
following events or conditions and the failure of the successor corporation to
cure such event or condition within 30 days after receipt of written notice from
the Participant:
(1) a change in the Participant's status,
position or responsibilities (including reporting responsibilities)
that, in the Participant's reasonable judgment, represents a
substantial reduction in the status, position or responsibilities as in
effect immediately prior thereto; the assignment to the Participant of
any duties or responsibilities that, in the Participant's reasonable
judgment, are materially inconsistent with such status, position or
responsibilities; or any removal of the Participant from or failure to
reappoint or reelect the Participant to any of such positions, except
in connection with the termination of the Participant's employment for
Cause, as a result of his or her Disability or death, or by the
Participant other than for Good Reason;
(2) a material reduction in the Participant's
annual base salary, except in connection with a general reduction in
the compensation of the successor corporation's personnel with similar
status and responsibilities;
(3) the successor corporation's requiring the
Participant (without the Participant's consent) to be based at any
place outside a 50-mile radius of his or her place of employment prior
to a Change of Control, except for reasonably required travel on the
successor corporation's business that is not materially greater than
such travel requirements prior to the Change of Control;
(4) the successor corporation's failure to
provide the Participant with compensation and benefits substantially
equivalent (in terms of benefit levels and/or reward opportunities) to
those provided for under each material employee benefit plan, program
and practice as in effect immediately prior to the Change of Control;
(5) any material breach by the successor
corporation of its obligations to the Participant under the Plan or any
substantially equivalent plan of the successor corporation; or
(6) any purported termination of the
Participant's employment or service relationship for Cause by the
successor corporation that is not in accordance with the definition of
Cause under the Plan
(p) "Incentive Stock Option" means an Option that is
intended to meet the requirements of Section 422 of the Code or any successor
provision thereto.
(q) "Non-Employee Director" means a member of the Board
who qualifies as
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a "Non-Employee Director" as defined in Rule 16b-3(b)(3) of the Exchange Act, or
any successor definition adopted by the Board.
(r) "Non-Qualified Stock Option" means an Option that is
not intended to be an Incentive Stock Option.
(s) "Option" means a right granted to a Participant
pursuant to Article 5 of the Plan to purchase a specified number of shares of
Stock at a specified price during specified time periods. An Option may be
either an Incentive Stock Option or a Non-Qualified Stock Option.
(t) "Participant" means a person who, as a member of the
Board, consultant to the Company or Employee, has been granted an Award pursuant
to the Plan.
(u) "Performance-Based Award" means an Award granted to
selected Covered Employees pursuant to Articles 6 and 8, but which is subject to
the terms and conditions set forth in Article 9. All Performance-Based Awards
are intended to qualify as Qualified Performance-Based Compensation.
(v) "Performance Criteria" means the criteria that the
Committee selects for purposes of establishing the Performance Goal or
Performance Goals for a Participant for a Performance Period. The Performance
Criteria that will be used to establish Performance Goals are limited to the
following: net earnings (either before or after interest, taxes, depreciation
and amortization), net losses, sales or revenue, operating earnings, operating
cash flow, return on net assets, return on stockholders' equity, return on
assets, return on capital, stockholder returns, gross or net profit margin,
earnings per share, price per share of Stock, and market share, any of which may
be measured either in absolute terms or as compared to any incremental increase
or as compared to results of a peer group. The Committee shall, within the time
prescribed by Section 162(m) of the Code, define in an objective fashion the
manner of calculating the Performance Criteria it selects to use for such
Performance Period for such Participant.
(w) "Performance Goals" means, for a Performance Period,
the goals established in writing by the Committee for the Performance Period
based upon the Performance Criteria. Depending on the Performance Criteria used
to establish such Performance Goals, the Performance Goals may be expressed in
terms of overall Company performance or the performance of a division, business
unit, or an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes in
applicable laws, regulations, accounting principles, or business conditions.
(x) "Performance Period" means the one or more periods of
time, which may be of varying and overlapping durations, as the Committee may
select, over which the attainment of one or more Performance Goals will be
measured for the purpose of determining a Participant's right to, and the
payment of, a Performance-Based Award.
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(y) "Performance Share" means a right granted to a
Participant pursuant to Article 8, to receive cash, Stock, or other Awards, the
payment of which is contingent upon achieving certain performance goals
established by the Committee.
(z) "Plan" means this CancerVax Corporation 2003 Equity
Incentive Award Plan, as it may be amended from time to time.
(aa) "Public Trading Date" means the first date upon which
Stock is listed (or approved for listing) upon notice of issuance on any
securities exchange or designated (or approved for designation) upon notice of
issuance as a national market security on an interdealer quotation system.
(bb) "Qualified Performance-Based Compensation" means any
compensation that is intended to qualify as "qualified performance-based
compensation" as described in Section 162(m)(4)(C) of the Code.
(cc) "Restricted Stock" means Stock awarded to a
Participant pursuant to Article 6 that is subject to certain restrictions and to
risk of forfeiture.
(dd) "Stock" means the common stock of the Company and
such other securities of the Company that may be substituted for Stock pursuant
to Article 11.
(ee) "Stock Appreciation Right" or "SAR" means a right
granted pursuant to Article 7 to receive a payment equal to the excess of the
Fair Market Value of a specified number of shares of Stock on the date the SAR
is exercised over the Fair Market Value on the date the SAR was granted as set
forth in the applicable Award Agreement.
(ff) "Stock Payment" means (a) a payment in the form of
shares of Stock, or (b) an option or other right to purchase shares of Stock, as
part of any bonus, deferred compensation or other arrangement, made in lieu of
all or any portion of the compensation, granted pursuant to Article 8.
(gg) "Subsidiary" means any corporation or other entity of
which a majority of the outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Company.
ARTICLE 3
SHARES SUBJECT TO THE PLAN
3.1 NUMBER OF SHARES.
(a) Subject to Article 11, the aggregate number of shares
of Stock which may be issued or transferred pursuant to Awards under the Plan
shall be the sum of (i) 2,500,000 shares plus (ii) any shares of Stock which the
Company repurchases using the cash proceeds received by the Company from Option
exercises and from the value of any tax deductions realized by the Company with
respect to Option exercises. The payment of Dividend Equivalents in conjunction
with any outstanding Awards shall not be counted against the shares available
for issuance under the Plan.
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(b) To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award shall again be
available for the grant of an Award pursuant to the Plan. Additionally, any
shares of Stock tendered or withheld to satisfy the grant or exercise price or
tax withholding obligation pursuant to any Award shall again be available for
the grant of an Award pursuant to the Plan. To the extent permitted by
applicable law or any exchange rule, shares of Stock issued in assumption of, or
in substitution for, any outstanding awards of any entity acquired in any form
of combination by the Company or any Subsidiary shall not be counted against
shares of Stock available for grant pursuant to this Plan.
3.2 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award
may consist, in whole or in part, of authorized and unissued Stock, treasury
Stock or Stock purchased on the open market.
3.3 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS.
Notwithstanding any provision in the Plan to the contrary, and subject to
Article 11: the maximum number of shares of Stock with respect to one or more
Awards that may be granted to any one Participant during a rolling three-year
period (measured from the date of any grant) shall be 1,000,000.
ARTICLE 4
ELIGIBILITY AND PARTICIPATION
4.1 ELIGIBILITY.
(a) GENERAL. Persons eligible to participate in this Plan
include Employees, consultants to the Company and all members of the Board, as
determined by the Committee.
(b) FOREIGN PARTICIPANTS. In order to assure the
viability of Awards granted to Participants employed in foreign countries, the
Committee may provide for such special terms as it may consider necessary or
appropriate to accommodate differences in local law, tax policy, or custom.
Moreover, the Committee may approve such supplements to, or amendments,
restatements, or alternative versions of, the Plan as it may consider necessary
or appropriate for such purposes without thereby affecting the terms of the Plan
as in effect for any other purpose; provided, however, that no such supplements,
amendments, restatements, or alternative versions shall increase the share
limitations contained in Sections 3.1 and 3.3 of the Plan.
4.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan,
the Committee may, from time to time, select from among all eligible
individuals, those to whom Awards shall be granted and shall determine the
nature and amount of each Award. No individual shall have any right to be
granted an Award pursuant to this Plan.
ARTICLE 5
STOCK OPTIONS
5.1 GENERAL. The Committee is authorized to grant Options to
Participants on the following terms and conditions:
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(a) EXERCISE PRICE. The exercise price per share of Stock
subject to an Option shall be determined by the Committee and set forth in the
Award Agreement; provided that the exercise price for any Option shall not be
less than par value of a share of Stock on the date of grant.
(b) TIME AND CONDITIONS OF EXERCISE. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part, provided that the term of any Option granted under the Plan shall not
exceed ten years, and provided further, that in the case of a Non-Qualified
Stock Option, such Option shall be exercisable for one year after the date of
the Participant's death. The Committee shall also determine the performance or
other conditions, if any, that must be satisfied before all or part of an Option
may be exercised.
(c) PAYMENT. The Committee shall determine the methods by
which the exercise price of an Option may be paid, the form of payment,
including, without limitation, cash, promissory note bearing interest at no less
than such rate as shall then preclude the imputation of interest under the Code,
shares of Stock held for longer than six months having a Fair Market Value on
the date of delivery equal to the aggregate exercise price of the Option or
exercised portion thereof, or other property acceptable to the Committee
(including through the delivery of a notice that the Participant has placed a
market sell order with a broker with respect to shares of Stock then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price, provided that payment of such
proceeds is then made to the Company upon settlement of such sale), and the
methods by which shares of Stock shall be delivered or deemed to be delivered to
Participants. Notwithstanding any other provision of the Plan to the contrary,
no Participant who is a member of the Board or an "executive officer" of the
Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to pay the exercise price of an Option in any method which would
violate Section 13(k).
(d) EVIDENCE OF GRANT. All Options shall be evidenced by
a written Award Agreement between the Company and the Participant. The Award
Agreement shall include such additional provisions as may be specified by the
Committee.
5.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be
granted only to Employees and the terms of any Incentive Stock Options granted
pursuant to the Plan must comply with the following additional provisions of
this Section 5.2:
(a) EXERCISE PRICE. The exercise price per share of Stock
shall be set by the Committee, provided that the exercise price for any
Incentive Stock Option shall not be less than 100% of the Fair Market Value on
the date of grant.
(b) EXPIRATION OF OPTION. An Incentive Stock Option may
not be exercised to any extent by anyone after the first to occur of the
following events::
(1) Ten years from the date it is granted,
unless an earlier time is set in the Award Agreement.
(2) One year after the date of the Participant's
termination of
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employment or service on account of Disability or death, unless in the
case of death a shorter or longer period is designated in the Award
Agreement. Upon the Participant's Disability or death, any Incentive
Stock Options exercisable at the Participant's Disability or death may
be exercised by the Participant's legal representative or
representatives, by the person or persons entitled to do so pursuant to
the Participant's last will and testament, or, if the Participant fails
to make testamentary disposition of such Incentive Stock Option or dies
intestate, by the person or persons entitled to receive the Incentive
Stock Option pursuant to the applicable laws of descent and
distribution.
(c) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair
Market Value (determined as of the time the Option is granted) of all shares of
Stock with respect to which Incentive Stock Options are first exercisable by a
Participant in any calendar year may not exceed $100,000.00 or such other
limitation as imposed by Section 422(d) of the Code, or any successor provision.
To the extent that Incentive Stock Options are first exercisable by a
Participant in excess of such limitation, the excess shall be considered
Non-Qualified Stock Options.
(d) TEN PERCENT OWNERS. An Incentive Stock Option shall
be granted to any individual who, at the date of grant, owns stock possessing
more than ten percent of the total combined voting power of all classes of Stock
of the Company only if such Option is granted at a price that is not less than
110% of Fair Market Value on the date of grant and the Option is exercisable for
no more than five years from the date of grant.
(e) TRANSFER RESTRICTION. The Participant shall give the
Company prompt notice of any disposition of shares of Stock acquired by exercise
of an Incentive Stock Option within (1) two years from the date of grant of such
Incentive Stock Option or (2) one year after the transfer of such shares of
Stock to the Participant.
(f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an
Incentive Stock Option may be made pursuant to this Plan after the tenth
anniversary of the Effective Date.
(g) RIGHT TO EXERCISE. During a Participant's lifetime,
an Incentive Stock Option may be exercised only by the Participant.
ARTICLE 6
RESTRICTED STOCK AWARDS
6.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make
Awards of Restricted Stock to any Participant selected by the Committee in such
amounts and subject to such terms and conditions as determined by the Committee.
All Awards of Restricted Stock shall be evidenced by a written Restricted Stock
Award Agreement.
6.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject
to such restrictions on transferability and other restrictions as the Committee
may impose (including, without limitation, limitations on the right to vote
Restricted Stock or the right to receive dividends on the Restricted Stock).
These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the
Committee
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determines at the time of the grant of the Award or thereafter.
6.3 FORFEITURE. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment
or service during the applicable restriction period, Restricted Stock that is at
that time subject to restrictions shall be forfeited; provided, however, that
the Committee may provide in any Restricted Stock Award Agreement that
restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part
restrictions or forfeiture conditions relating to Restricted Stock.
6.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted
pursuant to the Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing shares of Restricted Stock are
registered in the name of the Participant, certificates must bear an appropriate
legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical
possession of the certificate until such time as all applicable restrictions
lapse.
ARTICLE 7
STOCK APPRECIATION RIGHTS
7.1 GRANT OF STOCK APPRECIATION RIGHTS. A Stock Appreciation Right
may be granted to any Participant selected by the Committee. A Stock
Appreciation Right may be granted (a) in connection and simultaneously with the
grant of an Option, (b) with respect to a previously granted Option, or (c)
independent of an Option. A Stock Appreciation Right shall be subject to such
terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.
7.2 COUPLED STOCK APPRECIATION RIGHTS.
(a) A Coupled Stock Appreciation Right ("CSAR") shall be
related to a particular Option and shall be exercisable only when and to the
extent the related Option is exercisable.
(b) A CSAR may be granted to a Participant for no more
than the number of shares subject to the simultaneously or previously granted
Option to which it is coupled.
(c) A CSAR shall entitle the Participant (or other person
entitled to exercise the Option pursuant to the Plan) to surrender to the
Company unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the Company
in exchange therefor an amount determined by multiplying the difference obtained
by subtracting the Option exercise price from the Fair Market Value of a share
of Stock on the date of exercise of the CSAR by the number of shares of Stock
with respect to which the CSAR shall have been exercised, subject to any
limitations the Committee may impose.
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7.3 INDEPENDENT STOCK APPRECIATION RIGHTS.
(a) An Independent Stock Appreciation Right ("ISAR")
shall be unrelated to any Option and shall have a term set by the Committee. An
ISAR shall be exercisable in such installments as the Committee may determine.
An ISAR shall cover such number of shares of Stock as the Committee may
determine. The exercise price per share of Stock subject to each ISAR shall be
set by the Committee; provided, however, that, the Committee in its sole and
absolute discretion may provide that the ISAR may be exercised subsequent to a
termination of employment or service, as applicable, or following a Change in
Control of the Company, or because of the Participant's retirement, death or
disability, or otherwise.
(b) An ISAR shall entitle the Participant (or other
person entitled to exercise the ISAR pursuant to the Plan) to exercise all or a
specified portion of the ISAR (to the extent then exercisable pursuant to its
terms) and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR from
the Fair Market Value of a share of Stock on the date of exercise of the ISAR by
the number of shares of Stock with respect to which the ISAR shall have been
exercised, subject to any limitations the Committee may impose.
7.4 PAYMENT AND LIMITATIONS ON EXERCISE.
(a) Payment of the amounts determined under Section
7.2(c) and 7.3(b) above shall be in cash, in Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a combination
of both, as determined by the Committee.
(b) To the extent any payment under Section 7.2(c) or
7.3(b) is effected in Stock it shall be made subject to satisfaction of all
provisions of Article 5 above pertaining to Options.
ARTICLE 8
OTHER TYPES OF AWARDS
8.1 PERFORMANCE SHARE AWARDS. Any Participant selected by the
Committee may be granted one or more Performance Share awards which may be
denominated in a number of shares of Stock or in a dollar value of shares of
Stock and which may be linked to any one or more of the Performance Criteria or
other specific performance criteria determined appropriate by the Committee, in
each case on a specified date or dates or over any period or periods determined
by the Committee. In making such determinations, the Committee shall consider
(among such other factors as it deems relevant in light of the specific type of
award) the contributions, responsibilities and other compensation of the
particular Participant.
8.2 DIVIDEND EQUIVALENTS.
(a) Any Participant selected by the Committee may be
granted Dividend Equivalents based on the dividends declared on the shares of
Stock that are subject to any Award, to be credited as of dividend payment
dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the
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Committee. Such Dividend Equivalents shall be converted to cash or additional
shares of Stock by such formula and at such time and subject to such limitations
as may be determined by the Committee.
(b) Dividend Equivalents granted with respect to Options
or SARs that are intended to be Qualified Performance-Based Compensation shall
be payable, with respect to pre-exercise periods, regardless of whether such
Option or SAR is subsequently exercised.
8.3 STOCK PAYMENTS. Any Participant selected by the Committee may
receive Stock Payments in the manner determined from time to time by the
Committee. The number of shares shall be determined by the Committee and may be
based upon the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, determined on the date such Stock
Payment is made or on any date thereafter.
8.4 DEFERRED STOCK. Any Participant selected by the Committee may
be granted an award of Deferred Stock in the manner determined from time to time
by the Committee. The number of shares of Deferred Stock shall be determined by
the Committee and may be linked to the Performance Criteria or other specific
performance criteria determined to be appropriate by the Committee, in each case
on a specified date or dates or over any period or periods determined by the
Committee. Stock underlying a Deferred Stock award will not be issued until the
Deferred Stock award has vested, pursuant to a vesting schedule or performance
criteria set by the Committee. Unless otherwise provided by the Committee, a
Participant awarded Deferred Stock shall have no rights as a Company stockholder
with respect to such Deferred Stock until such time as the Deferred Stock Award
has vested and the Stock underlying the Deferred Stock Award has been issued.
8.5 TERM. The term of any Award of Performance Shares, Dividend
Equivalents, Stock Payments or Deferred Stock shall be set by the Committee in
its discretion.
8.6 EXERCISE OR PURCHASE PRICE. The Committee may establish the
exercise or purchase price of any Award of Performance Shares, Deferred Stock or
Stock Payments; provided, however, that such price shall not be less than the
par value of a share of Stock, unless otherwise permitted by applicable state
law.
8.7 EXERCISE UPON TERMINATION OF EMPLOYMENT OR SERVICE. An Award
of Performance Shares, Dividend Equivalents, Deferred Stock and Stock Payments
shall only be exercisable or payable while the Participant is an Employee,
consultant to the Company or a member of the Board, as applicable; provided,
however, that the Committee in its sole and absolute discretion may provide that
an Award of Performance Shares, Dividend Equivalents, Stock Payments or Deferred
Stock may be exercised or paid subsequent to a termination of employment or
service, as applicable, or following a Change in Control of the Company, or
because of the Participant's retirement, death or disability, or otherwise;
provided, however, that any such provision with respect to Performance Shares
shall be subject to the requirements of Section 162(m) of the Code that apply to
Qualified Performance-Based Compensation.
8.8 FORM OF PAYMENT. Payments with respect to any Awards granted
under
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this Article 8 shall be made in cash, in Stock or a combination of both, as
determined by the Committee.
8.9 AWARD AGREEMENT. All Awards under this Article 8 shall be
subject to such additional terms and conditions as determined by the Committee
and shall be evidenced by a written Award Agreement.
ARTICLE 9
PERFORMANCE-BASED AWARDS
9.1 PURPOSE. The purpose of this Article 9 is to provide the
Committee the ability to qualify Awards other than Options and SARs and that are
granted pursuant to Articles 6 and 8 as Qualified Performance-Based
Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9
shall control over any contrary provision contained in Articles 6 or 8;
provided, however, that the Committee may in its discretion grant Awards to
Covered Employees that are based on Performance Criteria or Performance Goals
but that do not satisfy the requirements of this Article 9.
9.2 APPLICABILITY. This Article 9 shall apply only to those
Covered Employees selected by the Committee to receive Performance-Based Awards.
The designation of a Covered Employee as a Participant for a Performance Period
shall not in any manner entitle the Participant to receive an Award for the
period. Moreover, designation of a Covered Employee as a Participant for a
particular Performance Period shall not require designation of such Covered
Employee as a Participant in any subsequent Performance Period and designation
of one Covered Employee as a Participant shall not require designation of any
other Covered Employees as a Participant in such period or in any other period.
9.3 PROCEDURES WITH RESPECT TO PERFORMANCE-BASED AWARDS. To the
extent necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award
granted under Articles 6 and 8 which may be granted to one or more Covered
Employees, no later than ninety (90) days following the commencement of any
fiscal year in question or any other designated fiscal period or period of
service (or such other time as may be required or permitted by Section 162(m) of
the Code), the Committee shall, in writing, (i) designate one or more Covered
Employees, (ii) select the Performance Criteria applicable to the Performance
Period, (iii) establish the Performance Goals, and amounts of such Awards, as
applicable, which may be earned for such Performance Period, and (iv) specify
the relationship between Performance Criteria and the Performance Goals and the
amounts of such Awards, as applicable, to be earned by each Covered Employee for
such Performance Period. Following the completion of each Performance Period,
the Committee shall certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned
by a Covered Employee, the Committee shall have the right to reduce or eliminate
(but not to increase) the amount payable at a given level of performance to take
into account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the Performance Period.
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9.4 PAYMENT OF PERFORMANCE-BASED AWARDS. Unless otherwise provided
in the applicable Award Agreement, a Participant must be employed by the Company
or a Subsidiary on the day a Performance-Based Award for such Performance Period
is paid to the Participant. Furthermore, a Participant shall be eligible to
receive payment pursuant to a Performance-Based Award for a Performance Period
only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or
eliminate the amount of the Performance-Based Award earned for the Performance
Period, if in its sole and absolute discretion, such reduction or elimination is
appropriate.
9.5 ADDITIONAL LIMITATIONS. Notwithstanding any other provision of
the Plan, any Award which is granted to a Covered Employee and is intended to
constitute Qualified Performance-Based Compensation shall be subject to any
additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan shall be deemed amended to the extent necessary to conform to such
requirements.
ARTICLE 10
PROVISIONS APPLICABLE TO AWARDS
10.1 STAND-ALONE AND TANDEM AWARDS. Awards granted pursuant to the
Plan may, in the discretion of the Committee, be granted either alone, in
addition to, or in tandem with, any other Award granted pursuant to the Plan.
Awards granted in addition to or in tandem with other Awards may be granted
either at the same time as or at a different time from the grant of such other
Awards.
10.2 AWARD AGREEMENT. Awards under the Plan shall be evidenced by
Award Agreements that set forth the terms, conditions and limitations for each
Award which may include the term of an Award, the provisions applicable in the
event the Participant's employment or service terminates, and the Company's
authority to unilaterally or bilaterally amend, modify, suspend, cancel or
rescind an Award.
10.3 LIMITS ON TRANSFER. No right or interest of a Participant in
any Award may be pledged, encumbered, or hypothecated to or in favor of any
party other than the Company or a Subsidiary, or shall be subject to any lien,
obligation, or liability of such Participant to any other party other than the
Company or a Subsidiary. Except as otherwise provided by the Committee, no Award
shall be assigned, transferred, or otherwise disposed of by a Participant other
than by will or the laws of descent and distribution. The Committee by express
provision in the Award or an amendment thereto may permit an Award (other than
an Incentive Stock Option) to be transferred to, exercised by and paid to
certain persons or entities related to the Participant, including but not
limited to members of the Participant's family, charitable institutions, or
trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant's family and/or charitable institutions, or to such other
persons or entities as may be expressly approved by the Committee, pursuant to
such conditions and procedures as the Committee may establish. Any permitted
transfer shall be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made
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for estate and/or tax planning purposes (or to a "blind trust" in connection
with the Participant's termination of employment or service with the Company or
a Subsidiary to assume a position with a governmental, charitable, educational
or similar non-profit institution) and on a basis consistent with the Company's
lawful issue of securities.
10.4 BENEFICIARIES. Notwithstanding Section 10.3, a Participant
may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with
respect to any Award upon the Participant's death. A beneficiary, legal
guardian, legal representative, or other person claiming any rights pursuant to
the Plan is subject to all terms and conditions of the Plan and any Award
Agreement applicable to the Participant, except to the extent the Plan and Award
Agreement otherwise provide, and to any additional restrictions deemed necessary
or appropriate by the Committee. If the Participant is married and resides in a
community property state, a designation of a person other than the Participant's
spouse as his beneficiary with respect to more than 50% of the Participant's
interest in the Award shall not be effective without the prior written consent
of the Participant's spouse. If no beneficiary has been designated or survives
the Participant, payment shall be made to the person entitled thereto pursuant
to the Participant's will or the laws of descent and distribution. Subject to
the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the
Committee.
10.5 STOCK CERTIFICATES. Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any certificates
evidencing shares of Stock pursuant to the exercise of any Award, unless and
until the Board has determined, with advice of counsel, that the issuance and
delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded. All Stock
certificates delivered pursuant to the Plan are subject to any stop-transfer
orders and other restrictions as the Committee deems necessary or advisable to
comply with federal, state, or foreign jurisdiction, securities or other laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or traded. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock. In addition to the terms and conditions provided
herein, the Board may require that a Participant make such reasonable covenants,
agreements, and representations as the Board, in its discretion, deems advisable
in order to comply with any such laws, regulations, or requirements. The
Committee shall have the right to require any Participant to comply with any
timing or other restrictions with respect to the settlement or exercise of any
Award, including a window-period limitation, as may be imposed in the discretion
of the Committee.
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ARTICLE 11
CHANGES IN CAPITAL STRUCTURE
11.1 ADJUSTMENTS. In the event of any stock dividend, stock split,
combination or exchange of shares, merger, consolidation, spin-off,
recapitalization or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Stock or the share price of the Stock, the Committee shall make such
proportionate adjustments, if any, as the Committee in its discretion may deem
appropriate to reflect such change with respect to (i) the aggregate number and
type of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 3.1 and 3.3); (ii) the terms and
conditions of any outstanding Awards (including, without limitation, any
applicable performance targets or criteria with respect thereto); and (iii) the
grant or exercise price per share for any outstanding Awards under the Plan. Any
adjustment affecting an Award intended as Qualified Performance-Based
Compensation shall be made consistent with the requirements of Section 162(m) of
the Code.
11.2 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control
occurs and a Participant's Awards are not converted, assumed, or replaced by a
successor, such Awards shall become fully exercisable and all forfeiture
restrictions on such Awards shall lapse. Upon, or in anticipation of, a Change
in Control, the Committee may cause any and all Awards outstanding hereunder to
terminate at a specific time in the future and shall give each Participant the
right to exercise such Awards during a period of time as the Committee, in its
sole and absolute discretion, shall determine. In the event that the terms of
any agreement between the Company or any Company subsidiary or affiliate and a
Participant contains provisions that conflict with and are more restrictive than
the provisions of this Section 11.2, this Section 11.2 shall prevail and control
and the more restrictive terms of such agreement (and only such terms) shall be
of no force or effect. Except as otherwise provided in the Agreement evidencing
the Award, any such Awards that are assumed or replaced in a Change of Control
and do not otherwise accelerate at that time shall become fully exercisable and
all forfeiture restrictions on such Awards shall lapse in the event that the
Participant's employment or service relationship with the successor corporation
should terminate (i) in connection with the Change of Control or (ii)
subsequently within two years following such Change of Control, unless such
employment or service relationship is terminated by the successor corporation
for Cause or by the Participant voluntarily without Good Reason.
11.3 OUTSTANDING AWARDS - CERTAIN MERGERS. Subject to any required
action by the stockholders of the Company, in the event that the Company shall
be the surviving corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Stock receive
securities of another corporation), each Award outstanding on the date of such
merger or consolidation shall pertain to and apply to the securities that a
holder of the number of shares of Stock subject to such Award would have
received in such merger or consolidation.
11.4 OUTSTANDING AWARDS - OTHER CHANGES. In the event of any other
change in the capitalization of the Company or corporate change other than those
specifically referred to in this Article 11, the Committee may, in its absolute
discretion, make such adjustments in the number and class of shares subject to
Awards outstanding on the date on
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which such change occurs and in the per share grant or exercise price of each
Award as the Committee may consider appropriate to prevent dilution or
enlargement of rights.
11.5 NO OTHER RIGHTS. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee
under the Plan, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number of shares
of Stock subject to an Award or the grant or exercise price of any Award.
ARTICLE 12
ADMINISTRATION
12.1 COMMITTEE. Unless and until the Board delegates administration
to a Committee as set forth below, the Plan shall be administered by the Board.
The Board may delegate administration of the Plan to a Committee or Committees
of one or more members of the Board, and the term "Committee" shall apply to any
person or persons to whom such authority has been delegated. If administration
is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board shall thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. Notwithstanding the foregoing,
however, from and after the Public Trading Date, a Committee of the Board shall
administer the Plan and the Committee shall consist solely of two or more
members of the Board each of whom is both an "outside director," within the
meaning of Section 162(m) of the Code, and a Non-Employee Director. Within the
scope of such authority, the Board or the Committee may (i) delegate to a
committee of one or more members of the Board who are not outside directors,"
within the meaning of Section 162(m) of the Code the authority to grant awards
under the Plan to eligible persons who are either (1) not then "covered
employees," within the meaning of Section 162(m) of the Code and are not
expected to be "covered employees" at the time of recognition of income
resulting from such award or (2) not persons with respect to whom the Company
wishes to comply with Section 162(m) of the Code and/or (ii) delegate to a
committee of one or more members of the Board who are not Non-Employee
Directors, the authority to grant awards under the Plan to eligible persons who
are not then subject to Section 16 of the Exchange Act. The Board may abolish
the Committee at any time and revest in the Board the administration of the
Plan. Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may only be filled by the Board.
12.2 ACTION BY THE COMMITTEE. A majority of the Committee shall
constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present, and acts approved in writing by a majority
of the Committee in lieu of a meeting, shall be deemed the acts of the
Committee. Each member of the Committee is entitled
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to, in good faith, rely or act upon any report or other information furnished to
that member by any officer or other employee of the Company or any Subsidiary,
the Company's independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.
12.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in
the Plan, the Committee has the exclusive power, authority and discretion to:
(a) Designate Participants to receive Awards;
(b) Determine the type or types of Awards to be granted
to each Participant;
(c) Determine the number of Awards to be granted and the
number of shares of Stock to which an Award will relate;
(d) Determine the terms and conditions of any Award
granted pursuant to the Plan, including, but not limited to, the exercise price,
grant price, or purchase price, any reload provision, any restrictions or
limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers
thereof, any provisions related to non-competition and recapture of gain on an
Award, based in each case on such considerations as the Committee in its sole
discretion determines; provided, however, that the Committee shall not have the
authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;
(e) Determine whether, to what extent, and pursuant to
what circumstances an Award may be settled in, or the exercise price of an Award
may be paid in, cash, Stock, other Awards, or other property, or an Award may be
canceled, forfeited, or surrendered;
(f) Prescribe the form of each Award Agreement, which
need not be identical for each Participant;
(g) Decide all other matters that must be determined in
connection with an Award;
(h) Establish, adopt, or revise any rules and regulations
as it may deem necessary or advisable to administer the Plan;
(i) Interpret the terms of, and any matter arising
pursuant to, the Plan or any Award Agreement; and
(j) Make all other decisions and determinations that may
be required pursuant to the Plan or as the Committee deems necessary or
advisable to administer the Plan.
12.4 DECISIONS BINDING. The Committee's interpretation of the Plan,
any Awards granted pursuant to the Plan, any Award Agreement and all decisions
and determinations by the Committee with respect to the Plan are final, binding,
and conclusive on all parties.
ARTICLE 13
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EFFECTIVE AND EXPIRATION DATE
13.1 EFFECTIVE DATE. The Plan is effective as of the date the Plan
is approved by the Company's stockholders (the "Effective Date"). The Plan will
be deemed to be approved by the stockholders if it receives the affirmative vote
of the holders of a majority of the shares of stock of the Company present or
represented and entitled to vote at a meeting duly held in accordance with the
applicable provisions of the Company's Bylaws.
13.2 EXPIRATION DATE. The Plan will expire on, and no Award may be
granted pursuant to the Plan after, the earlier of the tenth anniversary of (i)
the Effective Date or (ii) the date this Plan is approved by the Board. Any
Awards that are outstanding on the tenth anniversary of the Effective Date shall
remain in force according to the terms of the Plan and the applicable Award
Agreement. Each Award Agreement shall provide that it will expire on the tenth
anniversary of the date of grant of the Award to which it relates.
ARTICLE 14
AMENDMENT, MODIFICATION, AND TERMINATION
14.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of
the Board, at any time and from time to time, the Committee may terminate, amend
or modify the Plan; provided, however, that (i) to the extent necessary and
desirable to comply with any applicable law, regulation, or stock exchange rule,
the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required, and (ii) shareholder approval is
required for any amendment to the Plan that (A) increases the number of shares
available under the Plan (other than any adjustment as provided by Article 11),
(B) permits the Committee to grant Options with an exercise price that is below
Fair Market Value on the date of grant, or (C) permits the Committee to extend
the exercise period for an Option beyond ten years from the date of grant.
14.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Award
previously granted pursuant to the Plan without the prior written consent of the
Participant.
ARTICLE 15
GENERAL PROVISIONS
15.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person
shall have any claim to be granted any Award pursuant to the Plan, and neither
the Company nor the Committee is obligated to treat Participants, employees, and
other persons uniformly.
15.2 NO STOCKHOLDERS RIGHTS. No Award gives the Participant any of
the rights of a stockholder of the Company unless and until shares of Stock are
in fact issued to such person in connection with such Award.
15.3 WITHHOLDING. The Company or any Subsidiary shall have the
authority and the right to deduct or withhold, or require a Participant to remit
to the Company, an amount sufficient to satisfy federal, state, local and
foreign taxes (including the Participant's FICA obligation) required by law to
be withheld with respect to any taxable event concerning a
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Participant arising as a result of this Plan. The Committee may in its
discretion and in satisfaction of the foregoing requirement allow a Participant
to elect to have the Company withhold shares of Stock otherwise issuable under
an Award (or allow the return of shares of Stock) having a Fair Market Value
equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan, the number of shares of Stock which may be withheld with respect to
the issuance, vesting, exercise or payment of any Award (or which may be
repurchased from the Participant of such Award within six months after such
shares of Stock were acquired by the Participant from the Company) in order to
satisfy the Participant's federal, state, local and foreign income and payroll
tax liabilities with respect to the issuance, vesting, exercise or payment of
the Award shall be limited to the number of shares which have a Fair Market
Value on the date of withholding or repurchase equal to the aggregate amount of
such liabilities based on the minimum statutory withholding rates for federal,
state, local and foreign income tax and payroll tax purposes that are applicable
to such supplemental taxable income.
15.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any
Award Agreement shall interfere with or limit in any way the right of the
Company or any Subsidiary to terminate any Participant's employment or services
at any time, nor confer upon any Participant any right to continue in the employ
or service of the Company or any Subsidiary.
15.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an
"unfunded" plan for incentive compensation. With respect to any payments not yet
made to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.
15.6 INDEMNIFICATION. To the extent allowable pursuant to
applicable law, each member of the Committee or of the Board shall be
indemnified and held harmless by the Company from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any
and all amounts paid by him or her in satisfaction of judgment in such action,
suit, or proceeding against him or her, provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right
of indemnification shall not be exclusive of any other rights of indemnification
to which such persons may be entitled pursuant to the Company's Certificate of
Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the
Company may have to indemnify them or hold them harmless.
15.7 RELATIONSHIP TO OTHER BENEFITS. No payment pursuant to the
Plan shall be taken into account in determining any benefits pursuant to any
pension, retirement, savings, profit sharing, group insurance, welfare or other
benefit plan of the Company or any Subsidiary except to the extent otherwise
expressly provided in writing in such other plan or an agreement thereunder.
15.8 EXPENSES. The expenses of administering the Plan shall be
borne by the Company and its Subsidiaries.
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15.9 TITLES AND HEADINGS. The titles and headings of the Sections
in the Plan are for convenience of reference only and, in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.
15.10 FRACTIONAL SHARES. No fractional shares of Stock shall be
issued and the Committee shall determine, in its discretion, whether cash shall
be given in lieu of fractional shares or whether such fractional shares shall be
eliminated by rounding up or down as appropriate.
15.11 LIMITATIONS APPLICABLE TO SECTION 16 PERSONS. Notwithstanding
any other provision of the Plan, the Plan, and any Award granted or awarded to
any Participant who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.
15.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the
Company to make payment of awards in Stock or otherwise shall be subject to all
applicable laws, rules, and regulations, and to such approvals by government
agencies as may be required. The Company shall be under no obligation to
register pursuant to the Securities Act of 1933, as amended, any of the shares
of Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may
in certain circumstances be exempt from registration pursuant to the Securities
Act of 1933, as amended, the Company may restrict the transfer of such shares in
such manner as it deems advisable to ensure the availability of any such
exemption.
15.13 GOVERNING LAW. The Plan and all Award Agreements shall be
construed in accordance with and governed by the laws of the State of Delaware.
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