1992 Nonstatutory Stock Option Plan - Chesapeake Energy Corp.
CHESAPEAKE ENERGY CORPORATION
1992 NONSTATUTORY STOCK OPTION PLAN
As amended and restated through October 15, 1996
Reflects stock splits through December 31, 1996
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CHESAPEAKE ENERGY CORPORATION
1992 NONSTATUTORY STOCK OPTION PLAN
As amended and restated through October 15, 1996
Reflects stock splits through December 31, 1996
1. Purpose. The purpose of the Chesapeake Energy Corporation Third
Amended and Restated 1992 Nonstatutory Stock Option Plan (the "Plan") is to
aid Chesapeake Energy Corporation (the "Company") and its Subsidiaries, in
attracting and retaining (a) members on their Board of Directors
("Directors") and (b) professionals and independent consultants
(collectively, "Consultants") of outstanding competence and to enable
Directors and Consultants of the Company and any Subsidiary to acquire
or increase ownership interests in the Company on a basis that will
encourage them to use their best efforts to promote the growth and
profitability of the Company or any Subsidiary. Consistent with these
objectives, the Plan authorizes the granting to Directors and Consultants
of options to acquire shares of Company stock pursuant to the terms and
conditions hereinafter set forth.
2. Definitions. The following terms have the meanings set forth unless
the context clearly indicates to the contrary:
2.1 Board shall mean the Board of Directors of the Company.
2.2 Code shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
2.3 Committee shall mean the Stock Option Committee of the Board.
2.4 Company shall mean Chesapeake Energy Corporation.
2.5 Consultant shall mean a person who is engaged by the
Company or a Subsidiary to provide services to the Company or a Subsidiary
on a regular basis but who is not an employee. The term includes, but is not
limited to, attorneys and accountants.
2.6 Date of Grant shall mean the date on which an Option is
granted under the Plan to an Optionee.
2.7 Director shall mean a member of the Board.
2.8 ERISA shall mean the Employee Retirement Income Security
Act of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from
time to time.
2.9 Exchange shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
2.10 Option shall mean a "stock option" to purchase
Shares of the Company granted pursuant to the provisions of Paragraph 6
hereof.
2.11 Option Period shall mean the period during which an Option
may be exercised by the Optionee or Successor Optionee.
2.12 Option Price shall mean the price to be paid by the Optionee
to the Company upon the exercise of an Option.
2.13 Optionee shall mean a Director or Consultant to whom an
Option has been granted under the Plan.
2.14 Parent shall mean any future corporation which is a "parent"
of the Company as defined in Sections 424(e) and (g) of the Code.
2.15 Plan shall mean the Chesapeake Energy Corporation Amended
and Restated 1992 Nonstatutory Stock Option Plan.
2.16 Shares shall mean the $0.01 par value common stock of the
Company.
2.17 Stock Option Agreement shall mean the agreement entered
into between the Company and the Optionee under which the Optionee may
purchase Shares pursuant to the Plan.
2.18 Subsidiary shall mean any present or future corporation
which is a "subsidiary" of the Company as defined in Sections 424(f) and
(g) of the Code.
2.19 Successor Company shall mean any future corporation which
succeeds to or is assigned or has transferred to it the business of the
Company as a result of or in connection with a corporate merger, consolidation,
combination, reorganization or liquidation.
2.20 Successor Optionee shall mean the personal representative
of the estate of a deceased Optionee.
3. Administration. The Plan shall be administered by the Committee
appointed by the Board.
3.1 Composition of Committee. The Committee shall consist of
two (2) or more members of the Board appointed by the Board. The members of
the Committee shall serve, and may be removed, at the pleasure of the Board.
The grant of an Option under the Plan and any participation in the Plan by an
Optionee who is a member of the Committee must be ratified and approved by a
majority of the Directors who are not employees of the Company or a
Subsidiary. Any member may serve concurrently as a member of any other
administrative committee of any other plan of the Company or any of its
affiliates entitling participants therein to acquire stock, stock options
or deferred compensation rights (including stock appreciation rights).
3.2 Duties and Powers of Committee. Except with respect to
Options granted or to be granted pursuant to Paragraph 6.11 of this Plan,
the Committee shall have the power where consistent with the general purpose
and intent of the Plan (a) to establish policies and to adopt rules and
regulations for carrying out the purposes and provisions of the Plan;
(b) to interpret and construe the Plan and determine all questions arising
under the Plan and any agreement made pursuant to the Plan, and any such
interpretation, construction or determination made by the Committee shall
be final, binding and conclusive; (c) to determine the number of Shares
covered by each Option; (d) to determine the time or times when Options
will be granted and exercised; (e) to determine the conditions and
restrictions under which Options may be granted and exercised; (f) to
determine if the Shares will be subject to any restrictions upon the
exercise of such Option; and (g) to prescribe the form of the instruments
relating to the grant, exercise and other terms of Options. With respect to
participation in the Plan by an Optionee who is a member of the Committee,
the exercise of the foregoing powers must be ratified and approved by a
majority of the Directors who are not employees of the Company or any
Subsidiary.
3.3 Majority Rule. A majority of the members of the Committee
(but not less than two (2)) shall constitute a quorum for the transaction
of any business under the Plan and any action taken by a majority present
at a meeting at which a quorum is present shall constitute the action of
the Committee. Notwithstanding anything herein to the contrary, any action
with respect to participation in the Plan by any Optionee who is a
member of the Committee must be ratified and approved by not less
than a majority of the Directors who are not employees of the Company or
any Subsidiary.
3.4 Company Assistance. The Company shall supply full and
timely information to the Committee on all matters relating to (a) eligible
Directors, their membership on the Board, death, retirement, disability or
other termination of membership on the Board, (b) eligible Consultants,
the term of their engagement with the Company or with a Subsidiary, death,
retirement, disability or other termination as a Consultant for the Company
or for a Subsidiary and (c) such other pertinent facts as the Committee may
require. The Company shall furnish the Committee with such clerical and
other assistance as is necessary in the performance of its duties.
3.5 Reliance on Reports. Each member of the Committee and
each member of the Board shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the
Company, its Subsidiaries and Successor Companies and upon any other
information furnished in connection with the Plan by any person or persons.
In no event shall any person who is or shall have been a member of the
Committee or the Board be liable for any determination made or other action
taken or any omission to act in reliance upon any such report or information
or for any action or failure to act if made or done in good faith.
4. Eligibility; Participation in the Plan. Options may be granted only
to Directors and Consultants. Subject to the terms and conditions of the Plan,
the Committee shall determine from time to time those Directors and Consultants
who are to be granted Options. Except as provided in paragraph 6.11 of this
Plan, in making any determination as to Optionees to whom Options shall be
granted and as to the number of Shares to be covered by such Options, the
Committee shall take into account the duties of the respective Optionees,
their present and potential contributions to the success of the Company,
and such other factors as the Committee shall deem relevant in connection
with accomplishing the purposes of the Plan.
5. Shares Subject to Plan. Subject to any adjustment required by
Paragraph 5.1, the aggregate number of Shares which may be issued and sold
hereunder shall not exceed 3,132,000 Shares. Such Shares may be either
authorized and unissued Shares or Shares issued and thereafter acquired
by the Company. If any Option for Shares granted under the Plan lapses,
or is otherwise terminated, the Committee may grant Options for such
Shares to other Optionees.
5.1 Adjustments. If the outstanding Shares are hereafter
increased, decreased, changed into or exchanged for a different number or
kind of shares or other securities of the Company or of another corporation
by reason of merger, consolidation, reorganization, recapitalization,
reclassification, combination of shares, stock split-up, spin-off, or
stock dividend, then the following shall apply:
(a) Subject to the provisions of Paragraph 5.1(b), the
aggregate number and kind of Shares subject to Options which may be
granted hereunder shall be adjusted accordingly. For example, if there
were a two-for-one stock split, or if there were declared a stock dividend
of one share per Share, the aggregate number of Shares which may be issued
and sold hereunder would increase from 290,000 Shares to 580,000 Shares.
(b) Where dissolution or liquidation of the Company or any
merger or combination in which the Company is not a surviving corporation
is involved and no provision is made for the assumption of outstanding
Options or the substitution therefor, consistent with Paragraph 6.4
hereof, each outstanding Option granted hereunder shall terminate, but
the Optionee shall have the right, immediately prior to such dissolution,
liquidation, merger, or combination, to exercise his or her Option, in
whole or in part, to the extent that it shall not have been previously
exercised, without regard to any vesting provisions.
(c) Subject to the provisions of Paragraph 5.1(b), rights
under outstanding Options granted hereunder, both as to the number of Shares
and the Option Price, shall be adjusted accordingly. For example, if an
Option were granted under this Plan to purchase 1,000 Shares at $13.00 per
Share and there were a two-for-one stock split or if there were declared a
stock dividend of one share per Share, the aggregate number of Shares which
could be purchased and sold under the Option would increase from 1,000
Shares to 2,000 Shares and the Option Price for the Shares would decrease
from $13.00 per Share to $6.50 per Share.
5.2 Determination by Committee. The adjustments required by
Paragraph 5.1 and the manner of application of Paragraph 5.1 shall be
determined solely by the Committee, and any such adjustments may provide
for the elimination of fractional Share interests.
6. Option Grant and Stock Option Agreement. Each Option granted under
this Plan shall be evidenced by the minutes of a meeting of the Committee or
by the written consent of the Committee and by a written Stock Option
Agreement effective on the Date of Grant and executed by the Company and
the Optionee. Each Option granted hereunder shall contain such terms,
restrictions and conditions as the Committee may determine, which terms,
restrictions and conditions may or may not be the same in each case, subject
to the following provisions of this Paragraph 6. Optionees may be granted
more than one Option. The granting of an Option shall not affect any
outstanding Option previously granted to an Optionee under the Plan.
6.1 Option Price. The Option Price for Shares shall be
determined by the Committee but in no event shall such Option Price for
Options granted after the initial public offering of the Shares be less than
the greater of (a) the fair market value of the common stock of the Company
on the date of grant or (b) the par value of the Shares. "Fair market
value" shall be determined by the Committee as follows: (i) if the common
stock of the Company is listed for trading on one or more national securities
exchanges (including the NASDAQ National Market System), the reported last
sales price on such principal exchange as of the granting date, or other
relevant date, or if such common stock shall not have been traded
on such principal exchange on such date, the reported last sales price on
such principal exchange on the first day prior thereto on which such common
stock was so traded; or (ii) if the common stock of the Company is not
listed for trading on a national securities exchange (including the
NASDAQ National Market System) but is traded in the over-the-counter market,
the mean of the highest and lowest bid prices for such common stock as of
the granting date, or other relevant date, or if there are no such bid
prices for such common stock on such date, the mean of the highest and
lowest bid prices on the first day prior thereto on which such prices existed.
Provided, if the price of such common stock is not reported or listed as
aforesaid, then the "fair market value" of such common stock shall be
determined by the Committee as of the relevant date, and the Committee
shall utilize any reasonable and prudent method in determining such fair
market value, including without limitation, the obtaining of opinions of
independent and well-qualified experts.
6.2 Option Period. No Options may be granted under the Plan
after December 10, 2002. The maximum Option Period for exercise of an Option
shall be established by the Committee at the Date of Grant, but the Option
Period shall not be more than ten (10) years from the Date of Grant or such
shorter period as provided in Paragraph 6.3 with respect to early termination.
6.3 Vesting of Options. Each Option granted hereunder may
only be exercised to the extent that the Optionee is vested in such Option.
An Optionee shall vest separately in each Option granted hereunder in
accordance with a schedule determined by the Committee in its sole
discretion, which will be included in the Stock Option Agreement.
6.4 Merger, Consolidation, Etc. In the event that the Company
shall, pursuant to action by its Board, at any time propose to merge into,
consolidate with, or sell or otherwise transfer all or substantially all
of its assets to another corporation and provision is not made pursuant
to the terms of such transaction for the assumption by the surviving,
resulting or acquiring corporation of outstanding Options under the
Plan, or for the substitution of new options therefor, the Committee
shall cause written notice of the proposed transaction to be given to
each Optionee not less than forty (40) days prior to the anticipated
effective date of the proposed transaction, and his or her Option shall
become one hundred percent (100%) vested and, prior to a date specified
in such notice, which shall be not more than ten (10) days prior to the
anticipated effective date of the proposed transaction, each Optionee
shall have the right to exercise his or her Option to purchase any or all
of the Shares then subject to such Option, including those, if any, which
by reason of other provisions of the Plan have not then become available
for purchase. Each Optionee, by so notifying the Company in writing, may,
in exercising his or her Option, condition such exercise upon, and provide
that such exercise shall become effective at the time of, but immediately
prior to, the consummation of the transaction, in which event such Optionee
need not make payment for the Shares to be purchased upon exercise of such
Option until five (5) days after written notice by the Company to such
Optionee that the transaction has been consummated. If the transaction
is consummated, each Option, to the extent not previously exercised prior
to the date specified in the foregoing notice, shall terminate on the
effective date of such consummation. If the transaction is abandoned,
(i) any Shares not purchased upon exercise of such Option shall continue
to be available for purchase in accordance with the other provisions of
the Plan and (ii) to the extent that any Option not exercised prior to
such abandonment shall have vested solely by operation of this Paragraph
6.4, such vesting shall be deemed annulled, and the vesting schedule set
forth in Paragraph 6.3 shall be reinstituted, as of the date of such
abandonment.
6.5 Option Exercise. At all times during the period commencing
with the date an Option is granted to an Optionee and ending on the earlier
of the expiration of the Option Period applicable to such Option or the date
which is one (1) year prior to the date the Option is exercised by such
Optionee, such Optionee must be a Director, a Consultant or an employee
of the Company or a Subsidiary (in the event that after the date an Option
is granted a Director is or becomes a Consultant or an employee of the
Company or a Subsidiary or a Consultant is or becomes a Director or an
employee of the Company or a Subsidiary). In the event an Optionee's
membership on the Board, his engagement as a Consultant for the Company
or a Subsidiary or his employment by the Company or a Subsidiary is
terminated by reason of his death, the Successor Optionee may exercise
any unexercised Option granted to the Optionee under the Plan at any time
within three (3) years after the Optionee's death but in any event not
after the expiration of the Option Period applicable to such Option.
If an Optionee's membership on the Board, his engagement as a Consultant
for the Company or a Subsidiary or his employment by the Company or a
Subsidiary is terminated for cause, the Optionee's Option shall expire
thirty (30) days after such termination. Discharge for cause shall
include termination for malfeasance or gross misfeasance in the
performance of duties, conviction of illegal activity in connection
therewith, or any conduct detrimental to the interests of the Company,
and in any event the determination of the Committee with respect
thereto shall be final and conclusive. Notwithstanding the foregoing,
the Committee, in its sole discretion at the time an Option is granted,
may establish an earlier date (or dates) on which an Option must be exercised.
6.6 Notice of Option Exercise and Payment. Options may be exercised
in whole at any time, or in part from time to time, with respect to
whole shares only, within the period provided for the exercise thereof in
the Stock Option Agreement, and such Option shall be exercised by a written
notice of intent to exercise the Option with respect to a specified number
of Shares delivered to the Company at its principal office in Oklahoma
City, Oklahoma. Payment for Shares purchased under this Plan shall be
made in full, either in cash, or in common stock of the Company or in a
combination of cash and common stock of the Company, at the time of the
exercise of the Option as a condition thereof. If common stock of the
Company is utilized as consideration for the purchase of Shares upon
exercise of an Option, such common stock shall be valued at the "fair
market value" as determined in Paragraph 6.1 hereof as of the exercise
date or other relevant date. In addition to the foregoing procedure
which may be available for the exercise of any Option, the Optionee
may deliver to the Company a notice of exercise including an irrevocable
instruction to the Company to deliver the stock certificate representing
the Shares subject to an Option to a broker authorized to trade in the
common stock of the Company. Upon receipt of such notice, the Company
will acknowledge receipt of the executed notice of exercise and forward
the notice to the broker. Upon receipt of the copy of the notice which
has been acknowledged by the Company, and without waiting for issuance of
the actual stock certificate with respect to the exercise of the Option,
the broker may sell the Shares (or that portion of the Shares necessary to
cover the Option Price and any withholding taxes due). Upon receipt of
the stock certificate from the Company, the broker will deliver directly
to the Company that portion of the sales proceeds to cover the Option
Price and any withholding taxes. Further, the broker may also facilitate
a loan to the Optionee upon receipt of the notice of exercise in advance
of the issuance of the actual stock certificate as an alternative means
of financing and facilitating the exercise of any Option. For all
purposes of effecting the exercise of an Option, the date on which the
Optionee gives the notice of exercise to the Company will be the date he
becomes bound contractually to take and pay for the Shares underlying the
Option.
6.7 Limited Transferability of Options. The Committee may, in
its discretion, authorize all or a portion of the Options to be granted to an
Optionee who is a Director to be on terms which permit transfer by such
Optionee to (I) the ex-spouse of the Optionee pursuant to the terms of a
domestic relations order, (ii) the spouse, children or grandchildren of
the Optionee ("Immediate Family Members"), (iii) a trust or trusts for
the exclusive benefit of such immediate Family Members, or (iv) a
partnership in which such Immediate Family Members are the only
partners. In addition (x) there may be no consideration for any such
transfer, (y) the stock option agreement pursuant to which such Options
are granted must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this paragraph, and (z)
subsequent transfers of transferred Options shall be prohibited except
those in accordance with paragraph 6.8 hereof. Following transfer, any such
Options shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, provided that for purposes of
paragraphs 6.5 and 6.11 hereof the term "Optionee" shall be deemed to refer
to the transferee. The events of termination of employment of paragraphs
6.5 and 6.11 hereof shall continue to be applied with respect to the
original Option, following which the Options shall be exercisable by the
transferee only to the extent, and for the periods specified in paragraphs
6.5 and 6.11 hereof. No transfer pursuant to this paragraph 6.7 shall be
effective to bind the Company unless the Company shall have been furnished
with written notice of such transfer together with such other documents
regarding the transfer as the Committee shall request.
6.8 Transfers By Will or the Laws of Descent and Distribution.
Options shall be transferable by will or the laws of descent and distribution;
however, no such transfer of an Option by the Optionee shall be effective to
bind the Company unless the Company shall have been furnished with written
notice of such transfer and an authenticated copy of the will and/or such
other evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the Successor Optionee of
the terms and conditions of such Option.
6.9 No Rights as Stockholder or to Continued Membership on the
Board or to Continued Engagement as a Consultant. No Optionee shall have
any rights as a stockholder of the Company with respect to any Shares
prior to the date of issuance to him or her of the certificate or
certificates for such Shares and neither the Plan nor any Option granted
under the Plan shall confer upon an Optionee any right to continuance of
membership on the Board or Board of Directors of a Subsidiary, to
continuance of engagement as a Consultant for the Company or for a
Subsidiary or to continuance of employment by the Company or a Subsidiary
(in the event a Director or Consultant is or becomes an employee of the
Company after the date an Option is granted to any such Optionee) or
interfere in any way with the right of the shareholders of the Company
to terminate the Optionee's membership on the Board or Board of Directors
of a Subsidiary or interfere in any way with the right of any officer
of the Company or a Subsidiary to terminate the engagement of any
Consultant or the employment of any employee.
6.10 Surrender of Options. The Committee may permit the
voluntary surrender of all or a portion of any Option to be conditioned
upon the granting to the Optionee under this Plan of a new Option for the
same or a different number of Shares as the Option surrendered, or may
require such voluntary surrender as a condition precedent to a grant of
a new Option to such Optionee. Such new Option shall be exercisable at
the price, during the period, and in accordance with any other terms or
conditions specified by the Committee at the time the new Option is
granted, all determined in accordance with the provisions of this Plan
without regard to the price, period of exercise, or any other terms or
conditions of the Option surrendered.
6.11 Director Formula Awards. Notwithstanding anything to the
contrary in this Plan, each Director, who is not an executive officer of the
Company on the date this Paragraph 6.11 is approved by the shareholders of
the Company, shall be granted on such date an Option for the purchase of
5,000 Shares, and thereafter each person serving as a Director on the
second Tuesday of each succeeding October, other than any Director
who is an executive officer of the Company, shall be granted on such
date an option to purchase 10,000 Shares. A Director shall be eligible
to exercise any Option granted under this Paragraph 6.11 immediately.
The Option Price for Options granted under this Paragraph 6.11 shall be
equal to the fair market value (as defined in Paragraph 6.1 of this Plan)
on the date of grant. The number of shares and the option price shall be
subject to adjustment as provided in Paragraph 5.1 and the option price
shall be payable as provided in Paragraph 6.6. The terms of each option
granted under this Paragraph 6.11 shall be for a period which shall expire
upon the first to occur of (x) ten (10) years from the date of grant or
(y) one (1) year after the date that the Optionee ceases to be a Director
of the Company; provided, however, if an Optionee ceases to be a
Director by reason of his death or is terminated for cause, the exercise
period shall be as provided in Paragraph 6.5 hereof. Notwithstanding anything
herein to the contrary, pursuant to Rule 16(b)-3(c)(2)(ii)(B) promulgated
under the Exchange Act (or any successor rule) the provisions of this
Paragraph 6.11 cannot be amended more than once every six (6) months, other
than to comport with changes to the Code or rules and regulations thereunder.
7. Issuance of Shares; Restrictions. Subject to the conditions and
restrictions provided in this Paragraph 7, the Company shall, within twenty
(20) business days after an Option has been duly exercised in whole or in
part, deliver to the person who exercised the Option a certificate,
registered in the name of such person, for the number of Shares with respect
to which the Option has been exercised. The Company may legend any stock
certificate issued hereunder to reflect any restrictions provided for in
this Paragraph 7.
7.1 Registration. Unless the Shares subject to Options granted
under the Plan have been registered under the Securities Act of 1933, as
amended, and any applicable state securities laws (collectively, the "Act")
(and, in the case of any Optionee who may be deemed an "affiliate" of the
Company as defined in Rule 405 under the Act (or any successor rule), such
Shares have been registered under the Act for resale by such Optionee),
or the Company has determined that an exemption from registration is
available, the Company may require prior to and as a condition of the
issuance of any Shares that the person exercising an Option hereunder furnish
the Company with a written representation in a form prescribed by the
Committee to the effect that such person is acquiring such Shares solely
with a view to investment for his or her own account and not with a view to
the resale or distribution of all or any part thereof, and that such person
will not dispose of any of such Shares otherwise than in accordance with
the provisions of Rule 144 under the Act (or any successor rule) unless and
until either the Shares are registered under the Act or the Company is
satisfied that an exemption for such registration is available.
7.2 No Obligation to Issue. Anything contained herein to the
contrary notwithstanding, the Company shall not be obligated to sell or
issue any Shares under the Plan unless and until the Company is satisfied
that such sale or issuance complies with (i) all applicable requirements
of any stock exchange on which the Shares are listed for trading or all
requirements of the National Association of Securities Dealers, Inc. if the
Shares are included in the NASDAQ National Market System (or the governing
body of the principal market in which such Shares are traded), (ii) all
applicable provisions of the Act, and (iii) all other laws or regulations
by which the Company is bound or to which the Company is subject.
7.3 Disposition. Each Stock Option Agreement shall authorize
the Company (or a Subsidiary) to make such provision as it may deem
appropriate for the withholding of any applicable federal, state or local
taxes that it determines it may be obligated to withhold or pay in
connection with the grant or exercise of such Option or the disposition of
Shares acquired upon exercise of such Option.
8. Amendment and Termination of the Plan. The Plan shall terminate
after December 10, 2002, provided that the Plan shall continue with respect
to Options which are in effect as of such date. Prior to any such
termination, the Plan may be terminated, altered, changed, modified or
amended by the Board for any reason including, but not limited to, the
necessity of modifying requirements of the Plan to conform with the law
or to meet special circumstances not anticipated or covered by the Plan;
provided that except as required by Paragraph 5.1 hereof, no action of the
Board may, without the approval of the shareholders of the Company, (a)
increase the aggregate number of Shares which may be purchased under Options
granted under the Plan; (b) materially change the persons or class of persons
eligible to participate in the Plan; (c) withdraw the administration of the
Plan from the Committee; (d) amend or alter the Option Price; (e) extend
the maximum Option Period or extend the term of the Plan; (f) materially
increase the benefit accruing to participants under the Plan; or (g) amend
the Plan in any manner which would impair the applicability of Rule 16b-3
as promulgated under the Exchange Act (or any successor rule) to the Plan.
No amendment, modification or termination of the Plan shall in any manner
adversely affect any Option theretofore granted under the Plan without
the consent of the affected Optionee.
9. Indemnification. Each person who is or shall have been a member
of the Committee or of the Board shall be indemnified and held harmless by the
Company against and from any loss, cost, liability or expense that may be
imposed upon or be reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may
be a party or in which he may be involved by reason of any action taken
or failure to act under the Plan and against and from any and all amounts
paid by him in settlement thereof with the Company's approval or paid by
him in satisfaction of a judgment in any such action, suit, or proceeding
against him; provided, he shall give the Company an opportunity, at its own
expense, to defend the same before he undertakes to handle and defend it on
his own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such person may
be entitled by the Company's Certificate of Incorporation, Bylaws, as a
matter of law, or otherwise. This indemnification shall not apply or be
available if it is determined by the Company that such acts or omissions
to act were willfully committed by the person involved.
10. General.
10.1 Other Compensation Plans. The adoption of this Plan shall not
affect any other stock option or incentive or other compensation plans in
effect for the Company, any Subsidiary or Successor Company, nor shall the
Plan preclude the Company from establishing any other forms of incentive
or other compensation for employees, directors or consultants of the
Company, its Subsidiaries or Successor Company.
10.2 Plan Binding on Successors. This Plan shall be binding on the
successors of the Company (including any Successor Company) and any Optionee
hereunder.
10.3 Singular, Plural; Gender. Whenever used herein, nouns in the
singular shall include the plural and the masculine pronoun shall include the
feminine gender.
10.4 Headings No Part of Plan. Headings of paragraphs are inserted
for convenience and reference only and they constitute no part of the
Plan.
10.5 Requirements of Law. If required, the granting of Options and
the issuance of Shares upon the exercise of an Option shall not be issued
except upon the approval of proper governmental agencies or securities
exchanges, if required, and only in compliance with the Act, and any other
applicable securities law or pursuant to an exemption therefrom.
10.6 Unsecured Obligation. Optionees under this Plan shall not have
any interest in any fund or specific asset of the Company by reason of this
Plan.
10.7 Expenses of the Plan. The expenses of administering the Plan
shall be borne by the Company, its Subsidiaries and its Successor
Companies.