EXHIBIT 10.2
GSE SYSTEMS, INC.
1995 LONG-TERM INCENTIVE PLAN
(As Amended through November 20, 1998)
1 Definitions
In this Plan, except where the context otherwise indicates, the following
definitions apply:
1.1. "Agreement" means a written agreement implementing an Award.
1.2. "Award" means a grant of an Option or Right or an award of Restricted
Stock or Incentive Shares.
1.3. "Board" means the Board of Directors of the Corporation.
1.4. "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Committee" means the committee or subcommittee of the Board meeting
the standards of Rule 16b-3(d)(1) under the Exchange Act and Treasury
Regulations $ 1.162-27(e)(3), or any similar successor rule or regulation, as
may be appointed by the Board to administer the Plan. Unless otherwise
determined by the Board, the Compensation Committee of the Board shall be the
Committee.
1.6. "Common Stock" means the common stock, par value $.01 per share, of
the Corporation.
1.7. "Corporation" means GSE Systems, Inc.
1.8. "Date of Exercise" means the date on which the Corporation receives
notice of the exercise of an Option or Right in accordance with the terms of
Article 9.
1.9. "Date of Grant" means the date on which an Option or Right is granted
or Restricted Stock or Incentive Shares are awarded under the Plan.
1.10. "Director" means a member of the Board of the Corporation or any
Subsidiary.
1.11. "Employee" means any employee of the Corporation or a Subsidiary,
including an Employee Director or any person who has been hired to be an
employee of the Corporation or a Subsidiary, and any consultant or advisor to
the Corporation who is not a Director and who renders bona fide services to the
Corporation or a Subsidiary other than services in connection with the offer or
sale of securities in a capital raising transaction.
1.12. "Employee Director" means a Director who is also an Employee.
1.13. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.14. "Fair Market Value" means the amount equal to the closing sales price
for a Share, on the date such fair market value is to be determined (or if there
is no sale of Shares on such date, the closing sales price on the nearest
trading date preceding such date), in the principal trading market for the
Shares as reported by such source as the Committee may select, or, if such price
quotations of the Common Stock are not then reported, then the fair market value
of a Share as determined by the Committee pursuant to a reasonable method
adopted in good faith for such purpose.
1.15. "Grantee" means an Employee to whom Restricted Stock has been awarded
pursuant to Article 10 or Incentive Shares have been awarded pursuant to
Article 11.
1.16. "Incentive Shares" means Shares awarded under the Plan pursuant to
the provisions of Article 11.
1.17. "Incentive Stock Option" means an Option granted under the Plan that
qualifies as an incentive stock option under section 422 of the Code and that
the Corporation designates as such in the Agreement granting the Option.
1.18. "Independent Director" mean a "Director who is not an Employee
Director."
1.19. "Independent Director Program" means that portion of the Plan under
which grants are made to Independent Directors.
1.20. "Nonstatutory Stock Option" means an Option granted under the Plan
that is not an Incentive Stock Option.
1.21. "Option" means an option to purchase Shares granted under the Plan in
accordance with the terms of Article 6 or Article 7.
1.22. "Option Period" means the period during which an Option may be
exercised.
1.23. "Option Price" means the price per Share at which an Option may be
exercised. The Option Price shall be determined by the Committee and shall not
be less than the Fair Market Value determined as of the Date of Grant, except
that in the case of Nonstatutory Stock Options granted on or prior to the
thirtieth day after consummation of the Corporation's initial public offering of
Common Stock (the "IPO"), the Option Price shall not be less than the initial
public offering price of a Share in connection with the IPO. Notwithstanding the
foregoing, in the case of an Incentive Stock Option granted to an Optionee who
(applying the rules of Section 424(d) of the Code) owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
the Corporation or a Subsidiary (a "Ten-Percent Stockholder"), the Option Price
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value on the Date of Grant.
1.24. "Optionee" means an Employee or Director to whom an Option or Right
has been granted.
1.25. "Performance Goals" means performance goals established by the
Committee which may be based on earnings or earnings growth, sales, return on
assets, equity or investment, regulatory compliance, satisfactory internal or
external audits, improvement of financial ratings, achievement of balance sheet
or income statement objectives, or any other objective goals established by the
Committee, and may be absolute in their terms or measured against or in
relationship to other companies comparably, similarly or otherwise situated.
Such performance standards may be particular to an employee or the department,
branch, Subsidiary or other division in which he or she works, or may be based
on the performance of the Corporation generally, and may cover such period as
may be specified by the Committee.
1.26. "Plan" means the GSE Systems, Inc. 1995 Long Term Incentive Plan.
1.27. "Related Option" means the Option in connection with which, or by
amendment to which, a specified Right is granted.
1.28. "Related Right" means the Right granted in connection with, or by
amendment to, a specified Option.
1.29. "Restricted Stock" means Shares awarded under the Plan pursuant to
the provisions of Article 10.
1.30. "Right" means a stock appreciation right granted under the Plan in
accordance with the terms of
Article 8.
1.31. "Right Period" means the period during which a Right may be
exercised.
1.32. "Rule 16b-3" means Rule 16b-3 under Section 16 of the Exchange Act
(or any successor rule).
1.33. "Share" means a share of Common Stock.
1.34. "Subsidiary" means a corporation at least 50% of the total combined
voting power of all classes of stock of which is owned by the Corporation,
either directly or through one or more other Subsidiaries.
2 Purpose
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The Plan is intended to assist the Corporation and its Subsidiaries in
attracting and retaining Employees and Independent Directors of outstanding
ability and to promote the identification of their interests with those of the
stockholders of the Corporation.
3 Administration
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The Committee shall administer the Plan and shall have plenary authority,
in its discretion, to award Options, Rights, Restricted Stock and Incentive
Shares to Employees and Independent Directors, subject to the provisions of the
Plan. The Committee shall have plenary authority and discretion, subject to the
provisions of the Plan, to determine the terms of all Awards (which terms need
not be identical) to Employees, including, but not limited to, the exercise
price of Options, the time or times at which Awards are made, the number of
Shares covered by Awards, whether an Option shall be an Incentive Stock Option
or a Nonstatutory Stock Option, and the period during which Options and Rights
may be exercised and Restricted Stock shall be subject to restrictions. In
making these determinations, the Committee may take into account the nature of
the services rendered by the Award recipients, their present and potential
contributions to the success of the Corporation and its Subsidiaries, and such
other factors as the Committee in its discretion shall deem relevant. Subject to
the provisions of the Plan, the Committee shall have plenary authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to it and to make all other determinations deemed necessary or
advisable for the administration of the Plan. The determinations of the
Committee on the matters referred to in this Article 73 shall be binding and
final.
4 Eligibility
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Options, Rights, Restricted Stock and Incentive Shares may be granted or
awarded only to Employees, provided, however, that Independent Directors may
receive Nonstatutory Stock Options in accordance with the provisions of
Article 7.
5 Stock Subject to the Plan
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5.1. The maximum number of Shares that may be issued under the Plan is
625,000 Shares. The maximum number of Shares with respect to which an Employee
may receive Awards under the Plan is 100,000.
5.2. If an Option or Right expires or terminates for any reason (other than
termination by virtue of the exercise of a Related Option or Related Right, as
the case may be) without having been fully exercised, if Shares of Restricted
Stock are forfeited or if Incentive Shares are not issued or are forfeited, the
unissued or forfeited Shares which had been subject to the Award shall become
available for the grant of additional Awards.
5.3. Upon exercise of a Right (regardless of whether the Right is settled
in cash or Shares), the number of Shares with respect to which the Right is
exercised shall be charged against the number of Shares issuable under the Plan
and shall not become available for the grant of other Awards.
6 Options
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6.1. Options granted under the Plan to Employees shall be either Incentive
Stock Options or Nonstatutory Stock Options, as designated by the Committee.
Each Option granted under the Plan shall be clearly identified either as a
Nonstatutory Stock Option or an Incentive Stock Option and shall be evidenced by
an Agreement that specifies the terms and conditions of the grant. Options
granted to Employees shall be subject to the terms and conditions set forth in
this Article 6 and such other terms and conditions not inconsistent with this
Plan as the Committee may specify. All Incentive Stock Options granted under the
Plan shall comply with the provisions of the Code governing incentive stock
options and with all other applicable rules and regulations.
6.2. The Option Period for Options granted to Employees shall be determined
by the Committee and specifically set forth in the Agreement, provided, however,
that an Option shall not be exercisable after ten years (five years in the case
of an Incentive Stock Option granted to a Ten-Percent Stockholder) from its Date
of Grant.
6.3. The Committee, in its discretion, may provide in an Agreement for the
right of the Optionee to surrender to the Corporation an Option (or a portion
thereof) that has become exercisable and to receive upon such surrender, without
any payment to the Corporation (other than required tax withholding amounts)
that number of Shares (equal to the highest whole number of Shares) having an
aggregate fair market value as of the date of surrender equal to that number of
Shares subject to the Option (or portion thereof) being surrendered multiplied
by an amount equal to the excess of (i) the Fair Market Value on the date of
surrender over (ii) the Option Price, plus an amount of cash equal to the fair
market value of any fractional Share to which the Optionee would be entitled but
for the parenthetical above relating to whole number of Shares. Any such
surrender shall be treated as the exercise of the Option (or portion thereof).
7 Independant Director Program
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7.1. The Independent Director Program shall be a formula plan under which
Independent Directors shall be granted Nonstatutory Stock Options, but only in
accordance with the provisions set forth in this Article 7.
7.2. Nonstatutory Stock Options shall be granted to Independent Directors
as follows:
(i) Each person who becomes an Independent Director shall be granted on the
date such person first becomes an Independent Director, which shall be the Date
of Xxxxx, a Nonstatutory Stock Option to purchase 1,500 Shares at an Option
Price equal to the Fair Market Value on the Date of Grant; and
No,(ii) On December 31st of each year, each Independent Director shall be
granted a Nonstatutory Stock Option to purchase 1,500 Shares at an Option Price
equal to the Fair Market Value on such date, which date shall be the Date of
Grant; provided that if any Independent Director has served as a Director for
less than a full year as of such Date of Grant, the Nonstatutory Stock Option
granted to such Director on such Date of Grant shall be for the number of Shares
(rounded to the nearest whole Share) equal to 1,500 multiplied by a fraction,
the numerator of which shall be the number of days such person has served as a
Director and the denominator of which shall be 365.
7.3. Nonstatutory Stock Options granted under this Article 7 shall vest in
three installments on the first, second and third annual anniversaries of the
Date of Grant with 40% thereof vesting on the first such anniversary and 30%
thereof vesting on each of the second and third such anniversaries, and may be
exercised by the Optionee at any time after vesting and prior to the termination
of the Nonstatutory Stock Option. Nonstatutory Stock Options granted pursuant to
this Article 7shall terminate upon the earlier to occur of (i) 7 years from the
Date of Grant or (ii) 90 days from the date on which such Optionee ceases to be
a member of the Board or, if such Optionee ceases to be a member of theBoard by
reason of retirement, disability, death or removal from such position without
cause, five years from the date on which such Optionee ceases to be a member of
the Board. Nonstatutory Stock Options granted under this Article 7 are not
transferable except to the extent provided in Article 12. Exercise of
Nonstatutory Stock Options granted under this Article 7 may be made only in
writing delivered to the Corporation accompanied by payment of the Option
Pricein cash or Shares in accordance with Section 9.1.
7.4. If on any Date of Grant of Nonstatutory Stock Options to Independent
Directors there is an insufficient number of Shares available for such grants to
Independent Directors, the number of Shares subject to each grant shall be
reduced to the greatest whole number of Shares arrived at by dividing the
remaining Shares available for such grants by the number of Independent
Directors eligible for such grants.
7.5. Notwithstanding the provisions of Section 7.3, an Option granted
pursuant to this Article 7 may be exercised in full upon a Change of Control.
For purposes of this Section 7.5, a "Change of Control" shall be deemed to have
occurred if after the Date of Grant for such Option (i) any person or group of
persons (as defined in Section 13(d) and 14(d) of the Exchange Act) together
with its affiliates, excluding employee benefit plans of the Corporation,
becomes, directly or indirectly, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's then outstanding
securities; or (ii) as a result of a tender offer or exchange offer for the
purchase of securities of the Corporation (other than such an offer by the
Corporation for its own securities), or as a result of a proxy contest, merger,
consolidation or sale of assets, or as a result of any combination of the
foregoing, individuals who at the beginning of any two-year period constitute
the Board, plus new directors of the Corporation whose election or nomination
for election by the Corporation's stockholders is approved by a vote of at least
two-thirds of the Directors still in office who were Directors at the beginning
of such two-year period, cease for any reason during such two-year period to
constitute at least two-thirds of the members of the Board; or (iii) the
stockholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation or entity regardless of which entity is
the survivor, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least 66 2/3% of the combined
voting power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation; or (iv) the
stockholders of the Corporation approve a plan of complete liquidation or
winding-up of the Corporation or an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's assets.
8 Rights
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8.1. Rights granted under the Plan shall be evidenced by an Agreement
specifying the terms and conditions of the grant.
A Right may be granted under the Plan:
(i) in connection with, and at the same time as, the grant of an Option
under the Plan;
(ii) by amendment of an outstanding Option granted under the Plan; or
(iii)independently of any Option granted under the Plan.
A Right granted under clause (i) or (ii) of the preceding sentence is a
Related Right. A Related Right may, in the Committee's discretion, apply to all
or a portion of the Shares subject to the Related Option.
8.2. A Right may be exercised in whole or in part as provided in the
applicable Agreement, and, subject to the terms of the Agreement, entitles its
Optionee to receive, without payment to the Corporation (but subject to required
tax withholding), either cash or that number of Shares (equal to the highest
whole number of Shares), or a combination thereof, in an amount or having a fair
market value determined as of the Date of Exercise not to exceed the number of
Shares subject to the portion of the Right exercised multiplied by an amount
equal to the excess of (i) the Fair Market Value on the Date of Exercise of the
Right over (ii) either (A) the Fair Market Value on the Date of Grant of the
Right if it is not a Related Right, or (B) the Option Price as provided in the
Related Option if the Right is a Related Right.
8.3. The Right Period shall be determined by the Committee and specifically
set forth in the Agreement, subject to the following conditions:
(i) a Right will expire no later than the earlier of (A) ten years from
the Date of Grant, or (B) in the case of a Related Right, the expiration of the
related Option:
(ii) a Right may be exercised only when the Fair Market Value on the Date
of Exercise exceeds either (A) the Fair Market Value on the Date of Grant of the
Right if it is not a Related Right or (B) the Option Price of the Related Option
if the Right is a Related Right; and
(iii)a Right that is a Related Right to an Incentive Stock Option may be
exercised only when and to the extent the Related Option is exercisable.
8.4. The exercise, in whole or in part, of a Related Right shall cause a
reduction in the number of Shares subject to the Related Option equal to the
number of Shares with respect to which the Related Right is exercised.
Similarly, the exercise, in whole or in part, of a Related Option shall cause a
reduction in the number of Shares subject to the Related Right equal to the
number of Shares with respect to which the Related Option is exercised.
8.5. The extent provided in the Agreement, the Committee shall have sole
discretion to consent to or disapprove the election of any Optionee to receive
cash in full or partial settlement of a Right. In cases where an election of
settlement in cash must be consented to by the Committee, the Committee may
consent to, or disapprove, such election at any time after such election, or
within such period for taking action as is specified in the election, and
failure to give consent shall be disapproval. Consent may be given in whole or
as to a portion of the Right surrendered by the Optionee. If the election to
receive cash is disapproved in whole or in part, the Right shall be deemed to
have been exercised for Shares, or, if so specified in the notice of exercise
and election, not to have been exercised to the extent the election to receive
cash is disapproved. 9 Exercise of Options and Rights
9.1. An Option or Right may, subject to the terms of the applicable
Agreement under which it was granted, be exercised in whole or in part by the
delivery to the Corporation of written notice of the exercise, in such form as
the Committee may prescribe, accompanied, in the case of an Option, by full
payment for the Shares with respect to which the Option is exercised. To the
extent provided in the applicable Option Agreement, payment may be made, in
whole or in part, in Shares (other than Restricted Stock) valued at Fair Market
Value on the Date of Exercise or by delivery of a promissory note as provided in
Section 9.2 hereof.
9.2. To the extent provided in an Option Agreement and permitted by
applicable law, the Committee may accept as partial payment of the Option Price
a promissory note executed by the Optionee evidencing his or her obligation to
make future cash payment thereof; provided, however, that in no event may the
Committee accept a promissory note for an amount in excess of the difference
between the aggregate Option Price and the par value of the Shares. Promissory
notes made pursuant to this Section 9.2 shall be payable upon such terms as may
be determined by the Committee, shall be secured by a pledge of the Shares
received upon exercise of the Option and shall bear interest at a rate fixed by
the Committee.
10 Restricted Stock Awards
-----------------------
10.1. Restricted Stock awards under the Plan shall consist of Shares that
are restricted against transfer, subject to forfeiture, and subject to such
other terms and conditions intended to further the purposes of the Plan as may
be determined by the Committee. Such terms and conditions may provide, in the
discretion of the Committee, for the vesting of such awards to be contingent
upon the achievement of one or more specified Performance Goals.
10.2. Restricted Stock awards under the Plan shall be evidenced by
Agreements specifying the terms and conditions of the Award. Each Agreement
evidencing an award of Restricted Stock shall contain the following:
(i) prohibitions against the sale, assignment, transfer, exchange, pledge,
hypothecation, or other encumbrance of (A) the Shares awarded as Restricted
Stock under the Plan, (B) the right to vote the Shares, and (C) the right to
receive dividends thereon, in each case during the restriction period applicable
to the Shares; provided, however, that the Grantee shall have all the other
rights of a stockholder including, but not limited to, the right to receive
dividends and the right to vote the Shares;
(ii) a requirement that each certificate representing Shares of Restricted
Stock shall be deposited with the Corporation, or its designee, and shall bear
the following legend:
"This certificate and the shares of stock represented hereby are
subject to the terms and conditions (including the risks of forfeiture
and restrictions against transfer) contained in the GSE Systems, Inc.
1995 Long-Term Incentive Plan, and an Agreement entered into between
the registered owner and GSE Systems, Inc. Release from such terms and
conditions shall be made only in accordance with the provisions of the
Plan and the Agreement, a copy of each of which is on file in the
office of the Secretary of GSE Systems, Inc."
(iii) the terms and conditions upon which any restrictions applicable to
Shares of Restricted Stock shall lapse and new certificates free of the
foregoing legend shall be issued to the Grantee or his or her legal
representative; and
(iv) such other terms, conditions and restrictions as the Committee in its
discretion may specify including, without limitation, terms that condition the
lapse of forfeiture and transfer restrictions upon the achievement of
Performance Goals.
10.3. The Committee may include in a Restricted Stock Agreement a
requirement that in the event of a Grantee's termination of employment for any
reason prior to the lapse of restrictions, all Shares of Restricted Stock shall
be forfeited by the Grantee to the Corporation without payment of any
consideration by the Corporation, and neither the Grantee nor any successors,
heirs, assigns or personal representatives of the Grantee shall thereafter have
any further rights or interest in the Shares or certificates.
11 Incentive Shares Awarded
------------------------
11.1. Incentive Shares awarded under the Plan shall be evidenced by an
Agreement specifying the terms and conditions of such Award. Incentive Share
awards shall provide for the issuance of Shares to a Grantee at such times and
subject to such terms and conditions as the Committee shall deem appropriate
including, but not limited to, terms that condition the issuance of Shares upon
the achievement of Performance Goals.
12 Nontransferability
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Awards made under this Plan shall not be transferable other than (i) by
will or the laws of descent and distribution, or (ii) pursuant to a qualified
domestic relations order as defined in section 414(p) of the Code. An Option or
Right may be exercised during the Optionee's lifetime only by the Optionee or,
in the event of his or her legal disability, by his or her legal representative.
A Related Right is transferable only when the Related Option is transferable and
only with the Related Option and under the same conditions that apply to the
Related Option.
13 Capital Adjustments
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In the event of any change in the outstanding Common Stock by reason of any
stock dividend, split-up, recapitalization, reclassification, combination or
exchange of shares, merger, consolidation or liquidation and the like, the
Committee may, in its discretion, provide for a substitution for or adjustment
in (i) the number and class of Shares subject to outstanding Options, Rights,
Restricted Stock and Incentive Share awards, (ii) the Option Price of Options
and the base price upon which payments under Rights that are not Related Rights
are determined, and (iii) the aggregate number and class of Shares for which
Awards thereafter may be made under the Plan and to individual Award recipients.
The adjustments made with respect to Nonstatutory Stock Options granted pursuant
to Article 7 shall be equivalent to the treatment accorded to holders of Common
Stock.
14 Termination or Amendment
------------------------
The Board may amend, alter or terminate the Plan in any respect at any
time; provided, however, that, after the Plan has been approved by the
stockholders of the Corporation, no amendment, alteration or termination of the
Plan shall be made by the Board without approval of (i) the Corporation's
stockholders to the extent stockholder approval of the amendment is required by
applicable law or regulations or the requirements of the principal exchange or
interdealer quotation system on which the Common Stock is listed or quoted, and
(ii) each affected Optionee or Grantee if such amendment, alteration or
termination would adversely affect his or her rights or obligations under any
Award made prior to the date of such amendment, alteration or termination.
15 Modification, Extension and Renewal of Options, Rights, Restricted Stock
and Intentive Shares; Substituted Options and Rights
----------------------------------------------------
15.1. Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew outstanding Options and Rights, or accept the surrender
of outstanding options and stock appreciation rights (to the extent not
theretofore exercised) granted under the Plan or under any other plan of the
Corporation or a Subsidiary, and authorize the granting of new Options and
Rights pursuant to the Plan in substitution therefor (to the extent not
theretofore exercised), and the substituted Options or Rights may specify a
lower exercise price than the surrendered options and stock appreciation rights,
a longer term than the surrendered options and stock appreciation rights, or
have any other provisions that are authorized by the Plan. Subject to the terms
and conditions of the Plan, the Committee may modify the terms of any
outstanding awards of Restricted Stock or Incentive Shares. Notwithstanding the
foregoing, however, no modification of an Award shall, without the consent of
the Optionee or Grantee, alter or impair any of the Optionee's or Xxxxxxx's
rights or obligations under such Award.
15.2. Anything contained herein to the contrary notwithstanding, Options
and Rights may, at the discretion of the Committee, be granted under the Plan in
substitution for stock appreciation rights and options to purchase shares of
capital stock of another corporation which is merged into, consolidated with, or
all or a substantial portion of the property or stock of which is acquired by,
the Corporation or one of its Subsidiaries. The terms and conditions of the
substitute Options and Rights so granted may vary from the terms and conditions
set forth in this Plan to such extent as the Committee may deem appropriate (but
only to the extent consistent with the requirements of Rule 16b-3) in order to
conform, in whole or part, to the provisions of the options and stock
appreciation rights in substitution for which they are granted. Such Options and
Rights shall not be counted toward the 100,000 Share limit imposed by the second
sentence of Section 5.1, except to the extent it is determined by the Committee
that the applicability of such sentence is required in order for grants of
Options and Rights hereunder to be eligible to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code.
16 Effectiveness of the Plan
-------------------------
The Plan and any amendments requiring stockholder approval pursuant to
Article 14 are subject to approval by vote of the stockholders of the
Corporation within 12 months after their adoption by the Board. Subject to that
approval, the Plan and any amendments are effective on the date on which they
are adopted by the Board. Options, Rights, Restricted Stock and Incentive Shares
may be granted or awarded prior to stockholder approval of the Plan or
amendments, but each such Award shall be subject to the approval of the Plan or
amendments by the stockholders. The date on which any Option, Right, Restricted
Stock or Incentive Shares granted or awarded prior to stockholder approval of
the Plan or amendment is granted or awarded shall be the Date of Grant for all
purposes as if the Option, Right, Restricted Stock or Incentive Shares had not
been subject to approval. No Option, or Right may be exercised prior to such
stockholder approval, and any Restricted Stock or Incentive Shares awarded shall
be forfeited if such stockholder approval is not obtained.
17 Withholding
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The Corporation's obligation to deliver Shares or pay any amount pursuant
to the terms of any Award hereunder shall be subject to the satisfaction of
applicable federal, state and local tax withholding requirements. To the extent
provided in the applicable Agreement and in accordance with rules prescribed by
the Committee, an Optionee or Grantee may satisfy any such withholding tax
obligation by any of the following means or by a combination of such means:
(i) tendering a cash payment, (ii) authorizing the Corporation to withhold
Shares otherwise issuable to the Optionee or Grantee, or (iii) delivering to the
Corporation already owned and unencumbered Shares.
18 Term of the Plan
----------------
Unless sooner terminated by the Board pursuant to Article 14, the Plan
shall terminate on June 30, 2005, and no Options, Rights, Restricted Stock or
Incentive Shares may be granted or awarded after such date. The termination of
the Plan shall not affect the validity of any Award outstanding on the date of
termination.
19 Indemnification of Committee
----------------------------
In addition to such other rights of indemnification as they may have as
Directors or as members of the Committee, the members of the Committee shall be
indemnified by the Corporation against the reasonable expenses, including
attorneys' fees, actually and reasonably incurred in connection with the defense
of any action, suit or proceeding, or in connection with any appeal therein, to
which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any Option, Right,
Restricted Stock or Incentive Shares granted or awarded hereunder, and against
all amounts reasonably paid by them in settlement thereof or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, if such
members acted in good faith and in a manner which they believed to be in, and
not opposed to, the best interests of the Corporation.
20 General Provisions
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20.1. The establishment of the Plan shall not confer upon any Employee or
Independent Director any legal or equitable right against the Corporation, any
Subsidiary or the Committee, except as expressly provided in the Plan.
20.2. The Plan does not constitute inducement or consideration for the
employment of any Employee or the service of any Independent Director, nor is it
a contract between the Corporation or any Subsidiary and any Employee or
Independent Director. Participation in the Plan shall not give an Employee or
Independent Director any right to be retained in the service of the Corporation
or any Subsidiary.
20.3. Neither the adoption of this Plan nor its submission to the
stockholders, shall be taken to impose any limitations on the powers of the
Corporation or its Subsidiaries to issue, grant, or assume options, warrants,
rights, or restricted stock, otherwise than under this Plan, or to adopt other
stock option or restricted stock plans or to impose any requirement of
stockholder approval upon the same.
20.4. The interests of any Employee or Independent Director under the Plan
are not subject to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered except as provided in Article 12.
20.5. The Plan shall be governed, construed and administered in accordance
with the laws of the State of Delaware and the intention of the Corporation that
Incentive Stock Options granted under the Plan qualify as such under section 422
of the Code.
20.6. The Committee may require each person acquiring Shares pursuant to
Awards hereunder to represent to and agree with the Corporation in writing that
such person is acquiring the Shares without a view to distribution thereof. The
certificates for such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All certificates for Shares
issued pursuant to the Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities laws. The Committee may place a legend or
legends on any such certificates to make appropriate reference to such
restrictions.
20.7. The Corporation shall not be required to issue any certificate or
certificates for Shares with respect to Awards under this Plan, or record any
person as a holder of record of such Shares, without obtaining, to the complete
satisfaction of the Committee, the approval of all regulatory bodies deemed
necessary by the Committee, and without complying to the Committee's complete
satisfaction, with all rules and regulations, under federal, state or local law
deemed applicable by the Committee.
