Exhibit 4.1
WASTE CONNECTIONS, INC.
2002 RESTRICTED STOCK PLAN
1. PURPOSE.
The purpose of the Plan is to provide a means for the Company and any
subsidiary, through the grant of Restricted Stock to selected Employees, to
attract and retain persons of ability as Employees, and to motivate such persons
to exert their best efforts on behalf of the Company and any subsidiary.
2. DEFINITIONS.
(a) "AGREEMENT" means a written certificate or award agreement between the
Company and a Participant evidencing an Award. Each Agreement shall be subject
to the terms and conditions of the Plan.
(b) "AWARD" means shares of Restricted Stock awarded pursuant to the terms
and conditions of the Plan.
(c) "BOARD" means the Company's Board of Directors.
(d) "CAUSE" means (i) insobriety; (ii) conviction of a misdemeanor
involving moral turpitude or a felony; (iii) illegal business practices in
connection with the Company's or a subsidiary's business; (iv) misappropriation
of the Company's or a subsidiary's assets; (v) excessive absence of the
Participant from his employment during usual working hours for reasons other
than vacation, disability or sickness; or (vi) any material breach by an
Employee of any term or provision of his or her employment agreement or failure
of the Employee to perform competently and efficiently his or her duties
hereunder as determined by the Company in its reasonable discretion.
(e) "CHANGE IN CONTROL" means:
(i) any reorganization, liquidation or consolidation of the Company,
or any merger or other business combination of the Company with any other
corporation, other than any such merger or other combination that would result
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such transaction;
(ii) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the assets
of the Company; or
(iii) any "person" (as defined in Section 13(d) and 14(d) of the
Exchange Act) shall become the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the Company's outstanding voting securities (except that for purposes of this
definition, "person" shall not include any person (or any person
that controls, is controlled by or is under common control with such person) who
as of the date of an Agreement owns ten percent (10%) or more of the total
voting power represented by the outstanding voting securities of the Company, or
a trustee or other fiduciary holding securities under any employee benefit plan
of the Company, or a corporation that is owned directly or indirectly by the
stockholders of the Company in substantially the same percentage as their
ownership of the Company).
A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of the Company's incorporation or to create a holding
company that will be owned in substantially the same proportions by the persons
who held the Company's securities immediately before such transaction.
(f) "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, including the rules and regulations promulgated thereunder and
successor provisions and regulations and rules thereto.
(g) "COMMITTEE" means a committee appointed by the Board in accordance
with section 4(b) of the Plan.
(h) "COMPANY" means Waste Connections, Inc., a Delaware corporation.
(i) "DIRECTOR" means a member of the Company's Board.
(j) "EMPLOYEE" means any person, other than executive officers and
Directors, employed by the Company or any subsidiary of the Company. Service as
a consultant shall not be sufficient to constitute "employment" by the Company.
(k) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and regulations and rules thereto.
(l) "FAIR MARKET VALUE" means, as of any date, the value of Stock
determined as follows:
(i) 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 the Stock (or the closing bid, if no sales
were reported) as quoted on such exchange or system on the market trading day of
the date of determination, or, if the date of determination is not a market
trading day, the last market trading day prior to the date of determination, in
each case as reported in The Wall Street Journal or such other sources as the
Board deems reliable;
(ii) 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 between the high bid and low asked prices for the Stock on the market
trading day of the date of determination, or, if the date of determination is
not a market trading day, the last market trading day prior to the date of
determination; or
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(iii) In absence of an established market for the Stock, the Fair
Market Value thereof shall be determined in good faith by the Board.
(m) "NON-EMPLOYEE DIRECTOR" means a Director who satisfies the
requirements established from time to time by the Securities and Exchange
Commission for non-employee directors under Rule 16b-3.
(n) "PARTICIPANT" means an individual who has been selected, pursuant to
section 4(a), to participate in the Plan, and who holds an outstanding Award
pursuant to the Plan.
(o) "PLAN" means this Waste Connections, Inc. 2002 Restricted Stock Plan.
(p) "RESTRICTED STOCK" means Stock awarded under the Plan in accordance
with the terms and conditions set forth in section 5.
(q) "RESTRICTION PERIOD" means a time period, which may or may not be
based on the achievement of particular performance goals and/or the satisfaction
of vesting provisions (which may be dependent on the continued service of the
applicable Participant) applicable to, and established or specified by the Board
at the time of, each Award.
(r) "RULE 16B-3" means Rule 16b-3 under the Exchange Act or any successor
to Rule 16b-3, as amended from time to time.
(s) "SECURITIES ACT" means the Securities Act of 1933, as it may be
amended from time to time, including the rules and regulations promulgated
thereunder and successor provisions and regulations and rules thereto.
(t) "STOCK" means the Common Stock of the Company.
3. SHARES SUBJECT TO THE PLAN.
The securities subject to Awards granted under the Plan shall be shares of
Stock. Subject to adjustment as provided in section 7 for changes in Stock, such
shares of Stock subject to the Plan may be either authorized and unissued shares
(which will not be subject to preemptive rights) or previously issued shares
acquired by the Company or any subsidiary of the Company. The total number of
shares of Stock that may be delivered pursuant to Awards granted under the Plan
is 95,000. Any shares of Stock subject to an Award that are forfeited to the
Company may again be granted pursuant to an Award under the Plan.
4. ADMINISTRATION.
(a) Board's Powers and Responsibilities. The Plan shall be administered by
the Board or, at the election of the Board, by a Committee, as provided in
subsection (b), or, as to certain functions, by an officer of the Company, as
provided in subsection (c). Subject to the Plan, the Board shall:
(i) determine and designate from time to time those Employees to
whom Awards are to be granted;
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(ii) authorize the granting of Awards;
(iii) determine the number of shares of Stock to be included in any
Award and the periods for which Awards will be outstanding;
(iv) construe and interpret the Plan and the Agreements, and
establish, amend, waive and revoke rules and regulations for the Plan's
administration, and correct any defect, omission or inconsistency in the Plan or
any Agreement or any other instrument relating to the Awards in a manner and to
the extent it deems necessary or expedient to make the Plan fully effective;
(v) adopt such procedures and subplans and grant Awards on such
terms and conditions as the Board determines necessary or appropriate to permit
participation in the Plan by individuals otherwise eligible to so participate
who are foreign nationals or employed outside of the United States, or otherwise
to conform to applicable requirements or practices of jurisdictions outside of
the United States;
(vi) prescribe and approve the form and content of agreements for
use under the Plan;
(vii) establish and administer any terms, conditions, performance
criteria, restrictions, limitations, forfeiture, vesting schedule, and other
provisions, including, without limitation, the Restriction Period, of or
relating to any Award;
(viii) grant waivers of terms, conditions, restrictions and
limitations under the Plan or applicable to any Award, or accelerate the vesting
of any Award;
(ix) amend or adjust the terms and conditions of any outstanding
Award and/or adjust the number and/or class of shares of Stock subject to any
outstanding Award;
(x) at any time and from time to time after the granting of an
Award, specify such additional terms, conditions and restrictions with respect
to any such Award as may be deemed necessary or appropriate to ensure compliance
with any and all applicable laws or rules, including, but not limited to, terms,
restrictions and conditions for compliance with applicable securities laws and
methods of withholding or providing for the payment of required taxes;
(xi) offer to buy out an Award previously granted, based on such
terms and conditions as the Board shall establish with and communicate to the
Participant at the time such offer is made;
(xii) to the extent permitted under the applicable Agreement, permit
the transfer of an Award by one other than the Participant who received the
grant of such Award; and
(xiii) take any and all other actions it deems necessary for the
purposes of the Plan.
The Board shall have full discretionary authority in all matters related
to the discharge of its responsibilities and the exercise of its authority under
the Plan. Decisions and actions by the
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Board with respect to the Plan and any Agreement shall be final, conclusive and
binding on all persons having or claiming to have any right or interest in or
under the Plan and/or any Agreement.
(b) Authority to Delegate to Committee. The Board may delegate
administration of the Plan to a Committee of the Board. The Committee shall
consist of not less than two members appointed by the Board. Subject to the
foregoing, the Board may from time to time increase the size of the Committee
and appoint additional members, remove members (with or without cause) and
appoint new members in substitution therefor, or fill vacancies, however caused.
If the Board delegates administration of the Plan to a Committee, the Committee
shall have the same powers theretofore possessed by the Board with respect to
the administration of the Plan (and references in this Plan to the Board shall
apply to the Committee), subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. The Board may abolish the Committee at any time and revest in the Board
the administration of the Plan.
(c) Authority to Delegate to Officers. The Board may delegate
administration of sections 4(a)(i) through 4(a)(iii) above to the Chief
Executive Officer of the Company; provided, however, that such officer may not
grant Awards of more than 95,000 shares of Restricted Stock.
5. AWARDS OF RESTRICTED STOCK.
(a) Award Agreement. Each Award shall be evidenced by an Agreement, which
shall be executed by the Company and the Participant to whom such Award has been
granted, unless the Agreement provides otherwise; two or more Awards granted to
a single Participant may, however, be combined in a single Agreement. An
Agreement shall not be a precondition to the granting of an Award; no person
shall have any rights under any Award, however, unless and until the Participant
to whom the Award shall have been granted (i) shall have executed and delivered
to the Company an Agreement or other instrument evidencing the Award, unless
such Agreement provides otherwise, and (ii) has otherwise complied with the
applicable terms and conditions of the Award.
(b) Awards Subject to Plan. All Awards under the Plan shall be subject to
all the applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent therewith,
as the Board shall determine and which are set forth in the applicable
Agreement. Subject to the terms and restrictions of this section 5 or the
applicable Agreement or determined by the Board, on delivery of Restricted Stock
to a Participant, or creation of a book entry evidencing a Participant's
ownership of shares of Restricted Stock, pursuant to section 5(f), the
Participant shall have all of the rights of a stockholder with respect to such
shares.
(c) Discretionary Award. The Board may, in its discretion, authorize an
Award to a Participant. The Board may make any such Award without the
requirement of any cash payment from the Participant to whom such Award is made,
or may require a cash payment from such a Participant in an amount no greater
than the aggregate Fair Market Value of the Restricted Stock as of the date of
grant in exchange for, or as a condition precedent to, the completion of such
Award and the issuance of such shares of Restricted Stock.
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(d) Transferability. During the Restriction Period stated in the
Agreement, the Participant who receives an Award shall not be permitted to sell,
transfer, pledge, assign, encumber or otherwise dispose of such Restricted Stock
whether by operation of law or otherwise and shall not be made subject to
execution, attachment or similar process. Any attempt by such Participant to do
so shall constitute the immediate and automatic forfeiture of such Award.
Notwithstanding the foregoing, the Agreement may permit the payment or
distribution of a Participant's Award (or any portion thereof) after his or her
death to the beneficiary most recently named by such Participant in a written
designation thereof filed with the Company, or, in lieu of any such surviving
beneficiary, as designated by the Participant by will or by the laws of descent
and distribution. In the event any Award is to be paid or distributed to the
executors, administrators, heirs or distributees of the estate of a deceased
Participant, or such a Participant's beneficiary, in any such case pursuant to
the terms and conditions of the Plan and the applicable Agreement and in
accordance with such terms and conditions as may be specified from time to time
by the Board, the Company shall be under no obligation to issue Stock thereunder
unless and until the Board is satisfied that the person or persons to receive
such Stock is the duly appointed legal representative of the deceased
Participant's estate or the proper legatee or distributee thereof or the named
beneficiary of such Participant.
(e) Forfeiture of Restricted Stock. Shares of Restricted Stock shall be
forfeited and revert to the Company if the Participant (i) resigns from the
Company and its subsidiaries, (ii) is terminated for Cause from the Company and
its subsidiaries or (iii) violates the terms of any noncompetition or
nonsolicitation agreement to which the Participant is bound, if the Participant
has been terminated without Cause (which includes termination on permanent and
total disability (as defined in Code Section 422(c)(6)) and death). The Board
shall make all determinations regarding compliance with any such noncompetition
or nonsolicitation provision. Notwithstanding the foregoing, on any such
resignation or termination of service during the Restriction Period, shares of
Restricted Stock shall become free of all or part of the restrictions applicable
thereto to the extent that the Agreement, as determined by the Board in its
discretion on the award date, provides for lapse of such restrictions on such
termination of service, or the Board, in its discretion, otherwise determines to
waive forfeiture of such shares of Restricted Stock for whatever reason the
Board considers to be in the interests of the Company. A Participant who is
terminated without Cause (including Participant's estate or other transferee on
Participant's death) shall continue to be subject to the Plan and the Agreement,
including the Restriction Period.
(f) Receipt of Stock Certificates. Each Participant who receives an Award
shall be issued one or more stock certificates in respect of such shares of
Restricted Stock. Any such stock certificates for shares of Restricted Stock
shall be registered in the name of the Participant but shall be appropriately
legended and returned to the Company or its agent by the recipient, together
with a stock power or other appropriate instrument of transfer, endorsed in
blank by the recipient. Notwithstanding anything in the foregoing to the
contrary, in lieu of the issuance of certificates for any shares of Restricted
Stock during the applicable Restriction Period, a "book entry" (i.e., a
computerized or manual entry) may be made in the records of the Company, or its
designated agent, as the Board, in its discretion, may deem appropriate, to
evidence the ownership of such shares of Restricted Stock in the name of the
applicable Participant. Such records of the Company or such agent shall, absent
manifest error, be binding on all Participants
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hereunder. The holding of shares of Restricted Stock by the Company or its
agent, or the use of book entries to evidence the ownership of shares of
Restricted Stock, in accordance with this section 5(f), shall not affect the
rights of Participants as owners of their shares of Restricted Stock, nor affect
the Restriction Period applicable to such shares under the Plan or the
Agreement.
(g) Dividends. A Participant who holds outstanding shares of Restricted
Stock shall not be entitled to any dividends paid thereon.
(h) Expiration of Restriction Period. A Participant's shares of Restricted
Stock shall become free of the foregoing restrictions on the earlier of a Change
in Control or the expiration of the applicable Restriction Period and the
Company shall, subject to sections 6(a) or 6(b), then deliver stock certificates
evidencing such Stock to such Participant.
(i) Substitution of Awards. The Board may accept the surrender of
outstanding shares of Restricted Stock (to the extent that the Restriction
Period or other restrictions applicable to such shares have not yet lapsed) and
grant new Awards in substitution for such Restricted Stock.
6. CONDITIONS ON ISSUANCE OF SHARES.
(a) Securities Law Compliance. The Plan, the grant of Awards thereunder
and the obligation of the Company to deliver shares of stock on expiration of
the applicable Restriction Period shall be subject to all applicable Federal and
state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required, in the opinion of the Board. Awards may
not be granted and shares of stock may not be issued if either such action would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system on which the Stock may then be listed. In addition, no Stock may
be issued unless (i) a registration statement under the Securities Act shall at
the time of issuance of the Stock be in effect with respect to the shares of
Stock to be issued or (ii) in the opinion of legal counsel to the Company, the
shares of Stock to be issued on expiration of the applicable Restriction Period
may be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the issuance of any
Stock, the Company may require the Participant to satisfy any qualifications
that may be necessary or appropriate to evidence compliance with any applicable
law or regulation and to make any representation or warranty with respect
thereto as may be requested by the Company.
(b) Investment Representation. The Company may require any Participant, or
any person to whom an Award is transferred, as a condition of receiving shares
of Stock pursuant to such Award, to (i) give written assurances satisfactory to
the Company as to the Participant's knowledge and experience in financial and
business matters or to employ a purchaser representative reasonably satisfactory
to the Company who is knowledgeable and experienced in
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financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
receiving such Stock, and (ii) to give written assurances satisfactory to the
Company stating that such person is acquiring the Stock for such person's own
account and not with any present intention of selling or otherwise distributing
the Stock. The foregoing requirements, and any assurances given pursuant to such
requirements, shall not apply if (A) the issuance of the Stock has been
registered under a then currently effective registration statement under the
Securities Act, or (B) counsel for the Company determines as to any particular
requirement that such requirement need not be met in the circumstances under the
then applicable securities laws. Restricted Stock and any Stock received on the
expiration of the Restriction Period shall be subject to such other transfer
restrictions and/or legending requirements that are imposed by the Board, in its
discretion, and may be specified in the Agreement.
7. ADJUSTMENTS ON CERTAIN EVENTS.
(a) No Effect on Powers of Board or Shareholders. The existence of the
Plan and any Awards granted hereunder shall not affect in any way the right or
power of the Board or the stockholders of the Company to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's or
its subsidiaries' capital structure or its business, any merger or consolidation
of the Company or a subsidiary of the Company, any issue of debt, preferred or
prior preference stock ahead of or affecting Stock, the authorization or
issuance of additional shares of Stock, the dissolution or liquidation of the
Company or its subsidiaries, any sale or transfer of all or part of its assets
or business or any other corporate act or proceeding.
(b) Changes in Control. Each Agreement shall provide that, immediately
prior to a Change in Control, all restrictions imposed by the Board on any
outstanding Award shall be immediately automatically canceled, the Restriction
Period applicable to all outstanding Awards shall immediately terminate and such
Awards shall be fully vested, and any applicable performance goals shall be
deemed achieved at not less than the target level, notwithstanding anything to
the contrary in the Plan or the Agreement.
(c) Adjustment of Shares. The aggregate number, class and kind of shares
of stock available under the Plan as to which Awards may be granted, the
limitation set forth in section 4(c) on the number of shares of Stock that may
be issued by a single officer under the Plan and the number, class and kind of
shares under each outstanding Award shall be appropriately adjusted by the Board
in its discretion to preserve the benefits or potential benefits intended to be
made available under the Plan or with respect to any outstanding Awards or
otherwise necessary to reflect any such change, if the Company shall (i) pay a
dividend in, or make a distribution of, shares of Stock (or securities
convertible into, exchangeable for or otherwise entitling a holder thereof to
receive Stock), or evidences of indebtedness or other property or assets, on
outstanding Stock, (ii) subdivide the outstanding shares of Stock into a greater
number of shares, (iii) combine the outstanding shares of Stock into a smaller
number of shares or (iv) issue any shares of its capital stock in a
reclassification of the Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the resulting
corporation). An adjustment made pursuant to this section 7(c) shall, in the
case of a dividend or distribution, be made as of the record date therefor and,
in the case of a subdivision, combination or
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reclassification, be made as of the effective date thereof. Any new or
additional shares or securities received by a Participant shall be subject to
the same terms and conditions, including the Restriction Period, as relate to
the original Award.
(d) Receipt of Assets other than Stock. If at any time, as a result of an
adjustment made pursuant to this section 7, the Participant shall become
entitled to receive any shares of capital stock or shares or other units of
other securities or property or assets other than Stock, the number of such
other shares or units so receivable on expiration of the Restriction Period
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the shares of
Stock in this section 7, and the provisions of this Plan with respect to the
shares of Stock shall apply, with necessary changes in points of detail, on like
terms to any such other shares or units.
(e) Fractional Shares. All calculations under this section 7 shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be, but in no event shall the Company be obligated to issue any fractional
share.
(f) Inability to Prevent Acts Described in Section 7; Uniformity of
Actions Not Required. No Participant shall have or be deemed to have any right
to prevent the consummation of the acts described in this section 7 affecting
the number of shares of Stock subject to any Award held by the Participant. Any
actions or determinations by the Board under this section 7 need not be uniform
as to all outstanding Awards, and need not treat all Participants identically.
8. TAX WITHHOLDING OBLIGATIONS.
(a) General Authorization. The Company is authorized to take whatever
actions are necessary and proper to satisfy all obligations of Participants
(including, for purposes of this section 8, any other person entitled to
exercise an Award pursuant to the Plan or an Agreement) for the payment of all
Federal, state, local and foreign taxes in connection with any Awards
(including, but not limited to, actions pursuant to the following section 8(b)).
(b) Withholding Requirement and Procedure. Each Participant shall, no
later than the date as of which the value of the Award first becomes includible
in the gross income of the Participant for income tax purposes, pay to the
Company in cash, or make arrangements satisfactory to the Company regarding
payment to the Company of, any taxes of any kind required by law to be withheld
with respect to the Stock or other property subject to such Award. No Stock
shall be delivered to a Participant with respect to an Award until such payment
or arrangement has been made. The Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to such Participant. Notwithstanding the above, the Board may, in its
discretion and pursuant to procedures approved by the Board, permit the
Participant to elect withholding by the Company of Stock or other property
otherwise deliverable to such Participant pursuant to his or her Award,
provided, however, that the amount of any Stock so withheld shall not exceed the
amount necessary to satisfy the Company's required tax withholding obligations
using the minimum statutory withholding rates for Federal, state and/or local
tax purposes, including payroll taxes, that are
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applicable to supplemental taxable income in full or partial satisfaction of
such tax obligations, based on the Fair Market Value of the Stock on the payment
date.
(c) Section 83(b) Election. If a Participant makes an election under Code
Section 83(b), or any successor section thereto, to be taxed with respect to an
Award as of the date of transfer of the Restricted Stock rather than as of the
date or dates on which the Participant would otherwise be taxable under Code
Section 83(a), such Participant shall deliver a copy of such election to the
Company immediately after filing such election with the Internal Revenue
Service. Neither the Company nor any of its affiliates shall have any liability
or responsibility relating to or arising out of the filing or not filing of any
such election or any defects in its construction.
9. RIGHTS OF EMPLOYEES AND OTHER PERSONS.
This Plan and the Awards shall not confer on any Participant or other
person:
(a) Any rights or claims under the Plan except in accordance with the
provisions of the Plan and the applicable agreement;
(b) Any right with respect to continuation of employment by the Company or
any subsidiary, nor shall they interfere in any way with the right of the
Company or any subsidiary that employs a Participant to terminate the
Participant's employment at any time with or without Cause;
(c) Any right to be selected to participate in the Plan or to be granted
an Award; or
(d) Any right to receive any bonus, whether payable in cash or in Stock,
or in any combination thereof, from the Company or its subsidiaries, nor be
construed as limiting in any way the right of the Company or its subsidiaries to
determine, in its sole discretion, whether or not it shall pay any employee
bonus, and, if so paid, the amount thereof and the manner of such payment.
10. LIMITATION OF LIABILITY AND INDEMNIFICATION.
(a) Contractual Liability Limitation. Any liability of the Company or its
subsidiaries to any Participant with respect to any Award shall be based solely
on contractual obligations created by the Plan and the Agreement.
(b) Indemnification. In addition to such other rights of indemnification
as they may have as Directors or officers, Directors and officers to whom
authority to act for the Board or the Company is delegated shall be indemnified
by the Company against all reasonable expenses, including attorneys' fees,
actually and necessarily 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 right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such
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person is liable for gross negligence, bad faith or intentional misconduct in
duties; provided, however, that within sixty (60) days after the institution of
such action, suit or proceeding, such person shall offer to the Company, in
writing, the opportunity at its own expense to handle and defend the same.
11. MISCELLANEOUS
(a) Acceptance of Terms and Conditions of Plan. By accepting any benefit
under the Plan, each Participant and each person claiming under or through such
Participant shall be conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions of the Plan and
any action taken under the Plan by the Company, the Board or the Board, in any
case in accordance with the terms and conditions of the Plan.
(b) No Effect on Other Arrangements. Neither the adoption of the Plan nor
anything contained herein shall affect any other compensation or incentive plans
or arrangements of the Company or its subsidiaries, or prevent or limit the
right of the Company or any subsidiary to establish any other forms of
incentives or compensation for their Employees or grant or assume restricted
stock or other rights otherwise than under the Plan.
(c) Choice of Law. The Plan shall be governed by and construed in
accordance with the laws of the State of California, without regard to such
state's conflict of law provisions, and, in any event, except as superseded by
applicable Federal law.
(d) Compliance with Section 16 of the Exchange Act. So long as a class of
the Company's equity securities is registered under Section 12 of the Exchange
Act, the Company intends that the Plan shall comply in all respects with Rule
16b-3. If during such time any provision of this Plan is found not to be in
compliance with Rule 16b-3, that provision shall be deemed to have been amended
or deleted as and to the extent necessary to comply with Rule 16b-3, and the
remaining provisions of the Plan shall continue in full force and effect without
change. All transactions under the Plan during such time shall be executed in
accordance with the requirements of Section 16 of the Exchange Act and the
applicable regulations promulgated thereunder.
12. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Amendment of Plan. The Board may, at any time and with or without
prior notice, amend, alter, suspend, or terminate the Plan, retroactively or
otherwise; provided, however, that unless otherwise required by law or
specifically provided herein, no such amendment, alteration, suspension, or
termination shall be made that would materially impair the previously accrued
rights of any Participant with respect to his or her Award without his or her
written consent.
(b) Amendment of Awards. The Board may amend the terms of any Award
previously granted, including any Agreement, retroactively or prospectively, but
no such amendment shall materially impair the previously accrued rights of any
Participant with respect to any such Award without his or her written consent.
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(c) Automatic Termination of Plan. The Plan shall terminate on the date
all shares of Stock subject to the Plan have been delivered pursuant to the
Plan's provisions, and no such shares are any longer subject to any Restriction
Period.
13. EFFECTIVE DATE OF THE PLAN.
The effective date of the Plan shall be determined by the Board.
12
