EXHIBIT 10.49
AMENDMENT 1 TO STOCK MATCHING AGREEMENT
This Amendment 1 to Stock Matching Agreement ("Amendment 1") is made
and entered into effective March 6, 2002, by and between XXXXX XXXXXX
INCORPORATED, a Delaware corporation (the "Company") and XXXXX XXXXXXXX XXXXX
(the "Executive").
WHEREAS, the Board of Directors of the Company and the
Executive desire to make certain changes to that certain Stock Matching
Agreement dated as of March 1, 2001, by and between the Company and the
Executive (the "Stock Matching Agreement"), providing the Executive
with additional time to purchase the Company's Common Stock;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the Company and the Executive
hereby agree as follows: the phrase "at the close of business on the
first anniversary of the Employment Date" be changed to read "at the
close of business on September 2, 2002" in Sections 1, 3,5 and 6 of the
Stock Matching Agreement.
All capitalized terms in this Amendment 1 shall have the definition
ascribed to those terms in the Stock Matching Agreement. The Stock Matching
Agreement continues in full force and effect, except as amended hereby. This
Amendment 1 may be executed in counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same
instrument.
EXECUTED effective as of the day and year first written above.
Company: Executive:
XXXXX XXXXXX INCORPORATED
By:
-------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx XXXXX XXXXXXXX XXXXX
Senior Vice President and
Chief Operating Officer
XXXXX XXXXXX INCORPORATED
RESTATED 1987 STOCK OPTION PLAN
(AMENDED AS OF OCTOBER 24, 1990)
ARTICLE I
INTRODUCTION
1. Purpose. This Restated 1987 Stock Option Plan, which shall be known as the
"1987 Stock Option Plan" and which is hereinafter referred to as the "Plan," is
intended to promote the interests of Xxxxx Xxxxxx Incorporated ("Company") and
its stockholders by encouraging employees of the Company, its subsidiaries and
affiliated entities and non-employee directors of the Company to acquire or
increase their equity interest in the Company, thereby giving them an added
incentive to work toward the continued growth and success of the Company. The
Board of Directors also contemplates that through the adoption of the Plan, the
Company, its subsidiaries and affiliated entities will be better able to compete
for the services of personnel needed for the continued growth and success of the
Company. The Plan is a restatement of the Xxxxx Xxxxxx Incorporated 1987
Employee Stock Option Plan and incorporates amendments thereto which become
effective upon approval by the Company's stockholders.
2. Shares Subject to the Plan. Subject to adjustment as provided in Article II,
Paragraph 3(e), Article III, Paragraph 3(e), and Article IV, Paragraph 5(e), the
aggregate number of shares of Common Stock, $1 par value per share, of the
Company ("Common Stock") to be delivered upon exercise of all options granted
under the Plan shall not exceed 6,500,000 shares. In the event the number of
shares to be delivered upon the exercise in full of any option granted under the
Plan is reduced for any reason whatsoever or in the event any option granted
under the Plan can no longer under any circumstances be exercised, the number of
shares no longer subject to such option shall thereupon be released from such
option and shall thereafter be available to be re-optioned under the Plan.
Shares issued pursuant to the exercise of options granted under the Plan shall
be fully paid and non-assessable.
3. Administration of the Plan. Subject to the provisions of the Plan, the
Compensation Committee of the Board of Directors of the Company (the
"Committee") shall interpret the Plan and all options granted under the Plan,
shall make such rules as it deems necessary for the proper administration of the
Plan, shall make all other determinations necessary or advisable for the
administration of the Plan and shall correct any defect or supply any omission
or reconcile any inconsistency in the Plan or in any option granted under the
Plan in the manner and to the extent that the Committee deems desirable to carry
the Plan or any option into effect. Any action taken or determination made by
the Committee pursuant to this and the other paragraphs of the Plan shall be
conclusive on all parties. The act or determination of a majority of the
Committee shall be deemed to be the act or determination of the Committee.
The Committee shall consist of at least three members of the Board of
Directors of the Company appointed by and holding office during the pleasure of
the Board of Directors of the Company. Other than options granted to
Non-Employee Directors (as hereinafter defined) pursuant to Article IV, no
options may be granted under the Plan to any member of the Committee during the
term of his membership on the Committee. No person shall be eligible to serve on
the Committee unless he is then a "disinterested person" within the meaning of
Paragraph (d)(3) of Rule 16b-3 of the Securities and Exchange Commission ("Rule
16b-3") promulgated under the Securities Exchange Act of 1934, as amended (the
"Act"), if and as the Rule is then in effect.
4. Amendment and Discontinuance of the Plan. The Board of Directors of the
Company may amend, suspend or terminate the Plan; provided, however, that each
such amendment of the Plan (a) extending the period within which options may be
granted under the Plan, (b) increasing the number of shares of Common Stock to
be optioned under the Plan except as provided in Article II, Paragraph 3(e),
Article III, Paragraph 3(e), and Article IV, Paragraph 5(e), (c) reducing the
exercise prices per share provided in the Plan, (d) changing the class of
employees to whom options may be granted under Article II or III, (e) modifying
the provisions of Article IV, or (f) granting options to Non-Employee Directors
other than pursuant to Article IV, shall, in each case, be subject to approval
by the stockholders of the Company; provided, further, however, that no
amendment, suspension or termination of the Plan may cause the Plan to fail to
meet the requirements of Rule 16b-3 or may, without the consent of the holder of
an option granted under Article II, III, or IV, terminate such option or
adversely affect such person's rights in any material respect.
5. Granting of Options to Employees. The Committee shall have authority to
grant, prior to the expiration date of the Plan, to such eligible employees and
officers as may be selected by it ("Employee Optionees"), options to purchase,
on the terms and conditions hereinafter set forth in Articles II and III,
authorized but unissued, or reacquired, shares of Common Stock. The Committee
shall also have authority to determine whether such options granted to Employee
Optionees are granted pursuant to Article II or Article III, as hereinafter set
forth. Options granted to Employee Optionees under Article III shall be
"incentive stock options" as defined in Section 422A of the Internal Revenue
Code of 1986, as amended ("Code"), and are hereinafter referred to as "incentive
stock options." All other options granted to Employee Optionees under the Plan
shall be granted pursuant to Article II, and are hereinafter referred to as
"nonqualified options." In selecting Employee Optionees, and in determining the
number of shares to be covered by each option granted to Employee Optionees the
Committee may consider the office or position held by the Employee Optionee, the
Employee Optionee's degree of responsibility for and contribution to the growth
and success of the Company, the Employee Optionee's length of service, age,
promotions, potential and any other factors which it may consider relevant.
6. Granting of Options to Non-Employee Directors. All options granted to
Non-Employee Directors shall be options to purchase, on the terms and conditions
hereinafter set forth in Article IV, authorized but unissued, or reacquired,
shares of Common Stock and shall be nonqualified options.
7. Effective Date. The Plan shall become effective as of January 28, 1987 and
shall expire on November 15, 1996.
8. Miscellaneous. All references in the Plan to "Articles," "Paragraphs," and
other subdivisions refer to the corresponding Articles, Paragraphs, and
subdivisions of the Plan.
9. Rule 16b-3 Compliance. The Company intends:
(a) that the Plan meet the requirements of Rule 16b-3;
(b) that participation by Non-Employee Directors under Article IV of
the Plan will not prohibit them from being "disinterested persons" within the
meaning of Rule 16b-3(d)(3) with respect to administration of the Plan or with
respect to administration of any other plan of the Company;
(c) that transactions of the type specified in the first paragraph of
Rule 16b-3 by Non-Employee Directors pursuant to Article IV of the Plan will be
exempt from the operation of Section 16(b) of the Act; and
(d) that transactions of the type specified in the first paragraph of
Rule 16b-3 by officers of the Company (whether or not they are directors)
pursuant to the Plan will be exempt from the operation of Section 16(b) of the
Act. In all cases, the terms, provisions, conditions and limitations of the Plan
shall be construed and interpreted consistent with the Company's intent as
stated in this Article I, Paragraph 9.
ARTICLE II
NONQUALIFIED STOCK OPTIONS
1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive nonqualified options under this Article II.
2. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each nonqualified option granted
under Article II shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the lesser of (i) the per share price of the
last sale of Common Stock on the trading day prior to the grant of such option,
and (ii) the arithmetic average of the closing prices per share of the Common
Stock on all days on which such stock was traded during the 90-day period before
the date of grant. The exercise price for each nonqualified option granted under
Article II shall be subject to adjustment as provided in Article II, Paragraph
3(e).
3. Terms and Conditions of Options. Nonqualified options granted under Article
II shall be in such form as the Committee may from time to time approve. Options
granted under Article II shall be subject to the following terms and
conditions and may contain such additional terms and conditions, not
inconsistent with Article II, as the Committee shall deem desirable:
(a) Option Period and Conditions and limitations on Exercise. Subject
to Article II, Paragraph 4, no nonqualified option granted under Article II
shall be exercisable with respect to any of the shares subject to the option
later than the date which is ten years after the date of grant (the
"Nonqualified Option Expiration Date"). To the extent not prohibited by other
provisions of the Plan, each nonqualified option granted under Article II shall
be exercisable at such time or times as the Committee in its discretion may
determine at or prior to the time such option is granted; provided, however,
that unless the Committee determines otherwise, each nonqualified option granted
under Article II shall be exercisable from time to time, in whole or in part, at
any time prior to the Nonqualified Option Expiration Date.
(b) Termination of Employment and Death. For purposes of Article II and
each nonqualified option granted under Article II, an Employee Optionee's
employment shall be deemed to have terminated at the close of business on the
day preceding the first date on which he is no longer for any reason whatsoever
(including his death) employed by the Company or a subsidiary or affiliated
entity of the Company. If an Employee Optionee's employment is terminated for
any reason whatsoever (including his death), each nonqualified option granted to
him under Article II and all of his rights thereunder shall wholly and
completely terminate:
(1) At the time the Employee Optionee's employment is
terminated, with respect to options not then exercisable; or
(2) At the time the Employee Optionee's employment is
terminated if his employment is terminated because he is discharged for
fraud, theft or embezzlement committed against the Company or a
subsidiary, affiliated entity or customer of the Company, or for
conflict of interest (other than legitimate competition); or
(3) At the expiration of a period of one year after the
Employee Optionee's death (but in no event later than the Nonqualified
Option Expiration Date) if the Employee Optionee's employment is
terminated by reason of his death. To the extent exercisable, a
nonqualified option granted under Article II may be exercised by the
Employee Optionee's estate or by the person or persons who acquire the
right to exercise his option by bequest or inheritance with respect to
any or all of the shares remaining subject to his option at the time of
his death; or
(4) Unless it is otherwise provided in the option agreement,
at the expiration of a period of three years after the Employee
Optionee's employment is terminated because of retirement or disability
(but in no event later than the Nonqualified Option Expiration Date);
or
(5) At the expiration of a period of three months after the
Employee Optionee's employment is terminated (but in no event later
than the Nonqualified Option Expiration Date) if the Employee
Optionee's employment is terminated for any reason other than his
death, retirement, disability or the reasons specified in Article II,
Paragraph (b)(2), with respect to options then exercisable.
(c) Manner of Exercise. In order to exercise a nonqualified option
granted under Article II, the person or persons entitled to exercise it shall
deliver to the Company payment in full for the shares being purchased, together
with any required withholding tax. The payment of the exercise price for each
option granted under Article II and any required withholding tax shall either be
in cash or through delivery to the Company of shares of Common Stock, or by any
combination of cash or shares; the value of each share of Common Stock delivered
shall be deemed to be equal to the per share price of the last sale of Common
Stock on the trading day prior to the date the option is exercised, based on the
composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.
(d) Options Not Transferable. No nonqualified option granted under
Article II shall be transferable otherwise than by will or by the laws of
descent and distribution and, during the lifetime of the Employee Optionee to
whom any such option is granted, it shall be exercisable only by the Employee
Optionee. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
nonqualified option granted under Article II, or any right thereunder, contrary
to the provisions hereof, shall be void and ineffective, shall give no right to
the purported transferee, and shall, at the sole discretion of the Committee,
result in forfeiture of the option with respect to the shares involved in such
attempt.
(e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article II (including shares as to
which all outstanding nonqualified options granted under Article II, or portions
thereof then unexercised, shall be exercisable), to the end that after such
event the shares subject to Article II of the Plan and each Employee Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in an outstanding nonqualified option granted under
Article II shall be made without change in the total price applicable to he
option or the unexercised portion of the option (except for any change in the
aggregate price resulting from rounding-off of share quantities or prices) and
with any necessary corresponding adjustment in exercise price per share. Any
such adjustment made by the Committee shall be final and binding upon all
Employee Optionees, the Company, and all other interested persons.
(f) Listing and Registration of Shares. Each nonqualified option
granted under Article II shall be subject to the requirement that if at any time
the Committee determines, in its discretion, that the listing, registration, or
qualification of the shares subject to such option under any securities exchange
or under any state or Federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the issue or purchase of shares thereunder, such option may not
be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained and the
same shall have been free of any conditions not acceptable to the Committee.
4. Amendment. The Committee may, with the consent of the person or persons
entitled to exercise any outstanding nonqualified option granted under Article
II, amend such nonqualified option; provided, however, that any such amendment
increasing the number of shares of Common Stock subject to such option (except
as provided in Article II, Paragraph 3(e)) or reducing the exercise price per
share of such option (except as provided in Article II, Paragraph 3(e)) shall in
each case be subject to approval by the stockholders of the Company. The
Committee may at any time or from time to time, in its discretion, in the case
of any nonqualified option previously granted under Article II which is not then
immediately exercisable in full, accelerate the time or times at which such
option may be exercised to any earlier time or times. The Committee, in its
absolute discretion, may grant to holders of outstanding nonqualified options
granted under Article II, in exchange for the surrender and cancellation of such
options, new options having exercise prices lower (or higher) than the exercise
price provided in the options so surrendered and cancelled and containing such
other terms and conditions as the Committee may deem appropriate.
5. Other Provisions.
(a) The person or persons entitled to exercise, or who have exercised,
a nonqualified option granted under Article II shall not be entitled to any
rights as a stockholder of the Company with respect to any shares subject to
such option until he shall have become the holder of record of such shares.
(b) No nonqualified option granted under Article II shall be construed
as limiting any right which the Company or any subsidiary or affiliated entity
of the Company may have to terminate at any time, with or without cause, the
employment of any person to whom such option has been granted.
(c) Notwithstanding any provision of the Plan or the terms of any
nonqualified option granted under Article II, the Company shall not be required
to issue any shares hereunder if such issuance would, in the judgment of the
Committee, constitute a violation of any state or Federal law or of the rules or
regulations of any governmental regulatory body.
ARTICLE III
INCENTIVE STOCK OPTIONS
1. Eligible Employees. Key employees and officers (whether or not they are
directors) of the Company, its subsidiaries and affiliated entities shall be
eligible to receive incentive stock options under this Article III. As used in
this Article III, the terms "Parent Corporation" and "Subsidiary Corporation"
shall have the meanings ascribed to them in Section 425 of the Code.
2. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each incentive stock option granted
under Article III shall be equal to the fair market value per share of Common
Stock at the time of grant as determined by the Committee, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and shall not be less than the per share price of the last sale of
Common Stock on the trading day prior to the grant of such option; provided,
however, that in the case of an Employee Optionee who, at the time such option
is granted, owns (within the meaning of Section 425(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of its Parent Corporation or any Subsidiary Corporation, then the exercise price
per share shall be at least 110% of the fair market value per share of Common
Stock at the time of grant. The exercise price for each incentive stock option
shall be subject to adjustment as provided in Article III, Paragraph 3(e).
3. Terms and Conditions of Options. Incentive stock options granted under
Article III shall be in such form as the Committee may from time to time
approve. Options granted under Article III shall be subject to the following
terms and conditions and may contain such additional terms and conditions, not
inconsistent with Article III, as the Committee shall deem desirable:
(a) Option Period and Conditions and Limitations on Exercise. Subject
to Article III, Paragraph 4, no incentive stock option granted under Article III
shall be exercisable with respect to any of the shares subject to such option
later than the date which is ten years after the date of grant; provided,
however, that in the case of an Employee Optionee who, at the time such option
is granted, owns (within the meaning of Section 425(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of its Parent Corporation or any Subsidiary Corporation, then such option shall
not be exercisable with respect to any of the shares subject to such option
later than five years after the date of grant. The date on which an incentive
stock option ultimately becomes unexercisable under the previous sentence is
hereinafter referred to as the "ISO Expiration Date." To the extent not
prohibited by other provisions of the Plan, each incentive stock option granted
under Article III shall be exercisable at such time or times as the Committee in
its discretion may determine at or prior to the time such option is granted;
provided, however, that unless the Committee determines otherwise, each
incentive stock option granted under Article III shall be exercisable from time
to time, in whole or in part, subject to the dollar limitations set forth in
Article III, Paragraph 3(g), at any time prior to the ISO Expiration Date.
(b) Termination of Employment and Death. For purposes of Article III
and each incentive stock option granted under Article III, an Employee
Optionee's employment shall be deemed to have terminated at the close of
business on the day preceding the first date on which he is no longer for any
reason whatsoever (including his death) employed by the Company or a subsidiary
or affiliated entity of the Company. If an Employee Optionee's employment is
terminated by any reason whatsoever (including his death), each incentive stock
option granted to him and all of his rights thereunder shall wholly and
completely terminate:
(1) At the time the Employee Optionee's employment is
terminated, with respect to options not then exercisable; or
(2) At the time the Employee Optionee's employment is
terminated if his employment is terminated because he is discharged for
fraud, theft or embezzlement committed against the Company or a
subsidiary, affiliated entity or customer of the Company, or for
conflict of interest (other than legitimate competition); or
(3) At the expiration of a period of one year after the
Employee Optionee's death (but in no event later than the ISO
Expiration Date) if the Employee Optionee's employment is terminated by
reason of his death. To the extent exercisable, an incentive stock
option granted under Article III of the Plan may be exercised by the
Employee Optionee's estate or by the person or persons who acquire the
right to exercise his option by bequest or inheritance with respect to
any or all of the shares remaining subject to his option at the time of
his death; or
(4) Unless it is otherwise provided in the option agreement,
at the expiration of a period of three years after the Employee
Optionee's employment is terminated because of retirement or disability
(but in no event later than the ISO Expiration Date); or
(5) At the expiration of a period of three months after the
Employee Optionee's employment is terminated (but in no event later
than the ISO Expiration Date) if the Employee Optionee's employment is
terminated for any other reason than his death, retirement, disability
or the reasons specified in Article III, Paragraph (b)(2), with respect
to options then exercisable.
In the event and to the extent that an incentive stock option
granted under Article III is not exercised (i) within three months
after the Employee Optionee's employment is terminated because of
retirement or disability not within the meaning of Section 22(e)(3) of
the Code or (ii) within one year after the Employee Optionee's
employment is terminated because of disability within the meaning of
Section 22(e)(3) of the Code, such option shall be taxed as a
nonqualified option and shall be subject to the manner of exercise
provisions described in Article II, Paragraph 3(c).
(c) Manner of Exercise. In order to exercise an incentive stock option
granted under Article III, the person or persons entitled to exercise it shall
deliver to the Company payment in full for the shares being purchased. The
payment of the exercise price for each option granted under Article III shall
either be in cash or through delivery to the Company of shares of Common Stock,
or by any combination of cash or shares; the value of each share of Common Stock
delivered shall be deemed to be equal to the per share price of the last sale of
Common Stock on the trading day prior to the date the option is exercised, based
on the composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.
(d) Options Not Transferable. No incentive stock option granted under
Article III shall be transferable otherwise than by will or by the laws of
descent and distribution and, during the lifetime of the Employee Optionee to
whom any option is granted, it shall be exercisable only by such Employee
Optionee. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
incentive stock option granted under Article III, or any right thereunder,
contrary to the provisions hereof, shall be void and ineffective, shall give no
right to the purported transferee, and shall, at the sole discretion of the
Committee, result in forfeiture of the option with respect to the shares
involved in such attempt.
(e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article III (including shares as to
which all outstanding incentive stock options granted under Article III, or
portions thereof then unexercised, shall be exercisable), to the end that after
such event the shares subject to Article III of the Plan and each Employee
Optionee's proportionate interest shall be maintained as before the occurrence
of such event. Such adjustment in an outstanding incentive stock option shall be
made without change in the total price applicable to the option or the
unexercised portion of the option (except for any change in the aggregate price
resulting from rounding-off of share quantities or prices) and with any
necessary corresponding adjustment in exercise price per share. Any such
adjustment made by the Committee shall be final and binding upon all Employee
Optionees, the Company, and all other interested persons. Any adjustment of an
incentive stock option under this paragraph shall be made in such manner as not
to constitute a "modification" within the meaning of Section 425(h)(3) of the
Code.
(f) Listing and Registration of Shares. Each incentive stock option
granted under Article III shall be subject to the requirement that if at any
time the Committee determines, in its discretion, that the listing,
registration, or qualification of the shares subject to such option upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the issue or purchase of shares thereunder,
such option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained and the same shall have been free of any conditions not acceptable to
the Committee.
(g) Limitation on Amount. Notwithstanding any other provision of the
Plan, the aggregate fair market value (determined as of the time the incentive
stock option is granted) of the Common Stock with respect to which incentive
stock options are exercisable for the first time by an Employee Optionee during
any calendar year cannot exceed $100,000 as provided under Section 422A(b)(7) of
the Code.
4. Amendment. The Committee may, with the consent of the person or persons
entitled to exercise any outstanding incentive stock option granted under
Article III, amend such incentive stock option; provided, however, that any such
amendment increasing the number of shares of Common Stock subject to such option
(except as provided in Article III, Paragraph 3(e)) or reducing the exercise
price per share of such option (except as provided in Article III, Paragraph
3(e)) shall in each case be subject to approval by the stockholders of the
Company. Subject to Article III, Paragraph 3(g), the Committee may at any time
or from time to time, in its discretion, in the case of any incentive stock
option previously granted under
Article III which is not then immediately exercisable in full, accelerate the
time or times at which such option may be exercised to any earlier time or
times.
5. Other Provisions.
(a) The person or persons entitled to exercise, or who have exercised,
an incentive stock option granted under Article III shall not be entitled to any
rights as a stockholder of the Company with respect to any shares subject to
such option until he shall have become the holder of record of such shares.
(b) No incentive stock option granted under Article III shall be
construed as limiting any right which the Company or any subsidiary or
affiliated entity of the Company may have to terminate at any time, with or
without cause, the employment of any person to whom such option has been
granted.
(c) Notwithstanding any provision of the Plan or the terms of any
incentive stock option granted under Article III, the Company shall not be
required to issue any shares hereunder if such issuance would, in the judgment
of the Committee, constitute a violation of any state or Federal law or of the
rules or regulations of any governmental regulatory body.
(d) The Committee may require any person who exercises an incentive
stock option to give prompt notice to the Company of any disposition of shares
of Common Stock acquired upon exercise of an incentive stock option within one
year after the transfer of shares to such person.
ARTICLE IV
NON-EMPLOYEE DIRECTOR STOCK OPTIONS
1. Eligible Persons. Persons who are members of the Board of Directors of the
Company but are neither employees nor officers of the Company, its subsidiaries
or affiliated entities ("Non-Employee Directors") shall be eligible to receive
options under, and solely under, this Article IV.
2. Initial Granting of Options to Non-Employee Directors. Subject to the
limitation of the number of shares of Common Stock set forth in Article I,
Paragraph 2, each person who is a Class I or II Non-Employee Director on the
date of the Company's 1989 Annual Meeting of Stockholders and each Class III
Non-Employee Director elected at such meeting (collectively the "1989
Non-Employee Directors"), is hereby granted, effective on such date (which date
shall be the date of grant for purposes hereof), a nonqualified option to
purchase 2,000 shares of Common Stock. Subject to the limitation of the number
of shares of Common Stock set forth in Article I, Paragraph 2, each Non-Employee
Director who is elected to the Board of Directors of the Company after the date
of the Company's 1989 Annual Meeting of Stockholders (excluding the 1989
Non-Employee Directors), is hereby granted, effective on the date of his initial
election (which date shall be the date of grant for purposes hereof), a
nonqualified option to purchase 2,000 shares of Common Stock.
3. Annual Granting of Options to Non-Employee Directors. Subject to the
limitation of the number of shares of Common Stock set forth in Article I,
Paragraph 2, a nonqualified option to purchase 1,000 shares of Common Stock is
hereby granted, effective the fourth Wednesday of October of 1989 and each year
thereafter until the expiration of the Plan, to each person who is a
Non-Employee Director on each such date (which date shall be the date of grant
for purposes hereof).
4. Calculation of Exercise Price. The exercise price to be paid for each share
of Common Stock deliverable upon exercise of each option granted under Article
IV shall be equal to the lesser of (a) the per share price of the last sale of
Common Stock on the trading day prior to the grant of such option, based on the
composite transactions in the Common Stock as reported by The Wall Street
Journal, and (b) the arithmetic average of the closing prices per share of
Common Stock on all days in which such stock was traded during the 90-day period
before the date of grant, based on the composite transactions in the Common
Stock as reported by The Wall Street Journal. The exercise price for each option
granted under Article IV shall be subject to adjustment as provided in Article
IV, Paragraph 5(e).
5. Terms and Conditions of Options. Subject to the provisions of this Article
IV, Paragraph 5, options granted under Article IV shall be in such form as the
Committee may from time to time approve. Options granted under Article IV shall
be subject to the following terms and conditions:
(a) Option Period and Conditions and Limitations on Exercise. Each
option granted under Article IV shall be exercisable from time to time, in whole
or in part, at any time after one year from the date of grant and prior to the
date which is seven years after the date of grant (the "Option Expiration
Date").
(b) Termination of Directorship and Death. For purposes of Article IV
and each option granted under Article IV, a Non-Employee Director's directorship
shall be deemed to have terminated at the close of business on the day preceding
the first date on which he ceases to be a member of the Board of Directors of
the Company for any reason whatsoever (including his death). If a Non-Employee
Director's directorship is terminated for any reason whatsoever (including his
death), each option granted to him under Article IV and all of his rights
thereunder shall wholly and completely terminate:
(1) At the time the Non-Employee Director's directorship is
terminated if termination occurs within the one-year period following
the date of grant; or
(2) At the time the Non-Employee Director's directorship is
terminated if his directorship is terminated as a result of his removal
from the Board of Directors for cause (other than disability or in
accordance with the provisions of the Company's Bylaws regarding
automatic termination of directors' terms of office); or
(3) At the expiration of a period of one year after the
Non-Employee Director's death (but in no event later than the Option
Expiration Date) if the Non-Employee Director's directorship is
terminated by reason of his death. To the extent exercisable, an option
granted under Article IV may be exercised by the Non-Employee
Director's estate or by the person or persons who acquire the right to
exercise his option by bequest or inheritance with respect to any or
all of the shares remaining subject to his option at the time of his
death; or
(4) At the expiration of a period of three years after the
Non-Employee Director's directorship is terminated as a result of such
person's resignation or removal from the Board of Directors of the
Company because of disability or in accordance with the provisions of
the Company's Bylaws regarding automatic termination of directors'
terms of office (but in no event later than the Option Expiration
Date); or
(5) At the expiration of a period of three months after the
Non-Employee Director's directorship is terminated (but in no event
later than the Option Expiration Date) if the Non-Employee Director's
directorship is terminated for any reason other than the reasons
specified in Article IV, Paragraphs (b)(2) through (b)(4).
(c) Manner of Exercise. In order to exercise an option granted under
Article IV, the person or persons entitled to exercise it shall deliver to the
Company payment in full for the shares being purchased, together with any
required withholding tax. The payment of the exercise price for each option
granted under Article IV and any required withholding tax shall either be in
cash or through delivery to the Company of shares of Common Stock, or by any
combination of cash or shares; the value of each share of Common Stock delivered
shall be deemed to be equal to the per share price of the last sale of Common
Stock on the trading day prior to the date the option is exercised, based on the
composite transactions in the Common Stock as reported in The Wall Street
Journal. If the Committee so requires, such person or persons shall also deliver
a written representation that all shares being purchased are being acquired for
investment and not with a view to, or for resale in connection with, any
distribution of such shares.
(d) Options Not Transferable. No option granted under Article IV shall
be transferable otherwise than by will or by the laws of descent and
distribution and, during the lifetime of the Non-Employee Director to whom any
such option is granted, it shall be exercisable only by such Non-Employee
Director. Any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of, or to subject to execution, attachment or similar process, any
option granted under Article IV, or any right thereunder, contrary to the
provisions hereof, shall be void and ineffective, shall give no right to the
purported transferee, and shall, at the sole discretion of the Committee, result
in forfeiture of the option with respect to the shares involved in such attempt.
(e) Adjustment of Shares. In the event that at any time after the
effective date of the Plan the outstanding shares of Common Stock are changed
into or exchanged for a different number or kind of shares of the Company or
other securities of the Company by reason of merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or combination
of shares, the Committee shall make an appropriate and equitable adjustment in
the number and kind of shares subject to Article IV (including shares as to
which all outstanding options granted under Article IV, or portions thereof then
unexercised, shall be exercisable), to the end that after such event the shares
subject to Article IV of the Plan and each Non-Employee Director's proportionate
interest shall be maintained as before the occurrence of such event. Such
adjustment
in an outstanding option granted under Article IV shall be made without change
in the total price applicable to the option or the unexercised portion of the
option (except for any change in the aggregate price resulting from rounding-off
of share quantities or prices) and with any necessary corresponding adjustment
in exercise price per share. Any such adjustment made by the Committee shall be
final and binding upon all Non-Employee Directors, the Company, and all other
interested persons.
(f) Listing and Registration of Shares. Each option granted under
Article IV shall be subject to the requirement that if at any time the Committee
determines, in its discretion, that the listing, registration, or qualification
of the shares subject to such option under any securities exchange or under any
state or Federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
issue or purchase of shares thereunder, such option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained and the same shall have been free
of any conditions not acceptable to the Committee.
6. Other Provisions.
(a) The person or persons entitled to exercise, or who have exercised,
an option granted under Article IV shall not be entitled to any rights as a
stockholder of the Company with respect to any shares subject to such option
until he shall have become the holder of record of such shares.
(b) No option granted under Article IV shall be construed as limiting
any right which either the stockholders of the Company or the Board of Directors
of the Company may have to remove at any time, with or without cause, any person
to whom such option has been granted from the Board of Directors of the Company.
(c) Notwithstanding any provision of the Plan or the terms of any
option granted under Article IV, the Company shall not be required to issue any
shares hereunder if such issuance would, in the judgment of the Committee,
constitute a violation of any state or Federal law or of the rules or
regulations of any governmental regulatory body.
