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EXHIBIT 10F
June 28, 1995
Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
In recognition of your resignation, effective June 21, 1995, from your
positions as President and Chief Executive Officer and as an employee and
director of Garnet Resources Corporation ("Garnet") and as an officer and
director of Xxxxxx's subsidiaries, which you hereby confirm, this letter sets
forth the terms of our mutual understanding concerning your severance.
1. We have agreed to provide you with the following severance benefits
which are over and above those to which you would normally be entitled:
(a) You will be paid an amount equal to $203,300, which amount
will be paid in twenty-four equal monthly installments payable on the first
business day of each month commencing with July 1995.
(b) Until June 30, 1997, Garnet shall maintain in full force
and effect, for your continued benefit, the benefits under the $1,000,000 life
insurance policy currently in effect. Garnet shall continue to provide you with
the benefits under the medical and long term disability policies maintained by
Garnet until December 31, 1995. For a period of eighteen months commencing
January 1, 1996, Xxxxxx will pay to you, or at your direction directly to the
insurance carrier, the amount of the premium required to be paid to keep the
medical insurance for the benefit of you and your dependents effective for a
period of eighteen months commencing January 1, 1996 under COBRA.
(c) In consideration of your agreement to relinquish the stock
options held by you and listed on Schedule A attached hereto, Garnet will
deliver to you, simultaneously with the execution of this agreement, a stock
option entitling you to
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purchase 200,000 shares of Garnet Common Stock at an exercise price of $2.50
per share at any time after the date hereof and prior to June 21, 1998, which
option shall be in the form attached hereto as Exhibit A.
2. In consideration of the foregoing benefits:
(a) You agree to be available during the transition period
commencing on the date hereof and ending on December 31, 1995 to perform such
consulting services as the management and directors of Garnet may from time to
time reasonably request. Garnet shall reimburse you for all properly documented
reasonable out-of-pocket expenses incurred in the performance of your duties as
a consultant.
(b) You hereby relinquish all stock options currently held by
you in consideration of the issuance of the option in accordance with paragraph
1(c) above. You acknowledge that no additional severance benefits, bonus
payments, other compensation or reimbursement, except as specifically set forth
above, are payable to you by Garnet, or its subsidiaries or affiliates. You
acknowledge that all payments under paragraph 1 and any gain realized upon the
exercise of the option set forth in paragraph 1(c) will be subject to
applicable statutory withholding taxes.
(c) You, for yourself and for your successors and assigns, do
hereby fully and completely RELEASE, ACQUIT and FOREVER DISCHARGE Garnet, and
its affiliates, subsidiaries or other related entities as well as its
shareholders, officers, directors, employees or agents, from any and all
claims, debts, demands, actions, causes of action, suits, sums of money,
contracts, agreements, judgments and liabilities whatsoever, both in law and in
equity ("claims") of any kind and any character that you might now have, or
could have had, whether in contract, tort or otherwise, including specifically
any claims of discrimination that you may claim in connection with your
employment or the termination thereof. This includes but is not limited to,
claims arising under the federal, state or local laws prohibiting
discrimination on the basis of one's sex, race, age, disability, national
origin, color or religion, or claims growing out of any legal restriction on
Xxxxxx's right to terminate its employees. This also specifically includes the
waiver of any rights or claims arising under the Age Discrimination in
Employment Act of 1967 (29 U.S.C. 621 et seq.). It is also understood that the
execution of this agreement shall be construed as a release and covenant not to
sue, that you will not sue Garnet or any subsidiary, affiliate, officer,
director, employee or committee thereof, or file any claims of any sort with
any administrative agency for anything arising out of your employment, and the
terms of this agreement supersede any and all
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other agreements relating to your employment whether written or oral.
(d) You agree to return to Garnet all documents, records and
other property relating to Garnet and its business which are in your possession
or under your control. You agree not to disclose to anyone any confidential or
non-public information which relates to Garnet or its subsidiaries.
3. Xxxxxx encourages you to carefully review the terms of this
agreement and, if you wish, to seek advice and counsel from an attorney before
signing this agreement.
4. This Agreement shall inure to the benefit of and shall be binding
upon you and your executor, administrator, heirs, personal representatives and
assigns, and Xxxxxx and its successors and assigns; provided, however, that you
shall not be entitled to assign or delegate any of your rights or obligations
hereunder without the prior written consent of Xxxxxx.
5. This Agreement constitutes the entire agreement between the parties
relating to the subject matter hereof. It cannot be altered or amended except
by a writing duly executed by the party against whom such alteration or
amendment is sought to be enforced.
6. As the terms of this agreement were negotiated in the City of New
York at a meeting held therein, this agreement shall in all respects be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed entirely within such state. In the event
of any dispute between the parties relating in any way to this letter or to your
employment by Xxxxxx a proceeding relating to such dispute may be brought only
in the Federal or state courts sitting in the City of New York, to the
jurisdiction and venue of which both parties hereby submit. Process, including
original process in any such proceeding may be served by certified or registered
mail, return receipt requested or by any other lawful means. Costs in any such
proceeding shall be paid by the unsuccessful party as determined by the court
presiding over such proceeding.
7. If any one or more of the provisions contained in this agreement
shall be held illegal or unenforceable, no other provision shall be affected.
We are pleased that we have been able to reach this agreement. After
you have the chance to review this agreement and to consult with your attorney,
if you wish, please sign the enclosed copy and return it to me within 22 days.
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After you have executed and delivered this agreement, you will have
seven (7) days following the date of execution during which time you may revoke
this agreement, provided, however, that, if you elect to return an executed
copy of the document to us before the expiration of 22 days from the date
hereof, you may revoke this agreement at any time before the later to occur of
seven (7) days following the date of execution or 22 days after the date
hereof. If we do not receive a written revocation from you, or your attorney,
prior to the expiration of the period in which you may revoke this agreement,
this agreement will become effective on the date after the expiration of the
applicable revocation period.
GARNET RESOURCES CORPORATION
By /s/ XXXXX X. XXXXXX
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Accepted and Agreed:
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
I acknowledge that I have been given the opportunity to consider this
agreement for at least twenty-one (21) days, that I have been advised to
discuss this agreement with an attorney of my choice, that I have carefully
read and fully understand and agree to all of the provisions of this agreement
and that I am voluntarily entering into this agreement.
Finally, I also understand that I have seven (7) days after I sign this
agreement (or twenty-two days after the date hereof, if later) to change my
mind and that I may revoke this agreement by providing written notice of
revocation to you prior to the expiration of the applicable period.
July 11, 1995 /s/ XXXXXX X. XXXXXX
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Date of Execution Xxxxxx X. Xxxxxx
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SCHEDULE A
DATE OF NUMBER OF NUMBER OF
GRANT SHARES GRANTED SHARES VESTED EXERCISE PRICE
--------- -------------- ------------- --------------
2/ 6/90 54,441 54,441 $11.75
12/ 4/90 50,000 50,000 $ 6.625
12/ 8/92 5,352 3,211 $ 4.00
6/23/93 56,250 22,500 $ 5.75
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EXHIBIT A
GARNET RESOURCES CORPORATION
AGREEMENT RELATING TO STOCK OPTIONS
WHICH ARE NOT "INCENTIVE OPTIONS"
PURSUANT TO THE 1990 STOCK OPTION PLAN
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Option granted in New York, New York, as of June 28, 1995 (hereinafter
referred to as the "Date of Grant") by GARNET RESOURCES CORPORATION (the
"Corporation") to Xxxxxx X. Xxxxxx (the "Grantee"):
1. THE OPTION. Subject to the execution, delivery and effectiveness of
the letter agreement dated June 28, 1995 between the Corporation and the
Grantee (the "Agreement"), the Corporation hereby grants to the Grantee,
effective on the Date of Grant, a stock option (the "Option") to purchase, on
the terms and conditions herein set forth, up to 200,000 of the Corporation's
fully paid, non-assessable shares of Common Stock, par value $0.01 per share
(the "Shares"), at the option price set forth in Section 2 below.
The Option is granted pursuant to the Agreement and the Corporation's
1990 Stock Option Plan (the "Plan"), a copy of which is delivered herewith by
the Corporation and receipt thereof is acknowledged by the Grantee. The Option
is subject in its entirety to all the applicable provisions of the Agreement
and the Plan which are incorporated herein by reference. The Option is a
"Non-incentive Stock Option" within the meaning of Section 2 of the Plan.
2. THE PURCHASE PRICE. The purchase price of the Shares shall be $2.50
per share (the "Option Price").
3. EXERCISE OF OPTION.
(a) Except as otherwise provided in the Plan and this Option Agreement,
and provided the Grantee is not in breach of the Agreement, the Option is
exercisable over a period commencing on the date hereof and ending at the close
of business on June 21, 1998. The Option may be exercised from time to time
during the option period as to the total number of Shares allowable under this
Section 3(a), or any lesser amount thereof. In the event of the death of the
Grantee, this Option may be exercised by the person or persons entitled to do
so under the Grantee's will (a "legatee"), or, if the Grantee shall fail to
make testamentary disposition of this Option, or shall die intestate, by the
Grantee's legal representative (a "legal representative"). If the Grantee shall
die or become disabled within the meaning of Section
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22(e)(3) of the Internal Revenue Code of 1986, as amended, during the period in
which this Option is exercisable, the Stock Option and Compensation Committee
may, in its discretion, extend the period in which this Option may be
exercised. If this Option shall extend to 100 or more Shares, then this Option
may not be exercised for less than 100 Shares at any one time, and if this
Option shall extend to less than 100 Shares, then this Option must be exercised
for all such Shares at one time.
(b) Not less than five days nor more than thirty days prior to the date
upon which all or any portion of the Option is to be exercised, the person
entitled to exercise the Option shall deliver to the Corporation written notice
(the "Notice") of his election to exercise all or a part of the Option, which
Notice shall specify the date for the exercise of the Option and the number of
Shares in respect of which the Option is to be exercised. The date specified in
the Notice shall be a business day of the Corporation.
(c) On the date specified in the Notice, the person entitled to
exercise the Option shall pay to the Corporation the Option Price of the Shares
in respect of which the Option is exercised, and the minimum amount of any
Federal and state withholding tax and any employment tax. The Option Price shall
be paid in full at the time of purchase, in cash or by check or with stock of
the Corporation, the value of which shall be determined in the same manner as
provided for determining the fair market value of a share of Common Stock
subject to an Incentive Stock Option as set forth in Section 6(a) of the Plan.
If the Option is exercised in accordance with the provisions of the Plan and
this Option Agreement, within three business days of receipt of the purchase
price, the Corporation shall deliver to such person certificates representing
the number of Shares or other securities in respect of which the Option is being
exercised which Shares or other securities shall be registered in his name.
(d) In addition to the procedures set forth above, if Regulation T of
the Securities Exchange Act of 1934, as amended ("Regulation T") is applicable
to the exercise of this Option and so permits, the person entitled to exercise
this Option may direct the Corporation in the Notice to deliver all or any part
of the number of Shares or other securities to which he is entitled upon
exercise of this Option directly to a broker specified in the Notice. In such
event, the Corporation shall accept payment of the Option Price in cash or by
check from such broker on behalf of the person entitled to exercise this Option
and shall take all action necessary to effect the prompt delivery of such
Shares or other securities to such broker in accordance with the provisions of
Regulation T. Notwithstanding the foregoing, the Corporation shall not be
required to comply with the provisions of this Section 3(d) if, as a result of
a change in the accounting rules and regulations applicable to the Corporation,
or the
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interpretation thereof, compliance with the provisions of this Section 3(d)
will result in the imposition of substantial adverse financial reporting
requirements on the Corporation.
(e) In the event of the dissolution, liquidation, merger or
consolidation of the Corporation, or the sale of all or substantially all of
its assets, during the term hereof, the Corporation shall provide the Grantee
with at least 30 days' notice of the consummation of any of the events referred
to in the preceding sentence, during which period the Grantee may so exercise
the Option.
4. REPRESENTATIONS, WARRANTS AND COVENANTS.
(a) The Grantee represents and warrants that he is acquiring
this Option and, in the event this Option is exercised, the Shares, for
investment, for his own account and not with a view to the distribution
thereof, and that he has no present intention of disposing of this Option or
the Shares or any interest therein or sharing ownership thereof with any other
person or entity.
(b) The Grantee agrees that he will not offer, sell,
hypothecate, transfer or otherwise dispose of any of the Shares unless either:
(i) A registration statement covering the Shares which are to
be so offered has been filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933 (the "Securities
Act") and such sale, transfer or other disposition is accompanied by
a prospectus relating to a registration statement which is in effect
under the Securities Act covering the Shares which are to be sold,
transferred or otherwise disposed of and meeting the requirements of
Section 10 of the Securities Act; or
(ii) Counsel satisfactory to the Corporation renders a reasoned
opinion in writing and addressed to the Corporation, satisfactory in
form and substance to the Corporation and its counsel, that in the
opinion of such counsel such proposed sale, offer, transfer or other
disposition of the Shares is exempt from the provisions of Section 5
of the Securities Act in view of the circumstances of such proposed
offer, sale, transfer or other disposition.
(c) The Grantee acknowledges that (i) the Shares and this
Option constitute "securities" under the Securities Act and/or the Securities
Exchange Act of 1934 and/or the Rules and Regulations promulgated under said
acts; (ii) the Shares must be held indefinitely unless subsequently registered
under the
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Securities Act or an exemption from such registration is available; and (iii)
except as set forth in Section 8 below, the Corporation is not under any
obligation with respect to the registration of the Shares.
(d) The Grantee is advised that he or his legatee or legal
representative, as the case may be and as defined above, may be required to
make an appropriate representation at the time of any exercise of this Option
in form and substance similar to the representations contained herein,
relating to the Shares then being purchased.
5. SUCCESSORS AND ASSIGNS. This Option Agreement shall be binding upon
and shall inure to the benefit of any successor or assign of the Corporation
and, to the extent herein provided, shall be binding upon and inure to the
benefit of the Grantee's legatee or legal representative, as defined above;
provided, however, that under no circumstances shall the rights provided under
Section 8 hereof be transferred to or inure to the benefit of anyone other than
the Grantee, including without limitation the Grantee's legatee or legal
representative.
6. ADJUSTMENT OF OPTIONS.
(a) The number of Shares issuable upon exercise of this Option,
or the amount and kind of other securities issuable in addition thereto or in
lieu thereof upon the occurrence of the events specified in Section 9 of the
Plan, shall be determined and subject to adjustment, as the case may be, in
accordance with the procedures therein specified.
(b) Fractional shares resulting from any adjustment in options
pursuant to this Section may be settled in cash or otherwise as the Stock
Option and Compensation Committee shall determine. Notice of any adjustment in
this Option shall be given by the Corporation to the holder of this Option and
such adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan.
7. EXERCISE AND TRANSFERABILITY OF OPTION. During the lifetime of the
Grantee, this Option is exercisable only by him and shall not be assignable or
transferable by him and no other person shall acquire any rights therein. If
the Grantee shall die during the period in which this Option is exercisable,
his or her legatee or legal representative shall have the rights provided in
Section 3(a) above.
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8. REGISTRATION OF SHARES. In the event that the Shares issued or
issuable pursuant to this Option have not been otherwise registered under the
Securities Act and the Corporation, at any time or from time to time after an
initial offering of its securities registered under the Securities Act for sale
to the public generally (otherwise than in connection with a merger or offering
of its securities in exchange for securities or assets of another person, the
issuance to employees of securities or options or other rights to purchase
securities, and other similar transactions) (an "Offering"), the Corporation
proposes to effect an additional Offering (a "Subject Offering"), the
Corporation shall give written notice thereof to the Grantee, and the Grantee,
by written notice to the Corporation within 30 days after the giving of such
notice by the Corporation, may elect to cause the Corporation to register for
inclusion in the Subject Offering, upon the terms and subject to the conditions
hereof, all or any portion of the Shares held or to be held by the Grantee, as
at the date of filing of the registration statement, and which are or will have
been acquired upon the exercise in whole or in part of the Option, including
such other securities of the Corporation issued in replacement for or in
addition to such Shares pursuant to Section 9 of the Plan (such Shares and
other securities being herein referred to collectively as "Registrable Stock").
Such notice shall set forth the quantity of Registrable Stock sought to be
included in the Subject Offering and the intended manner of distribution
thereof; provided that, if the Subject Offering is to be underwritten, the
Registrable Stock may be sold only to or through the underwriter or
underwriters acting in respect of the Subject Offering. If and to the extent
that the underwriter or underwriters acting in respect of the Subject Offering
reasonably determine that the inclusion of the Registrable Stock may
substantially prejudice or hinder the consummation of the Subject Offering, the
amount of Registrable Stock which the Grantee shall be entitled to offer
therein shall be reduced or eliminated. Notwithstanding the foregoing, the
Corporation shall have the right, after the giving of notice of a proposed
Subject Offering hereunder and regardless of whether the Grantee shall have
requested the inclusion of any Registrable Stock therein, to elect not to file
such proposed registration statement, or to withdraw the same after the filing
but prior to the effective date thereof. Subject to the foregoing, the
Corporation shall use its best efforts to cause the registration statement
filed in respect of each Subject Offering including shares of Registrable Stock
hereunder to become effective and to remain effective for a period of at least
90 days, or for such greater period as may be required by law for the delivery
of a prospectus, and to qualify the Registrable Stock for sale in each state
wherein such qualification is requested by the Grantee, provided that the
Corporation shall not be obligated to make any changes in its capital structure
necessary to effect such qualification in any jurisdiction nor be required to
execute or file any general consent to service of process nor to qualify as a
foreign
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corporation to do business under the laws of any such jurisdiction. Upon
electing to participate in any Subject Offering hereunder, the Grantee shall
furnish such information and execute such documents as may be required by the
Securities and Exchange Commission and other regulatory authorities or otherwise
reasonably requested by the Corporation, and shall enter into an agreement with
the Corporation containing customary provisions for mutual indemnification
against liabilities associated with the offering. The Corporation shall bear all
costs and expenses of such registration and qualification, including printing
costs, accounting fees and the fees and expenses of counsel for the Corporation,
provided that the Grantee shall bear the fees and expenses of the Grantee's
counsel, applicable transfer taxes and underwriting discounts, commissions and
fees applicable to the shares of Registrable Stock sold by the Grantee.
If the foregoing is in accordance with the Grantee's understanding and
approved by him, he may so confirm by signing and returning the duplicate of
this Option Agreement delivered for that purpose.
GARNET RESOURCES CORPORATION
By
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Title: Vice President
The foregoing is in accordance with my understanding and is hereby confirmed
and agreed to as of the Date of Xxxxx.
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Xxxxxx X. Xxxxxx
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APPENDIX A
GARNET RESOURCES CORPORATION
1990 STOCK OPTION PLAN, AS PROPOSED TO BE AMENDED
Section 1. Establishments. There is hereby established the Garnet
Resources Corporation 1990 Stock Option Plan ("Plan"), pursuant to which
employees and any other persons who perform substantial services for or on
behalf of GARNET RESOURCES CORPORATION (the "Company"), its subsidiaries and
certain other entities may be granted options to purchase shares of common
stock of the Company, par value $.01 per share ("Common Stock"), and thereby
share in the future growth of the business. Notwithstanding the foregoing, any
director who is not an employee of the Company or any subsidiary of the Company
shall be ineligible to receive options under this Plan. The subsidiaries of the
Company included in this Plan (the "Subsidiaries") shall be any subsidiary of
the Company as defined in Section 425 of the Internal Revenue Code of 1986, as
amended (the "Code").
Section 2. Status of Options. The options which may be granted pursuant
to this Plan will constitute either incentive stock options within the meaning
of Section 422A of the Code ("Incentive Stock Options") or options which are
not Incentive Stock Options ("Non-incentive Stock Options"). Incentive Stock
Options and Non-incentive Stock Options shall be collectively referred to
herein as "Options".
Section 3. Eligibility. All employees of the Company or any of its
Subsidiaries (including officers, whether or not they are members of the Board
of Directors) who are employed at the time of the adoption of this Plan or
thereafter, and any other persons who perform substantial services for or on
behalf of the Company or any of its Subsidiaries, affiliates or any entity in
which the Company has an interest (collectively, the "Grantees") shall be
eligible to be granted Non-incentive Stock Options to purchase shares of Common
Stock under this Plan. All employees of the Company or any of its Subsidiaries
who are employed at the time of adoption of this Plan or thereafter shall be
eligible to be granted Incentive Stock Options under this Plan.
Section 4. Number of Shares Covered by Options; No Preemptive Rights.
The total number of shares which may be issued and sold pursuant to Options
granted under this Plan shall be 1,000,000 shares of Common Stock (or the
number and kind of shares of stock or other securities which, in accordance
with Section 9 of this Plan, shall be substituted for such shares of Common
Stock or to which said shares shall be adjusted; hereinafter, all references to
shares of Common Stock are deemed to be references to said shares or shares so
adjusted.) The issuance of shares upon exercise of an Option shall be free from
any preemptive or preferential right of subscription or purchase on the part of
any stockholder. If any outstanding Option granted under this Plan expires or
is terminated, for any reason, the shares of Common Stock subject to the
unexercised portion of the Option will again be available for Options issued
under this Plan.
Section 5. Administration.
(a) This Plan shall be administered by the committee (the "Committee")
referred to in paragraph (b) of this Section. Subject to the express provisions
of this Plan, the Committee shall have complete authority, in its discretion, to
interpret this Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the respective option
agreements (which need not be identical), to determine the Grantees to whom, and
the times and the prices at which, Options shall be granted, the option periods,
the number of shares of the Common Stock to be subject to each Option and
whether each Option shall be an Incentive Stock Option or a Non-incentive Stock
Option, and to make all other determinations necessary or advisable for the
administration of the Plan. Each Option shall be clearly identified at the time
of grant as to its status. In making such determinations, the Committee may take
into account the nature of the services rendered by the respective Grantees,
their present and potential contributions to the success of the Company and such
other factors as the Committee, in its discretion, shall deem relevant. Nothing
contained in this Plan shall be deemed to give any Grantee any right to be
granted an Option to purchase shares of Common Stock except to the extent and
upon such terms and conditions as may be determined by the Committee. The
Committee's determination on all of the matters referred to in this Section 5
shall be conclusive.
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(b) The Committee shall consist of from three (3) to five (5)
individuals who may, but need not, be members of the Board. The Committee shall
be appointed by the Board, which may at any time, and from time to time, remove
any member of the Committee, with or without cause, appoint additional members
to the Committee and fill vacancies, however caused, in the Committee. A
majority of the members of the Committee shall constitute a quorum and all
determinations of the Committee shall be made by a majority of such quorum. Any
decision or determination of the Committee reduced to writing and signed by all
of the members of the Committee shall be fully as effective as if it had been
made at a meeting duly called and held.
(c) The Committee may at its election provide in any option agreement
covering the grant of Options under this Plan that, upon the exercise of such
Options, the Company will loan to the holder thereof such amount as shall equal
the purchase price of the shares of Common Stock issuable upon such exercise,
such loan to be on terms and conditions appropriate by the Committee.
(d) Notwithstanding any provision hereof to the contrary, the
Committee shall have sole and exclusive authority with respect to the grant of
Options to directors.
Section 6. Terms of Incentive Stock Options. Each Incentive Stock
Option granted under this Plan shall be evidenced by an Incentive Stock Option
Agreement which shall be executed by the Company and by the person to whom such
Incentive Stock Option is granted, and shall be subject to the following terms
and conditions:
(a) The price at which shares of Common Stock covered by each
Incentive Stock Option may be purchased pursuant thereto shall be
determined in each case on the date of grant by the Committee, but shall
be an amount not less than the par value of such shares and not less
than the fair market value of such shares on the date of grant. For
purposes of this Section, the fair market value of shares of Common
Stock on any day shall be (i) in the event the Common Stock is not
publicly traded, the fair market value on such day as determined in good
faith by the Committee or (ii) in the event the Common Stock is publicly
traded, the last sale price of a share of Common Stock as reported by
the principal quotation service on which the Common Stock is listed, if
available, or, if last sale prices are not reported with respect to the
Common Stock, the mean of the high and low asked prices of a share of
Common Stock as reported by such principal quotation service, or, if
there is no such report by such quotation service for such day, such
fair market value shall be the average of (i) the last sale price (or,
if last sale prices are not reported with respect to the Common Stock,
the mean of the high bid and low asked prices) on the day next preceding
such day for which there was a report and (ii) the last sale price (or,
if last sale prices are not reported with respect to the Common Stock,
the mean of the high bid and low asked prices) on the day next
succeeding such day for which there was a report, or as otherwise
determined by the Committee in its discretion pursuant to any reasonable
method contemplated by Section 422A of the Code and any regulations
issued pursuant to that Section.
(b) The option price of the shares to be purchased pursuant to
each Incentive Stock Option shall be paid in full in cash, or by
delivery (i.e. surrender) of shares of Common Stock of the Company then
owned by the Grantee, at the time of the exercise of the Incentive Stock
Option. Shares of Common Stock so delivered will be valued on the day of
delivery for the purpose of determining the extent to which the option
price has been paid thereby, in the same manner as provided for the
purchase price of Incentive Stock Options as set forth in paragraph (a)
of this Section, or as otherwise determined by the Committee, in its
discretion, pursuant to any reasonable method contemplated by Section
422A of the Code and any regulations issued pursuant to that Section.
(c) Each Incentive Stock Option Agreement shall provide that
such Incentive Stock Option may be exercised by the Grantee, in such
parts and at such times as may be specified in such Agreement, within a
period not exceeding ten years after the date on which the Incentive
Stock Option is granted (hereinafter called the "Incentive Stock Option
Period") and, in any event, only during the continuance of the
employee's employment by the Company or any of its Subsidiaries or
during the period of three months after the termination of such
employment to the extent that the right to exercise such Incentive Stock
Option had accrued at the date of such termination; provided, however,
that if Incentive Stock Options as to 100 or more shares are held by a
Grantee, then such Incentive Stock Options may not be exercised for
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less than 100 shares at any one time, and if Incentive Stock Options for
less than 100 shares are held by a Grantee, then Incentive Stock Options
for all such shares must be exercised at one time; and provided,
further, that, if the Grantee, while still employed by the Company or
any of its Subsidiaries, shall die within the Incentive Stock Option
Period, the Incentive Stock Option may be exercised, to the extent
specified in the Incentive Stock Option Agreement, and as herein
provided, but only prior to the first to occur of:
(i) the expiration of the period of one year after the
date of the Grantee's death, or
(ii) the expiration of the Incentive Stock Option
Period, by the person or persons entitled to do so under the
Grantee's will, or, if the Grantee shall fail to make
testamentary disposition of said Incentive Stock Option, or
shall die intestate, by the Grantee's legal representative or
representatives.
(d) Each Incentive Stock Option granted under this Plan shall by
its terms be non-transferable by the Grantee except by will or by the
laws of descent and distribution.
(e) Notwithstanding the foregoing, if an Incentive Stock Option
is granted to a person at any time when such person 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 employer
corporation (or a parent or subsidiary of such corporation within the
meaning of Section 425 of the Code) the price at which each share of
Common Stock covered by such Incentive Stock Option may be purchased
pursuant to such Incentive Stock Option shall not be less than 110% of
the fair market value (determined as in paragraph (a) of this Section)
of the shares of Common Stock at the time the Incentive Stock Option is
granted, and such Incentive Stock Option must be exercised within a
period specified in the Incentive Stock Option Agreement which does not
exceed five years after the date on which such Incentive Stock Option is
granted.
(f) The Incentive Stock Option Agreement entered into pursuant
hereto may contain such other terms, provisions and conditions not
inconsistent herewith as shall be determined by the Committee including,
without limitation, provisions (i) requiring the giving of satisfactory
assurances by the Grantee that the shares are purchased for investment
and not with a view to resale in connection with a distribution of such
shares, and will not be transferred in violation of applicable
securities laws, (ii) restricting the transferability of such shares
during a specified period and (iii) requiring the resale of such shares
to the Company at the option price if the employment of the employee
terminates prior to a specified time. In addition, the Committee, in its
discretion, may afford to holders of Incentive Stock Options granted
under this Plan the right to require the Company to cause to be
registered under the Securities Act of 1933, as amended, for public sale
by the holders thereof, shares of Common Stock subject to such Incentive
Stock Options upon such terms and subject to such conditions as the
Committee may determine to be appropriate.
(g) In the discretion of the Committee, a single Stock Option
Agreement may include both Incentive Stock Options and Non-incentive
Stock Options, or those options may be included in separate stock option
agreements.
Section 7. Terms of Non-incentive Stock Options. Each Non-incentive
Stock Option granted under this Plan shall be evidenced by a Non-incentive
Stock Option Agreement which shall be executed by the Company and by the person
to whom such Non-incentive Stock Option is granted, and shall be subject to the
following terms and conditions:
(a) The price at which shares of Common Stock covered by each
Non-incentive Stock Option may be purchased pursuant thereto shall be an
amount not less than the par value of such shares.
(b) Each Non-incentive Stock Option Agreement shall provide that
such Non-incentive Stock Option may be exercised by the Grantee, in such
parts and at such times as may be specified in such
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Agreement, within a period up to and including ten years and thirty
days after the date on which the Non-incentive Stock Option is
granted.
(c) Each Non-incentive Stock Option granted under this Plan
shall by its terms be non-transferable by the optionee except by will
or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title 1 of the
Employee Retirement Income Security Act, or the rules thereunder.
(d) The Non-incentive Stock Option Agreement entered into
pursuant hereto may contain such other terms, provisions and conditions
not inconsistent herewith as shall be determined by the Committee, in
its sole discretion, including without limitation the terms, provisions
and conditions set forth in Section 6(f) with respect to Incentive
Stock Option Agreements.
Section 8. Limit on Option Amount. Notwithstanding any provision
contained herein, the aggregate fair market value (determined under Section
6(a) as of the time such Incentive Stock Options are granted) of the shares of
Common Stock with respect to which Incentive Stock Options are first
exercisable by any employee during any calendar year (under all stock option
plans of the employee's employer corporation and its parent and subsidiary
corporation within the meaning of Section 425 of the Code) shall not exceed
$100,000. An option may be granted which exceeds this $100,000 limitation, as
long as under then applicable law only the portion of such an option which is
exercisable for shares of Common Stock in excess of the $100,000 limitation
shall be treated as a Non-incentive Stock Option. The limit in this paragraph
shall not apply to options which are designated as Non-incentive Stock Options,
and, except as otherwise provided herein, there shall be no limit on the amount
of such options which may be first exercisable in any year.
Section 9. Adjustment of Number of Shares. In the event that a dividend
shall be declared upon the shares of Common Stock payable in shares of Common
Stock, the number of shares of Common Stock then subject to any Option granted
hereunder, and the number of shares reserved for issuance pursuant to this Plan
but not yet covered by an Option, shall be adjusted by adding to each of such
shares the number of shares which would be distributable thereon if such share
had been outstanding on the date fixed for determining the stockholders entitled
to receive such stock dividend. In the event that the outstanding shares of
Common Stock shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation,
whether through reorganization, recapitalization, stock split-up, combination of
shares, merger or consolidation, then there shall be substituted for each share
of Common Stock subject to any such Option and for each share of Common Stock
reserved for issuance pursuant to the Plan but not yet covered by an Option, the
number and kind of shares of stock or other securities into which each
outstanding share of Common Stock shall be so changed or for which each such
share shall be exchanged; provided, however, that in the event that such change
or exchange results from a merger or consolidation, and in the judgment of the
Board of Directors such substitution cannot be effected or would be
inappropriate, or if the Company shall sell all or substantially all of its
assets, the Company shall use reasonable efforts to effect some other adjustment
of each then outstanding Option which the Board of Directors, in its sole
discretion, shall deem equitable. In the event that there shall be any change,
other than as specified above in this Section 9, in the number or kind of
outstanding shares of Common Stock or of any stock or other securities into
which such shares of Common Stock shall have been changed or for which they
shall have been exchanged, then, if the Board of Directors shall determine that
such change equitably requires an adjustment in the number or kind of shares
theretofore reserved for issuance pursuant to the Plan but not yet covered by an
Option and of the shares then subject to an Option or Options, such adjustment
shall be made by the Board of Directors and shall be effective and binding for
all purposes of this Plan and of each stock option agreement. Notwithstanding
the foregoing, if any adjustment in the number of shares which may be issued and
sold pursuant to Options is required by the Code or regulations issued pursuant
thereto to be approved by the stockholders in order to enable the Company to
issue Incentive Stock Options pursuant to this Plan, then no such adjustment
shall be made without the approval of the stockholders. In the case of any such
substitution or adjustment as provided for in this Section, the option price in
each stock option agreement for each share covered thereby prior to such
substitution or adjustment will be the total option price for all shares of
stock or other securities which shall have been substituted for each such share
or to which such share shall
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have been adjusted pursuant to this Section 9. No adjustment or substitution
provided for in this Section 9 shall require the Company, in any stock option
agreement, to sell a fractional share, and the total substitution or adjustment
with respect to each stock option agreement shall be limited accordingly.
Notwithstanding the foregoing, in the case of Incentive Stock Options, if the
effect of the adjustments or substitution is to cause the Incentive Stock
Option to fail to continue to qualify as an Incentive Stock Option or to cause
a modification, extension or renewal of such Incentive Stock Option within the
meaning of Section 425 of the Code, the Board of Directors shall use reasonable
efforts to effect such other adjustment of each then outstanding option as the
Board of Directors, in its sole discretion, shall deem equitable.
Section 10. Amendments. This Plan may be terminated or amended from
time to time by vote of the Board of Directors; provided, however, that no such
termination or amendment shall materially adversely affect or impair any then
outstanding Option without the consent of the Grantee thereof and no amendment
which shall (i) change the total number of shares which may be issued and sold
pursuant to Options granted under this Plan, or (ii) change the designation of
employees eligible to receive Incentive Stock Options or the class of employees
or other persons eligible to receive Options, shall be effective without the
approval of the stockholders. Notwithstanding the foregoing, the Plan may be
amended by the Committee to incorporate any amendments made to the Code which
the Committee deems to be necessary or desirable to preserve incentive stock
option status for outstanding Incentive Stock Options and to preserve the
ability to issue Incentive Stock Options pursuant to this Plan.
Section 11. Termination. Except to the extent necessary to govern
outstanding Options, this Plan shall terminate on, and no additional Options
shall be granted after, ten years from the date the Plan is adopted, or ten
years from the date the Plan is approved by the stockholders, whichever is
earlier.
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