Exhibit 4.6
WATSCO, INC.
AMENDED AND
RESTATED
2001 INCENTIVE COMPENSATION
PLAN
(effective as of April 17,
2009)
1. Purpose . The purpose of
this WATSCO, INC. AMENDED AND RESTATED 2001 INCENTIVE COMPENSATION
PLAN (the “Plan”) is to assist Watsco, Inc., a Florida
corporation (the “Company”) and its Related Entities in
attracting, motivating, retaining and rewarding high-quality
executives and other employees, officers, directors, consultants
and other persons who provide services to the Company and its
Related Entities by enabling such persons to acquire or increase a
proprietary interest in the Company in order to strengthen the
mutuality of interests between such persons and the Company’s
stockholders, and providing such persons with annual and long term
performance incentives to expend their maximum efforts in the
creation of shareholder value. The Plan is intended to qualify
certain compensation awarded under the Plan for tax deductibility
under Section 162(m) of the Code (as hereafter defined) to the
extent deemed appropriate by the Committee (or any successor
committee) of the Board of Directors of the Company.
2. Definitions . For purposes
of the Plan, the following terms shall be defined as set forth
below, in addition to such terms defined in Section 1
hereof.
(a) “Award” means any
Option, Stock Appreciation Right, Restricted Stock, Deferred Stock
Award, Stock granted as a bonus or in lieu of another Award,
Dividend Equivalent, Other Stock-Based Award or Performance Award,
together with any other right or interest, granted to a Participant
under the Plan.
(b) “Award Agreement”
means any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee
hereunder.
(c) “Beneficiary” means
the person, persons, trust or trusts which have been designated by
a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits
specified under the Plan upon such Participant’s death or to
which Awards or other rights are transferred if and to the extent
permitted under Section 10(b) hereof. If, upon a
Participant’s death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means
the person, persons, trust or trusts entitled by will or the laws
of descent and distribution to receive such benefits.
(d) “Beneficial Owner”,
“Beneficially Owning” and “Beneficial
Ownership” shall have the meanings ascribed to such terms in
Rule 13d-3 under the Exchange Act and any successor to such
Rule.
(e) “Board” means the
Company’s Board of Directors.
(f) “Cause” shall, with
respect to any Participant, have the equivalent meaning (or the
same meaning as “cause” or “for cause”) set
forth in any employment agreement between the Participant and the
Company or a Related Entity or, in the absence of any such
agreement, such term shall mean (i) the failure by the
Participant to perform his or her duties as assigned by the Company
(or a Related Entity) in a reasonable manner, (ii) any
violation or breach by the Participant of his or her employment
agreement with the Company (or a Related Entity), if any,
(iii) any violation or breach by the Participant of his or her
non-competition and/or non-disclosure agreement with the Company
(or a Related Entity) if any, (iv) any act by the Participant
of dishonesty or bad faith with
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respect to the Company (or a Related Entity),
(v) chronic addiction to alcohol, drugs or other similar
substances affecting the Participant’s work performance, or
(vi) the commission by the Participant of any act,
misdemeanor, or crime reflecting unfavorably upon the Participant
or the Company. The good faith determination by the Committee of
whether the Participant’s employment was terminated by the
Company for “Cause” shall be final and binding for all
purposes hereunder.
(g) “Change in Control”
means a Change in Control as defined with related terms in
Section 9 of the Plan.
(h) “Change in Control
Price” means the amount calculated in accordance with
Section 9(c) of the Plan.
(i) “Code” means the
Internal Revenue Code of 1986, as amended from time to time,
including regulations there under and successor provisions and
regulations thereto.
(j) “Committee” means
the Compensation Committee designated by the Board; provided,
however, that the Committee shall consist of at least two
directors, each member of which shall be (i) a
“non-employee director” within the meaning of Rule
16b-3 under the Exchange Act, unless administration of the Plan by
“non-employee directors” is not then required in order
for exemptions under Rule 16b-3 to apply to transactions under the
Plan, (ii) an “outside director” within the
meaning of Section 162(m) of the Code, unless administration
of the Plan by “outside directors” is not then required
in order to qualify for tax deductibility under Section 162(m)
of the Code, and (iii) “Independent”.
(k) “Corporate
Transaction” means a Corporate Transaction as defined in
Section 9(b)(i) of the Plan.
(l) “Consultant” means
any Person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a
director) who is engaged by the Company or any Related Entity to
render consulting or advisory services to the Company or such
Related Entity.
(m) “Continuous Service”
means uninterrupted provision of services to the Company in any
capacity of Employee, Director, Consultant or other service
provider. Continuous Service shall not be considered to be
interrupted in the case of (i) any approved leave of absence,
(ii) transfers among the Company, any Related Entities, or any
successor entities, in any capacity of Employee, Director, or
Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related
Entity in any capacity of Employee, Director, or Consultant (except
as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other
authorized personal leave.
(n) “Covered Employee
” means the Person who, as of the end of the
taxable year, either is the principal executive officer of the
Company or is serving as the acting principal executive officer of
the Company, and each other Person whose compensation is required
to be disclosed in the Company’s filings with the Securities
and Exchange Commission by reason of that person being among the
five highest compensated officers of the Company as of the end of a
taxable year, or such other person as shall be considered a
“covered employee” for purposes of Section 162(m)
of the Code.
(o) “Deferred Stock”
means a right to receive Stock, including Restricted Stock, cash
measured based upon the value of Stock or a combination thereof, at
the end of a specified deferral period.
(p) “Deferred Stock
Award” means an Award of Deferred Stock granted to a
Participant under Section 6(e) hereof.
(q) “Director” means a
member of the Board or the board of directors of any Related
Entity.
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(r) “Disability” means a
permanent and total disability (within the meaning of
Section 22(e) of the Code), as determined by a medical doctor
satisfactory to the Committee.
(s) “Dividend
Equivalent” means a right, granted to a Participant under
Section 6(g) hereof, to receive cash, Stock, other Awards or
other property equal in value to dividends paid with respect to a
specified number of shares of Stock, or other periodic
payments.
(t) “Effective Date”
means the effective date of the Plan, which shall be June 1,
2001. The “Effective Date” of the Plan, as amended and
restated, shall be April 17, 2009.
(u) “Eligible Person”
means each officer, Director, Employee, Consultant and other person
who provides services to the Company or any Related Entity. The
foregoing notwithstanding, only Employees of the Company, or any
parent corporation or subsidiary corporation of the Company (as
those terms are defined in Sections 424(e) and (f) of the
Code, respectively), shall be Eligible Persons for purposes of
receiving any Incentive Stock Options. An Employee on leave of
absence may, in the discretion of the Committee, be considered as
still in the employ of the Company or a Related Entity for purposes
of eligibility for participation in the Plan.
(v) “Employee” means any
Person, including an officer or Director, who is an employee of the
Company or any Related Entity. The Payment of a director’s
fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.
(w) “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time,
including rules there under and successor provisions and rules
thereto.
(x) “Fair Market Value”
means the fair market value of Stock, Awards or other property as
determined by the Committee or the Board, or under procedures
established by the Committee or the Board. Unless otherwise
determined by the Committee or the Board, the Fair Market Value of
Stock as of any given date shall be the closing sale price per
share reported on a consolidated basis for stock listed on the
principal stock exchange or market on which Stock is traded on the
date as of which such value is being determined or, if there is no
sale on that date, then on the last previous day on which a sale
was reported.
(y) “Incentive Stock
Option” or “ISO” means any Option intended to be
designated as an incentive stock option within the meaning of
Section 422 of the Code or any successor provision
thereto.
(z) “Incumbent Board”
means the Incumbent Board as defined in Section 9(b)(ii) of
the Plan.
(aa) “Independent”, when
referring to either the Board or members of the Committee, shall
have the same meaning as used in the rules of the Listing
Market.
(bb) “Listing Market”
means the NYSE, the American Stock Exchange or any other national
securities exchange on which any securities of the Company are
listed for trading, and if not listed for trading, by the rules of
the NASDAQ Stock Market.
(cc) “Option” means a
right granted to a Participant under Section 6(b) hereof, to
purchase Stock or other Awards at a specified price during
specified time periods.
(dd) “Other Stock-Based
Awards” means Awards granted to a Participant under
Section 6(i) hereof.
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(ee) “Outside Director”
means a member of the Board who qualifies as an “outside
director” under Section 162(m) of the Code and as a
“Non-Employee Director” under Rule 16b-3 promulgated
under the Exchange Act.
(ff) “Parent
Corporation” means any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company, if
each of the corporations in the chain (other than the Company) owns
stock possessing 50% or more of the combined voting power of all
classes of stock in one of the other corporations in the
chain.
(gg) “Participant” means
a person who has been granted an Award under the Plan which remains
outstanding, including a person who is no longer an Eligible
Person.
(hh) “Performance Award”
means any Award of Performance Shares or Performance Units granted
pursuant to Section 6(h) hereof.
(ii) “Performance
Period” means that period established by the Committee at the
time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with
respect to such Award are to be measured.
(jj) “Performance Share”
means any grant pursuant to Section 6(h) hereof of a unit
valued by reference to a designated number of shares of Stock,
which value may be paid to the Participant by delivery of such
property as the Committee shall determine, including cash, Stock,
other property, or any combination thereof, upon achievement of
such performance goals during the Performance Period as the
Committee shall establish at the time of such grant or
thereafter.
(kk) “Performance Unit”
means any grant pursuant to Section 6(h) hereof of a unit
valued by reference to a designated amount of property (including
cash) other than Stock, which value may be paid to the Participant
by delivery of such property as the Committee shall determine,
including cash, Stock, other property, or any combination thereof,
upon achievement of such performance goals during the Performance
Period as the Committee shall establish at the time of such grant
or thereafter.
(ll) “Person” shall have
the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, and
shall include a “group” as defined in
Section 13(d) thereof.
(mm) “Related Entity”
means any Subsidiary, and any business, corporation, partnership,
limited liability company or other entity designated by the Board,
in which the Company or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(nn) “Restriction
Period” means the period of time specified by the Committee
that Restricted Stock Awards shall be subject to such restrictions
on transferability, risk of forfeiture and other restrictions, if
any, as the Committee may impose.
(oo) “Restricted Stock”
means any Stock issued with the restriction that the holder may not
sell, transfer, pledge or assign such Stock and with such risks of
forfeiture and other restrictions as the Committee, in its sole
discretion, may impose (including any restriction on the right to
vote such Stock and the right to receive any dividends), which
restrictions may lapse separately or in combination at such time or
times, in installments or otherwise, as the Committee may deem
appropriate.
(pp) “Restricted Stock
Award” means an Award granted to a Participant under
Section 6(d) hereof.
(qq) “Rule 16b-3” and
“Rule 16a-l(c)(3)” means Rule 16b-3 and Rule
16a-1(c)(3), as from time to time in effect and applicable to the
Plan and Participants, promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act.
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(rr) “Stock” means the
Company’s Common Stock, par value $.50 per share (the
“Common Stock”) and/or the Company’s Class B
Common Stock, par value $.50 per share (the “Class B Common
Stock”), and such other securities as may be substituted (or
resubstituted) for Stock pursuant to Section 10(c)
hereof.
(ss) “Stock Appreciation
Rights” or “SAR” means a right granted to a
Participant under Section 6(c) hereof.
(tt) “Subsidiary” means
any corporation or other entity in which the Company has a direct
or indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities or interests of
such corporation or other entity entitled to vote generally in the
election of directors or in which the Company has the right to
receive 50% or more of the distribution of profits or 50% or more
of the assets on liquidation or dissolution.
(uu) “Substitute Awards”
means Awards granted or Stock issued by the Company in assumption
of, or in substitution or exchange for, Awards previously granted,
or the right or obligation to make future Awards, by a company
(i) acquired by the Company or any Related Entity,
(ii) which becomes a Related Entity after the date hereof, or
(iii) with which the Company or any Related Entity
combines.
3. Administration
.
(a) Authority of the
Committee . The Plan shall be administered by the Committee;
provided, however, that except as otherwise expressly provided in
this Plan or in order to comply with Code Section 162(m) or
Rule 16b-3 under the Exchange Act, the Board may exercise any power
or authority granted to the Committee under this Plan. The
Committee or the Board shall have full and final authority, in each
case subject to and consistent with the provisions of the Plan, to
select Eligible Persons to become Participants, grant Awards,
determine the type, number and other terms and conditions of, and
all other matters relating to, Awards, prescribe Award agreements
(which need not be identical for each Participant) and rules and
regulations for the administration of the Plan, construe and
interpret the Plan and Award agreements and correct defects, supply
omissions or reconcile inconsistencies therein, and to make all
other decisions and determinations as the Committee or the Board
may deem necessary or advisable for the administration of the Plan.
In exercising any discretion granted to the Committee or the Board
under the Plan or pursuant to any Award, the Committee or the Board
shall not be required to follow past practices, act in a manner
consistent with past practices, or treat any Eligible Person in a
manner consistent with the treatment of other Eligible
Persons.
(b) Manner of Exercise of
Committee Authority . The Committee, and not the Board, shall
exercise sole and exclusive discretion on any matter relating to a
Participant then subject to Section 16 of the Exchange Act
with respect to the Company to the extent necessary in order that
transactions by such Participant shall be exempt under Rule 16b-3
under the Exchange Act. Any action of the Committee or the Board
shall be final, conclusive and binding on all persons, including
the Company, its subsidiaries, Participants, Beneficiaries,
transferees under Section 10(b) hereof or other persons
claiming rights from or through a Participant, and stockholders.
The express grant of any specific power to the Committee or the
Board, and the taking of any action by the Committee or the Board,
shall not be construed as limiting any power or authority of the
Committee or the Board. The Committee or the Board may delegate to
officers or managers of the Company or any Related Entity, or
committees thereof, the authority, subject to such terms as the
Committee or the Board shall determine, (i) to perform
administrative functions, (ii) with respect to Participants
not subject to Section 16 of the Exchange Act, to perform such
other functions as the Committee or the Board may determine, and
(iii) with respect to Participants subject to Section 16,
to perform such other functions of the Committee or the Board as
the Committee or the Board may determine to the extent performance
of such functions will not result in the loss of an exemption under
Rule 16b-3 otherwise available for transactions by such persons, in
each case to the extent permitted under applicable law and subject
to the requirements set forth in Section 8(d). The Committee
or the Board may appoint agents to assist it in administering the
Plan.
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(c) Limitation of Liability .
The Committee and the Board, and each member thereof, shall be
entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any executive officer, other
officer or employee of the Company or a Related Entity, the
Company’s independent auditors, consultants or any other
agents assisting in the administration of the Plan. Members of the
Committee and the Board, and any officer or employee of the Company
or a Related Entity acting at the direction or on behalf of the
Committee or the Board, shall not be personally liable for any
action or determination taken or made in good faith with respect to
the Plan, and shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such
action or determination.
4. Stock Subject to Plan
.
(a) Limitation on Overall Number
of Shares of Stock Available for Delivery Under the Plan .
Subject to adjustment as provided in Section 10(c) hereof, the
total number of shares of Stock reserved and available for delivery
in connection with Awards under the Plan shall be the sum of
(i) 4,000,000, plus (ii) the number of shares with
respect to Awards previously granted under the Plan that terminate
without being exercised, expire, are forfeited or canceled, and the
number of shares of Stock that are surrendered in payment of any
Awards or any tax withholding with regard thereto. Any shares of
Stock delivered under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. Subject to
adjustment as provided in Section 10(c) hereof, in no event
shall the aggregate number of shares of Stock which may be issued
pursuant to ISOs exceed 4,000,000 shares.
(b) Application of
Limitations . The limitation contained in Section 4(a)
shall apply not only to Awards that are settleable by the delivery
of shares of Stock but also to Awards relating to shares of Stock
but settleable only in cash (such as cash-only SARs). The Committee
or the Board may adopt reasonable counting procedures to ensure
appropriate counting, avoid double counting (as, for example, in
the case of tandem or substitute awards) and make adjustments if
the number of shares of Stock actually delivered differs from the
number of shares previously counted in connection with an
Award.
(c) Availability of Shares of
Stock Not Delivered under Awards and Adjustments to Limits
.
(i) If any Awards are forfeited,
expire or otherwise terminate without issuance of such shares of
Stock, or any Award is settled for cash or otherwise does not
result in the issuance of all or a portion of the Stock subject to
such Award, the Stock to which those Awards were subject, shall, to
the extent of such forfeiture, expiration, termination, cash
settlement or non-issuance, again be available for delivery with
respect to Awards under the Plan, subject to Section 4(c)(iv)
below.
(ii) In the event that any Option or
other Award granted hereunder is exercised through the tendering of
Stock (either actually or by attestation) or by the withholding of
Stock by the Company, or withholding tax liabilities arising from
such option or other award are satisfied by the tendering of Stock
(either actually or by attestation) or by the withholding of Stock
by the Company, then only the number of shares of Stock issued net
of the shares tendered or withheld shall be counted for purposes of
determining the maximum number of shares of Stock available for
grant under the Plan.
(iii) Substitute Awards shall not
reduce the Stock authorized for delivery under the Plan or
authorized for delivery to a Participant in any period.
Additionally, in the event that a company acquired by the Company
or any Related Entity or with which the Company or any Related
Entity combines has shares available under a pre-existing plan
approved by its shareholders, the shares available for delivery
pursuant to the terms of such pre-existing plan (as adjusted, to
the extent appropriate, using the exchange ratio or other
adjustment or valuation ratio or formula used in such acquisition
or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition
or combination) may be used for Awards under the Plan and shall not
reduce the Stock authorized for delivery under the Plan; if and to
the extent that the use of such Stock would not require approval of
the Company’s shareholders under the rules of the Listing
Market.
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(iv) Any share of Stock that again
becomes available for delivery pursuant to this Section 4(c)
shall be added back as one (1) share.
5. Eligibility; Per-Person Award
Limitations . Awards may be granted under the Plan only to
Eligible Persons. Subject to adjustment as provided in
Section 10(c), in any fiscal year of the Company during any
part of which the Plan is in effect, no Participant may be granted
(i) Options or Stock Appreciation Rights with respect to more
than 1,500,000 shares of Stock or (ii) Restricted Stock,
Deferred Stock, Performance Shares and/or Other Stock-Based Awards
with respect to more than 1,500,000 shares of Stock. In addition,
the maximum dollar value payable to any one Participant with
respect to Performance Units is (x) $5,000,000 with respect to
any 12 month Performance Period (pro-rated for any Performance
Period that is less than 12 months based upon the ratio of the
number of days in the Performance Period as compared to 365), and
(y) with respect to any Performance Period that is more than
12 months, $12,500,000.
6. Specific Terms of Awards
.
(a) General . Awards may be
granted on the terms and conditions set forth in this
Section 6 . In addition, the Committee or the Board may impose
on any Award or the exercise thereof, at the date of grant or
thereafter (subject to Section 10(e)), such additional terms
and conditions, not inconsistent with the provisions of the Plan,
as the Committee or the Board shall determine, including terms
requiring forfeiture of Awards in the event of termination of
employment by the Participant and terms permitting a Participant to
make elections relating to his or her Award. The Committee or the
Board shall retain full power and discretion to accelerate, waive
or modify, at any time, any term or condition of an Award that is
not mandatory under the Plan. Except in cases in which the
Committee or the Board is authorized to require other forms of
consideration under the Plan, or to the extent other forms of
consideration must be paid to satisfy the requirements of Florida
law, no consideration other than services may be required for the
grant (but not the exercise) of any Award.
(b) Options . The Committee
and the Board each is authorized to grant Options to Participants
on the following terms and conditions:
(i) Exercise Price . Other
than in connection with Substitute Awards, the exercise price per
share of Stock purchasable under an Option shall be determined by
the Committee or the Board, provided that such exercise price shall
not, in the case of Incentive Stock Options, be less than 100% of
the Fair Market Value of the Stock on the date of grant of the
Option and shall not, in any event, be less than the par value of a
share of Stock on the date of grant of such Option. If an employee
owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or
any Parent Corporation or Related Entity and an Incentive Stock
Option is granted to such employee, the option price of such
Incentive Stock Option (to the extent required by the Code at the
time of grant) shall be no less than 110% of the Fair Market Value
of the Stock on the date such Incentive Stock Option is
granted.
(ii) Time and Method of
Exercise . The Committee or the Board shall determine the time
or times at which or the circumstances under which an Option may be
exercised in whole or in part (including based on achievement of
performance goals and/or future service requirements), the time or
times at which Options shall cease to be or become exercisable
following termination of employment or upon other conditions, the
methods by which such exercise price may be paid or deemed to be
paid (including in the discretion of the Committee or the Board a
cashless exercise procedure), the form of such payment, including,
without limitation, cash, Stock, other Awards or awards granted
under other plans of the Company or any Related Entity, or other
property (including notes or other contractual obligations of
Participants to make payment on a deferred basis), and the methods
by or forms in which Stock will be delivered or deemed to be
delivered to Participants.
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(iii) ISOs . The terms of any
ISO granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code. Anything in the Plan to
the contrary notwithstanding, no term of the Plan relating to ISOs
(including any SAR in tandem therewith) shall be interpreted,
amended or altered, nor shall any discretion or authority granted
under the Plan be exercised, so as to disqualify either the Plan or
any ISO under Section 422 of the Code, unless the Participant
has first requested the change that will result in such
disqualification. Thus, if and to the extent required to comply
with Section 422 of the Code, Options granted as Incentive
Stock Options shall be subject to the following special terms and
conditions:
(A) the Option shall not be
exercisable more than ten years after the date such Incentive Stock
Option is granted; provided, however, that if a Participant owns or
is deemed to own (by reason of the attribution rules of
Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any Parent
Corporation and the Incentive Stock Option is granted to such
Participant, the term of the Incentive Stock Option shall be (to
the extent required by the Code at the time of the grant) for no
more than five years from the date of grant; and
(B) The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted)
of the shares of stock with respect to which Incentive Stock
Options granted under the Plan and all other option plans of the
Company or its Parent Corporation during any calendar year
exercisable for the first time by the Participant during any
calendar year shall not (to the extent required by the Code at the
time of the grant) exceed $100,000.
(iv) Repurchase Rights . The
Committee and the Board shall have the discretion to grant Options
which are exercisable for unvested shares of Common Stock. Should
the Optionee cease to be employed with or perform services to the
Company (or a Parent Corporation or Related Entity) while holding
such unvested shares, the Company shall have the right to
repurchase, at the exercise price paid per share, any or all of
those unvested shares. The terms upon which such repurchase right
shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased
shares) shall be established by the Committee or the Board and set
forth in the document evidencing such repurchase right.
(v) Formula Grants to Outside
Directors . The Committee and the Board each is authorized to
grant Options to Participants who are Outside Directors on the
following terms and conditions:
(1) Each Outside Director who, prior
to 1998, was not granted an option under any prior plan to purchase
shares of Common Stock shall receive an Option to purchase shares
of Common Stock upon his or her initial election to the Board as
may be determined by the Compensation Committee or Nominating
Committee. All such Options shall become fully exercisable at
20% per year commencing on the first anniversary of the date
of grant. Commencing on the sixth anniversary of the date of his or
her initial election to the Board, and thereafter on each
anniversary that such Outside Director is a member of the Board,
each such Outside Director shall receive an Option to purchase
3,375 shares of Common Stock, which option shall become fully
exercisable on the first anniversary of the date of
grant.
(2) Each Outside Director who, prior
to 1998, was granted an option to purchase under any prior plan
shares of Common Stock shall receive, commencing on the sixth
anniversary of the date of the last grant of an Option to
such
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Outside Director and thereafter on
each anniversary that such Outside Director is a member of the
Board, an Option to purchase 3,375 shares of Common Stock which
Option shall become fully exercisable on the first anniversary of
the date of grant.
(3) The per share exercise price of
all Options granted to Outside Directors pursuant to paragraphs
(1) and (2) of this Section 6(b)(v) will be equal to
the Fair Market Value of the Common Stock underlying such Option
o
