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Exhibit 10.1
SEVENTH AMENDED AND RESTATED
KENSEY NASH CORPORATION
EMPLOYEE INCENTIVE COMPENSATION PLAN
ARTICLE I
ESTABLISHMENT
1.1 Purpose . The Seventh Amended and Restated Kensey
Nash Corporation Employee Incentive Compensation Plan (the "
Plan "), which amends and restates the Sixth Amended and
Restated Kensey Nash Corporation Employee Incentive Compensation
Plan (the (" Prior Plan "), is hereby established by Kensey
Nash Corporation (" Company "). The purpose of the Plan is
to promote the overall financial objectives of the Company and its
stockholders by motivating those persons selected to participate in
the Plan to achieve long-term growth in stockholder equity in the
Company and by retaining the association of those individuals who
are instrumental in achieving this growth. The Plan is intended to
qualify certain compensation awarded under the Plan for tax
deductibility under Section 162(m) of the Code (as defined
herein) to the extent deemed appropriate by the Committee (as
defined herein). The Plan and the grant of awards hereunder are
expressly conditioned upon the Plan’s approval by the
stockholders of the Company. If such approval is not obtained, then
this Plan and all Awards (as defined herein) hereunder shall be
null and void ab initio with respect to all Awards granted on or
after the Effective Date (as defined below). The Plan is adopted
(and accordingly, the Prior Plan is amended and restated), subject
to stockholder approval, effective as of December 10, 2008
(the " Effective Date "), and the Plan’s terms shall
govern Awards granted hereunder (including all prior versions
hereof) before, on or after the Effective Date.
ARTICLE II
DEFINITIONS
As used in the Plan, in addition to terms defined elsewhere in
the Plan, the following terms shall have the meanings set forth
below:
2.1 " Affiliate " means a corporation or other entity
(i) controlled by or under common control with the Company (as
defined in Section 414(b) or (c) of the Code) and which,
in the case of grants of Stock Options and Stock Appreciation
Rights would, together with the Company, be classified as the
"service recipient" (as defined under Section 409A of the
Code) with respect to a Participant.
2.2 " Agreement " or " Award Agreement " means,
individually or collectively, any agreement entered into pursuant
to the Plan pursuant to which an Award is granted to a
Participant.
2.3 " Award " means any Option, SAR, Restricted Stock,
Stock, Other Stock-Based Award, Performance Award or Cash Incentive
Award, together with any other right or interest granted to a
Participant under the Plan.
2.4 " 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 hereunder. If, upon
a Participant’s death, there is no designated Beneficiary or
surviving designated Beneficiary, then the term Beneficiary means
the Participant’s Representative.
2.5 " Board of Directors " or " Board " means the
Board of Directors of the Company.
2.6 " Cash Incentive Award " means a conditional right
granted to a Participant under Section 9.3(c) hereof to
receive a cash payment, unless otherwise determined by the
Committee, after the end of a specified period.
2.7 " Cause " shall mean, for purposes of whether and
when a Participant has incurred a Termination of Service for Cause,
any act or omission which permits the Company to terminate the
written agreement or
arrangement between the Participant and the
Company or an Affiliate for "cause" as defined in such agreement or
arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the
term "cause" or a substantially equivalent term, then Cause shall
mean (a) any act or failure to act deemed to constitute cause
under the Company’s established practices, policies or
guidelines applicable to the Participant or (b) the
Participant’s act or omission which constitutes gross
misconduct with respect to the Company or an Affiliate in any
material respect, including, without limitation, an act or omission
of a criminal nature, the result of which is detrimental to the
interests of the Company or an Affiliate, or conduct, or the
omission of conduct, which constitutes a material breach of a duty
the Participant owes to the Company or an Affiliate.
2.8 " Change in Control" and " Change in Control
Price " have the meanings set forth in Sections 11.2 and 11.3,
respectively.
2.9 " Code " or " Internal Revenue Code " means
the Internal Revenue Code of 1986, as amended, Treasury regulations
(including proposed regulations) thereunder and any other effective
guidance thereunder, and includes any subsequent Internal Revenue
Code.
2.10 " Commission " means the Securities and Exchange
Commission or any successor agency.
2.11 " Committee " means the Compensation Committee of
the Board or such other Board committee as may be designated by the
Board to administer the Plan; provided, however, that the Committee
shall consist solely of two or more directors, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the
Exchange Act and each of whom is also an "outside director" under
Section 162(m) of the Code.
2.12 " Common Stock " means the shares of the $0.01 par
value common stock of the Company, whether presently or hereafter
issued, and any other stock or security resulting from adjustment
thereof as described hereinafter or the common stock of any
successor to the Company which is designated for the purpose of the
Plan.
2.13 " Company " means Kensey Nash Corporation, a
Delaware corporation, and includes any successor or assignee
corporation or corporations into which the Company may be merged,
changed or consolidated; any corporation for whose securities the
securities of the Company shall be exchanged; and any assignee of
or successor to substantially all of the assets of the Company.
2.14 " Covered Employee " means a Participant who is a
"covered employee" within the meaning of Section 162(m) of the
Code.
2.15 " Disability " means a mental or physical illness
that entitles the Participant to receive benefits under the
long-term disability plan of the Company or an Affiliate, or if the
Participant is not covered by such a plan or the Participant is not
an employee of the Company or an Affiliate, a mental or physical
illness that renders a Participant totally and permanently
incapable of performing the Participant’s duties for the
Company or an Affiliate. Notwithstanding the foregoing, a
Disability shall not qualify under this Plan if it is the result of
(i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease
contracted, suffered, or incurred while participating in a criminal
offense. The determination of Disability shall be made by the
Committee. The determination of Disability for purposes of this
Plan shall not be construed to be an admission of disability for
any other purpose.
2.16 " Effective Date " means December 10, 2008.
2.17 " Exchange Act " means the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated
thereunder.
2.18 " Fair Market Value " means the value
determined on the basis of the good faith determination of the
Committee, without regard to whether the Common Stock is restricted
or represents a minority interest, pursuant to the applicable
method described below:
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(a)
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if the Common Stock is listed on a
national securities exchange or quoted on NASDAQ, the closing price
of the Common Stock on the relevant date (or, if such date is not a
business day or a day on which quotations are reported, then on the
immediately preceding date on which quotations were reported), as
reported by the principal national exchange on which such shares
are traded (in the case of an exchange) or by NASDAQ, as the case
may be;
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(b)
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if the Common Stock is not listed on
a national securities exchange or quoted on NASDAQ, but is actively
traded in the over-the-counter market, the average of the closing
bid and asked prices for the Common Stock on the relevant date (or,
if such date is not a business day or a day on which quotations are
reported, then on the immediately preceding date on which
quotations were reported), or the most recent preceding date for
which such quotations are reported; and
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(c)
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if, on the relevant date, the Common
Stock is not publicly traded or reported as described in
(a) or (b) above, the value determined in good faith by
the Committee in accordance with Section 409A of the
Code.
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2.19 " Grant Date " means the date as of
which an Award is granted pursuant to the Plan.
2.20 " Incentive Stock Option " means any Stock Option
intended to be and designated as an "incentive stock option" within
the meaning of Section 422 of the Code.
2.21 " NASDAQ " means The Nasdaq Stock Market, including
the Nasdaq Global Select Market (or any successor thereto).
2.22 " Nonqualified Stock Option " means an Option to
purchase Common Stock in the Company granted under the Plan, the
taxation of which is pursuant to Section 83 of the Code.
2.23 " Option Period " means the period during which an
Option shall be exercisable in accordance with the related
Agreement and Article VI.
2.24 " Option Price " means the price at which the Common
Stock may be purchased under an Option as provided in
Section 6.3(b).
2.25 " Other Stock-Based Awards " means Awards granted to
a Participant under Section 9.2 hereof.
2.26 " Participant " means a person who satisfies the
eligibility conditions of Article V and to whom an Award has been
granted by the Committee under the Plan, and in the event a
Representative is appointed for a Participant or another person
becomes a Representative, then the term "Participant" shall mean
such Representative. The term shall also include a trust for the
benefit of the Participant, a partnership the interest of which was
held by or for the benefit of the Participant, the
Participant’s parents, spouse or descendants, or a custodian
under a uniform gifts to minors act or similar statute for the
benefit of the Participant’s descendants, to which an Award
has been assigned or transferred and to the extent permitted by the
Committee and the Plan. Notwithstanding the foregoing, the term
"Termination of Service" shall mean the Termination of Service of
the person to whom the Award was originally granted.
2.27 " Performance Award " means a right, granted to a
Participant under Section 9.3 hereof, to receive Awards based
upon performance criteria specified by the Committee.
2.28 " Plan " means the Seventh Amended and Restated
Kensey Nash Corporation Employee Incentive Compensation Plan, as
herein set forth and as may be amended from time to time.
2.29 " Prior Plan " means the Sixth
Amended and Restated Kensey Nash Corporation Employee Incentive
Compensation Plan.
2.30 " Representative " means (a) the person or
entity acting as the executor or administrator of a
Participant’s estate pursuant to the last will and testament
of a Participant or pursuant to the laws of the jurisdiction in
which the Participant had the Participant’s primary residence
at the date of the Participant’s death; (b) the person
or entity acting as the guardian or temporary guardian of a
Participant; (c) the person or entity which is the Beneficiary
of the Participant upon or following the Participant’s death;
or (d) any person to whom an Option has been permissibly
transferred; provided that only one of the foregoing shall be the
Representative at any point in time as determined under applicable
law and recognized by the Committee.
2.31 " Restricted Stock " means Common Stock granted to a
Participant under Section 8.1 hereof that is subject to
certain restrictions and to a risk of forfeiture.
2.32 " Retirement " means the Participant’s
Termination of Service after attaining either the normal retirement
age or the early retirement age as defined in the principal (as
determined by the Committee) tax-qualified plan of the Company or
an Affiliate, if the Participant is covered by such a plan, or if
the Participant is not covered by such a plan or such a plan does
not have an applicable definition of retirement age, then age 65,
or age 55 with the accrual of 10 years of service, as determined by
the Committee.
2.33 " Rule 16b-3 " and " Rule 16a-1(c)(3) " mean
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.
2.34 " Securities Act " means the Securities Act of 1933,
as amended, and the rules and regulations promulgated
thereunder.
2.35 " Stock Appreciation Right " or " SAR " means
a right granted under Article VII.
2.36 " Stock Option " or " Option " means a right
granted to a Participant under Section 6.1 hereof to purchase
Common Stock or other Awards at a specified price during specified
time periods.
2.37 " Strike Price " shall have the meaning set forth in
Section 7.3(b).
2.38 " Termination of Service " means the occurrence of
any act or event, whether pursuant to an employment agreement or
otherwise, that actually or effectively causes or results in the
person’s ceasing, for whatever reason, to be an officer,
independent contractor, director or employee of the Company or of
any Affiliate, or to be an officer, independent contractor,
director or employee of any entity that provides services to the
Company or an Affiliate, including, without limitation, death,
Disability, dismissal, severance at the election of the
Participant, Retirement, or severance as a result of the
discontinuance, liquidation, sale or transfer by the Company or its
Affiliates of all businesses owned or operated by the Company or
its Affiliates. With respect to any person who is not an employee
with respect to the Company or an Affiliate of the Company, the
Agreement shall establish what act or event shall constitute a
Termination of Service for purposes of the Plan. A transfer of
employment from the Company to an Affiliate, or from an Affiliate
to the Company, shall not be a Termination of Service, unless
expressly determined by the Committee. A Termination of Service
shall occur for an employee who is employed by an Affiliate of the
company if the Affiliate shall cease to be an Affiliate and the
Participant shall not immediately thereafter become an employee of
the Company or an Affiliate of the Company. The Committee shall
have the discretion to determine when a Participant, who terminates
service as an employee, but continues to provide services in the
capacity of a consultant or non-employee director, has incurred a
Termination of Service.
ARTICLE
III
ADMINISTRATION
3.1 Committee Structure and Authority . The Plan shall be
administered by the Committee. A majority of the Committee shall
constitute a quorum at any meeting thereof (including by telephone
conference) and the acts of a majority of the members present, or
acts approved in writing by the entire Committee without a meeting,
shall be the acts of the Committee for purposes of this Plan. The
Committee may authorize any one or more of its members or an
officer of the Company to execute and deliver documents on behalf
of the Committee. A member of the Committee shall not exercise any
discretion respecting himself or herself under the Plan. The Board
shall have the authority to remove, replace or fill any vacancy of
any member of the Committee upon notice to the Committee and the
affected member. Any member of the Committee may resign upon notice
to the Board. The Committee may allocate among one or more of its
members, or may delegate to one or more of its agents, such duties
and responsibilities as it determines.
Subject to and consistent with the provisions of the Plan, the
Committee shall have full power and authority and sole discretion
as follows:
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(a)
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to select those persons to whom
Awards may be granted from time to time;
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(b)
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to determine whether, when and to
what extent Awards or any combination thereof are to be granted
hereunder;
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(c)
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to determine the number of shares of
Common Stock to be covered by each stock-based Award granted
hereunder;
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(d)
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to determine the terms and
conditions of any Award granted hereunder (including, but not
limited to, the Option Price, the Option Period, any exercise
restriction or limitation and any exercise acceleration, forfeiture
or waiver regarding any Award, any shares of Common Stock relating
thereto, any applicable performance criteria and the satisfaction
of any such criteria);
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(e)
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to adjust the terms and conditions,
at any time or from time to time, of any Award, subject to the
limitations of Section 12.1;
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(f)
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to determine under what
circumstances an Award may be settled in cash or Common
Stock;
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(g)
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to provide for the forms of
Agreements to be utilized in connection with the Plan;
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(h)
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to determine whether a Participant
has a Disability or a Retirement;
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(i)
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to determine what securities law
requirements are applicable to the Plan, Awards and the issuance of
shares of Common Stock under the Plan and to require of a
Participant that appropriate action be taken with respect to such
requirements;
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(j)
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to cancel, with the consent of the
Participant or as otherwise provided in the Plan or an Agreement,
outstanding Awards;
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(k)
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to interpret and make final
determinations with respect to the remaining number of shares of
Common Stock available under this Plan;
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(l)
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to require, as a condition of the
exercise of an Award or the issuance or transfer of a certificate
of Common Stock, the withholding from a Participant of the amount
of any Federal, state or local taxes as may be necessary in order
for the Company or an Affiliate to obtain a deduction or as may be
otherwise required by law;
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(m)
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to determine whether and with what
effect a Participant has incurred a Termination of Service (
e.g. , whether Termination of Service was for
Cause);
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(n)
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to determine whether the Company or
any other person has a right or obligation to purchase Common Stock
from a Participant and, if so, the terms and conditions on which
such Common Stock is to be purchased;
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(o)
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to determine the restrictions or
limitations on the transfer of any Award and any Common Stock
underlying an Award;
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(p)
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to determine whether an Award is to
be adjusted, modified or purchased, or is to become fully
exercisable, under the Plan or the terms of an
Agreement;
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(q)
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to determine the permissible methods
of Award exercise and payment, including cashless exercise
arrangements;
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(r)
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to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the
administration of the Plan; and
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(s)
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to appoint and compensate agents,
counsel, auditors or other specialists to aid it in the discharge
of its duties.
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The Committee shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and
practices governing the Plan (including, without limitation, rules
and procedures applicable to any Awards constituting deferred
compensation under Code Section 409A and any applicable terms
and definitions as the Committee determines appropriate) as it
shall, from time to time, deem advisable, to interpret the terms
and provisions of the Plan and any Award issued under the Plan (and
any Agreement) and to otherwise supervise the administration of the
Plan. The Committee’s policies and procedures may differ with
respect to Awards granted at different times or to different
Participants.
Any determination made by the Committee pursuant to the
provisions of the Plan shall be made in its sole discretion and, in
the case of any determination relating to an Award, may be made at
the time of the grant of the Award or, unless in contravention of
any express term of the Plan or an Agreement, at any time
thereafter. All decisions made by the Committee pursuant to the
provisions of the Plan shall be final and binding on all persons,
including the Company and Participants. No determination shall be
subject to de novo review if challenged in court.
ARTICLE IV
STOCK SUBJECT TO PLAN
4.1 Number of Shares . Subject to the adjustment as
provided under Section 4.6, the aggregate number of shares of
Common Stock which may be delivered under the Plan shall not exceed
the sum of (a) seven hundred thousand (700,000), plus
(b) the number of remaining shares of Common Stock available
for Awards under the Prior Plan as of the Effective Date (
i.e. , shares not subject to outstanding Awards under the
Prior Plan and not delivered out of the shares reserved
thereunder). Of the 700,000 shares of Common Stock available under
subsection (a) above, only 100,000 of such shares may be used
for share-based Awards other than Options and Stock Appreciation
Rights (" Full Value Awards ") and the other 600,000 such
shares must be used exclusively for share-based Awards consisting
of Options and Stock Appreciation Rights. Of the shares of Common
Stock available under subsection (b) above, no such shares
shall be allowed to be used for Full Value Awards under the Plan.
Shares of Common Stock available for distribution pursuant to
Awards under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares.
4.2 Release of Shares . Subject to the terms of this
Section 4.2, if any shares of Common Stock that are subject to
any Award (including Awards made under the Prior Plan or its
predecessor amended and restated plans) cease to be subject to an
Award or are forfeited, or if any Award is settled in cash or
otherwise terminates without issuance of shares of Common Stock
being made to the Participant, such shares, in the discretion of
the Committee, may again be available for distribution in
connection with Awards under the Plan; provided ,
however , that any such shares of Common Stock resulting
from the forfeiture of a Full Value Award (as described in
Section 4.1) shall be reallocated for future grants of Full
Value Awards under the Plan. A number of shares equal to the
greater of each share of Common Stock delivered upon exercise of a
SAR and the number of shares of Common Stock underlying such SAR
(whether the distribution is made in cash, shares of Common
Stock or a combination of cash and shares of
Common Stock) shall reduce the number of available shares of Common
Stock under the Plan by one (1) share, other than a SAR that,
by its terms, from and after the Grant Date thereof is payable only
in cash, in which case the number of such available shares shall
not be reduced. Any shares (whether or not restricted) of Common
Stock that the Company receives in connection with the exercise or
payment of an Award, including the satisfaction of any tax
withholding obligation, shall not again be available for Awards
under the Plan.
4.3 Restrictions on Shares . Shares of Common Stock
issued as or in conjunction with an Award shall be subject to the
terms and conditions specified herein and to such other terms,
conditions and restrictions as the Committee in its discretion may
determine or provide in an Award Agreement. The Company shall not
be required to issue or deliver any certificates for shares of
Common Stock, cash or other property prior to (i) the listing
of such shares on any stock exchange or NASDAQ (or other public
market) on which the Common Stock may then be listed (or regularly
traded), (ii) the completion of any registration or
qualification of such shares under Federal or state law, or any
ruling or regulation of any government body which the Committee
determines to be necessary or advisable, and (iii) the
satisfaction of any applicable withholding obligation . The Company
may cause any certificate for any share of Common Stock to be
delivered to be properly marked with a legend or other notation
reflecting the limitations on transfer of such Common Stock as
provided in this Plan or as the Committee may otherwise require.
The Committee may require any person exercising an Award to make
such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of
the shares of Common Stock in compliance with applicable law or
otherwise. Fractional shares shall not be delivered, but shall be
rounded to the next lower whole number of shares.
4.4 Stockholder Rights . No person shall have any rights
of a stockholder as to shares of Common Stock subject to an Award
until, after proper exercise of the Award or other action required,
such shares shall have been recorded on the Company’s
official stockholder records as having been issued or transferred.
Upon exercise or payment of the Award or any portion thereof,
subject to other applicable provisions of the Plan, the Company
will have thirty (30) days in which to issue the shares, and
the Participant will not be treated as a stockholder for any
purpose whatsoever prior to such issuance. No adjustment shall be
made for cash dividends or other rights for which the record date
is prior to the date such shares are recorded as issued or
transferred in the Company’s official stockholder records,
except as provided herein or in an Agreement.
4.5 Best Efforts To Register . The Company will use its
reasonable best efforts to register under the Securities Act the
Common Stock delivered or deliverable pursuant to Awards on
Commission Form S-8 if available to the Company for this purpose
(or any successor or alternate form that is substantially similar
to that form to the extent available to effect such registration),
in accordance with the rules and regulations governing such forms,
as soon after stockholder approval of the Plan as the Committee, in
its sole discretion, shall deem such registration appropriate. The
Company will use its reasonable best efforts to cause the
registration statement to become effective and will file such
supplements and amendments to the registration statement as may be
necessary to keep the registration statement in effect until the
earliest of (a) one year following the expiration of the
Option Period of the last Option outstanding, (b) the date the
Company is no longer a reporting company under the Exchange Act and
(c) the date all Participants have disposed of all shares
delivered pursuant to any Award. The Company may delay the
foregoing obligation if the Committee reasonably determines that
any such registration would materially and adversely affect the
Company’s interests or if there is no material benefit to
Participants.
4.6 Adjustments . In the event of any Company stock
dividend, stock split, combination or exchange of shares,
recapitalization or other change in the capital structure of the
Company, corporate separation or division of the Company
(including, but not limited to, a split-up, spin-off, split-off or
distribution to Company stockholders other than a normal cash
dividend), sale by the Company of all or a substantial portion of
its assets (measured on either a stand-alone or consolidated
basis), reorganization, rights offering, a partial or complete
liquidation, or any other corporate transaction, Company stock
offering or event involving the Company and having an effect
similar to any of the foregoing, then the Committee shall adjust or
substitute, as the case may be,
the number of shares of Common Stock available
for Awards under the Plan, the number of shares of Common Stock
covered by outstanding Awards, the exercise price per share of
outstanding Awards, the limitations set forth in Section 5.2
and performance conditions and any other characteristics or terms
of the Awards as the Committee shall deem necessary or appropriate
to reflect equitably the effects of such changes to the
Participants; provided, however, that the Committee may limit any
such adjustment so as to maintain the deductibility of the Awards
under Code Section 162(m) or to continue to maintain an
exemption for an Award under Code Section 409 or to prevent a
violation of Code Section 409A with respect to any Award. Any
fractional shares resulting from such adjustment shall be
eliminated by rounding to the next lower whole number of shares
with appropriate payment for such fractional shares as shall
reasonably be determined by the Committee.
ARTICLE V
ELIGIBILITY
5.1 Eligibility . Except as herein provided, the persons
who shall be eligible to participate in the Plan and be granted
Awards shall be those persons who are directors, officers,
employees and consultants of the Company or any Affiliate of the
Company, who shall be in a position, in the opinion of the
Committee, to make contributions to the growth, management,
protection and success of the Company and its Affiliates. Of those
persons described in the preceding sentence, the Committee may,
from time to time, select persons to be granted Awards and shall
determine the terms and conditions with respect thereto. In making
any such selection and in determining the form of the Award, the
Committee may give consideration to the person’s functions
and responsibilities, the person’s contributions to the
Company and its Affiliates, the value of the individual’s
service to the Company and its Affiliates and such other factors
deemed relevant by the Committee.
5.2 Per-Person Award Limitations . Subject to adjustment
under Section 4.6, the maximum number of shares of Common
Stock that may be covered by Stock Options, Stock Appreciation
Rights, Restricted Stock, Other Stock Based Awards and other Awards
that are payable in Shares, in the aggregate, granted to any one
Participant during any three consecutive fiscal years of the
Company shall be 1,000,000 shares of Common Stock. In addition, the
maximum aggregate amount that may be paid out as Cash Incentive
Awards to a Participant or other cash Awards in any fiscal year of
the Company shall be $1,000,000.
ARTICLE VI
STOCK OPTIONS
6.1 General . The Committee shall have authority to grant
Stock Options under the Plan at any time or from time to time.
Stock Options may be granted alone or in addition to other Awards
and may be either Incentive Stock Options or Nonqualified Stock
Options. A Stock Option shall entitle the Participant to receive
shares of Common Stock upon exercise of such Option, subject to the
Participant’s satisfaction in full of any conditions,
restrictions or limitations imposed in accordance with the Plan or
an Agreement (the terms and provisions of which may differ from
other Agreements), including, without limitation, payment of the
Option Price.
6.2 Grant and Exercise . The grant of a Stock Option
shall occur as of the date the Committee determines. Each Option
granted under this Plan shall be evidenced by an Agreement, in a
form approved by the Committee, which shall embody the terms and
conditions of such Option and which shall be subject to the express
terms and conditions set forth in the Plan. Such Agreement shall
become effective upon execution by the Participant to the extent
that such execution is required, or otherwise on the Grant Date of
the Stock Option; provided, however, any such execution shall not
in any way impact the Grant Date or Option Price of the Stock
Option. Only a person who is a common-law employee of the Company,
any "parent corporation" of the Company or a "subsidiary" of the
Company (as such terms are defined in Section 424 of the Code)
on the Grant Date shall be eligible to be granted an Option which
is intended to be and is an Incentive Stock Option. To the extent
that any Stock Option is not designated as an Incentive Stock
Option or even if so designated does not qualify as an Incentive
Stock Option, it shall constitute a Nonqualified Stock Option.
Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to
Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be
exercised, so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the Participant affected, to
disqualify any Incentive Stock Option under such
Section 422.
6.3 Terms and Conditions . Stock Options shall be subject
to such terms and conditions as shall be determined by the
Committee, including the following:
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(a)
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Option Period . The Option
Period of each Stock Option shall be fixed by the Committee;
provided that no Stock Option shall be exercisable more than ten
(10) years after the Grant Date of the Stock Option. In the
case of an Incentive Stock Option granted to an individual who owns
more than ten percent (10%) of the combined voting power of
all classes of stock of the Company, a corporation which is a
"parent corporation" of the Company or any "subsidiary" of the
Company (each as defined in Section 424 of the Code), the
Option Period shall not exceed five (5) years from the Grant
Date. No Option which is intended to be an Incentive Stock Option
shall be granted more than ten (10) years from the date the
Plan is adopted by the Company or the date the Plan is approved by
the stockholders of the Company, whichever is earlier.
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(b)
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Option Price . The Option
Price per share of the Common Stock purchasable under a Stock
Option shall be determined by the Committee; provided, however,
that the Option Price per share shall be not less than the Fair
Market Value per share on the Grant Date of the Option. If such
Option is intended to qualify as an Incentive Stock Option and is
granted to an individual who owns or who is deemed to own stock
possessing more than ten percent (10%) of the combined voting
power of all classes of stock of the Company, a corporation which
is a "parent corporation" of the Company or any "subsidiary" of the
Company (each as defined in Section 424 of the Code), the
Option Price per share shall not be less than one hundred ten
percent (110%) of such Fair Market Value per share on the
Grant Date of the Option.
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(c)
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Exercisability . Subject
to Section 11.1, Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall be
determined by the Committee. If the Committee provides that any
Stock Option is exercisable only in installments, the Committee may
at any time waive such installment exercise provisions, in whole or
in part. In addition, the Committee may at any time accelerate the
exercisability of any Stock Option. If the Committee intends that
an Option be an Incentive Stock Option, the Committee may, in its
discretion, provide that the aggregate Fair Market Value
(determined at the Grant Date) of the Common Stock as to which such
Incentive Stock Option which is exercisable for the first time
during any calendar year shall not exceed $100,000.
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(d)
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Method of Exercise .
Subject to the provisions of this Article VI, a Participant may
exercise Stock Options, in whole or in part, at any time during the
Option Period by the Participant’s giving written notice of
exercise on a form provided by the Committee (if available) to the
Company specifying the number of shares of Common Stock subject to
the Stock Option to be purchased. Such notice shall be accompanied
by payment in full of the purchase price by cash or check or such
other form of payment as the Committee may accept. If approved by
the Committee, payment in full or in part may also be made
(i) by delivering Common Stock already owned by the
Participant having a total Fair Market Value on the date of such
delivery equal to the Option Price; (ii) by authorizing the
Company to retain shares of Common Stock which would otherwise be
issuable upon exercise of the Option having a total Fair Market
Value on the date of delivery equal to the Option Price;
(iii) by the delivery of cash or the extension of credit by a
broker-dealer to whom the Participant has submitted a notice of
exercise or otherwise indicated an intent to exercise an Option (in
accordance with Part 220, Chapter II, Title 12 of the Code of
Federal Regulations, so-called "cashless" exercise); or
(iv) by any combination of the foregoing. If payment of the
Option Price of a Nonqualified Stock Option is made in whole or in
part in the form of Restricted Stock, the number of shares of
Common Stock to be received upon such exercise that is equal to the
number of shares of Restricted Stock used for payment of the Option
Price shall be subject to the same forfeiture provisions to which
such Restricted Stock was subject, unless otherwise
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determined by the Committee. In the
case of an Incentive Stock Option, the right to make a payment in
the form of already owned shares of Common Stock of the same class
as the Common Stock subject to the Stock Option may be authorized
only at the time the Stock Option is granted. No shares of Common
Stock shall be issued until full payment therefor, as determined by
the Committee, has been made. Subject to any forfeiture provisions
that may apply if a Stock Option is exercised using Restricted
Stock, a Participant shall have all of the rights of a stockholder
of the Company holding the class of Common Stock that is subject to
such Stock Option (including, if applicable, the right to vote the
shares and the right to receive dividends) when the Participant has
given written notice of exercise, has paid in full the Option Price
for such shares and such shares have been recorded on the
Company’s official stockholder records as having been issued
or transferred.
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(e)
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Non-transferability of
Options . Except as provided herein or in an Agreement, no
Stock Option or interest therein shall be transferable by the
Participant other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable during the
Part
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