STATEMENT OF TERMS AND CONDITIONS
APPLICABLE TO
OPTIONS, RESTRICTED STOCK,
RESTRICTED STOCK UNITS AND PERFORMANCE SHARES
GRANTED TO EMPLOYEES PURSUANT TO THE 2005 STOCK PLAN
(As Amended through
April 25, 2006)
The following
terms and conditions shall apply to each Award granted under the
Plan to an Employee eligible to participate in the Plan. This
Statement of Terms and Conditions is intended to meet the
requirements of Code Section 409A and any rules promulgated
thereunder and is subject to the terms of the Plan and of any Award
made pursuant to the Plan. In the event of any inconsistency
between this Statement of Terms and Conditions and the Plan, the
Plan shall govern. Capitalized terms not otherwise defined in this
Statement of Terms and Conditions shall have the meaning set forth
in the Plan.
1. Option
Notice and Agreement . An Option granted under the Plan shall
be evidenced by an Option Agreement setting forth the terms and
conditions of the Option, including whether the Option is an
Incentive Stock Option or a Nonstatutory Stock Option and the
number Shares subject to the Option. Each Option Agreement shall
incorporate by reference and be subject to this Statement of Terms
and Conditions and the terms and conditions of the Plan.
2.
Exercise Price . The per Share Exercise Price of an Option,
as specified in the Option Agreement, shall be equal to or greater
than the per Share Fair Market Value of the Shares underlying the
Option on the Grant Date.
3. Option
Period . An Option shall be exercisable only during the
applicable Option Period, and during such Option Period the
exercisability of the Option shall be subject to the vesting
provisions of Section II.4 as modified by the rules set forth
in Sections II.5 and V. The Option Period shall be not more
than seven years from the Grant Date.
4.
Vesting of Right to Exercise Options .
(A) Except
as provided in Section V, an Option shall be exercisable
during the Option Period in accordance with the following vesting
schedule: (i) 25% of the Shares subject to the Option shall
vest on the first anniversary of the Grant Date; (ii) an
additional 25% of the Shares shall vest on the second anniversary
of the Grant Date; (iii) an additional 25% of the Shares shall
vest on the third anniversary of the Grant Date; and (iv) the
remaining 25% of the Shares subject to the Option shall vest on the
fourth anniversary of the Grant Date. Notwithstanding the
foregoing, the Administrator may specify a different vesting
schedule at the time the Option is granted and as specified in the
Option Agreement.
(B) Any
vested portion of an Option not exercised hereunder shall
accumulate and be exercisable at any time on or before the
Termination Date, subject to the rules set forth in Section V.
No Option may be exercised for less than 5% of the total number of
Shares then available for exercise under such Option. In no event
shall the Corporation be required to issue fractional
shares.
5. Limits
on Option Period and Acceleration of Vesting . The Option
Period may end before the Termination Date, and in the
circumstances described in Sections II.5(B), (D), (E) and
(F), the vesting schedule of an Option may be accelerated, (subject
to the provisions of Section V), as follows:
(A) If
a Participant ceases to be a bona fide employee of the Corporation
or of its affiliates during the Option Period for reasons other
than for Cause (as defined herein), Long-Term Disability, Normal or
Early Retirement or death, the Option Period shall end ninety days
after the date of the Participant’s termination of employment
or on the Termination Date, whichever occurs first and in all cases
the Option shall be exercisable only to the extent that it was
exercisable under the provisions of the foregoing Section II.4
at the time of such termination of employment. If a Participant is
absent from work with the Corporation or an affiliate because of
his or her Short-Term Disability or because the Participant is on
an approved leave of absence, the Participant shall not be deemed
during the period of any such absence, by virtue of such absence
alone, to have terminated employment with the Corporation or an
affiliate except as the Administrator may otherwise expressly
determine. Notwithstanding the foregoing, if the Participant is on
a voluntarily leave of absence for the purpose of serving the
government of the country of which the Participant is a citizen or
in which the Participant’s principal place of employment is
located and such leave exceeds twelve months in duration, then the
Participant shall be deemed to have terminated employment with the
Corporation or an affiliate for purposes of this Section
II.5(A).
(B) If
a Participant ceases to be a bona fide employee of the Corporation
or of its affiliates (for reasons other than for Cause, Long-Term
Disability, Normal or Early Retirement or death) during the Option
Period, the Administrator may, in its sole and absolute discretion
(and subject to conditions deemed appropriate in the circumstances)
approve the continuation of the vesting schedule of the
Participant’s Option. The Option Period for any Option that
continues to vest pursuant to this subsection (B) shall end
ninety days after the last Option installment vests, or on the
Termination Date, whichever occurs first.
(C) If
the Participant’s employment is terminated for Cause during
the Option Period, the Option Period shall end on the date of such
termination of employment and the Option shall thereupon not be
exercisable to any extent whatsoever.
(D) If
a Participant ceases to be a bona fide employee of the Corporation
or of its affiliates due to his or her Long-Term Disability during
the Option Period, the vesting schedule of the Participant’s
Option shall be accelerated, the Option shall become fully
exercisable and the Option Period shall end three years after the
date of the Participant’s termination of employment or on the
Termination Date, whichever occurs first.
(E) If
the Participant’s employment is terminated:
(i) by
reason of Normal Retirement, the vesting schedule of the
Participant’s Option shall be accelerated and the Option
shall become fully exercisable as of the date of Normal Retirement;
or
(ii) by
reason of Early Retirement, the Option shall be exercisable only to
the extent that it was exercisable under the provisions of the
foregoing Section II.4 at the time of such Early Retirement;
provided, however, that the Administrator may, in its sole
discretion (and subject to conditions deemed appropriate in the
circumstances), either (A) accelerate the vesting schedule of
the Participant’s Option effective as of the date of the
Participant’s Early Retirement or (B) approve the
continuation of the vesting schedule of the Participant’s
Option.
(iii) With
respect to an Option held by a Participant at Normal or Early
Retirement, the Option Period for that portion of the Option
designated as a Nonstatutory Stock Option shall end three years
after the date of retirement or on the Termination Date, whichever
occurs first; provided, however, that in the case of an Option held
by a Participant at Early Retirement as to which the Administrator
exercises its discretionary authority to approve the continuation
of the vesting schedule, the Option Period shall end on the earlier
of the Termination Date or three years after the last Option
installment vests.
(F) If
a Participant should die while in the employ of the Corporation or
an affiliate and during the Option Period, the vesting schedule of
the Participant’s Option shall be accelerated and the Option
shall become fully exercisable, the Option Period shall end three
years after the date of death or on the Termination Date, whichever
occurs first, and the Participant’s Beneficiary may exercise
the entire unexercised portion of the then exercisable Shares
covered by such Option (or any lesser amount) remaining on the date
of death.
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(G) If
a Participant who ceases to be a bona fide employee of the
Corporation or an affiliate is subsequently rehired prior to the
expiration of his or her Option, then the Option shall continue to
remain outstanding until such time as the Participant subsequently
terminates employment. Upon the Participant’s subsequent
termination of employment, the post-termination exercise period
calculated pursuant to the terms and conditions of this
Section II.5 shall be reduced by the number days between the
date of the Participant’s initial termination of employment
and his or her re-hire date; provided, however, that if the rehired
Participant continues to be employed by the Corporation or an
affiliate for at least one year from his or her rehire date, then
the post termination exercise period for the Option shall be
determined in accordance with Sections II.5(A) through (F) and
shall not be adjusted as described above.
6. Method
of Exercise . A Participant may exercise an Option with respect
to all or any part of the exercisable Shares as follows:
(A) By
giving the Corporation, or its authorized representative designated
for this purpose, written notice of such exercise specifying the
number of Shares as to which the Option is so exercised. Such
notice shall be accompanied by an amount equal to the Exercise
Price of such Shares, in the form of any one or combination of the
following: cash or a certified check, bank draft, postal or express
money order payable to the order of the Corporation in lawful money
of the United States. The Participant may pay the Exercise Price,
in whole or in part, by tendering to the Corporation or its
authorized representative Shares which have been owned by the
Participant for at least six months prior to said tender, and
having a fair market value, as determined by the Corporation, equal
to the Exercise Price, or in lieu of the delivery of actual Shares
in such tender, the Corporation may accept an attestation by the
Participant, in a form prescribed by the Corporation or its
authorized representative, that the Participant owns sufficient
Shares, which have been owned by the Participant for at least six
months prior to said tender, of record or in an account in street
name to satisfy the Exercise Price, and such attestation will be
deemed a tender of Shares for purposes of this method of exercise.
In the event a Participant tenders Shares to pay the Exercise
Price, tender of Shares acquired through exercise of an Incentive
Stock Option may result in unfavorable income tax consequences
unless such Shares are held for at least two years from the Grant
Date of the Incentive Stock Option and one year from the date of
exercise of the Incentive Stock Option. The Corporation or its
authorized representative may accept payment of the Exercise Price
in the form of a Participant’s personal check. Payment may
also be made by delivery (including by FAX transmission) to the
Corporation or its authorized representative of an executed
irrevocable option exercise form together with irrevocable
instructions to an approved registered investment broker to sell
Shares in an amount sufficient to pay the Exercise Price plus any
applicable withholding taxes and to transfer the proceeds of such
sale to the Corporation.
(B) If
required by the Corporation, by giving satisfactory assurance in
writing, signed by the Participant, the Participant shall give his
or her assurance that the Shares subject to the Option are being
purchased for investment and not with a view to the distribution
thereof; provided that such assurance shall be deemed inapplicable
to (1) any sale of the Shares by such Participant made in
accordance with the terms of a registration statement covering such
sale, which has heretofore been (or may hereafter be) filed and
become effective under the Securities Act of 1933, as amended (the
“Securities Act”) and with respect to which no stop
order suspending the effectiveness thereof has been issued, and
(2) any other sale of the Shares with respect to which, in the
opinion of counsel for the Corporation, such assurance is not
required to be given in order to comply with the provisions of the
Securities Act.
(C) As
soon as practicable after receipt of the notice and the assurance
described in Sections II.6(A) and (B), the Corporation shall,
without transfer or issue tax (except for withholding tax
arrangements contemplated in Section VII.6) and without other
incidental expense to the Participant, cause an appropriate book
entry to be entered in the records of the Corporation’s
transfer agent recording the Participant’s unrestricted
interest in the purchased Shares; provided, however, that the time
of such delivery may be postponed by the Corporation for such
period as may be required for it with reasonable diligence to
comply with applicable registration requirements under the
Securities Act, the Exchange Act, any applicable listing
requirements of any national securities exchange and requirements
under any other law or regulation applicable to the issuance or
transfer of the Shares.
7.
Limitations on Transfer . An Option shall, during a
Participant’s lifetime, be exercisable only by the
Participant. No Option or any right granted thereunder shall be
transferable by the Participant by operation of law or otherwise,
other than by will or the laws of descent and distribution.
Notwithstanding the foregoing, (i) a
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Participant may
designate a beneficiary to succeed, after the Participant’s
death, to all of the Participant’s Options outstanding on the
date of death; (ii) a Nonstatutory Stock Option may be
transferable pursuant to a qualified domestic relations order as
defined in the Code or Title I of the Employee Retirement Income
Security Act; and (iii) any Participant, who is a senior
executive officer recommended by the Chief Executive Officer and
approved by the Administrator may voluntarily transfer any
Nonstatutory Stock Option to a Family Member as a gift or through a
transfer to an entity in which more than 50% of the voting
interests are owned by Family Members (or the Participant) in
exchange for an interest in that entity. In the event of any
attempt by a Participant to alienate, assign, pledge, hypothecate,
or otherwise dispose of an Option or of any right thereunder,
except as provided herein, or in the event of the levy of any
attachment, execution, or similar process upon the rights or
interest hereby conferred, the Corporation at its election may
terminate the affected Option by notice to the Participant and the
Option shall thereupon become null and void.
8. No
Shareholder Rights . Neither a Participant nor any person
entitled to exercise a Participant’s rights in the event of
the Participant’s death shall have any of the rights of a
shareholder with respect to the Shares subject to an Option except
to the extent that a book entry has been entered in the records of
the Corporation’s transfer agent with respect to such Shares
upon the exercise of an Option.
1.
Restricted Stock Agreement . A Restricted Stock Award
granted under the Plan shall be evidenced by a Restricted Stock
Agreement to be executed by the Participant and the Corporation
setting forth the terms and conditions of the Restricted Stock
Award. Each Restricted Stock Agreement shall incorporate by
reference and be subject to this Statement of Terms and Conditions
and the terms and conditions of the Plan.
2. Rights
with Respect to Shares of Restricted Stock . Upon written
acceptance of a grant of Restricted Stock Award by a Participant,
including the restrictions and other terms and conditions described
in the Plan, the Restricted Stock Agreement and herein, the
Corporation shall cause an appropriate book entry to be entered in
the records of the Corporation’s transfer agent recording the
Participant’s interest in the Restricted Stock. From and
after the Grant Date, the Participant shall have absolute ownership
of such shares of Restricted Stock, including the right to vote and
to receive dividends thereon, subject to the terms, conditions and
restrictions described in the Plan, the Restricted Stock Agreement
and this Statement of Terms and Conditions.
3.
Special Restrictions . Each Restricted Stock Award made
under the Plan shall contain the following terms, conditions and
restrictions and such additional terms, conditions and restrictions
as may be determined by the Administrator; provided, however, that
no Restricted Stock grant shall be subject to additional terms,
conditions and restrictions which are more favorable to a
Participant than the terms, conditions and restrictions set forth
elsewhere in the Plan, the Restricted Stock Agreement or this
Statement of Terms and Conditions.
(A)
Restrictions . Until the restrictions imposed on any
Restricted Stock grant shall lapse, shares of Restricted Stock
granted to a Participant: (i) shall not be sold, assigned,
transferred, pledged, hypothecated, or otherwise disposed of, other
than pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act
and (ii) shall, if the Participant’s continuous
employment with the Corporation or any of its affiliates shall
terminate for any reason (except as otherwise provided in the Plan
or in Section III.3(B)) be returned to the Corporation
forthwith, and all the rights of the Participant to such shares
shall immediately terminate. If a Participant is absent from work
with the Corporation or an affiliate because of his or her
Short-Term Disability or because the Participant is on an approved
leave of absence, the Participant shall not be deemed during the
period of any such absence, by virtue of such absence alone, to
have terminated employment with the Corporation or an affiliate
except as the Administrator may otherwise expressly determine.
Notwithstanding the foregoing, if the Participant is on a
voluntarily leave of absence for the purpose of serving the
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