Exhibit
10.1
Novelos
Therapeutics, Inc.
2006
STOCK INCENTIVE PLAN
SECTION
1. |
General
Purpose of the Plan;
Definitions
|
The
purpose of this 2006 Stock Incentive Plan (the “Plan”) is to encourage and
enable officers and employees of, and other persons providing services to,
Novelos Therapeutics, Inc. (the “Company”) and its Affiliates to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company’s welfare will assure a closer
identification of their interests with those of the Company and its
shareholders, thereby stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company.
The
following terms shall be defined as set forth below:
“Affiliate” means
a
parent corporation, if any, and each subsidiary corporation of the Company,
as
those terms are defined in Section 424 of the Code.
“Award”
or “Awards”, except where referring to a particular category of grant under the
Plan, shall include Incentive Stock Options, Non-Statutory Stock Options,
Restricted Stock Awards, Unrestricted Stock Awards, Performance Share Awards
and
Stock Appreciation Rights. Awards shall be evidenced by a written agreement
(which may be in electronic form and may be electronically acknowledged and
accepted by the recipient) containing such terms and conditions not inconsistent
with the provisions of this Plan as the Committee shall determine.
“Board”
means the Board of Directors of the Company.
“Cause”
shall mean, with respect to any Award holder, a determination by the Company
(including the Board) or any Affiliate that the Holder’s employment or other
relationship with the Company or any such Affiliate should be terminated as
a
result of (i) a material breach by the Award holder of any agreement to which
the Award holder and the Company (or any such Affiliate) are parties, (ii)
any
act (other than retirement) or omission to act by the Award holder that may
have
a material and adverse effect on the business of the Company, such Affiliate
or
any other Affiliate or on the Award holder’s ability to perform services for the
Company or any such Affiliate, including, without limitation, the proven or
admitted commission of any crime (other than an ordinary traffic violation),
or
(iii) any material misconduct or material neglect of duties by the Award holder
in connection with the business or affairs of the Company or any such Affiliate.
“Change
of Control” shall have the meaning set forth in Section 15.
“Code”
means the Internal Revenue Code of 1986, as amended, and any successor Code,
and
related rules, regulations and interpretations.
“Committee”
shall have the meaning set forth in Section 2.
“Disability”
means disability as set forth in Section 22(e)(3) of the Code.
“Effective
Date” means the date on which the Plan is approved by the Board of Directors as
set forth in Section 17.
“Eligible
Person” shall have the meaning set forth in Section 4.
“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended.
“Fair
Market Value” on any given date means the closing price per share of the Stock
on such date as reported by such registered national securities exchange on
which the Stock is listed, or, if the Stock is not listed on such an exchange,
as quoted on NASDAQ; provided, that, if there is no trading on such date, Fair
Market Value shall be deemed to be the closing price per share on the last
preceding date on which the Stock was traded. If the Stock is not listed on
any
registered national securities exchange or quoted on NASDAQ, the Fair Market
Value of the Stock shall be determined in good faith by the
Committee.
“Incentive
Stock Option” means any Stock Option designated and qualified as an “incentive
stock option” as defined in Section 422 of the Code.
“Non-Employee
Director” means any director who: (i) is not currently an officer of the Company
or an Affiliate, or otherwise currently employed by the Company or an Affiliate,
(ii) does not receive compensation, either directly or indirectly, from the
Company or an Affiliate, for services rendered as a consultant or in any
capacity other than as a director, except for an amount that does not exceed
the
dollar amount for which disclosure would be required pursuant to Rule 404(a)
of
Regulation S-K promulgated by the SEC, (iii) does not possess an interest in
any
other transaction for which disclosure would be required pursuant to Rule 404(a)
of Regulation S-K, and (iv) is not engaged in a business relationship for which
disclosure would be required pursuant to Rule 404(b) of Regulation
S-K.
“Non-Statutory
Stock Option” means any Stock Option that is not an Incentive Stock
Option.
“Normal
Retirement” means retirement in good standing from active employment with the
Company and its Affiliates in accordance with the retirement policies of the
Company and its Affiliates then in effect.
“Option”
or “Stock Option” means any option to purchase shares of Stock granted pursuant
to Section 5.
“Outside
Director” means any director who (i) is not an employee of the Company or of any
“affiliated group,” as such term is defined in Section 1504(a) of the Code,
which includes the Company (an “Affiliated Group Member”), (ii) is not a former
employee of the Company or any Affiliated Group Member who is receiving
compensation for prior services (other than benefits under a tax-qualified
retirement plan) during the Company’s or any Affiliated Group Member’s taxable
year, (iii) has not been an officer of the Company or any Affiliated Group
Member and (iv) does not receive remuneration from the Company or any Affiliated
Group Member, either directly or indirectly, in any capacity other than as
a
director. “Outside Director” shall be determined in accordance with Section
162(m) of the Code and the Treasury regulations issued thereunder.
“Performance
Share Award” means an Award pursuant to Section 8.
“Restricted
Stock Award” means an Award granted pursuant to Section 6.
“SEC”
means the Securities and Exchange Commission or any successor
authority.
“Stock”
means the common stock, $0.00001 par value per share, of the Company, subject
to
adjustments pursuant to Section 3.
“Stock
Appreciation Right” means an Award granted pursuant to Section 9.
“Unrestricted
Stock Award” means Awards granted pursuant to Section 7.
SECTION
2. |
Administration
of Plan; Committee Authority to Select Participants and Determine
Awards.
|
(a) Committee.
It is
intended that the Plan shall be administered by the Compensation Committee
of
the Board (the “Committee”), consisting of not less than two (2) persons each of
whom qualifies as an Outside Director and a Non-Employee Director, but the
authority and validity of any act taken or not taken by the Committee shall
not
be affected if any person administering the Plan is not an Outside Director
or a
Non-Employee Director. Except as specifically reserved to the Board under the
terms of the Plan, and subject to any limitations set forth in the charter
of
the Committee, the Committee shall have full and final authority to operate,
manage and administer the Plan on behalf of the Company.
(b) Powers
of Committee.
The
Committee shall have the power and authority to grant and modify Awards
consistent with the terms of the Plan, including the power and
authority:
(i) to
select
the persons to whom Awards may from time to time be granted;
(ii) to
determine the time or times of grant, and the extent, if any, of Incentive
Stock
Options, Non-Statutory Stock Options, Restricted Stock, Unrestricted Stock,
Performance Shares and Stock Appreciation Rights, or any combination of the
foregoing, granted to any one or more participants;
(iii) to
determine the number of shares to be covered by any Award;
(iv) to
determine and modify the terms and conditions, including restrictions, not
inconsistent with the terms of the Plan, of any Award, which terms and
conditions may differ among individual Awards and participants, and to approve
the form of written instruments evidencing the Awards; provided, however, that
no such action shall adversely affect rights under any outstanding Award without
the participant’s consent;
(v) to
accelerate the exercisability or vesting of all or any portion of any
Award;
(vi) to
extend
the period in which any outstanding Stock Option or Stock Appreciation Right
may
be exercised; and
(vii) to
adopt,
alter and repeal such rules, guidelines and practices for administration of
the
Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related
written instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection with
the Plan; and to otherwise supervise the administration of the
Plan.
All
decisions and interpretations of the Committee shall be binding on all persons,
including the Company and Plan participants. No member or former member of
the
Committee or the Board shall be liable for any action or determination made
in
good faith with respect to this Plan.
SECTION
3. |
Shares
Issuable under the Plan; Mergers;
Substitution.
|
(a) Shares
Issuable.
The
maximum number of shares of Stock which may be issued in respect of Awards
(including Stock Appreciation Rights) granted under the Plan, subject to
adjustment upon changes in capitalization of the Company as provided in this
Section 3, shall be 5,000,000 shares, subject to adjustment upon changes in
capitalization of the Company as provided in this Section 3. For purposes of
this limitation, the shares of Stock underlying any Awards which are forfeited,
cancelled, reacquired by the Company or otherwise terminated (other than by
exercise) shall be added back to the shares of Stock with respect to which
Awards may be granted under the Plan. Shares issued under the Plan may be
authorized but unissued shares or shares reacquired by the Company.
(b) Limitation
on Awards.
In no
event may any Plan participant be granted Awards (including Stock Appreciation
Rights) with respect to more than 750,000 shares of Stock in any calendar year.
The number of shares of Stock relating to an Award granted to a Plan participant
in a calendar year that is subsequently forfeited, cancelled or otherwise
terminated shall continue to count toward the foregoing limitation in such
calendar year. In addition, if the exercise price of an Award is subsequently
reduced, the transaction shall be deemed a cancellation of the original Award
and the grant of a new one so that both transactions shall count toward the
maximum shares issuable in the calendar year of each respective
transaction.
(c) Stock
Dividends, Mergers, etc.
In the
event that after approval of the Plan by the stockholders of the Company in
accordance with Section 17, the Company effects a stock dividend, stock split
or
similar change in capitalization affecting the Stock, the Committee shall make
appropriate adjustments in (i) the number and kind of shares of stock or
securities with respect to which Awards may thereafter be granted (including
without limitation the limitations set forth in Sections 3(a) and (b) above),
(ii) the number and kind of shares remaining subject to outstanding Awards,
and
(iii) the option or purchase price in respect of such shares. In the event
of
any merger, consolidation, dissolution or liquidation of the Company, the
Committee in its sole discretion may, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or accelerate, amend or terminate such Awards upon such
terms and conditions as it shall provide (which, in the case of the termination
of the vested portion of any Award, shall require payment or other consideration
which the Committee deems equitable in the circumstances), subject, however,
to
the provisions of Section 15.
(d) Substitute
Awards.
The
Committee may grant Awards under the Plan in substitution for stock and stock
based awards held by employees of another corporation who concurrently become
employees of the Company or an Affiliate as the result of a merger or
consolidation of the employing corporation with the Company or an Affiliate
or
the acquisition by the Company or an Affiliate of property or stock of the
employing corporation. The Committee may direct that the substitute awards
be
granted on such terms and conditions as the Committee considers appropriate
in
the circumstances.
Awards
may be granted to officers, directors and employees of, and consultants and
advisers to, the Company or its Affiliates (“Eligible Persons”).
SECTION
5. |
Stock
Options.
|
The
Committee may grant to Eligible Persons options to purchase stock.
Any
Stock
Option granted under the Plan shall be in such form as the Committee may from
time to time approve.
Stock
Options granted under the Plan may be either Incentive Stock Options (subject
to
compliance with applicable law) or Non-Statutory Stock Options. Unless otherwise
so designated, an Option shall be a Non-Statutory Stock Option. To the extent
that any option does not qualify as an Incentive Stock Option, it shall
constitute a Non-Statutory Stock Option.
No
Incentive Stock Option shall be granted under the Plan after the tenth
anniversary of the date of adoption of the Plan by the Board.
The
Committee in its discretion may determine the effective date of Stock Options,
provided, however, that grants of Incentive Stock Options shall be made only
to
persons who are, on the effective date of the grant, employees of the Company
or
an Affiliate. Stock Options granted pursuant to this Section 5 shall contain
such additional terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
(a) Exercise
Price.
The
exercise price per share for the Stock covered by a Stock Option granted
pursuant to this Section 5 shall be determined by the Committee at the time
of
grant but shall be not less than one hundred percent (100%) of Fair Market
Value
on the day immediately preceding the date of grant. 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 ten percent (10%) of the combined voting power
of
all classes of stock of the Company or any subsidiary or parent corporation
and
an Incentive Stock Option is granted to such employee, the option price shall
be
not less than one hundred ten percent (110%) of Fair Market Value on the day
immediately preceding the date of grant.
(b) Option
Term.
The
term of each Stock Option shall be fixed by the Committee, but no Incentive
Stock Option shall be exercisable more than ten (10) years after the date the
option is granted. If an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than ten percent (10%)
of
the combined voting power of all classes of stock of the Company or any
subsidiary or parent corporation and an Incentive Stock Option is granted to
such employee, the term of such option shall be no more than five (5) years
from
the date of grant.
(c) Exercisability;
Rights of a Shareholder.
Stock
Options shall become vested and exercisable at such time or times, whether
or
not in installments, as shall be determined by the Committee. The Committee
may
at any time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a shareholder only as to shares
acquired upon the exercise of a Stock Option and not as to unexercised Stock
Options.
(d) Method
of Exercise.
Stock
Options may be exercised in whole or in part, by delivering written notice
of
exercise to the Company, specifying the number of shares to be purchased.
Payment of the purchase price may be made by delivery of cash or bank check
or
other instrument acceptable to the Committee in an amount equal to the exercise
price of such Options, or, to the extent provided in the applicable Option
Agreement, by one or more of the following methods:
(i) by
delivery to the Company of shares of Stock of the Company having a Fair Market
Value equal in amount to the aggregate exercise price of the Options being
exercised; or
(ii) if
the
class of Stock is registered under the Exchange Act at such time, by delivery
to
the Company of a properly executed exercise notice along with irrevocable
instructions to a broker to deliver promptly to the Company cash or a check
payable and acceptable to the Company for the purchase price; provided that
in
the event that the optionee chooses to pay the purchase price as so provided,
the optionee and the broker shall comply with such procedures and enter into
such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure (including, in the case
of an
optionee who is an executive officer of the Company, such procedures and
agreements as the Committee deems appropriate in order to avoid any extension
of
credit in the form of a personal loan to such officer). The Company need not
act
upon such exercise notice until the Company receives full payment of the
exercise price; or
(iii) by
reducing the number of Option shares otherwise issuable to the optionee upon
exercise of the Option by a number of shares of Common Stock having a Fair
Market Value equal to such aggregate exercise price of the Options being
exercised; or
(iv) by
any
combination of such methods of payment.
The
delivery of certificates representing shares of Stock to be purchased pursuant
to the exercise of a Stock Option will be contingent upon receipt from the
Optionee (or a purchaser acting in his stead in accordance with the provisions
of the Stock Option) by the Company of the full purchase price for such shares
and the fulfillment of any other requirements contained in the Stock Option
or
imposed by applicable law.
(e) Non-transferability
of Options.
Except
as the Committee may provide with respect to a Non-Statutory Stock Option,
no
Stock Option shall be transferable other than by will or by the laws of descent
and distribution and all Stock Options shall be exercisable, during the
optionee’s lifetime, only by the optionee.
(f) Annual
Limit on Incentive Stock Options.
To the
extent required for “incentive stock option” treatment under Section 422 of the
Code, the aggregate Fair Market Value (determined as of the time of grant)
of
the Stock with respect to which Incentive Stock Options granted under this
Plan
and any other plan of the Company or its Affiliates become exercisable for
the
first time by an optionee during any calendar year shall not exceed
$100,000.
SECTION
6. |
Restricted
Stock Awards.
|
(a) Nature
of Restricted Stock Award.
The
Committee in its discretion may grant Restricted Stock Awards to any Eligible
Person, entitling the recipient to acquire, for such purchase price, if any,
as
may be determined by the Committee, shares of Stock subject to such restrictions
and conditions as the Committee may determine at the time of grant (“Restricted
Stock”), including continued employment and/or achievement of pre-established
performance goals and objectives.
(b) Acceptance
of Award.
A
participant who is granted a Restricted Stock Award shall have no rights with
respect to such Award unless the participant shall have accepted the Award
within sixty (60) days (or such shorter date as the Committee may specify)
following the award date by making payment to the Company of the specified
purchase price, if any, of the shares covered by the Award and by executing
and
delivering to the Company a written instrument that sets forth the terms and
conditions applicable to the Restricted Stock in such form as the Committee
shall determine.
(c) Rights
as a Shareholder.
Upon
complying with Section 6(b) above, a participant shall have all the rights
of a
shareholder with respect to the Restricted Stock, including voting and dividend
rights, subject to non-transferability restrictions and Company repurchase
or
forfeiture rights described in this Section 6 and subject to such other
conditions contained in the written instrument evidencing the Restricted Award.
Unless the Committee shall otherwise determine, certificates evidencing shares
of Restricted Stock Award shall remain in the possession of the Company until
such shares are vested as provided in Section 6(e) below.
(d) Restrictions.
Shares
of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise
encumbered or disposed of except as specifically provided herein. In the event
of termination of employment by the Company and its Affiliates for any reason
(including death, Disability, Normal Retirement and for Cause), any shares
of
Restricted Stock which have not then vested shall automatically be forfeited
to
the Company.
(e) Vesting
of Restricted Stock.
The
Committee at the time of grant shall specify the date or dates and/or the
attainment of pre-established performance goals, objectives and other conditions
on which the non-transferability of the Restricted Stock and the Company’s right
of forfeiture shall lapse. Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other
conditions, the shares on which all restrictions have lapsed shall no longer
be
Restricted Stock and shall be deemed “vested.” The Committee at any time may
accelerate such date or dates and otherwise waive or, subject to Section 13,
amend any conditions of the Award.
(f) Waiver,
Deferral and Reinvestment of Dividends.
The
written instrument evidencing the Restricted Stock Award may require or permit
the immediate payment, waiver, deferral or investment of dividends paid on
the
Restricted Stock.
SECTION
7. |
Unrestricted
Stock Awards.
|
(a) Grant
or Sale of Unrestricted Stock.
The
Committee in its discretion may grant or sell to any Eligible Person shares
of
Stock free of any restrictions under the Plan (“Unrestricted Stock”) at a
purchase price determined by the Committee. Shares of Unrestricted Stock may
be
granted or sold as described in the preceding sentence in respect of past
services or other valid consideration.
(b) Restrictions
on Transfers.
The
right to receive unrestricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered, other than by will or the laws of descent
and
distribution.
SECTION
8. |
Performance
Share Awards.
|
A
Performance Share Award is an award entitling the recipient to acquire shares
of
Stock upon the attainment of specified performance goals. The Committee may
make
Performance Share Awards independent of or in connection with the granting
of
any other Award under the Plan. Performance Share Awards may be granted under
the Plan to any Eligible Person. The Committee in its discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals applicable under each such Award (which may include, without limitation,
continued employment by the recipient or a specified achievement by the
recipient, the Company or any business unit of the Company), the periods during
which performance is to be measured, and all other limitations and conditions
applicable to the Award or the Stock issuable thereunder. Upon the attainment
of
the specified performance goal shares of Stock shall be issued pursuant to
the
Performance Share Award as soon as practicable thereafter, but in no event
later
than two and one-half months after the calendar year in which such performance
goal is attained.
SECTION
9. |
Stock
Appreciation Rights.
|
The
Committee in its discretion may grant Stock Appreciation Rights to any Eligible
Person. A Stock Appreciation Right shall entitle the participant upon exercise
thereof to receive from the Company, upon written request to the Company at
its
principal offices (the “Request”), a number of shares of Stock, a cash payment,
or a combination of shares and cash (as provided in the Stock Appreciation
Right) having an aggregate Fair Market Value equal to the product of (a) the
excess of Fair Market Value, on the date of such Request, over the exercise
price per share of Stock specified in such Stock Appreciation Right (which
exercise price shall be not less than one hundred percent (100%) of Fair Market
Value on the date of grant), multiplied by (b) the number of shares of Stock
for
which such Stock Appreciation Right shall be exercised.
SECTION
10. |
Termination
of Stock Options and Stock Appreciation
Rights.
|
(a) Incentive
Stock Options:
(i) Termination
by Death.
If any
participant’s employment by the Company and its Affiliates terminates by reason
of death, any Incentive Stock Option owned by such participant may thereafter
be
exercised to the extent exercisable at the date of death, by the legal
representative or legatee of the participant, for a period of one hundred eighty
(180) days from the date of death, or until the expiration of the stated term
of
the Incentive Stock Option, if earlier.
(ii) Termination
by Reason of Disability or Normal Retirement.
(A) Any
Incentive Stock Option held by a participant whose employment by the Company
and
its Affiliates has terminated by reason of Disability may thereafter be
exercised, to the extent it was exercisable at the time of such termination,
for
a period of ninety (90) days from the date of such termination of employment,
or
until the expiration of the stated term of the Option, if earlier.
(B) Any
Incentive Stock Option held by a participant whose employment by the Company
and
its Affiliates has terminated by reason of Normal Retirement may thereafter
be
exercised, to the extent it was exercisable at the time of such termination,
for
a period of ninety (90) days from the date of such termination of employment,
or
until the expiration of the stated term of the Option, if earlier.
(C) The
Committee shall have sole authority and discretion to determine whether a
participant’s employment has been terminated by reason of Disability or Normal
Retirement.
(iii) Involuntary Termination
without Cause.
If any
participant’s employment by the Company and its Affiliates has been terminated
by the Company without Cause, as determined by the Committee in its sole
discretion, any Incentive Stock Option held by such participant may thereafter
be exercised, to the extent it was exercisable on the date of termination of
employment, for ninety (90) days from the date of termination of employment
or
until the expiration of the stated term of the Option, if earlier.
(iv) Termination
for Cause.
If any
participant’s employment by the Company and its Affiliates has been terminated
for Cause, as determined by the Committee in its sole discretion, any Incentive
Stock Option held by such participant shall immediately terminate and be of
no
further force and effect.
(v) Other
Termination.
Unless
otherwise determined by the Committee, if a participant’s employment by the
Company and its Affiliates terminates for any reason other than death,
Disability, or Normal Retirement, involuntary termination without Cause, or
termination for Cause, any Incentive Stock Option held by such participant
may
thereafter be exercised, to the extent it was exercisable on the date of
termination of employment, for thirty (30) days from the date of termination
of
employment or until the expiration of the stated term of the Option, if
earlier.
(b) Non-Statutory
Stock Options and Stock Appreciation Rights.
Any
Non-Statutory Stock Option or Stock Appreciation Right granted under the Plan
shall contain such terms and conditions with respect to its termination as
the
Committee, in its discretion, may from time to time determine.
SECTION
11. |
Tax
Withholding and Notice.
|
(a) Payment
by Participant.
Each
participant shall, no later than the date as of which the value of an Award
or
of any Stock or other amounts received thereunder first becomes includable
in
the gross income of the participant for Federal income tax purposes, pay to
the
Company, or make arrangements satisfactory to the Committee regarding payment
of
any Federal, state, local and/or payroll taxes of any kind required by law
to be
withheld with respect to such income. The Company and its Affiliates shall,
to
the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(b) Payment
in Shares.
A
Participant may elect, with the consent of the Committee, to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Stock to be issued pursuant to an Award
a
number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due with
respect to such Award, or (ii) delivering to the Company a number of shares
of
Stock with an aggregate Fair Market Value (as of the date the withholding is
effected) that would satisfy the withholding amount due.
(c) Notice
of Disqualifying Disposition.
Each
holder of an Incentive Option shall agree to notify the Company in writing
immediately after making a disqualifying disposition (as defined in Section
421(b) of the Code) of any Stock purchased upon exercise of an Incentive Stock
Option.
SECTION
12. |
Transfer
and Leave of Absence.
|
For
purposes of the Plan, the following events shall not be deemed a termination
of
employment:
(a) a
transfer to the employment of the Company from an Affiliate or from the Company
to an Affiliate, or from one Affiliate to another;
(b) an
approved leave of absence for military service or sickness, or for any other
purpose approved by the Company, if the employee’s right to re-employment is
guaranteed either by a statute or by contract or under the policy pursuant
to
which the leave of absence was granted or if the Committee otherwise so provides
in writing; provided, that the vesting date or dates of any unvested Award
held
by such employee shall automatically be extended by a period of time equal
to
the period of such approved leave of absence.
SECTION
13. Amendments and Termination.
The
Board
may at any time amend or discontinue the Plan and the Committee may at any
time
amend or cancel any outstanding Award for the purpose of satisfying changes
in
law or for any other lawful purpose, but no such action shall adversely affect
rights under any outstanding Award without the holder’s consent. Notwithstanding
the foregoing, neither the Board nor the Committee shall have the power or
authority to decrease the exercise price of any outstanding Stock Option or
Stock Appreciation Right, whether through amendment, cancellation and regrant,
exchange or any other means, except for changes made pursuant to Section
3(c).
This
Plan
shall terminate as of the tenth anniversary of its effective date. The Board
may
terminate this Plan at any earlier time for any reason. No Award may be granted
after the Plan has been terminated. No Award granted while this Plan is in
effect shall be adversely altered or impaired by termination of this Plan,
except upon the consent of the holder of such Award. The power of the Committee
to construe and interpret this Plan and the Awards granted prior to the
termination of this Plan shall continue after such termination.
SECTION
14. Status of Plan.
With
respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant,
a
participant shall have no rights greater than those of a general creditor of
the
Company unless the Committee shall otherwise expressly determine in connection
with any Award or Awards.
SECTION
15. Change of Control Provisions.
(a) Upon
the
occurrence of a Change of Control as defined in this Section 15:
(i) subject
to the provisions of clause (iii) below, after the effective date of such Change
of Control, each holder of an outstanding Stock Option, Restricted Stock Award,
Performance Share Award or Stock Appreciation Right shall be entitled, upon
exercise of such Award, to receive, in lieu of shares of Stock (or consideration
based upon the Fair Market Value of Stock), shares of such stock or other
securities, cash or property (or consideration based upon shares of such stock
or other securities, cash or property) as the holders of shares of Stock
received in connection with the Change of Control;
(ii) the
Committee may accelerate, fully or in part, the time for exercise of, and waive
any or all conditions and restrictions on, each unexercised and unexpired Stock
Option, Restricted Stock Award, Performance Share Award and Stock Appreciation
Right, effective upon a date prior or subsequent to the effective date of such
Change of Control, as specified by the Committee; or
(iii) each
outstanding Stock Option, Restricted Stock Award, Performance Share Award and
Stock Appreciation Right may be cancelled by the Committee as of the effective
date of any such Change of Control provided that (x) prior written notice of
such cancellation shall be given to each holder of such an Award and (y) each
holder of such an Award shall have the right to exercise such Award to the
extent that the same is then exercisable or, in full, if the Committee shall
have accelerated the time for exercise of all such unexercised and unexpired
Awards, during the thirty (30) day period preceding the effective date of such
Change of Control.
(b) “Change
of Control” shall mean the occurrence of any one of the following
events:
(i) any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) becomes, after the Effective Date of this Plan, a “beneficial owner” (as
such term is defined in Rule 13d-3 promulgated under the Exchange Act) (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding securities;
or
(ii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation or other entity, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than fifty percent (50%) of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after
such merger or consolidation; or
(iii) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
SECTION 16.
General Provisions.
(a) No
Distribution; Compliance with Legal Requirements.
The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is acquiring
the shares without a view to distribution thereof.
No
shares
of Stock shall be issued pursuant to an Award until all applicable securities
laws and other legal and stock exchange requirements have been satisfied. The
Committee may require the placing of such stop orders and restrictive legends
on
certificates for Stock and Awards as it deems appropriate.
(b) Delivery
of Stock Certificates.
Delivery of stock certificates to participants under this Plan shall be deemed
effected for all purposes when the Company or a stock transfer agent of the
Company shall have delivered such certificates in the United States mail,
addressed to the participant, at the participant’s last known address on file
with the Company.
(c) Other
Compensation Arrangements; No Employment Rights.
Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval
if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan or
any
Award under the Plan does not confer upon any employee any right to continued
employment with the Company or any Affiliate.
(d) Lock-Up
Agreement. By
accepting any Award, the recipient shall be deemed to have agreed that, if
so
requested by the Company or by the underwriters managing any underwritten
offering of the Company’s securities, the recipient will not, without the prior
written consent of the Company or such underwriters, as the case may be, sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise
dispose of any shares subject to any such Award during the Lock-up Period,
as
defined below. The “Lock-Up Period” shall mean a period of time not exceeding
180 days or, if greater, such number of days as shall have been agreed to by
each director and executive officer of the Company in connection with such
offering in a substantially similar lock-up agreement by which each such
director and executive officer is bound. If requested by the Company or such
underwriters, the recipient shall enter into an agreement with such underwriters
consistent with the foregoing.
SECTION 17.
Effective Date of Plan.
This
Plan
shall become effective upon its adoption by the Company’s Board of Directors. If
the Plan shall not be approved by the shareholders of the Company within twelve
months following its adoption, this Plan shall terminate and be of no further
force or effect.
SECTION
18. Governing Law.
This
Plan
shall be governed by, and construed and enforced in accordance with, the
substantive laws of the State of Delaware without regard to its principles
of
conflicts of laws.
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