Exhibit 10.2
INTEGRA LIFESCIENCES HOLDINGS CORPORATION
AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN
EFFECTIVE AS OF JULY 9, 2008
WHEREAS, Integra LifeSciences Holdings Corporation (the “Company”) desires to
have the ability to award certain equity-based benefits to certain “Key
Employees” and “Associates” (as defined below);
NOW, THEREFORE, the Integra LifeSciences Holdings Corporation Amended and
Restated 2003 Equity Incentive Plan is hereby adopted under the following terms
and conditions. This Plan amends and restates in its entirety the Integra
LifeSciences Holdings Corporation 2003 Equity Incentive Plan, originally adopted
by the Board as of February 2, 2003 and approved by the Company’s stockholders
as of May 21, 2003.
1) Purpose. The Plan is intended to provide a means whereby the Company may
grant ISOs to Key Employees and may grant NQSOs, Restricted Stock, Stock
Appreciation Rights, Performance Stock, Contract Stock and Dividend Equivalent
Rights to Key Employees and Associates. Thereby, the Company expects to attract
and retain such Key Employees and Associates and to motivate them to exercise
their best efforts on behalf of the Company and any Related Corporations and
Affiliates.
2) Definitions
a) “Affiliate” shall mean an entity in which the Company or a Related
Corporation has a 50 percent or greater equity interest.
b) “Associate” shall mean a designated nonemployee director, consultant or other
person providing services to the Company, a Related Corporation or an Affiliate.
c) “Award” shall mean ISOs, NQSOs, Restricted Stock, Stock Appreciation Rights,
Performance Stock, Contract Stock and/or Dividend Equivalent Rights awarded by
the Committee to a Participant.
d) “Award Agreement” shall mean a written document evidencing the grant of an
Award, as described in Section 10.1.
e) “Board” shall mean the Board of Directors of the Company.
f) “Code” shall mean the Internal Revenue Code of 1986, as amended.
g) “Committee” shall mean the Company’s Compensation Committee of the Board,
which shall consist solely of not fewer than two directors of the Company who
shall be appointed by, and serve at the pleasure of, the Board (taking into
consideration the rules under section 16(b) of the Exchange Act and the
requirements of section 162(m) of the Code).
h) “Company” shall mean Integra LifeSciences Holdings Corporation, a Delaware
corporation.
i) “Contract Date” shall mean the date specified in the Award Agreement on which
a Participant is entitled to receive Contract Stock, provided he or she is still
providing services to the Company, a Related Corporation, or an Affiliate on
such date.
j) “Contract Stock” shall mean an Award that entitles the recipient to receive
unrestricted Shares, without payment, if the recipient is still providing
services to the Company or a Related Corporation as of a future date specified
in the Award Agreement.
k) “Disability” shall mean separation from service as a result of “permanent and
total disability,” as defined in section 22(e)(3) of the Code.

 

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l) “Dividend Equivalent Right” shall mean an Award that entitles the recipient
to receive a benefit in lieu of cash dividends that would have been payable on
any or all Shares subject to another Award granted to the Participant had such
Shares been outstanding.
m) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
n) “Fair Market Value” shall mean the following, arrived at by a good faith
determination of the Committee:
i) if there are sales of Shares on a national securities exchange or in an
over-the-counter market on the date of grant (or on such other date as value
must be determined), then the quoted closing price on such date; or
ii) if there are no such sales of Shares on the date of grant (or on such other
date as value must be determined), then the quoted closing price on the last
preceding date for which such quotation exists; or
iii) if the Shares are not listed on an established securities exchange or
over-the-counter market system on the date of grant, but the Shares are
regularly quoted by a recognized securities dealer, then the mean of the high
bid and low asked prices for such date or, if there are no high bid and low
asked prices for a Share on such date, the high bid and low asked prices for a
Share on the last preceding date for which such information exists; or
iv) if paragraphs (i) through (iii) above are not applicable, then such other
method of determining fair market value as shall be adopted by the Committee.
o) “ISO” shall mean an Option which, at the time such Option is granted under
the Plan, qualifies as an incentive stock option within the meaning of section
422 of the Code, unless the Award Agreement states that the Option will not be
treated as an ISO.
p) “Key Employee” shall mean an officer, executive, or managerial or
nonmanagerial employee of the Company, a Related Corporation, or an Affiliate.
q) “More-Than-10-Percent Stockholder” shall mean any person who at the time of
grant owns, directly or indirectly, or is deemed to own by reason of the
attribution rules of section 424(d) of the Code, Shares possessing more than
10 percent of the total combined voting power of all classes of Shares of the
Company or of a Related Corporation.
r) “NQSO” shall mean an Option that, at the time such Option is granted to a
Participant, does not meet the definition of an ISO, whether or not it is
designated as a nonqualified stock option in the Award Agreement.
s) “Option” is an Award entitling the Participant on exercise thereof to
purchase Shares at a specified exercise price.
t) “Participant” shall mean a Key Employee or Associate who has been granted an
Award under the Plan.
u) “Performance Stock” shall mean an Award that entitles the recipient to
receive Shares, without payment, following the attainment of designated
Performance Goals.
v) “Performance Goals” shall mean goals deemed by the Committee to be important
to the success of the Company or any of its Related Corporations or Affiliates.
The Committee shall establish the specific measures for each such goal at the
time an Award of Performance Stock is granted. In creating these measures, the
Committee shall use one or more of the following business criteria: return on
assets, return on net assets, asset turnover, return on equity, return on
capital, market price appreciation of Shares, economic value added, total
stockholder return, net income, pre-tax income, earnings per share, operating
profit margin, net income margin, sales margin, cash flow, market share,
inventory turnover, sales growth, capacity utilization, increase in customer
base, environmental health and safety, diversity, and/or quality. The business
criteria may be expressed in absolute terms or relative to the performance of
other companies or an index.

 

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w) “Plan” shall mean the Integra LifeSciences Holdings Corporation Amended and
Restated 2003 Equity Incentive Plan, as set forth herein and as it may be
amended from time to time.
x) “Related Corporation” shall mean either a “subsidiary corporation” of the
Company (if any), as defined in section 424(f) of the Code, or the “parent
corporation” of the Company (if any), as defined in section 424(e) of the Code.
y) “Restricted Stock” shall mean an Award that grants the recipient Shares at no
cost but subject to whatever restrictions are determined by the Committee.
z) “Securities Act” shall mean the Securities Act of 1933, as amended.
aa) “Shares” shall mean shares of common stock of the Company, par value $0.01
per share.
bb) “Stock Appreciation Right” shall mean an Award entitling the recipient on
exercise to receive an amount, in cash or Shares or a combination thereof (such
form to be determined by the Committee), determined in whole or in part by
reference to appreciation in Share value.
3. Administration
a) The Plan shall be administered by the Committee. Each member of the
Committee, while serving as such, shall be deemed to be acting in his or her
capacity as a director of the Company. Acts approved by a majority of the
members of the Committee at which a quorum is present, or acts without a meeting
reduced to or approved in writing by a majority of the members of the Committee,
shall be the valid acts of the Committee. Any authority of the Committee may be
delegated either by the Committee or the Board to a committee of the Board or
any other Plan administrator, but only to the extent such delegation complies
with the requirements of Section 162(m) of the Code, Rule 16b-3 promulgated
under the Exchange Act or as required by any other applicable rule or
regulation.
b) The Committee shall have the authority:
i) to select the Key Employees and Associates to be granted Awards under the
Plan and to grant such Awards at such time or times as it may choose;
ii) to determine the type and size of each Award, including the number of Shares
subject to the Award;
iii) to determine the terms and conditions of each Award;
iv) to amend an existing Award in whole or in part (including the extension of
the exercise period for any NQSO), except that the Committee may not (A) lower
the exercise price of any Option or Stock Appreciation Right, or (B) without the
consent of the Participant holding the Award, take any action under this clause
if such action would adversely affect the rights of such Participant;
v) to adopt, amend and rescind rules and regulations for the administration of
the Plan;
vi) to interpret the Plan and decide any questions and settle any controversies
that may arise in connection with it; and
vii) to adopt such modifications, amendments, procedures, sub-plans and the
like, which may be inconsistent with the provisions of the Plan, as may be
necessary to comply with the laws and regulations of other countries in which
the Company and its Related Corporations and Affiliates operate in order to
assure the viability of Awards granted under the Plan to individuals in such
other countries.
Such determinations and actions of the Committee, and all other determinations
and actions of the Committee made or taken under authority granted by any
provision of the Plan, shall be conclusive and shall bind all parties. Nothing
in this subsection (b) shall be construed as limiting the power of the Board or
the Committee to make the adjustments described in Sections 8.3 and 8.4.

 

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4. Effective Date and Term of Plan
a) Effective Date. The Plan, as amended and restated, having been adopted by the
Board on April 23, 2008, is subject to the approval of the stockholders of the
Company in accordance with Section 9(b), and shall become effective on the date
on which such approval is obtained.
b) Term of Plan for ISOs. No ISO may be granted under the Plan after
February 23, 2013, but ISOs previously granted may extend beyond that date.
Awards other than ISOs may be granted after that date.
5. Shares Subject to the Plan. The aggregate number of Shares that may be
delivered under the Plan is 4,000,000. Further, no Key Employee shall receive
Awards for more than 1,000,000 Shares in the aggregate during any calendar year
under the Plan. However, the limits in the preceding two sentences shall be
subject to the adjustment described in Section 8.3. Shares delivered under the
Plan may be authorized but unissued Shares or reacquired Shares, and the Company
may purchase Shares required for this purpose, from time to time, if it deems
such purchase to be advisable. Any Shares still subject to an Option which
expires or otherwise terminates for any reason whatever (including, without
limitation, the surrender thereof) without having been exercised in full, any
Shares that are still subject to an Award that is forfeited, any Shares withheld
for the payment of taxes with respect to an Award, and the Shares subject to an
Award which is payable in Shares or cash and that is satisfied in cash rather
than in Shares shall continue to be available for Awards under the Plan.
6. Eligibility. The class of individuals who shall be eligible to receive Awards
under the Plan shall be the Key Employees (including any directors of the
Company who are also officers or Key Employees) and the Associates. More than
one Award may be granted to a Key Employee or Associate under the Plan.
7. Types of Awards
7.1 Options
a) Kinds of Options. Both ISOs and NQSOs may be granted by the Committee under
the Plan. However, ISOs may only be granted to Key Employees of the Company or
of a Related Corporation. NQSOs may be granted to both Key Employees and
Associates. Once an ISO has been granted, no action by the Committee that would
cause the Option to lose its status as an ISO under the Code will be effective
without the consent of the Participant holding the Option.
b) $100,000 Limit. The aggregate Fair Market Value of the Shares with respect to
which ISOs are exercisable for the first time by a Key Employee during any
calendar year (counting ISOs under this Plan and under any other stock option
plan of the Company or a Related Corporation) shall not exceed $100,000. If an
Option intended as an ISO is granted to a Key Employee and the Option may not be
treated in whole or in part as an ISO pursuant to the $100,000 limit, the Option
shall be treated as an ISO to the extent it may be so treated under the limit
and as an NQSO as to the remainder. For purposes of determining whether an ISO
would cause the limit to be exceeded, ISOs shall be taken into account in the
order granted. The annual limits set forth above for ISOs shall not apply to
NQSOs.
c) Exercise Price. The exercise price of an Option shall be determined by the
Committee, subject to the following:
i) The exercise price of an ISO shall not be less than the greater of
(A) 100 percent (110 percent in the case of an ISO granted to a
More-Than-10-Percent Stockholder) of the Fair Market Value of the Shares subject
to the Option, determined as of the time the Option is granted, or (B) the par
value per Share.
ii) The exercise price of an NQSO shall not be less than the greater of
(A) 100 percent of the Fair Market Value of the Shares subject to the Option,
determined as of the time the Option is granted, or (B) the par value per Share.

 

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d) Term of Options. The term of each Option may not be more than 10 years (five
years, in the case of an ISO granted to a More-Than-10-Percent Stockholder) from
the date the Option was granted, or such earlier date as may be specified in the
Award Agreement.
e) Exercise of Options. An Option shall become exercisable at such time or times
(but not less than three months from the date of grant), and on such conditions,
as the Committee may specify. The Committee may at any time and from time to
time accelerate the time at which all or any part of the Option may be
exercised. Any exercise of an Option must be in writing, signed by the proper
person, and delivered or mailed to the Company, accompanied by (i) any other
documents required by the Committee and (ii) payment in full in accordance with
subsection (f) below for the number of Shares for which the Option is exercised
(except that, in the case of an exercise arrangement approved by the Committee
and described in subsection (f)(iii) below, payment may be made as soon as
practicable after the exercise). Only full shares shall be issued under the
Plan, and any fractional share that might otherwise be issuable upon exercise of
an Option granted hereunder shall be forfeited.
f) Payment for Shares. Shares purchased on the exercise of an Option shall be
paid for as follows:
i) in cash or by check (acceptable to the Committee), bank draft, or money order
payable to the order of the Company;
ii) in Shares previously acquired by the Participant; provided, however, that if
such Shares were acquired through the exercise of an ISO and are used to pay the
Option price of an ISO, such Shares have been held by the Participant for a
period of not less than the holding period described in section 422(a)(1) of the
Code on the date of exercise, or if such Shares were acquired through the
exercise of an NQSO and are used to pay the Option price of an ISO, or if such
Shares were acquired through the exercise of an ISO or an NQSO and are used to
pay the Option price of an NQSO, such Shares have been held by the Participant
for such period of time as required to be considered “mature” Shares for
purposes of accounting treatment;
iii) by delivering a properly executed notice of exercise of the Option to the
Company and a broker, with irrevocable instructions to the broker promptly to
deliver to the Company the amount of sale or loan proceeds necessary to pay the
exercise price of the Option; or
iv) by any combination of the above-listed forms of payment.
In the event the Option price is paid, in whole or in part, with Shares, the
portion of the Option price so paid shall be equal to the Fair Market Value on
the date of exercise of the Option of the Shares surrendered in payment of such
Option price.
7.2. Stock Appreciation Rights
a) Grant of Stock Appreciation Rights. Stock Appreciation Rights may be granted
to a Key Employee or Associate by the Committee. Stock Appreciation Rights may
be granted in tandem with, or independently of, Options granted under the Plan.
A Stock Appreciation Right granted in tandem with an Option that is not an ISO
may be granted either at or after the time the Option is granted. A Stock
Appreciation Right granted in tandem with an ISO may be granted only at the time
the ISO is granted.
b) Nature of Stock Appreciation Rights. A Stock Appreciation Right entitles the
Participant to receive, with respect to each Share as to which the Stock
Appreciation Right is exercised, the excess of the Share’s Fair Market Value on
the date of exercise over its Fair Market Value on the date the Stock
Appreciation Right was granted. Such excess shall be paid in cash, Shares, or a
combination thereof, as determined by the Committee.
c) Rules Applicable to Tandem Awards. When Stock Appreciation Rights are granted
in tandem with Options, the number of Stock Appreciation Rights granted to a
Participant that shall be exercisable during a specified period shall not exceed
the number of Shares that the Participant may purchase upon the exercise of the
related Option during such period. Upon the exercise of an Option, the Stock
Appreciation Right relating to the Shares covered by such Option will terminate.
Upon the exercise of a Stock Appreciation Right, the related Option will
terminate to the extent of an equal number of Shares. The Stock Appreciation
Right will be exercisable only at such time or times, and to the extent, that
the related Option is exercisable and will be exercisable in accordance with the
procedure required for exercise of the related Option. The Stock Appreciation
Right will be transferable only when the related Option is transferable, and
under the same conditions. A Stock Appreciation Right granted in tandem with an
ISO may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the exercise price of such ISO.

 

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d) Exercise of Independent Stock Appreciation Rights. A Stock Appreciation Right
not granted in tandem with an Option shall become exercisable at such time or
times, and on such conditions, as the Committee may specify in the Award
Agreement. The Committee may at any time accelerate the time at which all or any
part of the Stock Appreciation Right may be exercised. Any exercise of an
independent Stock Appreciation Right must be in writing, signed by the proper
person, and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
e) Term of Stock Appreciation Rights. The term of each Stock Appreciation Right
may not be more than 10 years from the date the Stock Appreciation Right was
granted, or such earlier date as may be specified in the Award Agreement.
7.3. Restricted Stock
a) General Requirements. Restricted Stock may be issued or transferred to a Key
Employee or Associate (for no consideration), to the extent permitted by
applicable law.
b) Rights as a Stockholder. Unless the Committee determines otherwise, a Key
Employee or Associate who receives Restricted Stock shall have certain rights of
a stockholder with respect to the Restricted Stock, including voting and
dividend rights, subject to the restrictions described in subsection (c) below
and any other conditions imposed by the Committee at the time of grant. Unless
the Committee determines otherwise, certificates evidencing shares of Restricted
Stock will remain in the possession of the Company until such Shares are free of
all restrictions under the Plan.
c) Restrictions. Except as otherwise specifically provided by the Plan,
Restricted Stock may not be sold, assigned, transferred, pledged, or otherwise
encumbered or disposed of, and if the Participant ceases to provide services to
any of the Company and its Related Corporations and Affiliates for any reason,
must be forfeited to the Company. These restrictions will lapse at such time or
times, and on such conditions, as the Committee may specify in the Award
Agreement. Upon the lapse of all restrictions, the Shares will cease to be
Restricted Stock for purposes of the Plan. The Committee may at any time
accelerate the time at which the restrictions on all or any part of the Shares
will lapse.
d) Notice of Tax Election. Any Participant making an election under section
83(b) of the Code for the immediate recognition of income attributable to an
Award of Restricted Stock must provide a copy thereof to the Company within
10 days of the filing of such election with the Internal Revenue Service.
7.4. Performance Stock; Performance Goals
a) Grant. The Committee may grant Performance Stock to any Key Employee or
Associate, conditioned upon the meeting of designated Performance Goals. The
Committee shall determine the number of Shares of Performance Stock to be
granted.
b) Performance Period and Performance Goals. When Performance Stock is granted,
the Committee shall establish the performance period during which performance
shall be measured, the Performance Goals, and such other conditions of the Award
as the Committee deems appropriate.
c) Delivery of Performance Stock. At the end of each performance period, the
Committee shall determine to what extent the Performance Goals and other
conditions of the Award have been met and the number of Shares, if any, to be
delivered with respect to the Award.

 

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7.5. Contract Stock
a) Grant. The Committee may grant Contract Stock to any Key Employee or
Associate, conditioned upon the Participant’s continued provision of services to
the Company and its Related Corporations and Affiliates through the date
specified in the Award Agreement. The Committee shall determine the number of
Shares of Contract Stock to be granted.
b) Contract Date. When Contract Stock is granted, the Committee shall establish
the Contract Date on which the Contract Stock shall be delivered to the
Participant, provided the Participant is still providing services to the Company
and its Related Corporations and Affiliates on such date.
c) Delivery of Contract Stock. If the Participant is still providing services to
the Company and its Related Corporations and Affiliates as of the Contract Date,
the Committee shall cause the Contract Stock to be delivered to the Participant
in accordance with the terms of the Award Agreement.
7.6. Dividend Equivalent Rights. The Committee may provide for payment to a Key
Employee or Associate of Dividend Equivalent Rights, either currently or in the
future, or for the investment of such Dividend Equivalent Rights on behalf of
the Participant.
8. Events Affecting Outstanding Awards
8.1. Termination of Service (Other Than by Death or Disability). If a
Participant ceases to provide services to the Company and its Related
Corporations and Affiliates for any reason other than death or Disability, as
the case may be, the following shall apply:
a) Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Participant’s termination of service shall terminate at
that time. Any Options or Stock Appreciation Rights that were exercisable
immediately prior to the termination of service will continue to be exercisable
for six months (or for such longer period as the Committee may determine), and
shall thereupon terminate, unless the Award Agreement provides by its terms for
immediate termination or for termination in less than six months in the event of
termination of service.
In no event, however, shall an Option or Stock Appreciation Right remain
exercisable beyond the latest date on which it could have been exercised without
regard to this Section. For purposes of this subsection (a), a termination of
service shall not be deemed to have resulted by reason of a sick leave or other
bona fide leave of absence approved for purposes of the Plan by the Committee.
b) Except as otherwise determined by the Committee, all Restricted Stock held by
the Participant at the time of the termination of service must be transferred to
the Company (and, in the event the certificates representing such Restricted
Stock are held by the Company, such Restricted Stock shall be so transferred
without any further action by the Participant), in accordance with Section 7.3.
c) Except as otherwise determined by the Committee, all Performance Stock,
Contract Stock, and Dividend Equivalent Rights to which the Participant was not
irrevocably entitled prior to the termination of service shall be forfeited and
the Awards canceled as of the date of such termination of service.
8.2. Death or Disability. If a Participant dies or incurs a Disability, the
following shall apply:
a) Except as otherwise determined by the Committee, all Options and Stock
Appreciation Rights held by the Participant immediately prior to death or
Disability, as the case may be, to the extent then exercisable, may be exercised
by the Participant or by the Participant’s legal representative (in the case of
Disability), or by the Participant’s executor or administrator or by the person
or persons to whom the Option or Stock Appreciation Right is transferred by will
or the laws of descent and distribution, at any time within the one-year period
ending with the first anniversary of the Participant’s death or Disability (or
such shorter or longer period as the Committee may determine), and shall
thereupon terminate. In no event, however, shall an Option or Stock Appreciation
Right remain exercisable beyond the latest date on which it could have been
exercised without regard to this Section. Except as otherwise determined by the
Committee, all Options and Stock Appreciation Rights held by a Participant
immediately prior to death or Disability that are not then exercisable shall
terminate at the date of death or Disability.

 

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b) Except as otherwise determined by the Committee, all Restricted Stock held by
the Participant at the date of death or Disability, as the case may be, must be
transferred to the Company (and, in the event the certificates representing such
Restricted Stock are held by the Company, such Restricted Stock shall be so
transferred without any further action by the Participant), in accordance with
Section 7.3.
c) Except as otherwise determined by the Committee, all Performance Stock,
Contract Stock, and Dividend Equivalent Rights to which the Participant was not
irrevocably entitled prior to death or Disability, as the case may be, shall be
forfeited and the Awards canceled as of the date of death or Disability.
8.3. Capital Adjustments. The maximum number of Shares that may be delivered
under the Plan, and the maximum number of Shares with respect to which Awards
may be granted to any Key Employee or Associate under the Plan, both as stated
in Section 5, and the number of Shares issuable upon the exercise or vesting of
outstanding Awards under the Plan (as well as the exercise price per Share under
outstanding Options or Stock Appreciation Rights), shall be proportionately
adjusted, as may be deemed appropriate by the Committee, to reflect any increase
or decrease in the number of issued Shares resulting from a subdivision
(share-split), consolidation (reverse split), stock dividend, or similar change
in the capitalization of the Company.
8.4. Certain Corporate Transactions
a) In the event of a corporate transaction (as, for example, a merger,
consolidation, acquisition of property or stock, separation, reorganization, or
liquidation), each outstanding Award shall be assumed by the surviving or
successor entity; provided, however, that in the event of a proposed corporate
transaction, the Committee may terminate all or a portion of any outstanding
Award, effective upon the closing of the corporate transaction, if it determines
that such termination is in the best interests of the Company. If the Committee
decides to terminate outstanding Options or Stock Appreciation Rights, the
Committee shall give each Participant holding an Option or Stock Appreciation
Right to be terminated not less than seven days’ notice prior to any such
termination, and any Option or Stock Appreciation Right that is to be so
terminated may be exercised (if and only to the extent that it is then
exercisable) up to, and including the date immediately preceding such
termination. Further, the Committee, in its discretion, may (i) accelerate, in
whole or in part, the date on which any or all Options and Stock Appreciation
Rights become exercisable, (ii) remove the restrictions from outstanding
Restricted Stock, (iii) cause the delivery of any Performance Stock, even if the
associated Performance Goals have not been met, (iv) cause the delivery of any
Contract Stock, even if the Contract Date has not been reached; and/or (v) cause
the payment of any Dividend Equivalent Rights. The Committee also may, in its
discretion, change the terms of any outstanding Award to reflect any such
corporate transaction, provided that, in the case of ISOs, such change would not
constitute a “modification” under section 424(h) of the Code, unless the
Participant consents to the change.
b) With respect to an outstanding Award held by a Participant who, following the
corporate transaction, will be employed by or otherwise providing services to an
entity which is a surviving or acquiring entity in such transaction or an
affiliate of such an entity, the Committee may, in lieu of the action described
in subsection (a) above, arrange to have such surviving or acquiring entity or
affiliate grant to the Participant a replacement award which, in the judgment of
the Committee, is substantially equivalent to the Award.
8.5. Exercise Upon Change in Control
a) Notwithstanding any other provision of this Plan, all outstanding Options and
all Stock Appreciation Rights shall become fully vested and exercisable, all
Performance Stock and all Dividend Equivalent Rights shall become fully vested,
all Contract Stock shall become immediately payable, and all restrictions shall
be removed from any outstanding Restricted Stock, upon a Change in Control.

 

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b) “Change in Control” shall mean:
i) An acquisition (other than directly from the Company) of any voting
securities of the Company (“Voting Securities”) by any “Person” (as such term is
used for purposes of section 13(d) or 14(d) of the Exchange Act) immediately
after which such Person has “Beneficial Ownership” (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 50 percent or more of the
combined voting power of all the then outstanding Voting Securities, other than
the Company, any trustee or other fiduciary holding securities under any
employee benefit plan of the Company or an affiliate thereof, 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;
provided, however, that any acquisition from the Company or any acquisition
pursuant to a transaction which complies with paragraph (iii)(A) and (B) below
shall not be a Change in Control under this paragraph (i);
ii) The individuals who, as of March 1, 2003, are members of the Board (the
“Incumbent Board”) cease for any reason to constitute at least two-thirds of the
Board; provided, however, that if the election, or nomination for election by
the stockholders, of any new director was approved by a vote of at least
two-thirds of the members of the Board who constitute Incumbent Board members,
such new directors shall for all purposes be considered as members of the
Incumbent Board as of March 1, 2003, provided further, however, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened “Election Contest” (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board of Directors (a “Proxy
Contest”) including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest;
iii) consummation by the Company of a reorganization, merger, or consolidation
or sale or other disposition of all or substantially all of the assets of the
Company or the acquisition of assets or stock of another entity (a “Business
Combination”), unless immediately following such Business Combination: (A) more
than 50 percent of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of (I) the
corporation resulting from such Business Combination (the “Surviving
Corporation”), or (II) if applicable, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets
either directly or through one or more subsidiaries (the “Parent Corporation”),
is represented, directly or indirectly, by Company Voting Securities outstanding
immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders
thereof is in substantially the same proportions as their ownership, immediately
prior to such Business Combination, of the Company Voting Securities; and (B) at
least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
were members of the Incumbent Board at the time of the execution of the initial
agreement, or the action of the Board, providing for such Business Combination;
iv) approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company; or
v) acceptance by the stockholders of the Company of shares in a share exchange
if the stockholders of the Company immediately before such share exchange do not
own, directly or indirectly, immediately following such share exchange more than
50 percent of the combined voting power of the outstanding Voting Securities of
the corporation resulting from such share exchange in substantially the same
proportion as their ownership of the Voting Securities outstanding immediately
before such share exchange.
9. Amendment or Termination of the Plan
a) In General. The Board, pursuant to a written resolution, may from time to
time suspend or terminate the Plan or amend it and, except as provided in
Section 3(b)(iv), 7.1(a), and 8.4(a), the Committee may amend any outstanding
Awards in any respect whatsoever; except that, without the approval of the
stockholders (given in the manner set forth in subsection (b) below):
i) no amendment may be made that would:
(A) change the class of employees eligible to participate in the Plan with
respect to ISOs;

 

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(B) except as permitted under Section 8.3, increase the maximum number of Shares
with respect to which ISOs may be granted under the Plan;
(C) extend the duration of the Plan under Section 4(b) with respect to any ISOs
granted hereunder; or
(D) reprice or regrant through cancellation, or modify (except in connection
with a change in the Company’s capitalization) any award, if the effect would be
to reduce the exercise price for the shares underlying such award.
ii) no amendment may be made that would constitute a modification of the
material terms of the “performance goal(s)” within the meaning of Treas. Reg. §
1.162-27(e)(4)(vi) or any successor thereto (to the extent compliance with
section 162(m) of the Code is desired).
Notwithstanding the foregoing, no such suspension, termination or amendment
shall materially impair the rights of any Participant holding an outstanding
Award without the consent of such Participant.
b) Manner of Stockholder Approval. The approval of stockholders must be effected
by a majority of the votes cast (including abstentions, to the extent
abstentions are counted as voting under applicable state law) in a separate vote
at a duly held stockholders’ meeting at which a quorum representing a majority
of all outstanding voting stock is, either in person or by proxy, present and
voting on the Plan.
10. Miscellaneous
10.1. Documentation of Awards. Awards shall be evidenced by such written Award
Agreements, if any, as may be prescribed by the Committee from time to time.
Such instruments may be in the form of agreements to be executed by both the
Participant and the Company, or certificates, letters, or similar instruments,
which need not be executed by the Participant but acceptance of which will
evidence agreement to the terms thereof.
10.2. Rights as a Stockholder. Except as specifically provided by the Plan or an
Award Agreement, the receipt of an Award shall not give a Participant rights as
a stockholder; instead, the Participant shall obtain such rights, subject to any
limitations imposed by the Plan or the Award Agreement, upon the actual receipt
of Shares.
10.3. Conditions on Delivery of Shares. The Company shall not deliver any Shares
pursuant to the Plan or remove restrictions from Shares previously delivered
under the Plan (i) until all conditions of the Award have been satisfied or
removed, (ii) until all applicable Federal and state laws and regulations have
been complied with, and (iii) if the outstanding Shares are at the time of such
delivery listed on any stock exchange, until the Shares to be delivered have
been listed or authorized to be listed on such exchange. If an Award is
exercised by the Participant’s legal representative, the Company will be under
no obligation to deliver Shares pursuant to such exercise until the Company is
satisfied as to the authority of such representative.
10.4. Registration and Listing of Shares. If the Company shall deem it necessary
to register under the Securities Act or any other applicable statute any Shares
purchased under this Plan, or to qualify any such Shares for an exemption from
any such statutes, the Company shall take such action at its own expense. If
Shares are listed on any national securities exchange at the time any Shares are
purchased hereunder, the Company shall make prompt application for the listing
on such national securities exchange of such Shares, at its own expense.
Purchases and grants of Shares hereunder shall be postponed as necessary pending
any such action.
10.5. Compliance with Rule 16b-3. All elections and transactions under this Plan
by persons subject to Rule 16b-3, promulgated under section 16(b) of the
Exchange Act, or any successor to such Rule, are intended to comply with at
least one of the exemptive conditions under such Rule. The Committee shall
establish such administrative guidelines to facilitate compliance with at least
one such exemptive condition under Rule 16b-3 as the Committee may deem
necessary or appropriate.
10.6. Tax Withholding
a) Obligation to Withhold. The Company shall withhold from any cash payment made
pursuant to an Award an amount sufficient to satisfy all Federal, state, and
local withholding tax requirements (the “Withholding Requirements”). In the case
of an Award pursuant to which Shares may be delivered, the Committee may require
that the Participant or other appropriate person remit to the Company an amount
sufficient to satisfy the Withholding Requirements, or make other arrangements
satisfactory to the Committee with regard to the Withholding Requirements, prior
to the delivery of any Shares.

 

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b) Election to Withhold Shares. The Committee, in its discretion, may permit or
require the Participant to satisfy the federal, state, and/or local withholding
tax, in whole or in part, by electing to have the Company withhold Shares (or by
returning previously acquired Shares to the Company); provided, however, that
the Company may limit the number of Shares withheld to satisfy the Withholding
Requirements to the extent necessary to avoid adverse accounting consequences.
Shares shall be valued, for purposes of this subsection (b), at their Fair
Market Value (determined as of the date an amount is includible in income by the
Participant (the “Determination Date”), rather than the date of grant). If
Shares acquired by the exercise of an ISO are used to satisfy the Withholding
Requirements, such Shares must have been held by the Participant for a period of
not less than the holding period described in section 422(a)(1) of the Code as
of the Determination Date. The Committee shall adopt such withholding rules as
it deems necessary to carry out the provisions of this Section.
10.7. Transferability of Awards. No ISO may be transferred other than by will or
by the laws of descent and distribution. No other Award may be transferred,
except to the extent permitted in the applicable Award Agreement. During a
Participant’s lifetime, an Award requiring exercise may be exercised only by the
Participant (or, in the event of the Participant’s incapacity, by the person or
persons legally appointed to act on the Participant’s behalf).
10.8. Registration. If the Participant is married at the time Shares are
delivered and if the Participant so requests at such time, the certificate or
certificates for such Shares shall be registered in the name of the Participant
and the Participant’s spouse, jointly, with right of survivorship.
10.9. Acquisitions. Notwithstanding any other provision of this Plan, Awards may
be granted hereunder in substitution for awards held by directors, key
employees, and associates of other corporations who are about to, or have,
become Key Employees or Associates as a result of a merger, consolidation,
acquisition of assets, or similar transaction by the Company or a Related
Corporation or (in the case of Awards other than ISOs) an Affiliate. The terms
of the substitute Awards so granted may vary from the terms set forth in this
Plan to such extent as the Committee may deem appropriate to conform, in whole
or in part, to the provisions of the awards in substitution for which they are
granted.
10.10. Employment Rights. Neither the adoption of the Plan nor the grant of
Awards will confer upon any person any right to continued employment by the
Company or any of its Related Corporations or Affiliates or affect in any way
the right of any of the foregoing to terminate an employment relationship at any
time.
10.11. Indemnification of Board and Committee. Without limiting any other rights
of indemnification that they may have from the Company or any of its Related
Corporations or Affiliates, the members of the Board and the members of the
Committee shall be indemnified by the Company against all costs and expenses
reasonably incurred by them in connection with any claim, action, suit or
proceeding to which they or any of them may be a party by reason of any action
taken or failure to act under, or in connection with, the Plan or any Award
granted thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by legal counsel selected by the Company)
or paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of willful misconduct or
recklessness on their part. Upon the making or institution of any such claim,
action, suit or proceeding, the Board or Committee member shall notify the
Company in writing, giving the Company an opportunity, at its own expense, to
handle and defend the same before such Board or Committee member undertakes to
handle it on his or her own behalf. The provisions of this Section shall not
give members of the Board or the Committee greater rights than they would have
under the Company’s by-laws or Delaware law.
10.12. Application of Funds. Any cash proceeds received by the Company from the
sale of Shares pursuant to Awards granted under the Plan shall be added to the
general funds of the Company. Any Shares received in payment for additional
Shares upon exercise of an Option shall become treasury stock.

 

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10.13. Governing Law. The Plan shall be governed by the applicable Code
provisions to the maximum extent possible. Otherwise, except as provided in
Section 10.12, the laws of the State of Delaware (without reference to the
principles of conflict of laws) shall govern the operation of, and the rights of
Participants under, the Plan and Awards granted hereunder.

 

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