EXHIBIT 10.23

 

 

MORGAN STANLEY 1994 OMNIBUS EQUITY PLAN

(Amended and Restated)

 

ARTICLE 1.    GENERAL

 

1.1    Purpose.    The purpose of the Morgan Stanley 1994 Omnibus Equity Plan
(the “Plan”) is to provide for certain officers, directors and key personnel, as
defined in Section 1.3, of Morgan Stanley (the “Company”) and certain of its
Affiliates an equity-based incentive to maintain and enhance the performance and
profitability of the Company. It is the further purpose of this Plan to permit
the granting of awards that will constitute performance based compensation for
certain executive officers, as described in Section 162(m) of the Internal
Revenue Code of 1986, as amended (the “Code”), and regulations promulgated
thereunder.

 

1.2    Administration.

 

(a)  The Plan shall be administered by the Stock Option Committee (the
“Committee”) of the Board of Directors of the Company (the “Board”), which
Committee shall consist of two or more directors. It is intended that the
directors appointed to serve on the Committee shall be “disinterested persons”
(within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act
of 1934 (the “Act”)) and “outside directors” (within the meaning of Code section
162(m)); however, the mere fact that a Committee member shall fail to qualify
under either of these requirements shall not invalidate any award made by the
Committee which award is otherwise validly made under the Plan. The members of
the Committee shall be appointed by, and may be changed at any time and from
time to time in the discretion of, the Board.

 

(b)  The Committee shall have the authority (i) to exercise all of the powers
granted to it under the Plan, (ii) to construe, interpret and implement the Plan
and any Plan agreements executed pursuant to the Plan, (iii) to prescribe, amend
and rescind rules relating to the Plan, (iv) to make any determination necessary
or advisable in administering the Plan, and (v) to correct any defect, supply
any omission and reconcile any inconsistency in the Plan.

 

(c)  The determination of the Committee on all matters relating to the Plan or
any Plan agreement shall be conclusive.

 

(d)  No member of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any award hereunder.

 

(e)  Notwithstanding anything to the contrary contained herein, the Board may,
in its sole discretion, at any time and from time to time, resolve to administer
the Plan, in which case, the term Committee as used herein shall be deemed to
mean the Board.

 

1.3    Persons Eligible for Awards.    Awards under the Plan may be made to such
officers, directors and executive, managerial or professional employees (“key
personnel”) of the Company or its Affiliates as the Committee shall from time to
time in its sole discretion select; provided, that officers and directors who
are not employees of either the Company or an Affiliate shall not be eligible to
receive awards under the Plan.

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1.4    Types of Awards Under Plan.

 

(a)  Awards may be made under the Plan in the form of (i) stock options
(“options”), (ii) stock appreciation rights related to an option (“related stock
appreciation rights”), (iii) stock appreciation rights not related to any option
(“unrelated stock appreciation rights”), (iv) restricted stock awards, (v)
recognition shares (including but not limited to unrestricted stock awards),
(vi) performance units, (vii) payment rights and (viii) tax benefit rights, all
as more fully set forth in Articles 2 and 3.

 

(b)  Options granted under the Plan may be either (i) “nonqualified” stock
options subject to the provisions of Code section 83 or (ii) options intended to
qualify for incentive stock option treatment described in Code section 422.

 

(c)  All options when granted are intended to be nonqualified stock options,
unless the applicable Plan agreement explicitly states that the option is
intended to be an incentive stock option. If an option is intended to be an
incentive stock option, and if for any reason such option (or any portion
thereof) shall not qualify as an incentive stock option, then, to the extent of
such nonqualification, such option (or portion) shall be regarded as a
nonqualified stock option appropriately granted under the Plan provided that
such option (or portion) otherwise meets the Plan’s requirements relating to
nonqualified stock options.

 

1.5    Shares Available for Awards.

 

(a)  Subject to Section 4.5 (relating to adjustments upon changes in
capitalization), as of any date the total number of shares of Common Stock with
respect to which awards may be granted under the Plan, shall equal the excess
(if any) of 12,000,000 shares, over (i) the number of shares of Common Stock
subject to outstanding awards, (ii) the number shares in respect of which
options and stock appreciation rights have been exercised, and (iii) the number
of shares issued subject to forfeiture restrictions which have lapsed.

 

In accordance with (and without limitation upon) the preceding sentence, awards
may be granted in respect of the following shares of Common Stock: shares
covered by previously-granted awards that have expired, terminated or been
canceled for any reason whatsoever (other than by reason of exercise or vesting)
and with respect to which shares a grantee has received no benefits of ownership
(other than voting rights and dividends that were forfeited on such expiration,
termination or cancellation).

 

As a further limitation in addition to the foregoing, the total number of shares
of Common Stock with respect to which restricted stock and recognition share
awards may vest under the Plan, shall not exceed (subject to adjustments under
Section 4.5), two (2) percent of the number of shares of Common Stock issued and
outstanding on the date the Plan is initially approved by the stockholders of
the Company.

 

(b)  In any year, a person eligible for awards under the Plan may not be granted
options and/or unrelated stock appreciation rights under the Plan covering a
total of more than 500,000 shares of Common Stock.

 

(c)  Shares of Common Stock that shall be subject to issuance pursuant to the
Plan shall be authorized and unissued or treasury shares of Common Stock.

 

(d)  Without limiting the generality of the foregoing, the Committee may, with
the grantee’s consent, cancel any award under the Plan and issue a new award in
substitution therefor upon such terms as the Committee may in its sole
discretion determine, provided that the substituted award shall satisfy all
applicable Plan requirements as of the date such new award is made; and further
provided, notwithstanding the foregoing or any other provision of the Plan, in
no event shall an option or stock appreciation right be granted in substitution
for a previously granted option or stock appreciation right with the old award
being canceled or surrendered as a condition of receiving the new award, if the
new award would have a lower option exercise price or stock appreciation right
appreciation base than the award it replaces. The foregoing is not intended to
prevent equitable adjustment of awards upon the occurrence of certain events as
herein provided, for example without limitation, adjustments pursuant to Section
4.5.

 

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1.6    Definitions of Certain Terms.

 

(a)  The term “Affiliate” as used herein means any person or entity which, at
the time of reference, directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Company.

 

(b)  The term “Common Stock” as used herein means the shares of common stock of
the Company as constituted on the effective date of the Plan, and any other
shares into which such common stock shall thereafter be changed by reason of a
recapitalization, merger, consolidation, split-up, combination, exchange of
shares or the like.

 

(c)  Except as otherwise determined by the Committee in its sole discretion, the
“fair market value” as of any date and in respect of any share of Common Stock
shall be:

 

(i)  if the Common Stock is listed for trading on the New York Stock Exchange,
the closing price, regular way, of the Common Stock as reported on the New York
Stock Exchange Composite Tape, or if no such reported sale of the Common Stock
shall have occurred on such date, on the next preceding date on which there was
such a reported sale; or

 

(ii)  if the Common Stock is not so listed but is listed on another national
securities exchange or authorized for quotation on the National Association of
Securities Dealers Inc.’s NASDAQ National Market System (“NASDAQ/NMS”), the
closing price, regular way, of the Common Stock on such exchange or NASDAQ/NMS,
as the case may be, on which the largest number of shares of Common Stock have
been traded in the aggregate on the preceding twenty trading days, or if no such
reported sale of the Stock shall have occurred on such date on such exchange or
NASDAQ/NMS, as the case may be, on the preceding date on which there was such a
reported sale on such exchange or NASDAQ/NMS, as the case may be; or

 

(iii)  if the Stock is not listed for trading on a national securities exchange
or authorized for quotation on NASDAQ/NMS, the average of the closing bid and
asked prices as reported by the National Association of Securities Dealers
Automated Quotation System (“NASDAQ”) or, if no such prices shall have been so
reported for such date, on the next preceding date for which such prices were so
reported.

 

1.7    Agreements Evidencing Awards.

 

(a)  Options, stock appreciation rights and restricted stock awards granted
under the Plan shall be evidenced by written agreements. Other awards granted
under the Plan shall be evidenced by written agreements to the extent the
Committee may in its sole discretion deem necessary or desirable. Any such
written agreements shall (i) contain such provisions not inconsistent with the
terms of the Plan as the Committee may in its sole discretion deem necessary or
desirable and (ii) be referred to herein as “Plan agreements.”

 

(b)  Each Plan agreement shall set forth the number of shares of Common Stock
subject to the award granted thereby.

 

(c)  Each Plan agreement with respect to the granting of a related stock
appreciation right shall set forth the number of shares of Common Stock subject
to the related option which shall also be subject to the related stock
appreciation right granted thereby.

 

(d)  Each Plan agreement with respect to the granting of an option shall set
forth the amount (the “option exercise price”) payable by the grantee to the
Company in connection with the exercise of the option evidenced thereby. The
option exercise price per share shall not be less than the fair market value of
a share of Common Stock on the date the option is granted.

 

(e)  Each Plan agreement with respect to a stock appreciation right shall set
forth the amount (the “appreciation base”) over which appreciation will be
measured upon exercise of the stock appreciation right evidenced thereby. The
appreciation base per share of Common Stock subject to a stock appreciation
right shall not be less than (i) in the case of an unrelated stock appreciation
right, the fair market value of a share of Common Stock on the date the stock
appreciation right is granted, or (ii) in the case of a related stock
appreciation right, the option exercise price per share of Common Stock subject
to the related option.

 

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ARTICLE 2.    STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

2.1    Grant of Stock Options.    The Committee may grant options to purchase
shares of Common Stock in such amounts and subject to such terms and conditions
as the Committee shall from time to time in its sole discretion determine,
subject to the terms of the Plan.

 

2.2    Grant of Stock Appreciation Rights.

 

(a)  Related Stock Appreciation Rights.    The Committee may grant a related
stock appreciation right in connection with all or any part of an option granted
under the Plan, either at the time the related option is granted or any time
thereafter prior to the exercise, termination or cancellation of such option,
and subject to such terms and conditions as the Committee shall from time to
time in its sole discretion determine, subject to the terms of the Plan. The
grantee of a related stock appreciation right shall, subject to the terms of the
Plan and the applicable Plan agreement, have the right to surrender to the
Company for cancellation all or a portion of the related option granted under
the Plan, but only to the extent that such option is then exercisable, and to be
paid therefor an amount equal to the excess (if any) of (i) the aggregate fair
market value of the shares of Common Stock subject to such option or portion
thereof (determined as of the date of exercise of such stock appreciation
right), over (ii) the aggregate appreciation base (determined pursuant to
Section 1.7(e)) of the shares of Common Stock subject to such stock appreciation
right or portion thereof.

 

(b)  Unrelated Stock Appreciation Rights.    The Committee may grant an
unrelated stock appreciation right in such amount and subject to such terms and
conditions as the Committee shall from time to time in its sole discretion
determine, subject to the terms of the Plan. The grantee of an unrelated stock
appreciation right shall, subject to the terms of the Plan and the applicable
Plan agreement, have the right to surrender to the Company for cancellation all
or a portion of such stock appreciation right, but only to the extent that such
stock appreciation right is then exercisable, and to be paid therefor an amount
equal to the excess (if any) of: (i) the aggregate fair market value of the
shares of Common Stock subject to such stock appreciation right or portion
thereof (determined as of the date of exercise of such stock appreciation
right); over (ii) the aggregate appreciation base (determined pursuant to
Section 1.7(e)) of the shares of Common Stock subject to such stock appreciation
right or portion thereof.

 

(c)  Payment.    Payment due to the grantee upon exercise of a stock
appreciation right shall be made in cash and/or in Common Stock (valued at the
fair market value thereof as of the date of exercise) as determined by the
Committee in its sole discretion.

 

2.3    Exercise of Related Stock Appreciation Right Reduces Shares Subject to
Option.    Upon any exercise of a related stock appreciation right or any
portion thereof, the number of shares of Common Stock subject to the related
option shall be reduced by the number of shares of Common Stock in respect of
which such stock appreciation right shall have been exercised.

 

2.4    Exercisability of Options and Stock Appreciation Rights.    Subject to
the other provisions of the Plan:

 

(a)  Exercisability Determined by Plan Agreement.    Each Plan agreement shall
set forth the period during which and the conditions subject to which the option
or stock appreciation right evidenced thereby shall be exercisable, as
determined by the Committee in its discretion.

 

(b)  Exercise of Related Stock Appreciation Right.    Unless the applicable Plan
agreement otherwise provides, a related stock appreciation right shall be
exercisable at any time during the period that the related option may be
exercised.

 

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(c)  Partial Exercise Permitted.    Unless the applicable Plan agreement
otherwise provides, an option or stock appreciation right granted under the Plan
may be exercised from time to time as to all or part of the full number of
shares as to which such option or stock appreciation right shall then be
exercisable.

 

(d)  Notice of Exercise; Exercise Date.

 

(i)  An option or stock appreciation right shall be exercisable by the filing of
a written notice of exercise with the Company, on such form and in such manner
as the Committee shall in its sole discretion prescribe, and by payment in
accordance with Section 2.6.

 

(ii)  Unless the applicable Plan agreement otherwise provides, or the Committee
in its sole discretion otherwise determines, the date of exercise of an option
or stock appreciation right shall be the date the Company receives such written
notice of exercise and payment.

 

2.5    Limitation on Exercise.    Notwithstanding any other provision of the
Plan, no Plan agreement shall permit an incentive stock option to be exercisable
more than 10 years after the date of grant.

 

2.6    Payment of Option Price.

 

(a)  Tender Due Upon Notice of Exercise.    Unless the applicable Plan agreement
otherwise provides or the Committee in its sole discretion otherwise determines,
any written notice of exercise of an option shall be accompanied by payment of
the full purchase price for the shares being purchased.

 

(b)  Manner of Payment.    Payment of the option exercise price shall be made in
any combination of the following:

 

(i)  by certified or official bank check payable to the Company (or the
equivalent thereof acceptable to the Committee);

 

(ii)  by personal check (subject to collection), which may in the Committee’s
discretion be deemed conditional;

 

(iii)  if and to the extent provided in the applicable Plan agreement, by
delivery of previously acquired shares of Common Stock owned by the grantee for
at least six months (or such other period as the Committee may prescribe) having
a fair market value (determined as of the option exercise date) equal to the
portion of the option exercise price being paid thereby, provided that the
Committee may require the grantee to furnish an opinion of counsel acceptable to
the Committee to the effect that such delivery would not result in the grantee
incurring any liability under Section 16(b) of the Act and does not require any
Consent (as defined in Section 4.2); and

 

(iv)  with the consent of the Committee in its sole discretion, by the full
recourse promissory note and agreement of the grantee providing for payment with
interest on the unpaid balance accruing at a rate not less than that needed to
avoid the imputation of income under Code section 7872 and upon such terms and
conditions (including the security, if any, therefor) as the Committee may
determine.

 

(c)  Cashless Exercise.    Payment in accordance with Section 2.6(b) may be
deemed to be satisfied, if and to the extent provided in the applicable Plan
agreement, by delivery to the Company of an assignment of a sufficient amount of
the proceeds from the sale of Common Stock acquired upon exercise to pay for all
of the Common Stock acquired upon exercise and an authorization to the broker or
selling agent to pay that amount to the Company, which sale shall be made at the
grantee’s direction at the time of exercise, provided that the Committee may
require the grantee to furnish an opinion of counsel acceptable to the Committee
to the effect that such delivery would not result in the grantee incurring any
liability under Section 16 of the Act and does not require any Consent (as
defined in Section 4.2).

 

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(d)  Issuance of Shares.    As soon as practicable after receipt of full
payment, the Company shall, subject to the provisions of Section 4.2, deliver to
the grantee one or more certificates for the shares of Common Stock so
purchased, which certificates may bear such legends as the Company may deem
appropriate concerning restrictions on the disposition of the shares in
accordance with applicable securities laws, rules and regulations or otherwise.

 

2.7    Default Rules Concerning Termination of Employment.

 

Subject to the other provisions of the Plan and unless the applicable Plan
agreement otherwise provides:

 

(a)  General Rule.    All options and stock appreciation rights granted to a
grantee shall terminate upon the grantee’s termination of employment for any
reason except to the extent post-employment exercise of the option or stock
appreciation right is permitted in accordance with this Section 2.7.

 

(b)  Termination for Cause.    All options and stock appreciation rights granted
to a grantee shall terminate and expire on the day a grantee’s employment is
terminated for cause, the grantee resigns for cause or the grantee has committed
an act or omission upon which the Company could have terminated the grantee’s
employment for cause.

 

(c)  Regular Termination; Leaves of Absence.    If the grantee’s employment
terminates for reasons other than as provided in subsections (b), (d), or (f) of
this Section 2.7, the portion of options and stock appreciation rights granted
to such grantee which were exercisable immediately prior to such termination of
employment may be exercised until the earlier of 90 days after the grantee’s
termination of employment or the date on which such options and stock
appreciation rights terminate or expire in accordance with the provisions of the
Plan (other than this Section 2.7) and the Plan agreement; provided, that the
Committee may, in its sole discretion, determine such other period for exercise
in the case of a grantee whose employment terminates solely because the
grantee’s employer ceases to be an Affiliate or the grantee transfers employment
with the Company’s consent to a purchaser of a business disposed of by the
Company. The Committee may, in its sole discretion, determine (i) whether any
leave of absence (including short-term or long-term disability or medical leave)
shall constitute a termination of employment for purposes of the Plan, and (ii)
the impact, if any, of any such leave on outstanding awards under the Plan.

 

(d)  Retirement.    If a grantee’s employment terminates by reason of retirement
(as defined in any pension plan maintained by the Company or any Affiliate in
which the grantee participates) the options and stock appreciation rights
exercisable by the grantee immediately prior to the grantee’s retirement shall
be exercisable by the grantee until the earlier of three years after the
grantee’s retirement or the date on which such options and stock appreciation
rights terminate or expire in accordance with the provisions of the Plan (other
than this Section 2.7) and the Plan agreement.

 

(e)  Death After Termination.    If a grantee’s employment terminates in the
manner described in subsections (c) or (d) of this Section 2.7 and the grantee
dies within the period for exercise provided for therein, the options and stock
appreciation rights exercisable by the grantee immediately prior to the
grantee’s death shall be exercisable by the personal representative of the
grantee’s estate or by the person to whom such options and stock appreciation
rights pass under the grantee’s will (or, if applicable, pursuant to the laws of
descent and distribution) until the earlier of 180 days after the grantee’s
death, or the date on which such options and stock appreciation rights terminate
or expire in accordance with the provisions of subsections (c) or (d) of this
Section 2.7.

 

(f)  Death Before Termination.    If a grantee dies while employed by the
Company or any Affiliate, all options and stock appreciation rights granted to
the grantee but not exercised before the death of the grantee, whether or not
exercisable by the grantee before the grantee’s death, shall immediately become
and be exercisable by the personal representative of the grantee’s estate or by
the person to whom such options and stock appreciation rights pass under the
grantee’s will (or, if applicable, pursuant to the laws of descent and
distribution) until the earlier of three years after the grantee’s death or the
date on which such options or stock appreciation rights terminate or expire in
accordance with the provisions of the Plan (other than this Section 2.7) and the
Plan agreement.

 

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2.8    Special ISO Requirements.    In order for a grantee to receive special
tax treatment with respect to stock acquired under an option intended to be an
incentive stock option, the grantee of such option must be, at all times during
the period beginning on the date of grant and ending on the day three months
before the date of exercise of such option, an employee of the Company or any of
the Company’s parent or subsidiary corporations (within the meaning of Code
section 424), or of a corporation or a parent or subsidiary corporation of such
corporation issuing or assuming a stock option in a transaction to which Code
section 424(a) applies. If an option granted under the Plan is intended to be an
incentive stock option, and if the grantee, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the grantee’s employer corporation or of its parent or subsidiary
corporation, then (i) the option exercise price per share shall in no event be
less than 110% of the fair market value of the Common Stock on the date of such
grant and (ii) such option shall not be exercisable after the expiration of five
years after the date such option is granted.

 

ARTICLE 3.    AWARDS OTHER THAN STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

 

3.1    Restricted Stock Awards.

 

(a)  Grant of Awards.    The Committee may grant restricted stock awards, alone
or in tandem with other awards, under the Plan in such amounts and subject to
such terms and conditions as the Committee shall from time to time in its sole
discretion determine. The vesting of a restricted stock award granted under the
Plan may be conditioned upon the completion of a specified period of employment
with the Company or any Affiliate, upon the attainment of specified performance
goals, and/or upon such other criteria as the Committee may determine in its
sole discretion.

 

(b)  Payment.    Each Plan agreement with respect to a restricted stock award
shall set forth the amount (if any) to be paid by the grantee with respect to
such award. If a grantee makes any payment for a restricted stock award which
does not vest, appropriate payment may be made to the grantee following the
forfeiture of such award on such terms and conditions as the Committee may
determine.

 

(c)  Forfeiture upon Termination of Employment.    Unless the applicable Plan
agreement otherwise provides or the Committee otherwise determines, (i) if a
grantee’s employment terminates for any reason (including death) before all of
his restricted stock awards have vested, such awards shall terminate and expire
upon such termination of employment, and (ii) in the event any condition to the
vesting of restricted stock awards is not satisfied within the period of time
permitted therefor, such unvested shares shall be returned to the Company.

 

(d)  Issuance of Shares.    The Committee may provide that one or more
certificates representing restricted stock awards shall be registered in the
grantee’s name and bear an appropriate legend specifying that such shares are
not transferable and are subject to the terms and conditions of the Plan and the
applicable Plan agreement, or that such certificate or certificates shall be
held in escrow by the Company on behalf of the grantee until such shares vest or
are forfeited, all on such terms and conditions as the Committee may determine.
Unless the applicable Plan agreement otherwise provides, no share of restricted
stock may be assigned, transferred, otherwise encumbered or disposed of by the
grantee until such share has vested in accordance with the terms of such award.
Subject to the provisions of Section 4.2, as soon as practicable after any
restricted stock award shall vest, the Company shall issue or reissue to the
grantee (or to the grantee’s designated beneficiary in the event of the
grantee’s death) one or more certificates for the Common Stock represented by
such restricted stock award.

 

(e)  Grantees’ Rights Regarding Restricted Stock.    Unless the applicable Plan
agreement otherwise provides: (i) a grantee may vote and receive dividends on
restricted stock awarded under the Plan; and (ii) any stock received as a
distribution with respect to a restricted stock award shall be subject to the
same restrictions as such restricted stock.

 

3.2    Recognition Shares.    The Committee may issue stock under the Plan,
alone or in tandem with other awards, in such amounts and subject to such terms
and conditions as the Committee shall from time to time in its sole discretion
determine. Recognition shares under the Plan shall relate to a specified maximum
number of shares granted as, or in payment of, a bonus, or to provide incentives
or recognize special achievements or contributions.

 

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3.3    Performance Units.

 

(a)  Grant of Units.    The Committee may grant performance units under the Plan
to acquire shares of Common Stock in such amounts and subject to such terms and
conditions as the Committee shall from time to time in its sole discretion
determine, subject to the terms of the Plan.

 

(b)  Performance Units.    Each performance unit under the Plan shall relate to
a specified maximum number of shares, and shall be exchangeable for all or a
portion of such shares, or cash (or such other form of consideration as may be
determined by the Committee equivalent in value thereto) in up to an amount
equal to the fair market value of an equal number of unrestricted shares, at the
end of such specified period (a “performance cycle”) as may be established by
the Committee. The number of such shares which may be deliverable pursuant to
such performance unit shall be based upon the degree of attainment over such
performance cycle of such measure of the performance of the Company, its
subsidiaries or the participant as may be established by the Committee. The
Committee may provide for full or partial credit, prior to completion of such
performance cycle or achievement of the degree of attainment of the measures of
performance specified in connection with such performance unit, in the event of
the participant’s death, normal retirement, early retirement, or total or
permanent disability, or in such other circumstances as the Committee may
determine to be fair and equitable to the participant or in the interest of the
Company.

 

3.4    Payment Rights.    Payment rights under the Plan shall provide for the
grant of a specified maximum number of shares or for the grant of options,
performance units or recognition shares in payment of all or a portion of
compensation under other or additional compensation arrangements of the Company
or any Affiliate or in consideration of the surrender of all or a portion of
such compensation; provided, however, that no grant of a payment right shall be
made at less than eighty five percent (85%) of the fair market value of a share
of Common Stock as of the grant date.

 

3.5    Tax Benefit Rights.    The Committee may, from time to time and upon such
terms and conditions as it may in its discretion determine, grant rights (“tax
benefit rights”) under the Plan to receive as a result of the receipt or
exercise of any award pursuant to this Plan (except an incentive stock option or
a stock appreciation right with respect thereto), an amount in cash up to the
then applicable maximum statutory federal income tax rate for corporations
multiplied by the amount of compensation, if any, realized by the participant
for federal income tax purposes by reason of the receipt or exercise of such
award.

 

ARTICLE 4.    MISCELLANEOUS

 

4.1    Amendment of the Plan; Modification of Awards.

 

(a)  Plan Amendments.    The Board may, without stockholder approval, at any
time and from time to time suspend, discontinue or amend the Plan in any respect
whatsoever, except that no such amendment shall impair any rights under any
award theretofore made under the Plan without the consent of the grantee of such
award. Furthermore, except as and to the extent otherwise permitted by Section
4.5 or 4.11, no such amendment shall, without stockholder approval:

 

(i)  materially increase the benefits accruing to grantees under the Plan;

 

(ii)  increase the maximum number of shares which may be made subject to awards
to an individual as options or stock appreciation rights in any year;

 

(iii)  materially increase, beyond the amounts set forth in Section 1.5, the
number of shares of Common Stock in respect of which awards may be issued under
the Plan;

 

(iv)  materially modify the designation in Section 1.3 of the class of persons
eligible to receive awards under the Plan;

 

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(v)  provide for the grant of stock options or stock appreciation rights having
an option exercise price or appreciation base per share of Common Stock less
than 100% of the fair market value of a share of Common Stock on the date of
grant; or

 

(vi)  extend the term of the Plan beyond the period set forth in Section 4.13.

 

(b)  Award Modifications.    Subject to the terms and conditions of the Plan
(including Section 4.1(a)), the Committee may amend outstanding Plan agreements
with such grantee, including, without limitation, any amendment which would (i)
accelerate the time or times at which an award may vest or become exercisable
and/or (ii) extend the scheduled termination or expiration date of the award,
provided, however, that no modification having a material adverse effect upon
the interest of a grantee in an award shall be made without the consent of such
grantee.

 

4.2    Restrictions.

 

(a)  Consent Requirements.    If the Committee shall at any time determine that
any Consent (as hereinafter defined) is necessary or desirable as a condition
of, or in connection with, the granting of any award under the Plan, the
acquisition, issuance or purchase of shares or other rights hereunder or the
taking of any other action hereunder (each such action being hereinafter
referred to as a “Plan Action”), then such Plan Action shall not be taken, in
whole or in part, unless and until such Consent shall have been effected or
obtained to the full satisfaction of the Committee. Without limiting the
generality of the foregoing, the Committee shall be entitled to determine not to
make any payment whatsoever until Consent has been given if (i) the Committee
may make any payment under the Plan in cash, Common Stock or both, and (ii) the
Committee determines that Consent is necessary or desirable as a condition of,
or in connection with, payment in any one or more of such forms.

 

(b)  Consent Defined.    The term “Consent” as used herein with respect to any
Plan Action means (i) any and all listings, registrations or qualifications in
respect thereof upon any securities exchange or other self-regulatory
organization or under any federal, state or local law, rule or regulation, (ii)
the expiration, elimination or satisfaction of any prohibitions, restrictions or
limitations under any federal, state or local law, rule or regulation or the
rules of any securities exchange or other self-regulatory organization, (iii)
any and all written agreements and representations by the grantee with respect
to the disposition of shares, or with respect to any other matter, which the
Committee shall deem necessary or desirable to comply with the terms of any such
listing, registration or qualification or to obtain an exemption from the
requirement that any such listing, qualification or registration be made, and
(iv) any and all consents, clearances and approvals in respect of a Plan Action
by any governmental or other regulatory bodies or any parties to any loan
agreements or other contractual obligations of the Company or any Affiliate.

 

4.3    Transferability.    Except as otherwise set forth by the Committee in an
applicable Plan agreement described in Section 1.7: (a) no award granted to any
grantee under the Plan shall be assignable or transferable by the grantee other
than by will or by the laws of descent and distribution; and (b) during the
grantee’s lifetime, all rights appurtenant to any award may only be exercised by
the grantee of such award.

 

4.4    Withholding Taxes.

 

(a)  Whenever under the Plan shares of Common Stock are to be delivered pursuant
to an award, the Committee may require as a condition of delivery that the
grantee remit an amount sufficient to satisfy all federal, state and other
governmental withholding tax requirements related thereto. Whenever cash is to
be paid under the Plan (whether upon the exercise of a stock appreciation right
or otherwise), the Company may, as a condition of its payment, deduct therefrom,
or from any salary or other payments due to the grantee, an amount sufficient to
satisfy all federal, state and other governmental withholding tax requirements
related thereto or to the delivery of any shares of Common Stock under the Plan.

 

(b)  Without limiting the generality of the foregoing, (i) a grantee may elect
to satisfy all or part of the foregoing withholding requirements by delivery of
unrestricted shares of Common Stock owned by the grantee for at least six months
(or such other period as the Committee may determine) having a fair

 

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market value (determined as of the date of such delivery by the grantee) equal
to all or part of the amount to be so withheld, provided that the Committee may
require, as a condition of accepting any such delivery, the grantee to furnish
an opinion of counsel acceptable to the Committee to the effect that such
delivery would not result in the grantee incurring any liability under Section
16(b) of the Act and (ii) the Committee may permit any such delivery to be made
by withholding shares of Common Stock from the shares otherwise issuable
pursuant to the award giving rise to the tax withholding obligation (in which
event the date of delivery shall be deemed the date such award was exercised).

 

4.5    Adjustments Upon Changes in Capitalization.    If and to the extent
specified by the Committee, the number of shares of Common Stock which may be
issued pursuant to awards under the Plan, the maximum number of options and/or
unrelated stock appreciation rights which may be granted to any one person in
any year, the number of shares of Common Stock subject to awards, the two (2)
percent limitation on the number of shares of Common Stock which may vest in
respect of restricted stock and recognition share awards under Section 1.5(a)
above, the option exercise price and appreciation base of options and stock
appreciation rights theretofore granted under the Plan, and the amount payable
by a grantee in respect of an award, shall be appropriately adjusted (as the
Committee may determine) for any change in the number of issued shares of Common
Stock resulting from the subdivision or combination of shares of Common Stock or
other capital adjustments, or the payment of a stock dividend after the
effective date of the Plan, or other change in such shares of Common Stock
effected without receipt of consideration by the Company; provided that any
awards covering fractional shares of Common Stock resulting from any such
adjustment shall be eliminated and provided further, that each incentive stock
option granted under the Plan shall not be adjusted in a manner that causes such
option to fail to continue to qualify as an “incentive stock option” within the
meaning of Code section 422. Adjustments under this Section shall be made by the
Committee, whose determination as to what adjustments shall be made, and the
extent thereof, shall be final, binding and conclusive.

 

4.6    Right of Discharge Reserved.    Nothing in the Plan or in any Plan
agreement shall confer upon any person the right to continue in the employment
of the Company or an Affiliate or affect any right which the Company or an
Affiliate may have to terminate the employment of such person.

 

4.7    No Rights as a Stockholder.    No grantee or other person shall have any
of the rights of a stockholder of the Company with respect to shares subject to
an award until the issuance of a stock certificate to him for such shares.
Except as otherwise provided in Section 4.5, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary, and
whether in cash, securities or other property) for which the record date is
prior to the date such stock certificate is issued. In the case of a grantee of
an award which has not yet vested, the grantee shall have the rights of a
stockholder of the Company if and only to the extent provided in the applicable
Plan agreement.

 

4.8    Nature of Payments.

 

(a)  Any and all awards or payments hereunder shall be granted, issued,
delivered or paid, as the case may be, in consideration of services performed
for the Company or for its Affiliates by the grantee.

 

(b)  No such awards and payments shall be considered special incentive payments
to the grantee or, unless otherwise determined by the Committee, be taken into
account in computing the grantee’s salary or compensation for the purposes of
determining any benefits under (i) any pension, retirement, life insurance or
other benefit plan of the Company or any Affiliate or (ii) any agreement between
the Company or any Affiliate and the grantee.

 

(c)  By accepting an award under the Plan, the grantee shall thereby waive any
claim to continued exercise or vesting of an award or to damages or severance
entitlement related to non-continuation of the award beyond the period provided
herein or in the applicable Plan agreement, notwithstanding any contrary
provision in any written employment contract with the grantee, whether any such
contract is executed before or after the grant date of the award.

 

4.9    Non-Uniform Determinations.    The Committee’s determinations under the
Plan need not be uniform and may be made by it selectively among persons who
receive, or are eligible to receive, awards under the

 

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Plan (whether or not such persons are similarly situated). Without limiting the
generality of the foregoing, the Committee shall be entitled, among other
things, to make non-uniform and selective determinations, and to enter into
non-uniform and selective Plan agreements, as to (a) the persons to receive
awards under the Plan, (b) the terms and provisions of awards under the Plan,
(c) the exercise by the Committee of its discretion in respect of the exercise
of stock appreciation rights pursuant to the terms of the Plan, and (d) the
treatment of leaves of absence pursuant to Section 2.7(c).

 

4.10    Other Payments or Awards.    Nothing contained in the Plan shall be
deemed in any way to limit or restrict the Company, any Affiliate or the
Committee from making any award or payment to any person under any other plan,
arrangement or understanding, whether now existing or hereafter in effect.

 

4.11    Reorganization.

 

(a)  In the event that the Company is merged or consolidated with another
corporation and, whether or not the Company shall be the surviving corporation,
there shall be any change in the shares of Common Stock by reason of such merger
or consolidation, or in the event that all or substantially all of the assets of
the Company are acquired by another person, or in the event of a reorganization
or liquidation of the Company (each such event being hereinafter referred to as
a “Reorganization Event”) or in the event that the Board shall propose that the
Company enter into a Reorganization Event, then the Committee may in its
discretion, by written notice to a grantee, provide that his options and stock
appreciation rights will be terminated unless exercised within 30 days (or such
longer period as the Committee shall determine in its sole discretion) after the
date of such notice; provided that if, and to the extent that, the Committee
takes such action with respect to the grantee’s options and/or stock
appreciation rights not yet exercisable, the Committee shall also accelerate the
dates upon which such options and stock appreciation rights shall be
exercisable. The Committee also may in its discretion by written notice to a
grantee provide that all or some of the restrictions on any of the grantee’s
awards may lapse in the event of a Reorganization Event upon such terms and
conditions as the Committee may determine.

 

(b)  Whenever deemed appropriate by the Committee, the actions referred to in
Section 4.11(a) may be made conditional upon the consummation of the applicable
Reorganization Event.

 

4.12    Section Headings.    The section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said sections.

 

4.13    Effective Date and Term of Plan.

 

(a)  The Plan shall be deemed adopted and become effective upon the approval
thereof by the Board or such other date as the Board shall determine.

 

(b)  The Plan shall terminate 10 years after the earlier of the date on which it
becomes effective or is approved by shareholders, and no awards shall thereafter
be made under the Plan. Notwithstanding the foregoing, all awards made under the
Plan prior to such termination date shall remain in effect until such awards
have been satisfied or terminated in accordance with the terms and provisions of
the Plan and the applicable Plan agreement.

 

4.14    Governing Law.    The Plan shall be governed by the laws of the State of
Delaware applicable to agreements made and to be performed entirely within such
state.

 

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