Exhibit 10.1
SAFENET, INC.
2001 OMNIBUS STOCK PLAN
1. Establishment, Purpose and Types of Awards
     SafeNet, Inc. hereby amends and restates the SafeNet, Inc. 2001 Omnibus
Stock Plan (the “Plan”) to read as provided herein. The purpose of the Plan is
to promote the long-term growth and profitability of SafeNet, Inc. (the
“Corporation”) by (i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial success of the
Corporation, and (ii) enabling the Corporation to attract, retain and reward the
best available persons for positions of substantial responsibility.
     The Plan permits the granting of stock options (including nonqualified
stock options and incentive stock options qualifying under Section 422 of the
Code), stock appreciation rights (including free-standing, tandem and limited
stock appreciation rights), restricted or unrestricted share awards, phantom
stock, performance awards, or any combination of the foregoing (collectively,
“Awards”).
2. Definitions
     Under this Plan, except where the context otherwise indicates, the
following definitions apply:
     (a) “Board” shall mean the Board of Directors of the Corporation.
     (b) “Change in Control” shall mean: (i) any sale, exchange or other
disposition of substantially all of the Corporation’s assets or over 50% of its
Common Stock; or (ii) any merger, share exchange, consolidation or other
reorganization or business combination in which the Corporation is not the
surviving or continuing corporation, or in which the Corporation’s stockholders
become entitled to receive cash, securities of the Corporation other than voting
common stock, or securities of another issuer.
     (c) “Code” shall mean the Internal Revenue Code of 1986, as amended, and
any regulations issued there under.
     (d) “Committee” shall mean the Board or committee of Board members
appointed pursuant to Section 3 of the Plan to administer the Plan.
     (e) “Common Stock” shall mean shares of the Corporation’s common stock.
     (f) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.
     (g) “Fair Market Value” of a share of the Corporation’s Common Stock for
any purpose on a particular date shall be determined as follows: (1) if there is
a public market for the Common Stock, the Fair Market Value per share shall be
the average of the bid and asked prices of the Common Stock for such day if the
Common Stock is then included for quotation on the NASDAQ Small-Cap Market or,
the Fair Market Value per share shall be the closing price of the Common Stock
for such day if the Common Stock is then included on the NASDAQ National Market
or listed on the New York, American or Pacific Stock Exchange, or (2) if there
is no public market for the Common Stock, the Fair Market Value of the Common
Stock shall be determined in good faith by the Board or Committee in such manner
as it may deem equitable for Plan purposes. The Board or the Committee may rely
upon published quotations in The Wall Street Journal or a comparable publication
for purposes of the calculation of the Fair Market Value per share as set forth
above.
     (h) “Grant Agreement” shall mean a written agreement between the
Corporation and a grantee memorializing the terms and conditions of an Award
granted pursuant to the Plan.
     (i) “Grant Date” shall mean the date on which the Committee formally acts
to grant an Award to a grantee or such other date as the Committee shall so
designate at the time of taking such formal action.
     (j) “Parent” shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of “parent corporation” provided in Section
424(e) of the Code, or any successor thereto of similar import.
     (k) “Rule 16b-3” shall mean Rule 16b-3 as in effect under the Exchange Act
on the effective date of the Plan, or any successor provision prescribing
conditions necessary to exempt the issuance of securities under the Plan (and
further transactions in such securities) from Section 16(b) of the Exchange Act.
     (l) “Subsidiary” and “subsidiaries” shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of “subsidiary corporation” provided in Section 424(f) of the Code,
or any successor thereto of similar import.

 

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3. Administration
     (a) Procedure. The Plan shall be administered by the Board. In the
alternative, the Board may appoint a Committee to administer the Plan consisting
solely of two (2) or more members of the Board who are “nonemployee directors”
within the meaning of Rule 16b-3 and “outside directors” within the meaning of
Code Section 162(m). Once appointed, the Committee shall continue to serve until
otherwise directed by the Board. From time to time, the Board may increase the
size of the Committee and appoint additional members thereof, remove members
(with or without cause) and appoint new members in substitution therefore, fill
vacancies, however caused, and remove all members of the Committee and,
thereafter, directly administer the Plan. In the event that the Board is the
administrator of the Plan in lieu of a Committee, the term “Committee” as used
herein shall be deemed to mean the Board.
     Members of the Board or Committee who are either eligible for Awards or
have been granted Awards may vote on any matters affecting the administration of
the Plan or the grant of Awards pursuant to the Plan.
     The Committee shall meet at such times and places and upon such notice as
it may determine. A majority of the Committee shall constitute a quorum. Any
acts by the Committee may be taken at any meeting at which a quorum is present
and shall be by majority vote of those members present. Additionally, any acts
reduced to writing or approved in writing by all of the members of the Committee
shall be valid acts of the Committee.
     (b) Powers of the Committee. The Committee shall have all the powers vested
in it by the terms of the Plan, such powers to include authority, in its sole
and absolute discretion, to grant Awards under the Plan, prescribe Grant
Agreements evidencing such Awards and establish programs for granting Awards.
The Committee shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not
limited to, the authority to:
     (i) determine the eligible persons to whom, and the time or times at which
Awards shall be granted,
     (ii) determine the types of Awards to be granted,
     (iii) determine the number of shares to be covered by or used for reference
purposes for each Award,
     (iv) impose such terms, limitations, restrictions and conditions upon any
such Award as the Committee shall deem appropriate,
     (v) modify, extend or renew outstanding Awards, provided that the Committee
shall not reprice such Awards or substitute new Awards for such Awards, and
provided further that no such action shall be taken with respect to any
outstanding Award which would adversely affect the grantee without the grantee’s
consent,
     (vi) accelerate or otherwise change the time in which an Award may be
exercised or becomes payable and to waive or accelerate the lapse, in whole or
in part, of any restriction or condition with respect to such Award, including,
but not limited to, any restriction or condition with respect to the vesting or
exercisability of an Award following termination of any grantee’s employment,
and
     (vii) to establish objectives and conditions, if any, for earning Awards
and determining whether Awards will be paid after the end of a performance
period.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration of the Plan and for the conduct of its
business as the Committee deems necessary or advisable and to interpret same,
all within the Committee’s sole and absolute discretion.
     (c) Limited Liability. To the maximum extent permitted by law, no member of
the Board or Committee shall be liable for any action taken or decision made in
good faith relating to the Plan or any Award there under.
     (d) Indemnification. To the maximum extent permitted by law, the members of
the Board and Committee shall be indemnified by the Corporation in respect of
all their activities under the Plan.
     (e) Effect of Committee’s Decision. All actions taken and decisions and
determinations made by the Committee on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Committee’s sole
and absolute discretion and shall be conclusive and binding on all parties
concerned, including the Corporation, its stockholders, any participants in the
Plan and any other employee of the Corporation, and their respective successors
in interest.

 

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4. Shares Available for the Plan; Maximum Awards
     Subject to adjustments as provided in Section 12 of the Plan, the shares of
stock that may be delivered or purchased or used for reference purposes (with
respect to stock appreciation rights, phantom stock units or performance awards
payable in cash) with respect to Awards granted under the Plan, including with
respect to incentive stock options intended to qualify under Section 422 of the
Code, shall not exceed an aggregate of 5,000,000 shares of Common Stock of the
Corporation. The Corporation shall reserve said number of shares for Awards
under the Plan, subject to adjustments as provided in Section 12 of the Plan. If
any Award, or portion of an Award, under the Plan expires or terminates
unexercised, becomes unexercisable or is forfeited or otherwise terminated,
surrendered or canceled as to any shares without the delivery of shares of
Common Stock or other consideration, the shares subject to such Award shall
thereafter be available for further Awards under the Plan. The maximum number of
shares listed above does not include 400,000 shares of Common Stock reserved for
stock options under the SafeNet, Inc. 2000 Nonqualified Stock Option Plan which
stock options and shares shall be administered under the Plan.
     The maximum number of shares of Common Stock subject to Awards of any
combination that may be granted during any one calendar year to any one
individual shall be limited to 200,000. To the extent required by Section 162(m)
of the Code and so long as Section 162(m) of the Code is applicable to persons
eligible to participate in the Plan, shares of Common Stock subject to the
foregoing limit with respect to which the related Award is terminated,
surrendered or canceled shall not again be available for grant under this limit.
     Stock Awards under Section 8 may not be issued after July 26, 2005,
including stock Awards that may be issued as performance awards under Section 9.
Stock Awards under Section 8 may not become vested based on less than 3 years of
service after the grant date, unless vesting is based on meeting performance
goals as specified in Section 9, in which case vesting of stock Awards may occur
one year after the grant date, provided that the Committee may accelerate these
vesting periods, in the Committee’s discretion, in the even of death,
disability, change of control, or retirement.
5. Participation
     Participation in the Plan shall be open to all employees, officers,
directors and consultants of the Corporation, or of any Parent or Subsidiary of
the Corporation, as may be selected by the Committee from time to time.
Notwithstanding the foregoing, participation in the Plan with respect to Awards
of incentive stock options shall be limited to employees of the Corporation or
of any Parent or Subsidiary of the Corporation.
     Awards may be granted to such eligible persons and for or with respect to
such number of shares of Common Stock as the Committee shall determine, subject
to the limitations in Section 4 of the Plan. A grant of any type of Award made
in any one year to an eligible person shall neither guarantee nor preclude a
further grant of that or any other type of Award to such person in that year or
subsequent years.
6. Stock Options
     Subject to the other applicable provisions of the Plan, the Committee may
from time to time grant to eligible participants Awards of nonqualified stock
options or incentive stock options as that term is defined in Section 422 of the
Code. The stock option Awards granted shall be subject to the following terms
and conditions.
     (a) Grant of Option. The grant of a stock option shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, stating the number
of shares of Common Stock subject to the stock option evidenced thereby and the
terms and conditions of such stock option, in such form as the Committee may
from time to time determine.
     (b) Price. The price per share payable upon the exercise of each stock
option (“exercise price”) shall be determined by the Committee, but shall be no
less than the Fair Market Value of such shares on the date of grant. Not
withstanding Section 3(b)(v) or any other provision hereof, the Committee shall
not authorize the amendment of any outstanding stock option to reduce the
exercise price thereof.
     (c) Payment. Stock options may be exercised in whole or in part by payment
of the exercise price of the shares to be acquired in accordance with the
provisions of the Grant Agreement, and/or such rules and regulations as the
Committee may have prescribed, and/or such determinations, orders, or decisions
as the Committee may have made. Payment may be made in cash (or cash equivalents
acceptable to the Committee) or, if approved by the Committee, in shares of
Common Stock or a combination of cash and shares of Common Stock, or by such
other means as the Committee may prescribe. The Fair Market Value of shares of
Common Stock delivered on exercise of stock options shall be determined as of
the date of exercise. Shares of Common Stock delivered in payment of the
exercise price may be previously owned shares or, if approved by the Committee,
shares acquired upon exercise of the stock option. Any fractional share will be
paid in cash. If approved by the Board of Directors, the Corporation may make or
guarantee loans to grantees to assist grantees in exercising stock options and
satisfying any related withholding tax obligations.

 

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     If the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, the Committee, subject to such limitations as it may determine,
may authorize payment of the exercise price, in whole or in part, by delivery of
a properly executed exercise notice, together with irrevocable instructions, to:
(i) a brokerage firm to deliver promptly to the Corporation the aggregate amount
of sale or loan proceeds to pay the exercise price and any withholding tax
obligations that may arise in connection with the exercise, and (ii) the
Corporation to deliver the certificates for such purchased shares directly to
such brokerage firm.
     (d) Terms of Options. The term during which each stock option may be
exercised shall be determined by the Committee; provided, however, that in no
event shall a stock option be exercisable more than ten years from the date it
is granted. Prior to the exercise of the stock option and delivery of the shares
certificates represented thereby, the grantee shall have none of the rights of a
stockholder with respect to any shares represented by an outstanding stock
option.
     (e) Restrictions on Incentive Stock Options. Incentive stock option Awards
granted under the Plan shall comply in all respects with Code Section 422 and,
as such, shall meet the following additional requirements:
     (i) Grant Date. An incentive stock option must be granted within 10 years
of the earlier of the Plan’s adoption by the Board of Directors or approval by
the Corporation’s shareholders.
     (ii) Exercise Price and Term. The exercise price of an incentive stock
option shall not be less than 100% of the Fair Market Value of the shares on the
date the stock option is granted and the term of the stock option shall not
exceed ten years. Also, the exercise price of any incentive stock option granted
to a grantee who owns (within the meaning of Section 422(b)(6) of the Code,
after the application of the attribution rules in Section 424(d) of the Code)
more than 10% of the total combined voting power of all classes of shares of the
Corporation or its Parent or Subsidiary corporations (within the meaning of
Sections 422 and 424 of the Code) shall be not less than 110% of the Fair Market
Value of the Common Stock on the grant date and the term of such stock option
shall not exceed five years.
     (iii) Maximum Grant. The aggregate Fair Market Value (determined as of the
Grant Date) of shares of Common Stock with respect to which all incentive stock
options first become exercisable by any grantee in any calendar year under this
or any other plan of the Corporation and its Parent and Subsidiary corporations
may not exceed $100,000 or such other amount as may be permitted from time to
time under Section 422 of the Code. To the extent that such aggregate Fair
Market Value shall exceed $100,000, or other applicable amount, such stock
options shall be treated as nonqualified stock options. In such case, the
Corporation may designate the shares of Common Stock that are to be treated as
stock acquired pursuant to the exercise of an incentive stock option by issuing
a separate certificate for such shares and identifying the certificate as
incentive stock option shares in the stock transfer records of the Corporation.
     (iv) Grantee. Incentive stock options shall only be issued to employees of
the Corporation, or of a Parent or Subsidiary of the Corporation.
     (v) Designation. No stock option shall be an incentive stock option unless
so designated by the Committee at the time of grant or in the Grant Agreement
evidencing such stock option.
     (vi) Stockholder Approval. No stock option issued under the Plan shall be
an incentive stock option unless the Plan is approved by the shareholders of the
Corporation within 12 months of its adoption by the Board in accordance with the
Bylaws and Articles of the Corporation and governing law relating to such
matters.
     (f) Other Terms and Conditions. Stock options may contain such other
provisions, not inconsistent with the provisions of the Plan, as the Committee
shall determine appropriate from time to time.
7. Stock Appreciation Rights
     (a) Award of Stock Appreciation Rights. Subject to the other applicable
provisions of the Plan, the Committee may at any time and from time to time
grant stock appreciation rights (“SARs”) to eligible participants, either on a
free-standing basis (without regard to or in addition to the grant of a stock
option) or on a tandem basis (related to the grant of an underlying stock
option), as it determines. SARs granted in tandem with or in addition to a stock
option may be granted either at the same time as the stock option or at a later
time; provided, however, that a tandem SAR shall not be granted with respect to
any outstanding incentive stock option Award without the consent of the grantee.
SARs shall be evidenced by Grant Agreements, executed by the Corporation and the
grantee, stating the number of shares of Common Stock subject to the SAR
evidenced thereby and the terms and conditions of such SAR, in such form as the
Committee may from time to time determine. The term during which each SAR may be
exercised shall be determined by the Committee. In no event shall a SAR be
exercisable more than ten years from the date it is granted. The grantee shall
have none of the rights of a stockholder with respect to any shares of Common
Stock represented by a SAR.
     (b) Restrictions of Tandem SARs. No incentive stock option may be
surrendered in connection with the exercise of a tandem SAR unless the Fair
Market Value of the Common Stock subject to the incentive stock option is
greater than the exercise price for such incentive stock option. SARs granted in
tandem with stock options shall be exercisable only to the same extent and
subject to the same conditions as the stock options related thereto are
exercisable. The Committee may, in its discretion, prescribe additional
conditions to the exercise of any such tandem SAR.

 

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     (c) Amount of Payment Upon Exercise of SARs. A SAR shall entitle the
grantee to receive, subject to the provisions of the Plan and the Grant
Agreement, a payment having an aggregate value equal to the product of (i) the
excess of (A) the Fair Market Value on the exercise date of one share of Common
Stock over (B) the base price per share specified in the Grant Agreement, times
(ii) the number of shares specified by the SAR, or portion thereof, which is
exercised. In the case of exercise of a tandem SAR, such payment shall be made
in exchange for the surrender of the unexercised related stock option (or any
portion or portions thereof which the grantee from time to time determines to
surrender for this purpose).
     (d) Form of Payment Upon Exercise of SARs. Payment by the Corporation of
the amount receivable upon any exercise of a SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined
in the sole discretion of the Committee from time to time. If upon settlement of
the exercise of a SAR a grantee is to receive a portion of such payment in
shares of Common Stock, the number of shares shall be determined by dividing
such portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the Committee
shall determine whether cash shall be given in lieu of such fractional shares or
whether such fractional shares shall be eliminated.
8. Stock Awards (Including Restricted and Unrestricted Shares and Phantom Stock)
     (a) Stock Awards, In General. Subject to the other applicable provisions of
the Plan, the Committee may at any time and from time to time grant stock Awards
to eligible participants in such amounts and for such consideration, including
no consideration or such minimum consideration as may be required by law, as it
determines. A stock Award may be denominated in shares of Common Stock or
stock-equivalent units (“phantom stock”), and may be paid in Common Stock, in
cash, or in a combination of Common Stock and cash, as determined in the sole
discretion of the Committee from time to time.
     (b) Restricted Shares. Each stock Award shall specify the applicable
restrictions, if any, on such shares of Common Stock, the duration of such
restrictions, and the time or times at which such restrictions shall lapse with
respect to all or a specified number of shares of Common Stock that are part of
the Award. Notwithstanding the foregoing, the Committee may reduce or shorten
the duration of any restriction applicable to any shares of Common Stock awarded
to any grantee under the Plan. Share certificates with respect to restricted
shares of Common Stock granted pursuant to a stock Award may be issued at the
time of grant of the stock Award, subject to forfeiture if the restrictions do
not lapse, or upon lapse of the restrictions. If share certificates are issued
at the time of grant of the stock Award, the certificates shall bear an
appropriate legend with respect to the restrictions applicable to such stock
Award or, alternatively, the grantee may be required to deposit the certificates
with the Corporation during the period of any restriction thereon and to execute
a blank stock power or other instrument of transfer therefor. Except as
otherwise provided by the Committee, during such period of restriction following
issuance of share certificates, the grantee shall have all of the rights of a
holder of Common Stock, including but not limited to the rights to receive
dividends (or amounts equivalent to dividends) and to vote with respect to the
restricted shares. If share certificates are issued upon lapse of restrictions
on a stock Award, the Committee may provide that the grantee will be entitled to
receive any amounts per share pursuant to any dividend or distribution paid by
the Corporation on its Common Stock to stockholders of record after grant of the
stock Award and prior to the issuance of the share certificates.
     (c) Phantom Stock. The grant of phantom stock units shall be evidenced by a
Grant Agreement, executed by the Corporation and the grantee, that incorporates
the terms of the Plan and states the number of phantom stock units evidenced
thereby and the terms and conditions of such phantom stock units in such form as
the Committee may from time to time determine. Phantom stock units granted to a
participant shall be credited to a bookkeeping reserve account solely for
accounting purposes and shall not require a segregation of any of the
Corporation’s assets. Phantom stock units may be exercised in whole or in part
by delivery of an appropriate exercise notice to the Committee in accordance
with the provisions of the Grant Agreement, and/or such rules and regulations as
the Committee may prescribe, and/or such determinations, orders, or decisions as
the Committee may make. Except as otherwise provided in the applicable Grant
Agreement, the grantee shall have none of the rights of a stockholder with
respect to any shares of Common Stock represented by a phantom stock unit as a
result of the grant of a phantom stock unit to the grantee. Phantom stock units
may contain such other provisions, not inconsistent with the provisions of the
Plan, as the Committee shall determine appropriate from time to time.
9. Performance Awards
     The Committee may in its discretion grant performance Awards which become
payable on account of attainment of one or more performance goals established by
the Committee. Performance Awards may be paid by the delivery of Common Stock or
cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Committee from time to time. Performance goals established by
the Committee may be based on the Corporation’s operating income or one or more
other business criteria selected by the Committee that apply to an individual or
group of individuals, a business unit, or the Corporation as a whole, over such
performance period as the Committee may designate. The Committee in its
discretion may recommend to the Board of Directors of the Corporation that the
material terms of any Performance Award or program with respect to some or all
eligible participants be submitted for approval by the stockholders.

 

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10. Withholding of Taxes
     The Corporation may require, as a condition to the grant of any Award under
the Plan or exercise pursuant to such Award or to the delivery of certificates
for shares issued or payments of cash to a grantee pursuant to the Plan or a
Grant Agreement (hereinafter collectively referred to as a “taxable event”),
that the grantee pay to the Corporation, in cash or, if approved by the
Corporation, in shares of Common Stock, including shares acquired upon grant of
the Award or exercise of the Award, valued at Fair Market Value on the date as
of which the withholding tax liability is determined, any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan. The Corporation, to the extent permitted or
required by law, shall have the right to deduct from any payment of any kind
(including salary or bonus) otherwise due to a grantee any federal, state or
local taxes of any kind required by law to be withheld with respect to any
taxable event under the Plan, or to retain or sell without notice a sufficient
number of the shares to be issued to such grantee to cover any such taxes.
11. Transferability
     No Award granted under the Plan shall be transferable by a grantee
otherwise than by will or the laws of descent and distribution. Unless otherwise
determined by the Committee in accord with the provisions of the immediately
preceding sentence, an Award may be exercised during the lifetime of the
grantee, only by the grantee or, during the period the grantee is under a legal
disability, by the grantee’s guardian or legal representative. Notwithstanding
the foregoing, a nonqualified stock option Award may, in the Committee’s sole
discretion, be transferable by gift or domestic order relations to (i) the
grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships (such persons, “Family Members”), (ii) a corporation, partnership,
limited liability company or other business entity whose only stockholders,
partners or members, as applicable are the grantee and/or Family Members, or
(iii) a trust in which the grantee and/or Family Members have all of the
beneficial interests, and subsequent to any such transfer any such nonqualified
stock option Award may be exercised by any such transferee.
12. Adjustments; Business Combinations
     In the event of a reclassification, recapitalization, stock split, reverse
stock split, stock dividend, combination of shares, or other similar event, the
maximum number and kind of shares reserved for issuance or with respect to which
Awards may be granted under the Plan as provided in Section 4 shall be adjusted
to reflect such event, and the Committee shall make such adjustments as it deems
appropriate and equitable in the number, kind and price of shares covered by
outstanding Awards made under the Plan, and in any other matters which relate to
Awards and which are affected by the changes in the Common Stock referred to
above.
     In the event of any proposed Change in Control, the Committee shall take
such action as it deems appropriate and equitable to effectuate the purposes of
this Plan and to protect the grantees of Awards, which action may include, but
without limitation, any one or more of the following: (i) acceleration or change
of the exercise and/or expiration dates of any Award to require that exercise be
made, if at all, prior to the Change in Control; (ii) cancellation of any Award
upon payment to the holder in cash of the Fair Market Value of the Common Stock
subject to such Award as of the date of (and, to the extent applicable, as
established for purposes of) the Change in Control, less the aggregate exercise
price, if any, of the Award; and (iii) in any case where equity securities of
another entity are proposed to be delivered in exchange for or with respect to
Common Stock of the Corporation, arrangements to have such other entity replace
the Awards granted hereunder with awards with respect to such other securities,
with appropriate adjustments in the number of shares subject to, and the
exercise prices under, the award.
     The Committee is authorized to make adjustments in the terms and conditions
of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in the
preceding two paragraphs of this Section 12) affecting the Corporation, or the
financial statements of the Corporation or any Subsidiary, or of changes in
applicable laws, regulations, or accounting principles, whenever the Committee
determines that such adjustments are appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan.
     In the event the Corporation dissolves and liquidates (other than pursuant
to a plan of merger or reorganization), then notwithstanding any restrictions on
exercise set forth in this Plan or any Grant Agreement, or other agreement
evidencing a stock option, stock appreciation right or restricted stock Award:
(i) each grantee shall have the right to exercise his stock option or stock
appreciation right, or to require delivery of share certificates representing
any such restricted stock Award, at any time up to ten (10) days prior to the
effective date of such liquidation and dissolution; and (ii) the Committee may
make arrangements with the grantees for the payment of appropriate consideration
to them for the cancellation and surrender of any stock option, stock
appreciation right or restricted stock Award that is so canceled or surrendered
at any time up to ten (10) days prior to the effective date of such liquidation
and dissolution. The Committee may establish a different period (and different
conditions) for such exercise, delivery, cancellation, or surrender to avoid
subjecting the grantee to liability under Section 16(b) of the Exchange Act. Any
stock option or stock appreciation right not so exercised, canceled, or
surrendered shall terminate on the last day for exercise prior to such effective
date; and any restricted stock as to which there has not been such delivery of
share certificates or that has not been so canceled or surrendered, shall be
forfeited on the last day prior to such effective date. The Committee shall give
to each grantee written notice of the commencement of any proceedings for such
liquidation and dissolution of the Corporation and the grantee’s rights with
respect to his outstanding Award.

 

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     Except as hereinbefore expressly provided, issuance by the Corporation of
shares of stock of any class or securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warranty to subscribe therefore, or upon conversion of
shares or obligations of the Corporation convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to Awards theretofore granted or the purchase
price per share of Common Stock subject to Awards.
13. Termination and Modification of the Plan
     The Board, without further approval of the stockholders, may modify or
terminate the Plan or any portion thereof at any time, except that no
modification shall become effective without prior approval of the stockholders
of the Corporation (i) to increase the number of shares of Common Stock subject
to the Plan, (ii) to increase the benefits accruing to participants under the
Plan, except as expressly stated herein, (iii) to materially modify eligibility
requirements for participation in the Plan, or (iv) if stockholder approval is
necessary to comply with any tax or regulatory requirement or rule of any
exchange or NASDAQ System upon which the Common Stock is listed or quoted
(including for this purpose stockholder approval that is required for continued
compliance with Rule 16b-3 or stockholder approval that is required to enable
the Committee to grant incentive stock options pursuant to the Plan).
     The Committee shall be authorized to make minor or administrative
modifications to the Plan as well as modifications to the Plan that may be
dictated by requirements of federal or state laws applicable to the Corporation
or that may be authorized or made desirable by such laws. The Committee may
amend or modify the grant of any outstanding Award in any manner to the extent
that the Committee would have had the authority to make such Award as so
modified or amended. No modification may be made that would materially adversely
affect any Award previously made under the Plan without the approval of the
grantee.
14. Non-Guarantee of Employment
     Nothing in the Plan or in any Grant Agreement there under shall confer any
right on an employee to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation to terminate an employee
at any time.
15. Termination of Employment
     For purposes of maintaining a grantee’s continuous status as an employee
and accrual of rights under any Award, transfer of an employee among the
Corporation and the Corporation’s Parent or Subsidiaries shall not be considered
a termination of employment. Nor shall it be considered a termination of
employment for such purposes if an employee is placed on military or sick leave
or such other leave of absence which is considered as continuing intact the
employment relationship; in such a case, the employment relationship shall be
continued until the date when an employee’s right to reemployment shall no
longer be guaranteed either by law or contract.
16. Written Agreement
     Each Grant Agreement entered into between the Corporation and a grantee
with respect to an Award granted under the Plan shall incorporate the terms of
this Plan and shall contain such provisions, consistent with the provisions of
the Plan, as may be established by the Committee.
17. Non-Uniform Determinations
     The Committee’s determinations under the Plan (including without limitation
determinations of the persons to receive Awards, the form, amount and time of
such Awards, the terms and provisions of such Awards and the agreements
evidencing same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Plan, whether
or not such persons are similarly situated.
18. Limitation on Benefits
     With respect to persons subject to Section 16 of the Exchange Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Committee.
19. Listing and Registration
     If the Corporation determines that the listing, registration or
qualification upon any securities exchange or upon any listing or quotation
system established by the National Association of Securities Dealers, Inc.
(“NASDAQ System”) or under any law, of shares subject to any Award is necessary
or desirable as a condition of, or in connection with, the granting of same or
the issue or purchase of shares there under, no such Award may be exercised in
whole or in part and no restrictions on such Award shall lapse, unless such
listing, registration or qualification is effected free of any conditions not
acceptable to the Corporation.

 

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20. Compliance with Securities Law
     Common Stock shall not be issued with respect to an Award granted under the
Plan unless the exercise of such Award and the issuance and delivery of share
certificates there under for such Common Stock pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated there under, and the requirements of any national securities
exchange or NASDAQ System upon which the Common Stock may then be listed or
quoted, and shall be further subject to the approval of counsel for the
Corporation with respect to such compliance to the extent such approval is
sought by the Committee.
     Stock certificates evidencing unregistered shares acquired upon the
exercise of Options shall contain a restrictive securities legend substantially
as follows:
     “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
21. No Trust or Fund Created
     Neither the Plan nor any Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Corporation and a grantee or any other person. To the extent that any grantee or
other person acquires a right to receive payments from the Corporation pursuant
to an Award, such right shall be no greater than the right of any unsecured
general creditor of the Corporation.
22. No Limit on Other Compensation Arrangements
     Nothing contained in the Plan shall prevent the Corporation or its Parent
or Subsidiary corporations from adopting or continuing in effect other
compensation arrangements (whether such arrangements be generally applicable or
applicable only in specific cases) as the Committee in its discretion determines
desirable, including without limitation the granting of stock options, stock
awards, stock appreciation rights or phantom stock units otherwise than under
the Plan.
23. No Restriction of Corporate Action
     Nothing contained in the Plan shall be construed to prevent the Corporation
or any Parent or Subsidiary from taking any corporate action which is deemed by
the Corporation or such Parent or Subsidiary to be appropriate or in its best
interest, whether or not such action would have an adverse effect on the Plan or
any Award issued under the Plan. No employee, beneficiary or other person shall
have any claim against the Corporation or any Parent or Subsidiary as a result
of such action.
24. Governing Law
     The validity, construction and effect of the Plan, of Grant Agreements
entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Board or Committee relating to the Plan or such Grant
Agreements, and the rights of any and all persons having or claiming to have any
interest therein or there under, shall be determined exclusively in accordance
with applicable federal laws and the laws of the State of Delaware, without
regard to its conflict of laws rules and principles.
25. Plan Subject to Charter and By-Laws
     This Plan is subject to the Articles and By-Laws of the Corporation, as
they may be amended from time to time.
26. Effective Date; Termination Date
     The Plan, as amended and restated herein, is effective as of the date on
which the amendment and restatement of the Plan was adopted by the Board;
provided that the amendment and restatement of the Plan shall be null and void
unless approved within 12 months thereafter by the shareholders of the
Corporation. No Award shall be granted under the Plan after the close of
business on the day immediately preceding the tenth anniversary of the effective
date of the Plan. Subject to other applicable provisions of the Plan, all Awards
made under the Plan prior to such termination of the Plan shall remain in effect
until such Awards have been satisfied or terminated in accordance with the Plan
and the terms of such Awards.