Prepared by MERRILL CORPORATION




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Exhibit 4.6  


 
 
 

DELPHI INFORMATION SYSTEMS, INC.
  
    1996 STOCK INCENTIVE PLAN
  
    Table of Contents    




	1.	 	PURPOSE	 	1
	

2.	
 	

DEFINITIONS	
 	

1
	

3.	
 	

SHARES AND PERFORMANCE UNITS AVAILABLE UNDER THE LAW	
 	

3
	

4.	
 	

OPTION RIGHTS	
 	

4
	

5.	
 	

APPRECIATION RIGHTS	
 	

5
	

6.	
 	

RESTRICTED SHARES	
 	

6
	

7.	
 	

DEFERRED SHARES	
 	

6
	

8.	
 	

PERFORMANCE SHARES AND PERFORMANCE UNITS	
 	

7
	

9.	
 	

TRANSFERABILITY	
 	

8
	

10.	
 	

ADJUSTMENTS	
 	

8
	

11.	
 	

FRACTIONAL SHARES	
 	

8
	

12.	
 	

WITHHOLDING TAXES	
 	

8
	

13.	
 	

PARTICIPATION BY DIRECTORS, OFFICERS AND OTHER KEY EMPLOYEES OF OR CONSULTANTS TO A LESS-THAN-80-PERCENT SUBSIDIARY	
 	

9
	

14.	
 	

CERTAIN TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF ABSENCE	
 	

9
	

15.	
 	

FOREIGN PARTICIPANTS	
 	

9
	

16.	
 	

ADMINISTRATION OF THE PLAN	
 	

9
	

17.	
 	

AMENDMENTS AND OTHER MATTERS	
 	

10




DELPHI INFORMATION SYSTEMS, INC.

1996 STOCK INCENTIVE PLAN 


    1.  PURPOSE.  The
purpose of this Plan is to attract and retain directors, officers and other key employees of and consultants to Delphi Information
Systems, Inc. (the "Corporation") and its Subsidiaries and to provide such persons with incentives and rewards for superior performance. 


    2.  DEFINITIONS.



    (a)  As
used in this Plan: 


    "APPRECIATION
RIGHT" means a right granted pursuant to Section 5 of this Plan, including a Free-Standing Appreciation Right and a Tandem Appreciation Right. 



    "BASE
PRICE" means the price to be used as the basis for determining the Spread upon the exercise of a free-Standing Appreciation Right. 


    "BOARD"
means the Board of Directors of the Corporation. 


    "CODE"
means the Internal Revenue Code of 1986, as amended from time to time. 





 


    "COMMITTEE" means a committee of not less than two "Non-Employee Directors" (as defined in Rule 16b-3(b)(3)(i) under Section 16(b) of the
Exchange Act) appointed by and serving at the pleasure of the Board. 


    "COMMON
SHARES" means (i) shares of the Common Stock, par value $.10 per share, of the Corporation and (ii) any security into which Common Shares may be converted by
reason of any transaction or event of the type referred to in Section 10 of this Plan. 


    "DATE
OF GRANT" means the date specified by the Board on which a grant of Option Rights, Appreciation Rights or Performance Shares or Performance Units or a grant or sale of
Restricted shares or Deferred Shares shall become effective, which shall not be earlier than the date on which the Board takes action with respect thereto. 


    "DEFERRAL
PERIOD" means an award pursuant to Section 7 of this Plan of the right to receive Common Shares at the end of a specified Deferral Period. 


    "EXCHANGE
ACT" means the Securities Exchange Act of 1934, as amended from time to time. 


    "FREE-STANDING
APPRECIATION RIGHT" means an Appreciation Right granted pursuant to Section 5 of this Plan that is not granted in tandem with an Option Right or
similar right. 


    "INCENTIVE
STOCK OPTION" means an Option Right that is intended to qualify as an "incentive stock option" under Section 422 of the Code or any successor provision thereto. 


    "LESS-THAN-80-PERCENT
SUBSIDIARY" means a subsidiary with respect to which the Corporation directly or indirectly owns or controls less than
80 percent of the total combined voting or other decision-making power. 


    "MANAGEMENT
OBJECTIVES" means the achievement or performance objectives established pursuant to this Plan for Participants who have received grants of Performance Shares or
Performance Units or, when so determined by the Board, Restricted Shares. 


    "MARKET
VALUE PER SHARE" means the fair market value of the Common Shares as determined by the Board from time to time. 


    "NONQUALIFIED
OPTION" means an Option Right that is not intended to qualify as a Tax-Qualified Option. 


    "OPTIONEE"
means the person so designated in an agreement evidencing an outstanding Option Right. 


    "OPTION
PRICE" means the purchase price payable upon the exercise of an Option Right. 



    "OPTION
RIGHT" means the right to purchase Common Shares from the Corporation upon the exercise of a Nonqualified Option or a Tax-Qualified Option granted pursuant to
Section 4, or a Replacement Option Right granted pursuant to Section 17(c), of this Plan. 


    "PARTICIPANT"
means a person who is selected by the Board to receive benefits under this Plan and (i) is at that time a director or an officer (including officers who are also
directors) or other key employee of or a consultant to the Corporation or any Subsidiary or (ii) has agreed to commence serving in any such capacity. 



    "PERFORMANCE
PERIOD" means, in respect of a Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management
Objectives relating thereto are to be achieved. 


    "PERFORMANCE
SHARE" means a bookkeeping entry that records the equivalent of one Common Share awarded pursuant to Section 8 of this Plan. 


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    "PERFORMANCE UNIT" means a bookkeeping entry that records a unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan. 



    "REPLACEMENT
OPTION RIGHT" means an Option Right granted pursuant to Section 17(c) of this Plan in exchange for the surrender and cancellation of an option to purchase shares
of another corporation that is acquired by the Corporation or a Subsidiary by merger or otherwise. 


    "RESTRICTED
SHARES" means Common Shares granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the restrictions on
transfer referred to in Section 6 hereof has expired. 


    "SPREAD"
means, in the case of a Free-Standing Appreciation Right, the amount by which the Market Value per Share on the date when the Appreciation Right is exercised
exceeds the Base Price specified therein or, in the case of a Tandem Appreciation Right, the amount by which the Market Value per share on the date when the Appreciation Right is exercised exceeds the
Option Price specified in the related Option Right. 


    "SUBSIDIARY"
means a corporation, partnership, joint venture, unincorporated association or other entity in which the Corporation has a direct or indirect ownership or other equity
interest; PROVIDED, HOWEVER, for purposes of determining whether any person may be a Participant for purposes of determining whether any person may be a Participant for purposes of any grant of
Incentive Stock Options, "Subsidiary" means any corporation in which the Corporation owns or controls directly or indirectly more than 50 percent of the total combined voting power represented
by all classes of stock issued by such corporation at the time of the grant. 


    "TANDEM
APPRECIATION RIGHT" means an Appreciation Right granted pursuant to Section 5 of this Plan that is granted in tandem with an Option Right or any similar right granted
under any other plan of the Corporation. 


    "TAX-QUALIFIED
OPTION" means an Option Right that is intended to qualify under particular provisions of the Code, including but mot limited to an Incentive Stock Option. 


    (b) As
used in this Plan, the terms "employed" and "employment" shall be deemed to refer to service as a nonemployee director or as a consultant, as well as to a
traditional employment relationship, as the case may be. 


    3.  SHARES
AND PERFORMANCE UNITS AVAILABLE UNDER THE PLAN. 


    (a) Subject
to the adjustment as provided in Section 10 of this Plan, the aggregate number aggregate number of Common Shares covered by outstanding awards,
except Replacement Option Rights, granted
under this Plan and issued or transferred upon the exercise or payment thereof, and the aggregate number of Performance Units granted under this Plan, shall not exceed 6,000,000. Common Shares issued
or transferred under this Plan may be common shares of original issuance or Common Shares held in treasury or a combination thereof. 


    (b) Subject
to adjustment as provided in Section 10 of this Plan, the aggregate number of Common Shares covered by Replacement Option Rights granted under this
Plan during any calendar year shall not exceed five percent of the Common Shares outstanding on January 1 of that year. 


    (c) For
the purposes of this Section 3: 



     (i) Upon
payment in cash of the benefit provided by any award granted under this Plan, any Common Shares that were covered by that award shall again be available for
issuance or transfer hereunder. 


    (ii) Common
Shares covered by any award granted under this Plan shall be deemed to have been issued or transferred, and shall cease to be available for future issuance
or transfer in respect 



3





 


of any other award granted hereunder, at the earlier of the time when they are actually issued or transferred or the time when dividends or dividend equivalents are paid thereon; PROVIDED, HOWEVER,
that Restricted Shares shall be deemed to have been issued or transferred at the earlier of the time when they cease to be subject to a substantial risk of forfeiture or the time when dividends are
paid thereon. 


    (iii) Performance
Units that are granted under this Plan, but are not earned by the Participant at the end of the Performance Period, shall be available for future
grants of Performance Units hereunder. 




    4.  OPTION
RIGHTS.  The Board may from time to time authorize grants to Participants of Option Rights upon such terms and conditions as the Board may
determine in accordance with the following provisions: 



    (a) Each
grant shall specify the number of Common Shares to which it pertains. 


    (b) Each
grant shall specify an Option Price per Common share, which shall be equal to or greater than the Market Value per Share on the Date of Grant; PROVIDED,
HOWEVER, that the Option Price per Common Share of a Replacement Option Right may be less than the Market Value per Share on the Date of Grant. 


    (c) Each
grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which may include
(i) cash in the form of currency or check or other cash equivalent acceptable to the Corporation, (ii) nonforfeitable, unrestricted Common Shares that are already owned by the optionee
and have a value at the time of exercise that is equal to the Option Price, (iii) any other legal consideration that the Board may deem appropriate, including but not limited to any form of
consideration authorized under Section 4(d) below, on such basis as the Board may determine in accordance with this Plan and (iv) any combination of the foregoing. 


    (d) On
or after the Date of Grant of any Nonqualified Option, the Board may determine that payment of the Option Price may also be made in whole or in part in the form
of Restricted Shares or other Common Shares that are subject to risk of forfeiture or restrictions on transfer. Unless otherwise determined by the Board on or after the Date of Grant, whenever any
Option Price is paid in whole or in part by means of any of the forms of consideration specified in this Section 4(d), the Common Shares received by the Optionee upon the exercise of the
Nonqualified Option shall be subject to the same risks of forfeiture or restrictions on transfer as those that applied to the consideration surrendered by the optionee; PROVIDED, HOWEVER, that such
risks of forfeiture and restrictions on transfer shall apply only to the same number of Common Shares received by the optionee as applied to the forfeitable or restricted Common Shares surrendered by
the Optionee. 


    (e) Any
grant may provide for deferred payment of the Option Price from the proceeds of sale through a broker on the date of exercise of some or all of the Common
Shares to which the exercise relates. 


    (f)  Successive
grants may be made to the same Participant regardless of whether any Option Rights previously granted to the Participant remain unexercised. 



    (g) Each
grant may specify a period or periods of continuous employment of the Optionee by the Corporation or any Subsidiary that are necessary before the Option Rights
or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of the Option Rights in the event of a change in control of the Corporation or other similar
transaction or event. 


    (h) Option
Rights granted pursuant to this Section 4 maybe Nonqualified Options or Tax-Qualified Options or combinations thereof. 



4





 


    (i)  On or after the Date of Grant of any Nonqualified Option, the Board may provide for the payment to the Optionee of dividend equivalents thereon in cash or Common
Shares on a current, deferred or contingent basis, or the Board may provide that any dividend equivalents shall be credited against the Option Price. 


    (j)  No
Option Right granted pursuant to this Section 4 may be exercised more than 10 years from the Date of Grant. 


    (k) Each
grant shall be evidenced by an agreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by the
Optionee and shall contain such terms and provisions as the Board may determine consistent with this Plan. 




    5.  APPRECIATION
RIGHTS.  The Board may also authorize grants to Participants of Appreciation Rights. An Appreciation Right shall be a right of the
Participant to receive from the Corporation an amount, which shall be determined by the Board and shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the tile of the
exercise of an Appreciation Right. Any grant of Appreciation Rights under this Plan shall be upon such terms and conditions as the Board may determine in accordance with the following provisions: 



    (a) Any
grant may specify that the amount payable upon the exercise of an Appreciation Right may be paid by the corporation in cash, Common Shares or any combination
thereof and may (i) either grant to the Participant or reserve to the Board the right to elect among those alternatives or (ii) preclude the right of the Participant to receive and the
Corporation to issue Common Shares or other equity securities in lieu of cash. 


    (b) Any
grant may specify that the amount payable upon the exercise of an Appreciation Right shall not exceed a maximum specified by the Board on the Date of Grant. 



    (c) Any
grant may specify (i) a waiting period or periods before Appreciation Rights shall become exercisable and (ii) permissible dates or periods on or
during which Appreciation Rights shall be exercisable. 


    (d) Any
grant may specify that an Appreciation Right may be exercised only in the event of a change in control of the Corporation or other similar transaction or event. 


    (e) On
or after the Date of Grant of any Appreciation Rights, the Board may provide for the payment to the Participant of dividend equivalents thereon in cash or Common
Shares on a current, deferred or contingent basis. 


    (f)  Each
grant shall be evidenced by an agreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by the
Optionee and shall describe the subject Appreciation Rights, identify any related Option Rights, state that the Appreciation Rights are subject to all of the terms and conditions of this Plan and
contain such other terms and provisions as the Board may determine consistent with this Plan. 


    (g) Regarding
Tandem Appreciation Rights only: Each grant shall provide that a Tandem Appreciation Right may be exercised only (i) at a time when the related
Option Right (or any similar right granted under any other plan of the Corporation) is also exercisable and the Spread is positive and (ii) by surrender of the related Option Right (or such
other right) for cancellation. 


    (h) Regarding
Free-Standing Appreciation Rights only: 



     (i) Each
grant shall specify in respect of each Free-Standing Appreciation Right a Base Price per Common Share, which shall be equal to or greater than the
Market Value per Share on the Date of Grant; 




5





 



    (ii) Successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant
remain unexercised; 


    (iii) Each
grant shall specify the period or periods of continuous employment of the Participant by the Corporation or any Subsidiary that are necessary before the
Free-Standing Appreciation Rights or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of the Free-Standing Appreciation Rights
in the event of a change in control of the Corporation or other similar transaction or event; and 


    (iv) No
Free-Standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. 





    6.  RESTRICTED
SHARES.  The Board may also authorize grants or sales to Participants of Restricted Shares upon such terms and conditions as the Board may
determine in accordance with the following provisions 



    (a) Each
grant or sale shall constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services,
entitling the Participant to dividend, voting and other ownership rights, subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to. 


    (b) Each
grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the
Market Value per Share on the Date of Grant. 


    (c) Each
grant or sale shall provide that the Restricted Shares covered thereby shall be subject to a "substantial risk of forfeiture" within the meaning of
Section 83 of the Code for a period to be determined by the Board on the Date of Grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in
control of the Corporation or other similar transaction or event. 


    (d) Each
grant or sale shall provide that, during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares
shall be prohibited or restricted in the manner and to the extent prescribed by the Board on the Date of Grant. Such restrictions may include, but are not limited to, rights of repurchase or first
refusal in the Corporation or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee. 



    (e) Any
grant or sale may require that any or all dividends or other distributions paid on the Restricted Shares during the period of such restrictions be automatically
sequestered and reinvested on an immediate or deferred basis in additional Common Shares, which may be subject to the same restrictions as the underlying award or such other restrictions as the Board
may determine. 


    (f)  Each
grant or sale shall be evidenced by an agreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by
the Participant and shall contain such terms and provisions as the Board may determine consistent with this Plan. Unless otherwise directed by the Board, all certificates representing Restricted
Shares, together with a stock power that shall be endorsed in blank by the Participant with respect to the Restricted Shares, shall be held in custody by the Corporation until all restrictions thereon
lapse. 



6





 

    7.  DEFERRED
SHARES.  The Board may also authorize grants or sales to Participants of Deferred Shares upon such terms and conditions as the Board may
determine in accordance with the following provisions: 



    (a) Each
grant or sale shall constitute the agreement by the Corporation to issue or transfer Common Shares to the Participant in the future in consideration of the
performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Board may specify. 


    (b) Each
grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the
Market Value per Share on the Date of Grant. 


    (c) Each
grant or sale shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the Board on the Date of
Grant, and any grant or sale may provide for the earlier termination of the Deferral Period in the event of a change in control of the Corporation or other similar transaction or event. 


    (d) During
the Deferral Period, the Participant shall not have any right to transfer any rights under the subject award, shall not have any rights of ownership in the
Deferred Shares and shall not have any right to vote the Deferred Shares, but the Board may on or after the Date of Grant authorize the payment of dividend equivalents on the Deferred Shares in cash
or additional Common Shares on a current, deferred or contingent basis. 



    (e) Each
grant or sale shall be evidenced by an agreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by
the Participant and shall contain such terms and provisions as the Board may determine consistent with this Plan. 




    8.  PERFORMANCE
SHARES AND PERFORMANCE UNITS.  The Board may also authorize grants of Performance Shares and Performance Units, which shall become
payable to the Participant upon the achievement of specified Management Objectives, upon such terms and conditions as the Board may determine in accordance with the following provisions: 



    (a) Each
grant shall specify the number of Performance Shares or Performance Units to which it pertains, which may be subject to adjustment to reflect changes in
compensation or other factors. 


    (b) The
Performance Period with respect to each Performance Share or Performance Unit shall be determined by the Board on the Date of Grant and may be subject to
earlier termination in the event of a change in control of the Corporation or other similar transaction or event. 


    (c) Each
grant shall specify the Management Objectives that are to be achieved by the Participant, which may be described in terms of Corporation-wide
objectives or objectives that are related to the performance of the individual Participant or the Subsidiary, division, department or function within the Corporation or Subsidiary in which the
Participant is employed. 


    (d) Each
grant shall specify in respect of the specified Management Objectives a minimum acceptable level of achievement below which no payment will be made and shall
set forth a formula for determining the amount of any payment to be made if performance is at or above the minimum acceptable level but falls short of full achievement of the specified Management
Objectives. 


    (e) Each
grant shall specify the time and manner of payment of Performance Shares or Performance Units that shall have been earned, and any grant may specify that any
such amount may be paid by the Corporation in cash, Common Shares or any combination thereof and may either grant to the Participant or reserve to the Board the right to elect among those
alternatives. 



7





 


    (f)  Any grant of Performance Shares may specify that the amount payable with respect thereto may not exceed a maximum specified by the Board on the Date of Grant. Any
grant of Performance Units may specify that the amount payable, or the number of Common Shares issuable, with respect thereto may not exceed maximums specified by the Board on the Date of Grant. 



    (g) On
or after the Date of Grant of Performance Shares, the Board may provide for the payment to the Participant of dividend equivalents thereon in cash or additional
Common Shares on a current, deferred or contingent basis. 


    (h) The
Board may adjust Management Objectives and the related minimum acceptable level of achievement if, in the sole judgment of the Board, events or transactions
have occurred after the Date of Grant that are unrelated to the performance of the Participant and result in distortion of the Management objectives or the related minimum acceptable level of
achievement. 



    (i)  Each
grant shall be evidenced by an agreement, which shall be executed on behalf of the Corporation by any officer thereof and delivered to and accepted by the
Participant and shall contain such terms and provisions as the Board may determine consistent with this Plan. 




    9.  TRANSFERABILITY.  (a) Any
grant of an Option Right or other "derivative security" (as defined in Rule 163-1(c) under
Section 16(a) of the Exchange Act) under this Plan may permit the transfer thereof by the Participant upon such terms and conditions as the Board shall specify. 


    (b) Any
grant made under this Plan may provide that all or any part of the Common Shares that are to be issued or transferred by the Corporation upon the exercise of
Option Rights or Appreciation Rights or upon the termination of the Deferral Period applicable to Deferred Shares or in payment of Performance Shares or Performance Units, or are no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, shall be subject to further restrictions upon transfer. 


    10. ADJUSTMENTS.  The
Board may make or provide for such adjustments in the number of Common Shares covered by outstanding Option Rights, Appreciation
Rights, Deferred Shares and Performance Shares granted hereunder, the Option Prices per Common Share or Base Prices per Common Share applicable to any such Option Rights and Appreciation Rights, and
the kind of shares (including shares of another issuer) covered thereby, as the Board may in good faith determine to be equitably required in order to prevent dilution or expansion of the rights of
Participants that otherwise would result from (a) any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Corporation or
(b) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of
assets, issuance of warrants or other rights to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing. In the event of any such transaction
or event, the Board may provide in substitution for any or all outstanding awards under this Plan such alternative consideration as it may in good faith determine to be equitable under the
circumstances and may require in connection therewith the surrender of all awards so replaced. Moreover, the Board may on or after the Date of Grant provide in the agreement evidencing any award under
this Plan that the holder of the award may elect to receive an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a
similar effect, or the Board may provide that the holder will automatically be entitled to receive such an equivalent award. The Board may also make or provide for such adjustments in the numbers of
Common Shares specified in Sections 3(a)(i) and 3(a)(ii) of this Plan as the Board may in good faith determine to be appropriate in order to reflect any transaction or event described in
this Section 10. 


8





 


    11. FRACTIONAL SHARES.  The Corporation shall not be required to issue any fractional Common Shares pursuant to this Plan. The Board may provide for the
elimination of fractions or for the settlement thereof in cash. 


    12. WITHHOLDING
TAXES.  To the extent that the Corporation is required to withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Corporation for the withholding are insufficient, it shall be a condition to the receipt of
any such payment or the realization of any such benefit that the Participant or such other person make arrangements satisfactory to the Corporation for payment of the balance of any taxes required to
be withheld. At the discretion of the Board, any such arrangements may include relinquishment of a portion of any such payment or benefit. The Corporation and any Participant or such other person may
also make similar arrangements with respect to the payment of any taxes with respect to which withholding is not required. 


    13. PARTICIPATION
BY DIRECTORS, OFFICERS AND OTHER KEY EMPLOYEES OF OR CONSULTANTS TO A LESS-THAN-80-PERCENT
SUBSIDIARY.  As a condition to the effectiveness of any grant or award to be made hereunder to a Participant who is a director or an officer or other key employee of or a consultant to
a Less-Than-80-Percent Subsidiary, regardless of whether the Participant is also employed by the Corporation or another Subsidiary, the Board may require the
Less-Than-80-Percent Subsidiary to agree to transfer to the Participant (as, if and when provided for under this Plan and any applicable agreement entered into
between the Participant and the Less-Than-80-Percent Subsidiary pursuant to this Plan) the Common Shares that would otherwise be delivered by the Corporation upon
receipt by the Less-Than-80-Percent Subsidiary of any consideration then otherwise payable by the Participant to the Corporation. Any such award may be evidenced by
an agreement between the Participant and the Less-Than-80-Percent Subsidiary, in lieu of the Corporation, on terms consistent with this Plan and approved by the
Board and the Less-Than-80-Percent Subsidiary. All Common Shares so delivered by or to a Less-Than-80-Percent Subsidiary will be
treated as if they had been delivered by or to the Corporation for purposes of Section 3 of this Plan, and all references to the Corporation in this Plan shall be deemed to refer to the
Less-Than-80-Percent Subsidiary except with respect to the definitions of the Board and the Committee and in other cases where, the context otherwise requires. 


    14. CERTAIN
TERMINATIONS OF EMPLOYMENT, HARDSHIP AND APPROVED LEAVES OF ABSENCE.  Notwithstanding any other provision of this Plan to the contrary, in
the event of termination of employment by reason of death, disability, normal retirement, early retirement with the consent of the Corporation, termination of employment to enter public service with
the consent of the Corporation or leave of absence approved by the Corporation, or in the event of hardship or other special circumstances, of a Participant who holds an Option Right or Appreciation
Right that is not immediately and fully exercisable, any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, any Deferred
Shares as to which the Deferral Period is not complete, any Performance Shares or Performance Units that have not been fully earned, or any Common Shares that are subject to any transfer restriction
pursuant to Section 9[(b)] of this Plan, the Board may take any action that it deems to be equitable under the circumstances or in the best interests of the Corporation,
including without limitation waiving or modifying any limitation or requirement with respect to any award under this Plan. 


    15. FOREIGN
PARTICIPANTS.  In order to facilitate the making of any award or combination of awards under this Plan, the Board may provide for such
special terms for awards to Participants who are foreign nationals, or who are employed by the Corporation or any Subsidiary outside of the United States of America, as the Board may consider
necessary or appropriate to accommodate differences in
local law, tax policy or custom. Moreover, the Board may approve such supplements to, or amendments, restatements or alternative versions of, this Plan as it may consider necessary or appropriate for
such purposes without thereby affecting the terms of this Plan as in effect for any other 


9





 


purpose; PROVIDED, HOWEVER, that no such supplements, amendments, restatements or alternative versions shall include any provisions that are inconsistent with the terms of this Plan, as then in
effect, unless this Plan could have been amended to eliminate the inconsistency without further approval by the stockholders of the Corporation. 


    16. ADMINISTRATION
OF THE PLAN.  (a) This Plan shall be administered by the Board, which may delegate any or all of its authority hereunder to the
Committee. To the extent of any such delegation, references in this Plan to the Board shall be deemed to refer to the Committee, unless the context requires otherwise. A majority of the Board shall
constitute a quorum, and the acts of the members of the Board who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Board in writing,
shall be the acts of the Board. 


    (b) The
interpretation and construction by the Board of any provision of this Plan or any agreement, notification or document evidencing the grant of Option Rights,
Appreciation Rights, Restricted Shares, Deferred Shares, Performance Shares or Performance Units, and any determination by the Board pursuant to any provision of this Plan or any such agreement,
notification or document, shall be final and conclusive. No member of the Board shall be liable for any such action taken or determination made in good faith. 


    17. AMENDMENTS
AND OTHER MATTERS.  (a) This Plan may be amended from time to time by the Board; PROVIDED, HOWEVER, except as expressly authorized by this
Plan, no such amendment shall increase the numbers of Common Shares specified in Sections 3(a)(i) and 3(a)(ii) hereof or the number of Performance Units specified in Section 3(b)
hereof without the further approval of the stockholders of the Corporation. 


    (b) With
the concurrence of the affected Participant, the Board may cancel any agreement evidencing Option Rights or any other award granted under this Plan. In the
event of any such cancellation, the Board may authorize the granting of new Option Rights or other awards hereunder, which may or may not cover the same number of Common Shares as had been covered by
the cancelled Option Rights or other award, at such Option Price, in such manner and subject to such other terms, conditions and discretion as would have been permitted under this Plan had the
cancelled Option Rights or other award not been granted. 


    (c) The
Board may grant under this Plan any award or combination of awards authorized under this Plan, including but not limited to Replacement Option Rights, in
exchange for the surrender and
cancellation of an award that was not granted under this Plan, including but not limited to an award that was granted by the Corporation or a Subsidiary, or by another corporation that is acquired by
the Corporation or a Subsidiary by merger or otherwise, prior to the adoption of this Plan by the Board, and any such award or combination of awards so granted under this Plan may or may not cover the
same number of Common Shares as had been covered by the cancelled award and shall be subject to such other terms, conditions and discretion as would have been permitted under this Plan had the
cancelled award not been granted. 


    (d) This
Plan shall not confer upon any Participant any right with respect to continuance of employment with the Corporation or any Subsidiary and shall not interfere
in any way with any right that the Corporation or any Subsidiary would otherwise have to terminate any Participant's employment at any time. 


    (e) To
the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as a Tax-Qualified Option from so qualifying,
any such provision shall be null and void with respect to any such Option Right; PROVIDED, HOWEVER, that any such provision shall remain in effect with respect to other Option Rights, and there shall
be no further effect on any provision of this Plan. 


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DELPHI INFORMATION SYSTEMS, INC. 1996 STOCK INCENTIVE PLAN