Document:

exv10w24

 

Exhibit 10.24

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED

STOCKBUILDER PLAN

1. PURPOSE

     The purpose of the StockBuilder Plan (the “Plan”) is to attract and retain
employees of outstanding ability by making available to them a convenient means
of acquiring ownership of the $0.01 par value common stock (the “Common Stock”)
of American Management Systems, Incorporated (the “Company”). The Company
believes that stock ownership by its employees and employees of its wholly
owned participating subsidiaries will encourage greater employee dedication to
the Company’s growth, development and success.

     Participation in the Plan is entirely voluntary. There is no guarantee
under the Plan against loss because of fluctuations in the market price of the
Common Stock.

2. ELIGIBILITY TO PARTICIPATE

     Each employee of the Company or of a participating wholly owned subsidiary
who has attained the age of majority (18 years of age in most cases) shall be
eligible to participate in the Plan, except directors and officers who, in the
Company’s sole judgment, are determined to be subject to Section 16 of the
Securities Exchange Act of 1934, as amended; provided, however, that an
individual who has previously participated in the Plan and whose participation
in the Plan has terminated (other than as a result of the Participant’s
transfer to the payroll of another wholly owned subsidiary of the Company) may
not participate in the Plan again for a period of six (6) months from the date
of termination of participation in the Plan and no sooner than the next open
enrollment period. (See Section 4, “Participation-Payroll Deductions”, for
information about open enrollment periods.) Both full-time and part-time
employees shall be eligible to participate in the Plan. Notwithstanding the
foregoing, effective January 1, 2002, any officer of the Company shall be
eligible to participate in the Plan even if such officer is subject to Section
16 of the Securities Exchange Act of 1934 and no “Five Percent Stockholder”
shall be permitted to participate in the Plan. A “Five Percent Stockholder”
shall mean a person who, taking into account any stock in the Company that may
be purchased on the next purchase date, owns stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of stock of
that person’s employer corporation or its parent or subsidiary corporation.
“Five Percent Stockholder” status shall be determined within the meaning of
Section 423(b)(3) of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations promulgated thereunder.

     3. ENROLLMENT

 

 

     Each eligible individual may become a participant in the Plan (a
“Participant”) by filing with AMS Benefits Office, 4050 Legato Road, 4th Floor,
Fairfax, Virginia 22033 (“Benefits Office”), or with the payroll office (the
“Payroll Office”) of the participating wholly owned subsidiary of the Company
for which the individual works, an enrollment form and such other forms as are
requested by the Company, the Recordskeeper or the Broker. (See Section 8 for
the definition of the term “Broker” and Section 20 for the definition of the
term “Recordskeeper”). Contracts between the Company or any participating
subsidiary and the Recordskeeper or Broker, as the case may be, shall specify
the forms required by the Recordskeeper and/or Broker. Any employee may become
a Participant within 30 days following his or her hire date or otherwise during
any open enrollment period. The employee’s participation in the Plan will begin
as soon as practicable after the necessary forms are received by the Benefits
Office or the appropriate Payroll Office. Appropriate enrollment forms for
these purposes shall be provided by the Company. Notwithstanding the
foregoing, a Participant who has voluntarily withdrawn from the Plan or whose
participation was terminated automatically (other than as a result of the
Participant’s transfer to the payroll of another wholly owned subsidiary) is
subject to the restrictions on re-enrollment as set forth in Section 19,
“Re-enrollment.”

4. PARTICIPATION-PAYROLL DEDUCTIONS

     All Participant contributions under the Plan shall be made only through
payroll deductions. Each Participant shall specify in the enrollment form the
amount to be withheld from his or her earnings. The Participant shall
authorize his or her employer to withhold the authorized amount from the
Participant’s salary or wages in each payroll period thereafter until the
Participant’s participation in the Plan is terminated or until the amount of
such deduction shall be changed or suspended as provided below.

     Payroll deductions shall be made in either a fixed dollar amount or as a
percent of qualified gross earnings for the relevant pay period, depending upon
the currency in which the Participant is paid. For Participants who are paid
in U.S. or Canadian dollars, payroll deductions must be made as a percent of
qualified gross earnings. For Participants who are paid in currency other than
U.S. or Canadian dollars, or in any combination of U.S. dollars and another
currency, payroll deductions must be made as a fixed dollar amount.

     Deductions from Participants who are paid in currency other than U.S. or
Canadian dollars, or in any combination of U.S. dollars and other currency, are
converted to U.S. dollars for purchasing purposes. The rate of conversion is
based on the average of the exchange rates in effect on the last five business
days of the month prior to the month in which the deduction is made. The
Company will determine the exchange rate in its sole discretion.

     If the fixed dollar deduction method is employed, the amount deducted must
be not less than U.S. $5 per payroll period and not greater than the larger of
(i) 10% of the

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Participant’s average qualified gross earnings per payroll period for the prior
year, and (ii) 10% of the Participant’s regular salary per payroll period for
the current year plus 1/24th of the sales commissions to be received by the
Participant from the Participant’s employer in the current year.

     If the percentage deduction method is employed, the percentage may not be
less than 1%, nor more than 10% (in .1% increments), of qualified gross
earnings for the payroll period.

     Qualified gross earnings shall be limited to regular salary, overtime,
shift differential payments, and sales commissions. Thus, qualified gross
earnings excludes all other forms of cash and non-cash compensation, such as
travel bonuses, performance bonuses, incentive compensation, special bonuses in
lieu of incentive compensation, taxable moving and relocation advances and
reimbursements, and payments in lieu of unused leave.

     If a Participant’s contributions for the year would exceed 10% of his or
her qualified gross earnings, the Company will disallow contributions in
payroll periods to the extent necessary to lower the total annual contribution
to 10% of the Participant’s qualified gross earnings.

     A Participant may increase or decrease the amount of payroll deductions
only during an open enrollment period which shall begin on March 1, May 1,
August 1 and November 1 of each year, or, if any such date falls on a day on
which the Company is not open for business, then the open enrollment period
shall begin on the next business day. A Participant may cease payroll
deductions at any time, but may not subsequently re-enroll for a period of six
(6) months from the date of voluntary withdrawal from the Plan and, after such
time has elapsed, may only re-enroll during an open enrollment period. Each
such change shall be made by filing an amended enrollment form with the
Benefits Office or the appropriate Payroll Office and shall become effective as
soon as practicable after the amended form is received.

     Notwithstanding the foregoing, the Company has the right to suspend a
Participant’s participation in the Plan or a Participant’s ability to increase
or decrease the amount of payroll deductions at any time.

5. SOURCE OF SHARES AND PURCHASE PRICE

     Shares of Common Stock purchased by the Broker from the Company pursuant
to Section 7 of the Plan shall be from the Company’s treasury stock. The
purchase price for each share of Common Stock shall be equal to (A) the Fair
Market Value of a share of Common Stock as of the purchase date, (B) discounted
by fifteen percent (15%). Fair Market Value for purposes of this Section 5
shall mean the closing bid price of the Common Stock quoted over the National
Association of Securities Dealers Automated Quotation System (“NASDAQ”) in the
national market for the purchase date, or if there is no trade on such date,
the closing bid price on the last preceding date upon which such Common Stock
was traded. In the event that the

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Common Stock is not traded over NASDAQ, Fair Market Value shall be defined
as the closing bid price of a share of Common Stock published in the National
Daily Stock Quotation Summary on the purchase date, or if there are no
quotations published on such date, the closing bid price on the last preceding
date upon which such Common Stock was quoted. In the event that the Common
Stock is listed upon an established stock exchange or exchanges, Fair Market
Value shall be deemed to be the highest closing price of the Common Stock on
such stock exchange or exchanges on the purchase date, or if no sale of the
Common Stock shall have been made on any exchange on that date, then the next
preceding day on which there was a sale of such stock. In the event that Fair
Market Value cannot be determined under the foregoing sentences, Fair Market
Value shall be determined by the Board of Directors.

6. TRANSMITTAL OF CONTRIBUTIONS

     Each employer shall accumulate on a per payperiod basis and hold, without
interest, all amounts deducted from the earnings of its Participants.

     All such amounts accumulated shall be transmitted by the Company to the
Recordskeeper or Broker as promptly as possible after the close of the
payperiod of withholding. The contract with the Recordskeeper and/or Broker
shall specify the party that shall receive the transmittal. A list of the
names, account numbers and amount withheld in respect of each Participant shall
be transmitted to the Broker or Recordskeeper with each transmittal of monies
by the Company under the Plan.

7. PURCHASES OF SHARES

     Upon receipt of funds from the Company pursuant to the Plan, the Broker
shall, as promptly as practicable, purchase from the Company as many whole
shares of Common Stock as the aggregate of such funds will permit at such
purchase price as is determined in accordance with Section 5 of the Plan.

8. THE BROKER

     The Company shall have the power to designate the broker that will make
purchases of Common Stock for the benefit of employees participating in the
Plan (the “Broker”). The Company shall not be required to hire one Broker to
provide all brokerage services under the Plan; provided, that, if more than one
Broker is hired, the services contracts with each Broker shall specify the
Participants to or for whom the Broker shall provide services. The Broker may
open and maintain individual accounts in the names of the Participants, such
accounts being based in the U.S. or Canada as appropriate; notwithstanding the
foregoing, the Company, in its discretion, may instead instruct the Broker to
establish an account in the name of the Company. The services contract with
the Broker shall specify whether individual accounts are to be opened and
maintained in the names of Participants or whether an account shall be opened
in the name of the Company. The Company shall not be required to use the same
method of holding

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Common Stock (i.e., the use of a Company account or individual accounts) for
all Participants. If an individual account is established with respect to a
Participant, the relationship between the Broker and the Participant would be
the customary relationship of a broker and its client and the Company would
have no responsibility in this regard except for payroll deductions and
remittance of such funds to the Broker. If a Company account is established,
the Company shall act as a fiduciary with respect to Common Stock held in the
account; provided, that, the Company shall have no fiduciary obligation other
than the holding of such stock. The Company shall have the right to change its
designation of the Broker, and the Broker shall have the right to terminate its
services as Broker under the Plan as provided in the applicable contract.

9. EXPENSES

     Brokerage commissions on purchases of Common Stock under the Plan and all
administrative fees of the Broker incurred in connection with the Plan shall be
paid by the Participant’s employer.

     Brokerage commissions and other expenses incurred in connection with
purchases of additional Common Stock or sales and other transfers of Common
Stock shall be paid by the Participant.

10. ALLOCATION OF SHARES TO PARTICIPANTS

     In the event that shares purchased by the Broker are held in a Company
account, for each purchase of shares by the Broker, the Recordskeeper shall
allocate the shares in the Company account to the Participants in proportion to
the amount of funds delivered to the Broker on behalf of each such Participant.
In the event that the services contract with the Broker provides for the
establishment of individual accounts for Participants, shares purchased by the
Broker shall be allocated to the respective accounts of the Participants in
proportion to the amount of such funds delivered to the Broker on behalf of
each Participant.

     Allocation shall be made in whole shares and fractional share interests to
the nearest thousandth of a share. Allocations shall be made as soon as is
administratively feasible, but in no event sooner than three (3) business days
after the purchase of Common Stock.

     If shares are purchased at more than one price in any one payperiod, the
cost of each share purchased in that pay period shall be the average cost of
all shares purchased with funds transmitted to the Broker for that pay period.

11. OWNERSHIP OF SHARES BY PARTICIPANT

     At the time of purchase, each Participant immediately shall acquire
beneficial ownership of its respective shares and fractional share interests
purchased by the Broker, unless the Participant establishes an individual
account with the Broker and requests that the shares be registered in the
Participant’s name.

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     If the services contract with the Broker provides for the establishment of
individual accounts, then unless otherwise requested by the Participant, all
shares shall be registered in the name of the Broker and shall remain so
registered until delivery or sale of the shares is requested by the
Participant. If the services contract with the Broker provides for the
establishment of an account in the name of the Company, all shares shall be
registered in the name of the Company. Under either method of holding shares
purchased under the Plan, a Participant may request a certificate for any or
all of his or her whole shares to be delivered to him or her at any time. A
Participant may not require delivery of a certificate for a fractional interest
in a share because the remaining fraction of that share is owned by other
Participants. However, the Participant may instruct the Recordskeeper or
Broker to sell the fractional interest and remit the proceeds to him or her.
The services contract with the Recordskeeper or Broker shall specify whether
the Recordskeeper or Broker is to be provided with the requisite instruction.

     If the services contract with the Broker provides for the establishment of
an account in the name of the Company, a Participant may make arrangements to
transfer his or her pro-rata share of the shares in the Company account to an
individual account that the Participant opens with the Broker. The Participant
must notify the Recordskeeper of any such arrangements.

12. SALE OF SHARES BY PARTICIPANT

     A Participant may instruct the Broker or Recordskeeper to sell any or all
of the whole shares and any fractional interest in a share held in his or her
individual account or his or her pro-rata portion of shares held in a Company
account. The services contract with the Broker or Recordskeeper will specify
the party to whom a Participant must provide sale instructions. The Broker or
Recordskeeper may establish rules requiring that any sale instructions be
delivered by a specified time or in a specified manner. Upon such sale, the
Broker or Recordskeeper will mail the Participant a check for the proceeds in
U.S. or Canadian dollars, or such other currency as may be specified in the
contract with the Broker or Recordskeeper, as the case may be, less the regular
brokerage commission and any transfer taxes, registration fee or other normal
charges which shall be payable by the Participant.

     A sale of all shares owned by a Participant, or a request for delivery of
certificates for all shares owned, shall not affect the employee’s status as a
Participant unless the employee also terminates his or her payroll deduction
authorization.

13. ADDITIONAL PURCHASES BY PARTICIPANT

     If an individual account is established for a Participant, such
Participant may, at any time, instruct the Broker in writing to purchase
additional shares of Common Stock for his or her individual account. Any such
purchases shall be made by the Broker in the open market and in accordance with
the customary practices of brokers in executing orders for customers. All

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costs and expenses relating to any such additional purchases shall be borne by
the Participant. Shares of Common Stock so purchased for a Participant
pursuant to this section shall be allocated to such Participant’s individual
account and such shares shall thereafter be held and dealt with by the Broker
in accordance with the terms of the Plan.

14. CONFIRMATION

     The Broker or Recordskeeper will forward to each Participant, on a
quarterly basis, a confirmation statement indicating the number of shares of
Common Stock acquired under the Plan (including, for Canadian participants,
fractions to the fourth decimal and, for all other participants, fractions to
the sixth decimal) for his or her account, the cost of the shares in U.S. or
Canadian dollars, the date of acquisition, and the total number of shares then
credited to his or her account. The services contract with the Broker or
Recordskeeper shall specify the party that is to provide the account
statements.

15. DISTRIBUTIONS ON COMMON STOCK

     A Participant’s individual account, or his or her pro-rata share in the
Company account, will be credited with any and all dividends paid with respect
to the full shares and any fractional interest in a share held in his or her
account or his or her pro-rata share in the Company account. Any cash
dividends will be reinvested in Common Stock as promptly as practicable
following receipt of the dividends by the Broker, unless the Participant
instructs the Broker or Recordskeeper to the contrary. The source of such
shares shall be from either the Company’s treasury stock or the open market, as
determined by the Board. If the source of the shares is the Company’s treasury
stock, the purchase price per share shall be the Fair Market Value of a share
of Common Stock determined in accordance with Section 5 of the Plan. The
services contract with the Broker or Recordskeeper shall specify the party to
which the Participant must issue instructions. Regular brokerage commissions
payable by the Participant (or the Company, if the Participant’s shares are
held in a Company account) with respect to Common Stock purchased with
reinvested cash dividends will be deducted from the amount of each dividend to
be reinvested.

     Stock dividends and stock splits in respect of shares held in the
Participant’s account or the Company account will be credited to the applicable
account without charge. Any other securities or subscription rights
distributed with respect to the Common Stock will be sold and the proceeds will
be applied in the same manner as a cash dividend.

16. VOTING AND OTHER RIGHTS

     All rights of an owner of Common Stock shall vest in a Participant upon
the date when shares are credited to his or her individual account or the
Company account. Voting rights in respect of such shares shall be exercised by
the Broker in accordance with the Participant’s signed proxy instructions duly
delivered to the Broker or Recordskeeper. The services contract

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with the Broker or Recordskeeper shall specify the party to which a Participant
must deliver proxy instructions. The Broker or Recordskeeper will deliver to
each Participant, as promptly as practicable, by mail or otherwise, all notices
of meetings, proxy statements and other material distributed by the Company to
its stockholders. The services contract with the Broker or Recordskeeper shall
specify the party that shall deliver such information. There will be no charge
to the Participant for the Broker’s retention or delivery of stock certificates
or in connection with notices, proxies or other such material.

17. VOLUNTARY WITHDRAWAL FROM THE PLAN

     A Participant may withdraw from the Plan at any time by delivering to the
Benefits Office or the appropriate Payroll Office a written notice terminating
his or her payroll deduction authorization. The withdrawal shall become
effective as soon as practicable after receipt of the notice by the
Participant’s employer. Any withdrawal by a Participant will not in itself
affect the status of the Participant’s account with the Broker or otherwise
affect his or her client relationship with the Broker. Upon receipt of the
Participant’s instruction, the Participant’s pro-rata share in the Company
account (if any) will be sold, distributed to the Participant or transferred to
an individual account opened by the Participant.

18. AUTOMATIC WITHDRAWAL FROM THE PLAN

     Participation in the Plan and attendant payroll deductions shall terminate
automatically without notice (i) upon the Participant’s death or other
termination of employment with the Company or a participating wholly owned
subsidiary, (ii) upon commencement of the Participant’s authorized voluntary
leave without pay or (iii) upon a transfer of the Participant to the payroll of
another wholly owned subsidiary of the Company.

19. RE-ENROLLMENT

     A Participant who has voluntarily withdrawn from the Plan or whose
participation terminated automatically (other than as a result of the
Participant’s transfer to the payroll of another wholly owned subsidiary of the
Company), and who is later eligible to participate in the Plan, may re-enroll
in the Plan; however, such re-enrollment may only occur after the expiration of
six (6) months from the date of the Participant’s withdrawal from the Plan or
automatic termination (other than as a result of the Participant’s transfer to
the payroll of another wholly owed subsidiary) and during an open enrollment
period. A Participant whose participation has automatically terminated due to
a transfer to the payroll of another wholly owned subsidiary of the Company may
re-enroll within 30 days of such transfer or, after such 30-day period, such
Participant may re-enroll only during an open enrollment period. The procedure
for re-enrollment shall be the same as for an employee’s initial enrollment in
the Plan.

20. ADMINISTRATION

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     The Plan shall be administered by the Company’s Board of Directors, or
such committee of directors as the Board may appoint. The Board or such
committee shall have the authority to make rules and regulations for carrying
out the Plan as it may deem advisable, including, but not limited to,
designation of participating wholly owned subsidiaries of the Company. The
Board or such committee may delegate its authority to designate participating
subsidiaries to any executive officer of the Company and to any person
designated by the executive officer to act in his or her stead. Interpretation
and construction of any provision of the Plan by the Board or such committee
shall be final and conclusive. Neither the Board nor any committee shall
receive compensation from the Plan.

     The Company may hire one or more recordskeepers (the “Recordskeeper”) to
assist the Company with the administration of the Plan. If more than one
Recordskeeper is hired, the services contract with each Recordskeeper shall
specify the group of Participants for whom the Recordskeeper is to provide
services.

     Effective January 1, 2002, this Plan shall be administered such that all
employees granted an option to purchase stock in the Company under this Plan
shall have the same rights and privileges, within the meaning of Section
423(b)(5) of the Code and the regulations promulgated thereunder.

21. AMENDMENTS, SUSPENSION AND TERMINATIONS

     The Company may amend any or all provisions of this Plan at any time,
without stockholder approval, by action of its Board of Directors or a
committee thereof; provided that, subject to applicable law, nonmaterial
amendments to the Plan may be made by written instrument identified as an
amendment of the Plan effective as of a specified date and executed by an
executive officer of the Company (or his/her delegate by written
authorization), if and to the extent that the Compensation Committee is
notified of any such amendment by the executive officer or his or her delegate
at or before the next scheduled meeting of the Compensation Committee. Such
executive officer (or his/her delegate) will have the discretion to decide
whether an amendment is material or nonmaterial. The Company may at any time,
without stockholder approval, suspend or terminate, in whole or in part, any or
all of the provisions of the Plan by action of its Board of Directors or a
committee thereof. No amendment, suspension or termination may be made which,
in the judgment of the Board of Directors or such committee, will retroactively
affect adversely the rights of Participants in the Plan. No part of the funds
or shares of Common Stock credited to the account of any Participant shall be
subject to forfeiture for any reason.

22. RESTRICTIONS ON RESALE

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     Shares acquired by Participants who are not affiliates of the Company may
be freely resold without registration under the Securities Act of 1933, as
amended and without the need to comply with Rule 144 thereunder.

     Public resales by Participants who are affiliates of the Company will be
subject to registration under the Securities Act of 1933, as amended, or an
exemption therefrom, such as compliance with the requirements of Rule 144,
other than the holding period requirement of Paragraph (d) of Rule 144.

23. EFFECTIVE DATE

     Except as otherwise provided herein, the Plan, as set forth herein, is
effective as of March 1, 2004. The Plan was originally adopted by the Company
on September 2, 1993. On March 1, 2002, the Plan was amended and restated as
two plans: one plan being applicable to eligible employees of the Company and
participating wholly owned subsidiaries organized within the United States or
Canada and the other plan being applicable to eligible employees of
participating wholly owned subsidiaries not organized within the United States
or Canada. Effective June 1, 2002, the two plans were merged and restated as a
single plan. Effective September 1, 2003, the Plan was amended to effect
changes to the open enrollment periods, establish other enrollment and
re-enrollment parameters, permit the delegation of authority under the Plan,
and make certain non-material amendments to the Plan.

10exv10w25

 

Exhibit 10.25

AMERICAN MANAGEMENT SYSTEMS, INCORPORATED

2003 STOCK INCENTIVE PLAN

(As amended, Effective as of September 19, 2003)

     SECTION 1.  PURPOSES.  The purposes of the American Management Systems,
Incorporated Stock Incentive Plan (the “Plan”) are to encourage selected
Employees, Contractors and Directors of American Management Systems,
Incorporated, a Delaware corporation, (“AMS” or the “Company”) and its
Affiliates to acquire a proprietary and vested interest in the growth and
performance of the Company, to generate an increased incentive to contribute to
the Company’s future success and prosperity, thus enhancing the value of the
Company for the benefit of its stockholders, and to enhance the ability of the
Company and its Affiliates to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth
and profitability of the Company depends.

     SECTION 2.  DEFINITIONS.  As used in the Plan, the following terms shall
have the meanings set forth below:

     (a) “Affiliate” shall mean, as determined by the Committee, (i) any Person
that directly, or through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company; or (ii) any entity
in which the Company has a significant equity interest.

     (b) “Award” shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share, Performance Unit, Dividend Equivalent, Other
Stock Unit Award or any other right, interest or option relating to Shares or
other property granted pursuant to the provisions of the Plan.

     (c) “Award Agreement” shall mean any written agreement, contract or other
instrument or document evidencing any Award granted by the Committee hereunder,
which may, but need not, be executed or acknowledged by both the Company and
the Participant.

     (d) “Board” shall mean the Board of Directors of the Company.

     (e) “Cause” shall mean (1) the conviction of the Participant of, or the
entry of a plea of guilty or nolo contendere by the Participant to, any felony
or misdemeanor involving moral turpitude; (2) fraud, misappropriation or
embezzlement by the Participant; (3) the Participant’s willful failure, gross
negligence or gross misconduct in the performance of his or her assigned duties
for the Company; (4) the Participant’s breach of a fiduciary duty to the
Company; (5) any act or omission of the Participant not at the express
direction of the Board or other appropriate authority that reflects adversely
on the integrity and reputation for honesty and fair dealing of the Company;
(6) the breach by the Participant of any material term of the Award Agreement;
or (7) the Participant’s breach of any confidentiality, non-solicitation or
non-compete obligations or terms in his or her individual employment agreement,
AMS Confidentiality and Intellectual Property Rights Agreement, Separation
Agreement, and/or any other similar agreement.

     (f) “Change in Control” shall mean the happening of any of the following
events, unless otherwise specified in an individual employment agreement:

            (i) Any person or group (within the meaning of Sections 13(d) and 14(d) of
the Exchange Act), other than AMS or a trustee or other fiduciary holding
securities under an employee benefit plan of AMS or a

 

 

corporation owned directly or indirectly by the stockholders of AMS in
substantially the same proportions as their ownership of stock of AMS becomes
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities representing fifty percent (50%) or more
of the combined voting power of AMS’s then-outstanding securities entitled
generally to vote for the election of directors;

  
            (ii) During
    any period of two consecutive years, individuals who, at the beginning of
    the period, constituted the Board cease for any reason to constitute at least
    a majority thereof, unless the election or the nomination for election by
    AMS’s stockholders of each new director was approved by a vote of at
    least two-thirds (66 2/3%) of the directors then still in office who were
    directors at the beginning of the period; and provided further, however,
    that any such individual whose initial assumption of office occurs as a result
    of or in connection with either an actual or threatened solicitation with
    respect to the election of directors (as such terms are used in Rule 14a-12(c)
    of Regulation 14A promulgated under the Exchange Act) or other actual
    or threatened solicitation of proxies or consents by or on behalf of an entity
    other than the Board shall not be so considered as a member of the Board;

  
            (iii) The consummation of a merger or consolidation with another
corporation (other than a majority-controlled subsidiary of AMS) unless AMS’s
stockholders immediately before the merger or consolidation are to own more
than two-thirds (66 2/3%) of the combined voting power of the resulting
entity’s voting securities entitled generally to vote for the election of
directors; or

            (iv) The disposition or sale of all or substantially all of the business
or assets of the Company and its Subsidiaries, taken as a whole.

     Notwithstanding the foregoing, no Change in Control shall be deemed to
have occurred with respect to a Participant by reason of (A) any event
involving a transaction in which the Participant or a group of persons or
entities with whom or with which the Participant acts in concert, acquires,
directly or indirectly, fifty percent (50%) or more of the combined voting
power of AMS’s then-outstanding voting securities or the business or assets of
AMS, or (B) any event involving or arising out of a proceeding under Title 11
of the United States Code or comparable provisions of any future United States
bankruptcy law, an assignment for the benefit of creditors or an insolvency
proceeding under state or local law.

  
     (g) “Change
    in Control Price” means, with respect to a Share, the higher of (A) the
    highest reported sales price, regular way, of such Share in any transaction
    reported on The Nasdaq Stock Market (or any national securities exchange or
    other automated quotation medium on which the Shares are then listed or quoted)
    during the 60-day period prior to and including the date of a Change in Control,
    or (B) if the Change in Control is the result of a tender or exchange
    offer or a Corporate Transaction, the highest price per such Share paid in
    such tender or exchange offer or Corporate Transaction; provided, however,
    that in the case of Incentive Stock Options and Stock Appreciation Rights
    relating to Incentive Stock Options, the Change in Control Price shall be
    the Fair Market Value of such Share on the date such Incentive Stock Option
    or Stock Appreciation Right is exercised or deemed exercised pursuant to Section 12(b).
    To the extent the consideration paid in any such transaction described above
    consists all or in part of securities or other noncash consideration, the
    value of such securities or other noncash consideration shall be determined
    in the sole discretion of the Board.
  
     (h) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.

     (i) “Committee” shall mean the Compensation Committee of the Board, or any
successor to such committee, composed of no fewer than two directors, each of
whom is a non-employee Director within the meaning of Rule 16b-3(b)(3) of the
Exchange Act and an “outside director” within the meaning of Section 162(m) of
the Code, or any successor provision thereto.

     (j) “Company” shall mean American Management Systems, Incorporated, a
Delaware corporation.

     (k) “Contractor” shall mean any consultant, advisor or independent
contractor who provides services to the Company or any Affiliate, so long as
such person is an individual who renders bona fide services that (a) are

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not in connection with the offer and sale of the Company’s securities in a
capital-raising transaction and (b) do not directly or indirectly promote or
maintain a market for the Company’s securities. Unless otherwise determined by
the Committee in its sole discretion, for purposes of the Plan, a Contractor
shall be considered to have ceased to be a Contractor if his or her employer
ceases to provide services to the Company, even if he or she continues to be
employed by such employer.

     (l) “Corporate Transaction” shall mean the consummation of a merger or
consolidation with another corporation pursuant to Section 2(f)(iii) or the
disposition or sale of all or substantially all of the business or assets of
the Company and its Subsidiaries, taken as a whole, pursuant to Section
2(f)(iv).

     (m) “Covered Employee” shall mean a “covered employee” within the meaning
of Section 162(m)(3) of the Code, or any successor provision thereto.

     (n) “Director” shall mean a member of the Board who is not an Employee.

     (o) “Dividend Equivalent” shall mean payments in amounts equivalent to
cash dividends on Shares with respect to the number of Shares covered by an
Award. As determined by the Committee, in its sole discretion, such amounts
(if any) may be paid in cash on an immediate basis or shall be deemed to have
been reinvested in additional Shares.

     (p) “Employee” shall mean any employee of the Company or any Affiliate.
Unless otherwise determined by the Committee in its sole discretion, for
purposes of the Plan, an Employee shall be considered to have terminated
employment or services and to have ceased to be an Employee if his or her
employer ceases to be an Affiliate, even if he or she continues to be employed
by such employer.

     (q) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

     (r) “Fair Market Value” shall mean, with respect to any property, the
market value of such property determined by such methods or procedures as shall
be established from time to time by the Committee. Unless otherwise determined
by the Committee, the Fair Market Value of Shares as of any date shall be the
closing price for the Shares during regular trading hours as reported on the
The Nasdaq Stock Market (or on any national securities exchange or other
automated quotation medium on which the Shares are then listed or quoted) for
that date or, if no such prices are reported for that date, the closing price
on the preceding date for which such prices were reported.

     (s) “Incentive Stock Option” shall mean an Option granted under Section 6
that is intended to meet the requirements of Section 422 of the Code or any
successor provision thereto.

     (t) “Nonstatutory Stock Option” shall mean an Option granted under Section
6 that is not intended to be an Incentive Stock Option.

     (u) “Option” shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.

     (v) “Other Stock Unit Award” shall mean any right granted to a Participant
by the Committee pursuant to Section 11.

     (w) “Participant” shall mean (i) an Employee; (ii) a Director; or (iii)
any Contractor who is selected by the Committee to receive an Award under the
Plan.

     (x) “Performance Award” shall mean any Award of Performance Shares or
Performance Units pursuant to Section 10.

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     (y) “Performance Period” shall mean that period established by the
Committee at the time any Performance Award is granted or at any time
thereafter during which any performance goals specified by the Committee with
respect to such Award are to be measured.

     (z) “Performance Share” shall mean any grant pursuant to Section 10 of a
unit valued by reference to a designated number of Shares, which value may be
paid to the Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the
Performance Period as the Committee shall establish at the time of such grant
or thereafter.

     (Aa) “Performance Unit” shall mean any grant pursuant to Section 10 of a
unit valued by reference to a designated amount of property other than Shares,
which value may be paid to the Participant by delivery of such property as the
Committee shall determine, including, without limitation, cash, Shares, other
property, or any combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the
time of such grant or thereafter.

     (Bb) “Person” shall mean any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or political subdivision thereof.

     (Cc) “Prior Plans” shall mean the Company’s 1996 Amended Stock Option Plan
F, 1999 Contractor Stock Option Plan, Stock Option Plan for Employees, and
Restricted Stock and Stock Bonus Plan.

     (Dd) “Restricted Stock” shall mean any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including, without limitation, any restriction on the right to vote such
Share, and the right to receive any cash dividends), which restrictions may
lapse separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

     (Ee) “Restricted Stock Award” shall mean an award of Restricted Stock under Section 9.
(Ff) “Shares” shall mean the shares of common stock of the Company, par value $0.01 per share.

     (Gg) “Stock Appreciation Right” or “SAR” shall mean any right granted to a
Participant pursuant to Section 7 to receive, upon exercise by the Participant,
the excess of (i) the Fair Market Value of one Share on the date of exercise
or, if the Committee shall so determine in the case of any such right other
than one related to any Incentive Stock Option, at any time during a specified
period before the date of exercise, over (ii) the grant price of the right on
the date of grant, or if granted in connection with an outstanding Option on
the date of grant of the related Option, as specified by the Committee in its
sole discretion, which, except in the case of Substitute Awards or in
connection with an adjustment provided in Section 4(e), shall not be less than
the Fair Market Value of one Share on such date of grant of the right or the
related Option, as the case may be. Any payment by the Company in respect of
such right may be made in cash, Shares, other property, or any combination
thereof, as the Committee, in its sole discretion, shall determine.

     (Hh) “Subsidiary” shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if, at the time of
the granting of the Award, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain.

     (Ii) “Substitute Awards” shall mean Awards granted or Shares issued by the
Company in assumption of, or in substitution or exchange for, awards previously
granted, or the right or obligation to make future awards, by a company
acquired by the Company or with which the Company combines.

     SECTION 3.  ADMINISTRATION.  The Plan shall be administered by the
Committee, which shall have full power, discretion, and authority, subject to
such orders or resolutions not inconsistent with the provisions of the

-4-

 

Plan as may from time to time be adopted by the Board, to (a) select the
Participants to whom Awards may from time to time be granted hereunder; (b)
determine the type or types of Award to be granted to each Participant
hereunder; (c) determine the number of Shares to be covered by each Award
granted hereunder; (d) determine the terms and conditions, not inconsistent
with the provisions of the Plan, of any Award granted hereunder; (e) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property or canceled or suspended; (f) determine whether,
to what extent, and under what circumstances cash, Shares, other property and
other amounts payable with respect to an Award made under the Plan shall be
deferred either automatically or at the election of the Participant; (g)
interpret and administer the terms of the Plan and any instrument or agreement
entered into under the Plan; (h) establish such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and (i) make any other determination and take any other action
that the Committee deems necessary or desirable for administration of the Plan.
Decisions of the Committee shall be final, conclusive and binding on all
Persons, including the Company, any Participant, any stockholder and any
Employee of the Company or any Affiliate. A majority of the members of the
Committee may determine its actions and fix the time and place of its meetings.
Notwithstanding the foregoing or anything else to the contrary in the Plan,
any action or determination by the Committee specifically affecting or relating
to an Award to a Director shall be approved and ratified by the Board. In
addition, no member of the Board or any of its Committees, as the case may be,
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.

     SECTION 4.  SHARES SUBJECT TO THE PLAN.

     (a) Subject to adjustment as provided in Section 4(e), a total of 4.5
million Shares plus any remaining shares under the Prior Plans shall be
authorized for issuance under the Plan and available for grant. No more than
40% may be issued pursuant to Awards other than Options or Stock Appreciation
Rights; provided that if any Shares subject to an Award or to an award under
Prior Plans are forfeited or if any Award or award under Prior Plans based on
Shares is settled for cash, or expires or otherwise is terminated without
issuance of such Shares, the Shares subject to such Award shall, to the extent
of such cash settlement, forfeiture or termination, again be available for
Awards under the Plan. In the event that any Option or Award granted under the
Plan or any Prior Plans is exercised through the tendering of Shares (either
actually or by attestation) or in the event that withholding tax liabilities
arising from such Option or other Award are satisfied by the tendering of
Shares or by the withholding of Shares by the Company, the Shares so tendered
or withheld shall again be available for Awards under the Plan. Shares
reacquired by the Company on the open market using the cash proceeds (the
exercise price plus the value of any tax deductions) received by the Company
from the exercise of options granted under Prior Plans or Options granted under
the Plan that are exercised after the effective date of the Plan shall be
available for Awards under the Plan. In addition, Substitute Awards shall not
reduce the Shares authorized for issuance under the Plan or authorized for
grant to a Participant in any calendar year. In the event that a company
acquired by the Company or with which the Company combines has shares available
under a pre-existing plan not adopted in contemplation of such acquisition or
combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for issuance under the Plan; provided that Awards using such
available shares shall not be made after the date awards or grants could have
been made under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not Employees,
Contractors or Directors of the Company or an Affiliate prior to such
acquisition or combination.

     (b) The maximum number of Options and “freestanding” Stock Appreciation
Rights, as defined in Section 7, which may be granted under the Plan to any one
Participant in any 12-month period is 1,500,000 Shares. “Tandem” SARs granted
in connection with an outstanding Option pursuant to Section 7 shall not count
against such limit.

     (c) The maximum individual cash Award or Performance Share Award under the
Plan which may be granted to any one Participant for any Performance Period of
36 months is $4,500,000 or 300,000 Shares, respectively, with proportionate
adjustments for shorter or longer Performance Periods, not to exceed five
years.

-5-

 

     (d) Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares, treasury shares or shares purchased in the open
market or otherwise.

     (e) In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, reverse stock split, spin-off or
similar transaction or other change in corporate structure affecting the
Shares, such adjustments and other substitutions shall be made to the Plan and
to Awards as the Committee, in its sole discretion, deems equitable or
appropriate, including, without limitation, such adjustments in the aggregate
number, class and kind of securities that may be delivered under the Plan, in
the aggregate or to any one Participant, in the number, class, kind and option
or exercise price of securities subject to outstanding Options, Stock
Appreciation Rights or other Awards granted under the Plan, and in the number,
class and kind of securities subject to Awards granted under the Plan
(including, if the Committee deems appropriate, the substitution of similar
options to purchase the shares of, or other awards denominated in the shares
of, another company) as the Committee may determine to be appropriate in its
sole discretion; provided, however, that the number of Shares subject to any
Award shall always be a whole number.

     SECTION 5.  ELIGIBILITY.  Any Employee, Contractor or Director shall be
eligible to be selected as a Participant.

     SECTION 6.  STOCK OPTIONS.  Options may be granted hereunder to
Participants either alone or in addition to other Awards granted under the
Plan. Any Option granted under the Plan shall be evidenced by an Award
Agreement in such form as the Committee may from time to time approve. Any
such Option shall be subject to the following terms and conditions and to such
additional terms and conditions, not inconsistent with the provisions of the
Plan, as the Committee shall deem desirable:

     (a) OPTION PRICE. The purchase price per Share purchasable under an
Option shall be determined by the Committee in its sole discretion; provided,
however, that, except in the case of Substitute Awards or in connection with an
adjustment provided for in Section 4(e), such purchase price of an Option shall
not be less than 100% of the Fair Market Value of the Share on the date of the
grant.

     (b) OPTION PERIOD. The term of each Option shall be fixed by the
Committee in its sole discretion; provided that no Option shall be exercisable
after the expiration of ten years from the date the Option is granted.

     (c) EXERCISABILITY. Options shall be exercisable at such time or times as
determined by the Committee at or subsequent to grant.

     (d) METHOD OF EXERCISE. Subject to the other provisions of the Plan, any
Option may be exercised by the Participant in whole or in part at such time or
times, and the Participant may make payment of the option price in such form or
forms, including, without limitation, payment by delivery of cash, delivery of
Shares (either actually or by attestation) already owned by the Participant for
at least six months (or any shorter period sufficient to avoid a charge to the
Company’s earnings for financial reporting purposes) or delivery of other
consideration (including, where permitted by law and the Committee, Awards)
having a Fair Market Value on the exercise date equal to the total option
price, or by any combination of cash, such Shares and other consideration as
the Committee may specify in the applicable Award Agreement; provided that the
Committee shall have the authority to limit the payment options available to
Participants in accordance with applicable law.

     (e) INCENTIVE STOCK OPTIONS. In accordance with rules and procedures
established by the Committee, and except as otherwise provided in Section 12,
the aggregate Fair Market Value (determined as of the time of grant) of the
Shares with respect to which Incentive Stock Options held by any Participant
which are exercisable for the first time by such Participant during any
calendar year under the Plan (and under any other employee benefit plans of the
Company or any Subsidiary) shall not exceed $100,000 or, if different, the
maximum limitation in effect at the time of grant under Section 422 of the
Code, or any successor provision, and any regulations promulgated thereunder.
Incentive Stock Options shall be granted only to Participants who are Employees
of the Company or a Subsidiary of the Company. The terms of any Incentive Stock
Option granted hereunder shall comply in all respects with the provisions of
Section 422 of the Code or any successor provision, and

-6-

 

any regulations promulgated thereunder. The aggregate number of Shares
with respect to which Incentive Stock Options may be issued under the Plan
shall not exceed 2.7 million.

     (f) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the Shares to be issued upon an Option’s
exercise shall be in the form of Restricted Stock, Other Stock Unit Awards or
other similar securities, or may reserve the right so to provide after the time
of grant.

     (g) PROHIBITION ON REPRICING. The Company may not reprice Option grants,
including the cancellation of an existing grant followed by a regrant, without
the express approval of stockholders of the Company.

  
     SECTION
    7.  STOCK APPRECIATION RIGHTS.  Stock Appreciation
    Rights (“SARs”) may be granted hereunder to Participants either
    alone (“freestanding”) or in addition to other Awards granted under
    the Plan (“tandem”) and may, but need not, relate to a specific
    Option granted under Section 6. The provisions of SARs need not be the
    same with respect to each recipient. Any tandem SAR related to a Nonstatutory
    Stock Option may be granted at the same time such Option is granted or at
    any time thereafter before exercise or expiration of such Option. Any tandem
    SAR related to an Incentive Stock Option must be granted at the same time
    such Option is granted. In the case of any tandem SAR related to any Option,
    the SAR or applicable portion thereof shall terminate and no longer be exercisable
    upon the termination or exercise of the related Option, except that a SAR
    granted with respect to less than the full number of Shares covered by a related
    Option shall not be reduced until the exercise or termination of the related
    Option exceeds the number of Shares not covered by the SAR. Any Option related
    to any tandem SAR shall no longer be exercisable to the extent the related
    SAR has been exercised. The Committee may impose such conditions or restrictions
    on the exercise of any SAR, as it shall deem appropriate; provided
    that a freestanding SAR shall not have a term of greater than ten years and
    an exercise price less than 100% of the Fair Market Value of the Share on
    the date of the grant. The Company may not reprice SAR grants, including the
    cancellation of an existing grant followed by a regrant, without the express
    approval of stockholders of the Company.
  
     SECTION 8.  OPTION/SAR TREATMENT UPON PARTICIPANT TERMINATION.  Unless
otherwise stated to the contrary in an individual Award Agreement or pursuant
to Section 12, the Participant is entitled to the following upon termination of
employment or service with the Company or an Affiliate or Subsidiary:

     (i) Death/Disability. All Options/SARs held by such Participant which are
not then exercisable and not vested, shall become fully exercisable and vested.
In the event of death or disability, all vested options may be exercised
during the lesser of the remaining term of the Option/SAR or one year following
the date of termination. For purposes of the Plan, disability shall be defined
pursuant to the Company’s long-term disability plan.

     (ii) Involuntary Termination for Cause. All Options/SARs held by such
Participant which have not been exercised shall be forfeited upon termination
for Cause.

     (iii) Voluntary Termination or Involuntary Termination (Not for Cause).
All Options/SARs held by such Participant which are not then exercisable and
not vested, shall cease to vest and be forfeited. All vested Options/SARs may
be exercised during the lesser of the remaining term of the Option/SAR or 90
days after termination, unless the Participant has ten or more years of
continuous service at the time of termination, in which case, the vested
Options/SARs may be exercised during the lesser of the remaining term of the
Option/SAR or one year from the date of termination.

     (iv) Extension of Exercise Period. Upon the occurrence of a voluntary
termination or involuntary termination not for Cause, the Committee may in its
discretion provide for an exercise period of up to one (1) year in lieu of the
ninety (90) day period specified in (iii) above for a Participant who has less
than ten years of continuous service at the time of termination.1

	1	 	Section 8(iv) was added on September 19, 2003; effective as of same date.

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     SECTION 9.  RESTRICTED STOCK.

     (a) ISSUANCE. A Restricted Stock Award shall be subject to restrictions
imposed by the Committee during a period of time specified by the Committee
(the “Restriction Period”). Restricted Stock Awards may be issued hereunder to
Participants, for no cash consideration or for such minimum consideration as
may be required by applicable law, either alone or in addition to other Awards
granted under the Plan. The provisions of Restricted Stock Awards need not be
the same with respect to each recipient. Except for certain limited situations
as determined by the Committee, Restricted Stock Awards shall be subject to
restrictions for a minimum of three years from the date of grant.

     (b) REGISTRATION. Any Restricted Stock issued hereunder may be evidenced
in such manner, as the Committee, in its sole discretion, shall deem
appropriate, including, without limitation, book entry registration or issuance
of a stock certificate or certificates. In the event any stock certificates
are issued in respect of Shares of Restricted Stock awarded under the Plan,
such certificates shall be registered in the name of the Participant and shall
bear an appropriate legend referring to the terms, conditions and restrictions
applicable to such Award.

     (c) FORFEITURE. Except as otherwise determined by the Committee at the
time of grant or thereafter, upon termination of employment or services for any
reason during the Restriction Period, all Shares of Restricted Stock still
subject to restriction shall be forfeited by the Participant and reacquired by
the Company. Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the grantee promptly after
expiration of the Restriction Period, as determined or modified by the
Committee.

     SECTION 10.  PERFORMANCE AWARDS.  Performance Awards may be issued
hereunder to Participants, for no cash consideration or for such minimum
consideration as may be required by applicable law, either alone or in addition
to other Awards granted under the Plan. The performance criteria to be
achieved during any Performance Period and the length of the Performance Period
shall be determined by the Committee upon the grant of each Performance Award,
provided, however, that a Performance Period shall not be shorter than 12
months or longer than five years. Except as provided in Section 12,
Performance Awards will be distributed only after the end of the relevant
Performance Period. Performance Awards may be paid in cash, Shares, other
property, or any combination thereof, in the sole discretion of the Committee
at the time of payment. The performance levels to be achieved for each
Performance Period and the amount of the Award to be distributed shall be
conclusively determined by the Committee. Performance Awards may be paid in a
lump sum or in installments following the close of the Performance Period or,
in accordance with procedures established by the Committee, on a deferred
basis.

     (a) PERFORMANCE MEASURES. One or more of the following performance
measures may be used as a performance criteria to be achieved during any
Performance Period including: cash generation targets, profit and revenue
targets on an aggregate and/or per share basis (including but not limited to
earnings before interest and taxes (“EBIT”); earnings before interest, taxes,
depreciation and amortization (“EBITDA”); operating income; earnings per share
(“EPS”); market share targets; profitability targets as measured through return
ratios and stockholder returns or, only with respect to Awards that are paid to
any Person other than a Covered Employee, any other financial measure that the
Committee believes may be worthy of consideration.

          (i) The measurement of the Company’s performance against its goals shall
exclude the impact of charges for restructurings, discontinued operations,
extraordinary items, and any other unusual or non-recurring items, and the
cumulative effects of accounting changes, each as defined by generally accepted
accounting principles and as identified in the Company’s financial statements,
notes to the financial statements or management’s discussion and analysis.

          (ii) The Company may establish performance goals on a corporate-wide basis
or with respect to one or more of the Company’s business units, divisions, or
Subsidiaries or any combination thereof; and in either absolute terms or
relative to the performance of one or more comparable companies or an index
covering multiple companies.

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     (b) PRO-RATA EARN-OUT. Unless otherwise specified in the Award Agreement
or determined by the Committee at the time of grant or thereafter, a
Participant shall be entitled to a pro-rata earn-out upon a termination of
employment or services during the Performance Cycle due to death or disability.
Payment shall be made upon completion of the Performance Cycle based on actual
performance.

     SECTION 11.  OTHER STOCK UNIT AWARDS.

     (a) STOCK AND ADMINISTRATION. Other Awards of Shares and other Awards
that are valued in whole or in part by reference to, or are otherwise based on,
Shares or other property (“Other Stock Unit Awards”) may be granted hereunder
to Participants, either alone or in addition to other Awards granted under the
Plan, and such Other Stock Unit Awards shall also be available as a form of
payment in the settlement of other Awards granted under the Plan. Other Stock
Unit Awards may be paid in Shares, cash or any other form of property, as the
Committee shall determine. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Participants
to whom and the time or times at which such Awards shall be made, the number of
Shares to be granted pursuant to such Awards, and all other conditions of the
Awards. The provisions of Other Stock Unit Awards need not be the same with
respect to each recipient. Except for certain limited situations, and where
not a form of payment of other Awards, Other Stock Unit Awards, granted to
Employees subject solely to continued employment conditions shall generally
have a vesting period of not less than three years.

     (b) TERMS AND CONDITIONS. Subject to the provisions of the Plan and any
applicable Award Agreement, Awards and Shares subject to Awards made under this
Section 11 may not be sold, assigned, transferred, pledged or otherwise
encumbered prior to the date on which the Shares are issued, or, if later, the
date on which any applicable restriction, performance or deferral period
lapses. Shares (including securities convertible into Shares) subject to
Awards granted under this Section 11 may be issued for no cash consideration or
for such minimum consideration as may be required by applicable law. Shares
(including securities convertible into Shares) purchased pursuant to a purchase
right awarded under this Section 11 shall be purchased for such consideration
as the Committee shall determine in its sole discretion, which, except in the
case of Substitute Awards, shall not be less than the Fair Market Value of such
Shares or other securities as of the date such purchase right is awarded.

     SECTION 12.  CHANGE IN CONTROL PROVISIONS.

     (a) IMPACT OF EVENT. Subject to Section 12(a)(v) and notwithstanding any
other provision of the Plan to the contrary, unless the Committee shall
determine otherwise at the time of grant with respect to a particular Award, in
the event of a consummation of a Change in Control transaction:

          (i) Any Options and SARs outstanding as of the date such Change in Control
is determined to have occurred, and which are not then exercisable and not
vested, shall become fully exercisable and vested to the full extent of the
original grant;

          (ii) The restrictions and deferral limitations applicable to any
Restricted Stock shall lapse, and such Restricted Stock shall become free of
all restrictions and limitations and become fully vested and transferable to
the full extent of the original grant;

          (iii) All Performance Awards shall be immediately accelerated and
considered to be earned and payable pro rata based on: (a) the portion of the
Performance Period that has been completed as of the date such Change in
Control is determined to have occurred and (b) the actual performance as of
such date; in addition, any deferral or other restriction shall lapse and such
Performance Awards shall be immediately settled or distributed;

          (iv) The restrictions and deferral limitations and other conditions
applicable to any Other Stock Unit Awards or any other Awards shall lapse, and
such Other Stock Unit Awards or such other Awards shall become free of all
restrictions, limitations or conditions and become fully vested and
transferable to the full extent of the original grant; and

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          (v) Notwithstanding the foregoing, if in the event of a Corporate
Transaction the successor company assumes or substitutes for an Option, SAR,
Share of Restricted Stock or Other Stock Unit Award, then each outstanding
Option, SAR, Share of Restricted Stock or Other Stock Unit Award shall not be
accelerated as described in Sections 12(a)(i), (ii) and (iv). For the purposes
of this Section 12(a)(v), an Option, SAR, Share of Restricted Stock or Other
Stock Unit Award shall be considered assumed or substituted for if following
the Corporate Transaction the Award confers the right to purchase or receive,
for each Share subject to the Option, SAR, Share of Restricted Stock or Other
Stock Unit Award immediately prior to the Corporate Transaction, the
consideration (whether stock, cash or other securities or property) received in
the Corporate Transaction by holders of Shares for each Share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares); provided, however, that if such consideration received
in the Corporate Transaction is not solely common stock of the successor
company, the Committee may, with the consent of the successor company, provide
that the consideration to be received upon the exercise or vesting of an
Option, SAR, Share of Restricted Stock or Other Stock Unit Award, for each
Share subject thereto, will be solely common stock of the successor company
substantially equal in fair market value to the per share consideration
received by holders of Shares in the Corporate Transaction. The determination
of such substantial equality of value of consideration shall be made by the
Committee in its sole discretion and its determination shall be conclusive and
binding.

          (vi) In the event of an involuntary termination not for Cause within 12
months following a Change in Control, replacement awards (Options, SARs,
Restricted Stock/stock units, and Other Stock Awards) shall vest in full.

     (b) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of
the Plan, in the event of a Change in Control, the Committee may, in its
discretion, provide that each Option or SAR shall, upon the occurrence of a
Change in Control, be cancelled in exchange for a payment in an amount equal to
the amount by which the Change in Control Price per Share exceeds the purchase
price per Share under the Option or SAR (the “spread”) multiplied by the number
of Shares granted under the Option or SAR.

     SECTION 13.  CODE SECTION 162(m) PROVISIONS.

     (a) Notwithstanding any other provision of the Plan, if the Committee
determines at the time Restricted Stock, a Performance Award or an Other Stock
Unit Award is granted to a Participant who is then an officer that such
Participant is, or is likely to be as of the end of the tax year in which the
Company would claim a tax deduction in connection with such Award, a Covered
Employee, then the Committee may provide that this Section 13 is applicable to
such Award.

     (b) If Restricted Stock, a Performance Award or an Other Stock Unit Award
is subject to this Section 13, then the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable,
shall be subject to the achievement of one or more objective performance goals
established by the Committee as described in Section 10(a). Such performance
goals shall be set by the Committee within the time period prescribed by, and
shall otherwise comply with the requirements of, Section 162(m) of the Code, or
any successor provision thereto, and the regulations thereunder.

     (c) Notwithstanding any provision of the Plan other than Section 12, with
respect to any Restricted Stock, Performance Award or Other Stock Unit Award
that is subject to this Section 13, the Committee may adjust downwards, but not
upwards, the amount payable pursuant to such Award, and the Committee may not
waive the achievement of the applicable performance goals except in the case of
the death or disability of the Participant.

     (d) The Committee shall have the power to impose such other restrictions
on Awards subject to this Section 13 as it may deem necessary or appropriate to
ensure that such Awards satisfy all requirements for “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any
successor provision thereto.

-10-

 

     SECTION 14.  AMENDMENTS AND TERMINATION.  The Board may amend, alter,
suspend, discontinue or terminate the Plan or any portion thereof at any time;
provided, however, that no such amendment, alteration, suspension,
discontinuation or termination shall be made without (a) stockholder approval
if such approval is necessary to qualify for or comply with any tax or
regulatory requirement for which or with which the Board deems it necessary or
desirable to qualify or comply or (b) the consent of the affected Participant,
if such action would impair the rights of such Participant under any
outstanding Award. Notwithstanding anything to the contrary herein, the
Committee may amend the Plan in such manner as may be necessary so as to have
the Plan conform to local rules and regulations in any jurisdiction within or
outside the United States.

     The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, except as provided in Section 15(f) of
this Agreement, no such amendment shall impair the rights of any Participant
without his or her consent or shall have the effect of reducing the purchase
price of any Option or SAR. Any change or adjustment to an outstanding
Incentive Stock Option shall not, without the consent of the Participant, be
made in a manner so as to constitute a “modification” that would cause such
Incentive Stock Option to fail to continue to qualify as an Incentive Stock
Option. Notwithstanding the foregoing, any adjustments made pursuant to
Section 4(e) shall not be subject to these restrictions.

     SECTION 15.  GENERAL PROVISIONS.

     (a) No Award, and no Shares subject to Awards described in Section 11 that
have not been issued or as to which any applicable restriction, performance or
deferral period has not lapsed, may be sold, assigned, transferred, pledged or
otherwise encumbered, except by will or by the laws of descent and
distribution; provided, however, that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a
beneficiary to exercise the rights of the Participant with respect to any Award
upon the death of the Participant. Each Award shall be exercisable, during the
Participant’s lifetime, only by the Participant or, if permissible under
applicable law, by the Participant’s guardian or legal representative.
Notwithstanding the foregoing, and subject to Section 422 of the Code, the
Committee, in its sole discretion, may permit a Participant to assign or
transfer an Award; provided, however, that an Award so assigned or transferred
shall be subject to all the terms and conditions of the Plan and the instrument
evidencing the Award.

     (b) No Employee or Participant shall have any claim to be granted any
Award under the Plan, and there is no obligation for uniformity of treatment of
Employees or Participants under the Plan.

     (c) The prospective recipient of any Award under the Plan shall not, with
respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless such recipient shall have
executed an agreement or other instrument evidencing the Award and delivered a
copy thereof to the Company, and otherwise complied with the then applicable
terms and conditions.

     (d) Nothing in the Plan or any Award granted under the Plan shall be
deemed to constitute an employment or service contract or confer or be deemed
to confer on any Participant any right to continue in the employ or service of,
or to continue any other relationship with, the Company or any Affiliate or
limit in any way the right of the Company or any Affiliate to terminate a
Participant’s employment or service or other relationship at any time, with or
without cause.

     (e) Except as provided in Section 13, the Committee shall be authorized to
make adjustments in performance award criteria or in the terms and conditions
of other Awards in recognition of unusual or nonrecurring events affecting the
Company or its financial statements or changes in applicable laws, regulations
or accounting principles. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem desirable to carry it into effect. In the
event that the Company shall assume outstanding employee benefit awards or the
right or obligation to make future such awards in connection with the
acquisition of or combination with another corporation or business entity, the
Committee may, in its discretion, make such adjustments in the terms of Awards
under the Plan as it shall deem appropriate.

-11-

 

     (f) The Committee shall have full power and authority to determine
whether, to what extent and under what circumstances any Award shall be
canceled or suspended. In addition, all outstanding Awards to any Participant
shall be canceled if the Participant, without the consent of the Company, while
employed by the Company or after termination of such employment or services,
violates any confidentiality, non-solicitation or non-compete obligations or
terms in his or her individual employment agreement, AMS Confidentiality and
Intellectual Property Rights Agreement, Separation Agreement, and/or any other
similar agreement; or, if during the period of employment or service,
Participant establishes a relationship with a competitor of the Company or
engages in activity that is in conflict with or adverse to the interest of the
Company, as determined by the Company in its sole discretion.

     (g) All certificates for Shares delivered under the Plan pursuant to any
Award shall be subject to such stock-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities
association or stock exchange upon which the Shares are then listed, and any
applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

     (h) No Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would comply with all applicable requirements of the U.S. federal
securities laws and any other laws to which such offer, if made, would be
subject.

     (i) The Committee shall be authorized to establish procedures pursuant to
which the payment of any Award may be deferred. Subject to the provisions of
the Plan and any Award Agreement, the recipient of an Award (including, without
limitation, any deferred Award) may, if so determined by the Committee, be
entitled to receive, currently or on a deferred basis, cash dividends or
Dividend Equivalents.

     (j) Except as otherwise required in any applicable Award Agreement or by
the terms of the Plan, recipients of Awards under the Plan shall not be
required to make any payment or provide consideration other than the rendering
of services.

     (k) The Committee may delegate to a committee of one or more directors of
the Company or, to the extent permitted by Delaware law, to one or more
officers or a committee of officers the right to grant Awards to Participants
who are not officers or directors of the Company and to cancel or suspend
Awards to Participants who are not officers or Directors of the Company.

     (l) The Company shall be authorized to withhold from any Award granted or
payment due under the Plan the amount of withholding taxes due in respect of an
Award or payment hereunder and to take such other action as may be necessary in
the opinion of the Company to satisfy all obligations for the payment of such
taxes. The Committee shall be authorized to establish procedures for election
by Participants to satisfy such obligation for the payment of such taxes by
delivery of or transfer of Shares to the Company (up to the employee’s minimum
required tax withholding rate to the extent the Participant has owned the
surrendered shares for less than six months if such a limitation is necessary
to avoid a charge to the Company for financial reporting purposes), or by
directing the Company to retain Shares (up to the employee’s minimum required
tax withholding rate if such maximum is necessary to avoid a charge to the
Company for financial reporting purposes) otherwise deliverable in connection
with the Award.

     (m) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.

     (n) The validity, construction and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the
laws of the Commonwealth of Virginia and applicable federal law.

-12-

 

     (o) If any provision of the Plan is or becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws or if it
cannot be construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, it shall be stricken and
the remainder of the Plan shall remain in full force and effect.

     (p) Awards may be granted to Participants who are foreign nationals or
employed outside the United States, or both, on such terms and conditions
different from those applicable to Awards to Participants employed in the
United States as may, in the judgment of the Committee, be necessary or
desirable in order to recognize differences in local law or tax policy. The
Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for
Participants on assignments outside their home country.

     (q) Awards may contain the right to receive dividends and Dividend
Equivalents.

     (r) In the event of a dissolution or liquidation of the Company, all
outstanding Award Agreements shall terminate immediately prior to the
completion of such dissolution or liquidation.

     (s) In the event of a conflict between the terms of the Plan and the terms
of an Award Agreement, the terms of the Plan shall govern.

     SECTION 16.  EFFECTIVE DATE OF PLAN.  The Plan shall be effective as of
May 9, 2003.

     SECTION 17.  TERM OF PLAN.  The Plan shall terminate on the tenth
anniversary of the effective date, unless sooner terminated by the Board
pursuant to Section 14; provided, however, that no Incentive Stock Options may
be granted more than ten years after the later of (i) the adoption of the Plan
by the Board and (ii) the adoption by the Board of any amendment to the Plan
that constitutes the adoption of a new plan for purposes of Section 422 of the
Code.

-13-

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