Unitech Industries
1992 OMNIBUS EQUITY INCENTIVE PLAN
1. PURPOSE
The Plan is intended to provide to selected directors, employees,
independent contractors and/or consultants of Unitech Industries, a California
corporation (the 'Participants' and the 'Corporation,' respectively), an
opportunity to acquire shares of common stock of the Corporation. The
Corporation intends to use the Plan to attract and retain Participants with
outstanding qualifications and motivate Participants to attain exceptional
levels of performance. The Plan is effective April 12, 1992.
The Plan is designed to enable the Corporation to (i) grant to
Participants options to purchase shares of common stock of the Corporation, (ii)
issue to Participants restricted shares of common stock of the Corporation,
and/or (iii) issue to Participants stock appreciation rights with respect to
shares of common stock of the Corporation upon such terms and conditions as
provided in this Plan document (collectively referred to as Plan 'Awards').
2. DEFINITIONS.
(a) 'AWARD' shall mean any award under the Plan, including any
Option, share of Restricted Stock or Stock Appreciation Right.
(b) 'AWARD AGREEMENT' shall mean, with respect to each Award, the
signed written agreement between the Corporation and the Participant setting
forth the terms and conditions of the Award.
(c) 'BOARD' shall mean the board of directors of the
Corporation.
(d) 'CODE' shall mean the Internal Revenue Code of 1986, as amended.
(e) 'COMMITTEE' shall mean the committee appointed by the Board in
accordance with Section 4(b) to administer the Plan.
(f) 'COMMON STOCK' shall mean the voting common stock of the
Corporation.
(g) 'CORPORATION' shall mean Unitech Industries, a California
corporation.
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(h) 'EMPLOYEE' shall mean any individual who is employed, within the
meaning of Section 3401 of the Code and the regulations thereunder, by the
Corporation. For purposes of the Plan only, a director and any independent
contractor of the Corporation shall be deemed to be an Employee and service as a
director or independent contractor with the Corporation shall be deemed to be
employment, but no Incentive Stock Option shall be granted to a Participant who
is not an employee of the Corporation within the meaning of Section 3401 of the
Code and the regulations thereunder. The Committee shall be responsible for
determining when a director's or independent contractor's period of service is
no longer continuous and when an employee's period of employment is deemed to be
continued during an approved leave of absence.
(i) 'ESCROW AGENT' shall mean the person selected by the Corporation
to hold the stock certificate issued under this Plan in the name of a
Participant as Restricted Stock, pursuant to such Participant's exercise of an
Option, or pursuant to such Participant's exercise of a Stock Appreciation Right
which is settled in Shares rather than cash. The Escrow Agent shall hold such
certificate in accordance with the terms of the Joint Escrow Instructions and
the Assignment Separate from Certificate entered into between the Escrow Agent,
the Corporation and the Participant. The Joint Escrow Instructions and the
Assignment Separate From Certificate are to facilitate the transfer of Shares if
the Corporation exercises its Right of First Refusal under Section 13, and if
nonvested Shares of Restricted Stock are forfeited under Section 14.
(j) 'EXCHANGE ACT' shall mean the Securities Exchange Act of 1934, as
amended.
(k) 'EXERCISE PRICE' shall mean the price per Share at which an
Option may be exercised, as determined by the Committee and as specified in the
Participant's Award Agreement.
(l) 'FAIR MARKET VALUE' shall mean the value of each Share determined
as of any specified date as follows:
(i) If the Shares are traded of any United States securities
exchange, the value per Share shall be the closing price on such exchange on the
business day immediately preceding such specified date;
(ii) If the Shares are not traded of any United States
securities exchange but are traded on any formal over-the-counter quotation
system in general use in the United States,
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the value per Share shall be the mean between the closing high bid and low asked
quotations on such system on the business day immediately preceding such
specified date; or
(iii) If neither Paragraph (i) nor (ii) applies, the value per
Share shall be determined by the Board in accordance with Section 4(e) in good
faith and based on uniform principles consistently applied. Such determination
shall be conclusive and binding on all persons.
(m) 'INCENTIVE STOCK OPTION' shall mean an Option of the type which
is described in Section 422(b) of the Code.
(n) 'JOINT ESCROW INSTRUCTIONS AND ASSIGNMENT SEPARATE FROM
CERTIFICATE' shall mean, respectively, the form of joint escrow instructions
entered into between Participant, the Corporation and the Escrow Agent, and the
form of assignment executed by the Participant to facilitate the transfer of
Shares if the Corporation exercises its Right of First Refusal under Section 13
and if nonvested Shares of Restricted Stock are forfeited under Section 14.
(o) 'NONSTATUTORY STOCK OPTION' shall mean an Option which is not of
the type described in Section 422(b) or 423(b) of the Code.
(p) 'OPTION' shall mean an option which is granted pursuant to the
Plan to purchase Shares of Common Stock, whether granted as an Incentive Stock
Option or as a Nonstatutory Stock Option.
(q) 'PARTICIPANT' shall mean any individual to whom an Award has been
granted or issued under the Plan.
(r) 'PLAN' shall mean this Unitech Industries 1992 Omnibus Equity
Incentive Plan, as amended. The Plan is effective April 12, 1992.
(s) 'PLAN YEAR' shall mean the 12 consecutive month period coinciding
with the Corporation's fiscal year, which is the calendar year.
(t) 'PURCHASE PRICE' shall mean, at any specified time, the (i)
Exercise Price of an Option times the number of optioned Shares being exercised,
or (ii) the amount, if any, a Participant is to pay for a Share of Restricted
Stock times the number of Shares being purchased.
(u) 'RESTRICTED STOCK' shall mean a Share of Common Stock which is
issued to a Participant and which is either vested (as defined in Section 8(a))
when issued or nonvested until specified conditions are met. The applicable
vesting conditions shall be set forth in a Participant's
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Award Agreement. Shares of Restricted Stock are subject to forfeiture under
Section 14 prior to vesting.
(v) 'SHARE' shall mean one authorized share of Common Stock.
(w) 'STOCK APPRECIATION RIGHT' shall mean a right issued to a
Participant to receive all or any portion of the future appreciation in the Fair
Market Value of one Share of Common Stock. A Stock Appreciation Right may be
settled in cash or in Shares of Common Stock in accordance with the terms and
conditions set forth Section 9.
3. EFFECTIVE DATE.
The Plan was adopted by the Corporation effective April 12, 1992,
subject to the approval of the Corporation's shareholders in accordance with
Section 21.
4. ADMINISTRATION.
(a) ADMINISTRATION BY THE BOARD OR THE COMMITTEE.
The Board may administer the Plan or appoint a Committee to
administer the Plan. If no Committee has been appointed or is currently
constituted, the Board shall have the powers and authority otherwise delegated
to the Committee in this Plan document and all acts to be performed by the
Committee under this Plan shall be performed by the Board. In any event, the
Board shall have the authority to determine the Fair Market Value of the Common
Stock in accordance with Subsection (e).
(b) COMPOSITION OF THE COMMITTEE.
(i) If appointed by the Board, the Committee shall consist of
not less than two members, who may also be members of the Board. Each Committee
member shall serve until the member resigns, dies or is removed by the Board,
whichever is the first event to occur. The Board may, from time to time,
increase the size of the Committee, fill vacancies however caused, remove
members with or without cause, and disband the Committee and thereafter directly
administer the Plan. The Board shall designate one members as Chairman of the
Committee. The Committee shall hold meetings at such times and places as it may
determine. For a Committee meeting, if the Committee has two or three members,
all must be present to constitute a quorum,
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and if the Committee has four or more members, a majority of the Committee plus
one member shall constitute a quorum. Acts by a majority of the members present
at a meeting at which a quorum is present and acts approved in writing by all
the members of the Committee shall constitute valid acts of the Committee.
(ii) Members of the Board or the Committee who are either
eligible for Awards or have been granted an Award may vote on any matters
affecting the administration of the Plan or the grant of any Award pursuant to
the Plan. However, no such member shall act upon the granting of an Award to
himself or herself (unless such grant is part of a plan under which Awards are
to be granted to a classification of Employees), although such member shall be
counted in determining the existence of a quorum at a meeting of the Committee
and shall be excluded in determining the number of directors voting or taking
written action with respect to an Award granted to such member.
(iii) If the Corporation registers any class of equity security
pursuant to Section 13 of the Exchange Act, from the effective date of such
registration until six months after the termination of such registration, the
Plan shall be administered by a Committee which shall consist of not less than
three members, who may also be members of the Board. During such period, the
Committee shall be comprised of individuals who:
(A) Shall be ineligible to participate in the Plan and in
any plan sponsored by the Corporation which provides for the grant of stock of
the Corporation, and
(B) Shall have been ineligible to participate in the Plan
and any such other plan for a one-year period prior to the time such individual
becomes a member of the Committee. The Board may from time to time designate
individuals as ineligible to participate in the Plan for such one-year period in
order to become eligible to be a member of the Committee.
(c) POWERS OF THE COMMITTEE.
Subject to the provisions of the Plan, the Committee shall have
the authority and discretion and on behalf of the Corporation to:
(i) Prescribe, amend and rescind rules and regulations
relating to the Plan;
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(ii) Select Participants to receive Awards;
(iii) Determine the form and terms of Awards;
(iv) Determine the number of Shares or other consideration
subject to Awards;
(v) Determine whether Awards will be granted singly, in
combination, in tandem, in replacement of, or as alternatives to, other Awards
under the Plan or any other incentive or compensation plan of the Corporation;
(vi) Construe and interpret the Plan, any Award Agreement and
any other agreement or document executed pursuant to the Plan;
(vii) Correct any defect or omission, or reconcile any
inconsistency in the Plan, any Award or any Award Agreement;
(viii) Determine whether an Award has been earned and/or vested;
(ix) Accelerate or defer, with the consent of the Participant,
the exercise date of any Option or Stock Appreciation Right, or the vesting of
any Award;
(x) Authorize any person to execute on behalf of the
Corporation any instrument required to effectuate the grant of an Award as made
by the Committee;
(xi) With the consent of the Participant, reprice, cancel and
reissue, or otherwise adjust the terms of an Award previously issued to the
Participant; and
(xii) Make all other determinations deemed necessary or
advisable for the administration of the Plan.
(d) COMMITTEE'S INTERPRETATION OF THE PLAN.
The Committee's interpretation and construction of any provision
of the Plan, of any Award granted under the Plan, or of any Award Agreement
shall be final and binding on all parties claiming an interest in an Award
granted or issued under the Plan. No member of the Committee nor any director
shall be liable for any action or determination made in good faith with respect
to the Plan.
(e) BOARD'S DETERMINATION OF FAIR MARKET VALUE.
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The Board shall have the authority to determine, upon review of relevant
information, the Fair Market Value of the Common Stock, subject to the
provisions of the Plan and irrespective of whether the Board has appointed a
Committee to administer the Plan.
5. PARTICIPATION.
(a) ELIGIBILITY FOR PARTICIPATION.
Plan Participants shall be limited to such Employees and such
directors, independent contractors and/or consultants of the Corporation as the
Committee may select.
(b) ELIGIBILITY FOR AWARDS.
Incentive Stock Options may be granted only to Participants who
are common law employees (including officers and inside directors) of the
Corporation. All other Awards may be granted to any person eligible for
Participation, as defined in Subsection (a). A Participant may be granted more
than one Award under the Plan.
(c) TEN PERCENT STOCKHOLDERS GRANTED INCENTIVE STOCK OPTIONS.
Any Employee who owns stock of the Corporation possessing more
than 10% of the total combined voting power of all classes of outstanding stock
of the Corporation shall be eligible to receive an Incentive Stock Option only
if:
(i) The Exercise Price of the Shares subject to such Incentive
Stock Option, when granted, equals or exceeds 110% of the Fair Market Value of
such Shares; and
(ii) Such Incentive Stock Option by its terms is not
exercisable after five years from the date of grant.
(d) STOCK OWNERSHIP AND OUTSTANDING STOCK.
For purposes of Subsection (c) above:
(i) In determining stock ownership, an Employee shall be
considered as owning the stock owned, directly or indirectly, by or for his or
her brothers and sisters, spouse, ancestors, and lineal descendants. Stock
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust shall be considered as being owned proportionately by or for its
shareholders, partners or beneficiaries, respectively.
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(ii) The term 'outstanding stock' shall include all shares
of stock actually issued and outstanding immediately after the grant of the
Option to the Participant but shall not include any share of stock subject to
an unexercised stock option held by any person.
6. SHARES OF STOCK OF THE CORPORATION.
(a) SHARES SUBJECT TO THIS PLAN.
Stock with respect to which Awards are granted or issued under
this Plan (i.e., issued as Restricted Stock, issued upon the exercise of an
Option, issued upon the exercise of a Stock Appreciation Right which is settled
in Shares rather than cash, or constituting the basis for a Stock Appreciation
Right) shall be authorized but unissued or reacquired Shares of the
Corporation's Common Stock. The aggregate number of Shares which may be issued
under this Plan shall not exceed 300,000, subject to adjustment under Section
11.
(b) ADJUSTMENT OF SHARES.
In the event of an adjustment described in Section 11 excluding
Section 11(b)(ii), then (i) the number of Shares reserved for issuance under the
Plan, (ii) the Exercise Prices of and number of Shares subject to outstanding
Options, (iii) the number of Shares subject to other outstanding Awards, and
(iv) any other factor pertaining to outstanding Awards shall be duly and
proportionately adjusted, subject to any required action by the Board or the
shareholders of the Corporation and compliance with applicable securities laws;
provided, however, that fractions of a Share shall not be issued but shall
either be paid in cash at Fair Market Value or shall be rounded up to the
nearest Share, as determined by the Committee. The Committee shall in its sole
discretion determine if and when any adjustment of Shares as described in this
Subsection (b) is required.
(c) AWARDS NOT TO EXCEED SHARES AVAILABLE.
The number of Shares subject to Awards which are outstanding at
any time shall not exceed the number of Shares authorized for issuance under the
Plan, reduced by the number of Awards previously granted or issued under this
Plan. The number of Shares subject to an Award which expires or is canceled,
forfeited or terminated for any reason, shall again be
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available for issuance under the Plan. Any Shares the Corporation reacquires
pursuant to Sections 13 and 14 shall also again be available for issuance under
this Plan.
7. TERMS AND CONDITIONS OF OPTIONS.
(a) AWARD AGREEMENTS.
Each Option shall be evidenced by a written Award Agreement which
shall set forth the terms and conditions pertaining to such Option, provided
that all such terms shall be subject to and consistent with this Plan.
(b) NUMBER OF SHARES COVERED BY AN OPTION.
Each Award Agreement shall state the number of Shares for which
the Option is exercisable and shall provide for the adjustment of such Shares in
accordance with Section 6(b) and Section 11.
(c) EXERCISE OF OPTIONS.
A Participant may exercise an Option only on or after the date on
which the Option vests, as provided in Subsection (d) below, and only on or
before the date on which the Option expires, as provided in Subsection (e)
below.
(d) VESTING OF OPTIONS.
A Participant may exercise an Option to purchase Shares only on
or after the date the Option has vested with respect to such Shares. Each Award
Agreement shall include a vesting schedule applicable to the Shares to which
such Option pertains. The vesting schedule shall not impose upon the Corporation
any obligation to retain the Participant in its employ for any period. A
Participant's Award Agreement shall so specify if all or any nonvested Options
held by the Participant on the date of death or total and permanent disability
shall become vested.
(e) TERM AND LAPSE OF OPTIONS.
A Participant may exercise an Option to purchase Shares only on
or before the date on which the term of the Option expires, lapses or otherwise
ends. Each Award Agreement shall set forth the term of the Option and the events
described in the immediately
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following sentence which will cause the Option to lapse or otherwise end, in
whole or in part, as of on earlier date. An Option shall lapse on the first to
occur of the following events:
(i) The tenth anniversary of the date the Option was granted
(substituting 'fifth anniversary' for 'tenth anniversary' for an Incentive Stock
Option granted to a 'ten percent stockholder' as described in Section 5(c));
(ii) The date determined under Section 7(i) for a Participant
who ceases to be an Employee by reason of the Participant's death or total and
permanent disability within the meaning of Section 22(e)(3) of the Code;
(iii) The date determined under Section 7(j) for a Participant
who ceases to be an Employee for any reason other than by reason of death or
total and permanent disability, unless the Committee in its discretion extends
such date before the applicable expiration date (but no longer than three months
after the date the Participant ceases to be an Employee with respect to any
Incentive Stock Option the Participant holds);
(iv) On the effective date of a transaction described in
Section 11(b)(ii); or
(v) The expiration date specified in the Participant's Award
Agreement.
(f) EXERCISE PRICE.
Each Award Agreement shall state the Exercise Price for the
Shares to which the Option pertains, subject to the following:
(i) The Exercise Price of an Incentive Stock Option shall not
be less than 100% of the Fair Market Value of the Shares determined on the date
the Option is granted (substituting '110%' for '100%' for an Incentive Stock
Option granted to a 'ten percent stockholder' as described in Section 5(c)); and
(ii) The Exercise Price of a Nonstatutory Stock Option may be
less than 100% of the Fair Market Value of the Shares determined on the date the
Option is granted.
(g) MEDIUM AND TIME OF PAYMENT OF PURCHASE PRICE.
A Participant exercising an Option shall pay the Purchase Price
of the Shares to which such exercise pertains in full in cash (in U.S. dollars)
as a condition of such exercise, unless the Committee in its discretion allows
the Participant to pay the Purchase Price in a manner allowed under Section 17,
so long as the sum of cash so paid and such other consideration
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equals the Purchase Price. The sequential exercise of an Option through
'pyramiding' is specifically allowable under the Plan, subject to the consent of
the Committee at its discretion.
(h) NONTRANSFERABILITY OF OPTIONS.
An Option granted to a Participant shall, during the lifetime of
the Participant, be exercisable only by the Participant or the Participant's
conservator or legal representative. Options shall not assignable or
transferable, and any attempt to assign or transfer the Options will be void and
unenforceable. An Option granted to a Participant is exempt from the claims of
the Participant's creditors, and may not be made subject to execution,
attachment or any other process which would result in the transfer of the Option
to such creditors. In the event of the Participant's death, the Option is
transferable by the Participant only by will or the laws of descent and
distribution.
(i) DEATH OR DISABILITY OF A PARTICIPANT.
If a Participant dies while an Employee, or ceases to be an
Employee as a consequence of becoming totally and permanently disabled (within
the meaning of Section 22(e)(3) of the Code), any Option granted to the
Participant may be exercised, to the extent it was vested on the date of
termination of employment, at any time within 12 months after the termination of
employment (but not beyond the otherwise applicable term of the Option), by the
Participant or the Participant's conservator or legal representative.
(j) TERMINATION OF EMPLOYMENT OTHER THAN BY DEATH OR DISABILITY.
If a Participant ceases to be an Employee for any reason other
than death or total and permanent disability (as defined in Section 7(k)):
(i) any Nonstatutory Stock Option granted to the Participant
may be exercised, to the extent it was vested on the date of termination of
employment, at any time within 12 months after the termination of employment
(but not beyond the otherwise applicable term of the Option); and
(ii) any Incentive Stock Option granted to the Participant may
be exercised, to the extent it was vested on the date of termination of
employment, at any time within 3 months after the termination of employment (but
not beyond the otherwise applicable term of the Option).
(k) RIGHTS AS A STOCKHOLDER.
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A Participant, or an allowable transferee of a Participant, shall
have no rights as a shareholder of the Corporation with respect to any Shares
for which an Option is exercisable until the date a stock certificate for such
Shares is issued. No adjustment shall be made for dividends (ordinary or
extraordinary or whether in currency, securities, or other property),
distributions, or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 11.
(l) MODIFICATION, EXTENSION, AND RENEWAL OF OPTIONS.
Within the limitations of the Plan, the Committee may in its
discretion modify, extend or renew outstanding any Option or accept the
cancellation of outstanding Options for the granting of a new Option in
substitution therefor. Notwithstanding the preceding sentence, no modification
of an Option shall, without the consent of the Participant, alter or impair any
rights or obligations under any Option previously granted.
(m) OTHER PROVISIONS.
An Award Agreement may contain such other provisions as the
Committee deems advisable which are not inconsistent with the terms of the Plan,
including but not limited to:
(i) Restrictions on the exercise of the Option;
(ii) Submission by the Participant of such forms and documents
as the Committee may require; and/or
(iii) Procedures to facilitate the broker-assisted exercise of
the Option.
(n) LIMITATIONS ON INCENTIVE STOCK OPTIONS.
The aggregate Fair Market Value (determined as of the date of
grant) of Shares with respect to which Incentive Stock Options are exercisable
for the first time by a Participant during any calendar year (under the Plan or
under any other incentive stock option plan of the Corporation) shall not exceed
$100,000. If the Fair Market Value of the Shares on the date of grant with
respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, the Options for the first
$100,000 worth of Shares to become exercisable in such calendar year shall be
incentive Stock Options and the Options for the amount in excess of $100,000
that become exercisable in that calendar year shall be Nonstatutory Stock
Options. In the event the Code or the regulations promulgated thereunder are
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amended after the Effective Date of the Plan to provide for a different limit on
the Fair Market Value of Shares permitted to be subject to Incentive Stock
Options, such different limit shall be automatically incorporated into this
Section 7(o) and shall apply to any Options granted on or after the effective
date of such amendment.
8. TERMS AND CONDITIONS OF RESTRICTED STOCK.
(a) RESTRICTED STOCK AGREEMENTS.
Each Award of Restricted Stock shall be evidenced by a written
Award Agreement which shall set forth the terms and conditions pertaining to
such Award, provided that all such terms shall be subject to the terms and
conditions of this Plan. Each Restricted Stock Award Agreement shall state the
number of Shares of Restricted Stock to which it pertains and whether the Shares
are immediately vested. For purposes of determining when a Share of Restricted
Stock becomes 'vested,' the term 'vest' shall mean that the Restricted Stock is
no longer subject to a substantial risk of forfeiture within the meaning
prescribed by Section 83 of the Code and the regulations thereunder.
(b) VESTING.
Unless immediately vested at issuance, a Share of Restricted
Stock shall be forfeitable (in accordance with Section 14) prior to the date on
which the Restricted Share vests. Each Award Agreement shall include a vesting
schedule applicable to the Shares Restricted Stock to which it pertains. This
condition shall not impose upon the Corporation any obligation to retain the
Participant in its employ for any period. A Participant's Award Agreement shall
so specify if all or any nonvested Shares of Restricted Stock held by the
Participant on the date of death or total and permanent disability shall become
vested.
(c) RESTRICTED SHARES ISSUED WITHOUT PAYMENT OF FULL CONSIDERATION.
An Award of Restricted Stock may be issued without payment by the
Participant of any consideration, or may be issued in consideration of partial
or full payment of the Fair Market Value of the Shares as of the date of
issuance. Payment of such consideration may be made on any of the terms of
payment allowed under Section 17, so long as the sum of cash so paid and such
other consideration equals the Purchase Price, and payment shall be a condition
to the
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issuance of such Shares. Subject to vesting and to the payment of any required
consideration, the Shares shall be deemed fully paid and nonassessable.
(d) NONTRANSFERABILITY OF NONVESTED AWARDS OF RESTRICTED STOCK.
During the lifetime of the Participant, a nonvested Award of
Restricted Stock is neither assignable nor transferable, and any attempt to
assign or transfer the Award will be void and unenforceable. An nonvested Award
of Restricted Stock granted to a Participant is exempt from the claims of the
Participant's creditors, and may not be made subject to execution, attachment or
any other process which would result in the transfer of the nonvested Award to
such creditors.
(e) TERMINATION OF EMPLOYMENT FOR ANY REASON.
(i) If a Participant ceases to be an Employee for any reason,
including death and total and permanent disability (as defined in Section 7(k)),
any nonvested Share of Restricted Stock shall be forfeited in accordance with
Section 14 on the date the Participant's employment with the Corporation
terminates.
(ii) For purposes of this Section 8(e), the employment
relationship shall be treated as continuing intact while the Participant is an
active employee of the Corporation or is on military leave, sick leave or other
bona fide leave of absence, as determined by the Committee in its discretion.
(f) RIGHTS AS A STOCKHOLDER.
A Participant, or an allowable transferee of a Participant, shall
have all rights as a stockholder of the Corporation, including voting and
dividend rights, with respect to all Awards of Restricted Stock, whether vested
or forfeitable, commencing on the date of issuance of a stock certificate for
such Awards. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in currency, securities, or other property),
distributions, or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 11.
(g) MODIFICATION OF AWARDS OF RESTRICTED STOCK.
Within the limitations of the Plan, the Committee may modify the
terms of an Award of Restricted Stock or accept the cancellation of outstanding
Awards of Restricted Stock
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(to the extent not vested) for the issuance of a new Award of Restricted Stock
in substitution therefor. Notwithstanding the preceding sentence, no
modification of an Award of Restricted Stock shall, without the consent of the
Participant, alter or impair any rights or obligations under any such Award
previously issued.
(h) OTHER PROVISIONS.
An Award Agreement may contain such other provisions as the
Committee in its discretion deems advisable which are not inconsistent with
the terms of the Plan.
9. STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHTS AGREEMENTS.
Each Award of a Stock Appreciation Right shall be evidenced by
written Award Agreement which shall set forth the terms and conditions
pertaining to such Award, including the date the Stock Appreciation Right
expires and is no longer exercisable, provided that all such terms shall be
subject to the terms and conditions of this Plan. Each Stock Appreciation Right
Award Agreement shall state the number of Shares of Stock to which it pertains
and the Fair Market Value of the Shares which is the basis for determining
future appreciation.
(b) STOCK APPRECIATION RIGHTS ISSUED WITHOUT PAYMENT OF
CONSIDERATION.
A Stock Appreciation Right shall be issued without payment by the
Participant of any consideration.
(c) EXERCISE OF STOCK APPRECIATION RIGHTS.
A participant may exercise a Stock Appreciation Right only on or
after the date on which the Stock Appreciation Right vests, as provided in
Subsection (d), below, and only on or before the date on which the Stock
Appreciation Right lapses, as provided in Subsection (e), below.
(d) VESTING.
A Stock Appreciation Right shall be forfeitable prior to the date
on which the Right vests. Each Award Agreement shall include a vesting schedule
applicable to the Stock Appreciation Right to which it pertains. This condition
shall not impose upon the Corporation any obligation to retain the Participant
in its employ for any period. A Participant's Award Agreement
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shall so specify if all or any nonvested Stock Appreciation Rights held by the
Participant on the date of death or total and permanent disability shall become
vested.
(e) TERM AND LAPSE OF STOCK APPRECIATION RIGHTS.
A Participant may exercise a Stock Appreciation Right and receive
a settlement from the Corporation only on or before the date on which the term
of the Right expires, lapses or otherwise ends. Each Award Agreement shall set
forth the term of the Right and the events described in the immediately
following sentence which will cause the Right to lapse or otherwise end, in
whole or in part, as of on earlier date. A Stock Appreciation Right shall lapse
on the first to occur of the following events:
(i) The tenth anniversary of the date the Right was granted;
(ii) The date determined under Subsection (h) for a Participant
who ceases to be an Employee;
(iii) On the effective date of a transaction described in
Section 11(b)(ii); or
(iv) The expiration date specified in the Participant's Award
Agreement.
(f) EXERCISE AND SETTLEMENT OF A STOCK APPRECIATION RIGHT.
A Stock Appreciation Right may be exercised by delivering notice
to the Corporation only with respect to the number of underlying Shares which
are vested (and otherwise exercisable). The Stock Appreciation Right may be
settled in the form of cash (either in a lump sum payment or in installments),
whole Shares, or a combination thereof, as the Award Agreement prescribes.
(g) NONTRANSFERABILITY OF STOCK APPRECIATION RIGHTS.
During the lifetime of the Participant, a Stock Appreciation
Right is neither assignable nor transferable, and any attempt to assign or
transfer the Stock Appreciation Right will be void and unenforceable. A Stock
Appreciation Right granted to a Participant is exempt from the claims of the
Participant's creditors, and may not be made subject to execution, attachment or
any other process which would result in the transfer of the Stock Appreciation
Right to such creditors. In the event of the Participant's death, the Stock
Appreciation Right is transferable by the Participant only by will or the laws
of descent and distribution.
(h) TERMINATION OF EMPLOYMENT.
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If a Participant ceases to be an Employee for any reason, any
unexercised Stock Appreciation Right (whether vested or not) may be exercised,
to the extent it was vested on the date of termination of employment, at any
time within 12 months after the termination of employment (but not beyond the
otherwise applicable term of the Option).
(i) RIGHTS AS A STOCKHOLDER.
A Participant, or an allowable transferee of a Participant, shall
have no rights as a shareholder of the Corporation with respect to any Shares to
which a Stock Appreciation Right pertains, except for Stock appreciation Rights
settled in Shares and then not until the date a stock certificate for such
Shares is issued. No adjustment shall be made for dividends (ordinary or
extraordinary or whether in currency, securities, or other property),
distributions, or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 11.
(j) MODIFICATION, EXTENSION, AND RENEWAL OF STOCK APPRECIATION
RIGHTS.
Within the limitations of the Plan, the Committee may in its
discretion modify, extend or renew outstanding any Stock Appreciation Right or
accept the cancellation of an outstanding Rights for the granting of a new Right
in substitution therefor. Notwithstanding the preceding sentence, no
modification of a Right shall, without the consent of the Participant, alter or
impair any rights or obligations under any Right previously granted.
(k) OTHER PROVISIONS.
An Award Agreement may contain such other provisions as the
Committee deems advisable which are not inconsistent with the terms of the Plan,
including without limitation:
(i) Restrictions on the exercise of the Stock Appreciation
Right;
(ii) Submission by the Participant of such forms and documents
as the Committee may require; or
(iii) Procedures to facilitate the broker-assisted exercise of
the Right if it is settled in Shares rather than cash.
10. TERM OF PLAN.
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Awards may be granted pursuant to the Plan through the period ending
on April 12, 1995 (the third anniversary of the Effective Date shown in Section
3). All Awards which are outstanding on such date shall remain in effect until
they are exercised or expire by their terms. The Plan shall expire for all
purposes on April 12, 2002 (the tenth anniversary of the Effective Date shown in
Section 3).
11. RECAPITALIZATIONS, TAKEOVERS, AND LIQUIDATIONS.
(a) REORGANIZATIONS.
Notwithstanding any other provision of the Plan to the contrary,
but subject to any required action by the stockholders of the Corporation, the
Committee shall make any adjustments to the class and/or number of Shares
covered by the Plan, the number of Shares for which each outstanding Award
corresponds, the Exercise Price of an Option, and/or any other aspect of this
Plan to prevent the dilution or enlargement of the rights of Participants under
this Plan in connection with any increase or decrease in the number of issued
Shares resulting from the payment of a Common Stock dividend, a stock split, a
reverse stock split or any other event which results in an increase or decrease
in the number of issued Shares effected without receipt of adequate
consideration by the Corporation.
(b) MERGERS AND CONSOLIDATIONS.
Subject to any required action by the stockholders of the
Corporation: ties of the Corporation to which a holder of the number of Shares
subject to the Award would be entitled; and
(ii) In the event the Corporation is a party to a merger or
consolidation in which it is not the surviving corporation, unless the surviving
corporation expressly assumes outstanding Awards, each outstanding, unexercised
Award shall expire and/or be forfeited as of the effective date of the
transaction, but the Committee shall exercise all reasonable efforts to give
each Participant as much advance notice as practicable before the effective date
of such transaction to enable such Participant to exercise vested and otherwise
exercisable Options and Stock Appreciation Rights.
(c) CHANGE OF CONTROL.
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If the Corporation experiences a 'change of control', the
Committee may, in its sole discretion, reduce or remove any restrictions on the
exercise of any outstanding but non-vested Awards to the degree it determines
appropriate. For purposes of this Subsection (c), a 'change of control' will
occur if the current shareholders of the Corporation lose control of the
Corporation for any reason other than an event described by 11(b)(ii).
(d) DETERMINATION BY THE COMMITTEE.
All adjustments described in this Section 11 shall be made by the
Committee, whose determination shall be conclusive and binding on all persons.
(e) LIMITATION ON RIGHTS OF PARTICIPANT.
Except as expressly provided in this Section 11 and subject to
the rights of a Participant as a shareholder of record with respect to any
Shares issued to the Participant pursuant to this Plan, no Participant shall
have any rights by reason of any payment of any stock dividend, stock split,
reverse stock split, or any other change in the number of shares of stock of any
class, or by reason of any reorganization, consolidation, dissolution,
liquidation, merger, exchange, split-up or reverse split-up, or spin-off of
assets or stock of another corporation. Any issuance by the Corporation of
Shares, Options, Stock Appreciation Rights or securities convertible into Shares
shall not affect, and no adjustment by reason thereof shall be made with respect
to, Awards under the Plan.
(f) NO LIMITATION ON RIGHTS OF CORPORATION.
The grant of an Award pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets.
12. SECURITIES LAW REQUIREMENTS.
(a) LEGALITY OF ISSUANCE.
No Share shall be issued as Restricted Stock, or upon the
exercise of any Option or Stock Appreciation Right settled in Shares, unless and
until the Committee has determined that:
Page 19
(i) The Corporation and the Participant have taken all actions
required to register the Shares under the Securities Act of 1933, as amended
(the 'Act'), or to perfect an exemption from registration requirements of the
Act, or to determine that the registration requirements of the Act do not apply
to such exercise;
(ii) Any applicable listing requirement of any stock exchange
on which the Share is listed has been satisfied; and
(iii) Any other applicable provision of state, federal or
foreign law has been satisfied.
(b) RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF PARTICIPANT;
LEGENDS; AWARD AGREEMENTS.
Regardless of whether the offering and sale of Shares under the
Plan have been registered under the Act or have been registered or qualified
under the securities laws of any state, the Corporation may impose restrictions
upon the sale, pledge, or other transfer of such Shares (including the placement
of appropriate legends on stock certificates) if, in the judgment of the
Corporation and its counsel, such restrictions are necessary or desirable to
achieve compliance with the provisions of the Act, the securities laws of any
state, or any other law. If the offering and/or sale of Shares under the Plan is
not registered under the Act and the Corporation determines that the
registration requirements of the Act apply but an exemption is available which
requires an investment representation or other representation, the Participant
shall be required, as a condition to acquiring such Shares, to represent that
such Shares are being acquired for investment, and not with a view to the sale
or distribution thereof, except in compliance with the Act, and to make such
other representations as are deemed necessary or appropriate by the Corporation
and its counsel. Stock certificates evidencing Shares acquired pursuant to an
unregistered transaction to which the Act applies shall bear a restrictive
legend substantially in the following form and such other restrictive legends as
are required or deemed advisable under the Plan or the provisions of any
applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 ('ACT'). THEY MAY NOT BE TRANSFERRED, SOLD OR OFFERED FOR SALE
UNLESS A REGISTRATION STATEMENT
Page 20
UNDER THE ACT IS IN EFFECT AS TO SUCH TRANSFER OR IN THE OPINION OF
COUNSEL FOR THE ISSUER EITHER SUCH REGISTRATION IS UNNECESSARY IN
ORDER FOR SUCH TRANSFER TO COMPLY WITH THE ACT OR THE REGISTRATION
PROVISIONS OF THE ACT DO NOT APPLY TO SUCH PROPOSED TRANSFER.
The Corporation shall also place legends on stock certificates
representing that the Shares evidenced by the stock certificate are subject to
the terms of this Plan, including the Corporations right of first refusal under
Section 13 and the forfeiture provisions (if applicable) under Section 14. Any
determination by the Corporation and its counsel in connection with any of the
matters set forth in this Section 12 shall be conclusive and binding on all
persons.
All Award Agreements shall contain a provision stating that any
restrictions under any applicable Securities Laws will apply.
(c) REGISTRATION OR QUALIFICATION OF SECURITIES.
The Corporation may, but shall not be obligated to, register or
qualify the offering or sale of Shares under the Act or any other applicable
law.
(d) EXCHANGE OF CERTIFICATES.
If, in the opinion of the Corporation and its counsel, any legend
placed on a stock certificate representing Shares issued pursuant to the Plan is
no longer required, the Participant or the holder of such certificate shall be
entitled to exchange such certificate for a certificate representing the same
number of Shares but lacking such legend.
13. RIGHT OF FIRST REFUSAL.
(a) RIGHT OF FIRST REFUSAL.
If a Participant proposes to sell, pledge or otherwise transfer
any Shares acquired pursuant to the exercise of an Option, the settlement of a
Stock Appreciation Right, or received as Restricted Stock, or any interest in
such Shares, to any person or entity, the Corporation (and the persons described
in Section 13(e)) shall have a right of first refusal (the 'Right of First
Refusal') with respect to such Awards. Any Participant desiring to transfer
Shares acquired under the Plan shall first give a written notice (the 'Transfer
Notice') to the Corporation
Page 21
describing fully the proposed transfer, including the number of Shares proposed
to be transferred, the proposed transfer price, and the name and address of the
proposed transferee. The Transfer Notice shall be signed both by the Participant
and by the proposed transferee and must constitute a binding commitment of both
parties to the transfer of the Shares. The Corporation shall have the right to
purchase the Shares which are the subject of the Transfer Notice on the terms
described in the Transfer Notice, subject to any change in such terms permitted
under Section 13(b). The Corporation shall exercise its Right of First Refusal
by delivering a notice of exercise of the Right of First Refusal to the
Participant within 30 days after the date the Transfer Notice is received by the
Corporation. The Corporation's rights under this Section 13(a) shall be freely
assignable, in whole or in part, to the persons described in Section 13(e).
(b) TRANSFER OF SHARES.
If the Corporation does not exercise the Right of First Refusal
within 30 days after the date on which it receives the Transfer Notice and no
person described in Section 13(e) exercises the assigned Right of First Refusal
within an additional 30 days after such date, the Participant may, not later
than six months following receipt of the Transfer Notice by the Corporation,
consummate a transfer of the Shares subject to the Transfer Notice on the terms
and conditions described in the Transfer Notice. Any proposed transfer on terms
and conditions different from those described in the Transfer Notice, as well as
any subsequent proposed transfer by the Participant, shall again be subject to
the Right of First Refusal and shall again require compliance with the foregoing
notice and election procedure described in Section 13(a). If the Right of First
Refusal is exercised, the Participant shall immediately endorse and deliver to
the Corporation every stock certificate representing the Shares being purchased,
and the Corporation shall then promptly pay (or cause the person described in
Section 13(e) exercising the Right of First Refusal to pay) the purchase price
in accordance with the terms set forth in the Transfer Notice.
(c) REPURCHASE PAYMENT.
The amount payable to a Participant pursuant to the exercised
Right of First Refusal shall be paid to the Participant in full in cash (in U.S.
dollars) or upon such other terms which are set forth in the Transfer Notice.
Page 22
(d) BINDING EFFECT.
The Corporation's Right of First Refusal shall inure to the
benefit of its successors and assigns and shall be binding upon any transferee
of the Shares, other than a transferee acquiring Shares in a transaction with
respect to which the Right of First Refusal was not exercised (a 'Free
Transferee') or a transferee of a Free Transferee.
(e) ADDITIONAL PERSONS WITH RIGHT OF FIRST REFUSAL.
If the Corporation does not exercise the Right of First Refusal,
in whole or in part, within 30 days after the date on which it receives the
Transfer Notice, the Right of First Refusal may be exercised by the following
persons in the order set forth:
(i) Any qualified retirement plan sponsored by the Corporation
which has the right, under the terms of such plan, to purchase the Corporation's
Common Stock;
(ii) Any active Employee who is within the class of Employees
eligible to be granted Awards under the Plan; or
(iii) Any other holder of Shares of the Corporation's Common
Stock. The Corporation shall notify such persons, on or before the last day of
the Corporation's 30 day election period described in Subsection (b) above, of
the assignment of such Right of First Refusal to them. The Right of First
Refusal, as so assigned, may be exercised in whole or in part within an
additional 30 days after the date on which the Corporation received the Transfer
Notice in the manner described in Subsections (b) and (c) above.
(f) ESCROW OF STOCK CERTIFICATES.
To facilitate the consummation of the Right of First Refusal, the
Participant and the Corporation shall execute a Joint Escrow Instructions
agreement and the Participant shall deliver and deposit Assignment Separate From
Certificates in accordance with Section 26.
(g) TERMINATION OF RIGHT OF FIRST REFUSAL.
Notwithstanding any other provision of this Section 13, if the
Common Stock is listed on any United States securities exchange or traded on any
formal over-the-counter market in general use in the United States at the time
the Participant desires to transfer his or her Shares, the Corporation shall no
longer
Page 23
have the Right of First Refusal, and the Participant shall have no obligation to
comply with this Section 13.
14. FORFEITURE OF RESTRICTED STOCK.
(a) FORFEITURE OF NONVESTED AWARDS OF RESTRICTED STOCK.
Awards of Restricted Stock issued under the Plan to a Participant
which are not vested shall, as provided in Section 8(e), be forfeited and revert
to the Corporation ('Forfeiture Restriction') on the terms specified in this
Section 14 as of the date on which the Participant ceases to be an Employee for
any reason ('Employment Termination'). The Corporation shall legend the
Forfeiture Restriction on the stock certificates evidencing such Shares and
shall take such other steps as it deems necessary to ensure compliance with this
Restriction. The Corporation's rights under this Subsection (a) shall be freely
assignable, in whole or in part, to the persons described in Section 14(f).
(b) REPURCHASE PRICE.
Nonvested Awards of Restricted Stock shall be forfeited and
revert to the Corporation, with payment by the Corporation equal to the purchase
price paid by the Participant to the Corporation for any such Award of
Restricted Stock.
(c) ESCROW OF STOCK CERTIFICATES.
To facilitate the consummation of the Right of First Refusal, the
Participant and the Corporation shall execute a Joint Escrow Instructions
agreement and the Participant shall deliver and deposit Assignment Separate From
Certificates in accordance with Section 26.
(d) FORFEITURE PROCEDURE.
The Corporation shall promptly notify the Escrow Agent in
writing of a Participant's termination of employment prior to vesting of
Awards of Restricted Stock. A copy of such notice shall be sent
simultaneously to the Participant. The Escrow Agent shall act in accordance
with such notice and the Joint Escrow Instructions to return certificates
representing nonvested Awards of Restricted Stock to the Corporation.
(e) BINDING EFFECT.
Page 24
The Forfeiture Restriction shall inure to the benefit of and be
binding upon the Corporation and its successors and assigns, and shall be
binding upon the Participant and any representative, executor, administrator,
heir, legatee, or assignee of the Participant.
(f) ADDITIONAL PERSONS WITH FORFEITURE RIGHT OF REPURCHASE.
The Corporation may assign its repurchase rights, in whole or in
part, to the following persons:
(i) Any qualified retirement plan sponsored by the Corporation
which has the right, under the terms of such plan, to purchase the Corporation's
Common Stock;
(ii) Any active Employee who is within the class of Employees
eligible to be granted Awards under the Plan; or
(iii) Any other holder of Shares of the Corporation's Common
Stock.
15. EXERCISE OF UNVESTED OPTIONS.
(a) EXERCISED OPTIONS AND RESTRICTED SHARES OF COMMON STOCK.
The Committee, at its discretion, may grant any Participant the
right to exercise any unvested Option prior to the vesting of such Option,
provided that the Shares issued upon such exercise shall remain subject to
vesting, as Restricted Stock, at the same rate as under the Option so exercised,
and:
(i) Shares which have become vested shall be subject to the
Corporation's Right of First Refusal, on the terms and conditions set forth in
Section 13, if a Participant proposes to sell, pledge or otherwise transfer any
such Shares, or any interest in such Shares, to any person or entity; and
(ii) Shares which have not become vested on or before the
applicable date described in Section 7 for determining the forfeiture or lapsing
of the Option pursuant to which such Shares were issued under this Section 15,
shall be subject to forfeiture under Section 14 at the Exercise Price paid by
the Participant to the Corporation to acquire such Shares.
(b) ESCROW OF STOCK CERTIFICATES.
Page 25
To facilitate the consummation of the Right of First Refusal, the
Participant and the Corporation shall execute a Joint Escrow Instructions
agreement and the Participant shall deliver and deposit Assignment Separate From
Certificates in accordance with Section 26.
16. AMENDMENT OF THE PLAN.
The Board or the Committee may, from time to time, terminate, suspend
or discontinue the Plan, in whole or in part, or revise or amend it in any
respect whatsoever including, but not limited to, the adoption of any amendments
deemed necessary or advisable to qualify the Awards under rules and regulations
promulgated by the Securities and Exchange Commission with respect to Employees
who are subject to the provisions of Section 16 of the Exchange Act, or to
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any Award granted under the Plan, with or without approval of the
shareholders of the Corporation, but if any such action is taken without the
approval of the Corporation's shareholders, no such revision or amendment shall:
(a) Increase the number of Shares subject to the Plan, other than any
increase pursuant to Section 11;
(b) Change the designation of the class of persons eligible to
receive Awards;
(c) Permit any individual while a member of the Committee to be
eligible to receive and hold an Award granted or issued under the Plan;
(d) Withdraw administration of the Plan from the Committee;
(e) Increase the maximum duration of an Option or a Stock
Appreciation Right;
(f) Change the manner of determining the Exercise Price of an Option;
(g) Extend the term of the Plan; or
(h) Amend this Section 16 to defeat its purpose.
No amendment, termination or modification of the Plan shall, without the consent
of the Participant, affect any Award previously granted.
Page 26
17. PAYMENT FOR SHARE PURCHASES.
(a) PAYMENT.
Payment for Shares purchased pursuant to the Plan may be made in
cash (in U.S. dollars) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(i) By check;
(ii) By cancellation of indebtedness of the Corporation to the
Participant;
(iii) By surrender of Shares that either: (A) have been owned by
Participant for more than six (6) months and have been paid for within the
meaning of SEC Rule 144 (and, if such shares were purchased from the Corporation
by use of a promissory note, such note has been fully paid with respect to such
Shares); or (B) were obtained by Participant in the public market;
(iv) By tender of a full recourse promissory note having such
terms as may be approved by the Committee and bearing interest at a rate
sufficient to avoid imputation of income under Sections 483 and 1274 of the
Code, provided that Participants who are not employees of the Corporation shall
not be entitled to purchase Shares with a promissory note unless the note is
adequately secured by collateral other than the Shares;
(v) By waiver of compensation due or accrued to Participant
for services rendered;
(vi) With respect only to purchases upon exercise of an Option,
and provided that a public market for the Corporation's stock exists:
(A) Through a 'same day sale' commitment from Participant
and a broker-dealer that is a member of the National Association of Securities
Dealers (an 'NASD dealer') whereby Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased to pay for the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Corporation; or
(B) Through a 'margin' commitment from Participant and an
NASD Dealer whereby Participant irrevocably elects to exercise the Option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD
Page 27
Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Corporation; or
(vii) By any combination of the foregoing.
(b) LOAN GUARANTEES.
The Committee may in its discretion help a Participant pay for
Shares purchased under the Plan by authorizing a guarantee by the Corporation of
a third-party loan to the Participant, subject to any covenant(s) or other
agreements which may limit the Corporation's ability to provide such a
guarantee.
18. APPLICATION OF FUNDS.
The proceeds received by the Corporation from the sale of Common Stock
pursuant to the exercise of an Option, settlement of a Stock Appreciation Right,
or the issuance of Restricted Stock shall be used for general corporate
purposes.
19. PRIVILEGES OF STOCK OWNERSHIP.
A Participant shall have no of the rights of a shareholder of the
Corporation with respect to any Shares issued under the Plan until the date a
stock certificate for such Shares is issued to the Participant. After Shares are
issued to the Participant, the Participant shall be a shareholder and have all
the rights of a shareholder with respect to such Shares, including the right to
vote and receive all dividends or other distributions made or paid with respect
to such Shares; provided, that:
(a) If such Awards are Restricted Stock, then any new, additional or
different securities the Participant may become entitled to receive with respect
to such Shares by virtue of a stock dividend, stock split or any other change in
the corporate or capital structure of the Corporation shall be subject to the
same restrictions as the Restricted Stock; and
(b) The Participant shall have no right to retain such dividends or
distributions with respect to Shares that are repurchased at the Participant's
original Purchase Price pursuant to Section 14.
Page 28
20. TRANSFERABILITY.
Awards granted under the Plan, and any interest therein, shall not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as consistent with the specific Plan and Award
Agreement provisions relating thereto. During the lifetime of the Participant an
Option or Stock Appreciation Right may be exercisable only by the Participant,
and any elections with respect to any Award may be made only by the Participant.
21. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to approval by the affirmative vote of the holders of
a majority of all classes of the outstanding shares present and entitled to vote
at the first annual meeting of shareholders of the Corporation adopting the Plan
following the adoption of the Plan, and in no event later than _____, 19__(the
first anniversary of the Effective Date shown in Section 3). Prior to such
approval, Awards may be granted but may not be exercised or settled. Any
amendment described in Section 16 shall also be subject to approval by the
Corporation's shareholders.
22. WITHHOLDING OF TAXES.
(a) GENERAL.
Whenever Shares are to be issued under the Plan, the Corporation
may require the Participant to remit to the Corporation an amount sufficient to
satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate or certificates for such Shares. Whenever, under the
Plan, payments in satisfaction of Awards are to be made in cash, such payment
shall be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
(b) STOCK WITHHOLDING.
When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is
subject to tax withholding and the
Page 29
Participant is obligated to pay the Corporation the amount required to be
withheld, the Committee may allow the Participant to satisfy the minimum
withholding tax obligation by electing to have the Corporation withhold from the
Shares to be issued the specific number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date that
the amount of tax to be withheld is to be determined (the 'Tax Date'). All
elections by a Participant to have Shares withheld for this purpose shall be
made in writing in a form acceptable to the Committee and shall be subject to
the following restrictions:
(i) The election must be made on or prior to the applicable
Tax Date;
(ii) Once made, then except as provided below, the election
shall be irrevocable as to the particular Shares as to which the election is
made;
(iii) All elections shall be subject to the consent or
disapproval of the Committee;
(iv) In the event that the Tax Date is deferred until six (6)
months after the delivery of Shares under Section 83(b) of the Code, the
Participant shall receive the full number of Shares with respect to which the
exercise occurs, but such Participant shall be unconditionally obligated to
tender back to the Corporation the proper number of Shares on the Tax Date; and
(v) If the Participant is an 'insider' and if the Corporation
is subject to Section 16(b) of the Exchange Act:
(A) the election may not be made within six (6) months of
the date of grant of the Award, except as otherwise permitted by SEC Rule
16b-3(e) under the Exchange Act; and
(B) either:
(I) the election to use stock withholding must be
irrevocably made at least six (6) months prior to the Tax Date (although such
election may be revoked at any time at least six (6) months prior to the Tax
Date); or
(II) the exercise of the Option or election to use
stock withholding must be made in the ten day period beginning on the third day
following the release of the Corporation's quarterly or annual summary statement
of sales or earnings.
Page 30
23. STATEMENT TO PARTICIPANTS.
Within a reasonable time after the last day of each Plan Year, the
Committee shall furnish to each Participant a statement setting forth the
Participant's total number of Shares subject to Awards, the date such Awards
were granted, the Fair Market Value of such Awards as of the grant or issuance
date, and such other information as the Committee shall deem advisable to
furnish.
24. RIGHTS AS AN EMPLOYEE.
The Plan shall not be construed to give any individual the right to
remain in the employ of the Corporation or to affect the right of the
Corporation to terminate such individual's employment at any time, with or
without cause. The grant of an Award shall not entitle the Participant to, or
disqualify the Participant from, participation in the grant of any other Award
under the Plan or participation in any other plan maintained by the Corporation.
25. INSPECTION OF RECORDS.
Copies of the Plan, records reflecting each Participant's Awards and
any other documents and records which a Participant is entitled by law to
inspect shall be open to inspection by the Participant and his or her duly
authorized representative at the office of the Corporation at any reasonable
business hour upon reasonable advance notice from the Participant.
26. ESCROW OF STOCK CERTIFICATES.
To facilitate the consummation of the Corporation's rights and
obligations under Sections 13 and 14, the Participant and the Corporation shall
execute a Joint Escrow Instructions agreement and the Participant shall deliver
and deposit with the Escrow Agent two Assignments Separate from Certificates,
together with all certificates evidencing the Shares of Common Stock issued to
the Participant pursuant to this Plan, duly endorsed in blank. The Escrow Agent
shall hold such documents and deliver the same to the Corporation pursuant to
the Joint Escrow Instructions and in accordance with the terms of Sections 13
and/or 14, as applicable.
Page 31
27. DISCLAIMER OF TAX TREATMENT
While the Corporation has established this Plan to take advantage of
current special tax rules for the benefit of the Participants, the Corporation
does not guarantee and will not be responsible for the tax consequences of the
Awards for any Participant. Each Participant should consult with a professional
tax advisor to determine the consequences of the Plan on his or her individual
tax situation.
Page 32
INCENTIVE STOCK OPTION AGREEMENT
WITH
This Incentive Stock Option Agreement is made and entered into this
__________ day of ______________, ('Date of Grant') pursuant to the Unitech
Industries Omnibus Equity Incentive Plan ('Plan'). The Committee administering
the Plan has selected you to receive the following grant of incentive stock
options, as defined in Section 422(b) of the Internal Revenue Code of 1986, as
amended, to purchase shares of the common stock of Unitech Telecom, Inc.
('Unitech Telecom') ('Stock Options'), on the terms and conditions set forth
below:
1. Stock Options Granted:
Date of Grant ..............................__________
No. of Stock Options Granted ...............__________
Exercise Price Per Share ...................$_________
Expiration Date ............................__________
2. The Stock Options are granted pursuant to the Plan to purchase the
authorized but unissued common stock of Unitech Industries. All Stock Options
shall expire, and all rights to exercise them shall terminate, ten years from
the Date of Grant, except that the Stock Options may expire earlier as provided
in the Plan.
3. The Stock Options shall be exercisable in all respects in accordance
with the terms of the Plan which are incorporated herein by this reference. The
Optionee acknowledges having received and read a copy of the Plan. All shares of
Unitech Industries's common stock issued pursuant to the exercise of a Stock
Option shall be subject to Unitech Industries's Right of First Refusal as set
forth in the Plan.
4. The Stock Options are exercisable in accordance with the following
vesting schedule:
____________ exercisable as of __________________________.
5. The Optionee agrees to comply with all laws, rules, and regulations
applicable to the grant and exercise of the Stock Options and the sale or the
disposition of the common stock of Unitech Industries received pursuant to the
exercise of such Stock Options. This Incentive Stock Option Agreement is subject
to the restrictions of any applicable Securities Laws.
IN WITNESS WHEREOF, each of the parties hereto has executed this Stock
Option Agreement, in the case of Unitech Industries by its duly authorized
officer, as of the date and year written above.
Unitech Telecom
_________________________ By: ________________________________________
Name of Optionee Hong Lu, President
1992 Omnibus Equity Incentive Plan - Unitech Industries
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