AMENDMENT TO
TOM BROWN, INC.
AMENDED AND RESTATED
1993 STOCK OPTION PLAN
WHEREAS, TOM BROWN, INC. (the "Company") has heretofore adopted the TOM
BROWN, INC. AMENDED AND RESTATED 1993 STOCK OPTION PLAN (the "Plan") on behalf
of itself and its subsidiaries; and
WHEREAS, the Company, through the action of its Board of Directors
pursuant to Paragraph IX of the Plan, desires to amend the Plan in certain
respects;
NOW, THEREFORE, the Plan shall be amended as follows, effective as of
May 10, 2001:
1. The second sentence of Subparagraph VIII(c) of the Plan shall be
deleted and the following shall be substituted therefor:
"Notwithstanding any provision in an Option Agreement or the Plan to
the contrary, upon the occurrence of a Change in Control (as defined in
clause (i), (ii), (iii) or (iv) below) each Option then outstanding
that is held by an Optionee immediately prior to such Change in Control
shall become fully vested and exercisable in full immediately prior to
such Change in Control (or at such earlier time as may be specified by
the Committee). Moreover, effective as of a date (selected by the
Committee) within ten days after the approval by the shareholders of
the Company of a Change in Control (as defined in clause (ii), (iii) or
(iv) below), or thirty days of a Change in Control (as defined in
clause (i) below), the Committee, acting in its sole discretion without
the consent or approval of any Optionee, may effect one or more of the
following alternatives with respect to the then outstanding Options
held by Optionees which may vary among individual Optionees and which
may vary among Options held by any individual Optionee:
(1) accelerate the time at which such Options may be exercised or
adjust the time period during which such Options may be exercised so
that such Options may be exercised for a period of time on or before a
specified date (before or after such Change in Control) fixed by the
Committee, after which specified date all unexercised Options and all
rights of Optionees thereunder shall terminate,
(2) require the mandatory surrender to the Company by Optionees of
some or all of such Options (irrespective of whether such Options are
then exercisable under the provisions of the Plan) as of a date, before
or after such Change in Control, specified by the Committee, in which
event the Committee
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shall thereupon cancel such Options and pay (or cause to be paid) to
each Optionee an amount of cash per share equal to the excess of the
amount calculated in Subparagraph (d) below (the "Change in Control
Value") of the shares subject to such Option over the exercise price(s)
under such Options for such shares,
(3) make such adjustments to such Options as the Committee deems
appropriate to reflect such Change in Control (provided, however, that
the Committee may determine in its sole discretion that no adjustment
is necessary to such Options) or
(4) provide that, upon any exercise of an Option theretofore
granted, the Optionee shall be entitled to purchase under such Option,
in lieu of the number of shares of Stock as to which such Option shall
then be exercisable, the number and class of shares of stock or other
securities or property (including, without limitation, cash) to which
the Optionee would have been entitled pursuant to the terms of the
agreement effecting such Change in Control if, immediately prior to
such Change in Control the Optionee had been the holder of record of
the number of shares of Stock as to which such Option is then
exercisable.
For purposes of Subparagraphs VIII(c) and VIII(d), a "Change in
Control" shall mean:
(i) the acquisition, directly or indirectly, by any individual, entity
or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "1934 Act") (a "Person"), except for an
underwriter or group of underwriters in connection with a public offering of
common stock, of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 50% or more of either (x) the
then-outstanding shares of Stock of the Company (the "Outstanding Common Stock")
or (y) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"), in each case other than acquisitions of
beneficial ownership by (I) the Company and its subsidiaries, (II) any employee
benefit plan sponsored or maintained by the Company or any Person organized,
established or appointed pursuant to the terms of any such employee benefit plan
or (III) any acquisition by any Person pursuant to a transaction that complies
with items (x), (y) and (z) of clause (ii) below;
(ii) consummation of a merger of the Company with another entity, a
consolidation involving the Company, a share exchange involving the Company, or
the sale, lease or exchange of all or substantially all of the assets of the
Company (each a "Business Combination") unless, in any such case, immediately
following such Business Combination, (x) the Persons who were the beneficial
owners, respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50%, respectively, of the then outstanding
equity securities and 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors (or
comparable governing body), as the case may be, of the Resulting Person (as
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defined below) of such Business Combination in substantially the same
proportions as their beneficial ownership immediately prior to such Business
Combination; provided, however, that for purposes of this item (x), any shares
of equity securities or voting securities of the Resulting Person received or
otherwise owned by such beneficial owners in such Business Combination other
than as a result of such beneficial ownership of Outstanding Common Stock or
Outstanding Voting Securities immediately prior to such Business Combination
shall not be considered to be owned by such beneficial owners for the purposes
of calculating their percentage of ownership of the outstanding equity
securities and voting power of the Resulting Person, (y) no Person (excluding
any Resulting Person from such Business Combination or any employee benefit plan
sponsored or maintained by the Company or such Resulting Person or any Person
organized, established or appointed pursuant to the terms of any such employee
benefit plan) beneficially owns, directly or indirectly, 30% or more,
respectively, of the then-outstanding equity securities of the Resulting Person
or the combined voting power of the then-outstanding voting securities of the
Resulting Person unless such ownership existed immediately prior to the Business
Combination and (z) immediately following such Business Combination at least a
majority of the members of the Board of Directors (or comparable governing body)
of the Resulting Person were members of the Incumbent Board (as defined in
clause (iii) below) at the time of the execution of the initial agreement or
other action by the Board providing for such Business Combination;
(iii) as a result of or in connection with a contested election of the
Board, individuals who constituted the Board before such event (the "Incumbent
Board") (provided that any individual becoming a director subsequent to such
date whose appointment or whose nomination for election by the Company's
shareholders was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board), shall cease for any reason to constitute
at least a majority of the Board; or
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company pursuant to the corporation laws of
its jurisdiction of incorporation.
For purposes of the preceding sentence, "Resulting Person" in the
context of a Business Combination that is a merger or consolidation shall mean
the surviving Person unless the surviving Person is or shall become a subsidiary
of another Person and the holders of Outstanding Common Stock or Outstanding
Voting Securities receive securities of such other Person in such Business
Combination, in which event the Resulting Person shall be such other Person."
2. Subparagraph VIII(d) of the Plan shall be deleted and the following
shall be substituted therefor:
"(d) For the purposes of clause (2) in Subparagraph (c) above,
the "Change in Control Value" shall equal the amount determined in
clause (i), (ii) or (iii), whichever is applicable, as follows: (i) the
per share price offered to shareholders of the Company in any such
Change in Control transaction, (ii) the
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price per share offered to shareholders of the Company in any tender
offer or exchange offer whereby a Change in Control takes place, or
(iii) if such Change in Control occurs other than pursuant to a tender
or exchange offer, the fair market value per share of the shares into
which such Options being surrendered are exercisable, as determined by
the Committee as of the date determined by the Committee to be the date
of cancellation and surrender of such Options. In the event that the
consideration offered to shareholders of the Company in any transaction
described in this Subparagraph (d) or Subparagraph (c) above consists
of anything other than cash, the Committee shall determine the fair
cash equivalent of the portion of the consideration offered which is
other than cash."
3. As amended hereby, the Plan is specifically ratified and reaffirmed.
IN WITNESS WHEREOF, this Amendment to Tom Brown, Inc. Amended and
Restated 1993 Stock Option Plan has been executed to be effective as of May 10,
2001.
ATTEST: TOM BROWN, INC.
By: /s/ BRUCE R. DEBOER By: /s/ JAMES D. LIGHTNER
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Bruce R. DeBoer James D. Lightner
Secretary President and Chief Executive Officer
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1993 Stock Option Plan - Tom Brown Inc.
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