2000 Stock Option Plan – Z/I Imaging Corp.
Z/I IMAGING CORPORATION
2000 STOCK OPTION PLAN
SECTION 1. Purpose; Definitions.
The purpose of the Z/I Imaging Corporation 2000 Stock Option
Plan (the "Plan") is to enable Z/I Imaging Corporation (the
"Company") to attract, retain and reward directors and key
employees of, and consultants to, the Company and its
Subsidiaries and Affiliates and to strengthen the mutuality of
interests between such key employees, directors and consultants
by awarding such key employees and/or directors and consultants
performance-based stock incentives and/or other equity interests
or equity-based incentives in the Company. The creation of the
Plan shall not diminish or prejudice other compensation programs
approved from time to time by the Board.
For purposes of the Plan, the following terms shall be
defined as set forth below:
A. "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board as a participating
employer under the Plan, provided that the Company directly or
indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership
interests in such entity.
B. "Board" means the Board of Directors of the Company.
C. "Cause" has the meaning provided in Section 5(i) of the
Plan.
D. "Change in Control" has the meaning provided in Section 8(b)
of the Plan.
E. "Change in Control Price" has the meaning provided in
Section 8(c) of the Plan.
F. "Common Stock" means the Company's Common Stock, par value
$.01 per share.
G. "Commission" means the Securities and Exchange Commission.
H. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
I. "Committee" means the Committee referred to in Section 2 of
the Plan.
J. "Company" means Z/I Imaging Corporation, a corporation
organized under the laws of the State of Delaware or any
successor corporation.
K. "Disability" means disability as defined in Section 22(e)(3)
of the Code.
L. "Early Retirement" means retirement, for purposes of this
Plan with the express consent of the Company at or before the
time of such retirement, from active employment with the Company
and any Subsidiary or Affiliate prior to age 65, in accordance
with any applicable early retirement policy of the Company then
in effect or as may be approved by the Committee.
M. "Effective Date" has the meaning provided in Section 12 of
the Plan.
N. "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
O. "Fair Market Value" means with respect to the Common Stock,
as of any given date or dates, unless otherwise determined by the
Committee in good faith, the reported closing price of a share of
Common Stock on the NASDAQ-National Market or such other market
or exchange as is the principal trading market for the Common
Stock, or, if no such sale of a share of Common Stock is reported
on the NASDAQ-National Market or other exchange or principal
trading market on such date, the fair market value of a share of
Common Stock as determined by the Committee in good faith.
P. "Incentive Stock Option" means any Stock Option intended to
be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
Q. "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, and shall include adoptive relationships.
R. "Non-Employee Director" means a member of the Board who is a
Non-Employee Director within the meaning of Rule 16b-3(b)(3)
promulgated under the Exchange Act and an outside director within
the meaning of Treasury Regulation Sec. 162-27(e)(3) promulgated
under the Code.
S. "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.
T. "Normal Retirement" means retirement from active employment
with the Company and any Subsidiary or Affiliate on or after age
65.
U. "Other Stock-Based Award" means an award under Section 7
below that is valued in whole or in part by reference to, or is
otherwise based on, the Common Stock.
V. "Parent Company" means any company (other than the Company)
in an unbroken chain of companies ending with the Company if each
of the companies (other than the last company in the unbroken
chain) owns stock, membership interests or partnership interests
possessing 50% or more of the total combined voting power of all
classes of stock, membership interests or partnership interests
in one of the other companies in the chain.
W. "Plan" means this Z/I Imaging Corporation 2000 Stock Option
Plan, as amended from time to time.
X. "Restricted Stock" means an award of shares of Common Stock
that is subject to restrictions under Section 6 of the Plan.
Y. "Restriction Period" has the meaning provided in Section 6
of the Plan.
Z. "Retirement" means Normal or Early Retirement.
AA. "Section 162(m) Maximum" has the meaning provided in Section
3(a) hereof.
BB. "Stock Option" or "Option" means any option to purchase
shares of Common Stock (including Restricted Stock, if the
Committee so determines) granted pursuant to Section 5 below.
CC. "Subsidiary" means any company (other than the Company) in
an unbroken chain of companies beginning with the Company if each
of the companies (other than the last company in the unbroken
chain) owns stock, membership interests or partnership interests
possessing 50% or more of the total combined voting power of all
classes of stock, membership interests or partnership interests
in one of the other companies in the chain.
SECTION 2. Administration.
The Plan shall initially be administered by the Board. At
the Board's discretion, but in any event from and after the time
of the Company's initial public offering of Common Stock, the
Plan shall be administered by a Committee of not less than two
Non-Employee Directors, who shall be appointed by the Board and
who shall serve at the pleasure of the Board. The functions of
the Committee specified in the Plan may be exercised by the Board
or by an existing Committee of the Board composed exclusively of
Non-Employee Directors. From and after the time of the Company's
initial public offering of Common Stock, in the event there are
not at least two Non-Employee Directors on the Committee, the
Plan shall be administered by the Board. If at any time the Plan
is administered by the Board, all references herein to the
Committee shall refer to the Board.
The Committee shall have authority to grant, pursuant to the
terms of the Plan, to directors, officers, other key employees,
and consultants eligible under Section 4: (i) Stock Options,
(ii) Restricted Stock, and/or (iii) Other Stock-Based Awards.
In particular, the Committee, or the Board, as the case may
be, shall have the authority, consistent with the terms of the
Plan:
(a) to select the officers, key employees, directors and
consultants to the Company and its Subsidiaries and Affiliates to
whom Stock Options, Restricted Stock, and/or Other Stock-Based
Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options,
Restricted Stock, and/or Other Stock-Based Awards, or any
combination thereof, are to be granted hereunder to one or more
eligible persons;
(c) to determine the number of shares to be covered by each such
award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder (including,
but not limited to, the share price and any restriction or
limitation, or any vesting acceleration or waiver of forfeiture
restrictions regarding any Stock Option or other award and/or the
shares of Common Stock relating thereto, based in each case on
such factors as the Committee shall determine, in its sole
discretion); and to amend or waive any such terms and conditions
to the extent permitted by Section 9 hereof;
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash or Restricted Stock under
Section 5(k) or (l), as applicable, instead of Common Stock;
(f) to determine whether, to what extent, and under what
circumstances Option grants and/or other awards under the Plan
are to be made, and operate, on a tandem basis vis-a-vis other
awards under the Plan and/or cash awards made outside of the
Plan, or on an additive basis;
(g) to determine whether, to what extent, and under what
circumstances shares of Common Stock and other amounts payable
with respect to an award under this Plan shall be deferred either
automatically or at the election of the participant (including
providing for and determining the amount (if any) of any deemed
earnings on any deferred amount during any deferral period);
(h) to determine whether to require payment of tax withholding
requirements in shares of Common Stock subject to the award; and
(i) to impose any holding period required to satisfy Section 16
under the Exchange Act.
The Committee shall have the authority to adopt, alter, and
repeal such rules, guidelines, and practices governing the Plan
as it shall, from time to time, deem advisable; to interpret the
terms and provisions of the Plan and any award issued under the
Plan (and any agreements relating thereto); and to otherwise
supervise the administration of the Plan.
All decisions made by the Committee pursuant to the
provisions of the Plan (including without limitation Section 9)
shall be made in the Committee's sole discretion and shall be
final and binding on all persons, including the Company and Plan
participants.
SECTION 3. Shares of Common Stock Subject to Plan.
(a) As of the Effective Date, the aggregate number of shares of
Common Stock that may be issued under the Plan shall be 100,000
shares, less those shares authorized under Z/I Imaging
Corporation 1999 Stock Option Plan. The shares of Common Stock
issuable under the Plan may consist, in whole or in part, of
authorized and unissued shares or treasury shares. No officer of
the Company or other person whose compensation may be subject to
the limitations on deductibility under Section 162(m) of the Code
shall be eligible to receive awards pursuant to this Plan that
would cause such officer or other person to be deemed to have
received compensation in excess of the limitations imposed by
Section 162(m) of the Code (the "Section 162(m) Maximum").
(b) If any shares of Common Stock that have been optioned cease
to be subject to a Stock Option, or if any shares of Common Stock
that are subject to any Restricted Stock or Other Stock-Based
Award granted hereunder are forfeited prior to the payment of any
dividends, if applicable, with respect to such shares of Common
Stock, or any such award otherwise terminates without a payment
being made to the participant in the form of Common Stock, such
shares shall again be available for distribution in connection
with future awards under the Plan.
(c) In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, stock dividend,
stock split or other change in corporate structure affecting the
Common Stock, an appropriate substitution or adjustment shall be
made in the maximum number of shares that may be awarded under
the Plan, in the number and option price of shares subject to
outstanding Options granted under the Plan, the Section 162(m)
Maximum and in the number of shares subject to other outstanding
awards granted under the Plan as may be determined to be
appropriate by the Committee, in its sole discretion, provided
that the number of shares subject to any award shall always be a
whole number.
SECTION 4. Eligibility.
Officers, directors, other key employees of, and consultants
to, the Company and its Subsidiaries and Affiliates are eligible
to be granted awards under the Plan.
SECTION 5. Stock Options.
Stock Options may be granted alone, in addition to, or in
tandem with other awards granted under the Plan and/or cash
awards made outside of the Plan. Any Stock Option granted under
the Plan shall be in such form as the Committee may from time to
time approve.
Stock Options granted under the Plan may be of two types:
(i) Incentive Stock Options and (ii) Non-Qualified Stock Options.
Incentive Stock Options may be granted only to individuals who
are employees of the Company or any Subsidiary of the Company.
Subject to the foregoing, the Committee shall have the
authority to grant to any optionee Incentive Stock Options, Non-
Qualified Stock Options, or both types of Stock Options.
Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the
Plan, as the Committee shall deem desirable.
(a) Option Price. The option price per share of Common Stock
purchasable under a Stock Option shall be determined by the
Committee at the time of grant but shall be not less than 100%
(or, in the case of any employee who owns stock possessing more
than 10% of the total combined voting power of all classes of
stock of the Company or of any of its Subsidiaries or Parent
Companies, not less than 110%) of the Fair Market Value of the
Common Stock at grant, in the case of Incentive Stock Options,
and not less than 50% of the Fair Market Value of the Common
Stock at grant, in the case of Non-Qualified Stock Options.
(b) Option Term. The term of each Stock Option shall be fixed
by the Committee, but no Stock Option shall be exercisable more
than ten years (or, in the case of an employee who owns stock
possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries or
Parent Companies, more than five years in the case of Incentive
Stock Options) after the date the Option is granted.
(c) Exercisability. Stock Options shall be exercisable at such
time or times and subject to such terms and conditions as shall
be determined by the Committee at or after grant. The Committee
may provide that a Stock Option shall vest over a period of
future service at a rate specified at the time of grant, or that
the Stock Option is exercisable only in installments. If the
Committee provides, in its sole discretion, that any Stock Option
is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant, in
whole or in part, based on such factors as the Committee shall
determine in its sole discretion.
(d) Method of Exercise. Subject to whatever installment
exercise restrictions apply under Section 5(c), Stock Options may
be exercised in whole or in part at any time during the option
period, by giving written notice of exercise to the Company
specifying the number of shares to be purchased. Such notice
shall be accompanied by payment in full of the purchase price,
either by check, note, or such other instrument as the Committee
may accept. As determined by the Committee, in its sole
discretion, at or (except in the case of an Incentive Stock
Option) after grant, payment in full or in part may also be made
in the form of shares of Common Stock already owned by the
optionee and held by the optionee for at least six months (in
each case valued at the Fair Market Value of the Common Stock on
the date the Option is exercised). If payment of the option
exercise price of a Non-Qualified Stock Option is made in whole
or in part in the form of Restricted Stock, such Restricted Stock
shall remain restricted in accordance with the original terms of
the Restricted Stock award in question, and all shares of Common
Stock received upon the exercise of the Option shall be subject
to the same forfeiture restrictions, unless otherwise determined
by the Committee, in its sole discretion, at or after grant. No
shares of Common Stock shall be issued until full payment
therefor has been made. An optionee shall generally have the
rights to dividends or other rights of a stockholder with respect
to shares subject to the Option when the optionee has given
written notice of exercise, has paid in full for such shares and
satisfied any other conditions imposed by the Committee pursuant
to the terms of the Plan.
(e) Transferability of Options. Except as provided by the
Committee, no Non-Qualified Stock Option shall be transferable by
the optionee other than (i) transfers by the Optionee to a member
of his or her Immediate Family or a trust for the benefit of the
optionee or a member of his or her Immediate Family, or (ii)
transfers by will or by the laws of descent and distribution. No
Incentive Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution
and all Incentive Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee.
(f) Termination by Death. Subject to Section 5(j), if an
optionee's employment by the Company and any Subsidiary or
(except in the case of an Incentive Stock Option) Affiliate
terminates by reason of death, any Stock Option held by such
optionee may thereafter be exercised, to the extent such option
was exercisable at the time of death or (except in the case of an
Incentive Stock Option) on such accelerated basis as the
Committee may determine at or after grant (or except in the case
of an Incentive Stock Option, as may be determined in accordance
with procedures established by the Committee) by the legal
representative of the estate or by the legatee of the optionee
under the will of the optionee, for a period of one year (or such
other period as the Committee may specify at or after grant) from
the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter.
(g) Termination by Reason of Disability. Subject to
Section 5(j), if an optionee's employment by the Company and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Disability, any Stock Option
held by such optionee may thereafter be exercised by the
optionee, to the extent it was exercisable at the time of
termination or (except in the case of an Incentive Stock Option)
on such accelerated basis as the Committee may determine at or
after grant (or, except in the case of an Incentive Stock Option,
as may be determined in accordance with procedures established by
the Committee), for a period of (i) one year (or such other
period as the Committee may specify at or after grant) from the
date of such termination of employment or until the expiration of
the stated term of such Stock Option, whichever period is the
shorter, in the case of a Non-Qualified Stock Option and (ii) one
year from the date of termination of employment or until the
expiration of the stated term of such Stock Option, whichever
period is shorter, in the case of an Incentive Stock Option;
provided however, that, if the optionee dies within the period
specified in (i) above (or other such period as the committee
shall specify at or after grant), any unexercised Non-Qualified
Stock Option held by such optionee shall thereafter be
exercisable to the extent to which it was exercisable at the time
of death for a period of twelve months from the date of such
death or until the expiration of the stated term of such Stock
Option, whichever period is shorter. In the event of termination
of employment by reason of Disability, if an Incentive Stock
Option is exercised after the expiration of the exercise period
applicable to Incentive Stock Options, but before the expiration
of any period that would apply if such Stock Option were a Non-
Qualified Stock Option, such Stock Option will thereafter be
treated as a Non-Qualified Stock Option.
(h) Termination by Reason of Retirement. Subject to
Section 5(j), if an optionee's employment by the Company and any
Subsidiary or (except in the case of an Incentive Stock Option)
Affiliate terminates by reason of Normal or Early Retirement, any
Stock Option held by such optionee may thereafter be exercised by
the optionee, to the extent it was exercisable at the time of
such Retirement or (except in the case of an Incentive Stock
Option) on such accelerated basis as the Committee may determine
at or after grant (or, except in the case of an Incentive Stock
Option, as may be determined in accordance with procedures
established by the Committee), for a period of (i) three months
(or such other period as the Committee may specify at or after
grant) from the date of such termination of employment or the
expiration of the stated term of such Stock Option, whichever
period is the shorter, in the case of a Non-Qualified Stock
Option and (ii) three months from the date of such termination of
employment or the expiration of the stated term of such Stock
Option, whichever period is the shorter, in the event of an
Incentive Stock Option; provided however, that, if the optionee
dies within the period specified in (i) above (or other such
period as the Committee shall specify at or after grant), any
unexercised Non-Qualified Stock Option held by such optionee
shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months
from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is shorter. In the
event of termination of employment by reason of Retirement, if an
Incentive Stock Option is exercised after the expiration of the
exercise period applicable to Incentive Stock Options, but before
the expiration of the period that would apply if such Stock
Option were a Non-Qualified Stock Option, the option will
thereafter be treated as a Non-Qualified Stock Option.
(i) Other Termination. Subject to Section 5(j), unless
otherwise determined by the Committee (or pursuant to procedures
established by the Committee) at or (except in the case of an
Incentive Stock Option) after grant, (a) if an optionee's
employment by the Company and any Subsidiary or (except in the
case of an Incentive Stock Option) Affiliate is involuntarily
terminated for any reason other than death, Disability or Normal
or Early Retirement, or (b) if an optionee voluntarily terminates
employment (except for Disability, Normal or Early Retirement)
with the Company and any Subsidiary or (except in the case of an
Incentive Stock Option) Affiliate, the Stock Option shall
thereupon terminate, except that such Stock Option may be
exercised, to the extent otherwise then exercisable, for the
lesser of three months or the balance of such Stock Option's
term, but with respect to an involuntary termination, only if the
involuntary termination is without Cause. For purposes of this
Plan, "Cause" means (i) a participant's conviction of a felony or
of a misdemeanor involving the money or property of the Company
or any Subsidiary or Affiliate; (ii) a participant's failure
without proper cause to substantially perform the duties and
responsibilities of his or her position or to comply in all
material respects with the policies or directives of the Company
(as determined by the Board of Directors); (iii) a participant's
willful engagement in misconduct that materially damages or
injures the reputation of the Company or any Subsidiary or
Affiliate; or (iv) gross negligence in the performance of a
participant's duties and responsibilities.
(j) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term of this Plan relating to
Incentive Stock Options shall be interpreted, amended, or
altered, nor shall any discretion or authority granted under the
Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the
optionee(s) affected, to disqualify any Incentive Stock Option
under such Section 422. No Incentive Stock Option shall be
granted to any participant under the Plan if such grant would
cause the aggregate Fair Market Value (as of the date the
Incentive Stock Option is granted) of the Common Stock with
respect to which all Incentive Stock Options are exercisable for
the first time by such participant during any calendar year
(under all such plans of the Company and any Subsidiary) to
exceed $100,000. To the extent permitted under Section 422 of
the Code or the applicable regulations thereunder or any
applicable Internal Revenue Service pronouncement:
(i) if (x) a participant's employment is terminated by reason of
death, Disability, or Retirement and (y) the portion of any
Incentive Stock Option that is otherwise exercisable during the
post-termination period specified under Section 5(f), (g) or (h),
applied without regard to the $100,000 limitation contained in
Section 422(d) of the Code, is greater than the portion of such
Option that is immediately exercisable as an "Incentive Stock
Option" during such post-termination period under Section 422,
such excess shall be treated as a Non-Qualified Stock Option; and
(ii) if the exercise of an Incentive Stock Option is accelerated
by reason of a Change in Control, any portion of such Option that
is not exercisable as an Incentive Stock Option by reason of the
$100,000 limitation contained in Section 422(d) of the Code shall
be treated as a Non-Qualified Stock Option.
(k) Buyout Provisions. The Committee may at any time offer to
buy out for a payment in cash, Common Stock, or Restricted Stock
an Option previously granted, based on such terms and conditions
as the Committee shall establish and communicate to the optionee
at the time that such offer is made.
(l) Settlement Provisions. If the option agreement so provides
at grant or (except in the case of an Incentive Stock Option) is
amended after grant and prior to exercise to so provide (with the
optionee's consent), the Committee may require that all or part
of the shares to be issued with respect to the spread value of an
exercised Option take the form of Restricted Stock, which shall
be valued on the date of exercise on the basis of the Fair Market
Value (as determined by the Committee) of such Restricted Stock
determined without regards to the forfeiture restrictions
involved.
(m) Termination of Consultant. The Committee shall have
discretion in determining when a termination under Sections 5(f),
(g), (h) or (i) above shall occur with respect to a consultant's
relationship with the Company.
SECTION 6. Restricted Stock.
(a) Administration. Shares of Restricted Stock may be issued
either alone, in addition to, or in tandem with other awards
granted under the Plan and/or cash awards made outside the Plan.
The Committee shall determine the eligible persons to whom, and
the time or times at which, grants of Restricted Stock will be
made, the number of shares of Restricted Stock to be awarded to
any person, the price (if any) to be paid by the recipient of
Restricted Stock (subject to Section 6(b)), the time or times
within which such awards may be subject to forfeiture, and the
other terms, restrictions and conditions of the awards in
addition to those set forth in Section 6(c). The Committee may
condition the grant of Restricted Stock upon the attainment of
specified performance goals or such other factors as the
Committee may determine, in its sole discretion. The provisions
of Restricted Stock awards need not be the same with respect to
each recipient.
(b) Awards and Certificates. The prospective recipient of a
Restricted Stock award shall not have any rights with respect to
such award, unless and until such recipient has executed an
agreement evidencing the award and has delivered a fully executed
copy thereof to the Company, and has otherwise complied with the
applicable terms and conditions of such award.
(i) The purchase price for shares of Restricted Stock shall be
established by the Committee and may be zero.
(ii) Awards of Restricted Stock must be accepted within a period
of 60 days (or such shorter period as the Committee may specify
at grant) after the award date, by executing a Restricted Stock
Award Agreement and paying whatever price (if any) is required by
the Committee.
(iii) Each participant receiving a Restricted Stock award
shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the
name of such participant, and shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable
to such award.
(iv) The Committee may require that the stock certificates
evidencing such shares be held in custody by the Company until
the restrictions thereon shall have lapsed, and that, as a
condition of any Restricted Stock award, the participant shall
have delivered a stock power, endorsed in blank, relating to the
shares of Common Stock covered by such award.
(c) Restrictions and Conditions. The shares of Restricted Stock
awarded pursuant to this Section 6 shall be subject to the
following restrictions and conditions:
(i) In accordance with the provisions of this Plan and the award
agreement, during a period set by the Committee commencing with
the date of such award (the "Restriction Period"), the
participant shall not be permitted to sell, transfer, pledge,
assign, or otherwise encumber shares of Restricted Stock awarded
under the Plan. Within these limits, the Committee, in its sole
discretion, may provide for the lapse of such restrictions in
installments and may accelerate or waive such restrictions, in
whole or in part, based on service, performance, or such other
factors or criteria as the Committee may determine in its sole
discretion.
(ii) Except as provided in this paragraph (ii) and
Section 6(c)(i), the participant shall have, with respect to the
shares of Restricted Stock, all of the rights of a stockholder of
the Company, including the right to vote the shares, and the
right to receive any cash dividends. The Committee, in its sole
discretion, as determined at the time of award, may permit or
require the payment of cash dividends to be deferred and, if the
Committee so determines, reinvested, subject to Section 11(e), in
additional Restricted Stock to the extent shares are available
under Section 3, or otherwise reinvested. Pursuant to Section 3
above, stock dividends issued with respect to Restricted Stock
shall be treated as additional shares of Restricted Stock that
are subject to the same restrictions and other terms and
conditions that apply to the shares with respect to which such
dividends are issued. If the Committee so determines, the award
agreement may also impose restrictions on the right to vote and
the right to receive dividends.
(iii) Subject to the applicable provisions of the award
agreement and this Section 6, upon termination of a participant's
employment with the Company and any Subsidiary or Affiliate for
any reason during the Restriction Period, all shares still
subject to restriction will vest, or be forfeited, in accordance
with the terms and conditions established by the Committee at or
after grant.
(iv) If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction
Period, certificates for an appropriate number of unrestricted
shares shall be delivered to the participant promptly.
(d) Minimum Value Provisions. In order to better ensure that
award payments actually reflect the performance of the Company
and service of the participant, the Committee may provide, in its
sole discretion, for a tandem performance-based or other award
designed to guarantee a minimum value, payable in cash or Common
Stock to the recipient of a restricted stock award, subject to
such performance, future service, deferral, and other terms and
conditions as may be specified by the Committee.
SECTION 7. Other Stock-Based Awards.
(a) Administration. Other Stock-Based Awards, including,
without limitation, performance shares, convertible preferred
stock, convertible debentures, exchangeable securities and Common
Stock awards or options valued by reference to earnings per share
or Subsidiary performance, may be granted either alone, in
addition to, or in tandem with Stock Options, or Restricted Stock
granted under the Plan and cash awards made outside of the Plan;
provided that no such Other Stock-Based Awards may be granted in
tandem with Incentive Stock Options if that would cause such
Stock Options not to qualify as Incentive Stock Options pursuant
to Section 422 of the Code. Subject to the provisions of the
Plan, the Committee shall have authority to determine the persons
to whom and the time or times at which such awards shall be made,
the number of shares of Common Stock to be awarded pursuant to
such awards, and all other conditions of the awards. The
Committee may also provide for the grant of Common Stock upon the
completion of a specified performance period. The provisions of
Other Stock-Based Awards need not be the same with respect to
each recipient.
(b) Terms and Conditions. Other Stock-Based Awards made
pursuant to this Section 7 shall be subject to the following
terms and conditions:
(i) Shares subject to awards under this Section 7 and the award
agreement referred to in Section 7(b)(v) below, 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.
(ii) Subject to the provisions of this Plan and the award
agreement and unless otherwise determined by the Committee at
grant, the recipient of an award under this Section 7 shall be
entitled to receive, currently or on a deferred basis, interest
or dividends or interest or dividend equivalents with respect to
the number of shares covered by the award, as determined at the
time of the award by the Committee, in its sole discretion, and
the Committee may provide that such amounts (if any) shall be
deemed to have been reinvested in additional shares of Common
Stock or otherwise reinvested.
(iii) Any award under Section 7 and any shares of Common
Stock covered by any such award shall vest or be forfeited to the
extent so provided in the award agreement, as determined by the
Committee in its sole discretion.
(iv) In the event of the participant's Retirement, Disability, or
death, or in cases of special circumstances, the Committee may,
in its sole discretion, waive in whole or in part any or all of
the remaining limitations imposed hereunder (if any) with respect
to any or all of an award under this Section 7.
(v) Each award under this Section 7 shall be confirmed by, and
subject to the terms of, an agreement or other instrument by the
Company and the participant.
(vi) Common Stock (including securities convertible into Common
Stock) issued on a bonus basis under this Section 7 may be issued
for no cash consideration. Common Stock (including securities
convertible into Common Stock) purchased pursuant to a purchase
right awarded under this Section 7 shall be priced at least 50%
of the Fair Market Value of the Common Stock on the date of
grant.
SECTION 8. Change in Control Provisions.
(a) Impact of Event. In the event of a "Change in Control" as
defined in Section 8(b):
(i) Subject to the limitations set forth below in this Section
8(a), the following acceleration provisions shall apply:
a) Any Stock Option awarded under the Plan not previously
exercisable and vested shall become fully exercisable and vested.
b) The restrictions applicable to any Restricted Stock and
Other Stock-Based Awards, in each case to the extent not already
vested under the Plan, shall lapse and such shares and awards
shall be deemed fully vested.
(ii) Subject to the limitations set forth below in this Section
8(a), the value of all outstanding Stock Options, Restricted
Stock and Other Stock-Based Awards, in each case to the extent
vested, shall, unless otherwise determined by the Board or by the
Committee in its sole discretion prior to any Change in Control,
be cashed out on the basis of the "Change in Control Price" as
defined in Section 8(d) as of the date such Change in Control is
determined to have occurred or such other date as the Board or
Committee may determine prior to the Change in Control; provided,
however, that this section (a)(ii) shall have no effect if its
effect would preclude the pooling method of accounting for the
specific transaction that resulted in a Change in Control (if the
pooling method of accounting is proposed for such transaction).
For options with an exercise price greater than the Change in
Control Price, no cash payment shall be made, and such options
shall be terminated.
(iii) The Board or the Committee may impose additional
conditions on the acceleration or valuation of any award in the
award agreement.
(b) Definition of Change in Control. For purposes of Section
8(a), a "Change in Control" means the happening of any of the
following:
(i) any person or entity, including a "group" as defined in
Section 13(d)(3) of the Exchange Act, other than the Company, a
wholly-owned subsidiary thereof, any employee benefit plan of the
Company, any of its Subsidiaries, or Intergraph Corporation or
Carl Zeiss B.V., or any affiliate thereof, becomes the beneficial
owner of the Company's securities having 50% or more of the
combined voting power of the then outstanding securities of the
Company that may be cast for the election of directors of the
Company (other than as a result of an issuance of securities
initiated by the Company in the ordinary course of business); or
(ii) as the result of, or in connection with, any cash tender or
exchange offer, merger or other business combination, sales of
assets or contested election, or any combination of the foregoing
transactions, less than a majority of the combined voting power
of the then outstanding securities of the Company or any
successor Company or entity entitled to vote generally in the
election of the directors of the Company or such other company or
entity after such transaction are held in the aggregate by the
holders of the Company's securities entitled to vote generally in
the election of directors of the Company immediately prior to
such transaction; or
(iii) during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Board
cease for any reason to constitute at least a majority thereof,
unless (A) the election, or the nomination for election by the
Company's stockholders, of each director of the Company first
elected during such period was approved by a vote of at least two-
thirds of the directors of the Company then still in office who
were directors of the Company at the beginning of any such period
or (B) each director of the Company first elected during such
period was elected pursuant to a stockholders agreement to which
the Company is a party.
(c) Change in Control Price. For purposes of this Section 8,
"Change in Control Price" means the highest price per share paid
in any transaction reported on the NASDAQ National Market or such
other exchange or market as is the principal trading market for
the Common Stock, or paid or offered in any bona fide transaction
related to a Change in Control of the Company at any time during
the 60 day period immediately preceding the occurrence of the
Change in Control, in each case as determined by the Committee
except that, in the case of Incentive Stock Options, such price
shall be based only on transactions reported for the date on
which a cash out occurs under Section 8(a)(ii).
SECTION 9. Amendments and Termination.
The Board may at any time amend, alter or discontinue the
Plan; provided, however, that, without the approval of the
Company's stockholders, no amendment or alteration may be made
which would (a) except as a result of the provisions of Section
3(c) of the Plan, increase the maximum number of shares that may
be issued under the Plan or increase the Section 162(m) Maximum
or (b) change the provisions governing Incentive Stock Options
except as required or permitted under the provisions governing
incentive stock options under the Code. No amendment,
alteration, or discontinuation shall be made which would impair
the rights of an optionee or participant under a Stock Option,
Restricted Stock or Other Stock-Based Award theretofore granted,
without the participant's consent.
The Committee may amend the terms of any Stock Option or
other award theretofore granted, prospectively or retroactively,
but, subject to Section 3 above, no such amendment shall impair
the rights of any holder without the holder's consent. The
Committee may also substitute new Stock Options for previously
granted Stock Options (on a one for one or other basis),
including previously granted Stock Options having higher option
exercise prices. Solely for purposes of computing the Section
162(m) Maximum, if any Stock Options or other awards previously
granted to a participant are canceled and new Stock Options or
other awards having a lower exercise price or other more
favorable terms for the participant are substituted in their
place, both the initial Stock Options or other awards and the
replacement Stock Options or other awards will be deemed to be
outstanding (although the canceled Stock Options or other awards
will not be exercisable or deemed outstanding for any other
purposes).
SECTION 10. Unfunded Status of Plan.
The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any
payments not yet made to a participant or optionee by the
Company, nothing contained herein shall give any such participant
or optionee any rights that are greater than those of a general
creditor of the Company. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to
meet the obligations created under the Plan to deliver Common
Stock or payments in lieu of or with respect to awards hereunder;
provided, however, that, unless the Committee otherwise
determines with the consent of the affected participant, the
existence of such trusts or other arrangements is consistent with
the "unfunded" status of the Plan.
SECTION 11. General Provisions.
(a) The Committee may require each person purchasing shares
pursuant to a Stock Option or other award under the Plan to
represent to and agree with the Company in writing that the
optionee or participant is acquiring the shares without a view to
distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to
reflect any restrictions on transfer. All certificates for
shares of Common Stock or other securities delivered under the
Plan 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 Commission, any stock
exchange upon which the Common Stock is 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.
(b) Nothing contained in this 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.
(c) The adoption of the Plan shall not confer upon any employee
of the Company or any Subsidiary or Affiliate any right to
continued employment with the Company or a Subsidiary or
Affiliate, as the case may be, nor shall it interfere in any way
with the right of the Company or a Subsidiary or Affiliate to
terminate the employment of any of its employees at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal
income tax purposes with respect to any award under the Plan, the
participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be
withheld with respect to such amount. The Committee may require
withholding obligations to be settled with Common Stock,
including Common Stock that is part of the award that gives rise
to the withholding requirement. The obligations of the Company
under the Plan shall be conditional on such payment or
arrangements and the Company and its Subsidiaries or Affiliates
shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to the
participant.
(e) The actual or deemed reinvestment of dividends or dividend
equivalents in additional Restricted Stock (or other types of
Plan awards) at the time of any dividend payment shall only be
permissible if sufficient shares of Common Stock are available
under Section 3 for such reinvestment (taking into account then
outstanding Stock Options and other Plan awards).
(f) The Plan and all awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of
the State of Delaware.
(g) The members of the Committee and the Board shall not be
liable to any employee or other person with respect to any
determination made hereunder in a manner that is not inconsistent
with their legal obligations as members of the Board. In
addition to such other rights of indemnification as they may have
as directors or as members of the Committee, the members of the
Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys' fees actually and
necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of
any action taken or failure to act under or in connection with
the Plan or any option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding, except in relation to matters as
to which it shall be adjudged in such action, suit or proceeding
that such Committee member is liable for negligence or misconduct
in the performance of his duties; provided that within 60 days
after institution of any such action, suit or proceeding, the
Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend the same.
(h) In addition to any other restrictions on transfer that may
be applicable under the terms of this Plan or the applicable
award agreement, no Stock Option, Restricted Stock award, or
Other Stock-Based Award or other right issued under this Plan is
transferable by the participant without the prior written consent
of the Committee, other than (i) transfers by an optionee to a
member of his or her Immediate Family or a trust for the benefit
of the optionee or a member of his or her Immediate Family or
(ii) transfers by will or by the laws of descent and
distribution. The designation of a beneficiary will not
constitute a transfer.
(i) The Committee may, at or after grant, condition the receipt
of any payment in respect of any award or the transfer of any
shares subject to an award on the satisfaction of a six-month
holding period, if such holding period is required for compliance
with Section 16 under the Exchange Act.
SECTION 12. Effective Date of Plan.
The Plan shall be effective as of July 19, 2000, provided
that it must be approved by a majority of the votes cast by the
holders of the Company's Common Stock.
SECTION 13. Term of Plan.
No Stock Option, Restricted Stock award or Other Stock-Based
Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the Effective Date of the Plan, but awards granted
prior to such tenth anniversary may be extended beyond that date.
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