Initial Public Offering (IPO): Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) 110 661K
5: EX-7 Exhibit 10.7 14 50K
2: EX-10.1 Material Contract 10 47K
7: EX-10.11 Material Contract 29 121K
8: EX-10.15 Material Contract 17 93K
9: EX-10.16 Material Contract 42 167K
3: EX-10.2 Material Contract 14 51K
4: EX-10.5 Material Contract 44 186K
6: EX-10.8 Material Contract 7 29K
10: EX-23.1 Consent of Experts or Counsel 1 6K
11: EX-23.2 Consent of Experts or Counsel 1 7K
12: EX-27 Financial Data Schedule (Pre-XBRL) 2 10K
EX-7 — Exhibit 10.7
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TELETECH HOLDINGS, INC.
STOCK PLAN
AS AMENDED AND RESTATED
1. PREAMBLE.
TeleTech Holdings, Inc., a Delaware corporation (the "Company"), hereby
establishes the TeleTech Holdings, Inc. Stock Plan (the "Plan") as a means
whereby the Company may, through awards of (i) incentive stock options within
the meaning of section 422 of the Code (as herein defined), (ii) stock
appreciation rights, (iii) non-qualified stock options, (iv) restricted stock,
and (v) phantom stock:
(a) provide key employees who have substantial responsibilities for
the direction and management of the Company and its subsidiaries with
additional incentive to promote the success of the Company's and its
subsidiaries' businesses;
(b) enable such employees to acquire proprietary interests in the
Company;
(c) encourage such employees to remain in the employ of the Company
and its subsidiaries;
(d) provide Directors of the Company (who are not otherwise employees
of the Company) with an additional incentive to promote the success of the
Company's business; and
(e) provide consultants and other independent contractors who provide
services to the Company, with an additional incentive to promote the
success of the Company's business.
The provisions of this Plan do not apply to or affect any option, stock
appreciation right, or stock heretofore or hereafter granted under any other
stock plan of the Company or any subsidiary, and all such options, stock
appreciation right or stock continue to be governed by and subject to the
applicable provisions of the plan or agreement under which they were granted.
2. DEFINITIONS.
2.01 "BOARD" or "BOARD OF DIRECTORS" means the board of directors of
the Company.
2.02 "CAUSE" means, as determined in the sole discretion of the Board,
a Participant's (a) commission of a felony; (b) dishonesty or misrepresentation
involving the Company or any Subsidiary; (c) serious misconduct in the
performance or non-performance of Participant's responsibilities as an employee,
Officer, Director, consultant or independent contractor; (d) violation of a
material condition of employment; (e) unauthorized use of trade secrets or
confidential information; or (f) aiding a competitor of the Company or any
Subsidiary.
2.03 "CODE" means the Internal Revenue Code of 1986, as it exists now
and as it may be amended from time to time.
2.04 "COMMITTEE" means the committee comprised of two or more outside
Directors appointed by the Board to administer the Plan. Each member of the
Committee shall (a) be a member of the Board of Directors who has not at any
time within one year prior thereto, or at any time during such member's term of
service on the Committee, received any stock options, SARs or allocations of any
equity securities under the Plan or any other plan maintained by the Company or
any of its affiliates, except as permitted pursuant to the provisions of Rule
16b-3(c)(2)(i) of the Exchange Act or any successor rule thereof; and (b) be an
outside Director as determined under Proposed Regulation 26 CFR Section 1.162-
27(e)(3) or any final or successor regulation thereto. Once appointed, the
Committee shall continue to serve until otherwise directed by the Board of
Directors.
2.05 "COMMON STOCK" means the common stock of the Company, .01 par
value.
2.06 "COMPANY" means TeleTech Holdings, Inc., a Delaware corporation,
and any successor thereto.
2.07 "DIRECTOR" means a member of the Board.
2.08 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as it
exists now or from time to time may hereafter be amended.
2.09 "FAIR MARKET VALUE" means for the relevant day:
(a) If shares of Common Stock are listed or admitted to unlisted
trading privileges on any national or regional securities exchange,
the last reported sale price, regular way, on the composite tape of
that exchange on the day Fair Market Value is to be determined;
(b) If the Common Stock is not listed or admitted to unlisted trading
privileges as provided in paragraph (a), and if sales prices for
shares of Common Stock are reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. National Market
System ("NASDAQ System"), then the last sale price for Common Stock
reported as of the close of business on the day Fair Market Value is
to be determined, or if no such sale takes place on that day, the
average of the high bid and low asked prices so reported; if Common
Stock is not traded on that day, the next preceding day on which such
stock was traded; or
(c) If trading of the Common Stock is not reported by the NASDAQ
System or on a stock exchange, Fair Market Value will be determined by
the Committee in its discretion based upon the best available data.
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2.10 "ISO" means incentive stock options within the meaning of Section
422 of the Code.
2.11 "NAKED SAR" means a SAR issued not in connection with an ISO or
NSO.
2.12 "NSO" means non-qualified stock options, which are not intended
to qualify under Section 422 of the Code.
2.13 "OPTION" means the right of a Participant, whether granted as an
ISO or an NSO, to purchase a specified number of shares of Common Stock, subject
to the terms and conditions of the Plan.
2.14 "OPTION DATE" means the date upon which an Option, SAR,
Restricted Stock or Phantom Stock is awarded to a Participant under the Plan.
2.15 "OPTION PRICE" means the price per share at which an Option may
be exercised.
2.16 "PARTICIPANT" means an individual to whom an Option, SAR, Phantom
Stock or Restricted Stock has been granted under the Plan.
2.17 "PHANTOM STOCK" means a hypothetical share of Common Stock issued
as phantom stock under the Plan.
2.18 "PLAN" means the TeleTech Holdings, Inc. Stock Plan, as set forth
herein and as from time to time amended.
2.19 "RESTRICTED STOCK" means Common Stock awarded to a Participant
pursuant to this Plan and subject to the restrictions contained in Section 9.
2.20 "SAR" means a stock appreciation right. A SAR may be a Naked SAR
or a Tandem SAR.
2.21 "SECURITIES ACT" means the Securities Act of 1933, as it exists
now or from time to time may hereinafter be amended.
2.22 "SUBSIDIARY" means any corporation or other entity of which the
majority voting power or equity interest is owned directly or indirectly by the
Company.
2.23 "TANDEM SAR" means a SAR associated with and issued in
connection with an ISO or NSO.
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2.24 RULES OF CONSTRUCTION.
(a) GOVERNING LAW. The construction and operation of this Plan are
governed by the laws of the State of Delaware.
(b) UNDEFINED TERMS. Unless the context requires another meaning,
any term not specifically defined in this Plan has the meaning given to it
by the Code.
(c) HEADINGS. All headings in this Plan are for reference only and
are not to be utilized in construing the Plan.
(d) GENDER. Unless clearly appropriate, all nouns of whatever gender
refer indifferently to persons of any gender.
(e) SINGULAR AND PLURAL. Unless clearly inappropriate, singular
terms refer also to the plural and VICE VERSA.
(f) SEVERABILITY. If any provision of this Plan is determined to be
illegal or invalid for any reason, the remaining provisions shall continue
in full force and effect and shall be construed and enforced as if the
illegal or invalid provision did not exist, unless the continuance of the
Plan in such circumstances is not consistent with its purposes.
(g) TERMINATION OF EMPLOYMENT. For all purposes of this Plan, an
employee will have terminated employment with the Company when the
employee's employment relationship with the Company and all of its
subsidiaries is terminated. Additionally, with respect to consultants and
independent contractors, for all purposes of the Plan such consultant's or
independent contractor's "employment with the Company" shall be considered
terminated upon the termination of any consulting or independent contractor
agreement, or when the consultant or independent contractor no longer
performs any services for the Company.
3. STOCK SUBJECT TO THE PLAN.
Except as otherwise provided in Section 13, the aggregate number of shares
of Common Stock that may be issued under Options or as Restricted Stock under
this Plan may not exceed 1,400,000 shares of Common Stock. Reserved shares may
be either authorized but unissued shares or treasury shares, in the Board's
discretion. If any awards hereunder shall terminate or expire, as to any number
of shares, new ISOs, NSOs, and Restricted Stock may thereafter be awarded with
respect to such shares. Except as otherwise provided in Section 13, the
aggregate number of shares of Common Stock that may be issued under Options, as
Restricted Stock, or upon which SARs or Phantom Stock may be awarded to any one
individual Participant may not exceed 175,000 shares.
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4. ADMINISTRATION.
The Plan shall be administered by the Committee. In addition to any other
powers set forth in this Plan, the Committee has the exclusive authority:
(a) to construe and interpret the Plan, and to remedy any ambiguities
or inconsistencies therein;
(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;
(c) subject to the express provisions of the Plan, to determine the
individuals who will receive awards of Options, Restricted Stock, Phantom
Stock and/or SARs, the times when they will receive them, the number of
shares to be subject to each award and the Option Price, payment terms,
payment method, and expiration date applicable to each award;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter relating to
the Plan or to any awards of ISOs, NSOs, Restricted Stock, Phantom Stock
and/or SARs;
(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the awards of
ISOs, NSOs, Restricted Stock, Phantom Stock and/or SARs granted thereunder
as it may deem necessary or advisable;
(f) to determine the form in which payment of a SAR or a Phantom
Stock award granted hereunder will be made (i.e., cash, Common Stock or a
combination thereof) or to approve a participant's election to receive cash
in whole or in part in settlement of the SAR or Phantom Stock award;
(g) to determine the form in which tax withholding under Section 16
of this Plan will be made; and
(h) to amend the Plan or any Option, Restricted Stock, Phantom Stock
or SAR granted or awarded hereunder as may be necessary in order for any
business combination involving the Company to qualify for pooling-of-
interest treatment under APB No. 16.
5. ELIGIBLE EMPLOYEES.
Subject to the provisions of the Plan, the Committee shall determine from
time to time those consultants, independent contractors, key employees, Officers
or Directors of the Company or a Subsidiary who shall be designated as
Participants and the number, if any, of Options,
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SARs, Restricted Stock, and Phantom Stock, or any combination thereof, to be
awarded to each such Participant; provided, however, that no ISOs or Tandem SARs
granted with respect to ISOs, shall be awarded under the Plan after the
expiration of the period of ten years from the date this Plan is adopted by the
Board. In addition, no ISOs may be awarded to a Participant who is not an
employee of the Company or a Subsidiary.
6. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS.
The Committee may in its discretion, grant ISOs to any Participant under
the Plan; provided , however, that no ISOs may be granted to a Director or other
Participant who is not an employee of the Company or a Subsidiary. Each ISO
shall be evidenced by an agreement between the Company and the Participant.
Each ISO agreement, in such form as is approved by the Committee, shall be
subject to the following express terms and conditions and to such other terms
and conditions, not inconsistent with the Plan, as the Committee may deem
appropriate;
(a) OPTION PERIOD. Each ISO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions
of Section 12;
(ii) 10 years (or five years as specified in Section 6(e))
from the Option Date;
(iii) three months after the Participant's termination of
employment for any reason other than death; or
(iv) six months after the Participant's death.
(b) OPTION PRICE. Subject to the provisions of Section 6(e), the
Option Price per share shall be determined by the Committee at the time any
ISO is granted, and shall not be less than the Fair Market Value of the
Common Stock subject to the ISO on the Option Date.
(c) OTHER OPTION PROVISIONS. The form of ISO authorized by the Plan
may contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be
inconsistent with any requirements imposed on qualified stock options under
Section 422 of the Code.
(d) LIMITATIONS ON AWARDS. The aggregate Fair Market Value,
determined as of the Option Date, of Common Stock with respect to which
ISOs are exercisable by a Participant for the first time during any
calendar year under all ISO plans of the Company and any Subsidiary shall
not exceed $100,000.
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(e) AWARDS TO CERTAIN STOCKHOLDERS. Notwithstanding Sections 6(a)
and 6(b) hereof, if an ISO is granted to a Participant who owns stock
representing more than 10% of the voting power of all classes of stock of
the Company or a Subsidiary (as determined under the Code), the exercise
period specified in the ISO agreement for which the ISO thereunder is
granted shall not exceed five years from the Option Date, and the Option
Price shall be at least 110% of the Fair Market Value (as of the Option
Date) of the Common Stock subject to the ISO.
7. TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION.
The Committee may, in its discretion, grant NSOs to any Participant under
the Plan. Each NSO shall be evidenced by an agreement between the Company and
the Participant. Each NSO agreement, in such form as is approved by the
Committee, shall be subject to the following express terms and conditions and to
such other terms and conditions, not inconsistent with the Plan as the Committee
may deem appropriate:
(a) OPTION PERIOD. Each NSO will expire as of the earliest of:
(i) the date on which it is forfeited under the provisions
of Section 12;
(ii) the date three months after the Participant's
termination of employment for any reason other than
death; or
(iii) the date six months after the Participant's death.
(b) OPTION PRICE. At the time when the NSO is granted, the Committee
will fix the Option Price. The Option Price may be greater than, less than,
or equal to Fair Market Value on the Option Date, as determined in the sole
discretion of the Committee.
(c) OTHER OPTION PROVISIONS. The form of NSO authorized by the Plan
may contain such other provisions as the Committee may from time to time
determine.
8. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS.
The Committee may, in its discretion, grant a SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may be a Naked SAR or a Tandem SAR. Each SAR awarded to
Participants under the Plan shall be subject to the following express terms and
conditions and to such other terms and conditions, not inconsistent with the
Plan, as the Committee shall deem appropriate:
(a) TANDEM SARS. Tandem SARs shall terminate on the same date as the
related ISO or NSO. A Tandem SAR shall be exercisable only if the Fair
Market Value of a share of Common Stock on the date of surrender exceeds
the Option Price for the related Option, and then shall be exercisable to
the extent, and only to the extent, that
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the related Option is exercisable. A Tandem SAR shall entitle the
Participant to whom it is granted the right to elect, so long as such
Tandem SAR is exercisable and subject to such limitations as the Committee
shall have imposed, to surrender any then exercisable portion of his
related Option, in whole or in part, and receive from the Company in
exchange, without any payment of cash (except for applicable employee
withholding taxes), that number of shares of Common Stock having an
aggregate Fair Market Value on the date of surrender equal to the product
of (i) the excess of the Fair Market Value of a share of Common Stock on
the date of surrender over the per share Option Price, and (ii) the number
of shares of Common Stock subject to such Option or portion thereof which
is surrendered. Any Option or portion thereof which is surrendered shall
no longer be exercisable. The Committee, in its sole discretion, may allow
the Company to settle all or part of the Company's obligation arising out
of the exercise of a Tandem SAR by the payment of cash equal to the
aggregate Fair Market Value of the shares of Common Stock which the Company
would otherwise be obligated to deliver.
(b) NAKED SARS. Naked SARs shall terminate as provided in the
Participant's SAR agreement. The Committee may at the time of granting any
Naked SAR add such conditions and limitations to the Naked SAR as it shall
deem advisable, including but not limited to, limitations on the period
within which the Naked SAR shall be exercisable and the maximum amount of
appreciation to be recognized with regard to such Naked SAR.
(c) OTHER CONDITIONS. If a Participant is subject to Section 16(a)
and Section 16(b) of the Exchange Act, the Committee may at any time add
such additional conditions and limitations to such SAR which the Committee,
in its discretion, deems necessary or desirable in order to comply with
Section 16(a) or Section 16(b) of the Exchange Act and the rules and
regulations issued thereunder, or in order to obtain any exemption
therefrom. If a Participant subject to Section 16(a) or Section 16(b) of
the Exchange Act exercises a SAR and receives cash, the exercise must be
made or take effect during the ten-day period beginning on the third
business day after the release of quarterly or annual statements of sales
and earnings by the Company and ending on the twelfth business day after
such release of statements.
9. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
The Committee, in its discretion, may grant Restricted Stock to any
Participant under the Plan. Each grant of Restricted Stock shall be evidenced
by an agreement between the Company and the Participant. All shares of Common
Stock awarded to Participants under the Plan as Restricted Stock shall be
subject to the following express terms and conditions and to such other terms
and conditions, not inconsistent with the Plan, as the Committee shall deem
appropriate:
(a) RESTRICTED PERIOD. Shares of Restricted Stock awarded to
Participants may not be sold, transferred, pledged or otherwise encumbered
before they vest. Subject to the provisions of subparagraphs (b) and (c)
below and any other restrictions imposed by
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law, the certificates for any shares of Restricted Stock that vest will be
transferred to the Participant or, in the event of his death, to the
beneficiary or beneficiaries designated by writing filed by the Participant
with the Committee for such purpose or, if none, to his estate. Delivery
of shares in accordance with the preceding sentence shall be made within
the 30-day period after they vest.
(b) FORFEITURES. A Participant shall forfeit all unpaid accumulated
dividends and all shares of Restricted Stock which have not vested prior to
the date that his employment with the Company is terminated for any reason.
(c) CERTIFICATES DEPOSITED WITH COMPANY. Each certificate issued in
respect of shares of Restricted Stock awarded under the Plan shall be
registered in the name of the Participant and deposited with the Company.
Each such certificate shall bear the following (or a similar) legend:
"The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including forfeiture) relating to Restricted
Stock contained in the TeleTech Holdings, Inc. Stock Plan
and an agreement entered into between the registered owner
and TeleTech Holdings, Inc. Copies of such Plan and
agreement are on file at the principal office of TeleTech
Holdings, Inc."
(d) STOCKHOLDER RIGHTS. Subject to the foregoing restrictions, each
Participant shall have all the rights of a stockholder with respect to his
shares of Restricted Stock including, but not limited to, the right to vote
such shares.
(e) DIVIDENDS. On each Common Stock dividend payment date, each
Participant shall receive an amount equal to the dividend paid on that date
on a share of Common Stock, multiplied by his number of shares of
Restricted Stock.
10. TERMS AND CONDITIONS OF PHANTOM STOCK.
The Committee may, in its discretion, award Phantom Stock to any
Participant under the Plan. Each award of Phantom Stock shall be evidenced by
an agreement between the Company and the Participant. The Committee may at the
time of awarding any Phantom Stock add such additional conditions and
limitations to the Phantom Stock as it shall deem advisable, including, but not
limited to, the right for Participants to receive dividends equivalent to those
paid on Common Stock, limitations on the period or periods within which the
Phantom Stock may be surrendered, and the maximum amount of appreciation to be
recognized with regard to such Phantom Stock. An award of Phantom Stock shall
entitle the Participant to whom it is awarded the right to elect, so long as
such Phantom Stock is vested and subject to such limitations as the Committee
shall have imposed, to surrender any then vested portion of the Phantom Stock,
in whole or in part, and receive from the Company in exchange therefor the Fair
Market Value on
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the date of surrender of the Common Stock to which the surrendered Phantom Stock
relates in cash or in shares of Common Stock as the Committee may determine. If
a Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act,
the Committee may at any time add such additional conditions and limitations to
such Phantom Stock which, in its discretion, the Committee deems necessary or
desirable in order to comply with Section 16(a) or Section 16(b) of the Exchange
Act and the rules and regulations promulgated thereunder, or in order to obtain
any exemption therefrom. If a Participant subject to Section 16(a) or Section
16(b) of the Exchange Act receives cash in exchange for the surrender of Phantom
Stock, the surrender of such Phantom Stock must be made or take effect during
the ten-day period beginning on the third business day after the release of
quarterly or annual statements of sales and earnings by the Company and ending
on the twelfth business day after such release of statements.
11. MANNER OF EXERCISE OF OPTIONS.
To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the Committee,
stating the number of shares to which he intends to exercise the Option. The
Company will issue the shares with respect to which the Option is exercised upon
payment in full of the Option Price. The Option Price may be paid (i) in cash,
(ii) in shares of Common Stock having an aggregate Fair Market Value, as
determined on the date of delivery, equal to the Option Price, or (iii) by
delivery of irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds necessary to pay for all Common
Stock acquired through such exercise and any tax withholding obligations
resulting from such exercise. The Option Price may be paid in shares of Common
Stock which were received by the Participant upon the exercise of one or more
Options. The Option Price may be paid in shares of Common Stock which were
received by the Participant as an award of Restricted Stock under the Plan. The
Option Price may be paid by surrender of Tandem SARs equal to the Option Price.
12. VESTING.
A Participant may not exercise an Option or surrender a SAR or Phantom
Stock until it has become vested. The portion of an Option, SAR or Phantom
Stock award that is vested depends upon the period that has elapsed since the
Option Date. Unless the Committee establishes a different vesting schedule at
the time when an Option is granted or the Restricted Stock, SAR or Phantom Stock
is awarded, all Options granted under this Plan, Restricted Stock, SARs, and
Phantom Stock awarded under this Plan shall vest according to the following
schedule:
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Period Elapsed Vested Percentage
-------------------------------- -----------------
First Anniversary of Option Date 10%
Second Anniversary of Option Date 25%
Third Anniversary of Option Date 45%
Fourth Anniversary of Option Date 70%
Fifth Anniversary of Option Date 100%
Except as provided below, if a Participant terminates either his employment with
the Company or its Subsidiaries, for any reason, he forfeits any Options,
Restricted Stock, SARs and/or Phantom Stock that are not yet vested. A transfer
from the Company to a Subsidiary or affiliate, or VICE VERSA is not a
termination of employment for purposes of this Plan. Unless the Committee in
its sole discretion specifically waives the application of this sentence, then
notwithstanding the vesting schedule contained herein or in the Participant's
agreement, if the Participant's employment, or if a Director, his membership on
the Board, is terminated for Cause all Options, SARs, Restricted Stock and/or
Phantom Stock granted or awarded to the Participant will be immediately
cancelled and forfeited by the Participant upon delivery to him of notice of
such termination.
13. ADJUSTMENTS TO REFLECT CHANGES IN CAPITAL STRUCTURE.
If there is any change in the corporate structure or shares of the Company,
the Board of Directors may, in its discretion, make any adjustments necessary to
prevent accretion, or to protect against dilution, in the number and kind of
shares authorized by the Plan and, with respect to outstanding Options,
Restricted Stock, Phantom Stock and/or SARs, in the number and kind of shares
covered thereby and in the applicable Option Price; provided, however, no
adjustment will be made for the issuance of preferred stock or the conversion of
convertible preferred stock. For the purpose of this Section 13, a change in
the corporate structure or shares of the Company includes, without limitation,
any change resulting from a recapitalization, stock split, stock dividend,
consolidation, rights offering, spin-off, reorganization, or liquidation and any
transaction in which shares of Common Stock are changed into or exchanged for a
different number or kind of shares of stock or other securities of the Company
or another corporation.
14. NON-TRANSFERABILITY OF OPTIONS, SARS AND PHANTOM STOCK.
The Options and SARs granted or Phantom Stock awarded under the Plan are
not transferable, voluntarily or involuntarily, other than by will or the laws
of descent and distribution, or to the extent permissible under Section 422 of
the Code pursuant to a qualified domestic relations order as defined in Section
414(p) of the Code. During a Participant's lifetime, his Options may be
exercised only by him.
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15. RIGHTS AS STOCKHOLDER.
No Common Stock may be delivered upon the exercise of any Option until full
payment has been made and all income tax withholding requirements thereon have
been satisfied. A Participant has no rights whatsoever as a stockholder with
respect to any shares covered by an Option until the date of the issuance of a
stock certificate for the shares. A Participant who has been granted SARs or
Phantom Stock shall have no rights whatsoever as a stockholder with respect to
such SARs or Phantom Stock.
16. WITHHOLDING TAX.
The Company shall have the right to withhold in cash or shares of Common
Stock with respect to any payments made to Participants under the Plan any taxes
required by law to be withheld because of such payments. With respect to a
Participant subject to Section 16(a) or 16(b), withholding made in Common Stock
upon the exercise of an Option, or the exercise of a SAR or Phantom Stock which
the Participant had the discretion regarding the timing of exercise, must be
made or take effect during the period beginning on the third business day
following the release of quarterly or annual statements of sales and earnings by
the Company and ending on the twelfth business day after such release of
statements. Notwithstanding the foregoing, with respect to a Participant
subject to Section 16(a) or 16(b) of the Exchange Act, all amounts required to
be withheld upon either (i) the vesting of Restricted Stock or (ii) the exercise
of a SAR or surrender of Phantom Stock which had a set duration and for which
payment is made in Common Stock, shall automatically be withheld in Common Stock
otherwise deliverable to the Participant and having a Fair Market Value
determined on the date the income is includable in the Participant's income
equal to the amount of taxes required to be withheld.
17. NO RIGHT TO EMPLOYMENT.
Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company or any subsidiary, or any right or claim
to any benefit under the Plan, unless the right or claim has specifically
accrued under the Plan.
18. AMENDMENT OF THE PLAN.
The Committee may from time to time amend or revise the terms of this Plan
in whole or in part and may without limitation, adopt any amendment deemed
necessary; provided, however, that (a) except as provided in Section 4(h), no
change in any award previously granted to a Participant may be made that would
impair the rights of the Participant without the Participant's consent, (b) no
amendment may extend the period during which a Participant may exercise an ISO
beyond the period set forth in Section 6(a)(ii) or 6(e), and (c) the Committee
may not (i) change the aggregate number of shares that may be sold pursuant to
Options granted under the Plan (except in accordance with the provisions of
Section 14), (ii) change the class of eligible individuals who may receive
awards under the Plan, (iii) adopt any amendment affecting the Option Price at
which Options may be granted, or (iv) materially increase benefits accruing
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to participants under the Plan without approval of the Company's stockholders.
Approval of the Company's stockholders to any amendment under part (c)(i) shall
require a favorable vote by the majority of the shares of the Company's Common
Stock and preferred stock voting separately as a class, and to all other
amendments requiring stockholder approval shall require a vote of the majority
of the shares of the Company's Common Stock and preferred stock voting together
as one class, present in person or by proxy at a duly held stockholders meeting
or by written consent. If any amendment requiring stockholder approval for the
Committee to act under part (c) of the previous sentence is made subsequent to
the first registration of any class of equity securities by the Company under
Section 12 of the Exchange Act, such stockholder approval shall be solicited as
described in Section 19. All amendments shall be in writing and consented to by
a majority of the members of the Committee.
19. STOCKHOLDER APPROVAL.
Continuance of the Plan shall be subject to approval by the stockholders of
the Company within 12 months before or after the date the Plan is adopted by the
Committee in accordance with Rule 16b-3(b) of the Exchange Act. If such
stockholder approval is obtained at a duly held stockholder's meeting, it may be
obtained by the affirmative vote of the holders of a majority of the shares of
the Company's common stock present at the meeting or represented and entitled to
vote thereon.
20. CONDITIONS UPON ISSUANCE OF SHARES.
An Option shall not be exercisable, a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the Stockholders of the
Company and unless the award of Restricted Stock, exercise of such Option and
the issuance and delivery of such share pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares of Common stock may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Common Stock is being
purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
21. EFFECTIVE DATE AND TERMINATION OF PLAN.
21.1 EFFECTIVE DATE. This Plan is effective as of the later of the
date of its adoption by the Committee, or the date it is approved by the
stockholders of the Company, pursuant to Section 19.
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21.2 TERMINATION OF THE PLAN. The Committee may terminate the Plan at
any time with respect to any shares that are not then subject to Options or
Restricted Stock. Termination of the Plan will not affect the rights and
obligations of any Participant with respect to Options, SARs, Phantom Stock or
Restricted Stock awarded before termination.
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