Exhibit 4.3
1996 STOCK INCENTIVE PLAN
STERLING FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
(AMENDED AND RESTATED, EFFECTIVE FEBRUARY 26, 2002)
1. Purpose. The purpose of this Stock Incentive Plan (the “Plan”) is to advance the development, growth and financial condition of Sterling Financial
Corporation (the “Corporation”) and each subsidiary thereof as defined in
Section 424 of the Internal Revenue Code of 1986, as amended (the “Code”), by
providing incentives through participation in the appreciation of capital stock
of the Corporation so as to secure, retain and motivate personnel who may be
responsible for the operation and management of the affairs of the Corporation
and any such subsidiary now or hereafter existing (“Subsidiary”).
2. Term. The Plan shall become effective as of the date it is adopted by the Corporation’s Board of Directors (the “Board”), so long as the Corporation’s
stockholders duly approve the Plan within twelve (12) months either before or
after the date of the Board’s adoption of the Plan. Any and all options and
rights awarded under the Plan (“Awards”) before it is so approved by the
Corporation’s stockholders shall be conditional upon and may not be exercised
before timely obtainment of such approval, and shall lapse upon the failure
thereof. If the Plan is so approved, it shall continue in effect until all
Awards either have lapsed or been exercised, satisfied or cancelled according to
their terms under the Plan.
3. Stock. The shares of stock that may be issued under the Plan shall not exceed, in the aggregate, 500,000 shares of the Corporation’s common stock, par
value $5.00 per share (the “Stock”), as authorized in 1996, and as adjusted
pursuant to paragraph 18 hereof, and an additional 750,000 shares, authorized in
2002, as may be adjusted pursuant to paragraph 18 hereof. Such shares of Stock
may be either authorized and unissued shares of Stock, or authorized shares of
Stock issued by the Corporation and subsequently reacquired by it as treasury
stock. Under no circumstances shall any fractional shares of Stock be issued or
sold under the Plan or any Award. Except as may be otherwise provided in the
Plan, any Stock subject to an Award that for any reason lapses or terminates
prior to its exercise as to such Stock shall become and again be available under
the Plan. The Corporation shall reserve and keep available, and shall duly apply
for any requisite governmental authority to issue or sell the number of shares
of Stock needed to satisfy the requirements of the Plan while in effect. The
Corporation’s failure to obtain any such governmental authority deemed necessary
by the Corporation’s legal counsel for the lawful issuance and sale of Stock
under the Plan shall relieve the Corporation of any duty, or liability for the
failure to issue or sell such Stock as to which such authority has not been
obtained.
4. Administration. The Plan shall be administered by a committee (the “Committee”) consisting exclusively of two (2) or more non-employee directors
from the Board serving for such terms as determined, selected and appointed by
the Board. The Board shall fill all vacancies occurring in the Committee’s
membership, and at any time and for any reason may
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add additional members to the Committee or may remove members from the Committee
and appoint their successors. Except as otherwise permitted under Section 16(b)
of the Securities Exchange Act of 1934, as amended, and applicable rules and
regulations thereto, a member of the Committee must be a director of the
Corporation and during the year prior to commencing service on the Committee,
and while a member of the Committee, was not granted or awarded any Awards,
allocations or other options or rights of or with respect to Stock or any other
equity securities of the Corporation or its affiliates pursuant to the Plan or
any other plan of the Corporation or its affiliates which provides for grants or
awards. A majority of the Committee’s membership shall constitute a quorum for
the transaction of all business of the Committee, and all decisions and actions
taken by the Committee shall be determined by a majority of the members of the
Committee attending a meeting at which a quorum of the Committee is present.
The Committee shall be responsible for the management and operation of the Plan and, subject to its provisions, shall have full, absolute and final power
and authority, exercisable in its sole discretion: to interpret and construe the
provisions of the Plan, adopt, revise and rescind rules and regulations relating
to the Plan and its administration, and decide all questions of fact arising in
the application thereof; to determine what, to whom, when and under what facts
and circumstances Awards shall be made, and the form, number, terms, conditions
and duration thereof, including but not limited to when exercisable, the number
of shares of Stock subject thereto, and Stock option purchase prices; to adopt,
revise and rescind procedural rules for the transaction of the Committee’s
business, subject to any directives of the Board not inconsistent with the
provisions or intent of the Plan or applicable provisions of law; and to make
all other determinations and decisions, take all actions and do all things
necessary or appropriate in and for the administration of the Plan. The
Committee’s determinations, decisions and actions under the Plan, including but
not limited to those described above, need not be uniform or consistent, but may
be different and selectively made and applied, even in similar circumstances and
among similarly situated persons. Unless contrary to the provisions of the Plan,
all decisions, determinations and actions made or taken by the Committee shall
be final and binding upon the Corporation and all interested persons, and their
heirs, personal and legal representatives, successors, assigns and
beneficiaries. No member of the Committee or of the Board shall be liable for
any decision, determination or action made or taken in good faith by such person
under or with respect to the Plan or its administration.
5. Awards. Awards may be made under the Plan in the form of: (a) “Qualified Options” to purchase Stock that are intended to qualify for certain
tax treatment as incentive stock options under Sections 421 and 422 of the Code,
(b) “Non-Qualified Options” to purchase Stock that are not intended to qualify
under Sections 421-424 of the Code, (c) Stock appreciation rights (“SARs”), or
(d) “Restricted Stock”. More than one Award may be granted to an eligible
person, and the grant of any Award shall not prohibit the grant of any other
Award, either to the same person or otherwise, or impose any obligation upon the
person to whom granted to exercise the Award. All Awards and the terms and
conditions thereof shall be set forth in written agreements, in such form and
content as approved by the Committee from time to time, and shall be subject to
the provisions of the Plan whether or not contained in such agreements. Multiple
Awards for a particular person may be set forth in a single written agreement or
in multiple agreements, as determined by the Committee, but in all cases each
agreement for one or more Awards shall identify each of the Awards thereby
represented as a Qualified Option, Non-
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Qualified Option, SAR, or Restricted Stock, as the case may be. Every Award made
to a person (a “Recipient”) shall be exercisable during his or her lifetime only
by the Recipient, and shall not be salable, transferable or assignable by the
Recipient except by his or her Will or pursuant to applicable laws of descent
and distribution.
6. Eligibility. Persons eligible to receive Awards shall be those key officers and other management employees of the Corporation and each Subsidiary
as determined by the Committee. In no case, however, shall any current member of
the Committee be eligible to receive any Awards. A person’s eligibility to
receive Awards shall not confer upon him or her any right to receive any Awards;
rather, the Committee shall have the sole authority, exercisable in its
discretion consistent with the provisions of the Plan, to select when, to whom
and under what facts and circumstances Awards will be made. Except as otherwise
provided, a person’s eligibility to receive, or actual receipt of Awards under
the Plan shall not limit or affect his or her benefits under or eligibility to
participate in any other incentive or benefit plan or program of the Corporation
or its affiliates.
7. Qualified Options. In addition to other applicable provisions of the Plan, all Qualified Options and Awards thereof shall be under and subject to the following terms and conditions:
(a) No Qualified Option shall be awarded more than ten (10) years after the date the Plan is adopted by the Board or the date the Plan is approved by the Corporation’s stockholders, whichever date is earlier;
(b) The time period during which any Qualified Option is exercisable, as determined by the Committee, shall not commence before the
expiration of six (6) months or continue beyond the expiration of ten (10)
years after the date such Option is awarded;
(c) If the Recipient of a Qualified Option ceases to be employed by the Corporation or any Subsidiary for any reason other than his or her
death, the Committee may permit the Recipient thereafter to exercise such
Option during its remaining term for a period of not more than three (3)
months after such cessation of employment to the extent that the Option
was then and remains exercisable, unless such employment cessation was due
to the Recipient’s disability as defined in Section 422(e)(3) of the Code,
in which case such three (3) month period shall be twelve (12) months; if
the Recipient dies while employed by the Corporation or a Subsidiary, the
Committee may permit the Recipient’s qualified personal representatives,
or any persons who acquire the Qualified Option pursuant to his or her
Will or laws of descent and distribution, thereafter to exercise such
Option during its remaining term for a period of not more than twelve (12)
months after the Recipient’s death to the extent that the Option was then
and remains exercisable; the Committee may impose terms and conditions
upon and for said exercise of such Qualified Option after such cessation
of the Recipient’s employment or his or her death;
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(d) The purchase price of a share of Stock subject to any Qualified Option, as determined by the Committee, shall not be less than the Stock’s
fair market value at the time such Option is awarded, as determined under
paragraph 13 hereof, or less than the Stock’s par value.
8. Non-Qualified Options. In addition to other applicable provisions of the Plan, all Non-Qualified Options and Awards thereof shall be under and subject to the following terms and conditions:
(a) The time period during which any Non-Qualified Option is exercisable, as determined by the Committee, shall not commence before the
expiration of six (6) months or continue beyond the expiration of ten (10)
years after the date such Option is awarded;
(b) If a Recipient of a Non-Qualified Option, before its lapse or full exercise, ceases to be eligible under the Plan, the Committee may
permit the Recipient thereafter to exercise such Option during its
remaining term, to the extent that the Option was then and remains
exercisable, for such time period and under such terms and conditions as
may be prescribed by the Committee;
(c) The purchase price of a share of Stock subject to any Non-Qualified Option, as determined by the Committee, shall not be less
than the Stock’s fair market value at the time such Option is awarded, as
determined under paragraph 13 hereof.
9. Stock Appreciation Rights. In addition to other applicable provisions of the Plan, all SARs and Awards thereof shall be under and subject to the following terms and conditions:
(a) SARs may be granted either alone, or in connection with another previously or contemporaneously granted Award (other than another SAR) so
as to operate in tandem therewith by having the exercise of one affect the
right to exercise the other, as and when the Committee may determine;
however, no SAR shall be awarded in connection with a Qualified Option
more than ten (10) years after the date the Plan is adopted by the Board
or the date the Plan is approved by the Corporation’s stockholders,
whichever date is earlier;
(b) Each SAR shall entitle its Recipient to receive upon exercise of the SAR all or a portion of the excess of (i) the fair market value at the
time of such exercise of a specified number of shares of Stock as
determined by the Committee, over (ii) a specified price as determined by
the Committee of such number of shares of Stock that, on a per share
basis, is not less than the Stock’s fair market value at the time the SAR
is awarded;
(c) Upon exercise of any SAR, the Recipient shall be paid either in cash or in Stock, or in any combination thereof, as the Committee shall
determine; if such payment is to be made in Stock, the number of shares
thereof to be issued pursuant to the exercise shall be determined by
dividing the amount payable upon exercise by the Stock’s fair market value
at the time of exercise;
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(d) The time period during which any SAR is exercisable, as determined by the Committee, shall not commence before the expiration of
six (6) months or continue beyond the expiration of ten (10) years after
the date such SAR is awarded; however, no SAR connected with another Award
shall be exercisable beyond the last date that such other connected Award
may be exercised;
(e) If a Recipient of a SAR, before its lapse or full exercise, ceases to be eligible under the Plan, the Committee may permit the
Recipient thereafter to exercise such SAR during its remaining term, to
the extent that the SAR was then and remains exercisable, for such time
period and under such terms and conditions as may be prescribed by the
Committee;
(f) No SAR shall be awarded in connection with any Qualified Option unless the SAR (i) lapses no later than the expiration date of such
connected Option, (ii) is for not more than the difference between the
Stock purchase price under such connected Option and the Stock’s fair
market value at the time the SAR is exercised, (iii) is transferable only
when and as such connected Option is transferable and under the same
conditions, (iv) may be exercised only when such connected Option may be
exercised, and (v) may be exercised only when the Stock’s fair market
value exceeds the Stock purchase price under such connected Option.
10. Restricted Stock. In addition to other applicable provisions of the Plan, all Restricted Stock and Awards thereof shall be under and subject to the following terms and conditions:
(a) Restricted Stock shall consist of shares of Stock that may be acquired by and issued to a Recipient at such time, for such or no
purchase price, and under and subject to such transfer, forfeiture and
other restrictions, conditions or terms as shall be determined by the
Committee, including but not limited to prohibitions against transfer,
substantial risks of forfeiture within the meaning of Section 83 of the
Code, and attainment of performance or other goals, objectives or
standards, all for or applicable to such time periods as determined by the
Committee;
(b) Except as otherwise provided in the Plan or the Restricted Stock Award, a Recipient of shares of Restricted Stock shall have all the rights
as does a holder of Stock, including without limitation the right to vote
such shares and receive dividends with respect thereto; however, during
the time period of any restrictions, conditions or terms applicable to
such Restricted Stock, the shares thereof and the right to vote the same
and receive dividends thereon shall not be sold, assigned, transferred,
exchanged, pledged, hypothecated, encumbered or otherwise disposed of
except as permitted by the Plan or the Restricted Stock Award;
(c) Each certificate issued for shares of Restricted Stock shall be deposited with the Secretary of the Corporation, or the office thereof, and shall bear a legend in substantially the following form and content:
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This Certificate and the shares of Stock hereby represented are
subject to the provisions of the Corporation’s Stock Incentive Plan
and a certain agreement entered into between the owner and the
Corporation pursuant to said Plan. The release of this Certificate
and the shares of Stock hereby represented from such provisions
shall occur only as provided by said Plan and agreement, a copy of
which are on file in the office of the Secretary of the Corporation.
Upon the lapse or satisfaction of the restrictions, conditions and terms
applicable to such Restricted Stock, a certificate for the shares of Stock
free thereof without such legend shall be issued to the Recipient;
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(d) |
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If a Recipient’s employment with the Corporation or a Subsidiary ceases for any reason prior to the lapse of the
restrictions, conditions or terms applicable to his or her
Restricted Stock, all of the Recipient’s Restricted Stock
still subject to unexpired restrictions, conditions or terms
shall be forfeited absolutely by the Recipient to the
Corporation without payment or delivery of any consideration
or other thing of value by the Corporation or its affiliates,
and thereupon and thereafter neither the Recipient nor his or
her heirs, personal or legal representatives, successors,
assigns, beneficiaries, or any claimants under the Recipient’s
Last Will or laws of descent and distribution, shall have any
rights or claims to or interests in the forfeited Restricted
Stock or any certificates representing shares thereof, or
claims against the Corporation or its affiliates with respect
thereto. |
11. Exercise. Except as otherwise provided in the Plan, Awards may be exercised in whole or in part by giving written notice thereof to the Secretary
of the Corporation, or his or her designee, identifying the Award being
exercised, the number of shares of Stock with respect thereto, and other
information pertinent to exercise of the Award. The purchase price of the shares
of Stock with respect to which an Award is exercised shall be paid with the
written notice of exercise, either in cash or in Stock at its then current fair
market value, or in any combination thereof, as the Committee shall determine;
provided, that if the Stock tendered as payment for a Qualified Option was
acquired through the exercise of a Qualified Option, the Recipient must have
held such Stock for a period not less than the holding period described in Code
Section 422(a)(1). Funds received by the Corporation from the exercise of any
Award shall be used for its general corporate purposes.
The number of shares of Stock subject to an Award shall be reduced by the number of shares of Stock with respect to which the Recipient has exercised
rights under the Award. If a SAR is awarded in connection with another Award,
the number of shares of Stock that may be acquired by the Recipient under the
other connected Award shall be reduced by the number of shares of Stock with
respect to which the Recipient has exercised his or her SAR, and the number of
shares of Stock subject to the Recipient’s SAR shall be reduced by the number of
shares of Stock acquired by the Recipient pursuant to the other connected Award.
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The Committee may permit an acceleration of previously established exercise terms of any Awards or the lapse of restrictions thereon as, when,
under such facts and circumstances, and subject to such other or further
requirements and conditions as the Committee may deem necessary or appropriate.
In addition: (a) if the Corporation or its stockholders execute an agreement to
dispose of all or substantially all of the Corporation’s assets or capital stock
by means of sale, merger, consolidation, reorganization, liquidation or
otherwise, as a result of which the Corporation’s stockholders as of immediately
before such transaction will not own at least fifty percent (50%) of the total
combined voting power of all classes of voting capital stock of the surviving
entity (be it the Corporation or otherwise) immediately after the consummation
of such transaction, thereupon any and all Awards immediately shall become and
remain exercisable with respect to the total number of shares of Stock still
subject thereto for the remainder of their respective terms unless the
transaction is not consummated and the agreement expires or is terminated, in
which case thereafter all Awards shall be treated as if said agreement never had
been executed; (b) if there is an actual, attempted or threatened change in the
ownership of at least twenty-five percent (25%) of all classes of voting capital
stock of the Corporation, as determined by the Committee in its sole discretion,
through the acquisition of, or an offer to acquire such percentage of the
Corporation’s voting capital stock by any person or entity, or persons or
entities acting in concert or as a group, and such acquisition or offer has not
been duly approved by the Board, thereupon any and all Awards immediately shall
become and remain exercisable with respect to the total number of shares of
Stock still subject thereto for the remainder of their respective terms; or (c)
if during any period of two (2) consecutive years, the individuals who at the
beginning of such period constituted the Board, cease for any reason to
constitute at least a majority of the Board, unless the election of each
director of the Board, who was not a director of the Board at the beginning of
such period, was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period, thereupon
any and all Awards immediately shall become and remain exercisable with respect
to the total amount of shares of Stock still subject thereto for the remainder
of their respective terms. If an event described in (a), (b) or (c) occurs, the
Committee shall immediately notify the Recipients in writing of the occurrence
of such event and their rights under this paragraph 11.
12. Withholding. Whenever the Corporation is about to issue or transfer Stock pursuant to any Award, the Corporation may require the Recipient to remit
to the Corporation an amount sufficient to satisfy fully any federal, state and
other jurisdictions’ income and other tax withholding requirements prior to the
delivery of any certificates for such shares of Stock. Whenever payments are to
be made in cash to any Recipient pursuant to his or her exercise of an Award,
such payments shall be made net after deduction of all amounts sufficient to
satisfy fully any federal, state and other jurisdictions’ income and other tax
withholding requirements.
13. Value. Where used in the Plan, the “fair market value” of Stock or Options or rights with respect thereto, including Awards, shall mean and be
determined by: (a) in the event that the Stock is listed on an established
exchange, the closing price of the Stock on the relevant date or, if no trade
occurred on that day, on the next preceding day on which a trade occurred, (b)
in the event that the Stock is not listed on an established exchange, but is
then quoted on the National Association of Securities Dealers Automated
Quotation System (“NASDAQ”), the average of the average of the closing bid and
asked quotations of the Stock for the five (5)
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trading days immediately preceding the relevant date, or (c) in the event that
the Stock is not then listed on an established exchange or quoted on NASDAQ, the
average of the average of the closing bid and asked quotations of the Stock for
five (5) trading days immediately preceding the relevant date as reported by
such brokerage firms which are then making a market in the Stock. In the event
that the Stock is not listed on an established exchange, quoted on NASDAQ, and
no closing bid and asked quotations are available, fair market value shall be
determined in good faith by the Committee. In the case of (b) or (c) above, in
the event that no closing bid or asked quotation is available on one or more of
such trading days, fair market value shall be determined by reference to the
five (5) trading days immediately preceding the relevant date on which closing
bid and asked quotations are available.
14. Amendment. To the extent permitted by applicable law, the Board may amend, suspend, or terminate the Plan at any time; provided, however, that: (a)
no amendment may be adopted that permits an Award to be granted to any member of
the Committee; (b) with respect to qualified options, except as specified in
paragraph 18 hereof, no amendment may be adopted that will increase the number
of shares reserved for Awards under the Plan, change the option price, or change
the provisions required for compliance with Section 422 of the Code and
regulations issued thereunder. The amendment or termination of this Plan shall
not, without the consent of the Recipients, alter or impair any rights or
obligations under any Award previously granted hereunder.
In addition and subject to the foregoing, the Committee may prescribe other or additional terms, conditions and provisions with respect to the grant
or exercise of any or all Awards as the Committee may determine necessary or
appropriate for such Awards and the Stock subject thereto to qualify under and
comply with all applicable laws, rules and regulations, and changes therein,
including but not limited to the provisions of Sections 421 and 422 of the Code
and Section 16 of the Securities Exchange Act of 1934, as amended. Without
limiting the generality of the preceding sentence, each Qualified Option, and
any SAR awarded in connection therewith, shall be subject to such other and
additional terms, conditions and provisions as the Committee may deem necessary
or appropriate in order to qualify such Option, or connected Option and SAR, as
an incentive stock option under Section 422 of the Code, including but not
limited to the following provisions:
(i) the aggregate fair market value, at the time such Option is
awarded, of the Stock subject thereto and of any Stock or other capital
stock with respect to which incentive stock options qualifying under
Sections 421 and 422 of the Code are exercisable for the first time by the
Recipient during any calendar year under the Plan and any other plans of
the Corporation or its affiliates, shall not exceed $100,000.00; and
(ii) No Qualified Option, or any SAR in connection therewith, shall be awarded to any person if at the time of such Award, such person owns
Stock possessing more than ten percent (10%) of the total combined voting
power of all classes of capital stock of the Corporation or its
affiliates, unless at the time such Option or SAR is awarded the Stock
purchase price under such Option is at least one hundred and ten percent (110%) of the fair market value of the Stock subject to such Option and the
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Option (and any SAR connected therewith) by its terms is not exercisable after the expiration of five (5) years from the date it is awarded.
From time to time, the Committee may rescind, revise and add to any of such
terms, conditions and provisions as may be necessary or appropriate to have any
Awards be or remain qualified and in compliance with all applicable laws, rules
and regulations, and may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in applicable laws,
rules or regulations.
15. Continued Employment. Nothing in the Plan or any Award shall confer upon any Recipient or other persons any right to continue in the employment of,
or maintain any particular relationship with the Corporation or its affiliates,
or limit or affect any rights, powers or privileges that the Corporation or its
affiliates may have to supervise, discipline and terminate such Recipient or
other persons, and the employment and other relationships thereof. However, the
Committee may require as a condition of making and/or exercising any Award that
its Recipient agree to, and in fact provide services, either as an employee or
in another capacity, to or for the Corporation or any Subsidiary for such time
period following the date the Award is made and/or exercised as the Committee
may prescribe. The immediately preceding sentence shall not apply to any
Qualified Option to the extent such application would result in disqualification
of said Option as an incentive stock option under Sections 421 and 422 of the
Code.
16. General Restrictions. Each Award shall be subject to the requirement and provision that if at any time the Committee determines it necessary or
desirable as a condition of or in consideration of making such Award, or the
purchase or issuance or Stock thereunder, (a) the listing, registration or
qualification of the Stock subject to the Award, or the Award itself, upon any
securities exchange or under any federal or state securities or other laws, (b)
the approval of any governmental authority, or (c) an agreement by the Recipient
with respect to disposition of any Stock (including without limitation that at
the time of the Recipient’s exercise of the Award, any Stock thereby acquired is
being and will be acquired solely for investment purposes and without any
intention to sell or distribute such Stock), then such Award shall not be
consummated in whole or in part unless such listing, registration,
qualification, approval or agreement shall have been appropriately effected or
obtained to the satisfaction of the Committee and legal counsel for the
Corporation.
17. Rights. Except as otherwise provided in the Plan, the Recipient of any Award shall have no rights as a holder of the Stock subject thereto unless and
until one or more certificates for the shares of such Stock are issued and
delivered to the Recipient. No adjustments shall be made for dividends, either
ordinary or extraordinary, or any other distributions with respect to Stock,
whether made in cash, securities or other property, or any rights with respect
thereto, for which the record date is prior to the date that any certificates
for Stock subject to an Award are issued to the Recipient pursuant to his or her
exercise thereof. No Award, or the grant thereof, shall limit or affect the
right or power of the Corporation or its affiliates to adjust, reclassify,
recapitalize, reorganize or otherwise change its or their capital or business
structure, or to merge, consolidate, dissolve, liquidate or sell any or all of
its or their business, property or assets.
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18. Adjustments. In the event of any change in the number of issued and outstanding shares of Stock which results from a stock split, reverse stock
split, payment of a stock dividend or any other change in the capital structure
of the Corporation, the Committee shall proportionately adjust the maximum
number of shares subject to each outstanding Award, and (where appropriate) the
purchase price per share thereof (but not the total purchase price under the
Award), so that upon exercise or realization of such Award, the Recipient shall
receive the same number of shares he or she would have received had he or she
been the holder of all shares subject to his or her outstanding Award and
immediately before the effective date of such change in the number of issued and
outstanding shares of Stock. Such adjustments shall not, however, result in the
issuance of fractional shares. Any adjustments under this paragraph 18 shall be
made by the Committee, subject to approval by the Board. No adjustments shall be
made that would cause a Qualified Option to fail to continue to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
In the event the Corporation is a party to any merger, consolidation or other reorganization, any and all outstanding Awards shall apply and relate to
the securities to which a holder of Stock is entitled after such merger,
consolidation or other reorganization. Upon any liquidation or dissolution of
the Corporation, any and all outstanding Awards shall terminate upon
consummation of such liquidation or dissolution, but prior to such consummation
shall be exercisable to the extent that the same otherwise are exercisable under
the Plan.
19. Forfeiture. Notwithstanding anything to the contrary in this Plan, if the Committee finds after full consideration of the facts presented on behalf of
the Corporation and the involved Recipient, that he or she has been engaged in
fraud, embezzlement, theft, commission of a felony, or dishonesty in the course
of his or her employment by the Corporation or any Subsidiary that has damaged
it, or that the Recipient has disclosed trade secrets of the Corporation or its
affiliates, the Recipient shall forfeit all rights under and to all unexercised
Awards, and all exercised Awards under which the Corporation has not yet
delivered payment or certificates for shares of Stock (as the case may be), all
of which Awards and rights shall be automatically canceled. The decision of the
Committee as to the cause of the Recipient’s discharge from employment with the
Corporation or any Subsidiary and the damage thereby suffered shall be final for
purposes of the Plan, but shall not affect the finality of the Recipient’s
discharge by the Corporation or Subsidiary for any other purposes. The preceding
provisions of this paragraph shall not apply to any Qualified Option to the
extent such application would result in disqualification of said Option as an
incentive stock option under Sections 421 and 422 of the Code.
20. Indemnification. In and with respect to the administration of the Plan, the Corporation shall indemnify each present and future member of the
Committee and/or of the Board, who shall be entitled without further action on
his or her part to indemnity from the Corporation for all damages, losses,
judgments, settlement amounts, punitive damages, excise taxes, fines, penalties,
costs and expenses (including without limitation attorneys’ fees and
disbursements) incurred by such member in connection with any threatened,
pending or completed action, suit or other proceedings of any nature, whether
civil, administrative, investigative or criminal, whether formal or informal,
and whether by or in the right or name of
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the Corporation, any class of its security holders, or otherwise, in which such
member may be or have been involved, as a party or otherwise, by reason of his
or her being or having been a member of the Committee and/or of the Board,
whether or not he or she continues to be such a member. The provisions,
protection and benefits of this paragraph shall apply and exist to the fullest
extent permitted by applicable law to and for the benefit of all present and
future members of the Committee and/or of the Board, and their respective heirs,
personal and legal representatives, successors and assigns, in addition to all
other rights that they may have as a matter of law, by contract, or otherwise,
except (a) as may not be allowed by applicable law, (b) to the extent there is
entitlement to insurance proceeds under insurance coverage provided by the
Corporation on account of the same matter or proceeding for which
indemnification hereunder is claimed, or (c) to the extent there is entitlement
to indemnification from the Corporation, other than under this paragraph, on
account of the same matter or proceeding for which indemnification hereunder is
claimed.
21. Miscellaneous. Any reference contained in this Plan to a particular section or provision of law, rule or regulation, including but not limited to
the Internal Revenue Code of 1986 and the Securities Exchange Act of 1934, both
as amended, shall include any subsequently enacted or promulgated section or
provision of law, rule or regulation, as the case may be, of similar import.
With respect to persons subject to Section 16 of the Securities Exchange Act of
1934, as amended, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 or any successor rule that may be
promulgated by the Securities and Exchange Commission, to the extent any
provision of this Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by applicable law and deemed
advisable by the Committee, and to the extent that there are additional
requirements under Rules 16b-3, it is the responsibility of the participants to
satisfy such requirements. Where used in this Plan: the plural shall include the
singular, and unless the context otherwise clearly requires, the singular shall
include the plural; and, the term “affiliates” shall mean each and every
Subsidiary and any parent of the Corporation. The captions of the numbered
paragraphs contained in this Plan are for convenience only, and shall not limit
or affect the meaning, interpretation or construction of any of the provisions
of the Plan.
AS APPROVED BY THE BOARD OF DIRECTORS
FEBRUARY 26, 2002
AS APPROVED BY THE SHAREHOLDERS
APRIL 30, 2002
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