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| 1. |
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History
and Purpose
Ameritrade Online Holdings Corp. ("Old Ameritrade")
established the Ameritrade Holding Corporation 1996
Directors Incentive Plan (the "Plan") to attract
and retain as non-employee directors persons whose
abilities, experience and judgment can contribute
to the continued progress of the company and its
subsidiaries and to facilitate the directors' ability
to acquire a proprietary interest in the company.
Old Ameritrade was known as Ameritrade Holding Corporation
prior to the closing of the merger involving Old
Ameritrade and Datek Online Holdings Corp. on September
9, 2002 (the "Merger"). As a result of the Merger,
Old Ameritrade became a subsidiary of a newly formed
corporation, Ameritrade Holding Corporation ("Ameritrade"
or the "Company") effective as of September 9, 2002
(the "Merger Closing Date") and as of the Merger
Closing Date Ameritrade assumed the Plan, and all
outstanding obligations under the Plan. The following
provisions constitute the amended and restated Plan. |
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| 2. |
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Administration
- 2.1 Administration By Committee.
- The Plan shall be administered by the Compensation
Committee (the "Committee")
of the Board of Directors of the Company
(the "Board"). Notwithstanding
the foregoing, no member of the Committee
shall act with respect to the administration
of the Plan except to the extent consistent
with the exempt status of the Plan under
Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule
16b-3").
- 2.2 Authority.
- Subject to the provisions of the Plan,
the Committee shall have the authority
to (a) interpret the Plan and to adopt,
amend and rescind administrative guidelines
and other rules and regulations relating
to the Plan, (b) correct any defect or
omission and to reconcile any inconsistency
in the Plan or in any payment made hereunder,
and (c) make all other determinations
and to take all other actions necessary
or advisable for the implementation and
administration of the Plan. The determination
of the Committee on matters within its
authority shall be conclusive and binding
on the Company and all other persons.
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| 3. |
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Participation
Only Non-Employee Directors shall be eligible to
participate in the Plan. As of any applicable date,
a "Non-Employee Director" is a person who is serving
as a director of the Company and who is not an employee
of the Company or any subsidiary of the Company
as of that date. |
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| 4. |
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Definition of Fair Market
Value
For purposes of the Plan, the "Fair Market Value"
of a share of common stock of the Company ("Stock")
as of any date shall be the closing market composite
price for such Stock as reported on NASDAQ on that
date or, if Stock is not traded on that date, on
the next preceding date on which Stock was traded. |
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| 5. |
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- Shares Subject
to the Plan
5.1 Number of Shares Reserved.
- The shares of Stock with respect to which
awards may be made under the Plan or which
may be distributed pursuant to elections
under Sections 9 or 10 of the Plan shall
be shares currently authorized but unissued
or currently held or subsequently acquired
by the Company as treasury shares, including
shares purchased in the open market or
in private transactions. Subject to the
provisions of subsection 5.3, the number
of shares of Stock which may be issued
with respect to awards under the Plan
or distributed pursuant to elections made
in accordance with Section 9 or 10 of
the Plan shall not exceed 1,460,000 shares
in the aggregate.
5.2 Reusage of Shares.
- (a) In the event of the exercise or termination
(by reason of forfeiture, expiration,
cancellation, surrender or otherwise)
of any award under the Plan, that number
of shares of Stock that was subject to
the award but not delivered shall again
be available for awards under the Plan.
- (b) In the event that shares of Stock are
delivered under the Plan as a Stock Award
(as defined in Section 7) and are thereafter
forfeited or reacquired by the Company
pursuant to rights reserved upon the award
thereof, such forfeited or reacquired
shares shall again be available for awards
under the Plan.
- (c) Notwithstanding the provisions of paragraphs
(a) or (b), the following shares shall
not be available for reissuance under
the Plan: (i) shares with respect to which
the Non-Employee Director has received
the benefits of ownership (other than
voting rights), either in the form of
dividends or otherwise, and (ii) shares
which are surrendered in payment of the
Option Price (as defined in subsection
6.3) upon the exercise of an Option.
5.3 Adjustments to Shares Reserved.- In the event of any merger, consolidation,
reorganization, recapitalization, spinoff,
stock dividend, stock split, reverse stock
split, exchange or other distribution
with respect to shares of Stock or other
change in the corporate structure or capitaliza-tion
affecting the Stock, the type and number
of shares of stock which are or may be
subject to awards under the Plan and the
terms of any outstanding awards (including
the price at which shares of stock may
be issued pursuant to an outstanding award)
shall be equitably adjusted by the Committee,
in its sole discretion, to preserve the
value of benefits awarded or to be awarded
to Non-Employee Directors under the Plan.
In determining what adjustment, if any,
is appropriate pursuant to the preceding
sentence, the Committee may rely on the
advice of such experts as they deem appropriate,
including counsel, investment bankers
and the accountants of the Company.
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| 6. |
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Options
- 6.1 Definitions.
- The grant of an "Option" under this Section
6 entitles the Non-Employee Director to
purchase shares of Stock at the Option
Price, subject to the terms of this Section
6. Options granted under this Section
6 shall be non-qualified stock options
which are not intended to be "incentive
stock options" as that term is described
in section 422(b) of the Internal Revenue
Code of 1986, as amended (the "Code").
6.2 Awards of Options. - Each Non-Employee Director shall be awarded
Options under this Section 6 in accordance
with the following:
- (a) Upon his election to the Board for
his first term, each Non-Employee Director
shall be awarded an Option to purchase
such number of shares of Stock as determined
by the Chairman of the Board; provided,
however, that such award shall be approved
by the Board.
- (b) At such times as the Board shall determine,
each Non-Employee Director shall be awarded
an Option to purchase that number of shares
of Stock determined by the Board and approved
by the members of the Board other than
those receiving the grant of an Option
pursuant to this paragraph (b). In determining
the number of shares of Stock subject
to an Option under this paragraph (b),
the Board may take into account such objective
or subjective factors as it determines
appropriate.
- (c) Notwithstanding the provisions of paragraphs
(a) or (b), the following shares shall
not be available for reissuance under
the Plan: (i) shares with respect to which
the Non-Employee Director has received
the benefits of ownership (other than
voting rights), either in the form of
dividends or otherwise, and (ii) shares
which are surrendered in payment of the
Option Price (as defined in subsection
6.3) upon the exercise of an Option.
6.3 Option Price.- The price at which shares of Stock may
be purchased upon the exercise of an Option
(the "Option Price") shall be
not less than the greater of (i) the Fair
Market Value of a share of Stock as of
the date on which the Option is granted,
or (ii) the par value of a share of Stock
on such date.
6.4 Exercise. - Except as otherwise provided in the Plan,
each Option granted to a Non-Employee
Director under this Section 6 shall become
exercisable in substantially equal annual
installments over a period of three years,
beginning with the first anniversary of
the date of grant and no Option shall
be exercisable after the Expiration Date
(as defined in Section 8). Notwithstanding
a Non-Employee Director’s termination
of service as a director, Options shall
continue to vest over a period of three
years unless the Non-Employee Director
terminates for cause. If a Non-Employee
Director’s service as a director
terminates for Cause, Options shall continue
to vest over a period of one year following
such termination of service. The full
Option Price of each share of Stock purchased
upon the exercise of any Option shall
be paid at the time of such exercise and,
as soon as practicable thereafter, a certificate
representing the shares so purchased shall
be delivered to the person entitled thereto.
The Option Price shall be payable in cash
or in shares of Stock (valued at Fair
Market Value as of the day of exercise),
or in any combination thereof.
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| 7. |
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- Stock Awards
7.1 Definition.
- Subject to the terms of this Section 7,
a "Stock Award" under the Plan
is a grant of shares of Stock to a Non-Employee
Director, the vesting of which is subject
to the conditions described in subsection
7.3. The period beginning on the date
of the grant of a Stock Award and ending
on the vesting or forfeiture of such Stock
(as applicable) is referred to as the
"Restricted Period".
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7.2 Non-Discretionary Awards.
- Upon his election to the Board for his
first term, each Non-Employee Director
shall be awarded such number of shares
of Stock pursuant to this Section 7 as
determined by the Chairman of the Board;
provided, however, that such award shall
be approved by the Board; and provided
further that, the Fair Market Value of
the Stock awarded to a Non-Employee Director
pursuant to this subsection 7.2 shall
be approximately $20,000 or such other
amount determined by the Board from time
to time.
7.3 Vesting. - Except as otherwise provided in the Plan,
the shares of Stock subject to an award
under this Section 7 shall become vested
in substantially equal annual installments
over a period of three years, beginning
with the first anniversary of the date
of grant and all shares of Stock awarded
pursuant to this Section 7 which are not
vested on the Expiration Date shall be
forfeited.
7.4 Rights with Respect to Stock. - Beginning on the date of the grant of shares
of Stock comprising a Stock Award, and
including any applicable Restricted Period,
the Non-Employee Director, as owner of
such shares, shall have the right to vote
such shares; provided, however, that payment
of dividends with respect to Stock Awards
shall be subject to the following:
(a) On and after date that a Non-Employee
Director has a fully earned and vested
right to the shares comprising a Stock
Award, and the shares have been distributed
to the Non-Employee Director, the Non-Employee
Director shall have all dividend rights
(and other rights) of a stockholder with
respect to such shares.
(b) Prior to the date that a Non-Employee
Director has a fully earned and vested
right to the shares comprising a Stock
Award, the Committee, in its sole discretion,
may award Dividend Rights (as defined
below) with respect to such shares.
(c) On and after the date that a Non-Employee
Director has a fully earned and vested
right to the shares comprising a Stock
Award, but before the shares have been
distributed to the Non-Employee Director,
the Non-Employee Director shall be entitled
to Dividend Rights with respect to such
shares, at the time and in the form determined
by the Committee.
A "Dividend Right" with respect
to shares comprising a Stock Award shall
entitle the Non-Employee Director, as
of each dividend payment date, to an amount
equal to the dividends payable with respect
to a share of Stock multiplied by the
number of such shares. Dividend Rights
shall be settled in the same form (either
cash or in shares of Stock) as dividends
paid to shareholders of the Company.
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| 8. |
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Expiration of Awards
The "Expiration Date" with respect
to an award under the Plan means the earlier
of the following dates:
(a) the ten-year anniversary of the date on
which the award is granted; or
(b) the one-year anniversary of the date on which
the Non-Employee Director's service as a director
of the Company terminates for cause. |
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| 9. |
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- Payment of
Retainers; Elections
9.1 Payment of Retainer.
- Subject to the terms and conditions of
the Plan, for each fiscal year of the
Company (the "Award Year"),
each individual who is a Non-Employee
Director shall be paid a retainer in an
amount determined from time to time by
the Board (the "Retainer") in
accordance with and subject to the following:
(a) For each Award Year, a "Cash
Retainer" shall be payable to each
individual who is a Non-Employee Director
as of the first day of the Award Year
in an amount equal to one-half of the
Retainer for the Award Year; and
(b) For each Award Year, a "Stock
Retainer" shall be payable to each
individual who is a Non-Employee Director
as of the first day of the Award Year
in an amount equal to one-half of the
Retainer for the Award Year, which Stock
Retainer shall be payable in shares of
Stock having a Fair Market Value equal
to the Stock Retainer, with the Fair Market
Value of any fractional share payable
in cash.
(c) Notwithstanding the foregoing, if
a Non-Employee Director has met the specified
requirements of the Ameritrade Holding
Corporation Equity Ownership and Disposition
Guidelines, the Non-Employee Director
may elect to receive all or any portion
of the Stock Retainer in cash. The portion
of a Non-Employee Director’s retainer
which is paid in cash pursuant to this
paragraph (c) shall be treated as part
of the Cash Retainer.
Notwithstanding the foregoing, (i) the
Board, in its sole discretion, may determine
that an Award Year of less than 12 months
is appropriate, in which case, the amount
of the Retainer and any other amounts
payable to a Non-Employee Director for
such Award Year to which any provision
of the Plan applies shall be calculated
and shall be payable as determined by
the Board in its sole discretion, and
(ii) in no event shall the Retainer for
the Award Year commencing on September
28, 2002 (the "2003 Award Year")
be payable prior to October 11, 2002.
9.2 Elections to Receive Stock. - Subject to the terms and conditions of
the Plan, each Non-Employee Director may
elect to forego receipt of all or any
portion of the Eligible Cash Payments
(as defined below) payable to him in any
Award Year beginning after the date of
his election and instead to receive whole
shares of Stock of equivalent value to
the Eligible Cash Payments so foregone
(determined in accordance with subsection
9.4). An election under this subsection
9.2 to have Eligible Cash Payments paid
in shares of Stock shall be valid only
if it is in writing, signed by the Non-Employee
Director, and filed with the Committee
in accordance with uniform and nondiscriminatory
rules adopted by the Committee, including,
but not limited to, rules required to
cause the receipt of Stock pursuant to
any such election to be exempt under Rule
16b-3. For purposes of the Plan, the term
"Eligible Cash Payments" means
the Cash Retainer and meeting fees and
committee fees that would otherwise be
payable to the Non-Employee Director by
the Company in cash as established, from
time to time, by the Board or any committee
thereof. Notwithstanding the foregoing,
in no event shall any Eligible Cash Payments
for the 2003 Award Year be payable prior
to October 11, 2002.
9.3 Revocation of Election to Receive
Stock. - Once effective, an election pursuant to
subsection 9.2 to receive Stock shall
remain in effect for successive Award
Years until it is revised or revoked.
Any such revision or revocation shall
be in writing, signed by the Non-Employee
Director, shall be effective for the Award
Year next following the date on which
it is received by the Committee, or such
later date specified in such notice, and
shall be filed with the Committee in accordance
with uniform and nondiscriminatory rules
established by the Committee, including,
but not limited to, rules required to
cause the receipt of Stock (or the receipt
of cash in lieu of Stock as previously
elected) to be exempt under Rule 16b-3.
9.4 Equivalent Amount of Stock. The number
of whole shares of Stock to be distributed
to any Non-Employee Director by reason
of his election pursuant to subsection
9.2 to receive Stock in lieu of Eligible
Cash Payments shall be equal to (rounded
to the nearest whole number of shares):
- (a) the amount of the Eligible Cash Payments
which the Non-Employee Director has elected
to have paid to him in shares of Stock;
DIVIDED BY
(b) the Fair Market Value of a share of
Stock as of the date on which such Eligible
Cash Payments would otherwise have been
payable to the Non-Employee Director;
provided, however, that in the case of
Eligible Cash Payments which were payable
(i) for the 2003 Award Year to individuals
who were Non-Employee Directors as of
the first day of the 2003 Award Year and
(ii) on or prior to October 11, 2002,
Fair Market Value under this paragraph
(b) shall be determined as of October
1, 2002.
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| 10. |
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- Deferred Compensation
10.1 Deferral of Compensation.
- Subject to the terms and conditions of
the Plan, each Non-Employee Director,
by filing a written ‘Deferral Election’
with the Committee in accordance with
uniform and nondiscriminatory rules adopted
by the Committee, may elect to defer the
receipt of all or any portion of the Eligible
Deferral Amounts (as defined below) otherwise
payable to him on or after the Effective
Date until a future date (the ‘Distribution
Date’) specified by the Non-Employee
Director in his Deferral Election as of
which payment of his Deferred Compensation
Account (as defined in subsection 10.2)
shall commence in accordance with subsection
10.3. If no Distribution Date is specified
in a Non-Employee Director's Deferral
Election, the Distribution Date shall
be deemed to be the first business day
in January of the year following the date
on which the Non-Employee Director ceases
to be a director of the Company for any
reason. A Non-Employee Director's Deferral
Election shall be effective with respect
to Eligible Deferral Amounts otherwise
payable to him for services rendered after
the last day of the fiscal year in which
such election is filed with the Committee;
provided, however, that:
(a) a Deferral Election which is filed
within 30 days of the date on which a
director first becomes a Non-Employee
Director shall be effective with respect
to all Eligible Deferral Amounts otherwise
payable to him for periods after the date
on which the Deferral Election is filed;
and
(b) by notice filed with the Committee
in accordance with uniform and nondiscriminatory
rules established by it, a director may
terminate or modify any Deferral Election
as to Eligible Deferral Amounts payable
for services rendered after the last day
of the fiscal year in which such notice
is filed with the Committee; provided,
however, that no modification may be made
to the Distribution Date unless the Non-Employee
Director shall file such notice with the
Committee at least six months prior thereto.
Notwithstanding the provisions of paragraph
(b) next above, the Committee may, in
its sole discretion, after considering
all of the pertinent facts and circumstances,
approve a change to the Distribution Date
which is requested by a Non-Employee Director
less than six months prior thereto. For
purposes of the Plan, the term ‘Eligible
Deferral Amounts’ shall mean the
Retainer (including both the Cash Retainer
and the Stock Retainer) and meeting fees
and committee fees that would otherwise
be payable to the Non-Employee Director
by the Company, all as established from
time to time by the Board or any committee
thereof.
10.2 Crediting and Adjustment of Deferred
Amounts. - The amount of any Eligible Deferral Amounts
deferred pursuant to a Non-Employee Director’s
Deferral Election in accordance with subsection
10.1 ("Deferred Compensation")
shall be credited to a bookkeeping account
maintained by the Company in the name
of the Non-Employee Director (the "Deferred
Compensation Account"), which account
shall consist of two subaccounts, one
known as the "Cash Subaccount"
and the other as the "Company Stock
Subaccount." Any portion of the Stock
Retainer and any Eligible Cash Payments
that the Non-Employee Director has elected
to receive in Stock pursuant to subsection
9.2 and, in each case, with respect to
which the Non-Employee Director has made
a Deferral Election pursuant to subsection
10.1 shall be credited to his Company
Stock Subaccount. Any other Deferred Compensation
shall be credited to his Cash Subaccount.
A Non-Employee Director's Deferred Compensation
Account shall be adjusted as follows:
(a) As of the first day of each fiscal
quarter occurring after the Effective
Date (which dates are referred to herein
as "Accounting Dates"), the
Non-Employee Director’s Cash Subaccount
shall be adjusted as follows:
(i)
first, the amount of any distributions
from the Cash Subaccount made since the
last preceding Accounting Date shall be
charged to the Cash Subaccount;
(ii)
next, the balance of the Cash Subaccount
after adjustment in accordance with subparagraph
(i) above shall be credited with interest
since the last preceding Accounting Date
computed at the prime rate as reported
by The Wall Street Journal for such date,
or if such date is not a business day,
for the next preceding business day; and
(iii)
finally, after adjustment in accordance
with the foregoing provisions of this
subsection 10.2, the Cash Subaccount shall
be credited with the Deferred Compensa-tion
otherwise payable to the Non-Employee
Director since the last preceding Accounting
Date which is to be credited to the Cash
Subaccount.
(b) The Non-Employee Director's Company
Stock Subaccount shall be adjusted as
follows:
(i)
as of any date on or after the Effective
Date on which Eligible Deferral Amounts
would have been payable to the Non-Employee
Director in Stock but for his or her Deferral
Election, the Non-Employee Director’s
Company Stock Subaccount shall be credited
with that number of stock units ("Stock
Units") equal to the number of shares
of Stock to which he would have been entitled
as of the applicable date;
(ii)
as of the date on which shares of Stock
are distributed to the Non-Employee Director
in accordance with subsection 10.3 below,
the Company Stock Subaccount shall be
charged with an equal number of Stock
Units; and
(iii)
as of the record date for any dividend
paid on Stock, the Company Stock Subaccount
shall be credited with that number of
additional Stock Units which is equal
to the number obtained by multiplying
the number of Stock Units then credited
to the Company Stock Subaccount by the
amount of the cash dividend or the fair
market value (as determined by the Board
of Directors) of any dividend in kind
payable on a share of Stock, and dividing
that product by the then Fair Market Value
of a share of Stock.
In the event of any merger, consolidation,
reorganization, recapitalization, spinoff,
stock split, reverse stock split, rights
offering, exchange or other change in
the corporate structure or capitalization
of the Company affecting the Stock, each
Non-Employee Director's Company Stock
Subaccount shall be equitably adjusted
in such manner consistent with subsection
5.3.
10.3 Payment of Deferred Compensation
Account. - Except as otherwise provided in this subsection
10.3 or subsection 10.4, the balances
credited to a Non-Employee Director's
Deferred Compensation Account shall each
be payable to the Non-Employee Director
in 10 annual installments commencing as
of the Distribution Date and continuing
on each annual anniversary thereof. Notwithstanding
the foregoing, a Non-Employee Director
may elect, by filing a notice with the
Committee at least six months prior to
the Distribution Date, to change the number
of payments to a single payment or to
any number of annual payments not in excess
of ten. Each such payment shall include
a cash portion, if applicable, and a Stock
portion, if applicable, as follows:
(a) The cash portion to be paid as of
the Distribution Date or any anniversary
thereof and charged to the Cash Subaccount
shall be equal to the balance of the Cash
Subaccount multiplied by a fraction, the
numerator of which is one and the denominator
of which is the number of remaining payments
to be made, including such payment.
(b) The Stock portion to be paid as of
the Distribution Date or any anniversary
thereof and charged to the Company Stock
Subaccount shall be distributed in whole
shares of Stock, the number of shares
of which shall be determined by rounding
to the next highest integer the product
obtained by multiplying the number of
Stock Units then credited to the Non-Employee
Director's Company Stock Subaccount by
a fraction, the numerator of which is
one and the denominator of which is the
number of remaining payments to be made,
including such payment.
Notwithstanding the foregoing, the Committee,
in its sole discretion, may distribute
all balances in any Deferred Compensation
Account to a Non-Employee Director (or
former Non-Employee Director) in a lump
sum as of any date.
10.4 Payments in the Event of Death.- If a Non-Employee Director dies before
payment of his Deferred Compensation Account
commences, all amounts then credited to
his Deferred Compensation Account shall
be distributed to his Beneficiary (as
described below), as soon as practicable
after his death, in a lump sum. If a Non-Employee
Director dies after payment of his Deferred
Compensation Account has commenced but
before the entire balance of such account
has been distributed, the remaining balance
thereof shall be distributed to his Beneficiary,
as soon as practicable after his death,
in a lump sum. Any amounts in the Cash
Subaccount shall be distributed in cash
and any amounts in the Stock Subaccount
shall be distributed in whole shares of
Stock determined in accordance with paragraph
10.3(b). For purposes of the Plan, the
Non-Employee Director's "Beneficiary"
is the person or persons the Non-Employee
Director designates, which designation
shall be in writing, signed by the Non-Employee
Director and filed with the Committee
prior to the Non-Employee Director's death.
A Beneficiary designation shall be effective
when filed with the Committee in accordance
with the preceding sentence. If more than
one Beneficiary has been designated, the
balance in the Non-Employee Director's
Deferred Compensation Account shall be
distributed to each such Beneficiary per
capita. In the absence of a Beneficiary
designation or if no Beneficiary survives
the Non-Employee Director, the Beneficiary
shall be the Non-Employee Director's estate.
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| 11. |
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Replacement Awards
Each holder of an award related to the common stock
of Old Ameritrade which was granted pursuant to
the Plan prior to the Merger Closing Date and which
was outstanding as of the Merger Closing Date after
giving effect to the transactions contemplated by
the Merger (the "Existing Awards"), will,
as of the Merger Closing Date, be automatically
granted a "Replacement Award" under the
Plan and the Existing Awards shall be cancelled
in exchange for the Replacement Awards. The number
of shares of Stock and, if applicable, the Option
Price per share of Stock, subject to a Replacement
Award shall be equal to the same number of shares
of common stock of Old Ameritrade and, if applicable,
the same Option Price per share, subject to corresponding
Existing Award. Except as provided in the preceding
sentence, the Replacement Awards granted pursuant
to this Section 11 shall be subject to the same
terms and conditions as the corresponding Existing
Awards. |
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| 12. |
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- Miscellaneous
12.1 Duration.
- The Plan shall be unlimited in duration and, in the event of Plan termination,
shall remain in effect as long as any awards under it are outstanding.
12.2 Withholding Payments. - To the extent that any Non-Employee Director would incur an obligation
for Nebraska state income taxes on account of an award or payment to him
under the Plan or the exercise of any award under the Plan (referred to
as the "Withholding Obligation"), the Company, in its sole discretion,
may make a cash payment to such Non-Employee Director in an amount such
that, after payment of all federal, state or local taxes on such cash payment,
the Non-Employee Director retains a cash payment equal to the Withholding
Obligation.
12.3 Limit on Distribution. - Distribution of shares of Stock or other amounts under the Plan shall
be subject to the following:
(a) Notwithstanding any other provision of the Plan, the Company shall
have no liability to deliver any shares of Stock under the Plan or make any
other distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity.
(b) To the extent that the Plan provides for issuance of certificates
to reflect the transfer of shares of Stock, the transfer of such shares
may be effected on a non-certificated basis, to the extent not prohibited by
applicable
law or the rules of any stock exchange.
12.4 Transferability. - Awards under the Plan are not transferable except as designated by a
Non-Employee Director by will or by the laws of descent and distribution.
To the extent that the Non-Employee Director who receives an award
under the Plan has the right to exercise such award, the award may be exercised
during the lifetime of the Non-Employee Director only by the Non-Employee
Director.
12.5 Notices. - Any notice or document required to be filed with the Committee under
the Plan will be properly filed if delivered or mailed by registered mail,
postage prepaid, to the Committee, in care of the Company, at its principal
executive offices. The Committee may, by advance written notice to affected
persons, revise such notice procedure from time to time. Any notice required
under the Plan (other than a notice of election) may be waived by the person
entitled to notice.
12.6 Form and Time of Elections. - Unless otherwise specified herein, each election required or permitted
to be made by any Non-Employee Director or other person entitled
to benefits under the Plan, and any permitted modification or revocation
thereof, shall
be in writing filed with the Committee at such times, in such form,
and subject to such restrictions and limitations, not inconsistent with
the
terms of the Plan, as the Committee shall require. Any notice required
under the Plan may be waived by the person entitled thereto.
12.7 Agreement With the Company. - At the time of an award to a Non-Employee Director under the Plan, the
Committee may require a Non-Employee Director to enter into an agreement
with the Company in a form specified by the Committee, agreeing to
the terms and conditions of the Plan and to such additional terms and conditions,
not inconsistent with the Plan, as the Committee may, in its sole
discretion,
prescribe.
12.8 Limitation of Implied Rights.- (a) Neither a Non-Employee Director nor any other person shall, by reason
of the Plan, acquire any right in or title to any assets, funds or property
of the Company whatsoever, including, without limitation, any specific
funds, assets, or other property which the Company, in its sole discretion,
may set aside in anticipation of a liability under the Plan. A Non-Employee
Director shall have only a contractual right to the amounts, if any, payable
under the Plan, unsecured by any assets of the Company. Nothing contained
in the Plan shall constitute a guarantee by the Company that the assets
of such companies shall be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of continued service, and
participation in the Plan shall not give any Non-Employee Director the
right to be retained as a director of the Company, nor any right or claim to
any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Except as otherwise provided in the Plan,
no award under the Plan shall confer upon the holder thereof any right as a
shareholder
of the Company prior to the date on which he fulfills all service requirements
and other conditions for receipt of such rights.
12.9 Evidence. - Evidence required of anyone under the Plan may be by certificate, affidavit,
document or other information which the person acting on it considers
pertinent and reliable, and signed, made or presented by the proper party
or parties.
12.10 Gender and Number. - Where the context admits, words in one gender shall include the other
gender, words in the singular shall include the plural and the plural shall
include the singular.
12.11 Source of Payments. - The provisions of Sections 9 and 10 constitute only unfunded, unsecured
promises of the Company to make payments to directors (or other persons)
in the future in accordance with the terms of the Plan.
12.12 Nonassignment. - Neither a director's nor any other person's rights to payments under
the Plan are subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment or garnishment by creditors
of the director.
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| 13. |
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Amendment
and Termination
The Board may, at any time, amend or terminate the
Plan, provided that, subject to subsection 5.3 (relating
to certain adjustments to shares) and subsection
10.3 (relating to lump sum payments of amounts held
in a Non-Employee Director's Deferred Compensation
Account), no amendment or termination may, without
the consent of the Non-Employee Director or beneficiary,
if applicable, materially adversely affect the rights
of any Non-Employee Director or beneficiary under
any award made under the Plan or rights already
accrued hereunder prior to the date such amendment
is adopted by the Board. |
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| 14. |
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Change
in Control
Notwithstanding any provision in the Plan to the
contrary, upon a Change in Control, all outstanding
Options will become fully exercisable and all outstanding
Stock Awards shall become fully vested. For purposes
of the Plan, the term "Change in Control"
means a change the beneficial ownership of the Company’s
voting stock or a change in the composition of the
Board which occurs as follows:
- Any "person" (as such
term is used in Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"))
is or becomes a beneficial owner, directly
or indirectly, of stock of the Company
representing 30 percent or more of the
total voting power of the Company’s
then outstanding stock.
- A tender offer (for which a filing has
been made with the Securities Exchange
Commission ("SEC") which purports
to comply with the requirements of Section
14(d) of the Exchange Act and the corresponding
SEC rules) is made for the stock of the
Company, which has not been negotiated
and approved by the Board. In case of
a tender offer described in this paragraph
(b), the Change in Control will be deemed
to have occurred upon the first to occur
of (i) any time during the offer when
the person (using the definition in (a)
above) making the offer owns or has accepted
for payment stock of the Company with
25 percent or more of the total voting
power of the Company’s stock, or
(ii) three business days before the offer
is to terminate unless the offer is withdrawn
first, if the person making the offer
could own, by the terms of the offer plus
any shares owned by this person, stock
with 50 percent or more of the total voting
power of the Company’s stock when
the offer terminates.
- Individuals who were the Board's nominees
for election as directors of the Company
immediately prior to a meeting of the
shareholders of the Company involving
a contest for the election of directors
shall not constitute a majority of the
Board following the election.
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