SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
Registration Statement
Under
The Securities Act of 1933
TOMPKINS TRUSTCO, INC.
(Exact name of Registrant as Specified in its Charter)
NEW YORK
(State or other Jurisdiction of Incorporation or Organization)
16-1482357
(IRS Employer Identification No.)
The Commons, P.O. Box 460
Ithaca, New York 14851
(Address of principal executive offices)
2001 STOCK OPTION PLAN
(Full Title of Plan)
Francis M. Fetsko
Senior Vice President and Chief Financial Officer
Tompkins Trustco, Inc.
The Commons, P.O. Box 460
Ithaca, New York 14851
(607) 273-3210
(Name, address, including zip code, and telephone number,
including area code, of Agent for Service)
with a copy to:
Edward C. Hooks, Esq.
Harris Beach LLP
119 East Seneca Street
Ithaca, New York 14851
(607) 273-6444
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price per Offering Registration
Registered Registered(1)(2) Share(3) Price(3) Fee(1)(3)
-------------------------------------------------------------------------------
Common
Stock 324,110 $39.91 $12,935,230 $3,091.52
-------------------------------------------------------------------------------
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(1) This Registration Statement also covers, pursuant to Instruction E to Form S-8, 25,890 shares of Common Stock previously registered on, and carried forward from, a Form S-8 Registration Statement (File No. 333-60873) filed on August 7, 1998 in connection with the former 1998 Stock Option Plan (one of the predecessor plans to the 2001 Stock Option Plan), with respect to which a filing fee of $304 was paid.
(2) This Registration Statement also includes an indeterminate number of additional shares that may become issuable as a result of terminated, expired or surrendered options to purchase Common Stock, or pursuant to the antidilution provisions of the 2001 Stock Option Plan.
(3) In accordance with Rule 457(h)(1), calculated on the basis of the average of the high and low sales prices of the Common Stock reported on the American Stock Exchange on December 20, 2001.
EXPLANATORY STATEMENT
Effective as of January 23, 2001, the Board of Directors of Tompkins Trustco, Inc. (the "Company") terminated its 1998 Stock Option Plan (the "1998 Plan") and adopted, subject to stockholder approval, the 2001 Stock Option Plan (the "2001 Plan"). The 1998 Plan remains in effect solely with respect to unexercised options issued in accordance with the terms and conditions of the 1998 Plan. On May 15, 2001, the stockholders of the Company approved the adoption of the 2001 Plan and the issuance of 350,000 shares of the Common Stock of the Company thereunder.
The Company registered 240,000 shares of Common Stock on a Form S-8 Registration Statement (File No. 333-60873) for issuance under the 1998 Plan. Of such 240,000 registered shares, a total of 25,890 shares remain available for issuance under the 2001 Plan. Pursuant to Instruction E to Form S-8 and the telephonic interpretation of the Securities and Exchange Commission (the "Commission") set forth in No. 89 in the Securities Act Forms section of the Division of Corporation Finance's Manual of Publicly Available Telephone Interpretations (July 1997), such 25,890 remaining shares are carried forward to, and deemed covered by, this Registration Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents are incorporated by reference in this Registration Statement:
(a) The Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2000 as filed with the Commission on April 2, 2001 pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act");
(b) All other reports filed by the Company with the Commission pursuant to Section 13(a) or Section 15(d) of the Exchange Act since the end of the fiscal year covered by the Company's Form 10-K referred to above; and
(c) The description of the Common Stock of the Company contained in the Company's Registration Statement on Form 8-A (SEC File No. 1-12709) filed with the Commission on January 30, 1997 pursuant to Section 12 of the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated herein by reference and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 722 of the New York Business Corporation Law (the "BCL") empowers a New York corporation to indemnify any person who is, or is threatened to be, made party to any action or proceeding (other than one by or in the right of the corporation to procure a judgment in its favor), whether civil or criminal, by reason of the fact that such person (or such person's testator or intestate), was an officer or director of such corporation, or served at the request of such corporation as a director, officer, employee, agent, or in any other capacity, of another corporation or enterprise. The indemnity may include judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys' fees actually and necessarily incurred by such person as a result of
such action or proceeding, or any appeal therein, provided that such officer or
director acted in good faith, for a purpose that he or she reasonably believed
to be in or, in the case of service for another corporation or enterprise, not
opposed to, the best interests of the corporation and, for criminal actions or
proceedings, in addition, had no reasonable cause to believe his or her conduct
was unlawful. A New York corporation may indemnify any officer or director
against amounts paid in settlement and reasonable expenses, including attorneys'
fees, actually and necessarily incurred by him or her in connection with the
defense or settlement of an action by or in the right of the corporation under
the same conditions, except that no indemnification is permitted in respect of
(1) a threatened action, or a pending action which is settled or otherwise
disposed of, or (2) any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent judicially approved. Where an officer or director is successful on the
merits or otherwise in the defense of an action referred to above, the
corporation must indemnify him or her against the expenses which such officer or
director actually and reasonably incurred.
In accordance with Section 402(b) of the BCL, the Certificate of Incorporation of the Company contains a provision to limit the personal liability of the directors of the Company to the fullest extent permitted under the BCL; provided, however, that there shall be no limitation of a director's liability for acts or omissions committed in bad faith, or that involved intentional misconduct or a knowing violation of law, or from which a director personally gained a financial profit or other advantage to which he or she was not legally entitled. The effect of this provision is to eliminate the personal liability of directors to the Company and its shareholders for monetary damages for actions involving a breach of their fiduciary duty of care, including any such actions involving gross negligence.
Article VIII of the By-Laws of the Company provides for indemnification for the officers and directors of the Company to the full extent permitted by applicable law.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, the Company has been informed that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are filed with this Registration Statement:
4.1 Form of Specimen Common Stock Certificate of the Company, incorporated herein by reference to Exhibit 4 to the Company's Registration Statement on Form 8-A (SEC File No. 0-27514) filed with the Commission on December 29, 1995 and amended by the Company's Form 8-A/A filed with the Commission on January 22, 1996
5 Opinion of Harris Beach LLP
23.1 Consent of KPMG LLP
23.2 Consent of Harris Beach LLP (contained in the opinion filed as Exhibit 5 to this Registration Statement)
24 Powers of Attorney (included in Part II of this Registration Statement under the caption "Signatures")
99 2001 Stock Option Plan
ITEM 9. UNDERTAKINGS
(a) RULE 415 OFFERINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) FILING OF REGISTRATION STATEMENT ON FORM S-8.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions of the registrant's charter, or otherwise, the registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Ithaca, State of New York, on December 21, 2001.
TOMPKINS TRUSTCO, INC.
By: /s/ JAMES J. BYRNES --------------------------------- James J. Byrnes Chairman of the Board and Chief Executive Officer |
Each person whose signature appears below hereby constitutes and appoints JAMES J. BYRNES, JAMES W. FULMER and FRANCIS M. FETSKO, and each of them singly, such person's true and lawful attorney-in-fact and agent, with full powers of substitution and resubstitution, for such person and in such person's name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement on Form S-8 to be filed by Tompkins Trustco, Inc., and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to perform any other act on behalf of the undersigned required to be done in connection therewith.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
By: /s/ JAMES J. BYRNES Chairman of the Board and December 21, 2001
---------------------------- Chief Executive Officer
James J. Byrnes
By: /s/ JAMES W. FULMER President and Director December 21, 2001
----------------------------
James W. Fulmer
By: /s/ FRANCIS M. FETSKO Senior Vice President and December 21, 2001
---------------------------- Chief Financial Officer
Francis M. Fetsko
By: /s/ JOHN E. ALEXANDER Director December 21, 2001
----------------------------
John E. Alexander
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By: /s/ REEDER D. GATES Director December 21, 2001 ---------------------------- Reeder D. Gates By: /s/ WILLIAM W. GRISWOLD Director December 21, 2001 ---------------------------- William W. Griswold By: /s/ JAMES R. HARDIE Director December 21, 2001 ---------------------------- James R. Hardie By: /s/ EDWARD C. HOOKS Director December 21, 2001 ---------------------------- Edward C. Hooks By: /s/ BONNIE H. HOWELL Director December 21, 2001 ---------------------------- Bonnie H. Howell By: /s/ HUNTER R. RAWLINGS, III Director December 21, 2001 ---------------------------- Hunter R. Rawlings, III By: /s/ THOMAS R. SALM Director December 21, 2001 ---------------------------- Thomas R. Salm By: /s/ MICHAEL H. SPAIN Director December 21, 2001 ---------------------------- Michael H. Spain By: /s/ WILLIAM D. SPAIN, JR. Director December 21, 2001 ---------------------------- William D. Spain, Jr. By: /s/ CRAIG YUNKER Director December 21, 2001 ---------------------------- Craig Yunker |
EXHIBIT INDEX
Exhibit
Number
------
Title of Exhibit
----------------
4.1 Form of Specimen Common Stock Certificate of the Company,
incorporated herein by reference to Exhibit 4 to the Company's
Registration Statement on Form 8-A (SEC File No. 0-27514) filed
with the Commission on December 29, 1995, and amended by the
Company's Form 8-A/A filed with the Commission on January 22,
1986
5 Opinion of Harris Beach LLP
23.1 Consent of KPMG LLP
23.2 Consent of Harris Beach LLP (contained in the opinion filed as
Exhibit 5 to this Registration Statement)
24 Powers of Attorney (included in Part II of this Registration
Statement under the caption "Signatures")
99 2001 Stock Option Plan
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EXHIBIT 5
OPINION OF COUNSEL
HARRIS BEACH LLP
99 Garnsey Road
Pittsford, New York 14534
December 21, 2001
Tompkins Trustco, Inc.
The Commons, P.O. Box 460
Ithaca, New York 14851
Ladies and Gentlemen:
We have acted as counsel to Tompkins Trustco, Inc., a New York corporation (the "Company"), in connection with the filing of the Company's registration statement on Form S-8 with the Securities and Exchange Commission (the "SEC") on December 21, 2001 (the "Registration Statement"), under the Securities Act of 1933, as amended. The Registration Statement is being filed in connection with the Company's offering of up to 350,000 shares of Common Stock (the "Shares") pursuant to the Company's 2001 Stock Option Plan (the "Plan"). The Registration Statement carries forward 25,890 shares of Common Stock registered under the Company's registration statement on Form S-8 (File No. 333-60873) for issuance under the Company's 1998 Stock Option Plan, filed with the SEC on August 7, 1998.
We are familiar with the proceedings to date with respect to such offering and have examined such records, documents and matters of law and satisfied ourselves as to such matters of fact as we have considered relevant for purposes of this opinion.
For purposes of this opinion, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. We have also assumed the genuineness of the signatures of persons signing all documents in connection with which this opinion is rendered, the authority of such persons signing on behalf of the parties thereto, and the due authorization, execution and delivery of all documents by the parties thereto.
We are of the opinion that, when the Shares shall have been issued and sold on the terms contemplated by the Plan, and the Registration Statement shall have become effective, the Shares will be legally issued, fully paid and non-assessable.
This opinion shall be limited to the New York Business Corporation Law and the federal securities laws of the United States of America.
We hereby consent to the use of this opinion as an exhibit to the Registration Statement. This opinion speaks only as of the date hereof and is limited to statutes, laws and regulations presently in effect and to the facts as they currently exist.
Very truly yours,
/s/ HARRIS BEACH LLP HARRIS BEACH LLP |
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Tompkins Trustco, Inc.:
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 of Tompkins Trustco, Inc. of our report dated January 22, 2001 relating to the consolidated statements of condition of Tompkins Trustco, Inc. as of December 31, 2000 and 1999, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the years in the three-year period ended December 31, 2000, which report has been included in the December 31, 2000 annual report on Form 10-K of Tompkins Trustco, Inc.
/s/ KPMG Syracuse, New York December 19, 2001 |
EXHIBIT 99
TOMPKINS TRUSTCO, INC. 2001 STOCK OPTION PLAN
1. Purpose. THE TOMPKINS TRUSTCO, INC. 2001 STOCK OPTION PLAN (hereinafter referred to as the "Plan") is designed to attract the best available personnel for positions of substantial responsibility and to furnish additional incentive to officers and key employees of TOMPKINS TRUSTCO, INC. (hereinafter referred to as the "Company"), or any of the Company's wholly-owned or substantially owned subsidiaries, upon whose efforts the successful conduct of the business of the Company largely depends, by encouraging such officers and key employees to acquire a proprietary interest in the Company or to increase the same. This purpose will be effected through the granting of options to purchase the Common Stock of the Company which will be either "Incentive Stock Options" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended to date (hereinafter referred to as the "Code") or Non-Statutory Stock Options (which shall not qualify under Section 422 of the Code) on the terms provided herein. Hereinafter the term "option" shall be deemed to refer to either Incentive Stock Options or Non-Statutory Stock Options as the context requires, unless specific reference is made to Incentive Stock Options.
2. Eligibility. The persons eligible to receive options under this Plan shall be such officers and key employees and "Consultants" of the Company and its subsidiaries as the Board of Directors of the Company shall select from time to time; provided, however, that all options must be approved by the Executive, Compensation/Personnel Committee designated by the Board of Directors (the "Compensation Committee"). The Compensation Committee shall be composed solely of two (2) or more "Non-Employee Directors," as that term is defined in Rule 16b-3(b)(3)(i) promulgated under Section 16 of the Securities Exchange Act of 1934, as amended. All references in this Plan to employees of the Company shall include the officers and key employees of any parent or subsidiary of the Company, as those terms are defined in Section 424 of the Internal Revenue Code. For the purposes of this Plan, "Consultant" shall mean any person or entity, including an officer or director of the Company or a subsidiary of the Company who provides services (other than as an employee) to the Company or a subsidiary of the Company, and shall include a member of the Board of Directors of the Company who is not an employee of the Company or a subsidiary of the Company at the time the option is granted. Key employees shall be entitled to receive Incentive Stock Options and/or Non-Statutory Stock Options hereunder. Consultants shall be entitled to receive Non-Statutory Stock Options hereunder.
3. Stock Subject to Options. Subject to the provisions of Section 11 hereof, options may be granted under this Plan for up to 350,000 shares of Common Stock, par value $.10 per share, of the Company (hereinafter referred to as "Shares"), which Shares may, in the discretion of the Board of Directors of the Company, consist either in whole or in part of authorized but unissued shares of Common Stock or shares of Common Stock held in the treasury of the Company. Any Shares subject to an option that expires or terminates unexercised as to such Shares for any reason whatsoever, shall continue to be available for options under this Plan.
4. Effective Date. The effective date of this Plan shall be January 23, 2001, the date that the Plan was adopted by the Board of Directors of the Company; provided, however, that the effectiveness of the Plan shall be subject to and contingent upon the approval by the stockholders of the Company within twelve (12) months of the date that this Plan is so adopted by the Board of Directors.
5. Terms and Conditions of Options. Each option granted by the Compensation Committee on behalf of the Board of Directors pursuant to this Plan shall be evidenced by a certain stock option agreement (the "Agreement") containing provisions consistent with this Plan. The Agreement shall specify whether the options granted are Incentive Stock Options, designed to qualify under the provisions of Section 422 of the Code, or Non-Statutory Stock Options, which are not designed to qualify under Section 422 of the Code. The Agreement, whether for Incentive Stock Options, Non-Statutory Stock Options, or both, shall incorporate in substance the following terms and conditions:
(a) Price. Each option shall state the number of Shares subject to the option as well as the option price of each such Share, which shall be an amount not less than the "Fair Market Value" of a share of Common Stock of the Company as of the date the option is granted. For the purposes of the Plan, the "Fair Market Value" of each share of Common Stock of the Company shall be, if shares of Common Stock of the Company are listed or admitted to trading on any stock exchange, an amount equal to the closing price of the Common Stock of the Company on such exchange, on the date immediately preceding the date of such grant. If the Common Stock of the Company is not, at the time an option is granted, listed or admitted to trading on a stock exchange, the "Fair Market Value" shall be the average between the lowest reported "bid" price and the highest reported "ask" price of shares of Common Stock of the Company on the date immediately preceding the date of such grant in the over-the-counter market, as such prices are reported in a publication of general circulation selected by the Compensation Committee. If for any reason the Common Stock of the Company is no longer being traded at the time of the grant of the option, the "Fair Market Value" of each share of Common Stock of the Company shall be determined by the Compensation Committee; provided, however, that the "Fair Market Value" shall in no event be less than the book value of the Common Stock of the Company as of the date said option is granted, excluding goodwill. In the event an option, which is designed to qualify as an Incentive Stock Option, is granted to any person who would after the grant of such option be deemed to beneficially own stock possessing more than ten percent (10 percent) of the total combined voting power of all classes of capital stock of the Company within the meaning of Section 422(b)(6) of the Code (hereinafter referred to as a "Ten Percent Shareholder"), the option price per share shall be an amount equal to not less than one hundred ten percent (110 percent) of the "Fair Market Value" of a share of Common Stock of the Company as of the date the option is granted.
(b) Term. The term of each option shall be determined by the Compensation Committee, but in no event shall an option be exercisable either in whole or in part after the expiration of ten (10) years from the date on which it is granted, or in the case of a Ten Percent Shareholder where the option is designed to qualify as an Incentive Stock Option, in no event shall such an option be exercisable either in whole or in part after the expiration of five (5) years from the date on which it is granted. The Board of Directors and an optionee may at any time by mutual agreement terminate any option granted to such optionee under this Plan.
(c) Vesting Schedule. Each Agreement may include, in the
discretion of the Compensation Committee, a vesting period following
the grant of any option during which all or any part of such option
remains forfeitable and cannot be exercised. All Agreements shall
provide for full and immediate vesting in the event that (i) the
Company shall dispose of all or substantially all of its assets as an
entity and thereafter dissolve, or (ii) consolidate with or merge into
another corporation or permit one or more corporations to consolidate
with or merge into it and pursuant to any such merger or consolidation
(1) the Company shall not be the resulting or surviving corporation and
(2) neither the Company nor the shareholders of the Company entitled to vote for the election of directors as of the date immediately preceding the effective date of said consolidation or merger, shall receive more than fifty percent (50 percent) of the resulting entity's voting capital stock. In the event of any merger or consolidation involving the Company and pursuant to which (1) the Company shall be the resulting or surviving corporation, or (2) either Company shall not be the resulting or surviving corporation and (2) neither the Company nor the shareholders of the Company entitled to vote for the election of directors as of the date immediately preceding the effective date of said consolidation or merger, shall receive more than fifty percent of the resulting entity's voting capital stock, then any options granted under this Plan shall remain subject to the vesting schedule set forth in the Agreement regarding such grant and shall not be subject to full and immediate vesting. Additional specific provisions regarding vesting in the event of an optionee's death or disability are set forth at Sections 9 and 10 of this Plan, respectively.
(d) Exercise. Notwithstanding any provision to the contrary set forth herein, any option exercised subsequent to the date in which optionee's relationship with the Company or any of its subsidiaries is terminated (whether such relationship is as an employee or Consultant), shall only be exercisable to the extent that said option vested as of said termination date. Each option, or any installment thereof, shall be exercised whether in whole or in part, by giving written notice to the Company at its principal office, specifying the number of Shares to be purchased and the purchase price to be paid, and accompanied by the payment of the purchase price. Any optionee may pay for the Shares subject to the option with cash, a certified check or a bank check payable to the order of the Company. Alternatively, the optionee may pay for the Shares, in whole or in part, by the delivery of shares of Common Stock of the Company already owned by him or her for a period in excess of six (6) months, which shares will be accepted in exchange for the Shares at their value on the date of exercise. Certificates representing the shares purchased by the optionee shall be issued as soon as practicable after the optionee has complied with the provisions hereof.
6. Annual Limitation for Incentive Stock Options. The aggregate Fair Market Value of the Shares (determined under Section 5 as of the time the option is granted) with respect to which Incentive Stock Options are first exercisable by an optionee during any calendar year (under all stock option plans of the Company or any of its subsidiaries) shall not exceed One Hundred Thousand Dollars ($100,000).
7. Non-Assignment. During the lifetime of the optionee, options issued hereunder shall be exercisable only by the optionee and shall not be assignable or transferable by the optionee, whether voluntarily or by operation of law or otherwise, and no other person shall acquire any rights therein.
(a) Optionees shall have the right to exercise the vested portion of any options granted under this Plan only while the optionee maintains a relationship as an employee or Consultant, as the case may be, of the Company or any of its subsidiaries and has been an employee or Consultant of one or more such corporations continuously since the grant of the option, except as otherwise expressly provided herein. For purposes of this Section, a relationship qualifying an optionee to participate under this Plan will be treated as continuing during the period when the optionee is on military duty, sick leave or other bona fide leave of absence if the period of such leave does not exceed ninety (90) days, or, if longer, so long as a statute or contract guarantees the optionee's right to re-employment with the Company or the applicable subsidiary. When the period of leave exceeds ninety (90)
days and the optionee's right to re-employment is not guaranteed either by statute or by contract, the relationship will be deemed to have terminated on the ninety-first (91st) day of such leave.
(b) In the event of an optionee's termination of employment
without "cause," other than by reason of death or permanent and total
disability, or the retirement by optionee as a result of "Normal
Retirement" (as defined for purposes of the Company's retirement plan
as in effect as of the date that this Plan was adopted by the Board of
Directors of the Company), the optionee shall have the right to
exercise the vested portion of his or her unexercised options as of
said termination date, or any portion thereof, at any time within
thirty (30) days of said termination date; provided, however, that in
any event, the option cannot be exercised after the expiration of the
term of the option. In the event of an optionee's termination of
employment for "cause", any option or options held by him or her under
this Plan, to the extent not exercised before the effective date of
such termination, shall forthwith terminate. For purposes of this Plan,
the term "cause" shall mean the optionee's dishonesty, malfeasance,
misfeasance or the commission of a criminal offense. The conclusion of
the Compensation Committee in determining whether "cause" for
termination exists shall be final and conclusive. In the event that the
optionee retires from the Company or any of its subsidiaries as a
result of a Normal Retirement, the optionee shall have the right to
exercise the vested portion of his or her unexercised options as of
said retirement date, or any portion thereof, at any time within ninety
(90) days of said Normal Retirement Date (as defined for purposes of
the Company's retirement plan as in effect as of the date that the Plan
was adopted by the Board of Directors of the Company); provided,
however, that in any event, the option cannot be exercised after the
expiration of the term of the option. Options not exercised within the
applicable period specified above shall terminate.
9. Death of Optionee. In the event that an optionee's employment (in the case of an employee), or provision of services as a consultant (in the case of a Consultant), terminates by reason of said optionee's death prior to the complete exercise of the vested portion of the options granted to the optionee under this Plan, any such unexercised option or portion thereof may be exercised in whole or in part within one (1) year after the date of the optionee's death and then only: (i) by the optionee's estate or by or on behalf of such person or persons to whom the optionee's rights pass under the optionee's Will or the laws of descent and distribution; and (ii) prior to the expiration of the term of the option.
10. Disability. In the event that an optionee's employment (in the case of an employee) or provision of services as a consultant (in the case of a Consultant) with the Company or any of its subsidiaries terminates by reason of said optionee's permanent and total disability (within the meaning of Section 22(e)(3) of the Code) prior to the complete exercise of the vested portion of the options granted to the optionee under this Plan, the optionee shall have the right to exercise the vested portion of his or her unexercised options as of the termination date, or any portion thereof, within one (1) year after the date that optionee's employment or consulting relationship with the Company terminates as a result of said permanent and total disability; provided, however, that in no event shall any such options be exercisable after the expiration of the term of the option.
11. Adjustments to Number of Shares. The aggregate number and kind of Shares available for options under this Plan, the number and kind of Shares subject to any outstanding option and the option price of each outstanding option, shall be proportionately adjusted by the Board of Directors for any increase, decrease or change in the total outstanding common shares of the Company resulting from a stock dividend, recapitalization or similar transaction (but not by reason of the issuance or purchase of common voting stock by the Company in consideration for money, services or property).
12. Rights as a Shareholder. The optionee shall have no rights as a stockholder of the Company with respect to the Shares purchased by him or her pursuant to the exercise of an option until the date of the issuance to him or her of a certificate of stock representing such Shares. No adjustment shall be made for dividends or for distributions of any other kind with respect to Shares for which the record date is prior to the date of the issuance to the optionee of a certificate for the Shares.
13. Investment Purpose. Each written notice by which an optionee exercises an option shall contain representations on behalf of the optionee that he or she acknowledges that the Company is selling or distributing Shares to him or her under a claim of exemption from registration under the Securities Act of 1933, as amended (hereinafter referred to as the "Act"), as a transaction not involving any public offering; that he or she represents and warrants that he or she is acquiring such Shares with a view to investment and not with a view to distribution or resale; and that he or she agrees not to make any sale or other distribution or disposition of such Shares unless (i) a registration statement with respect to such Shares shall be effective under the Act, together with proof satisfactory to the Company that there has been compliance with applicable state law, or (ii) the Company shall have received an opinion of counsel satisfactory to it that no violation of the Act or applicable state law will be involved in such transfer. The Company shall include on any certificate for Shares issued under this Plan such legend restricting the transfer thereof as it may deem appropriate to comply with any requirement established by law or by the rules of any stock exchange.
14. Term of Plan. This Plan originally was adopted by the Board of Directors on January 23, 2001, and approved by the stockholders of the Company at the Annual Meeting of Stockholders on May 15, 2001, and shall remain in effect until all Shares subject to issuance hereunder have been purchased pursuant to the exercise of the options granted under this Plan or until all such options have lapsed or terminated unexercised; provided, however, that all options and rights under this Plan must be granted on or before January 22, 2011, which date is ten (10) years from the date that this Plan was adopted by the Board of Directors of the Company.
15. Amendment and Termination of Plan. The Board of Directors of the Company, without further approval of the stockholders of the Company, may at any time suspend or terminate this Plan or may amend it from time to time in any manner; provided, however, that no amendment shall be effective without prior approval of the stockholders of the Company which would (i) except as provided in Section 11 hereof, increase the maximum number of Shares which may be issued under this Plan, (ii) change the eligibility requirements for individuals entitled to receive options under this Plan, (iii) extend the period for granting options, (iv) change the manner of determining the option price, or (v) materially increase the benefits accruing to employees under this Plan. No amendment, modification or termination of this Plan shall in any manner adversely affect any outstanding option under this Plan without the consent of the optionee holding such affected options.
16. Termination of Prior Stock Option Plans. Upon adoption of this Plan by the stockholders of the Company, all other stock option plans in effect on behalf of the Company or any of its subsidiaries shall terminate; provided, however, such plans shall remain in effect to the extent there remain unexercised options issued in accordance with the terms and conditions of such plan or plans.
17. Administration. This Plan shall be administered by the Compensation Committee of the Board of Directors and decisions of the Compensation Committee concerning the interpretation and construction of any provisions hereof or any option granted pursuant hereto shall be final. The Company shall effect the grant of options under this Plan in accordance with the decisions of the Compensation Committee, which may, from time to time, adopt rules and regulations for carrying out this Plan. For purposes of this Plan, an option shall be deemed to be granted when the written Agreement for the same is signed on behalf of the Company by its duly authorized officer or representative. Subject to the express provisions of this Plan, the Compensation Committee shall have the authority, in its discretion and without limitation, to determine: the Optionees to receive options, the times when such individuals shall receive such options, the number of Shares to be subject to each option, the term of each option, the date when each option or portion thereof shall become exercisable, the term of each installment, the option price of each Share subject to option, and such other terms or conditions of any option that are not inconsistent with the terms and conditions of this Plan or, in the case of an Incentive Stock Option, not inconsistent with the qualification of such option under Section 422 of the Code; to accelerate the date of exercise of any option or installment thereof; and to make all other recommendations advisable for administering this Plan.
18. Reservation of Shares. The Company shall be under no obligation to reserve Shares to fill options. The grant of options to employees hereunder shall not be construed to constitute the establishment of a trust of such Shares and no particular Shares shall be identified as optioned and reserved for employees hereunder. The Company shall be deemed to have complied with the terms of this Plan if, at the time of issuance and delivery pursuant to the exercise of an option, it has a sufficient number of Shares authorized and unissued or in its treasury which may then be appropriated and issued for the purposes contemplated herein, irrespective of the date when such Shares were authorized.
19. Application of Proceeds. The proceeds of a sale of Shares by the Company under this Plan will constitute general funds of the Company and may be used by the Company for any purpose.
20. No Rights Conferred. The adoption and maintenance of this Plan shall not be deemed to constitute a contract between the Company or any of its subsidiaries and any officer or employee or to be a consideration for, or an inducement to or condition of, the employment of any person. Nothing herein contained shall be deemed to: (i) give to any officer or employee the right to be retained in the employ of the Company or any of its subsidiaries, (ii) interfere with the right of the Company or any of its subsidiaries to discharge any officer or employee at any time, (iii) give to the Company or any of its subsidiaries the right to require any officer or employee to remain in its employ, or (iv) interfere with any officer's or employee's right to terminate his or her employment with the Company or any of its subsidiaries at any time.
21. Tax Withholding. The Company, which employs an officer or employee granted an option under this Plan, shall have the right to deduct or otherwise effect a withholding of any amount required by federal or state laws to be withheld with respect to the grant, exercise, or surrender of any option, or the sale of Shares acquired upon the exercise of an option, in order for the Company (or one of its subsidiaries, as the case may be) to obtain a tax deduction otherwise available as a consequence of such grant, exercise, surrender or sale,
as the case may be. Under appropriate circumstances, such right shall include the right to receive payment from the optionee of the required withholding amount. In addition, if, following the exercise of an option granted hereunder, an optionee sells Shares purchased on exercise of an Incentive Stock Option within two (2) years from the date of the granting of such Incentive Stock Option or within one (1) year after the transfer of such Shares to the optionee, the optionee shall notify the Company at the time of such sale.
22. Indemnification. To the extent permitted by law, each person who is or shall have been a member of the Board of Directors of the Company or the Compensation Committee shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under this Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company's approval, or paid by him or her in satisfaction of judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company or any subsidiary thereof may have to indemnify them or hold them harmless.
23. Governing Law. This Plan shall be governed by and construed in accordance with the laws of the State of New York.