As filed with the Securities and Exchange Commission on December 10, 2001
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CROSS COUNTRY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-4066229
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
6551 PARK OF COMMERCE BLVD, N.W.
SUITE 200
BOCA RATON, FL 33487
(Address of principal executive offices) (Zip code)
CROSS COUNTRY, INC. AMENDED AND RESTATED 1999 STOCK OPTION PLAN
CROSS COUNTRY, INC. AMENDED AND RESTATED EQUITY PARTICIPATION PLAN
(Full title of the plan)
JOSEPH A. BOSHART
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CROSS COUNTRY, INC.
6551 PARK OF COMMERCE BLVD, N.W.
SUITE 200
BOCA RATON, FL 33487
(561) 998-2232
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------------
COPIES OF ALL COMMUNICATIONS TO:
STEPHEN W. RUBIN, ESQ.
PROSKAUER ROSE LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036
(212) 969-3000
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CALCULATION OF REGISTRATION FEE
Proposed
maximum Proposed maximum
Title of securities to be Amount to be offering price aggregate offering Amount of
registered registered (1) per share(2) price (2) Registration Fee
- ----------------------------- ---------------- ----------------- ------------------------- ---------------------
Common Stock, par 4,398,001 $26.12 $114,875,786.12 $27,455.31
value $.0001 per share
- ----------------------------- ---------------- ----------------- ------------------------- ---------------------
(1) The maximum number of shares as to which awards may be granted
under the Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan (the "Stock Option Plan") is 2,145,515 and the
maximum number of shares as to which awards may be granted
under the Cross Country, Inc. Amended and Restated Equity
Participation Plan (the "Equity Participation Plan," and
together with the Stock Option Plan, the "Plans") is
2,252,486. Pursuant to Rule 416 of the Securities Act of 1933,
as amended (the "Securities Act"), this Registration Statement
also registers such additional indeterminate number of shares
of Common Stock as may be offered or issued to adjust for any
stock splits, stock dividends or similar transactions, as
provided for by the Plans.
(2) Computed pursuant to Rule 457(c) and (h) promulgated under the
Securities Act and is the product of multiplying the number of
shares as to which options may be granted under the Plans by
$26.12, which is the average of the high and low price of the
Registrant's Common Stock reported on the Nasdaq National
Market on December 4, 2001. The price stated is estimated
solely for the purpose of calculating the Registration Fee.
PART I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The Section 10(a) prospectuses for the Stock Option Plan and the Equity
Participation Plan are not being filed with the Securities and Exchange
Commission (the "Commission") as a part of this Registration Statement.
I-1
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Cross Country, Inc., a Delaware corporation (the "Company" or the
"Registrant"), is registering herewith 2,145,515 shares of its common stock, par
value $.0001 per share (the "Common Stock"), which are issuable pursuant to the
Stock Option Plan, and 2,252,486 shares of Common Stock, which are issuable
pursuant to the Equity Participation Plan.
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission by the Company are
incorporated herein by reference:
(a) The Company's prospectus, filed with the Commission on
October 25, 2001 pursuant to Rule 424(b) under the Securities Act;
(b) The Company's Quarterly Report on Form 10-Q for the period
ended September 30, 2001, filed with the Commission on November 16,
2001; and
(c) The description of the Company's Common Stock, par value
$.0001 per share, contained in the Company's Registration Statement on
Form 8-A (No. 000-33169), filed with the Commission on September 19,
2001, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14, and 15(d) of the
Exchange Act after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated
herein by reference in this Registration Statement and to be part
hereof from the date of filing such documents. Any statement in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the 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 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. INTEREST OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
hereby has been passed upon by Proskauer Rose LLP, 1585 Broadway, New York, New
York 10036. Stephen W. Rubin, Esq., a member of Proskauer Rose LLP, owns 500
shares of Common Stock of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the General Corporation Law of Delaware allows a
corporation to limit a director's personal liability to the corporation or its
stockholders from monetary damages for breach of fiduciary duty as a director,
with certain exceptions. The Company's Certificate of Incorporation, as amended,
provides such limitation to the fullest extent permitted by the General
Corporation Law of Delaware.
II-2
Section 145 of the General Corporation Law of Delaware permits a
corporation, subject to the standards set forth therein, to indemnify any person
in connection with any action, suit or proceeding brought or threatened by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation or is or was serving as such with respect to another
entity at the request of the corporation. The Company's Certificate of
Incorporation, as amended, and the Company's By-Laws, as amended, provide for
full indemnification of its directors and officers to the extent permitted by
Section 145.
The Company's amended and restated certificate of incorporation limits
the liability of the Company's directors to the Company and its stockholders to
the fullest extent permitted by Delaware law. Specifically, the Company's
directors will not be personally liable for money damages for breach of
fiduciary duty as a director, except for liability
o for any breach of the director's duty of loyalty to the
Company or its stockholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o under Section 174 of the Delaware General Corporation Law,
which concerns unlawful payments of dividends, stock
purchases, or redemptions; and
o for any transaction from which the director derived an
improper personal benefit.
The Company's amended and restated certificate of incorporation and
amended and restated by-laws will also contain provisions indemnifying the
Company's directors and officers to the fullest extent permitted by Delaware
law. The indemnification permitted under Delaware law is not exclusive of any
other rights to which such persons may be entitled.
In addition, the Company maintains insurance on behalf of its directors
and officers insuring them against liabilities asserted against them in their
capacities as directors or officers or arising out of such status, except when
the Company has directly indemnified the directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
The documents listed hereunder are filed as exhibits hereto.
EXHIBIT
NUMBER DOCUMENT
4.1 Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 3.1
to the Company's Registration Statement on Form S-1
(Registration No. 333-64914))
4.2 Amended and Restated By-laws of the Company
(incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement on Form S-1
(Registration No. 333-64914))
4.3 Amended and Restated 1999 Stock Option Plan of the
Company
II-3
4.4 Amended and Restated Equity Participation Plan of the
Company
*5.1 Opinion of Proskauer Rose LLP
*23.1(a) Consent of Ernst & Young LLP
*23.1(b) Consent of Ernst & Young LLP
*23.1(c) Consent of Ernst & Young LLP
*23.1(d) Consent of Ernst & Young LLP
*23.2 Consent of Pricewaterhouse Coopers LLP
*23.3 Consent of Deloitte & Touche LLP
*23.4 Consent of Proskauer Rose LLP (included in
Exhibit 5.1))
*24.1 Power of Attorney (included on Signature Page)
*Filed herewith.
ITEM 9. UNDERTAKINGS.
(a) 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 of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the 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 the
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
end 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 volume and
price represent no more than a 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 the Registration Statement or any material change
to such information in the Registration Statement;
II-4
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 Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, 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) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the 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) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boca Raton, State of Florida, on December 10,
2001.
By /s/ Joseph A. Boshart
----------------------------------------
Joseph A. Boshart
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENT, that each person whose signature appears below
constitutes and appoints Joseph A. Boshart his true and lawful attorney-in-fact
and agent, with full power of substitution, and resubstitution, to act, without
the other, for him and in his name, place and stead, in any and all capacities,
to sign a Registration Statement on Form S-8 of Cross Country, Inc. and any or
all amendments (including post-effective amendments) thereto, relating to the
registration, under the Securities Act of 1933, as amended, of shares of Common
Stock of the Company to be issued pursuant to the Company's Amended and Restated
1999 Stock Option Plan or the Company's Amended and Restated Equity
Participation Plan 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 do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as full to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in- fact
and agents, or any of them, their substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
/s/ Joseph A. Boshart President; Chief Executive Officer; December 10, 2001
Joseph A. Boshart Director (Principal Executive Officer)
/s/ Emil Hensel Chief Financial Officer, Chief December 10, 2001
Emil Hensel Operating Officer and Director
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Karen H. Bechtel Director December 10, 2001
Karen H. Bechtel
/s/ Bruce A. Cerullo Director December 10, 2001
Bruce A. Cerullo
II-6
/s/ Thomas C. Dircks Director December 10, 2001
Thomas C. Dircks
/s/ A. Lawrence Fagan Director December 10, 2001
A. Lawrence Fagan
/s/ M. Fazle Husain Director December 10, 2001
M. Fazle Husain
II-7
Exhibit 4.3
CROSS COUNTRY, INC.
AMENDED AND RESTATED
1999 STOCK OPTION PLAN
(EFFECTIVE AS OF OCTOBER 25, 2001)
CROSS COUNTRY, INC.
--------------------------
AMENDED AND RESTATED
1999 STOCK OPTION PLAN
--------------------------
ARTICLE I
PURPOSE
The purpose of this Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan is to enhance the profitability and value of the Company for the
benefit of its stockholders by enabling the Company to offer employees of and
Consultants to the Company and its Affiliates stock-based incentives in the
Company, thereby creating a means to raise the level of stock ownership by
employees and Consultants in order to attract, retain and reward such
individuals and strengthen the mutuality of interests between such individuals
and the Company's stockholders. The purpose of the Plan is also to enhance the
profitability of the Company and value of the Company for the benefit of its
stockholders by enabling the Company to offer non-employee directors of the
Company stock-based incentives in the Company.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" means each of the following: (i) any Subsidiary; (ii)
any Parent; (iii) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which is directly or
indirectly controlled 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) by the Company or one of its
Affiliates; and (iv) any other entity in which the Company or any of its
Affiliates has a material equity interest and which is designated as an
"Affiliate" by resolution of the Committee.
2.2 "Award" means any award under this Plan of a Stock Option.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Cause" means, with respect to a Participant's Termination: (i) in
the case where there is no employment agreement, consulting agreement, change in
control
agreement or similar agreement in effect between the Company or an Affiliate and
the Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define "cause" (or words of like import)), termination
due to a Participant's insubordination, dishonesty, fraud, incompetence, moral
turpitude, misconduct, refusal to perform his or her duties or responsibilities
for any reason other than illness or incapacity or materially unsatisfactory
performance of his or her duties for the Company or an Affiliate as determined
by the Committee in its sole discretion; or (ii) in the case where there is an
employment agreement, consulting agreement, change in control agreement or
similar agreement in effect between the Company or an Affiliate and the
Participant at the time of the grant of the Award that defines "cause" (or words
of like import), "cause" as defined under such agreement; provided, however,
that with regard to any agreement that conditions "cause" on occurrence of a
change in control, such definition of "cause" shall not apply until a change in
control actually takes place and then only with regard to a termination
thereafter. Notwithstanding the foregoing, a Participant shall be deemed to be
terminated for "cause" if the Participant: (i) breaches the terms of any
agreement between the Company and the Participant including, without limitation,
an employment agreement or non-competition agreement or (ii) discloses to anyone
outside the Company or its Affiliates, or uses in other than the Company's or
its Affiliate's business, without written authorization from the Company, any
confidential information or proprietary information, relating to the business of
the Company or its Affiliates, acquired by the Participant prior to the
Participant's Termination. Notwithstanding the foregoing, with respect to a
non-employee director's Termination of Directorship, "cause" means an act or
failure to act that constitutes cause for removal of a director under applicable
Delaware law.
2.5 "CEP" means Charterhouse Equity Partners III, L.P., and its
successors.
2.6 "Change in Control" has the meaning set forth in Article VIII.
2.7 "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.
2.8 "Committee" means (i) with respect to Eligible Employees and
Consultants, a committee or subcommittee of the Board appointed from time to
time by the Board, which committee or subcommittee shall consist of 2 or more
non-employee directors each of whom shall be a non-employee director as defined
in Rule 16b-3 under the Exchange Act and an outside director as defined under
Section 162(m) of the Code; provided, however, that if and to the extent that no
Committee exists which has the authority to administer this Plan, the functions
of the Committee shall be exercised by the Board and all references herein to
the Committee shall be deemed to be references to the Board; and (ii) with
respect to the application of this Plan to non-employee directors, the Board. If
for any reason the appointed Committee does not meet the requirements of Rule
16b-3 or Section 162(m) of the Code, such noncompliance with the requirements of
Rule 16b-3 or Section 162(m) of the Code shall not affect the validity of the
awards, grants, interpretations or other actions of the Committee.
2
2.9 "Common Stock" means the Common Stock, $.0001 par value per share,
of the Company.
2.10 "Company" means Cross Country, Inc., a Delaware corporation, and
its successors.
2.11 "Consultant" means any advisor or consultant to the Company or its
Affiliates.
2.12 "Disability" means a disability which would qualify as such under
the Company's long-term disability plan. A Disability shall only be deemed to
occur at the time of the determination by the Committee of the Disability.
2.13 "Effective Date" means the effective date of this Plan as defined
in Article XIII.
2.14 "Eligible Employee" means each employee of the Company or an
Affiliate.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also be a
reference to any successor provision.
2.16 "Fair Market Value" means, for purposes of this Plan, unless
otherwise required by any applicable provision of the Code or any regulations
issued thereunder, as of any date, the last sales price reported for the Common
Stock on the applicable date: (a) as reported on the principal national
securities exchange in the United States on which it is then traded or The
Nasdaq Stock Market, Inc.; or (b) if not traded on any such national securities
exchange or The Nasdaq Stock Market, Inc., as quoted on an automated quotation
system sponsored by the National Association of Securities Dealers, Inc. or if
the Common Stock shall not have been reported or quoted on such date, on the
first day prior thereto on which the Common Stock was reported or quoted;
provided, that the Committee may modify the definition of Fair Market Value to
reflect any changes in the trading practices of any exchange on which the Common
Stock is listed or traded. If the Common Stock is not readily tradable on a
national securities exchange, The Nasdaq Stock Market, Inc. or any automated
quotation system sponsored by the National Association of Securities Dealers,
Inc., its Fair Market Value shall be set in good faith by the Committee.
Notwithstanding anything herein to the contrary, "Fair Market Value" means the
price for Common Stock set by the Committee in good faith. For purposes of the
grant of any Stock Option, the applicable date shall be the date for which the
last sales price is available at the time of grant.
2.17 "Incentive Stock Option" means any Stock Option awarded to an
Eligible Employee under this Plan intended to be and designated as an "Incentive
Stock Option" within the meaning of Section 422 of the Code.
3
2.18 "MSDWCP" means a representative of Morgan Stanley Dean Witter
Capital Partners IV, L.P. and its affiliated funds, and their respective
successors.
2.19 "Non-Qualified Stock Option" means any Stock Option awarded under
this Plan that is not an Incentive Stock Option.
2.20 "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.21 "Participant" means any Eligible Employee or Consultant to whom a
Stock Option has been awarded under this Plan. Effective as of October 25, 2001,
non-employee directors shall be Participants for purposes of the Plan solely
with respect to awards of Stock Options pursuant to Article X.
2.22 "Plan" means this Cross Country, Inc. Amended and Restated 1999
Stock Option Plan, as amended from time to time.
2.23 "Retirement" means a Termination of Employment or Termination of
Consultancy without Cause by a Participant on or after age 65 or such earlier
date after age 50 as may be approved by the Committee with regard to such
Participant. With respect to a Participant's Termination of Directorship,
Retirement means the failure to stand for reelection or the failure to be
reelected on or after a Participant has attained age 65 or, with the consent of
the Board, before age 65 but after age 50.
2.24 "Securities Act" means the Securities Act of 1933, as amended. Any
reference to any section of the Securities Act shall also be a reference to any
successor provision.
2.25 "Stock Option" or "Option" means any option to purchase shares of
Common Stock granted to Eligible Employees or Consultants pursuant to Article VI
or non-employee directors pursuant to Article X.
2.26 "Subsidiary" means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
2.27 "Substitute Options" means Stock Options issued in assumption of
or substitution for stock options issued by a company acquired by the Company or
with which the Company combines.
2.28 "Ten Percent Stockholder" means a person owning stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, its Subsidiaries or its Parent.
2.29 "Termination" means a Termination of Consultancy or Termination of
Employment, as the case may be.
4
2.30 "Termination of Consultancy" means (i) that the Consultant is no
longer acting as a consultant to the Company or an Affiliate; or (ii) when an
entity which is retaining a Participant as a Consultant ceases to be an
Affiliate, unless the Participant otherwise is, or thereupon becomes, a
Consultant to the Company or another Affiliate. In the event that a Consultant
becomes an Eligible Employee upon the termination of his consultancy, the
Committee, in its sole and absolute discretion, may determine that no
Termination of Consultancy shall be deemed to occur until such time as such
Consultant is no longer a Consultant or an Eligible Employee. The Committee may
otherwise define Termination of Consultancy in the Award agreement or, if no
rights of a Participant are reduced, may otherwise define Termination of
Consultancy thereafter.
2.31 "Termination of Directorship" means, with respect to a
non-employee director, that the non-employee director has ceased to be a
director of the Company. In the event that a non-employee director becomes an
Eligible Employee or Consultant upon his termination of directorship, the Board,
in its sole and absolute discretion, may determine that no Termination of
Directorship shall be deemed to occur until such time as such non-employee
director is no longer an Eligible Employee or Consultant. The Committee may
otherwise define Termination of Directorship in the Award agreement or, if no
rights of a non-employee director are reduced, may otherwise define Termination
of Directorship thereafter.
2.32 "Termination of Employment" means: (i) a termination of employment
(for reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates; or (ii) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant otherwise is, or thereupon becomes, employed by the Company or
another Affiliate. In the event that an Eligible Employee becomes a Consultant
upon the termination of his employment, the Committee, in its sole and absolute
discretion, may determine that no Termination of Employment shall be deemed to
occur until such time as such Eligible Employee is no longer an Eligible
Employee or a Consultant. The Committee may otherwise define Termination of
Employment in the Award agreement or, if no rights of a Participant are reduced,
may otherwise define Termination of Employment thereafter.
2.33 "Transfer" means anticipate, alienate, attach, sell, assign,
pledge, encumber, charge, hypothecate or otherwise transfer and "Transferred"
has a correlative meaning.
ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered and interpreted by
the Committee.
3.2 GRANTS OF AWARDS. The Committee shall have full authority to grant
Stock Options to Eligible Employees and Consultants pursuant to the terms of
this Plan. All
5
Stock Options shall be granted by, confirmed by, and subject to the terms of, a
written agreement executed by the Company and the Participant. All authorities
granted to the Committee under this Section 3.2 with respect to awards to
Eligible Employees and Consultants shall be exercised by the Board with respect
to awards to non-employee directors. In particular, the Committee shall have the
authority:
(a) to select from among those persons recommended by the
President of the Company the Eligible Employees and Consultants to whom
Stock Options may from time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options are
to be granted hereunder to one or more Eligible Employees or
Consultants after receipt of a recommendation by the President of the
Company;
(c) to determine, in accordance with the terms of this Plan,
the number of shares of Common Stock to be covered by each Stock Option
granted hereunder;
(d) to determine the terms and conditions, not inconsistent
with the terms of this Plan, of any Stock Option granted hereunder
(including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions or waiver thereof,
regarding any Stock Option and the shares of Common Stock relating
thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or restricted stock
under Section 6.3(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans to Eligible Employees and Consultants in
order to exercise Stock Options under this Plan;
(g) to determine whether a Stock Option is an Incentive Stock
Option or Non-Qualified Stock Option;
(h) to determine whether to require an Eligible Employee or
Consultant, as a condition of the granting of any Stock Option, not to
sell or otherwise dispose of shares of Common Stock acquired pursuant
to the exercise of an Option for a period of time as determined by the
Committee, in its sole discretion, following the date of the
acquisition of such Option or Award; and
(i) to modify, extend or renew an Award, subject to Article IX
herein, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under the
Code or the
6
applicable accounting rules, the exercise price of a Stock Option may
continue to be the original exercise price even if less than the Fair
Market Value of the Common Stock at the time of such modification,
extension or renewal.
3.3 GUIDELINES. Subject to Article IX hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the delegation
of its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Stock Option issued under this Plan (and any agreements relating thereto);
and to otherwise supervise the administration of this Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in this
Plan or in any agreement relating thereto in the manner and to the extent it
shall deem necessary to effectuate the purpose and intent of this Plan. The
Committee may adopt special guidelines and provisions for persons who are
residing in or employed in, or subject to, the taxes of, foreign jurisdictions
to comply with applicable tax and securities laws and may impose any limitations
and restrictions that it deems necessary to comply with the applicable tax and
securities laws of such foreign jurisdictions. No action may be taken pursuant
to this Section 3.3 unless any such action would be permitted under the
applicable provisions of Rule 16b-3 under the Exchange Act (if any) and the
applicable provisions of Section 162(m) of the Code (if any). If and to the
extent applicable, this Plan is intended to comply with Section 162(m) of the
Code and the applicable requirements of Rule 16b-3 under the Exchange Act and
shall be limited, construed and interpreted in a manner so as to comply
therewith.
3.4 DECISIONS FINAL. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board or the
Committee (or any of its members) arising out of or in connection with this Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective heirs, executors, administrators,
successors and assigns.
3.5 PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places as it shall deem advisable, including, without limitation, by telephone
conference or by written consent to the extent permitted by applicable law. A
majority of the Committee members shall constitute a quorum. All determinations
of the Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the Committee members in
accordance with the By-Laws of the Company, shall be fully as effective as if it
had been made by a vote at a meeting duly called and held. The Committee shall
keep minutes of its meetings and shall make such rules and regulations for the
conduct of its business as it shall deem advisable.
3.6 DESIGNATION OF CONSULTANTS/LIABILITY.
7
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of
this Plan and may grant authority to officers to execute agreements or
other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of this Plan
and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee or Board in the engagement of
any such counsel, consultant or agent shall be paid by the Company. The
Committee, its members and any person designated pursuant to paragraph
(a) above shall not be liable for any action or determination made in
good faith with respect to this Plan. To the maximum extent permitted
by applicable law, no officer of the Company or member or former member
of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Stock
Option granted under it. To the maximum extent permitted by applicable
law or the Certificate of Incorporation or By-Laws of the Company and
to the extent not covered by insurance directly insuring such person,
each officer and member or former member of the Committee or the Board
shall be indemnified and held harmless by the Company against any cost
or expense (including reasonable fees of counsel reasonably acceptable
to the Company) or liability (including any sum paid in settlement of a
claim with the approval of the Company), and advanced amounts necessary
to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with
the administration of this Plan, except to the extent arising out of
such officer's, member's or former member's own fraud or bad faith.
Such indemnification shall be in addition to any rights of
indemnification the employees, officers, directors or members or former
officers, directors or members may have under applicable law or under
the Certificate of Incorporation or By-Laws of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification
will not apply to the actions or determinations made by an individual
with regard to Stock Option granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 SHARES.
The aggregate number of shares of Common Stock which may be issued or
used for reference purposes under this Plan or with respect to which Stock
Options may be granted shall not exceed 2,145,5151 shares of Common Stock
(subject to any increase or
- --------
(1) Note, this number reflects the stock split that occurred on August 23, 2001.
8
decrease pursuant to Section 4.2) which may be either authorized and unissued
Common Stock or Common Stock held in or acquired for the treasury of the Company
or both. If any Stock Option granted under this Plan other than a Substitute
Option expires, terminates or is forfeited for any reason other than by reason
of its exercise, the number of shares of Common Stock underlying such
unexercised or forfeited Stock Option shall again be available for the purposes
of Awards under this Plan.
In the event Substitute Options are granted pursuant to Section 5.4,
the Committee may increase the aggregate number of shares of Common Stock
available under the Plan for Non-Qualified Stock Options by the number of shares
of Common Stock subject to such Substitute Options. The maximum number of shares
of Common Stock which may be issued under this Plan with respect to Incentive
Stock Options shall not be increased (subject to any increase or decrease
pursuant to Section 4.2).
In determining the number of shares of Common Stock available for
Non-Qualified Stock Options, if Common Stock has been delivered or exchanged by
a Participant as full or partial payment to the Company for payment of the
exercise price, or for payment of withholding taxes, or if the number shares of
Common Stock otherwise deliverable has been reduced for payment of the exercise
price or for payment of withholding taxes, the number of shares of Common Stock
exchanged as payment in connection with the exercise or for withholding or
reduced shall again be available for purposes of Non-Qualified Stock Options
under this Plan. The maximum number of shares of Common Stock subject to any
Stock Option which may be granted under this Plan during any calendar year to
each Participant shall not exceed 1,000,000 shares (subject to any increase or
decrease pursuant to Section 4.2).
4.2 CHANGES.
(a) The existence of this Plan and the Stock Options granted
hereunder shall not affect in any way the right or power of the Board
or the stockholders of the Company to make or authorize (i) any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, (ii) any merger or
consolidation of the Company or any Affiliate, (iii) any issuance of
bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock, (iv) the dissolution or liquidation of the
Company or any Affiliate, (v) any sale or transfer of all or part of
the assets or business of the Company or any Affiliate, or (vi) any
other corporate act or proceeding.
(b) In the event of any change in the capital structure or business
of the Company by reason of any stock split, reverse stock split, stock
dividend, combination or reclassification of shares, recapitalization,
or other change in the capital structure of the Company, merger,
consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase any Common
Stock or securities convertible into Common Stock, or any other
corporate transaction or event having an effect similar to any of the
foregoing, then the Committee may take such action, if any, with
respect to the Plan and
9
outstanding Stock Options, as it may deem equitable to prevent
substantial dilution or enlargement of the rights granted to, or
available for, Participants under this Plan, including, without
limitation, adjustment of the aggregate number and kind of shares which
thereafter may be issued under this Plan, the number and kind of shares
or other property (including cash) to be issued upon exercise of an
outstanding Stock Option granted under this Plan and the purchase price
thereof. Any such action or adjustment determined by the Committee in
good faith shall be final, binding and conclusive on the Company and
all Participants and employees and their respective heirs, executors,
administrators, successors and assigns. Except as provided in this
Section 4.2, a Participant shall have no rights by reason of any
issuance by the Company of any class or securities convertible into
stock of any class of the Company, any subdivision or consolidation of
shares of stock of any class of the Company, the payment of any stock
dividend, any other increase or decrease in the number of shares of
stock of any class of the Company, any sale or transfer of all or part
of the Company's assets or business or any other change affecting the
Company's capital structure or business.
(c) Fractional shares of Common Stock resulting from any adjustment
in Options pursuant to Section 4.2(a) or (b) shall be aggregated until,
and eliminated at, the time of exercise by rounding-down for fractions
less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to
fractional shares eliminated by rounding. Notice of any adjustment
shall be given by the Committee to each Participant whose Option has
been adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of this Plan.
4.3 MINIMUM PURCHASE PRICE. Notwithstanding any provision of this Plan
to the contrary, if authorized but previously unissued shares of Common Stock
are issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
ARTICLE V
ELIGIBILITY
5.1 NON-QUALIFIED STOCK OPTIONS. All Eligible Employees and Consultants
and prospective employees of and Consultants to the Company and its Affiliates
are eligible to be granted Non-Qualified Stock Options. Eligibility for the
grant of a Non-Qualified Stock Option and actual participation in this Plan
shall be determined by the Committee in its sole discretion.
5.2 INCENTIVE STOCK OPTIONS. All Eligible Employees of the Company, its
Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock
Options under this Plan. Eligibility for the grant of an Incentive Stock Option
and actual participation in this Plan shall be determined by the Committee in
its sole discretion.
10
5.3 GENERAL REQUIREMENT. The vesting and exercise of Options granted to
a prospective employee or Consultant are conditioned upon such individual
actually becoming an Eligible Employee or Consultant.
5.4 SUBSTITUTE OPTIONS. Substitute Options may be granted by the
Committee in its sole discretion to holders of stock options issued by a company
acquired by the Company or with which the Company combines.
5.5 NON-EMPLOYEE DIRECTORS. Non-employee directors of the Company are
only eligible to receive awards of Stock Options in accordance with Article X of
the Plan.
ARTICLE VI
STOCK OPTIONS
6.1 STOCK OPTIONS. Each Stock Option granted hereunder shall be one of
two types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code; or (ii) a Non-Qualified Stock Option.
6.2 GRANTS. Subject to the provisions of Article V, the Committee shall
have the authority to grant to any Eligible Employee one or more Incentive Stock
Options, Non- Qualified Stock Options or both types of Stock Options. To the
extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Stock Option or the portion thereof which does not qualify,
shall constitute a separate Non-Qualified Stock Option. The Committee shall have
the authority to grant any Consultant one or more Non-Qualified Stock Options.
Notwithstanding any other provision of this Plan to the contrary or any
provision in an agreement evidencing the grant of a Stock Option to the
contrary, any Stock Option granted to an Eligible Employee of an Affiliate
(other than an Affiliate which is a Parent or a Subsidiary) shall be a
Non-Qualified Stock Option.
6.3 TERMS OF STOCK OPTIONS. Stock Options granted under this Plan shall
be subject to the following terms and conditions, and shall be in such form and
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem desirable:
(a) EXERCISE PRICE. The exercise price per share of Common Stock
shall be determined by the Committee, but, except in the case of
Substitute Options, shall not be less than 100% of the Fair Market
Value of the Common Stock at the time of grant; provided, however, that
if an Incentive Stock Option is granted to a Ten Percent Stockholder,
the exercise price shall be no less than 110% of the Fair Market Value
of the Common Stock.
(b) STOCK OPTION TERM. The term of each Stock Option shall be fixed
by the Committee; provided, however, that no Stock Option shall be
exercisable
11
more than 10 years after the date such Stock Option is granted; and
further provided that the term of an Incentive Stock Option granted to
a Ten Percent Stockholder shall not exceed 5 years.
(c) EXERCISABILITY. Stock Options shall be exercisable at such time
or times and subject to such terms and conditions as shall be
determined by the Committee at grant. If the Committee provides, in its
discretion, that any Stock Option is exercisable subject to certain
limitations (including, without limitation, that such Stock Option is
exercisable only in installments or within certain time periods), the
Committee may waive such limitations on the exercisability at any time
at or after grant in whole or in part (including, without limitation,
waiver of the installment exercise provisions or acceleration of the
time at which such Stock Option may be exercised), based on such
factors, if any, as the Committee shall determine, in its sole
discretion.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise
and waiting period provisions apply under subsection (c) above, Stock
Options may be exercised in whole or in part at any time and from time
to time during the Stock Option term by giving written notice of
exercise to the Committee specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the
purchase price as follows: (i) in cash or by check, bank draft or money
order payable to the order of the Company; (ii) if the Common Stock is
traded on a national securities exchange, The Nasdaq Stock Market, Inc.
or quoted on a national quotation system sponsored by the National
Association of Securities Dealers, through a "cashless exercise"
procedure whereby the Participant delivers irrevocable instructions to
a broker approved by the Committee to deliver promptly to the Company
an amount equal to the purchase price; or (iii) on such other terms and
conditions as may be acceptable to the Committee (including, without
limitation, the relinquishment of Stock Options or by payment in full
or in part in the form of Common Stock owned by the Participant for a
period of at least 6 months (and for which the Participant has good
title free and clear of any liens and encumbrances) based on the Fair
Market Value of the Common Stock on the payment date). No shares of
Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.
(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Eligible Employee during any
calendar year under this Plan and/or any other stock option plan of the
Company, any Subsidiary or any Parent exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any
Subsidiary or any Parent at all times from the time an Incentive Stock
Option is granted until 3 months prior to the date of exercise thereof
(or such other period as required by applicable law), such Stock Option
shall be treated as a Non-
12
Qualified Stock Option. Should any provision of this Plan not be
necessary in order for the Stock Options to qualify as Incentive Stock
Options, or should any additional provisions be required, the Committee
may amend this Plan accordingly, without the necessity of obtaining the
approval of the stockholders of the Company.
(f) FORM, MODIFICATION, EXTENSION AND RENEWAL OF STOCK OPTIONS.
Subject to the terms and conditions and within the limitations of this
Plan, Stock Options shall be evidenced by such form of agreement or
grant as is approved by the Committee, and the Committee may (i)
modify, extend or renew outstanding Stock Options granted under this
Plan (provided that the rights of a Participant are not reduced without
his consent), and (ii) accept the surrender of outstanding Stock
Options (up to the extent not theretofore exercised) and authorize the
granting of new Stock Options in substitution therefor (to the extent
not theretofore exercised).
(g) DEFERRED DELIVERY OF COMMON SHARES. The Committee may in its
discretion permit Participants to defer delivery of Common Stock
acquired pursuant to a Participant's exercise of an Option in
accordance with the terms and conditions established by the Committee.
ARTICLE VII
NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY
7.1 NON-TRANSFERABILITY. No Stock Option shall be Transferable by the
Participant otherwise than by will or by the laws of descent and distribution.
All Stock Options shall be exercisable, during the Participant's lifetime, only
by the Participant. No Stock Option shall, except as otherwise specifically
provided by law or herein, be Transferable in any manner, and any attempt to
Transfer any such Stock Option shall be void, and no such Stock Option shall in
any manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Stock Option,
nor shall it be subject to attachment or legal process for or against such
person.
Notwithstanding the foregoing, the Committee may determine at the time
of grant or thereafter that a Non-Qualified Stock Option that is otherwise not
Transferable pursuant to this Section 7.1 is Transferable to a Family Member in
whole or in part and in such circumstances, and under such conditions, as
specified by the Committee. A Stock Option that is Transferred to a Family
Member pursuant to the preceding sentence (i) may not be subsequently
Transferred otherwise than by will or by the laws of descent and distribution
and (ii) remains subject to the terms of this Plan and the Stock Option
agreement. Any shares of Common Stock acquired upon the exercise of a Stock
Option by a permissible transferee of a Stock Option shall be subject to the
terms of this Plan and the Stock Option agreement. For purposes of this
Section 7.1, the term "Family
13
Member" means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, any person sharing the employee's household (other than
a tenant or employee), a trust in which these persons have more than 50% of the
beneficial interest, a foundation in which these persons (or the employee)
control the management of assets, and any other entity in which these persons
(or the employee) own more than 50% of the voting interests or as otherwise
defined under the Securities Act or Securities Act Form S-8.
7.2 TERMINATION OF EMPLOYMENT AND TERMINATION OF CONSULTANCY. The
following rules apply with regard to the Termination of a Participant. Unless
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter:
(a) TERMINATION BY REASON OF DEATH, DISABILITY OR RETIREMENT. If a
Participant's Termination is by reason of death, Disability or
Retirement, all Stock Options held by such Participant which are
exercisable at the time of the Participant's Termination may be
exercised by the Participant (or, in the case of death, by the legal
representative of the Participant's estate) at any time within a period
of one year from the date of such Termination, but in no event beyond
the expiration of the stated terms of such Stock Options; provided,
however, that, in the case of Retirement, if the Participant dies
within such exercise period, all unexercised Stock Options held by such
Participant shall thereafter be exercisable, to the extent to which
they were exercisable at the time of death, for a period of one year
from the date of such death, but in no event beyond the expiration of
the stated term of such Stock Options.
(b) INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant's
Termination is by involuntary termination without Cause, all Stock
Options held by such Participant which are exercisable at the time of
such Termination, may be exercised by the Participant at any time
within a period of 90 days from the date of such Termination, but in no
event beyond the expiration of the stated term of such Stock Options.
(c) VOLUNTARY TERMINATION. If a Participant's Termination is
voluntary (other than a voluntary termination described in Section
7.2(d)(ii) below), all Stock Options held by such Participant which are
exercisable at the time of such Termination, may be exercised by the
Participant at any time within a period of 30 days from the date of
such Termination, but in no event beyond the expiration of the stated
terms of such Stock Options.
(d) TERMINATION FOR CAUSE. If a Participant's Termination (i) is
for Cause or (ii) is a voluntary termination (as provided in subsection
(c) above) at any time after an event which would be grounds for a
Termination for Cause, all Stock Options held by such Participant shall
thereupon terminate and expire as of the date of such Termination.
14
ARTICLE VIII
CHANGE IN CONTROL PROVISIONS
8.1 BENEFITS. In the event of a Change in Control of the Company,
except as otherwise provided by the Committee upon the grant of a Stock Option,
the Participant shall be entitled to the following benefits:
(a) Except to the extent provided in the applicable Stock Option
agreement, the Participant's employment agreement with the Company or
an Affiliate, as approved by the Committee, or other written agreement
approved by the Committee (as such agreement may be amended from time
to time), Stock Options granted and not previously exercisable shall
become exercisable upon a Change in Control, subject to subsection
8.1(b).
(b) Notwithstanding anything to the contrary herein, unless the
Committee provides otherwise at the time a Stock Option is granted
hereunder or thereafter, no acceleration of exercisability shall occur
with respect to such Stock Options if the Committee reasonably
determines in good faith, that the Stock Options shall be honored or
assumed, or new rights substituted therefor (each such honored, assumed
or substituted stock option hereinafter called an "Alternative
Option"), by a Participant's employer (or the parent or a subsidiary of
such employer) immediately following the Change in Control, provided
that any such Alternative Option must meet the following criteria:
(i) the Alternative Option must provide such Participant with
rights and entitlements substantially equivalent to or better than
the rights, terms and conditions applicable under such Stock
Option, including, but not limited to, an identical or better
exercise schedule; and
(ii) the Alternative Option must substantially comply and in
the case of an Incentive Stock Option, must comply with the
requirements of Treasury Regulation ss. 1.425-1 (and any amendments
thereto), except that the Alternative Option need not be an
Incentive Stock Option.
(c) If the Company and the other party to a transaction
constituting a Change in Control agree that such transaction shall be
treated as a "pooling of interests" for financial reporting purposes,
and if the transaction is in fact so treated, then the acceleration of
exercisability, vesting or lapse of the applicable Restriction Period
shall not occur to the extent that the Company's independent public
accountants determine in good faith that such acceleration would
preclude "pooling of interests" accounting.
8.2 CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred:
15
(a) upon any "person" as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than CEP, MSDWCP, the Company, any
trustee or other fiduciary holding securities under any employee
benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of Common Stock of the Company),
becoming the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's
then outstanding securities;
(b) during any period of 2 consecutive years, individuals who at
the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this Section or a director whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company or a Subsidiary with
any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 35% of the combined voting power of the voting securities of
the Company or such surviving entity or such surviving entity's parent
outstanding immediately after such merger or consolidation; or
(d) upon the approval by the stockholders of the Company of a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale or disposition of all or substantially all
of the assets of the Company to a person or persons who beneficially
own, directly or indirectly, at least 50% or more of the combined
voting power of the outstanding voting securities of the Company at the
time of the sale.
8.3 INITIAL PUBLIC OFFERING NOT A CHANGE IN CONTROL. For purposes of
the Plan, an initial public offering of the Common Stock of the Company shall
not be deemed to be a Change in Control.
16
ARTICLE IX
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the
Committee may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of this Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XII), or suspend or terminate it entirely, retroactively
or otherwise; provided, however, that, unless otherwise required by law or
specifically provided herein, the rights of a Participant with respect to Awards
granted prior to such amendment, suspension or termination, may not be impaired
without the consent of such Participant. In no event may this Plan be amended
without the approval of the stockholders of the Company, if and to the extent
required by the applicable provisions of Rule 16b-3 or, if and to the extent
required, by the applicable provisions of Section 162(m) of the Code, or with
regard to Incentive Stock Options, Section 422 of the Code, which would (i)
increase the aggregate number of shares of Common Stock that may be issued under
this Plan; (ii) decrease the minimum exercise price of any Stock Option; (iii)
increase the maximum individual Participant limitations for a calendar year
under Section 4.1; (iv) change the classification of employees, Consultants and
non-employee directors eligible to receive Stock Options under this Plan; or (v)
any other amendment that would require stockholder approval in order for the
Plan to continue to comply with the applicable provisions, if any, of Rule
16b-3, Section 162(m) of the Code or, with regard to Incentive Stock Options,
Section 422 of the Code or with the rules of any exchange or system on which the
Company's securities are listed or traded.
The Committee may amend the terms of any Stock Option theretofore
granted, prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by the
Committee shall impair the rights of any holder without the holder's consent.
ARTICLE X
NON-EMPLOYEE DIRECTOR
STOCK OPTION GRANTS
10.1 STOCK OPTIONS. The terms of this Article X shall apply only to
Stock Options granted to non-employee directors.
10.2 GRANTS. The Board shall have the authority to grant Stock Options
to each Non-Employee Director in accordance with the following provisions:
(a) Stock Options to purchase up to a maximum of 100,000 shares of
Common Stock as of the date the Non-Employee Director begins service as
a Non-Employee Director on the Board; and
17
(b) In addition to Stock Options granted pursuant to (a) above,
Stock Options to purchase up to a maximum of 100,000 shares of Common
Stock as of the first day of the month following the annual meeting of
the shareholders of the Company, provided he or she has not, as of such
day, experienced a Termination of Directorship, other than in the year
the Non-Employee Director receives a grant of Stock Options pursuant to
(a) above.
10.3 NON-QUALIFIED STOCK OPTIONS. Stock Options granted under this
Article X shall be Non-Qualified Stock Options.
10.4 TERMS OF STOCK OPTIONS. Stock Options granted under this Article X
shall be subject to the following terms and conditions, and shall be in such
form and contain such additional terms and conditions, not inconsistent with the
terms of this Plan, as the Board shall deem desirable:
(a) STOCK OPTION PRICE. The exercise price per share of Common
Stock shall be determined by the Board at the time of grant.
(b) STOCK OPTION TERM. The term of each Stock Option shall be 10
years.
(c) EXERCISABILITY. Except as otherwise provided herein,
twenty-five percent (25%) of any Option granted under this Article X
shall be exercisable on or after each of the four anniversaries
following the date of grant.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise
and waiting period provisions apply under subsection (c) above, Stock
Options may be exercised in whole or in part at any time and from time
to time during the Stock Option term, by giving written notice of
exercise to the Board specifying the number of shares to be purchased.
Such notice shall be accompanied by payment in full of the purchase
price as follows: (i) in cash or by check, bank draft or money order
payable to the Company; (ii) if the Common Stock is traded on a
national securities exchange, The Nasdaq Stock Market, Inc. or quoted
on a national quotation system sponsored by the National Association of
Securities Dealers, through a "cashless exercise" procedure whereby the
Participant delivers irrevocable instructions to a broker to deliver
promptly to the Company an amount equal to the purchase price; or (iii)
on such other terms and conditions that may be acceptable tot he Board
(including, without limitation, the relinquishment of Stock Options or
by payment in full or in part in the form of Common Stock owned by the
Participant for at least 6 months (and for which the Participant has
good title free and clear of any liens and encumbrances) based on the
Fair Market Value of the Common Stock on the payment date). No shares
of Common Stock shall be issued until payment, as provided herein,
therefor has been made or provided for.
18
(e) FORM, MODIFICATION, EXTENSION AND RENEWAL OF STOCK OPTIONS.
Subject to the terms and conditions and within the limitations of the
Plan, a Stock Option shall be evidenced by such form of agreement or
grant as is approved by the Board, and the Board may modify, extend or
renew outstanding Stock Options granted under the Plan (provided that
the rights of a Participant are not reduced without his consent).
10.5 TERMINATION OF DIRECTORSHIP. The following rules apply with regard
to Stock Options upon the Termination of Directorship:
(a) TERMINATION OF DIRECTORSHIP BY REASON OF DEATH, DISABILITY,
RETIREMENT OR OTHERWISE. If a Participant's Termination of Directorship
is by reason of death, Disability, Retirement or otherwise (other than
for Cause), all Stock Options held by such Participant which are
exercisable at the time of the Participant's Termination of
Directorship may be exercised by the Participant (or, in the case of
death, by the legal representative of the Participant's estate) at any
time within a period of one year from the date of such Termination of
Directorship, but in no event beyond the expiration of the stated term
of such Stock Option.
(b) CANCELLATION OF OPTIONS. Except as provided in (a) above, no
Stock Options that were not exercisable as of the date of Termination
of Directorship shall thereafter become exercisable upon a Termination
of Directorship for any reason or no reason whatsoever, and such Stock
Options shall terminate and become null and void upon a Termination of
Directorship. If a Non-Employee Director's Termination of Directorship
is for Cause, all Stock Options held by the Non-Employee Director shall
thereupon terminate and expire as of the date of termination.
10.6 ACCELERATION OF EXERCISABILITY. All Stock Options granted to
non-employee directors and not previously exercisable shall become fully
exercisable immediately upon a Change in Control (as defined herein). For this
purpose, a "Change in Control" shall have the meaning set forth in Section 8.2.
10.7 CHANGES. The Awards to a non-employee director shall be subject to
Sections 4.2 of the Plan.
ARTICLE XI
UNFUNDED PLAN
11.1 UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company.
19
ARTICLE XII
GENERAL PROVISIONS
12.1 LEGEND. The Committee may require each person receiving shares
pursuant to an Award under this Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under this Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed or any national securities association system upon
whose system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
12.2 OTHER PLANS. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
12.3 NO RIGHT TO EMPLOYMENT/CONSULTANCY. Neither this Plan nor the
grant of any Award hereunder shall give any Participant or other employee or
Consultant any right with respect to continuance of employment or consultancy by
the Company or any Affiliate, nor shall they be a limitation in any way on the
right of the Company or any Affiliate by which an employee is employed or a
Consultant is retained to terminate his employment or consultancy at any time.
12.4 WITHHOLDING OF TAXES. The Company shall have the right to deduct
from any payment to be made to a Participant, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.
Any statutorily required withholding obligation with regard to any
Eligible Employee may be satisfied, subject to the consent of the Committee, by
reducing the number of shares of Common Stock otherwise deliverable or by
delivering shares of Common Stock already owned. Any fraction of a share of
Common Stock required to satisfy such tax obligations shall be disregarded and
the amount due shall be paid instead in cash by the Participant.
20
12.5 LISTING AND OTHER CONDITIONS.
(a) Unless otherwise determined by the Committee, as long as the
Common Stock is listed on a national securities exchange or system
sponsored by a national securities association, the issue of any shares
of Common Stock pursuant to a Stock Option shall be conditioned upon
such shares being listed on such exchange or system. The Company shall
have no obligation to issue such shares unless and until such shares
are so listed, and the right to exercise any Stock Option with respect
to such shares shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to a Stock
Option is or may in the circumstances be unlawful or result in the
imposition of excise taxes on the Company under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no
obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the
Securities Act or otherwise with respect to shares of Common Stock or
Stock Option, and the right to exercise any Stock Option shall be
suspended until, in the opinion of said counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise taxes on
the Company.
(c) Upon termination of any period of suspension under this
Section 12.5, a Stock Option affected by such suspension which shall
not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would
otherwise have become available during the period of such suspension,
but no such suspension shall extend the term of any Stock Option.
(d) A Participant shall be required to supply the Company with any
certificates, representations and information that the Company requests
and otherwise cooperate with the Company in obtaining any listing,
registration, qualification, exemption, consent or approval the Company
deems necessary or appropriate.
12.6 STOCKHOLDERS AGREEMENT. As a condition to the receipt of shares of
Common Stock pursuant to a Stock Option under this Plan, to the extent required
by the Committee, the Participant shall execute and deliver a stockholder's
agreement or such other documentation which shall set forth certain restrictions
on transferability of the shares of Common Stock acquired upon exercise or
purchase, a right of first refusal of the Company with respect to shares, the
right of the Company to purchase Common Stock in accordance with this Plan and
such other terms as the Board or Committee shall from time to time establish.
Such stockholder's agreement shall apply to all Common Stock acquired under the
Plan.
21
12.7 GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).
12.8 CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
12.9 OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.
12.10 COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder.
12.11 NO RIGHT TO SAME BENEFITS. The provisions of Stock Options need
not be the same with respect to each Participant, and such Stock Options to
individual Participants need not be the same in subsequent years.
12.12 DEATH/DISABILITY. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of this Plan.
12.13 SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and permitted assigns of a Participant, including, without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate.
12.14 SEVERABILITY OF PROVISIONS. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
12.15 HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
this Plan, and shall not be employed in the construction of this Plan.
12.16 SECTION 16(B) OF THE EXCHANGE ACT. All elections and transactions
under this Plan by persons subject to Section 16 of the Exchange Act involving
shares of
22
Common Stock are intended to comply with any applicable exemptive condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
this Plan and the transaction of business thereunder.
ARTICLE XIII
EFFECTIVE DATE OF PLAN
13.1 The Plan shall become effective upon adoption by the Board,
subject to the approval of this Plan by the stockholders of the Company in
accordance with the requirements of the laws of the State of Delaware, or such
later date as provided in the adopting resolution.
ARTICLE XIV
TERM OF PLAN
14.1 No Stock Option shall be granted pursuant to this Plan on or after
the tenth anniversary of the earlier of the date this Plan is adopted or the
date of stockholder approval, but Stock Options granted prior to such tenth
anniversary may, and the Committee's authority to administer the terms of such
Options shall, extend beyond that date.
23
Exhibit 4.4
CROSS COUNTRY, INC.
AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
(EFFECTIVE AS OF OCTOBER 25, 2001)
CROSS COUNTRY, INC.
--------------------------
AMENDED AND RESTATED
EQUITY PARTICIPATION PLAN
--------------------------
ARTICLE I
PURPOSE
The purpose of this Cross Country, Inc. Amended and Restated Equity
Participation Plan is to enhance the profitability and value of the Company for
the benefit of its stockholders by enabling the Company to offer key management
employees of the Company and its Affiliates stock-based incentives in the
Company, thereby creating a means to raise the level of stock ownership by key
management employees in order to attract, retain and reward such employees and
strengthen the mutuality of interests between such employees and the Company's
stockholders.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" means each of the following: (i) any Subsidiary; (ii)
any Parent; (iii) any corporation, trade or business (including, without
limitation, a partnership or limited liability company) which is directly or
indirectly controlled 50% or more (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) by the Company or one of its
Affiliates; and (iv) any other entity in which the Company or any of its
Affiliates has a material equity interest and which is designated as an
"Affiliate" by resolution of the Committee.
2.2 "Award" means any award under this Plan of a Stock Option.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Cause" means, with respect to a Participant's Termination of
Employment: (i) in the case where there is no employment agreement, consulting
agreement, change in control agreement or similar agreement in effect between
the Company or an Affiliate and the Participant at the time of the grant of the
Award (or where there is such an agreement but it does not define "cause" (or
words of like import)), termination due to a Participant's insubordination,
dishonesty, fraud,
incompetence, moral turpitude, misconduct, refusal to perform his or her duties
or responsibilities for any reason other than illness or incapacity or
materially unsatisfactory performance of his or her duties for the Company or an
Affiliate as determined by the Committee in its sole discretion; or (ii) in the
case where there is an employment agreement, consulting agreement, change in
control agreement or similar agreement in effect between the Company or an
Affiliate and the Participant at the time of the grant of the Award that defines
"cause" (or words of like import), "cause" as defined under such agreement;
provided, however, that with regard to any agreement that conditions "cause" on
occurrence of a change in control, such definition of "cause" shall not apply
until a change in control actually takes place and then only with regard to a
termination thereafter.
2.5 "CEP" means Charterhouse Equity Partners III, L.P., and its
successors.
2.6 "Change in Control" has the meaning set forth in Article VIII.
2.7 "Code" means the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.
2.8 "Committee" means a committee or subcommittee of the Board
appointed from time to time by the Board, which committee or subcommittee shall
consist of 2 or more non-employee directors each of whom shall be a non-employee
director as defined in Rule 16b-3 under the Exchange Act and an outside director
as defined under Section 162(m) of the Code; provided, however, that if and to
the extent that no Committee exists which has the authority to administer this
Plan, the functions of the Committee shall be exercised by the Board and all
references herein to the Committee shall be deemed to be references to the
Board. If for any reason the appointed Committee does not meet the requirements
of Rule 16b-3 or Section 162(m) of the Code, such noncompliance with the
requirements of Rule 16b-3 or Section 162(m) of the Code shall not affect the
validity of the awards, grants, interpretations or other actions of the
Committee.
2.9 "Common Stock" means the Common Stock, $.0001 par value per share,
of the Company.
2.10 "Company" means Cross Country, Inc., a Delaware corporation, and
its successors.
2.11 "Consultant" means any advisor or consultant to the Company or its
Affiliates.
2.12 "Detrimental Activity" means (i) the disclosure to anyone outside
the Company or its Affiliates, or the use in other than the Company's or its
Affiliate's business, without written authorization from the Company, of any
confidential information or proprietary information, relating to the business of
the Company or its Affiliates, acquired by a Participant prior to the
Participant's Termination of Employment; (ii) activity while employed that
results, or if known could result, in the
2
Participant's Termination of Employment that is classified by the Company as a
termination for Cause; (iii) any attempt, directly or indirectly, to solicit,
induce or hire (or the identification for solicitation, inducement or hire) any
non-clerical employee of the Company or its Affiliates to be employed by, or to
perform services for, the Participant or any person or entity with which the
Participant is associated (including, but not limited to, due to the
Participant's employment by, consultancy for, equity interest in, or creditor
relationship with such person or entity) or any person or entity from which the
Participant receives direct or indirect compensation or fees as a result of such
solicitation, inducement or hire (or the identification for solicitation,
inducement or hire) without, in all cases, written authorization from the
Company; (iv) any attempt, directly or indirectly, to solicit in a competitive
manner any current customer of the Company or its Affiliates without, in all
cases, written authorization from the Company; (v) the Participant's
Disparagement, or inducement of others to do so, of the Company or its
Affiliates or their past and present officers, directors, employees or products;
(vi) without written authorization from the Company, the rendering of services
for any organization, or engaging, directly or indirectly, in any business,
which is competitive with the Company or its Affiliates, or which organization
or business, or the rendering of services to such organization or business, is
otherwise prejudicial to or in conflict with the interests of the Company or its
Affiliates, provided, however, that competitive activities shall only be those
competitive with any business unit or Affiliate of the Company with regard to
which the Participant performed services at any time within the 2 years prior to
the Participant's Termination of Employment; (vii) the Participant's breach of
the terms of any agreement between the Company and the Participant including,
without limitation, an employment agreement or non-competition agreement; or
(viii) except as otherwise provided in the applicable Stock Option agreement,
any other conduct or act determined by the Committee, in its sole discretion, to
be injurious, detrimental or prejudicial to any interest of the Company or its
Affiliates. For purposes of subparagraphs (i), (iii), (iv) and (vi) above, the
Chief Executive Officer and the General Counsel of the Company shall each have
authority, subject to the prior approval of the Board, to provide the
Participant with written authorization to engage in the activities contemplated
thereby and no other person shall have authority to provide the Participant with
such authorization.
2.13 "Disability" means a disability which would qualify as such under
the Company's long-term disability plan. A Disability shall only be deemed to
occur at the time of the determination by the Committee of the Disability.
2.14 "Disparagement" means (unless modified in the applicable Stock
Option agreement) making comments or statements to the press, the Company's or
its Affiliates' employees or any individual or entity with whom the Company or
its Affiliates has a business relationship which would adversely affect in any
manner: (i) the conduct of the business of the Company or its Affiliates
(including, without limitation, any products or business plans or business
prospects), or (ii) the business reputation of the Company or its Affiliates, or
any of their products, or their past or present officers, directors or
employees.
3
2.15 "Effective Date" means the effective date of this Plan as defined
in Article XIII.
2.16 "Eligible Employee" means each key management employee of the
Company or an Affiliate.
2.17 "Exchange Act" means the Securities Exchange Act of 1934, as
amended. Any references to any section of the Exchange Act shall also be a
reference to any successor provision.
2.18 "Fair Market Value" means, for purposes of this Plan, unless
otherwise required by any applicable provision of the Code or any regulations
issued thereunder, as of any date, the last sales price reported for the Common
Stock on the applicable date: (a) as reported on the principal national
securities exchange in the United States on which it is then traded or The
Nasdaq Stock Market, Inc.; or (b) if not traded on any such national securities
exchange or The Nasdaq Stock Market, Inc., as quoted on an automated quotation
system sponsored by the National Association of Securities Dealers, Inc. or if
the Common Stock shall not have been reported or quoted on such date, on the
first day prior thereto on which the Common Stock was reported or quoted;
provided, that the Committee may modify the definition of Fair Market Value to
reflect any changes in the trading practices of any exchange on which the Common
Stock is listed or traded. If the Common Stock is not readily tradable on a
national securities exchange, The Nasdaq Stock Market, Inc. or any automated
quotation system sponsored by the National Association of Securities Dealers,
Inc., its Fair Market Value shall be set in good faith by the Committee.
Notwithstanding anything herein to the contrary, "Fair Market Value" means the
price for Common Stock set by the Committee in good faith. For purposes of the
grant of any Stock Option, the applicable date shall be the date for which the
last sales price is available at the time of grant.
2.19 "Family Member" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
employee's household (other than a tenant or employee), a trust in which these
persons have more than 50% of the beneficial interest, a foundation in which
these persons (or the employee) control the management of assets, and any other
entity in which these persons (or the employee) own more than 50% of the voting
interests.
2.20 "Incentive Stock Option" means any Stock Option awarded to an
Eligible Employee under this Plan intended to be and designated as an "Incentive
Stock Option" within the meaning of Section 422 of the Code.
2.21 "MSDWCP" means a representative of Morgan Stanley Dean Witter
Capital Partners IV, L.P. and its affiliated funds, and their respective
successors.
4
2.22 "Non-Qualified Stock Option" means any Stock Option awarded under
this Plan that is not an Incentive Stock Option.
2.23 "Parent" means any parent corporation of the Company within the
meaning of Section 424(e) of the Code.
2.24 "Participant" means any Eligible Employee to whom a Stock Option
has been awarded under this Plan.
2.25 "Plan" means this Amended and Restated Cross Country, Inc. Equity
Participation Plan, as amended from time to time.
2.26 "Retirement" means a Termination of Employment without Cause by a
Participant at or after age 65 or such earlier date after age 50 as may be
approved by the Committee with regard to such Participant.
2.27 "Securities Act" means the Securities Act of 1933, as amended. Any
reference to any section of the Securities Act shall also be a reference to any
successor provision.
2.28 "Stock Option" or "Option" means any option to purchase shares of
Common Stock granted to Eligible Employees under Article VI.
2.29 "Subsidiary" means any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
2.30 "Ten Percent Stockholder" means a person owning stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Company, its Subsidiaries or its Parent.
2.31 "Termination of Employment" means: (i) a termination of employment
(for reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates; or (ii) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant otherwise is, or thereupon becomes, employed by the Company or
another Affiliate. In the event that an Eligible Employee becomes a Consultant
upon the termination of his employment, the Committee, in its sole and absolute
discretion, may determine that no Termination of Employment shall be deemed to
occur until such time as such Eligible Employee is no longer an Eligible
Employee or a Consultant. The Committee may otherwise define Termination of
Employment in the Award agreement or, if no rights of a Participant are reduced,
may otherwise define Termination of Employment thereafter.
2.32 "Transfer" means anticipate, alienate, attach, sell, assign,
pledge, encumber, charge, hypothecate or otherwise transfer and "Transferred"
has a correlative meaning.
5
ARTICLE III
ADMINISTRATION
3.1 THE COMMITTEE. The Plan shall be administered and interpreted by
the Committee.
3.2 GRANTS OF AWARDS. The Committee shall have full authority to grant
Stock Options to Eligible Employees pursuant to the terms of this Plan. All
Stock Options shall be granted by, confirmed by, and subject to the terms of, a
written agreement executed by the Company and the Participant. In particular,
the Committee shall have the authority:
(a) to select from among those persons recommended by the President
of the Company the Eligible Employees to whom Stock Options may from
time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options are to be
granted hereunder to one or more Eligible Employees after receipt of a
recommendation by the President of the Company;
(c) to determine, in accordance with the terms of this Plan, the
number of shares of Common Stock to be covered by each Stock Option
granted hereunder;
(d) to determine the terms and conditions, not inconsistent with
the terms of this Plan, of any Stock Option granted hereunder
(including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or
acceleration thereof and any forfeiture restrictions or waiver thereof,
regarding any Stock Option and the shares of Common Stock relating
thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);
(e) to determine whether and under what circumstances a Stock
Option may be settled in cash, Common Stock and/or restricted stock
under Section 6.3(d);
(f) to determine whether, to what extent and under what
circumstances to provide loans to Eligible Employees in order to
exercise Stock Options under this Plan;
(g) to determine whether a Stock Option is an Incentive Stock
Option or Non-Qualified Stock Option; provided, however, that a Stock
Option shall be, to the extent practicable, designated as an Incentive
Stock Option;
(h) to determine whether to require an Eligible Employee, as a
condition of the granting of any Stock Option, not to sell or otherwise
dispose of
6
shares of Common Stock acquired pursuant to the exercise of an Option
for a period of time as determined by the Committee, in its sole
discretion, following the date of the acquisition of such Option or
Award; and
(i) to modify, extend or renew an Award, subject to Article IX
herein, provided, however, that if an Award is modified, extended or
renewed and thereby deemed to be the issuance of a new Award under the
Code or the applicable accounting rules, the exercise price of a Stock
Option may continue to be the original exercise price even if less than
the Fair Market Value of the Common Stock at the time of such
modification, extension or renewal.
3.3 GUIDELINES. Subject to Article IX hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the delegation
of its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Stock Option issued under this Plan (and any agreements relating thereto);
and to otherwise supervise the administration of this Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in this
Plan or in any agreement relating thereto in the manner and to the extent it
shall deem necessary to effectuate the purpose and intent of this Plan. The
Committee may adopt special guidelines and provisions for persons who are
residing in or employed in, or subject to, the taxes of, foreign jurisdictions
to comply with applicable tax and securities laws and may impose any limitations
and restrictions that it deems necessary to comply with the applicable tax and
securities laws of such foreign jurisdictions. No action may be taken pursuant
to this Section 3.3 unless any such action would be permitted under the
applicable provisions of Rule 16b-3 under the Exchange Act (if any) and the
applicable provisions of Section 162(m) of the Code (if any). If and to the
extent applicable, this Plan is intended to comply with Section 162(m) of the
Code and the applicable requirements of Rule 16b-3 under the Exchange Act and
shall be limited, construed and interpreted in a manner so as to comply
therewith.
3.4 DECISIONS FINAL. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Company, the Board or the
Committee (or any of its members) arising out of or in connection with this Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, binding and conclusive on the Company and all employees
and Participants and their respective heirs, executors, administrators,
successors and assigns.
3.5 PROCEDURES. If the Committee is appointed, the Board shall
designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places as it shall deem advisable, including, without limitation, by telephone
conference or by written consent to the extent permitted by applicable law. A
majority of the Committee members shall constitute a quorum. All determinations
of the Committee shall be made by a majority of its members. Any decision or
determination reduced to writing and signed by all the Committee members in
accordance with the By-Laws of the Company, shall be fully as
7
effective as if it had been made by a vote at a meeting duly called and held.
The Committee shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
3.6 DESIGNATION OF CONSULTANTS/LIABILITY.
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of
this Plan and may grant authority to officers to execute agreements or
other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of this Plan and
may rely upon any opinion received from any such counsel or consultant
and any computation received from any such consultant or agent.
Expenses incurred by the Committee or Board in the engagement of any
such counsel, consultant or agent shall be paid by the Company. The
Committee, its members and any person designated pursuant to paragraph
(a) above shall not be liable for any action or determination made in
good faith with respect to this Plan. To the maximum extent permitted
by applicable law, no officer of the Company or member or former member
of the Committee or of the Board shall be liable for any action or
determination made in good faith with respect to this Plan or any Stock
Option granted under it. To the maximum extent permitted by applicable
law or the Certificate of Incorporation or By-Laws of the Company and
to the extent not covered by insurance directly insuring such person,
each officer and member or former member of the Committee or the Board
shall be indemnified and held harmless by the Company against any cost
or expense (including reasonable fees of counsel reasonably acceptable
to the Company) or liability (including any sum paid in settlement of a
claim with the approval of the Company), and advanced amounts necessary
to pay the foregoing at the earliest time and to the fullest extent
permitted, arising out of any act or omission to act in connection with
the administration of this Plan, except to the extent arising out of
such officer's, member's or former member's own fraud or bad faith.
Such indemnification shall be in addition to any rights of
indemnification the employees, officers, directors or members or former
officers, directors or members may have under applicable law or under
the Certificate of Incorporation or By-Laws of the Company or any
Affiliate. Notwithstanding anything else herein, this indemnification
will not apply to the actions or determinations made by an individual
with regard to Stock Option granted to him or her under this Plan.
ARTICLE IV
SHARE AND OTHER LIMITATIONS
4.1 SHARES.
8
(a) The aggregate number of shares of Common Stock which may be
issued or used for reference purposes under this Plan or with respect
to which Stock Options may be granted shall not exceed 2,252,4861
shares of Common Stock (subject to any increase or decrease pursuant to
Section 4.2) which may be either authorized and unissued Common Stock
or Common Stock held in or acquired for the treasury of the Company or
both.
(b) Stock Options granted under the Plan shall be sub-divided into
5 tranches (as described more fully in Section 6.2). The number of
shares of Common Stock available for each tranche shall be as follows:
Tranche Number of Shares
Subject to Tranche
1 403,076
2 758,732
3 758,732
4 165,973
5 165,973
(c) If any Stock Option granted under this Plan expires, terminates
or is forfeited for any reason other than by reason of its exercise,
the number of shares of Common Stock underlying such unexercised or
forfeited Stock Option shall again be available for the purposes of
Awards under this Plan. In determining the number of shares of Common
Stock available for Non-Qualified Stock Options, if Common Stock has
been delivered or exchanged by a Participant as full or partial payment
to the Company for payment of the exercise price, or for payment of
withholding taxes, or if the number shares of Common Stock otherwise
deliverable has been reduced for payment of the exercise price or for
payment of withholding taxes, the number of shares of Common Stock
exchanged as payment in connection with the exercise or for withholding
or reduced shall again be available for purposes of Non-Qualified Stock
Options under this Plan. The maximum number of shares of Common Stock
subject to any Stock Option which may be granted under this Plan during
any calendar year to each Participant shall not exceed 1,000,000 shares
(subject to any increase or decrease pursuant to Section 4.2).
4.2 CHANGES.
(a) The existence of this Plan and the Stock Options granted
hereunder shall not affect in any way the right or power of the Board
or the stockholders of the Company to make or authorize (i) any
adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, (ii) any merger or
consolidation of the Company or any Affiliate, (iii) any
- --------
(1) Note, the number reflects the stock split that occurred on August 23, 2001.
9
issuance of bonds, debentures, preferred or prior preference stock
ahead of or affecting the Common Stock, (iv) the dissolution or
liquidation of the Company or any Affiliate, (v) any sale or transfer
of all or part of the assets or business of the Company or any
Affiliate, or (vi) any other corporate act or proceeding.
(b) In the event of any change in the capital structure or business
of the Company by reason of any stock split, reverse stock split, stock
dividend, combination or reclassification of shares, recapitalization,
or other change in the capital structure of the Company, merger,
consolidation, spin-off, reorganization, partial or complete
liquidation, issuance of rights or warrants to purchase any Common
Stock or securities convertible into Common Stock, or any other
corporate transaction or event having an effect similar to any of the
foregoing, then the Committee may take such action, if any, with
respect to the Plan and outstanding Stock Options, as it may deem
equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under this Plan, including,
without limitation, adjustment of the aggregate number and kind of
shares which thereafter may be issued under this Plan, the number and
kind of shares or other property (including cash) to be issued upon
exercise of an outstanding Stock Option granted under this Plan and the
purchase price thereof. Any such action or adjustment determined by the
Committee in good faith shall be final, binding and conclusive on the
Company and all Participants and employees and their respective heirs,
executors, administrators, successors and assigns. Except as provided
in this Section 4.2, a Participant shall have no rights by reason of
any issuance by the Company of any class or securities convertible into
stock of any class of the Company, any subdivision or consolidation of
shares of stock of any class of the Company, the payment of any stock
dividend, any other increase or decrease in the number of shares of
stock of any class of the Company, any sale or transfer of all or part
of the Company's assets or business or any other change affecting the
Company's capital structure or business.
(c) Fractional shares of Common Stock resulting from any adjustment
in Options pursuant to Section 4.2(a) or (b) shall be aggregated until,
and eliminated at, the time of exercise by rounding-down for fractions
less than one-half and rounding-up for fractions equal to or greater
than one-half. No cash settlements shall be made with respect to
fractional shares eliminated by rounding. Notice of any adjustment
shall be given by the Committee to each Participant whose Option has
been adjusted and such adjustment (whether or not such notice is given)
shall be effective and binding for all purposes of this Plan.
4.3 MINIMUM PURCHASE PRICE. Notwithstanding any provision of this Plan
to the contrary, if authorized but previously unissued shares of Common Stock
are issued under this Plan, such shares shall not be issued for a consideration
which is less than as permitted under applicable law.
10
ARTICLE V
ELIGIBILITY
5.1 NON-QUALIFIED STOCK OPTIONS. All Eligible Employees are eligible to
be granted Non-Qualified Stock Options. Eligibility for the grant of a
Non-Qualified Stock Option and actual participation in this Plan shall be
determined by the Committee in its sole discretion.
5.2 INCENTIVE STOCK OPTIONS. All Eligible Employees of the Company, its
Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock
Options under this Plan. Eligibility for the grant of an Incentive Stock Option
and actual participation in this Plan shall be determined by the Committee in
its sole discretion.
ARTICLE VI
STOCK OPTIONS
6.1 STOCK OPTIONS. Each Stock Option granted hereunder shall be one of
two types: (i) an Incentive Stock Option intended to satisfy the requirements of
Section 422 of the Code; or (ii) a Non-Qualified Stock Option.
6.2 GRANTS. (a) Subject to the provisions of Article V, the Committee
shall have the authority to grant to any Eligible Employee one or more Incentive
Stock Options, Non-Qualified Stock Options or both types of Stock Options. To
the extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Stock Option or the portion thereof which does not qualify,
shall constitute a separate Non-Qualified Stock Option. Notwithstanding any
other provision of this Plan to the contrary or any provision in an agreement
evidencing the grant of a Stock Option to the contrary, any Stock Option granted
to an Eligible Employee of an Affiliate (other than an Affiliate which is a
Parent or a Subsidiary) shall be a Non-Qualified Stock Option.
(b) Each Stock Option granted under the Plan shall be sub-divided
into 5 tranches. The number of shares of Common Stock in each tranche
for any Stock Option shall be the total number of shares of Common
Stock subject to the Stock Option multiplied by the applicable
percentage for such tranche in the following table:
Tranche Percentage of Shares
Subject to Tranche
1 17.8947368%
2 33.6842105%
3 33.6842105%
4 7.368421%
5 7.368421%
11
6.3 TERMS OF STOCK OPTIONS. Stock Options granted under this Plan shall
be subject to the following terms and conditions, and shall be in such form and
contain such additional terms and conditions, not inconsistent with the terms of
this Plan, as the Committee shall deem desirable:
(a) EXERCISE PRICE. Stock Options under this Plan shall be
exercisable at the exercise prices set forth in the following table;
provided, however, that if an Incentive Stock Option is granted to a
Ten Percent Stockholder, the exercise price of the first tranche shall
be no less than 110% of the Fair Market Value of the Common Stock at
the time of grant:
Actual Exercise Price of
Exercise Price of Options Granted on the
Tranche Options Granted Effective Date
1 100% of Fair Market $7.75
Value on the Date of Grant
2 150% of Fair Market $11.62
Value on the Date of Grant
3 200% of Fair Market $15.50
Value on the Date of Grant
4 250% of Fair Market $19.37
Value on the Date of Grant
5 300% of Fair Market $23.25
Value on the Date of Grant
(b) STOCK OPTION TERM. The term of each Stock Option shall be fixed
by the Committee; provided, however, that no Stock Option shall be
exercisable more than 10 years after the date such Stock Option is
granted; and further provided that the term of an Incentive Stock
Option granted to a Ten Percent Stockholder shall not exceed 5 years.
(c) EXERCISABILITY. Except as otherwise provided by the Committee
in accordance with the provisions of this Section, 25% of each tranche
of any Stock Option granted under this Article VI shall be exercisable
on the first anniversary of the date of grant and 12.5% of each tranche
of any Stock Option granted under this Article VI shall be exercisable
at the end of each six-month period thereafter. Notwithstanding the
foregoing, Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Committee at grant. If the Committee provides, in its discretion, that
any Stock Option is exercisable subject to certain limitations
(including, without limitation, that such Stock Option is exercisable
only in installments or within certain time periods), the Committee may
waive such limitations on the exercisability at any time at or after
grant in whole or in part (including, without limitation, waiver of the
installment exercise provisions or acceleration of the time at which
such Stock
12
Option may be exercised), based on such factors, if any, as the
Committee shall determine, in its sole discretion. Unless otherwise
determined by the Committee at grant, the grant shall provide that (i)
in the event the Participant engages in Detrimental Activity prior to
any exercise of the Stock Option, all Stock Options held by the
Participant shall thereupon terminate and expire, (ii) as a condition
of the exercise of a Stock Option, the Participant shall be required to
certify at the time of exercise in a manner acceptable to the Company
that the Participant is in compliance with the terms and conditions of
the Plan and that the Participant has not engaged in, and does not
intend to engage in, any Detrimental Activity, (iii) in the event the
Participant engages in Detrimental Activity during the 6 month period
commencing on the date the Stock Option is exercised, the Company shall
be entitled to recover from the Participant at any time within one year
after such exercise, and the Participant shall pay over to the Company,
any gain realized as a result of the exercise (whether at the time of
exercise or thereafter) and (iv) the foregoing provisions described in
(i), (ii) and (iii) shall cease to apply upon a Change in Control.
(d) METHOD OF EXERCISE. Subject to whatever installment exercise
and waiting period provisions apply under subsection (c) above, Stock
Options may be exercised in whole or in part at any time and from time
to time during the Stock Option term by giving written notice of
exercise to the Committee specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the
purchase price as follows: (i) in cash or by check, bank draft or money
order payable to the order of the Company; (ii) if the Common Stock is
traded on a national securities exchange, The Nasdaq Stock Market, Inc.
or quoted on a national quotation system sponsored by the National
Association of Securities Dealers, through a "cashless exercise"
procedure whereby the Participant delivers irrevocable instructions to
a broker approved by the Committee to deliver promptly to the Company
an amount equal to the purchase price; or (iii) on such other terms and
conditions as may be acceptable to the Committee (including, without
limitation, the relinquishment of Stock Options or by payment in full
or in part in the form of Common Stock owned by the Participant for a
period of at least 6 months (and for which the Participant has good
title free and clear of any liens and encumbrances) based on the Fair
Market Value of the Common Stock on the payment date). No shares of
Common Stock shall be issued until payment therefor, as provided
herein, has been made or provided for.
(e) INCENTIVE STOCK OPTION LIMITATIONS. To the extent that the
aggregate Fair Market Value (determined as of the time of grant) of the
Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by an Eligible Employee during any
calendar year under this Plan and/or any other stock option plan of the
Company, any Subsidiary or any Parent exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any
Subsidiary or any Parent at all times from the time an Incentive Stock
Option is
13
granted until 3 months prior to the date of exercise thereof (or such
other period as required by applicable law), such Stock Option shall be
treated as a Non-Qualified Stock Option. Should any provision of this
Plan not be necessary in order for the Stock Options to qualify as
Incentive Stock Options, or should any additional provisions be
required, the Committee may amend this Plan accordingly, without the
necessity of obtaining the approval of the stockholders of the Company.
(f) FORM, MODIFICATION, EXTENSION AND RENEWAL OF STOCK OPTIONS.
Subject to the terms and conditions and within the limitations of this
Plan, Stock Options shall be evidenced by such form of agreement or
grant as is approved by the Committee, and the Committee may (i)
modify, extend or renew outstanding Stock Options granted under this
Plan (provided that the rights of a Participant are not reduced without
his consent), and (ii) accept the surrender of outstanding Stock
Options (up to the extent not theretofore exercised) and authorize the
granting of new Stock Options in substitution therefor (to the extent
not theretofore exercised).
(g) DEFERRED DELIVERY OF COMMON SHARES. The Committee may in its
discretion permit Participants to defer delivery of Common Stock
acquired pursuant to a Participant's exercise of an Option in
accordance with the terms and conditions established by the Committee.
ARTICLE VII
NON-TRANSFERABILITY AND
TERMINATION OF EMPLOYMENT
7.1 NON-TRANSFERABILITY. Except as provided herein, no Stock Option
shall be Transferable by the Participant otherwise than by will or by the laws
of descent and distribution. All Stock Options shall be exercisable, during the
Participant's lifetime, only by the Participant. No Stock Option shall, except
as otherwise specifically provided by law or herein, be Transferable in any
manner, and any attempt to Transfer any such Stock Option shall be void, and no
such Stock Option shall in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any person who shall be entitled
to such Stock Option, nor shall it be subject to attachment or legal process for
or against such person. Notwithstanding the foregoing, the Committee may
determine at the time of grant or thereafter that a Non-Qualified Stock Option
that is otherwise not Transferable pursuant to this Section 7.1 is Transferable
to a Family Member in whole or in part and in such circumstances, and under such
conditions, as specified by the Committee. A Non-Qualified Stock Option that is
Transferred to a Family Member pursuant to the preceding sentence (i) may not be
subsequently Transferred otherwise than by will or by the laws of descent and
distribution and (ii) remains subject to the terms of this Plan and the Stock
Option agreement. Any shares of Common Stock acquired upon the exercise of a
Stock Option by a transferee of a Stock Option shall be
14
subject to the terms of this Plan and the Stock Option agreement, including,
without limitation, the provisions of Article X hereof.
7.2 TERMINATION OF EMPLOYMENT. The following rules apply with regard to
the Termination of Employment of a Participant. Unless otherwise determined by
the Committee at grant or, if no rights of the Participant are reduced,
thereafter:
(a) TERMINATION BY REASON OF DEATH, DISABILITY OR RETIREMENT. If a
Participant's Termination of Employment is by reason of death,
Disability or Retirement, all Stock Options held by such Participant
which are exercisable at the time of the Participant's Termination of
Employment, may be exercised by the Participant (or, in the case of
death, by the legal representative of the Participant's estate) at any
time within a period of one year from the date of such Termination of
Employment, but in no event beyond the expiration of the stated terms
of such Stock Options; provided, however, that, in the case of
Retirement, if the Participant dies within such exercise period, all
unexercised Stock Options held by such Participant shall thereafter be
exercisable, to the extent to which they were exercisable at the time
of death, for a period of one year from the date of such death, but in
no event beyond the expiration of the stated term of such Stock
Options.
(b) INVOLUNTARY TERMINATION WITHOUT CAUSE. If a Participant's
Termination of Employment is by involuntary termination without Cause,
all Stock Options held by such Participant which are exercisable at the
time of such Termination of Employment, may be exercised by the
Participant at any time within a period of 90 days from the date of
such Termination of Employment, but in no event beyond the expiration
of the stated term of such Stock Options.
(c) VOLUNTARY TERMINATION. If a Participant's Termination of
Employment is voluntary (other than a voluntary termination described
in Section 7.2(d)(ii) below), all Stock Options held by such
Participant which are exercisable at the time of such Termination of
Employment, may be exercised by the Participant at any time within a
period of 30 days from the date of such Termination of Employment, but
in no event beyond the expiration of the stated terms of such Stock
Options.
(d) TERMINATION FOR CAUSE. If a Participant's Termination of
Employment (i) is for Cause or (ii) is a voluntary termination (as
provided in subsection (c) above) at any time after an event which
would be grounds for a Termination of Employment for Cause, all Stock
Options held by such Participant shall thereupon terminate and expire
as of the date of such Termination of Employment.
15
ARTICLE VIII
CHANGE IN CONTROL PROVISIONS
8.1 BENEFITS. In the event of a Change in Control of the Company,
except as otherwise provided by the Committee upon the grant of a Stock Option,
the Participant shall be entitled to the following benefits:
(a) Except to the extent provided in the applicable Stock Option
agreement, the Participant's employment agreement with the Company or
an Affiliate, as approved by the Committee, or other written agreement
approved by the Committee (as such agreement may be amended from time
to time), Stock Options granted and not previously exercisable shall
become exercisable upon a Change in Control, subject to subsection
8.1(b).
(b) Notwithstanding anything to the contrary herein, unless the
Committee provides otherwise at the time a Stock Option is granted
hereunder or thereafter, no acceleration of exercisability shall occur
with respect to such Stock Options if the Committee reasonably
determines in good faith that the Stock Options shall be honored or
assumed, or new rights substituted therefor (each such honored, assumed
or substituted stock option hereinafter called an "Alternative
Option"), by a Participant's employer (or the parent or a subsidiary of
such employer) immediately following the Change in Control, provided
that any such Alternative Option must meet the following criteria:
(i) the Alternative Option must provide such Participant with
rights and entitlements substantially equivalent to or better than
the rights, terms and conditions applicable under such Stock
Option, including, but not limited to, an identical or better
exercise schedule; and
(ii) the Alternative Option must substantially comply and in
the case of an Incentive Stock Option must comply with the
requirements of Treasury Regulation ss. 1.425-1 (and any amendments
thereto), except that the Alternative Option need not be an
Incentive Stock Option.
(c) If the Company and the other party to a transaction
constituting a Change in Control agree that such transaction shall be
treated as a "pooling of interests" for financial reporting purposes,
and if the transaction is in fact so treated, then the acceleration of
exercisability, vesting or lapse of the applicable Restriction Period
shall not occur to the extent that the Company's independent public
accountants determine in good faith that such acceleration would
preclude "pooling of interests" accounting.
8.2 CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
occurred:
16
(a) upon any "person" as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than CEP, MSDWCP, the Company, any
trustee or other fiduciary holding securities under any employee
benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of Common Stock of the Company),
becoming the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's
then outstanding securities;
(b) during any period of 2 consecutive years, individuals who at
the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in
paragraph (a), (c), or (d) of this Section or a director whose initial
assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a
person other than the Board) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company or a Subsidiary with
any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
more than 35% of the combined voting power of the voting securities of
the Company or such surviving entity or such surviving entity's parent
outstanding immediately after such merger or consolidation; or
(d) upon the approval by the stockholders of the Company of a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets other than the sale or disposition of all or substantially all
of the assets of the Company to a person or persons who beneficially
own, directly or indirectly, at least 50% or more of the combined
voting power of the outstanding voting securities of the Company at the
time of the sale.
8.3 INITIAL PUBLIC OFFERING NOT A CHANGE IN CONTROL. For purposes of
the Plan, an initial public offering of the Common Stock of the Company shall
not be deemed to be a Change in Control.
17
ARTICLE IX
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of this Plan, the Board or the
Committee may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of this Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XII), or suspend or terminate it entirely, retroactively
or otherwise; provided, however, that, unless otherwise required by law or
specifically provided herein, the rights of a Participant with respect to Awards
granted prior to such amendment, suspension or termination, may not be impaired
without the consent of such Participant. In no event may this Plan be amended
without the approval of the stockholders of the Company, if and to the extent
required by the applicable provisions of Rule 16b-3 or, if and to the extent
required, by the applicable provisions of Section 162(m) of the Code, or with
regard to Incentive Stock Options, Section 422 of the Code, which would (i)
increase the aggregate number of shares of Common Stock that may be issued under
this Plan; (ii) decrease the minimum exercise price of any Stock Option; (iii)
increase the maximum individual Participant limitations for a calendar year
under Section 4.1; (iv) change the classification of employees eligible to
receive Stock Options under this Plan; or (v) any other amendment that would
require stockholder approval in order for the Plan to continue to comply with
the applicable provisions, if any, of Rule 16b-3, Section 162(m) of the Code or,
with regard to Incentive Stock Options, Section 422 of the Code or with the
rules of any exchange or system on which the Company's securities are listed or
traded.
The Committee may amend the terms of any Stock Option theretofore
granted, prospectively or retroactively, but, subject to Article IV above or as
otherwise specifically provided herein, no such amendment or other action by the
Committee shall impair the rights of any holder without the holder's consent.
ARTICLE X
UNFUNDED PLAN
10.1 UNFUNDED STATUS OF PLAN. This Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments as to which a Participant has a fixed and vested interest but which are
not yet made to a Participant by the Company, nothing contained herein shall
give any such Participant any rights that are greater than those of a general
unsecured creditor of the Company.
ARTICLE XI
GENERAL PROVISIONS
18
11.1 LEGEND. The Committee may require each person receiving shares
pursuant to an Award under this Plan to represent to and agree with the Company
in writing that the Participant is acquiring the shares without a view to
distribution thereof. In addition to any legend required by this Plan, the
certificates for such shares may include any legend which the Committee deems
appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under this Plan
shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed or any national securities association system upon
whose system the Common Stock is then quoted, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.
11.2 OTHER PLANS. Nothing contained in this Plan shall prevent the
Board from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
11.3 NO RIGHT TO EMPLOYMENT. Neither this Plan nor the grant of any
Award hereunder shall give any Participant any right with respect to continuance
of employment by the Company or any Affiliate, nor shall they be a limitation in
any way on the right of the Company or any Affiliate by which an employee is
employed to terminate his employment at any time.
11.4 WITHHOLDING OF TAXES. The Company shall have the right to deduct
from any payment to be made to a Participant, or to otherwise require, prior to
the issuance or delivery of any shares of Common Stock or the payment of any
cash hereunder, payment by the Participant of, any Federal, state or local taxes
required by law to be withheld.
Any statutorily required withholding obligation with regard to any
Eligible Employee may be satisfied, subject to the consent of the Committee, by
reducing the number of shares of Common Stock otherwise deliverable or by
delivering shares of Common Stock already owned. Any fraction of a share of
Common Stock required to satisfy such tax obligations shall be disregarded and
the amount due shall be paid instead in cash by the Participant.
11.5 LISTING AND OTHER CONDITIONS.
(a) Unless otherwise determined by the Committee, as long as the
Common Stock is listed on a national securities exchange or system
sponsored by a national securities association, the issue of any shares
of Common Stock
19
pursuant to a Stock Option shall be conditioned upon such shares being
listed on such exchange or system. The Company shall have no obligation
to issue such shares unless and until such shares are so listed, and
the right to exercise any Stock Option with respect to such shares
shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to a Stock
Option is or may in the circumstances be unlawful or result in the
imposition of excise taxes on the Company under the statutes, rules or
regulations of any applicable jurisdiction, the Company shall have no
obligation to make such sale or delivery, or to make any application or
to effect or to maintain any qualification or registration under the
Securities Act or otherwise with respect to shares of Common Stock or
Stock Option, and the right to exercise any Stock Option shall be
suspended until, in the opinion of said counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise taxes on
the Company.
(c) Upon termination of any period of suspension under this
Section 12.5, a Stock Option affected by such suspension which shall
not then have expired or terminated shall be reinstated as to all
shares available before such suspension and as to shares which would
otherwise have become available during the period of such suspension,
but no such suspension shall extend the term of any Stock Option.
(d) A Participant shall be required to supply the Company with any
certificates, representations and information that the Company requests
and otherwise cooperate with the Company in obtaining any listing,
registration, qualification, exemption, consent or approval the Company
deems necessary or appropriate.
11.6 STOCKHOLDERS AGREEMENT. As a condition to the receipt of shares of
Common Stock pursuant to a Stock Option under this Plan, to the extent required
by the Committee, the Participant shall execute and deliver a stockholder's
agreement or such other documentation which shall set forth certain restrictions
on transferability of the shares of Common Stock acquired upon exercise or
purchase, a right of first refusal of the Company with respect to shares, the
right of the Company to purchase Common Stock in accordance with this Plan and
such other terms as the Board or Committee shall from time to time establish.
Such stockholder's agreement shall apply to all Common Stock acquired under the
Plan.
11.7 GOVERNING LAW. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflict of
laws).
11.8 CONSTRUCTION. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all
20
cases where they would so apply, and wherever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
11.9 OTHER BENEFITS. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its subsidiaries nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.
11.10 COSTS. The Company shall bear all expenses included in
administering this Plan, including expenses of issuing Common Stock pursuant to
any Awards hereunder. 11.11 NO RIGHT TO SAME BENEFITS. The provisions of Stock
Options need not be the same with respect to each Participant, and such Stock
Options to individual Participants need not be the same in subsequent years.
11.12 DEATH/DISABILITY. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant's death or Disability and to supply it with a copy of the will (in
the case of the Participant's death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of this Plan.
11.13 SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and permitted assigns of a Participant, including, without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate.
11.14 SEVERABILITY OF PROVISIONS. If any provision of this Plan shall
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.
11.15 HEADINGS AND CAPTIONS. The headings and captions herein are
provided for reference and convenience only, shall not be considered part of
this Plan, and shall not be employed in the construction of this Plan.
11.16 SECTION 16(B) OF THE EXCHANGE ACT. All elections and transactions
under this Plan by persons subject to Section 16 of the Exchange Act involving
shares of Common Stock are intended to comply with any applicable exemptive
condition under Rule 16b-3. The Committee may establish and adopt written
administrative guidelines, designed to facilitate compliance with Section 16(b)
of the Exchange Act, as it may deem necessary or proper for the administration
and operation of this Plan and the transaction of business thereunder.
21
ARTICLE XII
EFFECTIVE DATE OF PLAN
12.1 The Plan shall become effective upon adoption by the Board,
subject to the approval of this Plan by the stockholders of the Company in
accordance with the requirements of the laws of the State of Delaware, or such
later date as provided in the adopting resolution.
ARTICLE XIII
TERM OF PLAN
13.1 No Stock Option shall be granted pursuant to this Plan on or after
the tenth anniversary of the earlier of the date this Plan is adopted or the
date of stockholder approval, but Stock Options granted prior to such tenth
anniversary may, and the Committee's authority to administer the terms of such
Options shall, extend beyond that date.
22
EXHIBIT 5.1
OPINION OF PROSKAUER ROSE LLP
Cross Country, Inc.
6551 Park of Commerce Blvd, N.W.
Suite 200
Boca Raton, Florida 33487
Ladies and Gentlemen:
We are acting as counsel to Cross Country, Inc., a Delaware corporation (the
"Company"), in connection with the Registration Statement on Form S-8 (together
with the exhibits thereto, the "Registration Statement") filed by the Company
under the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, relating to the registration of 4,398,001 shares (the
"Shares") of common stock par value $.0001 per share, of the Company. 2,145,515
of the Shares are to be issued by the Company upon exercise of certain options
granted and to be granted to certain employees, advisors and consultants of the
Company and its affiliates pursuant to the Company's Amended and Restated 1999
Stock Option Plan (the "Stock Option Plan"), and 2,252,486 of the Shares are to
be issued by the Company upon exercise of certain options granted and to be
granted to certain employees of the Company and its affiliates pursuant to the
Company's Amended and Restated Equity Participation Plan (the "Equity
Participation Plan," and together with the Stock Option Plan, the "Plans").
As such counsel, we have participated in the preparation of the Registration
Statement and have reviewed the corporate proceedings in connection with the
adoption of the Plans. We have also examined and relied upon originals or
copies, certified or otherwise authenticated to our satisfaction, of all such
corporate records, documents, agreements, and instruments relating to the
Company, and certificates of public officials and of representatives of the
Company and have made such investigations of law, and have discussed with
representatives of the Company and such other persons such questions of fact, as
we have deemed proper or necessary as a basis for rendering this opinion.
Based upon, and subject to, the foregoing, we are of the opinion that the Shares
will be, when issued upon due exercise of the options granted under the Plans,
in accordance with the provisions of the Plans and in accordance with the stock
option agreements entered into in accordance with the provisions of the Plans
(including payment of the option exercise price provided for therein) legally
issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement. In giving the foregoing consent, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
PROSKAUER ROSE LLP
EXHIBIT 23.1(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement (Form
S-8) pertaining to the Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan and the Cross Country, Inc. Amended and Restated Equity
Participation Plan of our report dated May 7, 2001, except for the third
paragraph of Note 11, as to which the date is August 23, 2001, related to the
consolidated financial statements of Cross Country, Inc., included in the
Registration Statement (Form S-1) and related Prospectus of Cross Country, Inc.
dated October 24, 2001, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
West Palm Beach, Florida
December 6, 2001
EXHIBIT 23.1(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement (Form
S-8) pertaining to the Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan and the Cross Country, Inc. Amended and Restated Equity
Participation Plan of our report dated March 10, 2000, related to the
consolidated financial statements of TravCorps Corporation and Subsidiary,
included in the Registration Statement (Form S-1) and related Prospectus of
Cross Country, Inc. dated October 24, 2001, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Boston, Massachusetts
December 6, 2001
EXHIBIT 23.1(c)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement (Form
S-8) pertaining to the Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan and the Cross Country, Inc. Amended and Restated Equity
Participation Plan of our report dated April 26, 2001, related to the
consolidated financial statements of ClinForce, Inc., included in the
Registration Statement (Form S-1) and related Prospectus of Cross Country, Inc.
dated October 24, 2001, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Raleigh, North Carolina
December 6, 2001
EXHIBIT 23.1(d)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement (Form
S-8) pertaining to the Cross Country, Inc. Amended and Restated 1999 Stock
Option Plan and the Cross Country, Inc. Amended and Restated Equity
Participation Plan of our report dated August 10, 2001, related to the financial
statements of Heritage Professional Education, LLC, included in the Registration
Statement (Form S-1) and related Prospectus of Cross Country, Inc. dated October
24, 2001, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Nashville, Tennessee
December 6, 2001
EXHIBIT 23.2
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
our report dated November 5, 1999, except for Note 8 as to which the date is
December 16, 1999, relating to the financial statements of Cross Country
Staffing, a Partnership, as of July 29, 1999 and December 31, 1998 and for the
period from January 1, 1999 through July 29, 1999 and for the year ended
December 31, 1998, in the Registration Statement (Form S-1) and related
Prospectus of Cross Country, Inc. dated October 24, 2001.
/s/ PriceWaterhouseCoopers LLP
Fort Lauderdale, Florida
December 6, 2001
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this registration statement of
Cross Country, Inc. on form S-8 of our report dated March 12, 1999 related to
the consolidated financial statements of TravCorps Corporation and Subsidiary
for the year ended December 26, 1998, appearing in Registration Statement No.
333-64914 dated October 24, 2001.
/s/ Deloitte & Touche LLP
Boston, Massachusetts
December 7, 2001
