AMENDED
AND RESTATED 2003 STOCK PLAN
ARTICLE
1
PURPOSE
1.1 GENERAL. The
purpose of the LiveDeal, Inc. Amended and Restated 2003 Stock Plan (the “Plan”)
is to promote the success, and enhance the value, of LiveDeal, Inc. (the
“Company”) by linking the personal interests of its employees and non-employee
services providers to those of Company stockholders. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract, and retain the services of its employees and non-employee
services providers upon whose judgment, interest, and special effort the
successful conduct of the Company’s operation is largely dependent.
ARTICLE
2
EFFECTIVE
DATE
2.1 EFFECTIVE
DATE. The Plan is effective as of the date the Plan is approved
by the Company’s Stockholders (the “Effective Date”).
ARTICLE
3
DEFINITIONS
AND CONSTRUCTION
3.1 DEFINITIONS. When
a word or phrase appears in this Plan with the initial letter capitalized,
and
the word or phrase does not commence a sentence, the word or phrase shall
generally be given the meaning ascribed to it in this Section or in Sections
1.1
or 2.1 unless a clearly different meaning is required by the
context. The following words and phrases shall have the following
meanings:
(a) “Award”
means any Restricted Stock Award, Performance Share Award or Performance-Based
Award granted to a Participant under the Plan.
(b) “Award
Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award.
(c) “Board”
means the Board of Directors of the Company.
(d) “Cause”
means termination of employment or service as a result of any of the following
events: (1) the commission of an act of dishonesty, fraud,
embezzlement, theft or other similar acts of misconduct by the Participant,
whether within or outside the scope of the Participant’s employment or service
with the Company, (ii) the breach of duty by the Participant in the course
of
employment or service, unless waived in writing by the Company, (iii) the
neglect by the Participant of the Participant’s duties with the Company, unless
waived in writing by the Company, (iv) the Participant’s disobedience or refusal
or failure to discharge the Participant’s duties to the Company under any
employment agreement or otherwise, (v) the breach of obligations of the
Participant to the Company under this Agreement or any employment or other
agreement with the Company, unless waived in writing by the Company, (vi)
the
breach by the Participant of any fiduciary duty to the Company involving
personal gain or profit, including acceptance of gifts, gratuities, honorarium,
lodging, and other items of direct economic value in excess of One Hundred
Dollars ($100.00) from any one source, provided that this section does not
apply
to gifts or items received from family members or other non-business or
professional persons, (vii) the violation by the Participant of any law,
rule,
regulation, court order (other than a law, rule, or regulation relating to
a
traffic violation or similar offense) or a final cease and desist order,
or
(viii) the Participant economically committing the Company beyond the
Participant’s expressly approved authority as communicated to the Participant by
the Company from time to time.
(e) “Change
of Control” means any of the following:
(1) any
merger of the Company in which the Company is not the continuing or surviving
entity, or pursuant to which Stock would be converted into cash, securities,
or
other property other than a merger of the Company in which the holders of
the
Company’s Stock immediately prior to the merger have the same proportionate
ownership of beneficial interest of common stock or other voting securities
of
the surviving entity immediately after the merger;
(2) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of assets or earning power aggregating more than 50%
of
the assets or earning power of the Company or any major subsidiary, other
than
pursuant to a sale-leaseback, structured finance or other form of financing
transaction;
(3) the
shareholders of the Company approve any plan or proposal for liquidation
or
dissolution of the Company; or
(4) any
person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange
Act),
other than (A) any current shareholder of the Company or affiliate thereof,
or
(B) an employee benefit plan of the Company or any Subsidiary or any entity
holding shares of capital stock of the Company for or pursuant to the terms
of
any such employee benefit plan in its role as an agent or trustee for such
plan,
or (C) any affiliate of the Company as of the Effective Date becomes the
beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of
50% or more of the Company’s outstanding Stock.
(f) “Code”
means the Internal Revenue Code of 1986, as amended.
(g) “Committee”
means the committee of the Board described in Article 4.
(h) “Covered
Employee” means an Employee who is, or could be, a “covered employee” within the
meaning of Section 162(m) of the Code.
(i) “Disability”
shall mean any illness or other physical or mental condition of a Participant
which renders the Participant incapable of performing his customary and usual
duties for the Company, or any medically determinable illness or other physical
or mental condition resulting from a bodily injury, disease or mental disorder
which in the judgment of the Committee is permanent and continuous in
nature. The Committee may require such medical or other evidence as
it deems necessary to judge the nature and permanency of the Participant’s
condition.
(j) “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to
time.
(k) “Fair
Market Value” means, as of any given date, the fair market value of Stock
determined as follows:
(1) Where
there exists a public market for the Stock, the Fair Market Value shall be
(A) the closing price for the Stock for the last market trading day prior
to the time of the determination (or, if no closing price was reported on
that
date, on the last trading date on which a closing price was reported) on
the
stock exchange determined by the Committee to be the primary market for the
Stock or the Nasdaq National Market, whichever is applicable, or (B) if the
Stock is not traded on any such exchange or national market system, the average
of the closing bid and asked prices of the Stock on the Nasdaq Small Cap
Market
for the day prior to the time of the determination (or, if no such prices
were
reported on that date, on the last date on which such prices were reported),
in
each case, as reported in The Wall Street Journal or such other source as
the
Committee deems reliable; or
(2) In
the absence of an established market for the Stock of the type described
in (1),
above, the Fair Market Value thereof shall be determined by the Committee
in
good faith.
(l) “Participant”
means a person or entity who, as an employee or non-employee services provider
of the Company or any Subsidiary, has been granted an Award under the
Plan.
(m) “Performance-Based
Awards” means the Restricted Stock or Performance Share Awards granted to
selected Covered Employees pursuant to Articles 7 and 8, but which are subject
to the terms and conditions set forth in Article 9. All
Performance-Based Awards are intended to qualify as “performance-based
compensation” pursuant to Section 162(m) of the Code.
(n) “Performance
Criteria” means the criteria that the Committee selects for purposes of
establishing the Performance Goal or Performance Goals for a Participant
for a
Performance Period. The Performance Criteria that will be used to
establish Performance Goals are limited to the following: number of
customers, pre- or after-tax net earnings, sales or revenue, operating earnings,
operating cash flow, return on net assets, return on stockholders’ equity,
return on assets, return on capital, stockholder returns, gross or net profit
margin, earnings per share, price per share of Stock, and market share, any
of
which may be measured either in absolute terms or as compared to any incremental
increase or as compared to results of a peer group. The Committee
shall, within the time prescribed by Section 162(m) of the Code, define in
an
objective fashion the manner of calculating the Performance Criteria it selects
to use for such Performance Period for such Participant.
(o) “Performance
Goals” means, for a Performance Period, the goals established in writing by the
Committee for the Performance Period based upon the Performance
Criteria. Depending on the Performance Criteria used to establish
such Performance Goals, the Performance Goals may be expressed in terms of
overall Company performance or the performance of a division, business unit,
or
an individual. The Committee, in its discretion, may, within the time
prescribed by Section 162(m) of the Code, adjust or modify the calculation
of
Performance Goals for such Performance Period in order to prevent the dilution
or enlargement of the rights of Participants (i) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction,
event, or development, or (ii) in recognition of, or in anticipation of,
any
other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or in response to, or in anticipation of, changes
in
applicable laws, regulations, accounting principles, or business
conditions.
(p) “Performance
Period” means the one or more periods of time, which may be of varying and
overlapping durations, as the Committee may select, over which the attainment
of
one or more Performance Goals will be measured for the purpose of determining
a
Participant’s right to, and the payment of, a Performance-Based
Award.
(q) “Performance
Share” means a right granted to a Participant pursuant to Article 8, to receive
cash, Stock, or other Awards, the payment of which is contingent upon achieving
certain performance goals established by the Committee.
(r) “Plan”
means the LiveDeal, Inc. Amended and Restated 2003 Stock Plan.
(s) “Restricted
Stock” means Stock granted to a Participant under Article 7 that is subject to
certain restrictions and to risk of forfeiture.
(t) “Stock”
means the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to Article 11.
(u) “Subsidiary”
means any corporation or other entity of which a majority of the outstanding
voting stock or voting power is beneficially owned directly or indirectly
by the
Company.
ARTICLE
4
ADMINISTRATION
4.1 COMMITTEE. The
Plan shall be administered by a Committee appointed by, and which serves
at the
discretion of, the Board. If the Board does not appoint a Committee
to administer the Plan, the Plan shall be administered by the Board and all
references herein to the Committee shall refer to the Board.
4.2 ACTION
BY THE COMMITTEE. A majority of the Committee
shall constitute a quorum. The acts of a majority of the
members present at any meeting at which a quorum is present and acts approved
in
writing by a majority of the Committee in lieu of a meeting shall be deemed
the
acts of the Committee. Each member of the Committee is entitled to,
in good faith, rely or act upon any report or other information furnished
to
that member by any officer or other employee of the Company or any Subsidiary,
the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to
assist
in the administration of the Plan.
4.3 AUTHORITY
OF COMMITTEE. The Committee has the exclusive power, authority
and discretion to:
(a) Designate
Participants to receive Awards;
(b) Determine
the type or types of Awards to be granted to each Participant;
(c) Determine
the number of Awards to be granted and the number of shares of Stock to which
an
Award will relate;
(d) Determine
the terms and conditions of any Award granted under the Plan including but
not
limited to the purchase price, if any, any restrictions or limitations on
the
Award, any schedule for lapse of forfeiture restrictions or restrictions
on the
exercisability of an Award, and accelerations or waivers thereof, based in
each
case on such considerations as the Committee in its sole discretion
determines;
(e) Amend,
modify, or terminate any outstanding Award, with the Participant’s consent
unless the Committee has the authority to amend, modify, or terminate an
Award
without the Participant’s consent under any other provision of the
Plan;
(f) Determine
whether, to what extent, and under what circumstances an Award may be settled
in, or the purchase price of an Award, if any, may be paid in, cash, Stock,
other Awards, or other property, or an Award may be canceled, forfeited,
or
surrendered;
(g) Prescribe
the form of each Award Agreement, which need not be identical for each
Participant;
(h) Decide
all other matters that must be determined in connection with an
Award;
(i) Interpret
the terms of the Plan or any Award Agreement;
(j) Establish,
adopt, or revise any rules and regulations as it may deem necessary or advisable
to administer the Plan; and
(k) Make
all other decisions and determinations that may be required under the Plan
or as
the Committee deems necessary or advisable to administer the Plan.
4.4 DECISIONS
BINDING. The Committee’s interpretation of the Plan, any Awards
granted under the Plan, any Award Agreement and all decisions and determinations
by the Committee with respect to the Plan are final, binding, and conclusive
on
all parties.
ARTICLE
5
SHARES
SUBJECT TO THE PLAN
5.1 NUMBER
OF SHARES. Subject to adjustment provided in Section 11.1, the
aggregate number of shares of Stock reserved and available for grant under
the
Plan shall be 800,000.
5.2 LAPSED
AWARDS. To the extent that an Award terminates, expires, or
lapses for any reason, any shares of Stock subject to the Award will again
be
available for the grant of an Award under the Plan.
5.3 STOCK
DISTRIBUTED. Any Stock distributed pursuant to an Award may
consist, in whole or in part, of authorized and unissued Stock, treasury
Stock,
or Stock purchased on the open market.
ARTICLE
6
ELIGIBILITY
AND PARTICIPATION
6.1 ELIGIBILITY.
(a) GENERAL. Persons
eligible to participate in this Plan include employees and non-employee service
providers of the Company or a Subsidiary, as determined by the
Committee.
(b) FOREIGN
PARTICIPANTS. In order to assure the viability of Awards granted
to Participants employed or providing services in foreign countries, the
Committee may provide for such special terms as it may consider necessary
or
appropriate to accommodate differences in local law, tax policy, or
custom. Moreover, the Committee may approve such supplements to, or
amendments, restatements, or alternative versions of the Plan as it may consider
necessary or appropriate for such purposes without thereby affecting the
terms
of the Plan as in effect for any other purpose; provided, however, that no
such
supplements, amendments, restatements, or alternative versions shall increase
the share limitations contained in Section 5.1 of the Plan.
6.2 ACTUAL
PARTICIPATION. Subject to the provisions of the Plan, the
Committee may, from time to time, select from among all eligible individuals,
those to whom Awards shall be granted and shall determine the nature and
amount
of each Award. No individual shall have any right to be granted an
Award under this Plan.
ARTICLE
7
RESTRICTED
STOCK
7.1 GRANT
OF RESTRICTED STOCK. The Committee is authorized to make Awards
of Restricted Stock to Participants in such amounts and subject to such terms
and conditions as may be selected by the Committee. All Awards of
Restricted Stock shall be evidenced by a Restricted Stock Award
Agreement.
7.2 ISSUANCE
AND RESTRICTIONS. Restricted Stock shall be subject to such
restrictions on transferability, repurchase, and other restrictions as the
Committee may impose (including, without limitation, limitations on the right
to
vote Restricted Stock or the right to receive dividends on the Restricted
Stock). These restrictions may lapse separately or in combination at
such times, under such circumstances, in such installments, or otherwise,
as the
Committee determines at the time of the grant of the Award or
thereafter.
7.3 FORFEITURE. Except
as otherwise determined by the Committee at the time of the grant of the
Award
or thereafter, upon termination of employment or services during the applicable
restriction period, Restricted Stock that is at that time subject to
restrictions shall be forfeited, provided, however, that the Committee may
provide in any Restricted Stock Award Agreement that restrictions or forfeiture
conditions relating to Restricted Stock will be waived in whole or in part
in
the event of terminations resulting from specified causes, and the Committee
may
in other cases waive in whole or in part restrictions or forfeiture conditions
relating to Restricted Stock.
7.4 CERTIFICATES
FOR RESTRICTED STOCK. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee shall determine. If
certificates representing shares of Restricted Stock are registered in the
name
of the Participant, certificates must bear an appropriate legend referring
to
the terms, conditions, and restrictions applicable to such Restricted Stock,
and
the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.
ARTICLE
8
PERFORMANCE
SHARES
8.1 GRANT
OF PERFORMANCE SHARES. The Committee is authorized to grant
Performance Shares to Participants on such terms and conditions as may be
selected by the Committee. The Committee shall have the complete
discretion to determine the number of Performance Shares granted to each
Participant. All Awards of Performance Shares shall be evidenced by
an Award Agreement.
8.2 RIGHT
TO PAYMENT. A grant of Performance Shares gives the Participant
rights, valued as determined by the Committee, and payable to, or exercisable
by, the Participant to whom the Performance Shares are granted, in whole
or in
part, as the Committee shall establish at grant or
thereafter. Subject to the terms of the Plan, the Committee shall set
performance goals and other terms or conditions to payment of the Performance
Shares in its discretion which, depending on the extent to which they are
met,
will determine the number and value of Performance Shares that will be paid
to
the Participant.
8.3 OTHER
TERMS. Performance Shares may be payable in cash, Stock, or other
property, and have such other terms and conditions as determined by the
Committee and reflected in a written Performance Share Award
Agreement. Unless otherwise provided in an Award Agreement,
Performance Shares will lapse immediately if a Participant’s employment or
service is terminated for Cause.
ARTICLE
9
PERFORMANCE-BASED
AWARDS
9.1 PURPOSE. The
purpose of this Article 9 is to provide the Committee the ability to qualify
the
Restricted Stock Awards pursuant to Article 7 and the Performance Share Awards
pursuant to Article 8 as “performance-based compensation” pursuant to Section
162(m) of the Code. If the Committee, in its discretion, decides to
grant a Performance-Based Award to a Covered Employee, the provisions of
this
Article 9 shall control over any contrary provision contained in Articles
7 or
8.
9.2 APPLICABILITY. This
Article 9 shall apply only to those Covered Employees selected by the Committee
to receive Performance-Based Awards. The Committee may, in its
discretion, grant Restricted Stock Awards or Performance Share Awards to
Covered
Employees that do not satisfy the requirements of this Article 9. The
designation of a Covered Employee as a Participant for a Performance Period
shall not in any manner entitle the Participant to receive an Award for the
period. Moreover, designation of a Covered Employee as a Participant
for a particular Performance Period shall not require designation of such
Covered Employee as a Participant in any subsequent Performance Period and
designation of one Covered Employee as a Participant shall not require
designation of any other Covered Employees as a Participant in such period
or in
any other period.
9.3 DISCRETION
OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. With regard to a
particular Performance Period, the Committee shall have full discretion to
select the length of such Performance Period, the type of Performance-Based
Awards to be issued, the kind and/or level of the Performance Goal, and whether
the Performance Goal is to apply to the Company, a Subsidiary or any division
or
business unit thereof. Unless otherwise provided in an Award
Agreement, Performance-Based Awards will be forfeited if a Participant’s
employment is terminated for Cause.
9.4 PAYMENT
OR GRANT OF PERFORMANCE AWARDS. Unless otherwise provided in the
relevant Award Agreement, a Participant must be employed by the Company or
a
Subsidiary on the day a Performance Award for such Performance Period is
paid or
granted to the Participant. Furthermore, a Participant shall be
eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are
achieved. In determining the actual size of an individual
Performance-Based Award, the Committee may reduce or eliminate the amount
of the
Performance-Based Award earned for the Performance Period, if in its sole
and
absolute discretion, such reduction or elimination is appropriate.
9.5 MAXIMUM
AWARD PAYABLE OR GRANTED. The maximum Performance-Based Award
payable or granted to any one Participant pursuant to the Plan for a Performance
Period is 100,000 shares of Stock, or in the event the Performance-Based
Award
is paid in cash, such maximum Performance-Based Award shall be determined
by
multiplying 100,000 by the Fair Market Value of one share of Stock as of
the
date of grant of the Performance-Based Award.
ARTICLE
10
PROVISIONS
APPLICABLE TO AWARDS
10.1 STAND-ALONE
AND TANDEM AWARDS. Awards granted under the Plan may, in the
discretion of the Committee, be granted either alone or in addition to or
in
tandem with any other Award granted under the Plan. Awards granted in
addition to or in tandem with other Awards may be granted either at the same
time as or at a different time from the grant of such other Awards.
10.2 EXCHANGE
PROVISIONS. The Committee may at any time offer to exchange or
buy out any previously granted Award for a payment in cash, Stock, or another
Award (subject to Section 10.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is
made.
10.3 TERM
OF AWARD. The term of each Award shall be for the period as
determined by the Committee.
10.4 FORM
OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any
applicable law or Award Agreement, payments or transfers to be made by the
Company or a Subsidiary for the payment of an Award, if any, may be made
in such
forms as the Committee determines at or after the time of grant, including
without limitation, cash, promissory note, Stock, other Awards, or other
property, or any combination, and may be made in a single payment or transfer,
in installments, or on a deferred basis, in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee.
10.5 LIMITS
ON TRANSFER. No right or interest of a Participant in any Award
may be pledged, encumbered, or hypothecated to or in favor of any party other
than the Company or a Subsidiary, or shall be subject to any lien, obligation,
or liability of such Participant to any other party other than the Company
or a
Subsidiary. Except as otherwise provided by the Committee or as
otherwise provided in this Plan or in the applicable Award Agreement, no
Award
shall be assignable or transferable by a Participant other than by will or
the
laws of descent and distribution.
10.6 BENEFICIARIES. Notwithstanding
Section 10.5, a Participant may, in the manner determined by the Committee,
designate a beneficiary to exercise the rights of the Participant and to
receive
any distribution with respect to any Award upon the Participant’s
death. A beneficiary, legal guardian, legal representative, or other
person claiming any rights under the Plan is subject to all terms and conditions
of the Plan and any Award Agreement applicable to the Participant, except
to the
extent the Plan and Award Agreement otherwise provide, and to any additional
restrictions deemed necessary or appropriate by the Committee. If the
Participant is married, a designation of a person other than the Participant’s
spouse as his beneficiary with respect to more than 50 percent of the
Participant’s interest in the Award shall not be effective without the written
consent of the Participant’s spouse. If no beneficiary has been
designated or survives the Participant, payment shall be made to the person
entitled thereto under the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may
be changed or revoked by a Participant at any time provided the change or
revocation is filed with the Committee.
10.7 STOCK
CERTIFICATES. All Stock certificates delivered under the Plan are
subject to any stop-transfer orders and other restrictions as the Committee
deems necessary or advisable to comply with Federal or state securities laws,
rules and regulations and the rules of any national securities exchange or
automated quotation system on which the Stock is listed, quoted, or
traded. The Committee may place legends on any Stock certificate to
reference restrictions applicable to the Stock.
10.8 CHANGE
OF CONTROL. Unless otherwise provided in an Award Agreement, if a
Change of Control occurs, the Board shall have the discretion to remove all
restrictions on, or accelerate the vesting of, outstanding
Awards. Upon, or in anticipation of, such an event, the Committee may
cause every Award outstanding hereunder to terminate at a specific time in
the
future and, if applicable, shall give each Participant the right to exercise
Awards during a period of time as the Committee, in its sole and absolute
discretion, shall determine.
ARTICLE
11
CHANGES
IN CAPITAL STRUCTURE
11.1 GENERAL. In
the event a stock dividend is declared upon the Stock, the shares of Stock
then
subject to each Award (and the number of shares subject thereto) shall be
increased proportionately without any change in the aggregate purchase price
therefor. In the event the Stock shall be changed into or exchanged
for a different number or class of shares of Stock or of another corporation,
whether through reorganization, recapitalization, stock split-up, combination
of
shares, merger or consolidation, the Committee has the authority to substitute
for each such share of Stock then subject to each Award the number and class
of
shares of Stock into which each outstanding share of Stock shall be so
exchanged, all without any change in the aggregate purchase price for the
shares
then subject to each Award.
ARTICLE
12
AMENDMENT,
MODIFICATION AND TERMINATION
12.1 AMENDMENT,
MODIFICATION AND TERMINATION. With the approval of the Board, at
any time and from time to time, the Committee may terminate, amend, or modify
the Plan; provided, however, that to the extent necessary and desirable to
comply with any applicable law, regulation, or stock exchange rule, the Company
shall obtain shareholder approval of any Plan amendment in such a manner
and to
such a degree as required.
12.2 AWARDS
PREVIOUSLY GRANTED. Except as otherwise provided in the Plan,
including without limitation, the provisions of Article 10, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent
of
the Participant.
ARTICLE
13
GENERAL
PROVISIONS
13.1 NO
RIGHTS TO AWARDS. No Participant, employee, non-employee service
provider, or other person shall have any claim to be granted any Award under
the
Plan, and neither the Company nor the Committee is obligated to treat
Participants, employees, non-employee service providers, and other persons
uniformly.
13.2 NO
STOCKHOLDERS RIGHTS. No Award gives the Participant any of the
rights of a stockholder of the Company unless and until shares of Stock are
in
fact issued to such person in connection with such Award.
13.3 WITHHOLDING. The
Company or any Subsidiary shall have the authority and the right to deduct
or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy Federal, state, and local taxes (including the Participant’s FICA
obligation) required by law to be withheld with respect to any taxable event
arising as a result of this Plan.
13.4 NO
RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award
Agreement shall interfere with or limit in any way the right of the Company
or
any Subsidiary to terminate any Participant’s employment or services at any
time, nor confer upon any Participant any right to continue in the employ
of, or
to provide services to, the Company or any Subsidiary.
13.5 UNFUNDED
STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan
for incentive compensation. With respect to any payments not yet made
to a Participant pursuant to an Award, nothing contained in the Plan or any
Award Agreement shall give the Participant any rights that are greater than
those of a general creditor of the Company or any Subsidiary.
13.6 INDEMNIFICATION. To
the extent allowable under applicable law, each member of the Committee or
of
the Board shall be indemnified and held harmless by the Company from any
loss,
cost, liability, or expense that may be imposed upon or reasonably incurred
by
such member in connection with or resulting from any claim, action, suit,
or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action or failure to act under the Plan and against
and from any and all amounts paid by him or her in satisfaction of judgment
in
such action, suit, or proceeding against him or her provided he or she gives
the
Company an opportunity, at its own expense, to handle and defend the same
before
he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive
of any other rights of indemnification to which such persons may be entitled
under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or hold
them
harmless.
13.7 RELATIONSHIP
TO OTHER BENEFITS. No payment under the Plan shall be taken into
account in determining any benefits under any pension, retirement, savings,
profit sharing, group insurance, welfare or other benefit plan of the Company
or
any Subsidiary.
13.8 EXPENSES. The
expenses of administering the Plan shall be borne by the Company and its
Subsidiaries.
13.9 TITLES
AND HEADINGS. The titles and headings of the Sections in the Plan
are for convenience of reference only, and in the event of any conflict,
the
text of the Plan, rather than such titles or headings, shall
control.
13.10 FRACTIONAL
SHARES. No fractional shares of stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given
in
lieu of fractional shares or whether such fractional shares shall be eliminated
by rounding up or down as appropriate.
13.11 SECURITIES
LAW COMPLIANCE. With respect to any person who is, on the
relevant date, obligated to file reports under Section 16 of the Exchange
Act,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To
the extent any provision of the Plan or action by the Committee fails to
so
comply, it shall be void to the extent permitted by law and voidable as deemed
advisable by the Committee.
13.12 GOVERNMENT
AND OTHER REGULATIONS. The obligation of the Company to make
payment of awards in Stock or otherwise shall be subject to all applicable
laws,
rules, and regulations, and to such approvals by government agencies as may
be
required. The Company shall be under no obligation to register under
the Securities Act of 1933, as amended (the “1933 Act”), any of the shares of
Stock paid under the Plan. If the shares paid under the Plan may in
certain circumstances be exempt from registration under the 1933 Act, the
Company may restrict the transfer of such shares in such manner as it deems
advisable to ensure the availability of any such exemption.
13.13 GOVERNING
LAW. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Arizona.