Attached files
file | filename |
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EX-10.2 - RESTRICTED STOCK AWARD AGREEMENT - SINOHUB, INC. | ex10_2.htm |
EX-32.1 - SINOHUB, INC. | ex32_1.htm |
EX-31.2 - SINOHUB, INC. | ex31_2.htm |
EX-10.3 - STOCK OPTION AWARD AGREEMENT - SINOHUB, INC. | ex10_3.htm |
EX-10.4 - STOCK OPTION AWARD AGREEMENT - SINOHUB, INC. | ex10_4.htm |
EX-32.2 - SINOHUB, INC. | ex32_2.htm |
EX-31.1 - SINOHUB, INC. | ex31_1.htm |
10-Q - FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009 - SINOHUB, INC. | f1119210q.htm |
Exhibit
10.1
SINOHUB,
INC.
2008 STOCK PLAN
(As
Amended and Restated)
1. Establishment,
Purpose and Term of Plan.
1.1 Establishment. The SinoHub,
Inc. 2008 Stock Plan (the “Plan”) was originally adopted by the Company
effective as of October 10, 2008 (the “Effective Date”). Effective
upon the Plan’s approval by the stockholders of the Company, the Plan is amended
and restated as set forth below.
1.2 Purpose. The purpose of the
Plan is to advance the interests of the Participating Company Group and its
stockholders by providing an incentive to attract, retain and reward persons
performing services for the Participating Company Group and by motivating such
persons to contribute to the growth and profitability of the Participating
Company Group. The Company intends that Awards granted pursuant to the Plan be
exempt from or comply with Section 409A of the Code (including any
amendments or replacements of such Section), and the Plan shall be so
construed.
1.3 Term of Plan. The Plan shall
continue in effect until its termination by the Committee; provided, however,
that, to the extent required by applicable law, all Awards shall be granted, if
at all, within ten (10) years from the Effective Date.
2. Definitions
and Construction.
2.1 Definitions. Whenever used
herein, the following terms shall have their respective meanings set forth
below:
(a) “Affiliate” means (i) an entity,
other than a Parent Corporation, that directly, or indirectly through one or
more intermediary entities, controls the Company or (ii) an entity, other
than a Subsidiary Corporation, that is controlled by the Company directly or
indirectly through one or more intermediary entities. For this purpose, the term
“control” (including the term “controlled by”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of the relevant entity, whether through the ownership of voting
securities, by contract or otherwise; or shall have such other meaning assigned
such term for the purposes of registration on Form S-8 under the Securities
Act.
(b) “Award”
means any Option, Restricted Stock Award, Restricted Stock Unit Award, Stock
Appreciation Right, Performance Unit Award, Performance Share Award, Cash-Based
Award, or Other Stock-Based Award granted under the Plan.
(c) “Award
Agreement” means a written or electronic agreement between the Company
and a Participant setting forth the terms, conditions and restrictions of the
Award granted to the Participant.
(d) “Board”
means the Board of Directors of the Company.
(e) “Cash-Based
Award” means an
Award, denominated in cash, granted to a Participant as described in Section
11.
(f) “Cause” means, unless such term or
an equivalent term is otherwise defined with respect to an Award by the
Participant’s Award Agreement or by a written contract of employment or service,
any of the following: (i) the Participant’s theft, dishonesty, willful
misconduct, breach of fiduciary duty for personal profit, or falsification of
any Participating Company documents or records; (ii) the Participant’s
material failure to abide by a Participating Company’s code of conduct or other
policies (including, without limitation, policies relating to confidentiality
and reasonable workplace conduct); (iii) the Participant’s unauthorized
use, misappropriation, destruction or diversion of any tangible or intangible
asset or corporate opportunity of a Participating Company (including, without
limitation, the Participant’s improper use or disclosure of a Participating
Company’s confidential or proprietary information); (iv) any intentional
act by the Participant which has a material detrimental effect on a
Participating Company’s reputation or business; (v) the Participant’s
repeated failure or inability to perform any reasonable assigned duties after
written notice from a Participating Company of, and a reasonable opportunity to
cure, such failure or inability; (vi) any material breach by the
Participant of any employment, service, non-disclosure, non-competition,
non-solicitation or other similar agreement between the Participant and a
Participating Company, which breach is not cured pursuant to the terms of such
agreement; or (vii) the Participant’s conviction (including any plea of
guilty or nolo
contendere) of any criminal act involving fraud, dishonesty,
misappropriation or moral turpitude, or which impairs the Participant’s ability
to perform his or her duties with a Participating Company.
(g) “Change in
Control” means, the occurrence of any of the following:
(i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act) becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total combined voting power of
the Company’s then-outstanding securities entitled to vote generally in the
election of Directors; provided, however, that the following acquisitions shall
not constitute a Change in Control: (1) an acquisition by any such person
who on the Effective Date is the beneficial owner of more than fifty percent
(50%) of such voting power, (2) any acquisition directly from the Company,
including, without limitation, a public offering of securities, (3) any
acquisition by the Company, (4) any acquisition by a trustee or other
fiduciary under an employee benefit plan of a Participating Company or
(5) any acquisition by an entity owned directly or indirectly by the
stockholders of the Company in substantially the same proportions as their
ownership of the voting securities of the Company; or
(ii) an
Ownership Change Event or series of related Ownership Change Events
(collectively, a “Transaction”) in which the stockholders
of the Company immediately before the Transaction do not retain immediately
after the Transaction direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding securities
entitled to vote generally in the election of Directors or, in the case of an
Ownership Change Event described in Section 2.1(cc)(iii), the entity to
which the assets of the Company were transferred (the “Transferee”), as the case may
be;
provided,
however, that a Change in Control shall be deemed not to include a transaction
described in subsections (i) or (ii) of this Section in which a
majority of the members of the board of directors of the continuing, surviving
or successor entity, or parent thereof, immediately after such transaction is
comprised of Incumbent Directors. Notwithstanding the foregoing, to the extent
that any amount constituting Section 409A Deferred Compensation would
become payable under this Plan by reason of a Change in Control, such amount
shall become payable only if the event constituting a Change in Control would
also constitute a change in ownership or effective control of the Company or a
change in the ownership of a substantial portion of the assets of the Company
within the meaning of Section 409A. For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of one
or more corporations or other business entities which own the Company or the
Transferee, as the case may be, either directly or through one or more
subsidiary corporations or other business entities. The Committee shall have the
right to determine whether multiple sales or exchanges of the voting securities
of the Company or multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
(h) “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.
(i) “Committee” means the Compensation
Committee and such other committee or subcommittee of the Board, if any, duly
appointed to administer the Plan and having such powers in each instance as
shall be specified by the Board. If, at any time, there is no committee of the
Board then authorized or properly constituted to administer the Plan, the Board
shall exercise all of the powers of the Committee granted herein, and, in any
event, the Board may in its discretion exercise any or all of such
powers. For purposes of Awards intended to satisfy Section 162(m) of
the Code, a committee must be composed of not less than two (2) non-employee
directors, within the meaning of Rule 16b-3 of the Exchange Act, and “outside
directors,” as defined in Treasury Regulation § 1.162-27.
(j) “Company”
means SinoHub, Inc., a Delaware corporation, or any successor corporation
thereto.
(k) “Consultant”
means a person engaged to provide consulting or advisory services (other than as
an Employee or a Director) to a Participating Company.
(l) “Covered
Employee” means
any key Employee who is or may become a “covered employee,” as defined in
Section 162(m) of the Code, and who is designated, either as an individual
Employee or class of Employees, by the Committee within the shorter of: (i)
ninety (90) days after the beginning of the Performance Period, or (ii)
twenty-five percent (25%) of the Performance Period has elapsed, as a “Covered
Employee” under this Plan for such applicable Performance Period.
(m) “Director”
means a member of the Board.
(n) “Disability”
means the total and permanent disability of a person as defined in Section
22(e)(3) of the Code, provided that in the case of Awards other than an
Incentive Stock Option, the Committee in its discretion may determined whether a
permanent and total disability exists in accordance with uniform and
nondiscriminatory standards adopted by the Committee from time to
time.
(o) “Dividend
Equivalent Right”
means the right of a Participant, granted at the discretion of the
Committee or as otherwise provided by the Plan, to receive a credit for the
account of such Participant in an amount equal to the cash dividends paid on one
share of Stock for each share of Stock represented by an Award held by such
Participant.
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(p) “Employee”
means any person treated as an employee (including an Officer or a Director who
is also treated as an employee) in the records of a Participating Company. The
Company shall determine in good faith and in the exercise of its discretion
whether an individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination of employment, as
the case may be. For purposes of an individual’s rights, if any, under the terms
of the Plan as of the time of the Company’s determination of whether or not the
individual is an Employee, all such determinations by the Company shall be
final, binding and conclusive as to such rights, if any, notwithstanding that
the Company or any court of law or governmental agency subsequently makes a
contrary determination as to such individual’s status as an
Employee.
(q) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
(r) “Exchange
Program” means a
program under which (i) outstanding Awards are surrendered or cancelled in
exchange for Awards of the same type (which may have lower exercise prices and
different terms), Awards of a different type, and/or cash, (ii) Participants
have the opportunity to transfer any outstanding Awards to a financial
institution or other person or entity selected by the Committee, and/or (iii)
the exercise price of an outstanding Award is reduced. The Committee
will determine the terms and conditions of any Exchange Program in its sole
discretion.
(s) “Fair Market
Value” means, as of any date, the value of a share of Stock or other
property as determined by the Committee, in its discretion, or by the Company,
in its discretion, if such determination is expressly allocated to the Company
herein, subject to the following:
(i) If,
on such date, the Stock is listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a
share of Stock if the Stock is so quoted instead) as quoted on such national or
regional securities exchange or market system, as reported in The Wall Street
Journal or such other source as the Company deems reliable. If the
relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall be determined
by the Committee, in its discretion.
(ii) If,
on such date, the Stock is not listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of Stock shall be as
determined by the Committee using an average Stock price over a five-day trading
period determined by the Committee prior to the commencement of such five-day
trading period, and subject to the applicable requirements, if any, of
Section 409A of the Code.
(t) “Incentive Stock
Option” means an
Option granted to an Employee under Section 6 that is designated as an Incentive
Stock Option (as set forth in the Award Agreement) and that is intended to meet
the requirements of Section 422 of the Code, or any successor
provision.
(u) “Incumbent
Director” means
a director who either (i) is a member of the Board as of the Effective Date
or (ii) is elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination, but who was not elected or nominated in
connection with an actual or threatened proxy contest relating to the election
of directors of the Company.
(v) “Insider”
means an Officer, a Director of the Company or other person whose transactions
in Stock are subject to Section 16 of the Exchange Act.
(w) “Insider Trading
Policy” means
the written policy of the Company pertaining to the purchase, sale, transfer or
other disposition of the Company’s equity securities by Directors, Officers,
Employees or other service providers who may possess material, nonpublic
information regarding the Company or its securities.
(x) “Net-Exercise”
means a procedure by which the Company will reduce the number of shares
of Stock issued upon exercise of an Option by the largest whole number of shares
of Stock with an aggregate Fair Market Value on the date of exercise that is
equal to or less than the aggregate exercise price and will receive cash from
the Participant to the extent of any remaining balance of the aggregate exercise
price.
(y) “Nonstatutory
Stock Option” means an Option granted to a Participant under Section 6
that is not intended to be (as set forth in the Award Agreement) or which does
not qualify as an Incentive Stock Option.
(z) “Officer”
means any person designated by the Board as an officer of the
Company.
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(aa) “Option”
means a right granted under Section 6 to purchase Stock pursuant to the
terms and conditions of the Plan. All Options may be Incentive Stock Options or
Nonstatutory Stock Options.
(bb) “Other Stock-Based
Award” means an
equity-based or equity-related Award not otherwise described by the terms of
this Plan, granted pursuant to Section 11.
(cc) “Ownership Change
Event” means the
occurrence of any of the following with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which
the Company is a party; or (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company (other than a sale, exchange or
transfer to one or more subsidiaries of the Company).
(dd) “Parent
Corporation” means any present or future “parent corporation” of the
Company, as defined in Section 424(e) of the Code.
(ee) “Participant”
means any eligible person who has been granted one or more Awards.
(ff) “Participating
Company” means
the Company or any Parent Corporation, Subsidiary Corporation or Affiliate.
(gg) “Participating
Company Group” means, at any point in time, all entities collectively
which are then Participating Companies.
(hh) “Performance
Award” means an
Award of Performance Shares or Performance Units.
(ii) “Performance-Based
Compensation”
means compensation under an Award that is intended to satisfy the requirements
of Section 162(m) of the Code for certain performance-based compensation paid to
Covered Employees. Notwithstanding the foregoing, nothing in this
Plan shall be construed to mean that an Award which does not satisfy the
requirements for performance-based compensation under Section 162(m) of the Code
does not constitute performance-based compensation for other purposes, including
Section 409A of the Code.
(jj) “Performance-Based
Exception” means
the exception for Performance-Based Compensation from the tax deductibility
limitations of Section 162(m) of the Code.
(kk) “Performance
Measures” means
measures as described in Section 19 on which the performance goals are based and
which are approved by the Company’s stockholders pursuant to this Plan in order
to qualify Awards as Performance-Based Compensation.
(ll) “Performance
Period” means
the period of time during which the performance goals must be met in order to
determine the degree of payout and/or vesting with respect to an
Award.
(mm) “Performance
Share” means an
Award granted to a Participant pursuant to Section 10, denominated in fully paid
Shares, the value of which at the time it is payable is determined as a function
of the extent to which corresponding performance criteria or Performance
Measure(s), as applicable, have been achieved.
(nn) “Performance
Unit” means an
Award granted to a Participant pursuant to Section 10, denominated in units, the
value of which at the time it is payable is determined as a function of the
extent to which corresponding performance criteria or Performance Measure(s), as
applicable, have been achieved.
(oo) “Restricted Stock
Award” means
Stock granted to a Participant pursuant to Section 7.
(pp) “Restricted Stock
Unit” means a
right granted to a Participant pursuant to Section 8 to receive a share of
Stock on a date determined in accordance with the provisions of such Section and
the Participant’s Award Agreement.
(qq) “Rule 16b-3”
means Rule 16b-3 under the Exchange Act, as amended from time to time, or
any successor rule or regulation.
(rr) “Section 409A” means Section 409A of
the Code.
(ss) “Section 409A
Deferred Compensation”
means compensation provided pursuant to the Plan that constitutes
deferred compensation subject to and not exempted from the requirements of
Section 409A.
(tt) “Securities
Act” means the Securities Act of 1933, as amended.
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(uu) “Service”
means a Participant’s employment or service with the Participating Company
Group, whether in the capacity of an Employee, a Director or a Consultant. A
Participant’s Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders Service to the
Participating Company Group or a change in the Participating Company for which
the Participant renders such Service, provided that there is no interruption or
termination of the Participant’s Service. Furthermore, a Participant’s Service
shall not be deemed to have terminated if the Participant takes any military
leave, sick leave, or other bona fide leave of absence approved by the Company.
However, if any such leave taken by a Participant exceeds ninety (90) days,
then on the ninety-first (91st) day following the commencement of such leave the
Participant’s Service shall be deemed to have terminated, unless the
Participant’s right to return to Service is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining vesting under the Participant’s Award Agreement. A Participant’s
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the corporation for which the Participant performs Service
ceasing to be a Participating Company. Subject to the foregoing, the Company, in
its discretion, shall determine whether the Participant’s Service has terminated
for purposes of Awards granted under the Plan, and the effective date of and
reason for such termination.
(vv) “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 4.3.
(ww) “Stock
Appreciation Right” means an Award granted to a
Participant pursuant to Section 9.
(xx) “Subsidiary
Corporation” means any present or future “subsidiary corporation” of the
Company, as defined in Section 424(f) of the Code.
(yy) “Vesting
Conditions” mean
those conditions established in accordance with the Plan prior to the
satisfaction of which shares subject to an Award remain subject to forfeiture or
a repurchase option in favor of the Company exercisable for the Participant’s
monetary purchase price, if any, for such shares upon the Participant’s
termination of Service.
2.2 Construction. Captions and
titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan. Except when otherwise
indicated by the context, the singular shall include the plural and the plural
shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.
3. Administration.
3.1 Administration by the Committee.
The Plan shall be administered by the Committee. All questions of
interpretation of the Plan, of any Award Agreement or of any other form of
agreement or other document employed by the Company in the administration of the
Plan or of any Award shall be determined by the Committee, and such
determinations shall be final, binding and conclusive upon all persons having an
interest in the Plan or such Award, unless fraudulent or made in bad faith. Any
and all actions, decisions and determinations taken or made by the Committee in
the exercise of its discretion pursuant to the Plan or Award Agreement or other
agreement thereunder (other than determining questions of interpretation
pursuant to the preceding sentence) shall be final, binding and conclusive upon
all persons having an interest therein.
3.2 Authority of Officers. Any
Officer shall have the authority to act on behalf of the Company with respect to
any matter, right, obligation, determination or election which is the
responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation,
determination or election.
3.3 Administration with Respect to
Insiders. With respect to participation by Insiders in the Plan, at any
time that any class of equity security of the Company is registered pursuant to
Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements, if any, of Rule 16b-3.
3.4 Powers of the Committee. In
addition to any other powers set forth in the Plan and subject to the provisions
of the Plan, the Committee shall have the full and final power and authority, in
its discretion:
(a) to
determine the persons to whom, and the time or times at which, Awards shall be
granted and the number of shares of Stock to be subject to each
Award;
(b) to
determine the type of Award granted;
(c) to
determine the Fair Market Value of shares of Stock or other
property;
(d) to
determine the terms, conditions and restrictions applicable to each Award (which
need not be identical) and any shares acquired pursuant thereto, including,
without limitation, (i) the exercise or purchase price of shares pursuant
to any Award, (ii) the method of payment for shares purchased pursuant to
any Award, (iii) the method for satisfaction of any tax withholding
obligation arising in connection with Award, including by the withholding or
delivery of shares of Stock, (iv) the timing, terms and conditions of the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
(v) the time of the expiration of any Award, (vi) the effect of the
Participant’s termination of Service on any of the foregoing, and (vii) all
other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto not inconsistent with the terms of the
Plan;
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(e) to
determine whether an Award will be settled in shares of Stock, cash, or in any
combination thereof;
(f) to
approve one or more forms of Award Agreement;
(g) to
amend, modify, extend, cancel or renew any Award or to waive any restrictions or
conditions applicable to any Award or any shares acquired upon the exercise
thereof;
(h) to
accelerate, continue, extend or defer the exercisability of any Award or the
vesting of any shares acquired upon the exercise thereof, including with respect
to the period following a Participant’s termination of Service;
(i) to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan,
or to adopt sub-plans or supplements to, or alternative versions of, the Plan,
including, without limitation, as the Committee deems necessary or desirable to
comply with the laws or regulations of or to accommodate the tax policy,
accounting principles or custom of, foreign jurisdictions whose citizens may be
granted Awards;
(j) to
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Award Agreement and to make all other determinations and take such
other actions with respect to the Plan or any Award as the Committee may deem
advisable to the extent not inconsistent with the provisions of the Plan or
applicable law;
(k) to
institute, subject to Board approval and without further approval from the
Company’s stockholders, an Exchange Program and determine the terms and
conditions thereof;
(l) to
establish and/or amend, without further approval from the Company’s
stockholders, subplans and schedules with such terms and conditions necessary or
appropriate to satisfy local law, regulations and customs; and
(m) to
determine whether any corporate event or transaction that results in the sale,
spin-off or transfer of a Subsidiary, business group, operating unit, division,
or similar organization constitutes a termination of employment (or services),
and, if so, the effective date of such termination, for purposes of Awards
granted under the Plan.
3.5 Indemnification. In addition
to such other rights of indemnification as they may have as members of the Board
or the Committee or as officers or employees of the Participating Company Group,
members of the Board or the Committee and any officers or employees of the
Participating Company Group to whom authority to act for the Board, the
Committee or the Company is delegated shall be indemnified by the Company
against all reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty
(60) days after the institution of such action, suit or proceeding, such
person shall offer to the Company, in writing, the opportunity at its own
expense to handle and defend the same.
3.6 Consideration. The
Committee may provide the method for payment for shares of Stock purchased
pursuant to an Award under any of the following methods as determined by the
Committee, in its sole discretion: (a) in cash or its equivalent; (b) by
tendering (either by actual delivery or attestation) to the Company for
repurchase previously acquired Shares having an aggregate Fair Market Value at
the time of exercise equal to the Award price together with an assignment of the
proceeds of the Stock repurchase to pay the Award price (provided that any such
repurchase of Stock shall be subject to applicable laws); (c) by a cashless
(broker-assisted) exercise; (d) by deducting from the shares of Stock issuable
to a Participant upon the exercise or settlement of an Award; (e) by
Net-Exercise, (f) by promissory note (except for an executive officer or
director or equivalent thereof, as prohibited under the Sarbanes-Oxley Act of
2002), (g) by a combination of (a), (b), (c), (d), (e) and/or (f); or (h) any
other method approved or accepted by the Committee in its sole
discretion.
4. Shares
Subject to Plan.
4.1 Maximum Number of Shares
Issuable. Subject to adjustment as provided in Sections 4.2 and 4.3,
the maximum aggregate number of shares of Stock that may be issued under the
Plan shall be 4,000,000 which shall consist of authorized but unissued or
reacquired shares of Stock or any combination thereof. The maximum
number of shares of Stock that may be issued as Incentive Stock Options is
3,500,000.
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4.2 Share Counting. If an
outstanding Award for any reason lapses, expires or is terminated or canceled
without having been exercised or settled in full, or if shares of Stock acquired
pursuant to an Award subject to forfeiture or repurchase are forfeited or
repurchased by the Company, then the shares of Stock allocable to the terminated
portion of such Award or such forfeited or repurchased shares of Stock shall
again be available for issuance under the Plan. Shares withheld or
reacquired by the Company in satisfaction of tax withholding obligations
pursuant to Section 14.2 shall again be available for issuance under the
Plan. If the exercise price of an Option is paid by tender to the
Company, or attestation to the ownership, of shares of Stock owned by the
Participant, or by means of a Net-Exercise, or if shares of Stock are withheld
from the shares of Stock issuable to a Participant upon the exercise or
settlement of an Award, then such shares shall again be available for issuance
under the Plan. Shares of Stock shall not be deemed to have been
issued pursuant to the Plan with respect to any portion of an Award that is
settled in cash.
4.3 Adjustments for Changes in Capital
Structure. Subject to any required action by the stockholders of the
Company, in the event of any change in the Stock effected without receipt of
consideration by the Company, whether through merger, consolidation,
reorganization, reincorporation, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, or similar change in the capital
structure of the Company, or in the event of payment of a dividend or
distribution to the stockholders of the Company in a form other than Stock
(excepting normal cash dividends) that has a material effect on the Fair Market
Value of shares of Stock, appropriate and proportionate adjustments shall be
made in the number and class of shares subject to the Plan and to any
outstanding Awards, in the maximum share limitations, and in the exercise or
purchase price per share of any outstanding Awards in order to prevent dilution
or enlargement of Participants’ rights under the Plan. For purposes of the
foregoing, conversion of any convertible securities of the Company shall not be
treated as “effected without receipt of consideration by the Company.” If a
majority of the shares which are of the same class as the shares that are
subject to outstanding Awards are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the “New
Shares”), the Committee may unilaterally amend the outstanding Awards to
provide that such Awards are for New Shares. In the event of any such amendment,
the number of shares subject to, and the exercise or purchase price per share
of, the outstanding Awards shall be adjusted in a fair and equitable manner as
determined by the Committee, in its discretion. Any fractional share resulting
from an adjustment pursuant to this Section shall be rounded down to the nearest
whole number, and the exercise price per share shall be rounded up to the
nearest whole cent. In no event may the exercise price of any Award be decreased
to an amount less than the par value, if any, of the stock subject to the Award.
The Committee in its sole discretion, may also make such adjustments in the
terms of any Award to reflect, or related to, such changes in the capital
structure of the Company or distributions as it deems appropriate. The
adjustments determined by the Committee pursuant to this Section shall be final,
binding and conclusive.
5. Eligibility
and Option Limitations.
5.1 Persons Eligible for Awards.
Awards may be granted only to Employees, Consultants and
Directors. Incentive Stock Options may be granted only to Employees
of the Company or of any parent or subsidiary corporation (as permitted under
Sections 422 and 424 of the Code).
5.2 Participation in Plan. Awards
are granted solely at the discretion of the Committee. Eligible persons may be
granted more than one Award. However, eligibility in accordance with this
Section shall not entitle any person to be granted an Award, or, having been
granted an Award, to be granted an additional Award.
6. Stock
Options.
Options shall be evidenced by Award
Agreements specifying the number of shares of Stock covered thereby and the
terms, conditions and restrictions for such Award, in such form as the Committee
shall from time to time establish. Award Agreements evidencing Options may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:
6.1 Exercise Price. The exercise
price for each Option shall be established in the discretion of the Committee;
provided, however, that the exercise price per share for an Option shall be not
less than one hundred percent (100%) of the Fair Market Value of a share of
Stock on the effective date of grant of the Option. Notwithstanding the
foregoing, an Option may be granted with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another option in a manner that would qualify
under the provisions of Sections 424(a) and 409A of the
Code. With respect to an Employee who owns, directly or indirectly,
more than ten percent (10%) of the total combined voting power of all classes of
the stock of the Company, and Subsidiary Corporation, or any Affiliate, the
exercise price of Stock subject to an Incentive Stock Option shall be at least
equal to one hundred ten percent (110%) of the Fair Market Value of such Stock
on the effective date of grant.
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6.2 Exercisability and Term of
Options. Options shall be exercisable at such time or times, or upon such
event or events, and subject to such terms, conditions, performance criteria and
restrictions as shall be determined by the Committee and set forth in the Award
Agreement evidencing such Option; provided, however, that no Option shall be
exercisable after the expiration of ten (10) years after the effective date
of grant of such Option. Subject to the foregoing, unless otherwise specified by
the Committee in the grant of an Option, any Option granted hereunder shall
terminate ten (10) years after the effective date of grant of the Option,
unless earlier terminated in accordance with its provisions. With
respect to an Employee who owns, directly or indirectly, more than ten percent
(10%) of the total combined voting power of all classes of the stock of the
Company, and Subsidiary Corporation, or any Affiliate, no such Incentive Stock
Option shall be exercisable later than the day before the fifth (5th)
anniversary of the effective date of grant of such Incentive Stock
Option.
6.3 Payment of Exercise
Price. Payment of the exercise price for the number of shares
of Stock being purchased pursuant to any Option may be made by any method
determined by the Committee, in its sole discretion, and set forth in the Award
Agreement. Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Company’s stock. The Company reserves, at any and all times,
the right, in the Company’s sole and absolute discretion, to establish, decline
to approve or terminate any program or procedures for the exercise of Options
notwithstanding that such program or procedures may be available to other
Participants.
6.4 Effect of Termination of
Service.
(a) Option
Exercisability. Subject to earlier termination of the Option as otherwise
provided herein and unless otherwise provided by the Committee, an Option shall
terminate immediately upon the Participant’s termination of Service to the
extent that it is then unvested and shall be exercisable after the Participant’s
termination of Service to the extent it is then vested only during the
applicable time period determined in accordance with this Section and thereafter
shall terminate:
(i) Disability. If the
Participant’s Service terminates because of the Disability of the Participant,
the Option, to the extent unexercised and exercisable for vested shares on the
date on which the Participant’s Service terminated, may be exercised by the
Participant (or the Participant’s guardian or legal representative) at any time
prior to the expiration of six (6) months after the date on which the
Participant’s Service terminated, but in any event no later than the date of
expiration of the Option’s term as set forth in the Award Agreement evidencing
such Option (the “Option Expiration
Date”).
(ii) Death. If the Participant’s
Service terminates because of the death of the Participant, then the Option, to
the extent unexercised and exercisable for vested shares on the date on which
the Participant’s Service terminated, may be exercised by the Participant’s
legal representative or other person who acquired the right to exercise the
Option by reason of the Participant’s death at any time prior to the expiration
of six (6) months after the date on which the Participant’s Service
terminated, but in any event no later than the Option Expiration
Date.
(iii) Termination for Cause.
Notwithstanding any other provision of the Plan to the contrary, if the
Participant’s Service is terminated for Cause, the Option shall terminate in its
entirety and cease to be exercisable immediately upon such termination of
Service or act.
(iv) Other Termination of Service.
If the Participant’s Service terminates for any reason, except
Disability, death or Cause, the Option, to the extent unexercised and
exercisable for vested shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant at any time prior to the
expiration of ninety (90) days (three (3) months in the case of Incentive Stock
Options) after the date on which the Participant’s Service terminated, but in
any event no later than the Option Expiration Date.
(b) Extension if
Exercise Prevented by Law. Notwithstanding the foregoing, if the exercise
of an Option within the applicable time periods set forth in Section 6.4(a)
is prevented by the provisions of Section 15 below, the Option shall remain
exercisable until thirty (30) days after the date such exercise first would
no longer be prevented by such provisions, but in any event no later than the
Option Expiration Date.
6.5 Transferability of Options.
During the lifetime of the Participant, an Option shall be exercisable
only by the Participant or the Participant’s guardian or legal representative.
An Option shall not be subject in any manner to anticipation, alienation, sale,
exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors
of the Participant or the Participant’s beneficiary, except transfer by will or
by the laws of descent and distribution. Notwithstanding the foregoing, to the
extent permitted by the Committee, in its discretion, and set forth in the Award
Agreement evidencing such Option, an Option shall be assignable or transferable
subject to the applicable limitations, if any, described in the General
Instructions to Form S-8 under the Securities Act.
8
6.6 Incentive Stock Option
Limit. To the extent that the aggregate Fair Market Value of
the shares of Stock with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year
(under all plans of the Company and any Parent or Subsidiary) exceeds $100,000,
such Options shall be treated as Nonstatutory Stock Options. For
purposes of this Section, Incentive Stock Options shall be taken into account in
the order in which they were granted. The Fair Market Value of the
shares of Stock shall be determined as of the time the Option with respect to
such Shares is granted.
6.7 Notification of Disqualifying
Dispositions. If any Participant makes any disposition
of shares of Stock issued pursuant to the exercise of an Incentive Stock Option
under the circumstances described in Code Section 421(b) (relating to certain
disqualifying dispositions), such Participant shall notify the Company of such
disposition within ten (10) calendar days thereof.
6.8 162(m) Limit. For
purposes of the Performance-Based Exception, no Participant will be granted an
Option covering more than 50,000 shares of Stock during any fiscal
year. Notwithstanding the limitation in previous sentence, an
Employee may be granted Options covering up to an additional 150,000 shares of
Stock in connection with his or her initial service as an Employee.
7. Restricted
Stock Awards.
Restricted Stock Awards shall be
evidenced by Award Agreements specifying the number of shares of Stock subject
to the Award and the terms, conditions and restrictions for such Award, in such
form as the Committee shall from time to time establish. Award Agreements
evidencing Restricted Stock Awards may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the following
terms and conditions:
7.1 Types of Restricted Stock Awards
Authorized. Restricted Stock Awards may be granted upon such conditions
as the Committee shall determine, including, without limitation, upon the
attainment of one or more performance goals.
7.2 Purchase Price. If required by
applicable state corporate law, the Participant shall furnish consideration in
the form of cash or past services rendered to a Participating Company or for its
benefit having a value not less than the par value of the shares of Stock
subject to a Restricted Stock Award.
7.3 Payment of Purchase Price.
Except as otherwise provided below, payment of the purchase price for the
number of shares of Stock being purchased pursuant to Section 7.2 shall be made
(a) in cash or by check or cash equivalent, (b) by such other
consideration as may be approved by the Committee from time to time to the
extent permitted by applicable law, or (c) by any combination
thereof.
7.4 Vesting and Restrictions on Transfer.
Shares issued pursuant to any Restricted Stock Award may (but need not)
be made subject to Vesting Conditions based upon the satisfaction of such
Service requirements, conditions, restrictions or performance criteria as shall
be established by the Committee and set forth in the Award Agreement evidencing
such Award. During any period in which shares acquired pursuant to a Restricted
Stock Award remain subject to Vesting Conditions, such shares may not be sold,
exchanged, transferred, pledged, assigned or otherwise disposed of other than
pursuant to an Ownership Change Event or as provided in Section 7.7. The
Committee, in its discretion, may provide in any Award Agreement evidencing a
Restricted Stock Award that, if the satisfaction of Vesting Conditions with
respect to any shares subject to such Restricted Stock Award would otherwise
occur on a day on which the sale of such shares would violate the provisions of
the Insider Trading Policy, then satisfaction of the Vesting Conditions
automatically shall be determined on the next trading day on which the sale of
such shares would not violate the Insider Trading Policy. Upon request by the
Company, each Participant shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.
7.5 Voting Rights; Dividends and
Distributions. Except as provided in this Section, Section 7.4 and
any Award Agreement, during any period in which shares acquired pursuant to a
Restricted Stock Award remain subject to Vesting Conditions, the Participant
shall have all of the rights of a stockholder of the Company holding shares of
Stock, including the right to vote such shares and to receive all dividends and
other distributions paid with respect to such shares. However, in the event of a
dividend or distribution paid in shares of Stock or other property or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.3, any and all new, substituted or additional
securities or other property (other than normal cash dividends) to which the
Participant is entitled by reason of the Participant’s Restricted Stock Award
shall be immediately subject to the same Vesting Conditions as the shares
subject to the Restricted Stock Award with respect to which such dividends or
distributions were paid or adjustments were made.
9
7.6 Effect of Termination of Service.
The effect of termination of employment on a Participant’s Restricted
Stock Award shall be set forth in the Award Agreement evidencing such Restricted
Stock Award.
7.7 Nontransferability of Restricted
Stock Award Rights. Rights to acquire shares of Stock pursuant to a
Restricted Stock Award shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or the laws of descent and distribution. All rights with
respect to a Restricted Stock Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.
7.8 Section 83(b)
Election. The Committee may provide in an Award Agreement that
a Restricted Stock Award is conditioned upon the Participant making or
refraining from making an election with respect to the Award under Section 83(b)
of the Code. If a Participant makes an election pursuant to Section
83(b) of the Code concerning a Restricted Stock Award, the Participant shall be
required to file promptly a copy of such election with the Company.
7.9 162(m) Limit. For
purposes of the Performance-Based Exception, no Participant will be granted an
aggregate of more than 50,000 shares of Restricted Stock during any fiscal
year. Notwithstanding the limitation in previous sentence, an
Employee may be granted up to an additional 150,000 shares of Restricted Stock
in connection with his or her initial service as an Employee.
8. Restricted
Stock Unit Awards.
Restricted Stock Unit Awards shall be
evidenced by Award Agreements specifying the number of Restricted Stock Units
subject to the Award and the terms, conditions and restrictions for such Award,
in such form as the Committee shall from time to time establish. Award
Agreements evidencing Restricted Stock Units may incorporate all or any of the
terms of the Plan by reference and shall comply with and be subject to the
following terms and conditions:
8.1 Grant of Restricted Stock Unit
Awards. Restricted Stock Unit Awards may be granted upon such conditions
as the Committee shall determine, including, without limitation, upon the
attainment of one or more performance goals.
8.2 Purchase Price. No monetary
payment (other than applicable tax withholding, if any) shall be required as a
condition of receiving a Restricted Stock Unit Award, the consideration for
which shall be services actually rendered to a Participating Company or for its
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to a Participating Company or for its benefit having a
value not less than the par value of the shares of Stock issued upon settlement
of the Restricted Stock Unit Award.
8.3 Vesting. Restricted Stock Unit
Awards may (but need not) be made subject to Vesting Conditions based upon the
satisfaction of such Service requirements, conditions, restrictions or
performance criteria as shall be established by the Committee and set forth in
the Award Agreement evidencing such Award. The Committee, in its discretion, may
provide in any Award Agreement evidencing a Restricted Stock Unit Award that, if
the satisfaction of Vesting Conditions with respect to any shares subject to the
Award would otherwise occur on a day on which the sale of such shares would
violate the provisions of the Insider Trading Policy, then satisfaction of the
Vesting Conditions automatically shall be determined on the first to occur of
(a) the next trading day on which the sale of such shares would not violate
the Insider Trading Policy or (b) the later of (i) the last day of the
calendar year in which the original vesting date occurred or (ii) the last
day of the Company’s taxable year in which the original vesting date
occurred.
8.4 Voting Rights, Dividend Equivalent
Rights and Distributions. Participants shall have no voting rights with
respect to shares of Stock represented by Restricted Stock Units until the date
of the issuance of such shares (as evidenced by the appropriate entry on the
books of the Company or of a duly authorized transfer agent of the Company).
However, the Committee, in its discretion, may provide in the Award Agreement
evidencing any Restricted Stock Unit Award that the Participant shall be
entitled to Dividend Equivalent Rights with respect to the payment of cash
dividends on Stock during the period beginning on the date such Award is granted
and ending, with respect to each share subject to the Award, on the earlier of
the date the Award is settled or the date on which it is terminated. Such
Dividend Equivalent Rights, if any, shall be paid by crediting the Participant
with additional whole Restricted Stock Units as of the date of payment of such
cash dividends on Stock. The number of additional Restricted Stock Units
(rounded to the nearest whole number) to be so credited shall be determined by
dividing (a) the amount of cash dividends paid on such date with respect to
the number of shares of Stock represented by the Restricted Stock Units
previously credited to the Participant by (b) the Fair Market Value per
share of Stock on such date. Such additional Restricted Stock Units shall be
subject to the same terms and conditions and shall be settled in the same manner
and at the same time as the Restricted Stock Units originally subject to the
Restricted Stock Unit Award. In the event of a dividend or distribution paid in
shares of Stock or other property or any other adjustment made upon a change in
the capital structure of the Company as described in Section 4.3,
appropriate adjustments shall be made in the Participant’s Restricted Stock Unit
Award so that it represents the right to receive upon settlement any and all
new, substituted or additional securities or other property (other than normal
cash dividends) to which the Participant would be entitled by reason of the
shares of Stock issuable upon settlement of the Award, and all such new,
substituted or additional securities or other property shall be immediately
subject to the same Vesting Conditions as are applicable to the
Award.
10
8.5 Effect of Termination of Service.
The effect of termination of employment on a Participant’s Restricted
Stock Unit Award shall be set forth in the Award Agreement evidencing such
Restricted Stock Unit Award.
8.6 Settlement of Restricted Stock Unit
Awards. The Company shall issue to a Participant on the date on which
Restricted Stock Units subject to the Participant’s Restricted Stock Unit Award
vest or on such other date determined by the Committee, in its discretion, and
set forth in the Award Agreement one (1) share of Stock (and/or any other
new, substituted or additional securities or other property pursuant to an
adjustment described in Section 8.4) for each Restricted Stock Unit then
becoming vested or otherwise to be settled on such date, subject to the
withholding of applicable taxes, if any. If permitted by the Committee, the
Participant may elect, consistent with the requirements of Section 409A, to
defer receipt of all or any portion of the shares of Stock or other property
otherwise issuable to the Participant pursuant to this Section, and such
deferred issuance date(s) and amount(s) elected by the Participant shall be set
forth in the Award Agreement. Notwithstanding the foregoing, the Committee, in
its discretion, may provide in any Award Agreement for settlement of any
Restricted Stock Unit Award by payment to the Participant in cash of an amount
equal to the Fair Market Value on the payment date of the shares of Stock or
other property otherwise issuable to the Participant pursuant to this
Section.
8.7 Nontransferability of Restricted
Stock Unit Awards. The right to receive shares pursuant to a Restricted
Stock Unit Award shall not be subject in any manner to anticipation, alienation,
sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by
creditors of the Participant or the Participant’s beneficiary, except transfer
by will or by the laws of descent and distribution. All rights with respect to a
Restricted Stock Unit Award granted to a Participant hereunder shall be
exercisable during his or her lifetime only by such Participant or the
Participant’s guardian or legal representative.
8.8 162(m) Limit. For
purposes of the Performance-Based Exception, no Participant will be granted an
aggregate of more than 50,000 Restricted Stock Units during any fiscal
year. Notwithstanding the limitation in previous sentence, an
Employee may be granted up to an additional 150,000 Restricted Stock Units in
connection with his or her initial service as an Employee.
9. Stock
Appreciation Rights.
Stock Appreciation Rights shall be
evidenced by Award Agreements specifying the number of Stock Appreciation Rights
granted to the Participant and the terms, conditions and restrictions for such
Award, in such form as the Committee shall from time to time
establish. Award Agreements evidencing Stock Appreciation Rights may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:
9.1 Grant Price. The
grant price for each Stock Appreciation Right shall be established in the
discretion of the Committee; provided, however, that the grant price per share
for a Stock Appreciation Right shall be not less than one hundred percent (100%)
of the Fair Market Value of a share of Stock on the effective date of grant of
the Stock Appreciation Right.
9.2 Exercisability and Term of Stock
Appreciation Right. Stock Appreciation Rights shall be
exercisable at such time or times, or upon such event or events, and subject to
such terms, conditions, performance criteria and restrictions as shall be
determined by the Committee and set forth in the Award Agreement evidencing such
Stock Appreciation Right; provided, however, that no Stock Appreciation Right
shall be exercisable after the expiration of ten (10) years after the effective
date of grant of such Stock Appreciation Right. Subject to the
foregoing, unless otherwise specified by the Committee in the grant of a Stock
Appreciation Right, any Stock Appreciation Right granted hereunder shall
terminate ten (10) years after the effective date of grant of the Stock
Appreciation Right, unless earlier terminated in accordance with its
provisions.
9.3 Settlement of Stock Appreciation
Rights. Upon the exercise of a Stock Appreciation Right, a
Participant shall be entitled to receive payment from the Company in an amount
determined by multiplying: (i) the excess of the Fair Market Value of a share of
Stock on the date of exercise over the grant price; by (ii) the number of shares
of Stock with respect to which the Stock Appreciation Right is
exercised. At the discretion of the Committee, the payment upon Stock
Appreciation Right exercise may be in cash, fully paid shares of Stock, or any
combination thereof, or in any other manner approved by the Committee in its
sole discretion. The Committee’s determination regarding the form of
Stock Appreciation Right payout shall be set forth in the Award Agreement
evidencing such Stock Appreciation Right.
11
9.4 Effect of Termination of
Service. The effect of termination of employment on a
Participant’s right to exercise a Stock Appreciation Right shall be set forth in
the Award Agreement evidencing such Stock Appreciation Right.
9.5 Other
Restrictions. The Committee shall impose such other conditions
and/or restrictions on any shares of Stock received upon exercise of a Stock
Appreciation Right granted pursuant to the Plan as it may deem advisable or
desirable, including but not limited to a requirement that the Participant hold
the shares of Stock received upon exercise of a Stock Appreciation Right for a
specified period of time.
9.6 162(m) Limit. For
purposes of the Performance-Based Exception, no Participant will be granted
Stock Appreciation Rights covering more than 50,000 shares of Stock during any
fiscal year. Notwithstanding the limitation in previous sentence, an
Employee may be granted Stock Appreciation Rights covering up to an additional
150,000 shares of Stock in connection with his or her initial service as an
Employee.
10. Performance
Awards.
Performance Awards shall be evidenced
by Award Agreements specifying whether the Award is for Performance Shares or
Performance Units, the number of shares of Stock or units covered thereby, and
the terms, conditions and restrictions for such Award, in such form as the
Committee shall from time to time establish. Award Agreements
evidencing Performance Awards may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms
and conditions:
10.1 Value of Performance
Shares/Performance Units. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the effective date of
grant of the Performance Share Award. Each Performance Unit shall
have an initial value that is established by the Committee at the time of
grant. The Committee shall set performance goals in its discretion
which, depending on the extent to which they are met, will determine the value
and/or number of Performance Shares/Performance Units that will be paid out to
the Participant.
10.2 Earning of Performance
Shares/Performance Units. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Shares/Performance Units shall be entitled to receive payout on the value and
number of Performance Shares/Performance Units earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance goals have been achieved.
10.3 Form and Timing of Payment of
Performance Shares/Performance Units. Payment of earned
Performance Shares/Performance Units shall be as determined by the Committee and
as evidenced in the Award Agreement. Subject to the terms of this
Plan, the Committee, in its sole discretion, may pay earned Performance
Shares/Performance Units in the form of cash or in fully paid shares of Stock
(or in a combination thereof) equal to the value of the earned Performance
Shares/Performance Units at the close of the applicable Performance Period, or
as soon as practicable after the end of the Performance Period. Any
Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The determination of the Committee with respect to the
form of payout of such Performance Awards shall be set forth in the Award
Agreement pertaining to the grant of the Performance Award.
10.4 Effect of Termination of
Service. The effect of termination of employment on a
Participant’s right to receive payment for any Performance Shares/Performance
Units shall be set forth in the Award Agreement evidencing such Performance
Award.
10.5 162(m) Limit. For
purposes of the Performance-Based Exception, no Participant will be granted
Performance Units having an initial value greater than $500,000 and no
Participant will receive more than 50,000 Performance Shares during any fiscal
year. Notwithstanding the limitation in previous sentence, an
Employee may be granted up to an additional 150,000 Performance Shares in
connection with his or her initial service as an Employee.
11. Cash-Based Awards and Other
Stock-Based Awards.
Cash-Based
Awards and Other Stock-Based Awards shall be evidenced by Award Agreements, in
such form as the Committee shall from time to time establish. Award
Agreements evidencing such Awards may incorporate all or any of the terms of the
Plan by reference and shall comply with and be subject to the following terms
and conditions:
11.1 Cash-Based
Awards. The Subject to the terms and provisions of the Plan,
the Committee, at any time and from time to time, may grant Cash-Based Awards to
Participants in such amounts and upon such terms as the Committee may
determine. Each Cash-Based Award shall specify a payment amount or
payment range as determined by the Committee.
12
11.2 Other Stock-Based
Awards. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan
(including the grant or offer for sale of unrestricted shares of Stock) in such
amounts and subject to such terms and conditions as the Committee shall
determine. Each Other Stock-Based Award shall be expressed in terms
of shares of Stock or units based on shares of Stock, as determined by the
Committee. Such Awards may involve the transfer of actual fully paid
shares of Stock to Participants, or payment in cash or otherwise of amounts
based on the value of shares of Stock and may include, without limitation,
Awards designed to comply with or take advantage of the applicable local laws of
jurisdictions other than the United States.
11.3 Performance
Goals. The Committee may establish performance goals at its
discretion. If the Committee exercises its discretion to establish
performance goals, the number and/or value of Cash-Based Awards and Other
Stock-Based Awards that will be paid out to the Participant will depend on the
extent to which the performance goals are met, and provided the cash or services
received by the Company in exchange for shares of Stock shall have a value not
less than the aggregate par value of any shares of Stock issued as part of such
Other Stock-Based Award.
11.4 Payment of Cash-Based Awards and
Other Stock-Based Awards. Payment, if any, with respect to a
Cash-Based Award or Other Stock-Based Award shall be made in accordance with the
terms of the Award, in cash or fully paid shares of Stock as the Committee
determines.
11.5 Effect of Termination of Service.
The effect of termination of employment on a Participant’s Cash-Based
Award or Other Stock-Based Award shall be set forth in the Award Agreement
evidencing such Cash-Based Award or Other Stock-Based Award.
12. Standard
Forms of Award Agreements.
12.1 Award Agreements. Each Award
shall comply with and be subject to the terms and conditions set forth in the
appropriate form of Award Agreement approved by the Committee and as amended
from time to time. No Award or purported Award shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award Agreement.
Any Award Agreement may consist of an appropriate form of Notice of Grant and a
form of Agreement incorporated therein by reference, or such other form or
forms, including electronic media, as the Committee may approve from time to
time.
12.2 Authority to Vary Terms. The
Committee shall have the authority from time to time to vary the terms of any
standard form of Award Agreement either in connection with the grant or
amendment of an individual Award or in connection with the authorization of a
new standard form or forms; provided, however, that the terms and conditions of
any such new, revised or amended standard form or forms of Award Agreement are
not inconsistent with the terms of the Plan.
13. Change
in Control.
13.1 Effect of Change in Control on
Awards. Subject to the requirements and limitations of Section 409A
if applicable, the Committee may provide for any one or more of the
following:
(a) Accelerated
Vesting. The Committee may, in its discretion, provide in any Award
Agreement or, in the event of a Change in Control, may take such actions as it
deems appropriate to provide for the acceleration of the exercisability, vesting
and/or settlement in connection with such Change in Control of each or any
outstanding Award or portion thereof and shares acquired pursuant thereto upon
such conditions, including termination of the Participant’s Service prior to,
upon, or following such Change in Control, to such extent as the Committee shall
determine.
(b) Assumption,
Continuation or Substitution. In the event of a Change
in Control, the surviving, continuing, successor, or purchasing corporation or
other business entity or parent thereof, as the case may be (the "Acquiror"), may, without the consent
of any Participant, either assume or continue the Company’s rights and
obligations under each or any Award or portion thereof outstanding immediately
prior to the Change in Control or substitute for each or any such outstanding
Award or portion thereof a substantially equivalent award with respect to the
Acquiror’s stock, as applicable. For purposes of this Section, if so determined
by the Committee, in its discretion, an Award denominated in shares of Stock
shall be deemed assumed if, following the Change in Control, the Award confers
the right to receive, subject to the terms and conditions of the Plan and the
applicable Award Agreement, for each share of Stock subject to the Award
immediately prior to the Change in Control, the consideration (whether stock,
cash, other securities or property or a combination thereof) to which a holder
of a share of Stock on the effective date of the Change in Control was entitled;
provided, however, that if such consideration is not solely common stock of the
Acquiror, the Committee may, with the consent of the Acquiror, provide for the
consideration to be received upon the exercise or settlement of the Award, for
each share of Stock subject to the Award, to consist solely of common stock of
the Acquiror equal in Fair Market Value to the per share consideration received
by holders of Stock pursuant to the Change in Control. If any portion of such
consideration may be received by holders of Stock pursuant to the Change in
Control on a contingent or delayed basis, the Committee may, in its sole
discretion, determine such Fair Market Value per share as of the time of the
Change in Control on the basis of the Committee’s good faith estimate of the
present value of the probable future payment of such consideration. Any Award or
portion thereof which is neither assumed or continued by the Acquiror in
connection with the Change in Control nor exercised or settled as of the time of
consummation of the Change in Control shall terminate and cease to be
outstanding effective as of the time of consummation of the Change in Control.
13
(c) Cash-Out of
Awards. The Committee may, in its discretion and without the consent of
any Participant, determine that, upon the occurrence of a Change in Control,
each or any Award or a portion thereof outstanding immediately prior to the
Change in Control and not previously exercised or settled shall be canceled in
exchange for a payment with respect to each vested share (and each unvested
share, if so determined by the Committee) of Stock subject to such canceled
Award in (i) cash, (ii) stock of the Company or of a corporation or
other business entity a party to the Change in Control, or (iii) other
property which, in any such case, shall be in an amount having a Fair Market
Value equal to the Fair Market Value of the consideration to be paid per share
of Stock in the Change in Control, reduced by the exercise or purchase price per
share, if any, under such Award. If any portion of such consideration may be
received by holders of Stock pursuant to the Change in Control on a contingent
or delayed basis, the Committee may, in its sole discretion, determine such Fair
Market Value per share as of the time of the Change in Control on the basis of
the Committee’s good faith estimate of the present value of the probable future
payment of such consideration. In the event such determination is made by the
Committee, the amount of such payment (reduced by applicable withholding taxes,
if any) shall be paid to Participants in respect of the vested portions of their
canceled Awards as soon as practicable following the date of the Change in
Control and in respect of the unvested portions of their canceled Awards in
accordance with the vesting schedules applicable to such Awards.
13.2 Federal Excise Tax Under
Section 4999 of the Code.
(a) Excess Parachute
Payment. In the event that any acceleration of vesting pursuant to an
Award and any other payment or benefit received or to be received by a
Participant would subject the Participant to any excise tax pursuant to
Section 4999 of the Code due to the characterization of such acceleration
of vesting, payment or benefit as an “excess parachute payment” under Section
280G of the Code, the Participant may elect, in his or her sole discretion, to
reduce the amount of any acceleration of vesting called for under the Award in
order to avoid such characterization.
(b) Determination by
Independent Accountants. To aid the Participant in making any election
called for under Section 13.2(a), no later than the date of the occurrence
of any event that might reasonably be anticipated to result in an “excess
parachute payment” to the Participant as described in Section 13.2(a), the
Company shall request a determination in writing by independent public
accountants selected by the Company (the “Accountants”).
As soon as practicable thereafter, the Accountants shall determine and report to
the Company and the Participant the amount of such acceleration of vesting,
payments and benefits which would produce the greatest after-tax benefit to the
Participant. For the purposes of such determination, the Accountants may rely on
reasonable, good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Participant shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make their required determination. The Company
shall bear all fees and expenses the Accountants may reasonably charge in
connection with their services contemplated by this Section 13.2(b).
14. Tax
Withholding.
14.1 Tax Withholding in General.
The Company shall have the right to deduct from any and all payments made under
the Plan, or to require the Participant, through payroll withholding, cash
payment or otherwise, to make adequate provision for, the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to an Award or the shares acquired pursuant thereto.
The Company shall have no obligation to deliver shares of Stock, to release
shares of Stock from an escrow established pursuant to an Award Agreement, or to
make any payment in cash under the Plan until the Participating Company Group’s
tax withholding obligations have been satisfied by the Participant.
14.2 Withholding in Shares. The
Company shall have the right, but not the obligation, to deduct from the shares
of Stock issuable to a Participant upon the exercise or settlement of an Award,
or to accept from the Participant the tender of, a number of whole shares of
Stock having a Fair Market Value, as determined by the Company, equal to all or
any part of the tax withholding obligations of the Participating Company Group.
The Fair Market Value of any shares of Stock withheld or tendered to satisfy any
such tax withholding obligations shall not exceed the amount determined by the
applicable minimum statutory withholding rates.
14
15. Compliance
with Law.
15.1 Securities
Laws. The grant of Awards and the issuance of shares of Stock
pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities
and the requirements of any stock exchange or market system upon which the Stock
may then be listed. In addition, no Award may be exercised or shares issued
pursuant to an Award unless (a) a registration statement under the
Securities Act shall at the time of such exercise or issuance be in effect with
respect to the shares issuable pursuant to the Award or (b) in the opinion
of legal counsel to the Company, the shares issuable pursuant to the Award may
be issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares hereunder shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to issuance of any Stock,
the Company may require the Participant to satisfy any qualifications that may
be necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.
15.2
Currency
Laws. The grant of Awards and the issuance of shares of Stock
or payment of cash pursuant to any Award shall be compliance with all applicable
requirements of foreign law with respect to currency exchange and currency
transfer.
16. Compliance
with Section 409A.
16.1 Awards Subject to
Section 409A. The provisions of this Section shall apply to any
Award or portion thereof that is or becomes subject to Section 409A,
notwithstanding any provision to the contrary contained in the Plan or the Award
Agreement applicable to such Award. Awards subject to Section 409A include,
without limitation:
(a) Any
Nonstatutory Stock Option having an exercise price per share less than the Fair
Market Value determined as of the date of grant of such Option or that permits
the deferral of compensation other than the deferral of recognition of income
until the exercise or transfer of the Option or the time the shares acquired
pursuant to the exercise of the option first become substantially
vested.
(b) Any
Restricted Stock Award that either provides by its terms, or under which the
Participant makes an election, for settlement of all or any portion of the Award
either (i) on one or more dates following the end of the Short-Term
Deferral Period (as defined below) or (ii) upon or after the occurrence of
any event that will or may occur later than the end of the Short-Term Deferral
Period.
Subject
to U.S. Treasury Regulations promulgated pursuant to Section 409A
(“Section 409A
Regulations”) or other applicable guidance, the term “Short-Term
Deferral Period” means the period ending on the later of (i) the
15th day of the third month following the end of the Company’s fiscal year in
which the applicable portion of the Award is no longer subject to a substantial
risk of forfeiture or (ii) the 15th day of the third month following the
end of the Participant’s taxable year in which the applicable portion of the
Award is no longer subject to a substantial risk of forfeiture. For this
purpose, the term “substantial risk
of forfeiture” shall have the meaning set forth in Section 409A
Regulations or other applicable guidance.
16.2 Deferral and/or Distribution
Elections. Except as otherwise permitted or required by Section 409A
or Section 409A Regulations or other applicable guidance, the following
rules shall apply to any deferral and/or distribution elections (each, an “Election”)
that may be permitted or required by the Committee pursuant to an Award subject
to Section 409A:
(a) All
Elections must be in writing and specify the amount (or an objective,
nondiscretionary formula determining the amount) of the distribution in
settlement of an Award being deferred, as well as the time and form of
distribution as permitted by this Plan.
(b) All
Elections shall be made by the end of the Participant’s taxable year prior to
the year in which services commence for which an Award may be granted to such
Participant; provided, however, that if the Award qualifies as
“performance-based compensation” for purposes of Section 409A (and is based on a
performance period of at least 12 consecutive months), then the Election may be
made no later than six (6) months prior to the end of the performance
period, provided that the Participant’s service is continuous from the later of
the beginning of the performance period or the date on which the performance
goals are established through the date such election is made and provided
further that no election may be made after the compensation has become readily
ascertainable (as provided by Section 409A Regulations).
15
(c) Elections
shall continue in effect until a written election to revoke or change such
Election is received by the Company, except that a written election to revoke or
change such Election must be made prior to the last day for making an Election
determined in accordance with paragraph (b) above or as permitted by
Section 16.3.
16.3 Subsequent Elections. Except
as otherwise permitted or required by Section 409A Regulations or other
applicable guidance, any Award subject to Section 409A which permits a
subsequent Election to delay the distribution or change the form of distribution
in settlement of such Award shall comply with the following
requirements:
(a) No
subsequent Election may take effect until at least twelve (12) months after
the date on which the subsequent Election is made;
(b) Each
subsequent Election related to a distribution in settlement of an Award not
described in Section 16.4(b), 16.4(c) or 16.4(f) must result in a delay of
the distribution for a period of not less than five (5) years from the date
such distribution would otherwise have been made; and
(c) No
subsequent Election related to a distribution pursuant to Section 16.4(d)
shall be made less than twelve (12) months prior to the date of the first
scheduled payment under such distribution.
16.4 Distributions Pursuant to Deferral
Elections. Except as otherwise permitted or required by Section 409A
Regulations or other applicable guidance, no distribution in settlement of an
Award subject to Section 409A may commence earlier than:
(a) The
Participant’s separation from service (as defined by Section 409A
Regulations);
(b) The
date the Participant becomes Disabled (as defined below);
(c) The
Participant’s death;
(d) A
specified time (or pursuant to a fixed schedule) that is either
(i) specified by the Committee upon the grant of an Award and set forth in
the Award Agreement evidencing such Award or (ii) specified by the
Participant in an Election complying with the requirements of Section 16.2
and/or 16.3, as applicable;
(e) A
change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company (as defined by
Section 409A Regulations); or
(f) The
occurrence of an Unforeseeable Emergency (as defined by Section 409A
Regulations).
Notwithstanding
anything else herein to the contrary, to the extent that a Participant is a
“Specified Employee” (as defined by Section 409A Regulations) of the
Company, no distribution pursuant to Section 16.4(a) in settlement of an
Award subject to Section 409A may be made before the date (the “Delayed Payment
Date”) which is six (6) months after such Participant’s date of
separation from service, or, if earlier, the date of the Participant’s death.
All such amounts that would, but for this paragraph, become payable prior to the
Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.
16.5 Unforeseeable Emergency. The
Committee shall have the authority to provide in any Award subject to
Section 409A for distribution in settlement of all or a portion of such
Award in the event that a Participant establishes, to the satisfaction of the
Committee, the occurrence of an Unforeseeable Emergency. In such event, the
amount(s) distributed with respect to such Unforeseeable Emergency cannot exceed
the amounts reasonably necessary to satisfy such Unforeseeable Emergency plus
amounts necessary to pay taxes or penalties reasonably anticipated as a result
of such distribution(s), after taking into account the extent to which such
hardship is or may be relieved through reimbursement or compensation by
insurance or otherwise, by liquidation of the Participant’s assets (to the
extent the liquidation of such assets would not itself cause severe financial
hardship), or by cessation of deferrals under the Plan. All distributions with
respect to an Unforeseeable Emergency shall be made in a lump sum within
90 days of the occurrence of Unforeseeable Emergency and following the
Committee’s determination that an Unforeseeable Emergency has
occurred.
The
occurrence of an Unforeseeable Emergency shall be judged and determined by the
Committee. The Committee’s decision with respect to whether an Unforeseeable
Emergency has occurred and the manner in which, if at all, the distribution in
settlement of an Award shall be altered or modified, shall be final, conclusive,
and not subject to approval or appeal.
16.6 Disabled. The Committee shall
have the authority to provide in any Award subject to Section 409A for
distribution in settlement of such Award in the event that the Participant
becomes Disabled. A Participant shall be considered “Disabled”
if either:
16
(a) the
Participant is unable to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve (12) months, or
(b) the
Participant is, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving
income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Participant’s
employer.
All
distributions payable by reason of a Participant becoming Disabled shall be paid
in a lump sum or in periodic installments as established by the Participant’s
Election, commencing within 90 days following the date the Participant becomes
Disabled. If the Participant has made no Election with respect to distributions
upon becoming Disabled, all such distributions shall be paid in a lump sum
within 90 days following the date the Participant becomes
Disabled.
16.7 Death. If a Participant dies
before complete distribution of amounts payable upon settlement of an Award
subject to Section 409A, such undistributed amounts shall be distributed to
his or her beneficiary under the distribution method for death established by
the Participant’s Election, or, if the Participant has made no Election with
respect to distributions upon death, in a lump sum, within 90 days
following the Participant’s death and following receipt by the Committee of
satisfactory notice and confirmation of the Participant’s death.
16.8 No Acceleration of
Distributions. Notwithstanding anything to the contrary herein, this Plan
does not permit the acceleration of the time or schedule of any distribution
under this Plan pursuant to any Award subject to Section 409A, except as
provided by Section 409A and Section 409A Regulations.
17. Amendment
or Termination of Plan.
The Committee may amend, suspend or
terminate the Plan at any time. However, without the approval of the Company’s
stockholders, there shall be no amendment of the Plan that would require
approval of the Company’s stockholders under any applicable law, regulation or
rule, including the rules of any stock exchange or market system upon which the
Stock may then be listed. No amendment, suspension or termination of the Plan
shall affect any then outstanding Award unless expressly provided by the
Committee. Except as provided by the next sentence, no amendment, suspension or
termination of the Plan may adversely affect any then outstanding Award without
the consent of the Participant. Notwithstanding any other provision of the Plan
or any Award Agreement to the contrary, the Committee may, in its sole and
absolute discretion and without the consent of any Participant, amend the Plan
or any Award Agreement, to take effect retroactively or otherwise, as it deems
necessary or advisable for the purpose of conforming the Plan or such Award
Agreement to any present or future law, regulation or rule applicable to the
Plan, including, but not limited to, Section 409A of the Code and all
applicable guidance promulgated thereunder.
18. Miscellaneous
Provisions.
18.1 Repurchase Rights. Shares
issued under the Plan may be subject to one or more repurchase options, or other
conditions and restrictions as determined by the Committee in its discretion at
the time the Award is granted. The Company shall have the right to assign at any
time any repurchase right it may have, whether or not such right is then
exercisable, to one or more persons as may be selected by the Company. Upon
request by the Company, each Participant shall execute any agreement evidencing
such transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.
18.2 Forfeiture
Events.
(a) The
Committee may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of specified events,
in addition to any otherwise applicable vesting or performance conditions of an
Award. Such events may include, but shall not be limited to, termination of
Service for Cause or any act by a Participant, whether before or after
termination of Service, that would constitute Cause for termination of
Service.
(b) If
the Company is required to prepare an accounting restatement due to the material
noncompliance of the Company, as a result of misconduct, with any financial
reporting requirement under the securities laws, any Participant who knowingly
or through gross negligence engaged in the misconduct, or who knowingly or
through gross negligence failed to prevent the misconduct, and any Participant
who is one of the individuals subject to automatic forfeiture under
Section 304 of the Sarbanes-Oxley Act of 2002, shall reimburse the Company
the amount of any payment in settlement of an Award earned or accrued during the
twelve- (12-) month period following the first public issuance or filing with
the United States Securities and Exchange Commission (whichever first occurred)
of the financial document embodying such financial reporting
requirement.
17
(c) All
outstanding Awards and shares of Stock issued pursuant to an Award held by a
Participant will be forfeited in their entirety (including as to any portion of
an Award or shares of Stock subject thereto that are vested or as to which any
repurchase or resale rights or forfeiture restrictions in favor of the Company
or its designee with respect to such Shares have previously lapsed) if the
Participant, without the consent of the Company, while employed or in service,
as the case may be, or within twelve (12) months after termination of employment
or service, establishes an employment or similar relationship with a competitor
of a Participating Company or engages in any similar activity (including passive
investment, but excluding ownership of 1% or less of the shares of a competitor)
that is in conflict with or adverse to the interests of a Participating Company,
as determined by the Committee in its sole discretion; provided, that if a
Participant has sold shares of Stock issued upon exercise or settlement of an
Award within six (6) months prior to the date on which the Participant would
otherwise have been required to forfeit such shares of Stock or the Award under
this subsection as a result of the Participant’s competitive or similar acts,
then the Company will be entitled to recover any and all profits realized by the
Participant in connection with such sale.
(d) All
outstanding Awards and shares of Stock issued pursuant to an Award held by a
Participant will be forfeited in their entirety (including as to any portion of
an Award or shares of Stock subject thereto that are vested or as to which any
repurchase or resale rights or forfeiture restrictions in favor of the Company
or its designee with respect to such Shares have previously lapsed) if the
Participant, without the consent of the Company, while employed or in service,
as the case may be, or within twelve (12) months after termination of employment
or service, solicits any employee, client, or vendor to engage in employment or
similar relationship with a competitor of a Participating Company or to engage
in any similar activity (including passive investment) that is in conflict with
or adverse to the interests of a Participating Company, as determined by the
Committee in its sole discretion; provided, that if a Participant has sold
shares of Stock issued upon exercise or settlement of an Award within six (6)
months prior to the date on which the Participant would otherwise have been
required to forfeit such shares of Stock or the Award under this subsection as a
result of the Participant’s acts, then the Company will be entitled to recover
any and all profits realized by the Participant in connection with such
sale.
18.3 Provision of Information. Each
Participant shall be given access to information concerning the Company
equivalent to that information generally made available to the Company’s common
stockholders.
18.4 Rights as Employee, Consultant or
Director. No person, even though eligible pursuant to Section 5,
shall have a right to be selected as a Participant, or, having been so selected,
to be selected again as a Participant. Nothing in the Plan or any Award granted
under the Plan shall confer on any Participant a right to remain an Employee,
Consultant or Director or interfere with or limit in any way any right of a
Participating Company to terminate the Participant’s Service at any time. To the
extent that an Employee of a Participating Company other than the Company
receives an Award under the Plan, that Award shall in no event be understood or
interpreted to mean that the Company is the Employee’s employer or that the
Employee has an employment relationship with the Company.
18.5 Rights as a Stockholder. A
Participant shall have no rights as a stockholder with respect to any shares
covered by an Award until the date of the issuance of such shares (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company). No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date
such shares are issued, except as provided in Section 4.3 or another
provision of the Plan.
18.6 Delivery of Title to Shares.
Subject to any governing rules or regulations, the Company shall issue or
cause to be issued the shares of Stock acquired pursuant to an Award and shall
deliver such shares to or for the benefit of the Participant by means of one or
more of the following: (a) by delivering to the Participant evidence of
book entry shares of Stock credited to the account of the Participant,
(b) by depositing such shares of Stock for the benefit of the Participant
with any broker with which the Participant has an account relationship, or
(c) by delivering such shares of Stock to the Participant in certificate
form.
18.7 Fractional Shares. The Company
shall not be required to issue fractional shares upon the exercise or settlement
of any Award.
18.8 Retirement and Welfare Plans.
Neither Awards made under this Plan nor shares of Stock or cash paid pursuant to
such Awards shall be included as “compensation” for purposes of computing the
benefits payable to any Participant under any Participating Company’s retirement
plans (both qualified and non-qualified) or welfare benefit plans unless such
other plan expressly provides that such compensation shall be taken into account
in computing such benefits.
18
18.9 Severability. If any one or
more of the provisions (or any part thereof) of this Plan shall be held invalid,
illegal or unenforceable in any respect, such provision shall be modified so as
to make it valid, legal and enforceable, and the validity, legality and
enforceability of the remaining provisions (or any part thereof) of the Plan
shall not in any way be affected or impaired thereby.
18.10 No Constraint on Corporate
Action. Nothing in this Plan shall be construed to: (a) limit,
impair, or otherwise affect the Company’s or another Participating Company’s
right or power to make adjustments, reclassifications, reorganizations, or
changes of its capital or business structure, or to merge or consolidate, or
dissolve, liquidate, sell, or transfer all or any part of its business or
assets; or (b) limit the right or power of the Company or another
Participating Company to take any action which such entity deems to be necessary
or appropriate.
18.11 Unfunded Obligation.
Participants shall have the status of general unsecured creditors of the
Company. Any amounts payable to Participants pursuant to the Plan shall be
unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974.
No Participating Company shall be required to segregate any monies from its
general funds, or to create any trusts, or establish any special accounts with
respect to such obligations. The Company shall retain at all times beneficial
ownership of any investments, including trust investments, which the Company may
make to fulfill its payment obligations hereunder. Any investments or the
creation or maintenance of any trust or any Participant account shall not create
or constitute a trust or fiduciary relationship between the Committee or any
Participating Company and a Participant, or otherwise create any vested or
beneficial interest in any Participant or the Participant’s creditors in any
assets of any Participating Company. The Participants shall have no claim
against any Participating Company for any changes in the value of any assets
which may be invested or reinvested by the Company with respect to the
Plan.
18.12 Choice of Law. Except to the
extent governed by applicable federal law, the validity, interpretation,
construction and performance of the Plan and each Award Agreement shall be
governed by the laws of the State of Delaware, without regard to its conflict of
law rules.
18.13 Nontransferability of
Awards. Unless otherwise determined by the Committee, Awards
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in
any manner other than by will or the laws of descent and distribution, and may
be exercised during the lifetime of the Participant, only by the Participant or
the Participant’s guardian or legal representative.
19. Compliance
with Section 162(m).
The
Company intends that the Awards granted to Covered Employees shall satisfy the
requirements of the Performance-Based Exception, unless otherwise determined by
the Committee when the Award is granted. Accordingly, the terms of
this Plan, including the definition of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with Section 162(m) of the
Code and regulations thereunder. Notwithstanding the foregoing,
because the Committee cannot determine with certainty whether a given
Participant will be a Covered Employee with respect to a fiscal year that has
not yet been completed, the term Covered Employee as used herein shall mean only
a person designated by the Committee as likely to be a Covered Employee with
respect to a fiscal year. If any provision of the Plan or any Award
Agreement designated as intended to satisfy the Performance-Based Exception does
not comply or is inconsistent with the requirements of Section 162(m) of the
Code or regulations thereunder, such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee or any other person sole
discretion to increase the amount of compensation otherwise payable in
connection with such Award upon attainment of the applicable performance
objectives. Payment of any amount that the Company reasonably
determines would not be deductible by reason of Section 162(m) of the Code shall
be deferred until the earlier of the earliest date on which the Company
reasonably determines that the deductibility of the payment will not be so
limited, or the year following the termination of employment.
19.1 Performance
Measures. The performance goals upon which the payment or
vesting of an Award to a Covered Employee that is intended to qualify as
Performance-Based Compensation shall be limited to the following Performance
Measures:
(a) Financial
Goals.
(i) | Revenues | ||
(ii) | EBITDA | ||
(iii) | Net Income | ||
(iv) | Earnings per share |
19
(v) | Debt level | ||
(vi) | Cost reduction targets | ||
(vii) | Cash flow from operations | ||
(viii) | Equity ratios | ||
(ix) | Interest generated on cash | ||
(x) | Weighted average cost of capital | ||
(xi) | Return on assets | ||
(xii) | Return on investment | ||
(xiii) | Capital raised from sales of equity | ||
(xiv) | Bank loan lines | ||
(xv) | Capital raised from sales of debt | ||
(xvi) | Expenses | ||
(xvii) | Working capital | ||
(xviii) | Operating or profit margin | ||
(xix) | Return on equity or capital employed | ||
(xx) | Booking and billing | ||
(b)
Corporate
and Other Goals.
(i) | Total stockholder return | ||
(ii) | Goals related to acquisitions | ||
(iii) | Investments | ||
(iv) | Satisfactory internal or external audits | ||
(v) | Achievement of balance sheet or income statement objectives | ||
(vi) | Market share | ||
(vii) | Assets | ||
(viii) | Asset sale targets | ||
(ix) | Number of new customers | ||
(x) | Increase in customer size | ||
(xi) | Employee retention/attrition rates | ||
(xii) | Improvement of financial ratings | ||
(xiii) | Charge-offs | ||
(xiv) | Fair Market Value of Stock | ||
(xv) | Regulatory compliance | ||
(xvi) | Major exchange listing |
(c)
Operating
Goals.
(i) | Operating efficiency | ||
(ii) | Ability of MIS to meet agreed targets | ||
(iii) | Objective customer satisfaction measures | ||
(iv) | Limit on mistakes in SCM |
Any
Performance Measure(s) may be used to measure the performance of the Company,
any Subsidiary Corporation, or an Affiliate as a whole or any business unit of
the Company, any Subsidiary Corporation, or an Affiliate or any combination
thereof, as the Committee may deem appropriate, or any of the above Performance
Measures as compared to the performance of a group of comparator companies, or
published or special index that the Committee, in its sole discretion, deems
appropriate. The Committee also has the authority to provide for
accelerated vesting of any Award based on the achievement of performance goals
pursuant to the Performance Measures specified in this Section.
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Notwithstanding
the foregoing, for each Award designed to qualify for the Performance-Based
Exception, the Committee shall establish and set forth in the Award the
applicable performance goals for that Award no later than the latest date that
the Committee may establish such goals without jeopardizing the ability of the
Award to qualify for the Performance-Based Exception and the Committee shall be
satisfied that the attainment of such Performance Measure(s) shall represent
value to the Company in an amount not less than the par value of any related
Performance Shares.
19.2 Evaluation of
Performance. Subject to Section 19.3, the Committee may
provide in any such Award that any evaluation of performance may include or
exclude any of the following events that occurs during a Performance Period: (a)
asset write-downs and other asset revaluations, (b) litigation or claim
judgments or settlements, (c) the effect of changes in tax laws, accounting
principles, or other laws or provisions affecting reported results, (d) any
reorganization and restructuring programs, (e) extraordinary nonrecurring items
as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to stockholders for the
applicable year, (f) acquisitions or divestitures, (g) foreign exchange gains
and losses, and (h) changes in material liability estimates. To the
extent such inclusions or exclusions affect Awards to Covered Employees, they
shall be prescribed in a form that meets the requirements of Section 162(m) of
the Code for deductibility.
19.3 Adjustment of Performance-Based
Compensation. The degree of payout and/or vesting of Awards
designed to qualify for the Performance-Based Exception shall be determined
based upon the written certification of the Committee as to the extent to which
the performance goals and any other material terms and conditions precedent to
such payment and/or vesting have been satisfied. The Committee shall
have the sole discretion to adjust the determinations of the value and degree of
attainment of the pre-established performance goals; provided, however, that the
performance goals applicable to Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Covered Employees, may not be
adjusted so as to increase the payment under the Award (the Committee shall
retain the sole discretion to adjust such performance goals upward, or to
otherwise reduce the amount of the payment and/or vesting of the Award relative
to the pre-established performance goals).
19.4 Committee
Discretion. In the event that applicable tax and/or securities
laws change to permit Committee discretion to alter the governing Performance
Measures without obtaining stockholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining stockholder
approval. In addition, in the event that the Committee determines
that it is advisable to grant Awards that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Section 162(m) of the Code and base vesting on Performance
Measures other than those set forth in Section 19.1.
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