Attached files
KAMAN
CORPORATION
2003
STOCK INCENTIVE PLAN
(As
Amended through February 23, 2010)
Section 1. Purpose. This Plan is
designed to (a) give directors, officers and key employees of the Corporation
and other persons an expanded opportunity to acquire stock in the Corporation or
receive other long-term incentive remuneration in order that they may better
participate in the Corporation's growth and be motivated to remain with the
Corporation and promote its further development and success and (b) better align
total compensation of executives of the Corporation with shareholder interests
through Long-Term Performance Awards subject to specific performance
criteria. The Plan includes the continuation of certain predecessor
plans.
Section 2. Definitions. The
following terms shall have the meanings given below unless the context otherwise
requires:
(a) "Act"
means the Securities Exchange Act of 1934, as amended.
(b)
"Amendment Date" means October 13, 2009.
(c)
“Authorized Shares” is defined in Section 5.
(d)
"Award" or "Awards" except where referring to a particular category of grant
under the Plan shall include Incentive Stock Options, Non-Statutory Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock
Units and Long-Term Performance Awards.
(e)
"Beneficial Owner" is defined in Section 16(h)(iii)(A).
(f)
"Board" means the Board of Directors of the Corporation or a Subsidiary as the
context may require.
(g)
"Cause" is defined in Section 16(i)(iii).
(h)
"Change in Control" is defined in Section 16(h)(iii).
(i)
"Code" means the Internal Revenue Code of 1986, as amended from time to time,
and any successor Code, and related rules, regulations and
interpretations.
(j)
"Committee" means the committee of the Board established under Section 11
hereof.
(k)
"Corporation" means Kaman Corporation.
(l)
"Covered Employee" means a Participant whom the Committee designates, for each
Performance Period, in order to meet the Section 162(m) Exemption.
(m)
"Disability" or "Disabled" means disability or disabled as defined by Code
Section 22(e)(3).
(n)
"Effective Date" is defined in Section 4.
(o)
"Eligible Person" means any person, including a person who is not an employee of
the Corporation or a Subsidiary, or entity who satisfies all the eligibility
requirements set forth in either Section 3(a) or 3(b) hereof.
(p) "Fair
Market Value" of the Stock on any given date shall be the mean between the
highest and lowest quoted selling prices of the Stock in the NASDAQ Global
Market on such date. If there were no sales on the valuation date, "Fair Market
Value" shall be the closing price of the Stock in the NASDAQ Global Market on
the most recent trading day preceding the valuation date on which sales of the
Stock occurred.
(q)
"Federal Income Tax Regulations" means the federal income tax regulations that
implement the Code, as they may be amended from time to time and any
corresponding successor regulations.
(r) "Good
Reason" is defined in Section 16(i)(iv).
(s)
"Incentive Stock Option" means a stock option qualifying under the provisions of
Section 422 of the Code.
(t)
"Long-Term Performance Award" means an award under Section 10(a)
below. A Long-Term Performance Award shall permit the recipient to
receive a bonus payable in cash, stock or a combination of cash and stock (as
determined by the Committee) upon satisfaction of such performance factors as
are set out in the recipient's individual grant. Long-Term
Performance Awards will be based upon the achievement of Corporation, Subsidiary
and/or individual performance factors or upon such other criteria as the
Committee may deem appropriate.
(u)
"Merger" means a merger, share exchange, consolidation or similar business
combination under applicable law.
(v)
"Non-Employee Director" means an individual who is (i) an "outside director," as
described in Federal Income Tax Regulations Section 1.162-27(e)(3), and (ii) an
"independent director" under the listing standards of the Nasdaq Stock Market,
Inc. and also meets the requirements of Rule 16b-3(b)(3)(i) promulgated under
the Act, and any successor to such rule.
(w)
"Non-Employee Director Participant" means an Eligible Person, who at the time of
grant of an Award is a director of the Corporation but not an employee of the
Corporation or a Subsidiary.
(x)
"Non-Statutory Option" means a stock option not qualifying for incentive stock
option treatment under the provisions of Section 422 of the Code.
(y)
"Optionee" means the holder of any option granted under the Plan.
(z)
"Participant" means the holder of any Award granted under the Plan.
(aa)
"Performance Period" is defined in Section 10(a).
(bb)
"Person" is defined in Section 16(h)(iv).
(cc)
"Plan" means the Kaman Corporation 2003 Stock Incentive Plan.
(dd)
"Predecessor Plan" means any of the Corporation's 1973 Stock Incentive Plan,
1983 Stock Incentive Plan and 1993 Stock Incentive Plan.
(ee)
"Principal Shareholder" means any individual owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of capital
stock of the Corporation or of any Subsidiary.
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(ff)
"Qualified Performance-Based Award" means (i) a Long-Term Performance Award or
Restricted Stock Award that is intended to qualify for the Section 162(m)
Exemption and is made subject to objective performance goals based on Qualified
Performance Criteria as set forth in Section 16(c), or (ii) an Option or SAR
having an exercise price equal to or greater than the Fair Market Value of the
underlying Stock as of the date it is granted.
(gg)
"Qualified Performance Criteria" means one or more of the performance criteria
listed in Section 16(c) upon which performance goals for certain Qualified
Performance-Based Awards may be established by the Committee and which meet the
requirements for the Section 162(m) Exemption.
(hh)
"Restricted Stock" means Stock received pursuant to a Restricted Stock
Award.
(ii)
"Restricted Stock Award" is defined in Section 8(a).
(jj)
"Restricted Stock Unit" is defined in Section 9(a).
(kk)
"Retirement" means retirement at or after 62 years of age in accordance with the
terms of the Corporation's tax-qualified Employees' Pension Plan.
(ll)
"Section 162(m) Exemption" means the exemption from the limitation on
deductibility imposed by Section 162(m) of the Code that is set forth in Section
162(m)(4)(C) of the Code.
(mm)
"Section 409A" means Section 409A of the Code, and regulations promulgated
thereunder.
(nn)
"Stock" or "shares" means shares of Common Stock of the
Corporation.
(oo)
"Stock Appreciation Right" or "Right" means a right described in Section
7.
(pp)
"Subsidiary" means any corporation within the meaning of Section 424(f) of the
Code.
Section
3. Eligibility.
(a) Incentive Stock
Options. Incentive Stock Options may be granted to any
Eligible Persons who are full-time, salaried employees of the Corporation or a
Subsidiary and who in the sole opinion of the Committee are, from time to time,
responsible for the management and/or growth of all or part of the business of
the Corporation.
(b) Awards Other than Incentive
Stock Options. Awards, other than Incentive Stock Options, may
be granted to any Eligible Persons who in the sole opinion of the Committee are,
from time to time, responsible for the growth and/or the management of all or a
part of the business of the Corporation or Subsidiary.
(c) Substitute
Awards. The Committee, in its discretion, may also grant
Awards in substitution for any stock incentive awards previously granted by
companies acquired by the Corporation or one of its
Subsidiaries. Such substitute awards may be granted on such terms and
conditions as the Committee deems appropriate in the circumstances, provided,
however, that substitute Incentive Stock Options shall be granted only in
accordance with the Code.
Section 4. Term of
Plan. The Plan is
effective on November 1, 2003 (the "Effective Date") and shall continue to be
effective for ten (10) years thereafter, expiring on October 31,
2013.
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Section 5. Stock
Subject to the Plan. An aggregate of
2,484,395 shares of
Stock (the “Authorized Shares”) may be issued pursuant to Awards granted under
the Plan on or after the Amendment Date. The Authorized Shares
consist of (i) 2,000,000 shares of Stock newly authorized by the Board, subject
to further shareholder approval, as of the Amendment Date, plus (ii) 484,395
shares of Stock that were available for new Awards pursuant to the Plan
immediately prior to the Amendment Date which shall be in addition to all shares
of Stock issued or reserved for issuance prior to the Amendment Date pursuant to
Awards granted under the Plan or any Predecessor Plan. The Authorized
Shares may consist of treasury shares or authorized but unissued
shares. In the event that any Award under the Plan or any
Predecessor Plan for any reason expires, is terminated, forfeited, reacquired by
the Corporation, or satisfied without the issuance of Stock (except in the cases
of (i) Stock otherwise issuable under an Award but retained by the Corporation
for payment of withholding taxes under Section 16(b) hereof; (ii) Stock
otherwise issuable under a stock option but for which the Corporation has made a
discretionary payment under Section 7(d) hereof and (iii) Stock underlying any
Incentive Stock Option, Non-Statutory Option, or Stock Appreciation Right that
is cancelled in connection with a repricing of the exercise price thereunder)
the shares allocable to the unexercised portion of such Award may again be made
subject to an Award under the Plan. Any award of a Stock Appreciation
Right, to the extent that such Stock Appreciation Right may be settled only for
cash, shall not be deemed to reduce the aggregate number of shares of Stock
authorized to be issued pursuant to Awards granted under the Plan.
Section 6. Stock
Options. The following
terms and conditions shall apply to each option granted under the Plan and shall
be set forth in a stock option agreement between the Corporation and the
Optionee together with such other term and conditions not inconsistent herewith
as the Committee may deem appropriate in the case of each Optionee:
(a) Option
Price. The purchase price under each Incentive Stock Option
shall be as determined by the Committee but not less than 100% of the Fair
Market Value of the shares subject to such option on the date of grant, provided
that such option price shall not be less than 110% of such Fair Market Value in
the case of any Incentive Stock Option granted to a Principal
Shareholder. The purchase price per share of Stock deliverable upon
the exercise of a Non-Statutory Option shall be determined by the Committee, but
shall not be less than 100% of the Fair Market Value of such Stock on the date
of grant. In no event shall the purchase price of any Stock be less
than the par value per share of such Stock.
(b) Type of
Option. All options granted under the Plan shall be either
Incentive Stock Options or Non-Statutory Options. All provisions of
the Plan applicable to Incentive Stock Options shall be interpreted in a manner
consistent with the provisions of, and regulations under, Section 422 of the
Code.
(c) Period of Incentive Stock
Option. Each Incentive Stock Option shall have a term not in
excess of ten (10) years from the date on which it is granted, except in the
case of any Incentive Stock Option granted to a Principal Shareholder which
shall have a term not in excess of five (5) years from the date on which it is
granted; provided that any Incentive Stock Option granted or the unexercised
portion thereof, to the extent exercisable at the time of termination of
employment, shall terminate at the close of business on the day three (3) months
following the date on which the Optionee ceases to be employed by the
Corporation or a Subsidiary unless sooner expired or unless a longer period is
provided under subsection (g) of this Section in the event of the death or
Disability of such an Optionee.
(d) Period of Non-Statutory
Option. Each Non-Statutory Option granted under the Plan shall
have a term not in excess of ten (10) years and one (1) day from the date on
which it is granted; provided that any Non-Statutory Option granted to an
employee of the Corporation or a Subsidiary or to a Non-Employee Director
Participant, or the unexercised portion thereof, shall terminate not later than
the close of business on the day three (3) months following the date on which
such employee ceases to be employed by the Corporation or a Subsidiary or the
date on which such Non-Employee Director ceases to be a director of the
Corporation, as the case may be, unless a longer period is provided under
subsection (g) of this Section in the event of the death, Disability or
Retirement of such employee or the death or Disability of such Non-Employee
Director. Such an Optionee's Non-Statutory Option shall be
exercisable, if at all, during such three (3) month period only to the extent
exercisable on the date such Optionee's employment terminates or the date on
which such Optionee ceases to be a director, as the case may be.
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(e) Exercise of
Option.
(i) Each
option granted under the Plan shall become exercisable on such date or dates and
in such amount or amounts as the Committee shall determine. In the absence of
any other provision by the Committee, each option granted under the Plan shall
be exercisable with respect to not more than twenty percent (20%) of such shares
subject thereto after the expiration of one (1) year following the date of its
grant, and shall be exercisable as to an additional twenty percent (20%) of such
shares after the expiration of each of the succeeding four (4) years, on a
cumulative basis, so that such option, or any unexercised portion thereof, shall
be fully exercisable after a period of five (5) years following the date of its
grant; provided, however, that in the absence of any other provision by the
Committee, each Incentive Stock Option granted to a Principal Shareholder shall
be exercisable with respect to not more than twenty-five percent (25%) of the
shares subject thereto after the expiration of one (1) year following the date
of its grant, and shall be exercisable as to an additional twenty-five percent
(25%) after the expiration of each of the succeeding three (3) years, on a
cumulative basis, so that such option, or any unexercised portion thereof, shall
be fully exercisable after a period of four (4) years following the date of its
grant.
(ii) The
Committee, in its sole discretion, may, from time to time and at any time,
accelerate the vesting provisions of any outstanding option, subject, in the
case of Incentive Stock Options, to the provisions of Section (6)(i) relating to
"Limit on Incentive Options".
(iii)
Notwithstanding anything herein to the contrary, except as provided in
subsection (g) of this Section, no Optionee who was, at the time of the grant of
an option, an employee of the Corporation or a Subsidiary, may exercise such
option or any part thereof unless at the time of such exercise he or she shall
be employed by the Corporation or a Subsidiary and shall have been so employed
continuously since the date of grant of such option, excepting leaves of absence
approved by the Committee; provided that the option agreement may provide that
such an Optionee may exercise his or her option, to the extent exercisable on
the date of termination of such continuous employment, during the three (3)
month period, ending at the close of business on the day three (3) months
following the termination of such continuous employment unless such option shall
have already expired by its term.
(iv) An
option shall be exercised in accordance with the related stock option agreement
by serving written notice of exercise on the Corporation accompanied by full
payment of the purchase price in cash. As determined by the
Committee, in its discretion, at (or, in the case of Non-Statutory Options, at
or after) the time of grant, payment in full or in part may also be made by
delivery of (i) irrevocable instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds to pay the exercise price, or
(ii) previously owned shares of Stock not then subject to restrictions under any
Corporation plan (but which may include shares the disposition of which
constitutes a disqualifying disposition for purposes of obtaining incentive
stock option treatment for federal tax purposes), or (iii) shares of Stock
otherwise receivable upon the exercise of such option; provided, however, that
in the event the Committee shall determine in any given instance that the
exercise of such option by withholding shares otherwise receivable would be
unlawful, unduly burdensome or otherwise inappropriate, the Committee may
require that such exercise be accomplished in another acceptable
manner. For purposes of this subsection (iv), such surrendered shares
shall be valued at the closing price of the Stock in the NASDAQ Global Market on
the most recent trading day preceding the date of exercise on which sales of the
Stock occurred.
(f) Transferability. No
option granted under the Plan shall be transferable by the Optionee otherwise
than by will or by the laws of descent and distribution, and such option shall
be exercisable, during the Optionee's lifetime, only by the
Optionee.
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(g) Death, Disability or
Retirement of Optionee.
(i) With
respect to Incentive Stock Options, in the event of the death or Disability of
an Optionee while in the employ of the Corporation or a Subsidiary or while
serving as a director of the Corporation, such Optionee's Incentive Stock
Option, or the unexercised portion thereof, may be exercised within the period
of one (1) year succeeding such Optionee's death or Disability, but in no event
later than ten (10) years (five (5) years in the case of a Principal
Shareholder) from the date the Incentive Stock Option was granted.
(ii) With
respect to Non-Statutory Options, in the event of the death, Disability or
Retirement of an Optionee while in the employ of the Corporation or a Subsidiary
or in the event of death or Disability of an Optionee while serving as a
Director of the Corporation, such Optionee's Non-Statutory Option, or the
unexercised portion thereof, may be exercised within the period of five (5)
years succeeding such Optionee's death, Disability or Retirement, but in no
event later than ten (10) years and one (1) day from the date the Non-Statutory
Option was granted, by the person or persons designated in the Optionee's will
for that purpose or in the absence of any such designation, by the legal
representative of the Optionee's estate, or by the Optionee or the Optionee's
legal representative, as the case may be.
(iii)
Notwithstanding anything herein to the contrary and in the absence of any
contrary provision by the Committee, during any period following termination of
employment by reason of death, Disability or Retirement, or cessation as a
director by reason of death or Disability, during which an Optionee's Stock
Option may be exercisable as provided in either subsection (i) or (ii) above,
such Stock Option shall continue to vest in accordance with its terms and be and
become exercisable as if employment or service as a director had not
ceased.
(h) Shareholder
Rights. No Optionee shall be entitled to any rights as a
shareholder with respect to any shares subject to his or her option prior to the
date of issuance to him or her of a stock certificate representing such
shares.
(i) Limit on Incentive Stock
Options. The aggregate Fair Market Value (determined at the
time an option is granted) of shares with respect to which Incentive Stock
Options granted to an employee are exercisable for the first time by such
employee during any calendar year (under all incentive stock option plans of the
Corporation and its Subsidiaries to the extent required under the Code) shall
not exceed $100,000.
(j) Notification of
Disqualifying Disposition. Participants granted Incentive
Stock Options shall undertake, in the Incentive Stock Option agreements, as a
precondition to the granting of such option by the Corporation, to promptly
notify the Corporation in the event of a disqualifying disposition (within the
meaning of the Code) of any shares acquired pursuant to such Incentive Stock
Option agreement and provide the Corporation with all relevant information
related thereto.
Section
7. Stock
Appreciation Rights; Discretionary Payments.
(a) Nature of Stock Appreciation
Right. A Stock Appreciation Right is an Award entitling the
Participant to receive an amount in cash or shares of Stock (or forms of payment
permitted under Section 7(d) hereof) or a combination thereof, as determined by
the Committee at the time of grant, having a value equal to (or if the Committee
shall so determine at time of grant, less than) the excess of the closing price
of the Stock on the NASDAQ Global Market on the most recent trading day
preceding the date of exercise on which sales of the Stock occurred over the
Fair Market Value of a share of Stock on the date of grant (or over the option
exercise price, if the Stock Appreciation Right was granted in tandem with a
stock option) multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised.
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(b) Grant and Exercise of Stock
Appreciation Rights.
(i) Stock
Appreciation Rights may be granted in tandem with, or independently of, any
stock option granted under the Plan. In the case of a Stock
Appreciation Right granted in tandem with either an Incentive Stock Option or a
Non-Statutory Option, such Right may be granted only at the time of the grant of
such option. A Stock Appreciation Right or applicable portion thereof
granted in tandem with a given stock option shall terminate and no longer be
exercisable upon the termination or exercise of the related stock option, except
that a Stock Appreciation Right granted with respect to less than the full
number of shares covered by a related stock option shall not be reduced until
the exercise or termination of the related stock option exceeds the number of
shares not covered by the Stock Appreciation Right.
(ii) Each
Stock Appreciation Right granted under the Plan shall become exercisable on such
date or dates and in such amount or amounts as the Committee shall determine;
provided, however, that any Stock Appreciation Right granted in tandem with a
stock option shall be exercisable in relative proportion to and to the extent
that such related stock option is exercisable. Except as provided in
the immediately preceding sentence, in the absence of any other provision by the
Committee, each Stock Appreciation Right granted under the Plan shall be
exercisable with respect to not more than twenty percent (20%) of such shares
subject thereto after the expiration of one (1) year following the date of its
grant, and shall be exercisable as to an additional twenty percent (20%) of such
shares after the expiration of each of the succeeding four (4) years, on a
cumulative basis, so that such Right, or any unexercised portion thereof, shall
be fully exercisable after a period of five (5) years following the date of its
grant. The Committee, in its sole discretion, may, from time to time
and at any time, accelerate the vesting provisions of any outstanding Stock
Appreciation Right.
(iii)
Notwithstanding anything herein to the contrary, except as provided in
subsections (c)(v) and (c)(vi) of this Section, no Participant who was, at the
time of the grant of a Stock Appreciation Right, an employee of the Corporation
or a Subsidiary, may exercise such Right or any part thereof unless at the time
of such exercise, he or she shall be employed by the Corporation or a Subsidiary
and shall have been so employed continuously since the date of grant of such
Right, excepting leaves of absence approved by the Committee; provided that the
Stock Appreciation Right agreement may provide that such a Participant may
exercise his or her Stock Appreciation Right, to the extent exercisable on the
date of termination of such continuous employment, during the three (3) month
period ending at the close of business on the day three (3) months following the
termination of such continuous employment, unless such Right shall have already
expired by its terms.
(iv)
Notwithstanding anything herein to the contrary, except as provided in
subsections (c)(v) and (c)(vi) of this Section, no Non-Employee Director
Participant may exercise a Stock Appreciation Right or part thereof unless at
the time of such exercise he or she shall be a director of the Corporation and
shall have been a director of the Corporation continuously since the date of
grant of such Right excepting leaves of absence approved by the Committee;
provided that the Stock Appreciation Right agreement may provide that such
Participant may exercise his or her Stock Appreciation Right, to the extent
exercisable on the date he or she ceased to be a director of the Corporation,
during the three (3) month period ending at the close of business on the day
three (3) months following the cessation of such continuous service as a
director unless such Right shall already have expired by its terms.
(v) A
Stock Appreciation Right shall be exercised in accordance with the related Stock
Appreciation Right Agreement by serving written notice of exercise on the
Corporation.
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(c) Terms and Conditions of
Stock Appreciation Rights. Stock Appreciation Rights shall be
subject to such terms and conditions as shall be determined from time to time by
the Committee, subject to the following:
(i) Stock
Appreciation Rights granted in tandem with stock options shall be exercisable
only at such time or times and to the extent that the related stock options
shall be exercisable;
(ii) Upon
the exercise of a Stock Appreciation Right, the applicable portion of any
related stock option shall be surrendered.
(iii)
Stock Appreciation Rights granted in tandem with a stock option shall be
transferable only with such option. Stock Appreciation Rights shall
not be transferable otherwise than by will or the laws of descent and
distribution. All Stock Appreciation Rights shall be exercisable
during the Participant's lifetime only by the Participant or the Participant's
legal representative.
(iv) A
Stock Appreciation Right granted in tandem with a stock option may be exercised
only when the then Fair Market Value of the Stock subject to the stock option
exceeds the exercise price of such option. A Stock Appreciation Right
not granted in tandem with a stock option may be exercised only when the then
Fair Market Value of the Stock exceeds the Fair Market Value of the Stock on the
date of grant of such Right.
(v) Each
Stock Appreciation Right shall have a term not in excess of ten (10) years from
the date on which it is granted (ten (10) years and one (1) day in the case of a
Stock Appreciation Right granted in tandem with a Non-Statutory Option);
provided that any Stock Appreciation Right granted to (aa) an employee of the
Corporation or a Subsidiary shall terminate not later than the close of business
on the day three (3) months following the date such Participant ceases to be
employed by the Corporation or a Subsidiary, except as provided in subsection
(c)(vi) of this Section and excepting leaves of absences approved by the
Committee, and (bb) a Non-Employee Director Participant shall terminate not
later than the close of business on the day three (3) months following the date
such Participant ceases to be a director of the Corporation, except as provided
in subsection (c)(vi) of this Section. Such a Participant's Stock
Appreciation Right shall be exercisable, if at all, during such three (3) month
period only to the extent exercisable on the date his or her employment
terminates or the date he or she ceases to be a director, as the case may
be.
(vi) In
the event of the death, Disability or Retirement of a Participant while in the
employ of the Corporation or a Subsidiary or in the event of the death or
Disability of a Participant while serving as a director of the Corporation, his
or her Stock Appreciation Right or the unexercised portion thereof may be
exercised within the period of five (5) years succeeding his or her death,
Disability or Retirement, but in no event later than (i) ten (10) years from the
date on which it was granted (ten (10) years and one (1) day in the case of a
Stock Appreciation Right granted in tandem with a Non-Statutory Option), by the
person or persons designated in the Participant's will for that purpose or in
the absence of any such designation, by the legal representative of his or her
estate, or by the Participant or the legal representative of the Participant, as
the case may be. Notwithstanding anything herein to the contrary and
in the absence of any contrary provision by the Committee, during the five-year
period following termination of employment by reason of death, Disability or
Retirement, or cessation as a director by reason of death or Disability, a
Participant's Stock Appreciation Right shall continue to vest in accordance with
its terms and be and become exercisable as if employment or service as a
director had not ceased.
(d) Discretionary
Payments. Upon the written request of an Optionee whose stock
option is not accompanied by a Stock Appreciation Right, the Committee may, in
its discretion, cancel such option if the Fair Market Value of the shares
subject to the option at the exercise date exceeds the exercise price thereof;
in that event, the Corporation shall pay to the Optionee an amount equal to the
difference between the Fair Market Value of the shares subject to the cancelled
option (determined as of the date the option is cancelled) and the exercise
price. Such payment shall be by check or in Stock having a Fair
Market Value (determined on the date the payment is to be made) equal to the
amount of such payments or any combination thereof, as determined by the
Committee.
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Section
8. Restricted
Stock.
(a) Nature of Restricted Stock
Award. A Restricted Stock Award is an Award entitling the
Participant to receive shares of Stock, subject to such conditions, including a
Corporation right during a specified period or periods to require forfeiture of
such shares upon the Participant's termination of employment with the
Corporation or a Subsidiary or cessation as a director of the Corporation, as
the case may be, as the Committee may determine at the time of
grant. The Committee, in its sole discretion, may, from time to time
and at any time, waive any or all restrictions and/or conditions contained in
the Restricted Stock Award agreement. Notwithstanding anything herein
to the contrary, the Committee, in its discretion, may grant Restricted Stock
without any restrictions or conditions whatsoever. Restricted Stock
shall be granted in respect of past services or other valid
consideration.
(b) Award
Agreement. A Participant who is granted a Restricted Stock
Award shall have no rights with respect to such Award unless the Participant
shall have accepted the Award within 60 days (or such shorter date as the
Committee may specify) following the Award date by executing and delivering to
the Corporation a Restricted Stock Award Agreement in such form as the Committee
shall determine.
(c) Rights as a
Shareholder. Upon complying with paragraph (b) above, a
Participant shall have all the rights of a shareholder with respect to the
Restricted Stock including voting and dividend rights, subject to
nontransferability and Corporation forfeiture rights described in this Section 8
and subject to any other conditions contained in the Award
agreement. Unless the Committee shall otherwise determine,
certificates evidencing shares of Restricted Stock shall remain in the
possession of the Corporation until such shares are free of any restrictions
under the Plan. The Committee in its discretion may, as a
precondition of the Corporation's obligation to issue a Restricted Stock Award,
require the Participant to execute a stock power or powers or other agreement or
instruments necessary or advisable in connection with the Corporation's
forfeiture rights with respect to such shares.
(d) Restrictions. Shares
of Restricted Stock may not be sold, assigned, transferred or otherwise disposed
of or pledged or otherwise encumbered. In the event of termination of
employment of the Participant with the Corporation or a Subsidiary for any
reason, or cessation as a director of the Corporation in the case of a
Non-Employee Director Participant, such shares shall be forfeited to the
Corporation, except as set forth below:
(i) The
Committee at the time of grant shall specify the date or dates (which may depend
upon or be related to the attainment of performance goals and other conditions)
on which the nontransferability of the Restricted Stock and the Corporation's
forfeiture rights with respect thereto shall lapse. The Committee at
any time may accelerate such date or dates and otherwise waive or, subject to
Section 14, amend any conditions of the Award.
(ii)
Except as may otherwise be provided in the Award agreement, in the event of
termination of a Participant with the Corporation or a Subsidiary for any reason
or cessation as a director of the Corporation for any reason, all of the
Participant's Restricted Stock shall be forfeited to the Corporation without the
necessity of any further act by the Corporation, the Participant or the
Participant's legal representative; provided, however, that in the event of
termination of employment by reason of death, Disability or Retirement or
cessation of service as a director of the Corporation by reason of death or
Disability, all conditions and restrictions relating to a Restricted Stock Award
held by such a Participant shall thereupon be waived and shall
lapse.
9
(iii) In
the absence of any other provision by the Committee, each Restricted Stock Award
granted to (A) an employee of the Corporation or a Subsidiary shall be subject
to forfeiture to the Corporation conditioned on the Participant's continued
employment and (B) Non-Employee Director Participants shall be subject to
forfeiture to the Corporation conditioned on the Participant's continued service
as a director of the Corporation, and in the case of clause (A) or (B), such
forfeiture rights shall lapse as follows: with respect to twenty
percent (20%) of the shares subject to the Restricted Stock Award on the date
one year following the date of grant, and with respect to an additional twenty
percent (20%) of such shares after the expiration of each of the succeeding four
(4) years thereafter, on a cumulative basis, so that such Restricted Stock shall
be free of such risk of forfeiture on the date five (5) years following the date
of its grant.
(e) Performance-Based
Award. In the discretion of the Committee, the Corporation's
forfeiture rights with respect to Restricted Stock award to a Covered Employee
may be based upon Qualified Performance Criteria and the Restricted Stock Award
may be designated as a Qualified Performance-Based Award.
(f) Waiver, Deferral, and
Investment of Dividends. The Restricted Stock Award agreement
may require or permit the immediate payment, waiver, deferral or investment of
dividends paid with respect to the Restricted Stock.
Section
9. Restricted Stock
Units
(a) Nature of Restricted Stock
Unit Award. A Restricted Stock Unit is an Award denominated in
shares of Stock that will be settled, subject to the terms and conditions as the
Committee may determine at the time of grant, (i) in cash, based upon the Fair
Market Value of a specified number of shares of Stock, (ii) in shares of Stock,
or (iii) a combination thereof. Each Restricted Stock Unit represents
one share of Stock. Notwithstanding anything contained herein to the
contrary, a Restricted Stock Unit does not impart to a Participant any of the
rights that would otherwise be gained by such Participant by owning a share of
Stock, including without limitation voting and dividend rights.
(b) Terms and Restrictions of
Restricted Stock Unit Awards. Restricted Stock Units
shall be subject to such terms and conditions as the Committee may impose,
including conditioning the grant,
vesting, or transferability of Restricted Stock Units upon the continued service
of the applicable Participant. Prior to the grant of an Award of
Restricted Stock Units, the Committee shall (i) determine the nature, length and
starting date of any vesting period for such Award; and (ii) determine the
number of shares of Stock that may be awarded to the Participant pursuant to
such Award. The conditions for grant, vesting or transferability and
the other provisions of Restricted Stock Units need not be the same with respect
to each Participant. Restricted Stock Units may not be sold,
assigned, transferred or otherwise disposed of or pledged or otherwise
encumbered.
(c) Termination
of Participant’s Employment. Except as may otherwise be
provided in the Award Agreement, in the event of the termination of a
Participant’s employment by the Corporation or a Subsidiary for any reason, or a
cessation of a Participant as a director of the Corporation for any reason, all
of the Participant’s Restricted Stock Units shall be forfeited to the
Corporation without the necessity of any further action by the Corporation or
the Participant. Notwithstanding the foregoing and except as may be
otherwise provided in the Award Agreement, upon the death, Disability or
Retirement of the Participant, all of the Participant’s Restricted Stock Units
shall vest in full and shall be settled in accordance with the terms
hereof.
(d) Award
Agreement. A Participant who is
granted an Award of Restricted Stock Units shall have no rights with respect to
such Award unless the Participant shall have accepted the Award within 60 days
(or such shorter date as the Committee may specify) following the Award date by
executing and delivering to the Corporation a Restricted Stock Unit Award
Agreement in such form as the Committee shall determine.
10
(e) Settlement. An Award of Restricted Stock Units shall
be settled as and when the Restricted Stock Units vest or at a later time
specified by the Committee or in accordance with an election of the Participant,
if the Committee so permits.
Section
10. Long-Term Performance
Awards.
(a) Awards. Long-Term
Performance Awards may be payable in cash, stock or a combination of cash and
stock may be granted either alone, in addition to or in tandem with other Awards
granted under the Plan and/or awards made outside of the
Plan. Long-Term Performance Awards shall not require payment by the
recipient of any consideration for the Long-Term Performance Award or for shares
of Stock, if any, covered by such Award. The Committee shall
determine the nature, length and starting date of any performance period (the
"Performance Period") for each Long-Term Performance Award and shall determine
the performance and/or employment factors to be used in the determination of the
value of Long-Term Performance Awards and the extent to which such Long-Term
Performance Award may be made subject to various conditions, including vesting
or forfeiture provisions. Long-Term Performance Awards may vary from
Participant to Participant and between groups of Participants and shall be based
upon the achievement of Corporation, Subsidiary and/or individual performance
factors or upon such other criteria as the Committee may deem appropriate.
Performance Periods may overlap and Participants may participate simultaneously
with respect to Long-Term Performance Awards that are subject to different
Performance Periods and different performance factors and
criteria. Long-Term Performance Awards shall be confirmed by, and be
subject to the terms of, a written Long-Term Performance Award
agreement.
(b) Value of
Awards. At the beginning of each Performance Period, the
Committee shall determine for each Long-Term Performance Award subject to such
Performance Period the range of dollar values and/or numbers or dollar values of
shares of Common Stock to be issued to the Participant at the end of the
Performance Period if and to the extent that the relevant measures of
performance for such Long-Term Performance Award are met. Such dollar
values or numbers of shares of Common Stock may be fixed or may vary in
accordance with such performance or other criteria as may be determined by the
Committee.
(c) Adjustment of
Awards.
(i)
Notwithstanding the provisions of Section 10(a) hereof, the Committee may, after
the grant of Long-Term Performance Awards, adjust the performance factors
applicable to such Long-Term Performance Awards to take into account changes in
the law or in accounting or tax rules and to make such adjustments as the
Committee deems necessary or appropriate to, among other things, reflect the
inclusion or exclusion of the impact of extraordinary or unusual items, events
or circumstances in order to avoid windfalls or hardships to Participants,
provided, however that the provisions of this Section 10(c) shall not apply to
Long-Term Performance Awards granted to Covered Employees or otherwise intended
to satisfy the requirements of Section 162(m) of the Code.
(ii)
Notwithstanding the provisions of Section 10(a) hereof, with respect to any
Long-Term Performance Awards granted to Covered Employees or otherwise intended
to satisfy the requirements of Section 162(m) of the Code, the Committee retains
the discretion to eliminate or decrease the amount payable to a Participant with
respect to any such award.
(d) Termination.
(i)
Unless otherwise provided in the applicable Long-Term Performance Award
agreement or other applicable management agreement, if a Participant terminates
his or her employment or his or her consultancy during a Performance Period
because of death or Disability, then a prorata portion of such Long-Term
Performance Award shall be deemed fully vested and fully earned by such
Participant (or his or her estate), such portion to be determined by multiplying
100% of the target value of such Award by a fraction the numerator of which is
the number of days from the beginning of the Performance Period to the date of
such termination and the denominator of which is the total number of days during
the Performance Period. Such earned portion shall be paid ninety (90) days
following the date of such termination.
11
(ii)
Unless otherwise provided in the applicable Long-Term Performance Award
agreement or other applicable management agreement, if a Participant terminates
his or her employment or his or her consultancy during a Performance Period
because of Retirement, then such Participant shall continue to be entitled to a
prorata portion of any payment with respect to the Long-Term Performance Award
subject to such Performance Period in accordance with the payment terms set
forth in subsection (e) of this Section 10, determined by multiplying such
payment, calculated as if the Participant's employment or consultancy had not
been terminated, by a fraction the numerator of which is the number of days from
the beginning of the Performance Period to the date of such termination and the
denominator of which is the total number of days during the Performance
Period.
(iii)
Unless otherwise provided in the applicable Long-Term Performance Award
agreement or other applicable management agreement, if a Participant terminates
employment or his or her consultancy during a Performance Period for any reason
other than death, Disability or Retirement, then such a Participant shall not be
entitled to any payment with respect to the Long-Term Performance Award subject
to such Performance Period, unless the Committee shall otherwise determine in
its discretion.
(e) Form of Payment. The
earned portion of a Long-Term Performance Award shall be paid in cash between
the January 1 and September 30 of the calendar year following the close of the
applicable Performance Period, provided that the Committee may elect to pay up
to one-third (1/3) of such amount in whole shares of stock or, at the discretion
of the Committee, such earned portion may be paid in whole shares of Stock to
the extent requested by the Participant. Any such shares of Stock
shall be valued at their Fair Market Value at the close of business on the most
recent trading day preceding the date of such payment.
(f) Reservation of
Shares. In the event that the Committee grants a Long-Term
Performance Award that is payable in cash or Stock, the Committee may (but need
not) reserve an appropriate number of shares of Stock under the Plan at the time
of grant of the Long-Term Performance Award. If, and to the extent
that the full amount reserved is not actually paid in Stock, the shares of Stock
representing the portion of the reserve for that Long-Term Performance Award
shall again become available for award under the Plan. If shares of
Stock are not reserved by the Committee at the time of grant, then (i) no shares
shall be deducted from the number of shares available for grant under the Plan
at that time and (ii) at the time of payment of the Long-Term Performance Award,
only the number of shares actually issued to the Participant shall be so
deducted. If there are not a sufficient number of shares available under the
Plan for issuance to a Participant at the time of payment of a Long-Term
Performance Award, any shortfall shall be paid by the Corporation in
cash.
12
Section
11. The
Committee.
(a) Administration. The
Committee shall be a committee of not less than three (3) members of the Board
who are Non-Employee Directors, appointed by the Board. Vacancies
occurring in membership of the Committee shall be filled by the
Board. The Committee shall keep minutes of its
meetings. One or more members of the Committee may participate in a
meeting of the Committee by means of conference telephone or similar
communications equipment provided all persons participating in the meeting can
hear one another. A majority of the entire Committee shall constitute
a quorum, and the acts of a majority of the members present at or so
participating in any meeting at which a quorum is constituted shall be the acts
of the Committee. The Committee may act without meeting by unanimous
written consent. Absent some other provision by the Board, the power
and responsibilities of the Committee shall be vested in and assumed by the
Personnel and Compensation Committee of the Board, provided the members thereof
are all Non-Employee Directors.
(b) Authority of
Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to determine the persons to whom
Awards shall be granted, the number of shares to be subject to each Award, the
term of the Award, the vesting provisions of the Award, if any, restrictions on
the Award, if any, and the price at which the shares subject thereto may be
purchased. The Committee is empowered, in its discretion, to modify,
extend or renew any Award theretofore granted and adopt such rules and
regulations and take such other action as it shall deem necessary or proper for
the administration of the Plan. The Committee must certify in writing
prior to the payment of any compensation to a Covered Employee from a Qualified
Performance-Based Award that Qualified Performance Criteria were met, all in the
manner provided by Federal Income Tax Regulations Section
1.162-27(e)(5). The Committee shall have full power and authority to
construe, interpret and administer the Plan, and the decisions of the Committee
shall be final and binding upon all interested parties. No members of
the Committee shall be liable for any action taken or not taken or decision made
or not made in good faith relating to the Plan or any award
thereunder.
Section 12. Adjustments. Any limitations,
restrictions or other provisions of this Plan to the contrary notwithstanding,
each Award agreement shall make such provision, if any, as the Committee may
deem appropriate for the adjustment of the terms and provisions thereof
(including, without limitation, terms and provisions relating to the exercise
price and the number and class of shares subject to the Award) in the event of
any merger, consolidation, reorganization, recapitalization, stock dividend,
divisive reorganization, issuance of rights, combination or split-up or exchange
of shares, or the like. In the event of any merger, consolidation,
reorganization, recapitalization, stock dividend, divisive reorganization,
issuance of rights, combination or split-up or exchange of shares, or the like,
the Committee shall make an appropriate adjustment in the number of shares
authorized to be issued pursuant to the Plan.
Section 13. Awards
Under Predecessor Plans. Awards presently
outstanding which have been granted under any Predecessor Plan shall continue to
be governed and interpreted under the terms of such plans and not by the terms
hereof.
Section 14. Amendment
to and Termination of the Plan. The Board may
from time to time amend the Plan in such way as it shall deem advisable provided
the Board may not extend the expiration date of the Plan, change the class of
Eligible Persons, increase the maximum Award term, decrease the minimum exercise
price or increase the total number of authorized shares (except in accordance
with Section 12 hereof) for which Awards may be granted. The Board,
in its discretion, may at any time terminate the Plan prior to its expiration in
accordance with Section 4 hereof. No amendment to or termination of
the Plan shall in any way adversely affect Awards then outstanding
hereunder.
Section 15. Status of
Plan. Until shares
pursuant to an Award or exercise thereof are actually delivered to a
Participant, a Participant shall have no rights to or with respect to such
shares greater than those of a general creditor of the Corporation unless the
Committee shall otherwise expressly determine in connection with any Award or
Awards.
13
Section
16. General
Provisions.
(a) Other Compensation
Arrangements; No Right to Receive Awards; No Employment or Other
Rights. Nothing contained in this Plan shall prevent the Board
from adopting other or additional capital stock based compensation arrangements,
subject to stockholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases. No Eligible Person shall have any right to receive Awards
except as the Committee may determine. The Plan does not confer upon
any employee any right to continued employment with the Corporation or a
Subsidiary or upon any director or officer of the Corporation any right to
continued service as a director or officer of the Corporation, nor does it
interfere in any way with the right of the Corporation or a Subsidiary to
terminate the employment of any of its employees or for the Corporation to
remove a director or officer with or without cause at any time.
(b) Tax Withholding,
Etc. Any obligation of the Corporation to issue shares
pursuant to the grant or exercise of any Award shall be conditioned on the
Participant having paid or made provision for payment of all applicable tax
withholding obligations, if any, satisfactory to the Committee. The
Corporation and its Subsidiaries shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to the
Participant. In the case of Non-Statutory Options, Stock Appreciation
Rights exercisable only for Stock or the lapse of restrictions or conditions
pertaining to shares of Restricted Stock, the Committee in its discretion, but
only upon the written request of a Participant exercising such an Award or
holding such Restricted Stock, may permit such Participant to satisfy federal
income tax withholding requirements occasioned by the exercise of such an Award
or the lapse of such restrictions or conditions by the surrender of shares
otherwise to be received on the exercise of such Award or with respect to which
such restrictions or conditions have lapsed. For purposes of this
subsection (b), such surrendered shares shall be valued at the closing price of
the Stock in the NASDAQ Global Market on the most recent trading day preceding
the date of exercise on which sales of the Stock occurred.
(c) Section 162(m)
Exemption. When granting any Long-Term Performance Award,
Restricted Stock Award or other Award, the Committee may designate such Award as
a Qualified Performance-Based Award, based upon a determination that the
recipient is or may be a Covered Employee with respect to such Award, and the
Committee wishes such Award to qualify for the Section 162(m) Exemption. The
payment of an Award designated as a Qualified Performance-Based Award to an
employee for any calendar year shall not exceed $3,000,000. The
maximum number of shares underlying Options and SARs that may be awarded to a
Covered Employee for any calendar year shall not exceed 500,000 shares and their
exercise price shall be the fair market value of the shares on the date of
grant. If an Award is so designated, the Committee shall establish
performance goals for such Award (other than Options or SARs which meet the
definition of a Qualified Performance-Based Award under Section 2(dd)) within
the time period prescribed by Section 162(m) of the Code based on one or more of
the following Qualified Performance Criteria: (1) earnings per share, (2) EBITDA
(earnings before interest, taxes, depreciation and amortization), (3) EBIT
(earnings before interest and taxes), (4) economic profit, (5) cash flow, (6)
sales growth, (7) net profit before tax (8) gross profit, (9) operating income
or profit, (10) return on equity, (11) return on assets, (12) return on capital,
(13) changes in working capital, or (14) shareholder
return. Qualified Performance Criteria may be expressed in terms of
an objective formula or standard that relates to Corporation-wide objectives or
objectives that relate to the performance of a Subsidiary or a division, region,
department or function within the Corporation of a Subsidiary, may be absolute
in their terms or measured against or in relationship to other companies
comparably, similarly or otherwise situated or other external or internal
measures and may include or exclude extraordinary charges, losses from
discontinued operations, restatements and accounting changes and other unplanned
special charges such as restructuring expenses, acquisitions, acquisition
expenses (including without limitation expenses related to goodwill and other
intangible assets), stock offerings, stock repurchases and strategic loan loss
provisions. Qualified Performance Criteria may, but need not, be based upon a
change or an increase or positive result.
14
(d) Restrictions on Transfers of
Shares. Although the Corporation presently intends to register
under applicable securities laws all shares acquired or received by Participants
under the Plan, the Corporation is not required to cause such shares to be
registered under the Securities Act of 1933 or the securities laws of any
State. Accordingly, the shares acquired or received may be
"restricted securities" as defined in Rule 144 under said Securities Act of 1933
or other rule or regulation of the Securities and Exchange
Commission. Any certificate evidencing any such shares may bear a
legend restricting the transfer of such shares, and the recipient may be
required to assert that the shares are being acquired for his or her own account
and not with a view to the distribution thereof as a condition to the granting
or exercise of an Award.
(e) Issuance of
Shares. Any obligation of the Corporation to issue shares
pursuant to the grant or exercise of any Award shall be conditioned on the
Corporation's ability at nominal expense to issue such shares in compliance with
all applicable statutes, rules or regulations of any governmental
authority. The Participant shall provide the Corporation with any
assurances or agreements which the Committee, in its sole discretion, shall deem
necessary or advisable in order that the issuance of such shares shall comply
with any such statutes, rules or regulations.
(f) Date of
Grant. The date on which each Award under the Plan shall be
considered as having been granted shall be the date on which the award is
authorized by the Committee, unless a later date is specified by the Committee;
provided, however, in the case of options intended to qualify as Incentive Stock
Options, the date of grant shall be determined in accordance with the
Code.
(g) Shareholder
Approval. The material terms of any Qualified
Performance-Based Award that have not been approved by the Shareholders must be
disclosed to and approved by the Shareholders before compensation is paid to a
Covered Employee pursuant to such Award, and such compensation shall be paid to
a Covered Employee only if such material terms are approved by the Shareholders,
all in accordance with Federal Income Tax Regulations Section
1.162-27(e)(4).
(h) Change in
Control.
(i)
Subject to the payment terms set forth in Section 16(i) below and further
subject to the terms of any individual employment or other similar agreement,
upon the occurrence of a Change in Control (as defined below) all Long-Term
Performance Awards shall be deemed fully vested and fully earned to the extent
of 100% of the target value of each such Award, and shall be paid in accordance
with the terms of subsection (i) of Section 16 of this Plan; and
(ii) If
the Participant's employment is terminated during the thirty-six (36) month
period following a Change in Control, other than (A) by the Corporation or a
Subsidiary for Cause (as defined below), (B) by reason of death or Disability,
or (C) by the Participant without Good Reason (as defined below), then, and only
then,
A) the
vesting periods of any and all Incentive Stock Options, Non-Statutory Options
and Stock Appreciation Rights granted and outstanding under the Plan shall
immediately be accelerated;
B) the
restrictions and/or conditions applicable to any and all Restricted Stock Awards
granted and outstanding under the Plan shall immediately lapse and be of no
further force and effect;
15
C) such
that each Participant holding any such Award shall have the immediate, fully
vested, right to purchase, receive and/or own without risk of forfeiture any
Stock that is the subject of the Award on the terms and conditions set forth in
this Plan and the particular agreement respecting such Award.
(iii) As
used herein, the term "Change in Control" means any of the following events,
provided that such event is not also a Management Buyout (as defined
below):
A) any
Person (as defined below) is or becomes the Beneficial Owner (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the Corporation
representing 35% or more of the combined voting power of the Corporation's then
outstanding voting securities generally entitled to vote in the election of
directors of the Corporation, provided, however, that no Change in Control will
be deemed to have occurred as a result of a change in ownership percentage
resulting solely from an acquisition of securities by the Corporation or a
transaction described in clause (i) of paragraph (C) below;
B) during
any period of two consecutive years, individuals who, as of the beginning of
such period constitute the Board (the "Incumbent Board") cease to constitute at
least a majority of the Board; provided, that any person becoming a director of
the Corporation subsequent to the beginning of such period whose election, or
nomination for election by the Corporation's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is a result of an actual or threatened election contest,
including but not limited to a consent solicitation, relating to the election of
directors of the Corporation and whose appointment or election was not approved
by at least a majority of the directors of the Corporation in office immediately
before any such contest;
C) there
is consummated a Merger of the Corporation with any other business entity, other
than (i) a Merger which would result in the securities of the Corporation
generally entitled to vote in the election of directors of the Corporation
outstanding immediately prior to such Merger continuing to represent (either by
remaining outstanding or by being converted into such securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding such securities under an employee benefit
plan of the Corporation or any Subsidiary at least 50% of the combined voting
power of the voting securities of the Corporation or such surviving entity or
any parent thereof outstanding immediately after such Merger, generally entitled
to vote in the election of directors of the Corporation or such surviving entity
or any parent thereof and, in the case of such surviving entity or any parent
thereof, of a class registered under Section 12 of the Act, or (ii) a Merger
effected to implement a recapitalization of the Corporation (or similar
transaction) in which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation representing 35% or more of the
combined voting power of the Corporation's then outstanding voting securities of
the Corporation generally entitled to vote in the election of directors of the
Corporation; or
D) the
stockholders of the Corporation approve a plan of complete liquidation or
dissolution of the Corporation or there is consummated the sale or disposition
by the Corporation of all or substantially all of the Corporation's assets,
other than a sale or disposition by the Corporation of all or substantially all
of the Corporation's assets to an entity where the outstanding securities
generally entitled to vote in the election of directors of the Corporation
immediately prior to the transaction continue to represent (either by remaining
outstanding or by being converted into such securities of the surviving entity
or any parent thereof) 50% or more of the combined voting power of the
outstanding voting securities of such entity generally entitled to vote in such
entity's election of directors immediately after such sale and of a class
registered under Section 12 of the Act.
16
(iv) As
used herein, the term "Person" shall have the meaning given in Section 3(a)(9)
of the Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (A) the Corporation or any of its direct or
indirect Subsidiaries, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation, (C) an underwriter temporarily
holding securities pursuant to an offering of such securities, and (D) a
corporation owned, directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions and with substantially the
same voting rights as their ownership and voting rights with respect to the
Corporation.
(v) As
used herein, the term "Management Buyout" means any event or transaction which
would otherwise constitute a Change in Control (a "Transaction") if, in
connection with the Transaction, the Participant, members of the Participant's
immediate family, and/or the "Participant's Affiliates" (as defined below)
participate, directly or beneficially, as an equity investor in, or have the
option or right to acquire, whether or not vested, equity interests of, the
acquiring entity or any of its Affiliates (as defined in Rule 12b-2 under the
Act) (the "Acquiror") having a percentage interest therein greater than 1%. For
purposes of the preceding sentence, a party shall not be deemed to have
participated as an equity investor in the Acquiror by virtue of (i) obtaining
beneficial ownership of any equity interest in the Acquiror as a result of the
grant to the party of an incentive compensation award under one or more
incentive plans of the Acquiror (including, but not limited to, the conversion
in connection with the Transaction of incentive compensation awards of the
Corporation into incentive compensation awards of the Acquiror), on terms and
conditions substantially equivalent to those applicable to other employees of
the Corporation at a comparable level as such party immediately prior to the
Transaction, after taking into account normal differences attributable to job
responsibilities, title and the like, or (ii) obtaining beneficial ownership of
any equity interest in the Acquiror on terms and conditions substantially
equivalent to those obtained in the Transaction by all other shareholders of the
Corporation or (iii) the party's interests in any tax-qualified defined benefit
or defined contribution pension or retirement plan in which such party or any
family member is a participant or beneficiary. The "Participant's Affiliates" at
any time consist of any entity in which the Participant and/or members of the
Participant's immediate family then own, directly or beneficially, or have the
option or right to acquire, whether or not vested, greater than 10% of such
entity's equity interests, and all then current directors and executive officers
of the Corporation who are members of any group, that also includes the
Participant, a member of the Participant's immediate family and/or any such
entity, in which the members have agreed to act together for the purpose of
participating in the Transaction. The Participant's immediate family consists of
the Participant's spouse, parents, children and grandchildren.
(vi) As
used herein, the term "Cause" means (A) the willful refusal by the Participant
to perform proper responsibilities of the Participant's position with the
Corporation or a Subsidiary, (B) a violation of law by the Participant which
adversely affects the assets, financial position or reputation of the
Corporation or a Subsidiary, or (C) a violation by the Participant of any code
of ethics, code of conduct or similar policy maintained by the Corporation or a
Subsidiary from time to time.
(vii) As
used herein, the term "Good Reason" means a substantial diminution in the nature
or status of the Participant's responsibilities from those in effect immediately
prior to the Change in Control.
(i) Payment Following a Change
in Control.
(i) Any
payment of a Long Term Performance Award required under paragraph (i) of
subsection (h) of this Section shall be made at the time when the Award would
otherwise have been payable by its terms, provided, however, that if the
Participant experiences a separation from service, as that term is defined under
Section 409A, during the twenty-four (24) month period following a Change in
Control, other than by reason of death or Disability, the Participant shall be
paid in accordance with subsection (i)(ii) of this Section. Solely
for purposes of this Section 16(i), a Change in Control shall not include any
transaction that would not be considered a change in the ownership or effective
control of the Corporation, or in the ownership of a substantial portion of the
assets of the Corporation, for purposes of Section 409A.
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(ii) Any
payment required to be made under subsection (i)(i) of this Section on account
of the Participant's separation from service shall be made on the date of
separation from service referred to in subsection (i) of this Section, unless
the Participant is a specified employee, as determined by the Corporation in
accordance with Section 409A, at the time of separation from service, in which
case payment will be made on the date that is six months and a day following
separation from service.
(j) Prohibition on
Assignment. The rights of Participants under this Plan are not
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of any
Participant. No Participant shall have any power or right to
transfer, assign, anticipate, hypothecate, mortgage, commute, modify or
otherwise encumber any of the benefits payable hereunder nor shall any of said
benefits be subject to seizure for the payment of any debts, judgments, alimony
or separate maintenance of any Participant, nor be transferable by operation of
law in the event of bankruptcy, insolvency or otherwise. In the event
that any Participant attempts assignment, commutation, hypothecation, transfer
or disposal of the benefits hereunder, such attempt shall be ineffective and
shall not be given effect.
(k) Intent and
Interpretation. The Corporation intends Statutory Options,
Non-Statutory Options and Stock Appreciation Rights issued under this Plan to be
exempt from Section 409A. The Corporation intends Long Term
Performance Awards issued under this Plan to comply with Section
409A. The Plan shall be interpreted and administered in accordance
with the foregoing statements of intent.
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