Attached files
| file | filename |
|---|---|
| 10-K - RC2 2009 FORM 10-K - RC2 CORP | rcrcform10k2009.htm |
| EX-21 - EX 21 TO RC2 2009 FORM 10-K - RC2 CORP | es21rcrcform10k2009.htm |
| EX-10.8 - EX 10.8 TO RC2 2009 FORM 10-K - RC2 CORP | ex108rcrcform10k2009.htm |
| EX-23.1 - EX 23.1 TO RC2 2009 FORM 10-K - RC2 CORP | ex231rcrcform10k2009.htm |
| EX-10.10 - EX 10.10 TO RC2 2009 FORM 10-K - RC2 CORP | ex101rcrcform10k2009.htm |
| EX-31.1 - EX 31.1 TO RC2 2009 FORM 10-K - RC2 CORP | ex311rcrcform10k2009.htm |
| EX-31.2 - EX 31.2 TO RC2 2009 FORM 10-K - RC2 CORP | ex312rcrcform10k2009.htm |
| EX-32.1 - EX 32.1 TO RC2 2009 FORM 10-K - RC2 CORP | ex321rcrcform10k2009.htm |
| EX-10.17 - EX 10.17 TO RC2 2009 FORM 10-K - RC2 CORP | ex1017rcrcform10k2009.htm |
| EX-10.18 - EX 10.18 TO RC2 2009 FORM 10-K - RC2 CORP | ex1018rcrcform10k2009.htm |
| EX-10.9 - EX 10.9 TO RC2 2009 FORM 10-K - RC2 CORP | ex109torcrcform10k2009.htm |
Exhibit 10.6
RC2
CORPORATION
2005
STOCK INCENTIVE PLAN
(as
amended and restated effective February 24, 2010)
Article
1. Establishment and Purpose
1.1 Establishment. RC2
Corporation, a Delaware corporation (the "Company"), hereby establishes a stock
incentive plan for employees and others providing services to the Company, as
described herein, which shall be known as the RC2 Corporation 2005 Stock
Incentive Plan (the "Plan"). It is intended that certain of the
options issued pursuant to the Plan to employees of the Company may constitute
incentive stock options within the meaning of section 422 of the Internal
Revenue Code, and that other options issued pursuant to the Plan shall
constitute nonstatutory options. The Board shall determine which
options are to be incentive stock options and which are to be nonstatutory
options and shall enter into option agreements with recipients
accordingly.
1.2 Purpose. The
purpose of the Plan is to provide a means for the Company to attract and retain
competent personnel and to provide to participating directors, officers and
other key employees long term incentives for high levels of performance by
providing them with a means to acquire a proprietary interest in the Company's
success.
Article
II. Definitions
2.1 Definitions. For
purposes of this Plan, the following terms shall be defined as
follows:
| (a) | "Award" means any Restricted Stock, Incentive Stock Option, Nonstatutory Option or Stock Appreciation Right awarded to a Grantee pursuant to this Plan. | |
| (b) | "Board" means the Board of Directors of the Company. | |
| (c) | "Cause" means the definition of Cause in Grantee's written employment agreement, if any, with the Company. If no such employment agreement or definition in such agreement exists, Cause means (i) breach by a Grantee of any covenant not to compete or confidentiality agreement with the Company, (ii) failure by a Grantee to substantially perform his duties to the reasonable satisfaction of the Board, (iii) serious misconduct by a Grantee which is demonstrably and substantially injurious to the Company, (iv) fraud or dishonesty by a Grantee with respect to the Company, (v) material misrepresentation by a Grantee to a stockholder or director of the Company or (vi) acts of negligence by a Grantee in performance of the Grantee's duties that are substantially injurious to the Company. The Board, by majority vote, shall make the determination of whether Cause exists. |
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| (d) | "Code" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. | |
| (e) | "Commission" means the Securities and Exchange Commission or any successor agency. | |
| (f) | "Committee" means the Committee provided for by Article IV hereof, which may be created at the discretion of the Board. | |
| (g) | "Company" means RC2 Corporation, a Delaware corporation. | |
| (h) | "Consultant" means any person or entity, including an officer or director of the Company who provides services (other than as an Employee) to the Company and includes a Qualified Director, as defined below. | |
| (i) | "Date of Exercise" means the date the Company receives notice, by a Grantee, of the exercise of an Option pursuant to section 8.9 of this Plan or a Stock Appreciation Right pursuant to Article X of this Plan. Such notice shall indicate the number of shares of Stock the Grantee intends to purchase upon exercise of an Option or the number of shares of Stock as to which the Grantee is exercising a Stock Appreciation Right, as applicable. | |
| (j) | "Employee" means any person, including an officer or director of the Company, who is employed by the Company or any subsidiary of the Company (as defined in section 424(f) of the Code). | |
| (k) | "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. | |
| (l) | "Fair Market Value" means the fair market value of Stock upon which an Option or Stock Appreciation Right is granted under this Plan, as determined by the Board. If the Stock is traded on an over-the-counter securities market or national securities exchange, "Fair Market Value" shall mean the closing sales price of the Stock reported on such over-the-counter market or such national securities exchange on the applicable date or, if no sales of Stock have been reported for that date, on the next preceding date for which sales where reported. |
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| (m) | "Grantee" means an Employee or Consultant holding an Award under the Plan. | |
| (n) | "Incentive Stock Option" means an Option granted under this Plan which is intended to qualify as an "incentive stock option" within the meaning of section 422 of the Code. | |
| (o) | "IRS" means the Internal Revenue Service, or any successor agency. | |
| (p) | "Nonstatutory Option" means an Option granted under this Plan which is not intended to qualify as an incentive stock option within the meaning of section 422 of the Code. Nonstatutory Options may be granted at such times and subject to such restrictions as the Board shall determine without conforming to the statutory rules of section 422 of the Code applicable to incentive stock options. | |
| (q) | "Option" means the right, granted under Article VIII of this Plan, to purchase Stock of the Company at the option price for a specified period of time. For purposes of this Plan, an Option may be an Incentive Stock Option or a Nonstatutory Option. | |
| (r) | "Parent Corporation" shall have the meaning set forth in section 424(e) of the Code with the Company being treated as the employer corporation for purposes of this definition. | |
| (s) | "Qualified Director" means a director who is both (a) a "Non-Employee Director" as defined in Rule 16b-3(b)(3)(i), as promulgated by the Commission under the Exchange Act, or any successor definition adopted by the Commission, and (b) an "Outside Director" as defined by section 162(m) of the Code and the regulations promulgated thereunder, or any successor definition adopted by the IRS. | |
| (t) | "Restricted Stock" means an award of Stock granted under Article IX of this Plan. | |
| (u) | "Rule 16b-3" means Rule 16b-3, as promulgated by the Commission under section 16(b) of the Exchange Act, as amended from time to time. |
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| (v) | "Significant Stockholder" means an individual who, within the meaning of section 422(b)(6) of the Code, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company. In determining whether an individual is a Significant Stockholder, an individual shall be treated as owning stock owned by certain relatives of the individual and certain stock owned by corporations in which the individual is a partner, and estates or trusts of which the individual is a beneficiary, all as provided in section 424(d) of the Code. | |
| (w) | "Stock" means the Common Stock, par value $.01 per share, of the Company. | |
| (x) | "Stock Appreciation Right" means a right granted under Article X of this Plan. |
2.2 Gender and
Number. Except when otherwise indicated by the context, any
masculine terminology when used in this Plan also shall include the feminine
gender and the definition of any term herein in the singular shall also include
the plural.
Article
III. Eligibility and Participation
3.1 Eligibility and
Participation. All Employees are eligible to participate in
this Plan and receive Awards of Restricted Stock, Incentive Stock Options,
Nonstatutory Options and/or Stock Appreciation Rights. All
Consultants are eligible to participate in this Plan and receive Awards of
Restricted Stock, Nonstatutory Options and/or Stock Appreciation Rights
hereunder. Grantees shall be selected by the Board from among those
Employees and Consultants who, in the opinion of the Board, are in a position to
contribute materially to the Company's continued growth and development and to
its long-term financial success.
Article
IV. Administration
4.1 Administration. The
Board shall be responsible for administering the Plan.
The Board
is authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company, and to
make all other determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to the express provisions of the
Plan. Determinations, interpretations or other actions made or taken
by the Board pursuant to the provisions of this Plan shall be final and binding
and conclusive for all purposes and upon all persons.
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At the
discretion of the Board, this Plan may be administered by a Committee which
shall be a compensation committee of the Board, consisting solely of two or more
Qualified Directors. The members of such Committee may be directors
who are eligible to receive Awards under this Plan, but Awards may be granted to
such members only by action of the full Board and not by action of the
Committee. Such Committee shall have full power and authority,
subject to the limitations of the Plan and any limitations imposed by the Board,
to construe, interpret and administer this Plan and to make determinations which
shall be final, conclusive and binding upon all persons, including, without
limitation, the Company, the stockholders, the directors and any persons having
any interests in any Awards which may be granted under this Plan and, by
resolution providing for the creation and issuance of any such Award, to select
the Employees and Consultants to whom Awards may from time to time be granted,
to determine what form of Awards are to be granted under this Plan, and to
determine the terms and conditions of any Award granted under this Plan
(including, but not limited to, the number of shares, the share price, any
restriction or limitation and any vesting acceleration or forfeiture waiver
regarding any Award), which terms and conditions shall, in every case, be set
forth or incorporated by reference in the instrument or instruments evidencing
such Award, and shall be consistent with the provisions of the
Plan.
The Board
may from time to time remove members from, or add members to, the
Committee. The Board may terminate the Committee at any
time. Vacancies on the Committee, howsoever caused, shall be filled
by the Board. The Committee shall select one of its members as
Chairman, and shall hold meetings at such times and places as the Chairman may
determine. A majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by all of the members of the
Committee, shall be the valid acts of the Committee. A quorum shall
consist of two-thirds of the members of the Committee.
Where the
Committee has been created by the Board, references herein to actions to be
taken by the Board shall be deemed to refer to the Committee as well, except
where limited by this Plan or by the Board.
The Board
shall have all of the enumerated powers of the Committee but shall not be
limited to such powers. No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to the
Plan or any Award granted under it.
4.2 Special Provisions for
Grants to Officers or Directors. Rule 16b-3 provides that the
grant of a stock option, stock appreciation right or restricted stock to a
director or officer of a company subject to the Exchange Act will be exempt from
the provisions of section 16(b) of the Exchange Act if the conditions set forth
in Rule 16b-3 are satisfied. Unless otherwise specified by the Board,
grants of Awards hereunder to individuals who are officers or directors of the
Company for purposes of section 16(b) of the Exchange Act shall be made in a
manner that satisfies the conditions of Rule 16b-3.
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Article V. Stock
Subject to the Plan
5.1 Number. The
total number of shares of Stock hereby made available and reserved for issuance
under the Plan shall be 2,200,000, of which no more than 125,642 shares of
stock may be issued in the form of Restricted Stock under Article
IX. The aggregate number of shares of Stock available under this Plan
shall be subject to adjustment as provided in section 5.3. The total
number of shares of Stock may be authorized but unissued shares of Stock, or
shares acquired by purchase as directed by the Board from time to time in its
discretion, to be used for issuance pursuant to Awards granted
hereunder.
5.2 Unused Stock; Stock
Appreciation Rights. If an Option or Stock Appreciation Right
shall expire or terminate for any reason without having been exercised in full,
the unissued shares of Stock subject thereto shall (unless the Plan shall have
terminated) become available for other Awards under the Plan. If any
shares of Stock are subject to any Award of Restricted Stock are forfeited, such
shares of Stock shall (unless the Plan shall have terminated) become available
for other Awards under the Plan. To the extent any Stock Appreciation
Right is to be settled in cash or any other property other than Stock, the
shares of Stock subject to such Stock Appreciation Right shall not count towards
the number of shares of Stock available for other Awards under the
Plan.
5.3 Adjustment in
Capitalization. In the event of any change in the outstanding
shares of Stock by reason of a stock dividend or split, recapitalization,
reclassification or other similar corporate change, the aggregate number of
shares of Stock set forth in section 5.1 shall be appropriately adjusted by the
Board, whose determination shall be conclusive; provided, however, that
fractional shares shall be rounded to the nearest whole share. In any
such case, the number and kind of shares that are subject to any Option or Stock
Appreciation Right (including any Option or Stock Appreciation Right outstanding
after termination of employment) and the Option or Stock Appreciation Right
price per share shall be proportionately and appropriately adjusted without any
change in the aggregate Option or Stock Appreciation Right price.
Article
VI. Limitations
6.1 Incentive Stock
Options. In the cases of Incentive Stock Options, the total
Fair Market Value (determined at the date of grant) of shares of Stock with
respect to which Incentive Stock Options are exercisable for the first time by
the Grantee
during any calendar year under all plans of the Company under which incentive
stock options may be granted (and all such plans of any Parent Corporation and
any subsidiary corporations of the Company) shall not exceed
$100,000. (Hereinafter, this requirement is sometimes referred to as
the "$100,000 Limitation.") Nothing in this section shall be deemed
to prevent the grant of Options permitting exercise in excess of the maximums
established hereby where such excess amount is treated as a Nonstatutory
Option.
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6.2 Section 162(m)
Limitations. The following limitations shall apply to grants
of Awards under this Plan:
(a) No
individual Grantee shall be granted, in any fiscal year of the Company, Awards
with respect to more than 250,000 shares of Stock in total.
(b) In
connection with his or her initial service, a Grantee may be granted Awards with
respect to up to an additional 50,000 shares of Stock which shall not count
against the limit set forth in section 6.2(a) above.
(c) The
foregoing limitations shall be adjusted proportionately in connection with any
change in the Company's capitalization as described in
section 5.3
(d) If
an Award is cancelled in the same fiscal year of the Company in which it was
granted (other than in connection with a transaction described in Article XIV),
the cancelled Award will be counted against the limits set forth in sections
6.2(a) and (b) above. For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
Article
VII. Duration of the Plan
7.1 Duration of the
Plan. The Plan shall be in effect until May 6,
2015. Any Awards outstanding at the end of such period shall remain
in effect in accordance with their terms.
Article
VIII. Terms of Stock Options
8.1 Grant of
Options. Subject to section 5.1 and Article VI, Options may be
granted to Employees or Consultants at any time and from time to time as
determined by the Board; provided, however, that Consultants may receive only
Nonstatutory Options and may not receive Incentive Stock Options. The
Board shall have complete discretion in determining the number of Options
granted to each Grantee. In making such determinations, the Board may
take into account the nature of services rendered by such Employee or
Consultant, their present and potential contributions to the Company, and such
other factors as the Board in its discretion shall deem relevant. The
Board shall also determine whether an Option is to be an Incentive Stock Option
or a Nonstatutory Option.
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8.2 No Tandem
Options. Where an Option granted under this Plan is intended
to be an Incentive Stock Option, the Option shall not contain terms pursuant to
which the exercise of the Option would affect the Grantee's right to exercise
another Option, or vice versa, such that the Option intended to be an Incentive
Stock Option would be deemed a tandem stock option within the meaning of the
regulations under section 422 of the Code.
8.3 Option Agreement; Terms and
Conditions to Apply Unless Otherwise Specified. As determined
by the Board on the date of grant, each Option shall be evidenced by an Option
agreement (the "Option Agreement") that includes the nontransferability
provisions required by section 12.2 hereof and specifies: whether the
Option is an Incentive Stock Option or a Nonstatutory Option; the Option price;
the duration of the Option; the number of shares of Stock to which the Option
applies; any vesting or exercisability restrictions which the Board may impose;
in the case of an Incentive Stock Option, a provision implementing the $100,000
Limitation; and any other terms and conditions as shall be determined by the
Board at the time of grant of the Option.
All
Option Agreements shall incorporate the provisions of this Plan by reference,
with certain provisions to apply depending upon whether the Option Agreement
applies to an Incentive Stock Option or to a Nonstatutory Option.
8.4 Option
Price. No Option granted pursuant to this Plan shall have an
Option price that is less than the Fair Market Value of Stock on the date the
Option is granted. Incentive Stock Options granted to Significant
Stockholders shall have an Option price of not less than 110 percent of the Fair
Market Value of Stock on the date of grant.
8.5 Term of
Options. Each Option shall expire at such time as the Board
shall determine when it is granted, provided, however, that no Option shall be
exerciseable later than the tenth anniversary date of its grant.
8.6 Exercise of
Options. Options granted under this Plan shall be exercisable
at such times and be subject to such restrictions and conditions as the Board
shall in each instance approve, which need not be the same for all
Grantees.
8.7 Payment. Payment
for all shares of Stock shall be made at the time that an Option, or any part
thereof, is exercised, and no shares shall be issued until full payment therefor
has been made. Such payment may be made in cash, outstanding shares
of Stock, in combinations thereof, or any other method of payment approved by
the Board; provided, however, that (i) the deposit of any withholding tax shall
be made in accordance with applicable law and (ii) that such shares of Stock
used to pay the exercise price have been held by the Participant for at least
six months prior to the exercise date. If shares of Stock are being
used in part or full payment for the shares to be acquired upon exercise of the
Option, such shares shall be valued for the purpose of such exchange as of the
date of exercise of the Option at the Fair Market Value of the
shares. Any certificates evidencing shares of Stock used to pay the
purchase price shall be accompanied by stock powers duly endorsed in blank by
the registered holder of the certificate (with signatures thereon
guaranteed). In the event the certificates tendered by the holder in
such payment cover more shares than are required for such payment, the
certificate shall also be accompanied by instructions from the holder to the
Company's transfer agent with regard to the disposition of the balance of the
shares covered thereby.
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8.8 Prohibition on
Repricing. Except for adjustments pursuant to section 5.3
and Article XIV, the per share Option price for any Option granted pursuant to
this Plan may not be decreased after the date of grant nor may an outstanding
Option be surrendered to the Company as consideration for the grant of a new
Option with a lower Option price without the approval of the Company's
stockholders.
8.9 Written
Notice. A Grantee wishing to exercise an Option shall give
written notice to the Company, in the form and manner prescribed by the
Board. Full payment for the Options exercised, as provided in section
8.7 above, must accompany the written notice.
8.10 Issuance of Stock
Certificate. As soon as practicable after the receipt of
written notice and payment, the Company shall deliver to the Grantee or to a
nominee of the Grantee a certificate or certificates for the requisite number of
shares of Stock.
8.11 Privileges of a
Stockholder. A Grantee or any other person entitled to
exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such Stock.
8.12 Termination of Employment or
Services. Except as otherwise expressly specified by the
Board, all Options granted under this Plan shall be subject to the following
termination provisions.
(a) Death. If
a Grantee's employment in the case of an Employee, or provision of services as a
Consultant in the case of a Consultant, terminates by reason of death, the
Option may thereafter be exercised at any time prior to the expiration date of
the Option or within 12 months after the date of such death, whichever period is
the shorter, by the person or persons entitled to do so under the Grantee's will
or, if the Grantee shall fail to make a testamentary disposition of an Option or
shall die intestate, the Grantee's legal representative or
representatives. The Option shall be exercisable only to the extent
that such Option was exercisable as of the date of death.
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(b) Termination Other Than for
Cause or Due to Death. In the event of a Grantee's termination
of employment in the case of an Employee, or termination of the provision of
services as a Consultant in the case of a Consultant, other than for Cause or by
reason of death, the Grantee may exercise such portion of his Option as was
exercisable by him at the date of such termination (the "Termination Date") at
any time within three months of the Termination Date; provided, however, that
where the Grantee is an Employee, and is terminated due to disability within the
meaning of Code section 422, he may exercise such portion of his Option as was
exercisable by him on his Termination Date within one year of his Termination
Date. In any event, the Option cannot be exercised after the
expiration of the original term of the Option. Options not exercised
within the applicable period specified above shall terminate.
In the
case of an Employee, a change of duties or position within the Company, if any,
shall not be considered a termination of employment for purposes of this
Plan. The Option Agreements may contain such provisions as the Board
shall approve with respect to the effect of approved leaves of absence upon
termination of employment.
(c) Termination for
Cause. In the event of a Grantee's termination of employment
in the case of an Employee, or termination of the provision of services as a
Consultant in the case of a Consultant, which termination is by the Company for
Cause, any Option or Options held by him under the Plan, to the extent not
exercised before such termination, shall forthwith terminate.
Article
IX. Restricted Stock
9.1 Grant of Restricted
Stock. Subject to section 5.1 and Article VI, shares of
Restricted Stock may be granted to Employees or Consultants at any time and from
time to time as determined by the Board. The Board shall have
complete discretion in determining the number of shares of Restricted Stock
granted to each Grantee, the time or times within which such Awards may be
subject to forfeiture and any other terms and conditions of the Awards, in
addition to those contained in section 9.3. The Board may condition
the grant of Restricted Stock upon the attainment of specified performance goals
or such other factors or criteria as the Board shall determine. The
provisions of Restricted Stock awards need not be the same with respect to each
recipient. In making such determinations, the Board may take into
account the nature of services rendered by such Employee or Consultant, their
present and potential contributions to the Company, and such other factors as
the Board in its discretion shall deem relevant.
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9.2 Awards and
Certificates. Each Grantee receiving an Award of Restricted
Stock shall be issued a certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Grantee and shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such award, substantially in the following
form:
"The transferability of this
certificate and the shares of stock represented hereby are subject to the terms
and conditions (including forfeiture) of the RC2 Corporation Incentive Stock
Plan and a Restricted Stock Agreement. Copies of such Plan and
Agreement are on file at the offices of RC2 Corporation, 1111 West 22nd
Street, Oak Brook, Illinois 60523."
The Board may require that the
certificates evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed and that, as a condition of any Award of
Restricted Stock, the Grantee shall have delivered a stock power, endorsed in
blank, relating to the Stock covered by such award.
9.3 Terms and
Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:
(a) Subject to the
provisions of the Plan and the Restricted Stock Agreement referred to in section
9.3(f), during a period set by the Board, commencing with the date of such award
(the "Restriction Period"), the Grantee shall not be permitted to sell, assign,
transfer, pledge or otherwise encumber shares of Restricted
Stock. Within these limits, the Board may provide for the lapse of
such restrictions in installments and may accelerate or waive such restrictions,
in whole or in part, based on service, performance and such other factors or
criteria as the Board may determine.
(b) Except as
provided in this section and section 9.3(a), the Grantee shall have, with
respect to the shares of Restricted Stock, all of the rights of a stockholder of
the Company, including the right to vote the shares and the right to receive any
cash dividends. Unless otherwise determined by the Board, cash
dividends shall be automatically deferred and reinvested in additional
Restricted Stock and dividends payable in Stock shall be paid in the form of
Restricted Stock.
(c) Except to the
extent otherwise provided in the applicable Restricted Stock Agreement and
sections 9.3(a) and (d), upon termination of a Grantee's employment for any
reason during the Restriction Period, all shares still subject to restriction
shall be forfeited by the Grantee.
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(d) In the event of
hardship or other special circumstances of a Grantee whose employment is
involuntarily terminated (other than for Cause), the Board may waive in whole or
in part any or all remaining restrictions with respect to such Grantee's shares
of Restricted Stock.
(e) If and when the
Restriction Period expires without a prior forfeiture of the Restricted Stock
subject to such Restriction Period, unlegended certificates for such shares
shall be delivered to the Grantee.
(f) As determined by
the Board on the date of grant, each Award of Restricted Stock shall be
evidenced by a written agreement in a form to be established by the Board (the
"Restricted Stock Agreement") that specifies: the duration of the
Restricted Period; the number of shares of Restricted Stock granted; any vesting
or other restrictions which the Board may impose, and any other terms and
conditions as shall be determined by the Board at the time of grant of the
Restricted Stock. All Restricted Stock Agreements shall incorporate
the provisions of this Plan by reference.
Article X. Stock
Appreciation Rights
10.1 Grant of Stock Appreciation
Rights. Subject to section 5.1 and Article VI, Stock
Appreciation Rights may be granted to Employees or Consultants at any time and
from time to time as determined by the Board. The Board shall have
complete discretion in determining the number of Stock Appreciation Rights
granted to each Grantee. In making such determinations, the Board may
take into account the nature of services rendered by such Employee or
Consultant, their present and potential contributions to the Company, and such
other factors as the Board in its discretion shall deem relevant.
10.2 Terms and
Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions as shall be determined by the Board, including the
following:
(a) As
determined by the Board on the date of grant, each Stock Appreciation Right
shall be evidenced by a Stock Appreciation Right grant agreement (the "Stock
Appreciation Right Agreement") in a form to be established by the Board that
specifies the exercise price, term, conditions of exercise and such other terms
as the Board shall determine. All Stock Appreciation Right Agreements
shall incorporate the provisions of this Plan by reference.
(b) No
Stock Appreciation Right granted pursuant to this Plan shall have an exercise
price that is less than the Fair Market Value of Stock on the date the Stock
Appreciation Right is granted.
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(c) Each
Stock Appreciation Right shall expire at such time as the Board shall determine
when it is granted, provided, however, that no Stock Appreciation Right shall be
exerciseable later than the tenth anniversary date of its grant.
(d) Stock
Appreciation Rights granted under this Plan shall be exercisable at such times
and be subject to such restrictions and conditions as the Board shall in each
instance approve, which need not be the same for all Grantees. Upon
exercise of a Stock Appreciation Right, a Grantee will be entitled to receive
payment from the Company in an amount determined by multiplying (A) the
difference between the Fair Market Value on the Date of Exercise over the
exercise price of the Stock Appreciation Right, times (B) the number of
shares of Stock with respect to which the Stock Appreciation Right is
exercised. Payment upon exercise of a Stock Appreciation Right shall
be made in shares of Stock (based on the Fair Market Value on the Date of
Exercise), cash, other property or any combination thereof, as provided in the
Stock Appreciation Right Agreement for any such grant of a Stock Appreciation
Right.
10.3 Exercise of a Stock
Appreciation Right.
(a) Any
Stock Appreciation Right granted hereunder shall be exercisable according to the
terms of the Plan and at such times and under such conditions as are determined
by the Board and set forth in the Stock Appreciation Right
Agreement. If applicable, a Stock Appreciation Right may not be
exercised for a fraction of a share.
(b) A
Stock Appreciation Right shall be deemed exercised when the Company receives
written or electronic notice of exercise (in accordance with the Stock
Appreciation Right Agreement) from the person entitled to exercise the Stock
Appreciation Right. If applicable, shares issued upon exercise of a
Stock Appreciation Right shall be issued in the name of the Grantee or, if
requested by the Grantee, in the name of the Grantee and his or her
spouse. If applicable, until the shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Stock subject to
the Stock Appreciation Right, notwithstanding the exercise of the Stock
Appreciation Right. If applicable, the Company shall issue (or cause
to be issued) such shares promptly after the Stock Appreciation Right is
exercised.
10.4 Prohibition on
Repricing. Except for adjustments pursuant to section 5.3
and Article XIV, the per share exercise price for any Stock Appreciation Right
granted pursuant to this Plan may not be decreased after the date of grant nor
may an outstanding Stock Appreciation Right be surrendered to the Company as
consideration for the grant of a new Stock Appreciation Right with a lower
exercise price without the approval of the Company's
stockholders.
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10.5 Privileges of a
Stockholder. A Grantee or any other person entitled to
exercise a Stock Appreciation Right under this Plan shall not have stockholder
privileges with respect to any Stock covered by the Stock Appreciation Right
until the date of issuance of a stock certificate for such Stock.
10.6 Termination of Employment or
Services. Except as otherwise expressly specified by the
Board, all Stock Appreciation Rights granted under this Plan shall be subject to
the following termination provisions.
(a) Death. If
a Grantee's employment in the case of an Employee, or provision of services as a
Consultant in the case of a Consultant, terminates by reason of death, the Stock
Appreciation Right may thereafter be exercised at any time prior to the
expiration date of the Stock Appreciation Right or within 12 months after the
date of such death, whichever period is the shorter, by the person or persons
entitled to do so under the Grantee's will or, if the Grantee shall fail to make
a testamentary disposition of a Stock Appreciation Right or shall die intestate,
the Grantee's legal representative or representatives. The Stock
Appreciation Right shall be exercisable only to the extent that such Stock
Appreciation Right was exercisable as of the date of death.
(b) Termination Other Than for
Cause or Due to Death. In the event of a Grantee's termination
of employment in the case of an Employee, or termination of the provision of
services as a Consultant in the case of a Consultant, other than for Cause or by
reason of death, the Grantee may exercise such portion of his Stock Appreciation
Right as was exercisable by him at the date of such termination (the
"Termination Date") at any time within three months of the Termination Date;
provided, however, that where the Grantee is an Employee, and is terminated due
to disability within the meaning of Code section 422, he may exercise such
portion of his Stock Appreciation Right as was exercisable by him on his
Termination Date within one year of his Termination Date. In any
event, the Stock Appreciation Right cannot be exercised after the expiration of
the original term of the Stock Appreciation Right. Stock Appreciation
Rights not exercised within the applicable period specified above shall
terminate.
In the
case of an Employee, a change of duties or position within the Company, if any,
shall not be considered a termination of employment for purposes of this
Plan. The Stock Appreciation Right Agreements may contain such
provisions as the Board shall approve with respect to the effect of approved
leaves of absence upon termination of employment.
(c) Termination for
Cause. In the event of a Grantee's termination of employment
in the case of an Employee, or termination of the provision of services as a
Consultant in the case of a Consultant, which termination is by the Company for
Cause, any Stock Appreciation Right or Stock Appreciation Rights held by him
under the Plan, to the extent not exercised before such termination, shall
forthwith terminate.
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Article
XI. Change of Control Provisions
11.1 Impact of
Event. Notwithstanding any other provision of the Plan to the
contrary, in the event of a Change of Control (as defined in section 10.2), the
Board may, in its sole and absolute discretion (or, if required pursuant to any
Grantee's written employment agreement, the Board shall for such Grantee), cause
any Options and Stock Appreciation Rights outstanding as of the date such Change
in Control is determined to have occurred and not then exercisable and vested to
become fully exercisable and vested to the full extent of the original grant or
cause all restrictions applicable to any Restricted Stock to lapse and such
Restricted Stock to become free of all restrictions and fully vested to the full
extent of the original grant.
11.2 Definition of Change of
Control. For purposes of the Plan, a "Change of Control" shall
mean, as to any Grantee, the definition of Change of Control in such Grantee's
written employment agreement or, if no such Employment Agreement or definition
in such agreement exists, Change of Control shall mean the happening of any of
the following events:
(a) the
acquisition by any individual, entity or group (within the meaning of section
13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (i) the then outstanding shares of common stock of Company (the
"Outstanding Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of Company entitled to vote generally in the
election of directors (the "Outstanding Voting Securities"); provided, however,
that the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from Company, (ii) any
acquisition by Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by Company or any corporation controlled
by Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of section 10.2(c);
or
(b) individuals
who, as of May 6, 2005, constitute the Board of Directors of Company (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board of Directors of Company; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by Company's stockholders, 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 occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Directors of Company; or
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(c) approval
by the stockholders of Company of a reorganization, merger or consolidation (a
“Business Combination”), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Common Stock
and Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns Company through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee benefit plan (or
related trust) of Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the approval of the initial agreement, or of the action of the Board of
Directors of Company, providing for such Business Combination; or
(d) approval
by the stockholders of Company of (i) a complete liquidation or dissolution
of Company or (ii) the sale or other disposition of all or substantially
all of the assets of Company, other than to a corporation, with respect to which
following such sale or other disposition, [a] more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Common Stock and Outstanding Voting Securities, as the case may be,
[b] less than 30% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by any Person
(excluding any employee benefit plan (or related trust) of Company or such
corporation), except to the extent that such Person owned 30% or more of the
Outstanding Common Stock or Outstanding Voting Securities prior to the sale or
disposition, and [c] at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the time of
the approval of the initial agreement, or of the action of the Board of
Directors of Company, providing for such sale or other disposition of assets of
Company or were elected, appointed or nominated by the Board of Directors of
Company.
16
Article
XII. Rights of Grantees
12.1 Service. Nothing
in this Plan shall interfere with or limit in any way the right of the Company
to terminate any Employee's employment, or any Consultant's services, at any
time, nor confer upon any Employee any right to continue in the employ of the
Company, or upon any Consultant any right to continue to provide services to the
Company.
12.2 Nontransferability. Options
and Stock Appreciation Rights granted under this Plan shall be nontransferable
by the Grantee, other than by will or the laws of descent and distribution, and
shall be exercisable during the Grantee's lifetime only by the
Grantee.
Article
XIII. Amendment, Modification
and Termination of the
Plan
13.1 Amendment, Modification, and
Termination of the Plan.
The Board
may at any time terminate and from time to time may amend or modify the
Plan. The Company shall obtain the approval of the stockholders to
any amendment to this Plan to the extent necessary to comply with any applicable
laws or the rules of any stock exchange or quotation system on which the Stock
is listed or quoted. No amendment, modification or termination of the
Plan shall in any manner adversely affect any outstanding Award under the Plan
without the consent of the Grantee holding the Award.
Article
XIV. Acquisition, Merger and Liquidation
14.1 Acquisition. Notwithstanding
anything herein to contrary, in the event that an Acquisition (as defined below)
occurs with respect to the Company, the Company shall have the option, but not
the obligation, to cancel Options and Stock Appreciation Rights outstanding as
of the effective date of Acquisition, whether or not such Options or Stock
Appreciation Rights are then exercisable, in return for payment to the Grantees
for each Option and Stock Appreciation Right of an amount equal to a reasonable,
good faith estimate of an amount (hereinafter the "Spread") equal to the
difference between the net amount per share payable in the Acquisition, or as a
result of the Acquisition, less the exercise price per share of the Option or
Stock Appreciation Right. In estimating the Spread, appropriate
adjustments to give effect to the existence of the Options and Stock
Appreciation Rights shall be made, such as deeming the Options and Stock
Appreciation Rights to have been exercised, with the Company receiving the
exercise price payable under the Options, and treating the shares receivable
upon exercise of the Options and Stock Appreciation Rights as being outstanding
in determining the net amount per share. For purposes of this
section, an "Acquisition" shall mean any transaction in which substantially all
of the Company's assets are acquired or in which a controlling amount of the
Company's outstanding shares are acquired, in each case by a single person or
entity or an affiliated group of persons and/or entities. For
purposes of this section a controlling amount shall mean more than 50% of the
issued and outstanding shares of stock of the Company. The Company
shall have such an option regardless of how the Acquisition is effectuated,
whether by direct purchase, through a merger or similar corporate transaction,
or otherwise. In cases where the Acquisition consists of the
acquisition of assets of the Company, the net amount per share shall be
calculated on the basis of the net amount receivable with respect to shares upon
a distribution and liquidation by the Company after giving effect to expenses
and charges, including but not limited to taxes, payable by the Company before
the liquidation can be completed.
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Where the
Company does not exercise its option under this section 14.1, the remaining
provisions of this Article XIV shall apply, to the extent
applicable.
14.2 Merger or
Consolidation. Subject to section 14.1 and to any
required action by the stockholders, if the Company shall be the surviving
corporation in any merger or consolidation, any Option or Stock Appreciation
Right granted hereunder shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to the Option or Stock
Appreciation Right would have been entitled in such merger or
consolidation.
14.3 Other
Transactions. Subject to section 14.1, dissolution or a
liquidation of the Company or a merger and consolidation in which the Company is
not the surviving corporation shall cause every Option and Stock Appreciation
Right outstanding hereunder to terminate as of the effective date of the
dissolution, liquidation, merger or consolidation. However, the
Grantee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Grantee an
option or stock appreciation right, as applicable (the "Substitute Award") on
terms and conditions both as to number of shares and otherwise, which will
substantially preserve to the Grantee the rights and benefits of the Option or
Stock Appreciation Right outstanding hereunder granted by the Company, or (ii)
shall have the right immediately prior to such dissolution, liquidation, merger,
or consolidation to exercise any unexercised Options and Stock Appreciation
Rights whether or not then exercisable, subject to the provisions of this
Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Grantee has been offered a firm commitment and whether the
tendered Substitute Award will substantially preserve to the Grantee the rights
and benefits of the Options and Stock Appreciation Rights outstanding
hereunder. In any event, any Substitute Award for an Incentive Stock
Option shall comply with the requirements of the Code.
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Article XV. Securities
Registration
15.1 Securities
Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Awards or any Stock with respect to which
an Award may be or shall have been granted or exercised, or to qualify any such
Awards or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Grantee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Awards or
Stock.
Unless
the Company has determined that the following representation is unnecessary,
each person exercising an Option or Stock Appreciation Right or receiving an
Award of Restricted Stock under the Plan may be required by the Company, as a
condition to the issuance of the shares pursuant to exercise of the Option or
Stock Appreciation Right or Award, to make a representation in writing (a) that
he is acquiring such shares for his own account for investment and not with a
view to, or for sale in connection with, the distribution of any part thereof,
and (b) that before any transfer in connection with the resale of such shares,
he will obtain the written opinion of counsel to the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The
Company may also require that the certificates representing such shares contain
legends reflecting the foregoing.
Article XVI. Tax
Withholding
16.1 Tax
Withholding. Whenever shares of Stock, cash or other property
are to be issued in satisfaction of Options or Stock Appreciation Rights
exercised under this Plan or pursuant to an Award of Restricted Stock, the
Company shall have the power to require the recipient of the Stock, cash or
other property to remit to the Company an amount sufficient to satisfy federal,
state and local withholding tax requirements. Unless otherwise
determined by the Board, withholding obligations may be settled with Stock,
including Stock that is part of the award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company, its subsidiaries
and affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the
participant.
19
Article
XVII. Indemnification
17.1 Indemnification. To
the extent permitted by law, each person who is or shall have been a member of
the Board shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him in connection with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may be involved by reason
of any action taken or failure to act under the Plan and against and from any
and all amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its own expense, to handle and defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
articles of incorporation or bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.
Article
XVIII. Requirements of Law
18.1 Requirements of
Law. The granting of Awards and the issuance of shares of
Stock shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
18.2 Governing
Law. The Plan and all agreements hereunder shall be construed
in accordance with and governed by the laws of the state of
Delaware.
Article
XIX. Compliance with Code
19.1 Compliance with
Code. Incentive Stock Options granted hereunder are intended
to qualify as "incentive stock options" under Code section 422. If
any provision of this Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with Incentive Stock
Options granted under this Plan being treated as incentive stock options under
the Code. Awards granted hereunder to any person who is a "covered
employee" under Code section 162(m) at any time when the Company is subject to
Code section 162(m) are intended to qualify as performance-based compensation
within the meaning of Code section 162(m)(4)(C). If any provision of
this Plan is susceptible to more than one interpretation, such interpretation
shall be given thereto as is consistent with Awards granted under this Plan to
such "covered employees" being treated as performance-based compensation under
Code section 162(m).
20
This Plan
was:
Approved
and adopted by the Board of Directors and the stockholders of the Company
effective May 6, 2005.
Approved
and adopted, as amended and restated, by the Board of Directors and stockholders
of the Company effective May 8, 2008.
Approved
and adopted, as amended and restated, by the Board of Directors of the Company
effective February 25, 2009.
Approved
and adopted, as amended and restated, by the Board of Directors of the Company
effective February 24, 2010.
21