Attached files
| file | filename |
|---|---|
| 10-K - BOULDER BRANDS, INC. | v176609_10k.htm |
| EX-23 - BOULDER BRANDS, INC. | v176609_ex23.htm |
| EX-21 - BOULDER BRANDS, INC. | v176609_ex21.htm |
| EX-31.2 - BOULDER BRANDS, INC. | v176609_ex31-2.htm |
| EX-31.1 - BOULDER BRANDS, INC. | v176609_ex31-1.htm |
| EX-10.2 - BOULDER BRANDS, INC. | v176609_ex10-2.htm |
| EX-10.9 - BOULDER BRANDS, INC. | v176609_ex10-9.htm |
| EX-32.1 - BOULDER BRANDS, INC. | v176609_ex32-1.htm |
| EX-32.2 - BOULDER BRANDS, INC. | v176609_ex32-2.htm |
Exhibit
10.5
SECOND
AMENDED AND RESTATED SMART BALANCE, INC.
STOCK
AND AWARDS PLAN
Section
1. Purpose
and Construction.
(a) Purpose. This
Amended and Restated Smart Balance, Inc. Stock and Awards Plan (the “Plan”) has
three complementary purposes: (a) to promote the long-term growth and financial
success of Smart Balance, Inc. (the “Company”); (b) to induce, attract and
retain outstanding officers, employees, consultants and advisors; and (c) to
increase shareholder value. The Plan is designed to accomplish these goals by
providing Participants with incentives to increase shareholder value by offering
the opportunity to acquire shares of the Company’s common stock.
(b) Construction. Capitalized
terms used in this Plan shall have the meanings set forth in Section 12, unless
the context clearly requires otherwise. Awards made under this Plan and the
accompanying Award Agreements are intended to (i) be performance based
compensation which satisfies the requirements of Code Section 162(m)(4)(C) and
(ii) except for Awards of Restricted Stock Units, not constitute non-qualified
deferred compensation for purposes of Code Section 409A. The
Committee shall have the authority to interpret and apply the terms of the Plan
or any Award Agreement consistent with such intentions.
(c) Deemed
Amendment. Any non-complying provision of the Plan and any
Award Agreement issued under the Plan shall be deemed amended to the extent
necessary to preserve these intended tax consequences. Nothing in
this Plan shall be construed, interpreted or applied in any way that would
conflict with any provision of the Company’s Restated Certificate of
Incorporation.
(d) Effective Date and
Shareholder Approval. This Plan became effective on May 21,
2007. The Plan was amended and restated by action of the Board of
Directors effective August 7, 2008 in order to bring the Plan into full
compliance with the requirements of Section 409A of the Code and the final
Treasury Regulations issued thereunder and further amended and restated in the
form of this Second Amended and Restated Plan by action of the Board of
Directors to be effective May 21, 2007.
Section
2. Shares
Reserved Under this Plan.
(a) Plan
Reserve. An aggregate of 12,150,000 Shares are reserved for
issuance under this Plan, provided that no more that 1,930,000 Shares may be
awarded as restricted stock or restricted stock units. The maximum
number of Shares that may be the subject of Awards (Options, Restricted Stock or
Restricted Stock Units) granted to a Participant in any calendar year may not
exceed 3,000,000 Shares. The number of Shares covered by an Award under the Plan
shall be counted on the date of grant of such Award against the number of Shares
available for granting Awards under the Plan. Any Shares delivered
pursuant to the exercise of an Award may consist, in whole or in part, of
authorized and unissued Shares or of treasury shares. Under no
circumstances, may any Award be made effective prior to the date that such Award
is approved by the Committee.
(b) Share
Adjustment. In the event that the Committee shall determine
that any dividend or other distribution (whether in the form of cash, Shares,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
(collectively referred to as “Events”) affects the Shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then the Committee may, in such manner as it may
deem equitable, adjust any or all of: (i) the number and type of Shares subject
to the Plan and which thereafter may be made the subject of Awards under the
Plan; (ii) the number and type of Shares subject to outstanding Awards; and
(iii) the exercise price with respect to any Option (collectively referred to as
“Adjustments”); provided, however, that Awards subject to grant or previously
granted to Participants under the Plan at the time of any such Event shall be
subject only to such Adjustments as shall be necessary to maintain the
proportionate interest of the Participants and preserve, without exceeding, the
value of such Awards; and provided further that the number of Shares subject to
any Award shall always be a whole number. All such adjustments shall
be made so that the adjustments do not result in the grant of a new Award for
purposes of Section 409A of the Code or cause the Company to record a new
compensation charge for financial reporting purposes.
(c) Replenishment of Shares
Under this Plan. The number of Shares reserved for issuance
under this Plan shall be reduced only by the number of Shares actually delivered
in payment or settlement of Awards, including Restricted Stock and Restricted
Stock Units. If an Award lapses, expires, terminates or is cancelled
without the issuance of Shares under the Award, then the Shares subject to,
reserved for or delivered in payment in respect of such Award may again be used
for new Awards under this Plan. If Shares are issued under any Award
and the Company subsequently reacquires them pursuant to rights reserved upon
the issuance of the Shares, or if Shares, including previously owned Shares or
newly issued shares, are delivered by a Participant to the Company in
satisfaction of any employment or income tax withholding obligation or in
payment of the exercise price of an Award, then the Shares subject to, reserved
for or delivered in payment in respect of such Award may again be used for new
Awards under this Plan.
Section
3. Plan
Administration and Operation.
(a) Administrative
Authority. Subject to any limitations or restrictions under
the Company’s Restated Certificate of Incorporation, the Plan shall be
administered by, and Committee shall have full authority to administer this
Plan, including the authority to (i) interpret the provisions of this Plan, (ii)
prescribe, amend and rescind rules and regulations relating to this Plan, (iii)
correct any defect, supply any omission, or reconcile any inconsistency in any
Award or agreement covering an Award in the manner and to the extent it deems
desirable to carry this Plan into effect, and (iv) make all other determinations
necessary or advisable for the administration of this Plan.
2
(b) Awards. The
Committee has full authority to designate from time to time which Participants
shall receive Awards under this Plan and the nature and scope of such Awards.
The Committee may consider such factors as it deems pertinent in selecting
whether a Participant will receive any Award(s) and in determining the types and
amounts of Awards and in setting any Performance Goals, vesting periods, or
other conditions or limitations. In making such selection and determination,
factors the Committee may consider include, but will not be limited to: (a) the
Company’s financial condition; (b) anticipated profits for the current or future
years; (c) the Participant’s length of service or experience; and (d) other
compensation that the Company provides or has agreed to provide to the
Participant. The Committee’s decision to provide a Participant with an Award in
any year will not require the Committee to designate such person to receive an
Award in any other year.
(c) Committee Action and
Delegation. A majority of the members of the Committee will
constitute a quorum, and a majority of the Committee’s members present at a
meeting at which a quorum is present must make all determinations of the
Committee. The Committee may make any determination under this Plan without
notice or meeting of the Committee by a writing that a majority of the Committee
members have signed. To the extent applicable law permits, the Board may
delegate to another committee of the Board or the Committee may delegate to
specified officers of the Company any or all of the authority and responsibility
of the Committee. If such a delegation has been made, then all
references to the Committee in this Plan include such other committee or one or
more officers to the extent of such delegation. Except to the extent
prohibited by applicable law, the Committee may also authorize any one or more
of their number or the Secretary or any other officer of the Company to execute
and deliver documents previously approved by the Committee.
(d) Review of Committee
Decisions. All Committee determinations are final and binding
upon all interested parties and no reviewing court, agency or other tribunal
shall overturn a decision of the Committee unless it first determines that the
Committee acted in an arbitrary and capricious manner with respect to such
decision.
(e) Committee
Indemnification. No member of the Committee will be liable for any act
done, or determination made, by the individual in good faith with respect to the
Plan or any Award. The Company will indemnify and hold harmless all Committee
members to the maximum extent that the law and the Company’s bylaws and Restated
Certificate of Incorporation permit.
Section
4. Discretionary
Awards.
Subject
to the terms of this Plan, including Section 7 below, the Committee has full
power and authority to determine: (a) the type or types of Awards to be granted
to each Participant (i.e., Options, Restricted Stock and/or Restricted Stock
Units); (b) the number of Shares with respect to which an Award is granted to a
Participant, if applicable; and (c) any other terms and conditions of any Award
granted to a Participant. Awards under this Plan may be granted either alone or
in addition to, in tandem with, or in substitution for any other Award (or any
other award granted under another plan of the Company or any Company Entity).
The Committee may grant multiple Awards and different types of Awards (e.g.,
Options, Restricted Stock and/or Restricted Stock Units) to individual
Participants at the same time. All awards shall be evidenced by
written Awards Agreements.
3
Section
5. Options.
(a) Exercise Price of
Options. For each Option, the Award Agreement will specify (i)
the exercise price, which may not be less than the Fair Market Value of the
Shares subject to the Option on the Grant Date, and (ii) the method or methods
by which a Participant may pay the exercise price or satisfy his or her Tax
Obligation with respect to such Option, including net or cashless exercise
procedures.
(b) Terms and Conditions of
Options. The Award Agreement shall also set forth all other
terms and conditions of the Option, including the term of the Option, any
vesting schedule and any Performance Goals. Subject to the terms of
the Plan, an Option will be exercisable at such times and subject to such
conditions as the Committee specifies in the Award Agreement, including, but not
limited to, any Performance Goals. Notwithstanding the preceding, each Option
must terminate no later than ten (10) years after the Grant Date.
Section
6. Restricted Stock and Restricted Stock Units.
(a) Subject
to the terms of the Plan, each Award of Restricted Stock and/or Restricted Stock
Units may be subject to such terms and conditions as the Committee determines
appropriate, including, without limitation, (i) vesting schedules, (ii)
Performance Goals, and (iii) the method or methods by which a Participant may
satisfy his or her Tax Obligation with respect to such Award, including reducing
the number of Shares delivered to the Participant. The foregoing
notwithstanding, each award of Restricted Stock and/or Restricted Stock Units
Option (i) shall be payable only in Shares and (ii) must be subject to a
substantial risk of forfeiture (not withstanding the fulfillment of any
Performance Goal) for a period of at least one (1) year.
(b) Awards
of Performance-Based Restricted Stock may be granted to certain Participants
that are employed at a level of Vice President or higher. Each Award of
Restricted Stock that is Performance-Based Restricted Stock shall specify the
number of Shares of Performance-Based Restricted Stock to which it relates, the
Performance Goals which must be satisfied in order for the such Shares to vest
and restrictions thereon to lapse, and the Performance Cycle within which such
Performance Goals must be satisfied, and may require that an appropriate legend
be placed on Share certificates.
(c) The
Performance Goals with respect to a Performance Cycle shall be established in
writing by the Committee by the earlier of (x) the date on which a quarter of
the Performance Cycle has elapsed or (y) the date which is ninety (90) days
after the commencement of the Performance Cycle, and in any event while the
performance relating to the Performance Goals remain substantially
uncertain.
(d) Effect
of Certain Events. At the time of the granting of an Award of
Performance-Based Restricted Stock, or at any time thereafter, in either case to
the extent permitted under Section 162(m) of the Code and the regulations
thereunder without adversely affecting the treatment of the Award of
Performance-Based Restricted as performance-based compensation which satisfies
the requirements of Section 162(m)(4)(C), the Committee may provide for the
manner in which performance will be measured against the Performance Goals (or
may adjust the Performance Goals) to reflect losses from discontinued
operations, extraordinary, unusual or nonrecurring gains and losses, the
cumulative effect of accounting changes, acquisitions or divestitures, core
process redesign, structural changes/outsourcing, foreign exchange impacts, the
impact of specified corporate transactions, accounting or tax law changes and
other extraordinary or nonrecurring events.
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(e) Determination
of Performance. Prior to the vesting, payment, settlement or lapsing
of any restrictions with respect to any Award of Performance-Based Restricted
Stock that is made to an Eligible Employee who is subject to Section 162(m) of
the Code, the Committee shall certify in writing that the applicable Performance
Goal has been satisfied to the extent necessary for such Award to qualify as
performance-based compensation in accordance with Section 162(m)(4)(C) of the
Code. An Award Performance-Based Restricted Stock may be reduced at
any time before payment or lapsing of restrictions.
Section
7. Effect
of Termination of Employment.
(a) Award
Limitations. Subject to the limitations set forth in Section
7(b) below, the Committee shall, in its discretion, determine the consequences
under any outstanding Award(s) if the Participant has a Separation From Service
for any reason. The restrictions under Section 7(b) and any other limitations
imposed by the Committee under this Section 7(a) shall be included in the Award
Agreement. Unless otherwise stated under the Award Agreement, if a
Participant has a Separation From Service, all non-vested Options, Restricted
Stock and Restricted Stock Units shall immediately be forfeited and all vested
Options shall terminate and be forfeited if not exercised within ninety (90)
days of such Separation From Service. The foregoing notwithstanding,
in the event that the Separation From Service is due to the Participant’s death
or Disability, all non-vested Options shall vest upon such death or termination
and all Options shall terminate and be forfeited if not exercised within one (1)
year of the Separation From Service or prior to the expiration of the term of
the Option, if sooner. When a Participant has a Separation From
Service, the Committee, in its sole discretion, is authorized to (i) accelerate
vesting of non-vested Awards, (ii) grant Participant’s longer periods to
exercise Options following a Separation From Service, consistent with the
requirements of Treas. Reg. § 1.409A-1(b)(5)(v)(C), or (iii) allow continued
vesting of Options, Restricted Stock or Restricted Stock Units, on such terms
and conditions as the Committee may deem reasonable and appropriate; provided
however, that the Committee may not accelerate Awards of Performance-Based
Restricted Stock upon a Separation From Service that is not due to death or
Disability or occurs upon a Change of Control.
(b) For Cause
Termination. Notwithstanding any provision in this Plan or in
any Award Agreement, if a Participant’s employment is terminated by the Company
for Cause, then all Awards previously granted to such Participant shall
immediately be forfeited retroactively to the date the Participant first engaged
in the conduct that was the basis for such termination.
Section
8. Non-Transferability.
(a) Awards. Except
as otherwise provided in this Section or as the Committee otherwise provides in
the Award Agreement, Awards granted under this Plan are not transferable by a
Participant, other than by will or the applicable laws of descent or
distribution. During the lifetime of the Participant, Options may be
exercised only by the Participant. Following the death of a
Participant, Options may be exercised, consistent with the terms of the Option,
by the Participant’s legal representative or a transferee of such Participant by
will or applicable law of descent or distribution.
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(b) Shares. Shares
received in connection with an Award of Restricted Stock are not transferable
until the applicable restrictions lapse. Shares received in
connection with other Awards are transferable, subject to any restriction on
transfer imposed by applicable securities laws.
Section
9. Amendment
and Termination of the Plan and Awards.
(a) Term of
Plan. This Plan will terminate on, and no Award may be granted
after, the ten (10) year anniversary of the Effective Date, unless the Board
earlier terminates this Plan pursuant to Section 9(b).
(b) Termination and
Amendment. The Board may amend, alter, suspend, discontinue or
terminate this Plan at any time, subject to shareholder approval if: (i)
shareholder approval of such amendment(s) is required under the Exchange Act;
(ii) shareholder approval of such amendment(s) is required under the listing
requirements of principal securities exchange or market on which the Shares are
then traded (to maintain the listing or quotation of the Shares on that
exchange); or (iii) the amendment will: [a] materially increase any number of
Shares specified in Section 2(a) (except as permitted by Section 2(b)); [b]
shorten the restriction periods specified in Section 6; or [c] modify the
provisions of Section 9(e).
(c) Amendment, Modification or
Cancellation of Awards. Except as provided in Section 9(e) and
subject to the requirements of this Plan, the Committee may waive any
restrictions or conditions applicable to any Award or the exercise of the Award,
and the Committee may modify, amend, or cancel any of the other terms and
conditions applicable to any Awards by mutual agreement between the Committee
and the Participant or any other persons as may then have an interest in the
Award, so long as any amendment or modification does not increase the total
number of Shares issuable under this Plan (except as permitted by Section 2(b)),
but the Committee need not obtain the Participant’s (or other interested
party’s) consent for the cancellation of an Award pursuant to the provisions of
Section 2(b). Notwithstanding anything to the contrary in this Plan,
the Committee shall have sole discretion to alter the selected Performance
Goals. The foregoing notwithstanding, no modification, extension,
amendment or cancellation of any terms and conditions of any Award shall be made
to the extent such action would violate the requirements of Section 409A of the
Code or which would result in such modification, extension, amendment or
cancellation being treated as a new Option grant pursuant to Treas. Reg. §
1.409A-1(b)(5)(v).
(d) Survival of Committee
Authority and Awards. Notwithstanding the foregoing, the
authority of the Committee to administer this Plan and modify or amend an Award
shall extend beyond the date this Plan is terminated. In addition, termination
of this Plan will not affect the rights of Participants with respect to Awards
previously granted to them, and all unexpired Awards will continue in force and
effect after termination of this Plan except as they may lapse or be terminated
by their own terms and conditions.
(e) Repricing
Prohibited. Notwithstanding anything in this Plan to the
contrary, and except for the adjustments provided in Section 2(b), neither the
Committee nor any other person may decrease the exercise price for any
outstanding Option granted under this Plan after the date of grant nor allow a
Participant to surrender an outstanding Option granted under this Plan to the
Company as consideration for the grant of a new Option with a lower exercise
price.
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Section
10. Change of
Control.
To the
extent not prohibited under the Restated Certificate of Incorporation and except
to the extent otherwise provided in the applicable Award Agreement, in the event
of a Change of Control, the following rules shall apply.
(a) Options. All
unvested Options shall vest and become fully exercisable upon the occurrence of
a Change of Control without regard to any Performance Goal or vesting schedule
set forth in the applicable Award Agreement;
(b) Restricted
Stock. All unvested Restricted Stock shall vest and cease to
be subject to any substantial risk of forfeiture upon the occurrence of the
Change of Control without regard for any Performance Goal or vesting schedule
set forth in the applicable Award Agreement; and
(c) Restricted Stock
Units. All unvested Restricted Stock Units shall vest and be
converted into Shares upon the occurrence of the Change in Control without
regard for any Performance Goal or vesting schedule set forth in the applicable
Award Agreement.
Section
11. General
Provisions.
(a) Other Terms and
Conditions. The grant of any Award under this Plan may also be
subject to such other provisions or include other tandem rights or features
(whether or not applicable to the Award awarded to any other Participant) as the
Committee determines appropriate. The foregoing notwithstanding, no
Award shall include any additional deferral feature or other provision that
would cause the Award to be subject to Section 409A of the Code.
(b) No Fractional
Shares. No fractional Shares or other securities may be issued
or delivered pursuant to this Plan, and the Committee may determine whether
cash, other securities or other property will be paid or transferred in lieu of
any fractional Shares or other securities, or whether such fractional Shares or
other securities or any rights to fractional Shares or other securities will be
canceled, terminated or otherwise eliminated.
(c) Requirements of
Law. The granting of Awards under this Plan and the issuance
of Shares in connection with an Award are subject to all applicable laws, rules
and regulations and to such approvals by any governmental agencies or national
securities exchanges as may be required. Notwithstanding any other provision of
this Plan or any Award Agreement, the Company has no liability to deliver any
Shares under this Plan or make any payment unless such delivery or payment would
comply with all applicable laws and the applicable requirements of any
securities exchange or similar entity.
(d) Governing
Law. This Plan, and all agreements under this Plan, should be
construed in accordance with and governed by the laws of the State of Delaware,
without reference to any conflict of law principles. Any legal action or
proceeding with respect to this Plan, any Award or any Award Agreement, or for
recognition and enforcement of any judgment in respect of this Plan, any Award
or any Award Agreement, may only be brought and determined in a court sitting in
the County of Bergen, or the Federal District Court for the Third District of
New Jersey sitting in Third District, in the State of New
Jersey.
7
(e) Severability. If
any provision of this Plan or any Award Agreement or any Award (i) is or becomes
or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as
to any person or Award, or (ii) would disqualify this Plan, any Award Agreement
or any Award under any law the Committee deems applicable, then such provision
should be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of this Plan, Award Agreement or
Award, then such provision should be stricken as to such jurisdiction, person or
Award, and the remainder of this Plan, such Award Agreement and such Award will
remain in full force and effect.
(f) Other
Arrangements. Nothing contained in the Plan shall prevent the
Company or any Company Entity from adopting or continuing in effect other or
additional compensation arrangements for Participants, and such arrangements may
be either generally applicable or applicable only in specific
cases.
(g) No Right to Remain
Employed. The grant of an Award to a Participant pursuant to
the Plan shall confer no right on such Participant to continue as an officer,
employee, consultant, advisor or other similar position relative to the Company
or any Company Entity. Except for rights accorded under the Plan, Participants
shall have no rights as holders of Shares as a result of the granting of Awards
hereunder.
Section
12. Definitions.
(a) “Award”
means any grant of Options, Restricted Stock or Restricted Stock Units under
this Plan.
(b) “Award
Agreement” means a written agreement, in such form (consistent with the terms of
this Plan) as approved by the Committee.
(c) “Board”
shall mean the Board of Directors of the Company.
(d) “Cause”
means with respect to a Participant any of the following as determined by the
Board, in its sole discretion, (a) fraud or intentional misrepresentation, (b)
embezzlement, misappropriation or conversion of assets or opportunities of the
Company or any Company Entity, (c) acts or omissions that are in bad faith or
constitute gross negligence, or willful or reckless misconduct, or (d)
conviction, plea of guilty or nolo contendere, or judicial
determination of civil liability, based on a federal or state felony or serious
criminal or civil offense.
(e) “Change
of Control” means the occurrence of any of the following: events with respect to
the Company:
a. any
Person (other than an Exempt Person) acquires securities of the Company
representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding voting securities;
8
b. any
Person acquires, during the twelve (12) month period ending on the date of the
most recent acquisition, securities of Company representing thirty percent (30%)
of Company’s then outstanding voting securities;
c. a
majority of the members of the Board is replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board serving immediately prior to such
appointment or election; or
d. any
Person, during the twelve (12) month period ending on the date of the most
recent acquisition, acquires assets of Company having a total gross fair market
value equal to or more than forty percent (40%) of the total gross fair market
value of Company’s assets immediately before such acquisition or acquisitions;
but only
if the applicable transaction otherwise constitutes a “change in control event”
for purposes of Section 409A of the Code and Treas. Reg.
§1.409A-3(i)(5).
(f) “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and
as interpreted by applicable regulations, rulings, notices and other similar
guidance. Any reference to a specific provision of the Code includes any
successor provision and any guidance issued under such provision.
(g) “Committee”
means the Compensation Committee of the Board or any subcommittee
thereof.
(h) “Common
Stock” means the $.0001 par value common stock of the Company.
(i) “Company”
shall mean Smart Balance, Inc., a Delaware corporation, together with any
successor thereto.
(j) “Company
Entity” means a corporation or other entity in which the Company holds a
controlling interest under Treas. Reg. § 1.414(c)-2(b)(2)(i), but determined by
applying the phrase “at least 50 percent” in the place of the phrase “at least
80 percent” each place that it appears in such Treasury Regulation or Section
1563(a) of the Code and each other entity so designated by the
Committee as an Affiliate for “legitimate business reasons” (within the meaning
of Treas. Reg. § 1.409A-1(b)(5)(iii)(E)) in which the Company holds a
controlling interest under Treasury Regulation §1.414(c)-2(b)(2)(i), but
determined by applying the phrase “at least 20 percent” in the place of the
phrase “at least 80 percent” in each place it appears in such
Treasury Regulation or Section 1563(a) of the Code.
(k) “Disability”
means a determination by the Company to terminate the service relationship
between the Company and all Company Entities and a Participant based on the
inability of a Participant to perform a material portion of his or her duties
and responsibilities on behalf of the Company or a Company Entity due to a
physical or mental condition that is expected to last indefinitely.
(l) “Effective
Date” means May 21, 2007.
9
(m) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time, and as interpreted by applicable regulations, rulings, notices and other
similar guidance. Any reference to a specific provision of the Exchange Act
includes any successor provision and any guidance issued under such
provision.
(n) “Fair
Market Value” shall mean with respect to a Share, for purposes of determining
the minimum exercise price of an Option on the Grant Date or otherwise, (i) if
the Shares are readily tradable on an established securities market, the closing
price of a Share on such market on the Grant Date or (ii) if the Shares are not
readily tradable on an established securities market, the value determined by
the Committee as of the Grant Date through the reasonable application of a
reasonable valuation method and otherwise in accordance with Treas. Reg. §
1.409A-1(b)(5)(iv)(B).
(o) “Grant
Date” means the date on which all corporate action required to duly authorize
and effect the grant of the Award is first completed or the first date on which
all conditions precedent to the effectiveness of the Award are fully satisfied,
if later.
(p) “Option”
shall mean the right to purchase Shares at a stated price in accordance with the
terms of this Plan and the underlying Award Agreement.
(q) “Participant”
shall mean a permanent full-time employee (defined as at least 32 hours per
week) or director of the Company or any Company Entity and who enters into a
written Award Agreement with the Company. Only Participants shall be entitled to
receive Awards under this Plan.
(r) “Performance
Cycle” means a time period of not less than one (1) and not more than five (5)
years as specified by the Committee at the time Performance Awards are granted
during which the performance of the Company will be measured.
(s) “Performance
Goals” means any goals the Committee establishes that relate to one or more of
the following with respect to the Company or any one or more Company Entities or
other business units: revenue; cash flow; net cash provided by operating
activities; net cash provided by operating activities less net cash used in
investing activities; cost of goods sold; ratio of debt to debt plus equity;
profit before tax; gross profit; net profit; gross sales; net sales; product
units sold; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; Fair Market Value of Shares; basic earnings per
share; diluted earnings per share; return on shareholder equity; average
accounts receivable (calculated by taking the average of accounts receivable at
the end of each month); average inventories (calculated by taking the average of
inventories at the end of each month); return on average total capital employed;
return on net assets employed before interest and taxes; economic value added;
and/or return on year-end equity.
(t) “Performance-Based
Restricted Stock” means Awards of Restricted Stock that are contingent upon the
attainment of specified Performance Goals within the Performance Cycle and that
are subject to the terms and conditions provided in Section 6(b)-(e)
hereof.
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(u) “Plan”
shall mean the Amended and Restated Smart Balance, Inc. Incentive Stock and
Awards Plan, as set forth herein and as amended from time to time.
(v) “Restricted
Stock” means Shares that are issued to a Participant under this Plan and subject
to a risk of forfeiture and/or restrictions on transfer that constitute a
substantial risk of forfeiture for purposes of Section 83 of the Code and that
may lapse upon the achievement or partial achievement of Performance Goals
during the period specified by the Committee and/or upon the completion of a
period of service, as established by the Committee and reflected in the
applicable Award Agreement.
(w) “Restricted
Stock Units” mean the right to receive Shares and/or Restricted Stock at a
future date, subject to the completion of such Performance Goals and/or upon the
completion of a period of service, as the Committee shall establish as part of
the Award Agreement. Prior to the achievement of such Performance
Goals and/or upon the completion of a period of service, the Participant shall
have no rights with respect to such Restricted Stock Units, except as set forth
in the underlying Award Agreement. Each Restricted Stock Unit shall correspond
and relate to one Share under this Plan.
(x)
“Share” means a share of Common Stock.
(y) “Separation
From Service” shall mean with respect to an employee the termination of the
employee’s employment with the Company and all Company Entities, provided that,
notwithstanding such termination of the employment relationship between the
employee and the Company and all Company Entities, the employee shall not be
deemed to have had a Separation from Service where it is reasonably anticipated
that the level of bona fide services that the employee will perform (whether as
an employee or independent contractor) following such termination for the
Company and all Company Entities would be twenty percent (20%) or more of the
average level of bona fide services performed by the employee (whether as an
employee or independent contractor) for the Company and all Company Entities
over the immediately preceding thirty-six (36) month period (or such lesser
period of actual service). In such event, Separation from Service
shall mean the permanent reduction of the level of bona fide services to be
performed by the employee (whether as an employee or independent contractor) to
a level that is less than twenty percent (20%) of the average level of bona fide
services performed by the employee (whether as an employee or independent
contractor) during the thirty-six (36) month period (or such lesser period of
actual service) immediately prior to the termination of the employee’s
employment relationship. A Separation from Service shall not be
deemed to have occurred if the employee is absent from active employment due to
military leave, sick leave, or other bona fide leave of absence if the period of
such leave does not exceed the greater of (i) six months or (ii) the period
during which the Employee’s right to reemployment by the Company or any Company
Entity is provided either by statute or contract. “Separation of
Service” with respect to a consultant or advisor who is an independent
contractor with respect to the Company for income and employment tax purposes
means a good-faith and complete termination of the service relationship with the
consultant or advisor at a time when there is no reasonable expectation that the
consultant or advisor will provide further services in the future either as an
independent contractor or employee.
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(z) “Tax
Obligation” means with respect to any period an amount equal to the total
obligation of the Company to withhold and deposit federal, state or local
employment and income taxes with respect to an Award.
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