Attached files
| file | filename |
|---|---|
| 10-K - SHARING ECONOMY INTERNATIONAL INC. | v179491_10k.htm |
| EX-21 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex21.htm |
| EX-3.2 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex3-2.htm |
| EX-32.1 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex32-1.htm |
| EX-31.2 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex31-2.htm |
| EX-31.1 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex31-1.htm |
| EX-10.14 - SHARING ECONOMY INTERNATIONAL INC. | v179491_ex10-14.htm |
CHINA WIND SYSTEMS,
INC.
2010
Long-Term Incentive Plan
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1.
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Purpose;
Definitions.
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The purpose of the China Wind Systems,
Inc. 2010 Long-Term Incentive Plan (the “Plan”) is to enable China Wind Systems,
Inc. (the “Company”) to attract, retain and reward key employees of the Company
and its Subsidiaries and Affiliates, and others who provide services to the
Company and its Subsidiaries and Affiliates, and strengthen the mutuality of
interests between such key employees and such other persons and the Company’s
stockholders, by offering such key employees and such other persons incentives
and/or other equity interests or equity-based incentives in the Company, as well
as performance-based incentives payable in cash.
For purposes of the Plan, the following
terms shall be defined as set forth below:
(a) “Affiliate”
means any corporation, partnership, limited liability company, joint venture or
other entity, other than the Company and its Subsidiaries, that is designated by
the Board as a participating employer under the Plan, provided that the Company
directly or indirectly owns at least 20% of the combined voting power of all
classes of stock of such entity or at least 20% of the ownership interests in
such entity.
(b) “Board”
means the Board of Directors of the Company.
(c)
“Cause” means a felony conviction of a participant, or the failure of a
participant to contest prosecution for a felony, or a participant’s willful
misconduct or dishonesty, or breach of trust or other action by which the
participant obtains personal gain at the expense of or to the detriment of the
Company or conduct which results in civil or criminal liability or penalties,
including penalties pursuant to a consent decree, order or agreement, on the
part of the Company; provided, however, that if the participant has an
Employment Agreement with the Company, a Subsidiary or Affiliate which includes
a definition of “cause,” then “cause” shall have the meaning as defined in such
Employment Agreement.
(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
thereto.
(f) “Committee”
means the Committee referred to in Section 2 of the Plan. If at any
time no Committee shall be in office, then the functions of the Committee
specified in the Plan shall be exercised by the Board.
(g) “Company”
means China Wind Systems, Inc., a Delaware corporation, or any successor
corporation.
(h) “Disability”
means disability as determined under procedures established by the Committee for
purposes of the Plan; provided that if the participant has an Employment
Agreement with the Company, a Subsidiary or Affiliate which includes a
definition of “disability,” then “disability” shall have the meaning as defined
in such Employment Agreement.
(i) “Early
Retirement” means retirement, with the express consent for purposes of the Plan
of the Company at or before the time of such retirement, from active employment
with the Company and any Subsidiary or Affiliate pursuant to the early
retirement provisions of the applicable pension plan of such
entity.
(j) “Employment
Agreement” shall mean an employment or consulting agreement or other agreement
pursuant to which the participant performs services for the Company or a
Subsidiary or Affiliate.
(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, as of any given date, the market price of the Stock as
determined by or in accordance with the policies established by the Committee in
good faith; provided, that, in the case of an Incentive Stock Option, the Fair
Market Value shall be determined in accordance with the Code and the Treasury
regulations under the Code.
(m) “Incentive
Stock Option” means any Stock Option intended to be and designated as an
“Incentive Stock Option” within the meaning of Section 422 of the
Code.
(n) “Independent
Director” shall mean an independent director as determined by the rules or
regulations of the principal stock exchange or market on which the Stock is
traded or, if the Stock is not listed or traded on such exchange, as defined
under the rules of the Nasdaq Stock Market.
(o) “Non-Qualified
Stock Option” means any Stock Option that is not an Incentive Stock
Option.
(p) “Normal
Retirement” means retirement from active employment with the Company and any
Subsidiary or Affiliate on or after age 65 or such other age as is designated by
the Company, Subsidiary or Affiliate as the normal retirement age.
(q)
“Plan” means this China Wind Systems, Inc. 2010 Long-Term Incentive Plan, as
hereinafter amended from time to time.
(r) “Restricted
Stock” means an award of shares of Stock that is subject to restrictions under
Section 7 of the Plan.
(s) “Retirement”
means Normal Retirement or Early Retirement.
(t) “Stock”
means the common stock, par value $0.001 per share, of the Company or any class
of common stock into which such common stock may hereafter be converted or for
which such common stock may be exchanged pursuant to the Company’s certificate
of incorporation or as part of a recapitalization, reorganization or similar
transaction.
(u) “Stock
Option” or “Option” means any option to purchase shares of Stock (including
Restricted Stock, if the Committee so determines) granted pursuant to Section 5
of the Plan.
(v)
“Subsidiary” means any corporation or other business association, including a
partnership (other than the Company) in an unbroken chain of corporations or
other business associations beginning with the Company if each of the
corporations or other business associations (other than the last corporation in
the unbroken chain) owns equity interests (including stock or partnership
interests) possessing 50% or more of the total combined voting power of all
classes of equity in one of the other corporations or other business
associations in the chain. The Board may elect to treat as a
Subsidiary an entity in which the Company possesses less than 50% of the total
combined voting power of all classes of equity if, under generally accepted
accounting principles, the Company may include the financial statements of such
entity as part of the Company’s consolidated financial statements (other than as
a minority interest or other single line item).
In addition, the terms “Change in
Control,” “Potential Change in Control” and “Change in Control Price” shall have
meanings set forth, respectively, in Sections 7(b), (c) and (d) of the
Plan.
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2.
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Administration.
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(a) The
Plan shall be administered by a Committee of not less than three directors all
of whom shall be Independent Directors, who shall be appointed by the Board and
who shall serve at the pleasure of the Board. If and to the extent
that no Committee exists which has the authority to administer the Plan, the
functions of the Committee specified in the Plan shall be exercised by the
Board.
(b) The
Committee shall have full authority:
(i) to
grant, pursuant to the terms of the Plan, Stock Options or Restricted Stock to
officers and other persons eligible under Section 4 of the Plan, provided that
members of the Committee shall not be eligible for Stock Options or Restricted
Stock pursuant to the Plan unless such Stock Options or Restricted Stock are
granted by a majority of the independent directors of the Company other than the
proposed grantee.
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(ii) to
select the officers and other eligible persons to whom Stock Options and/or
Restricted Stock may from time to time be granted pursuant to the
Plan;
(iii) to
determine whether and to what extent Incentive Stock Options, Non-Qualified
Stock Options, Restricted Stock, are to be granted pursuant to the Plan, to one
or more eligible persons;
(iv) to
determine the number of shares to be covered by each such award granted pursuant
to the Plan;
(v) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any award granted under the Plan, including, but not limited to, the share
price or exercise price and any restriction or limitation, or any vesting,
acceleration or waiver of forfeiture restrictions regarding any Stock Option or
other award and/or the shares of Stock relating thereto, based in each case on
such factors as the Committee shall, in its sole discretion,
determine;
(vi) to
determine whether, to what extent and under what circumstances a Stock Option
may be settled in cash, Stock or Restricted Stock under Section 5(b)(x) or (xi)
of the Plan, as applicable, instead of cash;
(vii) to
determine whether, to what extent and under what circumstances Option grants
and/or Restricted Stock and/or other cash awards made by the Company are to be
made, and operate, on a tandem basis with other awards under the Plan and/or
cash awards made outside of the Plan in a manner whereby the exercise of one
award precludes, in whole or in part, the exercise of another award, or on an
additive basis;
(viii) to
determine whether, to what extent and under what circumstances Stock and other
amounts payable with respect to an award under this Plan shall be deferred
either automatically or at the election of the participant, including any
provision for any determination or method of determination of the amount (if
any) deemed be earned on any deferred amount during any deferral
period;
(ix) to
determine the terms and restrictions applicable to Restricted
Stock;
(x) to
reprice existing Stock Options or to grant Stock Options or Restricted Stock in
connection with or in consideration of the cancellation of an outstanding Stock
Option with a higher exercise price; and
(xi) to
determine an aggregate number of awards and the type of awards to be granted to
eligible persons employed or engaged by the Company and/or any specific
Subsidiary, Affiliate or division and grant to management the authority to grant
such awards, provided that no awards to any person subject to the reporting and
short-swing profit provisions of Section 16 of the Exchange Act may be granted
awards except by the Committee, subject to the provisions of Section 2(b)(i) of
the Plan.
(c) In
the event that any officers or other participants have Employment Agreements
with the Company which provide for the grant of options to such participants,
unless the Committee or the Board otherwise determines, the options shall be
treated for all purposes as if they were granted pursuant to this Plan as long
as there is a sufficient number of shares available for grant pursuant to this
Plan.
(d) The
Committee shall have the authority to adopt, alter and repeal such rules,
guidelines and practices governing the Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of the Plan and any award
issued under the Plan and any agreements relating thereto, and otherwise to
supervise the administration of the Plan.
(e) All
decisions made by the Committee pursuant to the provisions of the Plan shall be
made in the Committee’s sole discretion and shall be final and binding on all
persons, including the Company and Plan participants.
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3.
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Stock
Subject to Plan.
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(a) The
total number of shares of Stock reserved and available for distribution under
the Plan shall be two million (2,000,000) shares of Stock. In the
event that awards are granted in tandem such that the exercise of one award
precludes the exercise of another award then, for the purpose of determining the
number of shares of Stock as to which awards shall have been granted, the
maximum number of shares of Stock issuable pursuant to such tandem awards shall
be used.
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(b) If
any shares of Stock that have been optioned cease to be subject to a Stock
Option, or if any such shares of Stock that are subject to any Restricted Stock
award granted under the Plan are forfeited or any such award otherwise
terminates without a payment being made to the participant in the form of Stock,
such shares shall again be available for distribution in connection with future
awards under the Plan.
(c) In
the event of any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, stock distribution, reverse split, combination of shares
or other change in corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved for issuance
under the Plan, in the base number of shares, in the number and option price of
shares subject to outstanding Options granted under the Plan, in the number and
purchase price of shares subject to outstanding Stock Purchase Rights under the
Plan, and in the number of shares subject to other outstanding awards granted
under the Plan as may be determined to be appropriate by the Committee, in its
sole discretion, provided that the number of shares subject to any award shall
always be a whole number, and provided that the treatment of such options and
rights shall be consistent with the nature of the event.
4. Eligibility. Officers
and other key employees and directors of, and consultants and independent
contractors to, the Company and its Subsidiaries and Affiliates (but excluding,
except as provided in Section 2(b)(i) of the Plan, members of the Committee) who
are responsible for or contribute to the management, growth and/or profitability
of the business of the Company and/or its Subsidiaries and Affiliates are
eligible to be granted awards under the Plan.
5. Stock
Options.
(a) Administration. Stock
Options may be granted alone, in addition to or in tandem with other awards
granted under the Plan and/or cash awards made outside of the
Plan. Any Stock Option granted under the Plan shall be in such form
as the Committee may from time to time approve. Stock Options granted
under the Plan may be of two types: (i) Incentive Stock Options and
(ii) Non-Qualified Stock Options. The Committee shall have the
authority to grant to any optionee Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options.
(b) Option
Grants. Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee, in
its sole discretion, shall deem desirable:
(i) Option
Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant; but
shall not be less than the fair market value, as determined by the Committee, on
the date of grant.
(ii) Option
Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10) years
after the date the Option is granted.
(iii) Exercisability. Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at or after
grant. If the Committee provides, in its sole discretion, that any
Stock Option is exercisable only in installments, the Committee may waive such
installment exercise provisions at any time at or after grant in whole or in
part, based on such factors as the Committee shall, in its sole discretion,
determine.
(iv) Method of
Exercise.
(A) Subject
to whatever installment exercise provisions apply under Section 5(b)(iii) of the
Plan, Stock Options may be exercised in whole or in part at any time during the
option period, by giving written notice of exercise to the Company specifying
the number of shares to be purchased. Such notice shall be
accompanied by payment in full of the purchase price, either by check, note or
such other instrument, securities or property as the Committee may
accept. As and to the extent determined by the Committee, in its sole
discretion, at or after grant, payments in full or in part may also be made in
the form of Stock already owned by the optionee or, in the case of the exercise
of a Non-Qualified Stock Option, Restricted Stock subject to an award hereunder
(based, in each case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee).
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(B) If
payment of the option exercise price of a Non-Qualified Stock Option is made in
whole or in part in the form of Restricted Stock, the Stock issuable upon such
exercise (and any replacement shares relating thereto) shall remain (or be)
restricted or deferred, as the case may be, in accordance with the original
terms of the Restricted Stock award in question, and any additional Stock
received upon the exercise shall be subject to the same forfeiture restrictions
or deferral limitations, unless otherwise determined by the Committee, in its
sole discretion, at or after grant.
(C) No
shares of Stock shall be issued until full payment therefor has been received by
the Company. In the event of any exercise by note or other
instrument, the shares of Stock shall not be issued until such note or other
instrument shall have been paid in full, and the exercising optionee shall have
no rights as a stockholder until such payment is made.
(D) Subject
to Section 5(b)(iv)(C) of the Plan, an optionee shall generally have the rights
to dividends or other rights of a stockholder with respect to shares subject to
the Option only after the optionee has given written notice of exercise, has
paid in full for such shares, and, if requested, has given the representation
described in Section 10(a) of the Plan.
(v) Non-Transferability of
Options. No Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and all Stock
Options shall be exercisable, during the optionee’s lifetime, only by the
optionee.
(vi) Termination by
Death. Subject to Section 5(b)(ix) of the Plan with respect to
Incentive Stock Options, if an optionee’s employment by the Company and any
Subsidiary or Affiliate terminates by reason of death, any Stock Option held by
such optionee may thereafter be exercised, to the extent such option was
exercisable at the time of death or on such accelerated basis as the Committee
may determine at or after grant (or as may be determined in accordance with
procedures established by the Committee), by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee, for a
period of three months (or such other period as the Committee may specify at
grant) from the date of such death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
(vii) Termination by Reason of
Disability or Retirement. Subject to Section 5(b)(ix) of the
Plan with respect to Incentive Stock Options, if an optionee’s employment by the
Company and any Subsidiary or Affiliate terminates by reason of a Disability or
Normal or Early Retirement, any Stock Option held by such optionee may
thereafter be exercised by the optionee, to the extent it was exercisable at the
time of termination or on such accelerated basis as the Committee may determine
at or after grant (or as may be determined in accordance with procedures
established by the Committee), for a period of three months (or such other
period as the Committee may specify at grant) from the date of such termination
of employment or until the expiration of the stated term of such Stock Option,
whichever period is the shorter; provided, however, that, if the optionee dies
within such three-month period (or such other period as the Committee shall
specify at grant), any unexercised Stock Option held by such optionee shall
thereafter be exercisable to the extent to which it was exercisable at the time
of death for a period of three-months from the date of such death or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter. In the event of termination of employment by reason of
Disability or Normal or Early Retirement, if an Incentive Stock Option is
exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
Non-Qualified Stock Option.
(viii) Other
Termination. Unless otherwise determined by the Committee (or
pursuant to procedures established by the Committee) at or after grant, if an
optionee’s employment by the Company and any Subsidiary or Affiliate terminates
for any reason other than death, Disability or Normal or Early Retirement, the
Stock Option shall thereupon terminate; provided, however, that if the optionee
is involuntarily terminated by the Company or any Subsidiary or Affiliate
without Cause, including a termination resulting from the Subsidiary, Affiliate
or division in which the optionee is employed or engaged, ceasing, for any
reason, to be a Subsidiary, Affiliate or division of the Company, such Stock
Option may be exercised, to the extent otherwise exercisable on the date of
termination, for a period of three months (or seven months in the case of a
person subject to the reporting and short-swing profit provisions of Section 16
of the Exchange Act) from the date of such termination or until the expiration
of the stated term of such Stock Option, whichever is shorter.
(ix) Incentive
Stock Options.
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(A) Anything
in the Plan to the contrary notwithstanding, no term of the Plan relating to
Incentive Stock Options shall be interpreted, amended or altered, nor shall any
discretion or authority granted under the Plan be so exercised, so as to
disqualify the Plan under Section 422 of the Code, or, without the consent of
the optionee(s) affected, to disqualify any Incentive Stock Option under such
Section 422.
(B) To
the extent required for “incentive stock option” status under Section 422(d) of
the Code (taking into account applicable Treasury regulations and
pronouncements), the Plan shall be deemed to provide that the aggregate Fair
Market Value (determined as of the time of grant) of the Stock with respect to
which Incentive Stock Options are exercisable for the first time by the optionee
during any calendar year under the Plan and/or any other stock option plan of
the Company or any Subsidiary or parent corporation (within the meaning of
Section 425 of the Code) shall not exceed $100,000. If Section 422 is
hereafter amended to delete the requirement now in Section 422(d) that the plan
text expressly provide for the $100,000 limitation set forth in Section 422(d),
then this Section 5(b)(ix)(B) shall no longer be operative and the Committee may
accelerate the dates on which the incentive stock option may be
exercised.
(C) To
the extent permitted under Section 422 of the Code or the applicable regulations
thereunder or any applicable Internal Revenue Service
pronouncement:
(I) If
(x) a participant’s employment is terminated by reason of death, Disability or
Retirement and (y) the portion of any Incentive Stock Option that is otherwise
exercisable during the post-termination period specified under Sections 5(b)(vi)
and (vii) of the Plan, applied without regard to the $100,000 limitation
contained in Section 422(d) of the Code, is greater than the portion of such
option that is immediately exercisable as an “incentive stock option” during
such post-termination period under Section 422, such excess shall be treated as
a Non-Qualified Stock Option; and
(II) if
the exercise of an Incentive Stock Option is accelerated by reason of a Change
in Control, any portion of such option that is not exercisable as an Incentive
Stock Option by reason of the $100,000 limitation contained in Section 422(d) of
the Code shall be treated as a Non-Qualified Stock Option.
(x) Buyout
Provisions. The Committee may at any time offer to buy out for
a payment in cash, Stock or Restricted Stock an option previously granted, based
on such terms and conditions as the Committee shall establish and communicate to
the optionee at the time that such offer is made.
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6.
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Restricted
Stock.
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(a) Administration. Shares
of Restricted Stock may be issued either alone, in addition to or in tandem with
other awards granted under the Plan and/or cash awards made outside of the
Plan. The Committee shall determine the eligible persons to whom, and
the time or times at which, grants of Restricted Stock will be made, the number
of shares to be awarded, the price (if any) to be paid by the recipient of
Restricted Stock, subject to Section 6(b) of the Plan, the time or times within
which such awards may be subject to forfeiture, and all other terms and
conditions of the awards. The Committee may condition the grant of
Restricted Stock upon the attainment of specified performance goals or such
other factors as the Committee may, in its sole discretion,
determine. The provisions of Restricted Stock awards need not be the
same with respect to each recipient.
(b) Awards and
Certificates.
(i) The
prospective recipient of a Restricted Stock award shall not have any rights with
respect to such award unless and until such recipient either (A) has executed an
investment letter in such form as the Committee shall determined if there is no
condition or restriction on the recipient’s ownership of the Restricted Stock,
other than restrictions under the Securities Act, or (B) has executed an
agreement evidencing the award and has delivered a fully executed copy thereof
to the Company, and has otherwise complied with the applicable terms and
conditions of such award.
(ii) The
purchase price for shares of Restricted Stock may be equal to or less than their
par value and may be zero.
(iii) Awards
of Restricted Stock must be accepted within a period of 60 days (or such shorter
period as the Committee may specify at grant) after the award date, by executing
a Restricted Stock Award Agreement and paying the price, if any, required under
Section 6(b)(ii).
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(iv) Each
participant receiving a Restricted Stock award shall be issued a stock
certificate in respect of such shares of Restricted Stock. Such
certificate shall be registered in the name of such participant, and shall bear
an appropriate legend referring to the terms, conditions, and restrictions
applicable to such award.
(v) The
Committee shall, if there are any vesting or other restrictions on the
Restricted Stock (other than under the Securities Act), require that (A) the
stock certificates evidencing shares of Restricted Stock be held in the custody
of the Company until the restrictions thereon shall have lapsed, and (B) as a
condition of any Restricted Stock award, the participant shall have delivered a
stock power, endorsed in blank, relating to the Restricted Stock covered by such
award.
(c) Restrictions and
Conditions. The shares of Restricted Stock awarded pursuant to
this Section 6 shall be subject to the following restrictions and
conditions:
(i) Subject
to the provisions of the Plan and the award agreement, during a period set by
the Committee commencing with the date of such award (the “Restriction Period”),
the participant shall not be permitted to sell, transfer, pledge or assign
shares of Restricted Stock awarded under the Plan. Within these
limits, the Committee, in its sole discretion, 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/or such other factors or
criteria as the Committee may determine, in its sole discretion.
(ii) Except
as provided in this Section 6(c)(ii) and Section 6(c)(i) of the Plan, the
participant 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 regular cash dividends paid out of current
earnings. The Committee, in its sole discretion, as determined at the
time of award, may permit or require the payment of cash dividends to be
deferred and, if the Committee so determines, reinvested, subject to Section
10(e) of the Plan, in additional Restricted Stock to the extent shares are
available under Section 3 of the Plan, or otherwise reinvested. Stock
dividends, splits and distributions issued with respect to Restricted Stock
shall be treated as additional shares of Restricted Stock that are subject to
the same restrictions and other terms and conditions that apply to the shares
with respect to which such dividends are issued, and the Committee may require
the participant to deliver an additional stock power covering the shares
issuable pursuant to such stock dividend, split or distribution. Any
other dividends or property distributed with regard to Restricted Stock, other
than regular dividends payable and paid out of current earnings, shall be held
by the Company subject to the same restrictions as the Restricted
Stock.
(iii) Subject
to the applicable provisions of the award agreement and this Section 6, upon
termination of a participant’s employment or other services with the Company and
any Subsidiary or Affiliate for any reason during the Restriction Period, all
shares still subject to restriction will vest, or be forfeited, in accordance
with the terms and conditions established by the Committee at or after
grant.
(iv) If
and when the Restriction Period expires without a prior forfeiture of the
Restricted Stock subject to such Restriction Period, certificates for an
appropriate number of unrestricted shares, and other property held by the
Company with respect to such Restricted Shares, shall be delivered to the
participant promptly.
(d) Minimum Value
Provisions. In order to better ensure that award payments
actually reflect the performance of the Company and service of the participant,
the Committee may provide, in its sole discretion, for a tandem Stock Option or
performance-based or other award designed to guarantee a minimum value, payable
in cash or Stock to the recipient of a Restricted Stock award, subject to such
performance, future service, deferral and other terms and conditions as may be
specified by the Committee.
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7.
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Change
in Control Provisions.
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(a) Impact of
Event. In the event of a “Change in Control,” as defined in
Section 7(b) of the Plan, or a “Potential Change in Control,” as defined in
Section 7(c) of the Plan, except to the extent otherwise determined by the
Committee or the Board at or after grant (subject to any right of approval
expressly reserved by the Committee or the Board at the time of such
determination), the following acceleration and valuation provisions shall
apply:
(i) Any
Stock Options awarded under the Plan not previously exercisable and vested shall
become fully exercisable and vested and any Incentive Stock Options may, with
the consent of the holders thereof, be treated as Non-Qualified Stock
Options.
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(ii) The
restrictions and deferral limitations applicable to any Restricted Stock Awards,
in each case to the extent not already vested under the Plan, shall lapse and
such shares and awards shall be deemed fully vested.
(iii) The
value of all outstanding Stock Options and Restricted Stock, in each case to the
extent vested (including such rights which shall have become vested pursuant to
Sections 7(a)(i) and (ii) of the Plan), may, at the election of the Committee,
be purchased by the Company (“cashout”) in a manner determined by the Committee,
in its sole discretion, on the basis of the “Change in Control Price” as defined
in Section 7(d) of the Plan as of the date such Change in Control or such
Potential Change in Control is determined to have occurred or such other date as
the Committee may determine prior to the Change in Control, unless the Committee
shall, contemporaneously with or prior to any particular Change of Control or
Potential Change of Control, determine that this Section 7(a)(iii) shall not be
applicable to such Change in Control or Potential Change in
Control.
(b) Definition of “Change in
Control.” For purposes of Section 7(a) of the Plan, a “Change
in Control” means the happening of any of the following:
(i) When
any “person” (as defined in Section 3(a)(9) of the Exchange Act and as used in
Sections 13(d) and 14(d) of the Exchange Act, including a “group” as defined in
Section 13(d) of the Exchange Act, but excluding the Company and any Subsidiary
and any employee benefit plan sponsored or maintained by the Company or any
Subsidiary and any trustee of such plan acting as trustee) directly or
indirectly becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act, as amended from time to time), of securities of the Company
representing thirty percent (30%) or more of the combined voting power of the
Company’s then outstanding securities; provided, however, that a Change of
Control shall not arise if such acquisition is approved by the board of
directors or if the board of directors or the Committee determines that such
acquisition is not a Change of Control or if the board of directors authorizes
the issuance of the shares of Stock (or securities convertible into Stock or
upon the exercise of which shares of Stock may be issued) to such persons;
or
(ii) When,
during any period of twenty-four consecutive months during the existence of the
Plan, the individuals who, at the beginning of such period, constitute the Board
(the “Incumbent Directors”) cease for any reason other than death, Disability or
Retirement to constitute at least a majority thereof, provided, however, that a
director who was not a director at the beginning of such 24-month period shall
be deemed to have satisfied such 24-month requirement (and be an Incumbent
Director) if such director was elected by, or on the recommendation of, or with
the approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually (because they were directors at the
beginning of such 24-month period) or by prior operation of this Section
7(b)(ii); provided, however, that all directors who are elected to the board not
later than six months after the Acquisition Effective Date shall be deemed to be
an Incumbent Director and shall be deemed to have satisfied the 24-month
requirement set forth in this Section 7(b)(ii); or
(iii) The
occurrence of a transaction requiring stockholder approval for the acquisition
of the Company by an entity other than the Company or a Subsidiary through
purchase of assets, or by merger, or otherwise unless approved by a majority of
Incumbent Directors.
(c) Definition of Potential
Change in Control. For purposes of Section 7(a) of the Plan, a
“Potential Change in Control” means the happening of any one of the
following:
(i) The
approval by stockholders of an agreement by the Company, the consummation of
which would result in a Change in Control of the Company as defined in Section
7(b) of the Plan; or
(ii) The
acquisition of beneficial ownership, directly or indirectly, by any entity,
person or group (other than the Company or a Subsidiary or any Company employee
benefit plan or any trustee of such plan acting as such trustee) of securities
of the Company representing 25% or more of the combined voting power of the
Company’s outstanding securities and the adoption by the Board of Directors of a
resolution to the effect that a Potential Change in Control of the Company has
occurred for purposes of the Plan.
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(d) Change in Control
Price. For purposes of this Section 7, “Change in Control
Price” means the highest price per share paid in any transaction reported on the
principal stock exchange on which the Stock is traded or the average of the
highest bid and asked prices as reported by the principal stock exchange or
market on which the Stock is traded, or paid or offered in any bona fide
transaction related to a Potential or actual Change in Control of the Company at
any time during the sixty-day period immediately preceding the occurrence of the
Change in Control (or, where applicable, the occurrence of the Potential Change
in Control event), in each case as determined by the Committee except that, in
the case of Incentive Stock Options, such price shall be based only on
transactions reported for the date on which the optionee exercises such
Incentive Stock Options or, where applicable, the date on which a cashout occurs
under Section 7(a)(iii).
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8.
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Amendments
and Termination.
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(a) The
Board may amend, alter, or discontinue the Plan, but no amendment, alteration,
or discontinuation shall be made which would impair the rights of an optionee or
participant under a Stock Option or Restricted Stock award theretofore granted,
without the optionee’s or participant’s consent, and no amendment will be made
without approval of the stockholders if such amendment requires stockholder
approval under state law or if stockholder approval is necessary in order that
the Plan comply with Rule 16b-3 of the Commission under the Exchange Act or any
substitute or successor rule or if stockholder approval is necessary in order to
enable the grant pursuant to the Plan of options or other awards intended to
confer tax benefits upon the recipients thereof.
(b) The
Committee may amend the terms of any Stock Option or other award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights or any holder without the holder’s consent. The Committee may
also substitute new Stock Options for previously granted Stock Options (on a one
for one or other basis), including previously granted Stock Options having
higher option exercise prices.
(c) Subject
to the provisions of Sections 8(a) and (b) of the Plan, the Board shall have
broad authority to amend the Plan to take into account changes in applicable
securities and tax laws and accounting rules, as well as other developments,
and, in particular, without limiting in any way the generality of the foregoing,
to eliminate any provisions which are not required to included as a result of
any amendment to Rule 16b-3 of the Commission pursuant to the Exchange
Act.
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9.
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Unfunded
Status of Plan.
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The Plan
is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a
participant or optionee by the Company, nothing contained in this Plan shall
give any such participant or optionee any rights that are greater than those of
a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Stock or payments in lieu of or
with respect to awards under this Plan; provided, however, that, unless the
Committee otherwise determines with the consent of the affected participant, the
existence of such trusts or other arrangements shall be consistent with the
“unfunded” status of the Plan.
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10.
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General
Provisions.
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(a) The
Committee may require each person purchasing shares pursuant to a Stock Option
or other award under the Plan to represent to and agree with the Company in
writing that the optionee or participant is acquiring the shares without a view
to distribution thereof. The certificates for such shares may include
any legend which the Committee deems appropriate to reflect any restrictions on
transfer. All certificates or shares of Stock or other securities
delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Commission, any stock exchange upon
which the Stock is then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(b) Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable
only in specific cases.
(c) Neither
the adoption of the Plan nor the grant of any award pursuant to the Plan shall
confer upon any employee of the Company or any Subsidiary or Affiliate any right
to continued employment with the Company or a Subsidiary or Affiliate, as the
case may be, nor shall it interfere in any way with the right of the Company or
a Subsidiary or Affiliate to terminate the employment of any of its employees at
any time.
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(d) No
later than the date as of which an amount first becomes includible in the gross
income of the participant for Federal income tax purposes with respect to any
award under the Plan, the participant shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
respect to such amount. Unless otherwise determined by the Committee,
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 and its Subsidiaries or Affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the participant.
(e) The
actual or deemed reinvestment of dividends or dividend equivalents in additional
Restricted Stock at the time of any dividend payment shall only be permissible
if sufficient shares of Stock are available under Section 3 of the Plan for such
reinvestment (taking into account then outstanding Stock Options and Restricted
Stock awards).
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11.
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Effective
Date of Plan.
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The Plan shall be effective as of the
date the Plan is approved by the Board, subject to the approval of the Plan by a
majority of the votes cast by the holders of the Company’s Stock at the next
annual or special meeting of stockholders. Any grants made under the
Plan prior to such approval shall be effective when made (unless otherwise
specified by the Committee at the time of grant), but shall be conditioned on,
and subject to, such approval of the Plan by such stockholders.
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12.
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Term
of Plan.
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Stock
Option and Restricted Stock awards may be granted pursuant to the Plan until ten
years from the date the Plan was approved by the Board, unless the Plan shall be
terminated by the Board, in its discretion, prior to such date, but awards
granted prior to such termination may extend beyond that date.
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