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8-K - FORM 8-K - LITTELFUSE INC /DE | c58005e8vk.htm |
Exhibit
10.1
The text of the Littelfuse, Inc. Long-Term Incentive Plan, as it
is proposed to be approved and adopted, is as set forth below:
LITTELFUSE,
INC.
LONG-TERM INCENTIVE PLAN
SECTION 1.
ESTABLISHMENT, OBJECTIVES AND DURATION
LONG-TERM INCENTIVE PLAN
SECTION 1.
ESTABLISHMENT, OBJECTIVES AND DURATION
1.1 ESTABLISHMENT. Subject to the
approval of the stockholders of Littelfuse, Inc. (the
Corporation), the Corporation has established the
Littelfuse, Inc. Long-Term Incentive Plan (the
Plan), as set forth herein, effective as of
February 3, 2010. The Plan supercedes and replaces (subject
to the last sentence of Section 1.4) the Equity Incentive
Compensation Plan, Littelfuse, Inc. Equity Incentive
Compensation Plan, adopted effective March 1, 2006, and the
Littelfuse, Inc. Outside Directors Equity Plan, adopted
effective March 1, 2006 (the Prior Plans),
except that the Prior Plans shall remain in effect with respect
to awards granted under such Prior Plans until such awards have
been exercised, forfeited, canceled, expired or otherwise
terminated in accordance with the terms of such awards.
1.2 PURPOSE. The purpose of the
Plan is to enhance stockholder value by linking long-term
incentive compensation to the financial performance of the
Corporation and to further align employees financial
rewards with the financial rewards realized by the Corporation
and its stockholders. The Plan is also a vehicle to attract and
retain key personnel. To accomplish the foregoing, the Plan
provides that the Corporation may grant Incentive Stock Options,
Nonqualified Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares
and/or
Performance Units.
1.3 DURATION. The Plan shall remain
in effect, subject to the right of the Corporations Board
of Directors to amend or terminate the Plan at any time pursuant
to Section 15, until all Shares subject to the Plan shall
have been purchased or granted according to the Plans
provisions.
1.4 APPROVAL BY STOCKHOLDERS. The
Plan has been adopted by the Board of Directors subject to
approval by the stockholders of the Corporation at the first
annual meeting of stockholders held following the adoption by
the Board, or any special meeting of the stockholders duly
called. Awards may be granted prior to stockholder approval, but
no Award may be exercised or settled until the Plan is approved
by the stockholders, and if the Plan is not so approved by
January 31, 2011, the Plan, and all Awards granted under
the Plan, shall be null and void; provided, however, that
to the extent any Award could have been granted under one of the
Prior Plans, it shall not be void, but shall be treated as
having been granted under such Plan.
SECTION 2.
DEFINITIONS
Whenever used in the Plan, the following capitalized terms shall
have the meanings set forth below:
2.1 AWARD means, individually or
collectively, a grant under the Plan of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares, or
Performance Units.
2.2 AWARD AGREEMENT means a
written (or electronic) document setting forth the terms and
provisions applicable to an Award granted to the Participant
under the Plan which need not be executed unless required by the
Committee, and is a condition to the grant of an Award hereunder.
2.3 BOARD means the Board of
Directors of the Corporation.
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2.4 CHANGE IN CONTROL means,
unless the Committee otherwise determines, the first of the
following events to occur:
(a) The acquisition by any one person or more than one
person acting as a group (within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(v)(B)),
other than the Corporation, any Subsidiary, or any employee
benefit plan (or related trust) sponsored or maintained by the
Corporation or any Subsidiary, (a Person) of any of
stock of the Corporation that, together with stock held by such
Person, constitutes more than 50% of the total fair market value
or total voting power of the stock of the Corporation. For
purposes of this Paragraph (a), the following acquisitions shall
not constitute a Change in Control: (i) the acquisition of
additional stock by a Person who is considered to own more than
50% of the total fair market value or total voting power of the
stock of the Corporation, (ii) any acquisition in which the
Corporation does not remain outstanding thereafter and
(iii) any acquisition pursuant to a transaction which
complies with Paragraph (c) below. An increase in the
percentage of stock owned by any one Person as a result of a
transaction in which the Corporation acquires its stock in
exchange for property will be treated as an acquisition of stock
for purposes of this Paragraph;
(b) The replacement of individuals who constitute a
majority of the Board, during any twelve (12) month period,
by directors whose appointment or election is not endorsed by a
majority of the Board before the date of the appointment or
election, provided that, if the Corporation is not the relevant
corporation for which no other corporation is a majority
shareholder for purposes of Treasury
Regulation Section 1.409A-3(i)(5)(iv)(A)(2),
this Paragraph (b) shall be applied instead with respect to
the members of the board of the directors of such relevant
corporation for which no other corporation is a majority
shareholder;
(c) The acquisition by any one person or more than one
person acting as a group (within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vi)(D)),
other than the Corporation, a Subsidiary or any employee benefit
plan (or related trust) sponsored or maintained by the
Corporation or any Subsidiary , during the
12-month
period ending on the date of the most recent acquisition by such
by such person or persons, of ownership of stock of the
Corporation possessing 30% or more of the total voting power of
the stock of the Corporation. For purposes of this Paragraph
(c), the following acquisitions shall not constitute a Change in
Control: (i) the acquisition of additional control by a
person or more than one person acting as a group who are
considered to effectively control the Corporation within the
meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vi)
and (ii) any acquisition pursuant to a transaction which
complies with Paragraph (a); or
(d) The acquisition by any individual person or more than
one person acting as a group (within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vii)(C)),
other than a transfer to a related person within the meaning of
Treasury
Regulation Section 1.409A-3(i)(5)(vii)(B),
during the
12-month
period ending on the date of the most recent acquisition by such
by such person or persons, of assets from the Corporation that
have a total gross fair market value equal to or more than 40%
of the total gross fair market value of all of the assets of the
Corporation immediately prior to such acquisition(s). For
purposes of this Paragraph (d), gross fair market
value means the value of the assets of the Corporation, or
the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.
The above definition of Change in Control shall be
interpreted by the Board, in good faith, to apply in a similar
manner to transactions involving partnerships and partnership
interests, and to comply with Code Section 409A.
2.5 CODE means the Internal
Revenue Code of 1986, and all regulations and formal guidance
issued thereunder, as amended from time to time, or any
successor legislation thereto.
2.6 COMMITTEE means the
Compensation Committee of the Board, or such other committee as
shall be appointed by the Board as provided in Section 3 to
administer the Plan, or in the absence of either, the Board.
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2.7 CORPORATION means Littelfuse,
Inc., a Delaware corporation, and any successor to all or
substantially all of the assets or voting stock of such entity
as provided in Section 18.
2.8 DIRECTOR means any individual
who is a member of the Board.
2.9 DISABILITY means, unless
otherwise provided in the Award Agreement or in an employment,
change of control or similar agreement in effect between the
Participant and the Corporation or Subsidiary, the Participant
is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months; or, by reason of any medically determinable
physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits
for a period of not less than 3 months under an accident
and health plan covering employees of the Corporation or a
Subsidiary.
2.10 EFFECTIVE DATE means
February 3, 2010.
2.11 EMPLOYEE means any Employee
of the Corporation or any Subsidiary.
2.12 EXCHANGE ACT means the
Securities Exchange Act of 1934, and all rules and formal
guidance issued thereunder, as amended from time to time, or any
successor act thereto.
2.13 FAIR MARKET VALUE means, with
respect to the relevant date, if the Shares are duly listed on a
national securities exchange or on The Nasdaq Stock Market, the
closing price of a Share on such date, or, if there are no sales
on such date, on the next preceding day on which there were
sales, or if the Shares are not so listed, the fair market value
of the Shares for such date, as determined by the Committee in
good faith and in compliance with Code Section 409A. Such
price shall be subject to adjustment as provided in
Section 4.3.
2.14 INCENTIVE STOCK OPTION OR
ISO means the right to purchase Shares
pursuant terms and conditions that are intended to qualify as,
and that satisfy the requirements applicable to, an incentive
stock option within the meaning of Code Section 422, as
described in Section 6.
2.15 NAMED EXECUTIVE OFFICER means
a Participant who is one of the group of covered employees as
defined in the regulations promulgated under Code
Section 162(m), or any successor provision or statute.
2.16 NONQUALIFIED STOCK OPTION OR
NQSO means the right to purchase Shares
pursuant to terms and conditions that are not intended to be, or
do not qualify as, an Incentive Stock Option as described in
Section 6.
2.17 OPTION means an Incentive
Stock Option or a Nonqualified Stock Option, as described in
Section 6.
2.18 OPTION PRICE means the per
Share purchase price of a Share purchased pursuant to an Option.
2.19 PARTICIPANT means an
Employee, prospective Employee, or Director who has outstanding
an Award granted under the Plan, and includes those former
Employees and former Directors who have certain post-termination
rights under the terms of an Award.
2.20 PERFORMANCE-BASED EXCEPTION
means the exception for performance-based compensation from the
tax deductibility limitations of Code Section 162(m).
2.21 PERFORMANCE PERIOD means the
time period during which performance goals must be achieved with
respect to an Award, as determined by the Committee.
2.22 PERFORMANCE SHARE means an
Award granted to a Participant that entitles the Participant to
delivery of Shares upon achievement of performance goals, as
described in Section 9.
2.23 PERFORMANCE UNIT means an
Award that entitles the Participant to a cash payment upon
achievement of performance goals, as described in Section 9.
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2.24 PERIOD OF RESTRICTION means
the period during which the transfer of an Award or the Shares
is limited in some way (based on the passage of time, the
achievement of performance goals, or upon the occurrence of
other events as determined by the Committee, at its discretion),
and the Award or Shares are subject to a substantial risk of
forfeiture, as provided in Sections 8 and 9.
2.25 PLAN means the Littelfuse,
Inc. Long-Term Incentive Plan, as set forth herein.
2.26 RESTRICTED STOCK means an
Award of Shares subject to a Period of Restriction granted to a
Participant pursuant to Section 8.
2.27 RESTRICTED STOCK UNIT OR
RSUs shall mean a right to receive Shares or
cash upon the lapse of the Period of Restriction pursuant to
Section 8.
2.28 SERVICE shall mean the
performance of services for the Corporation (or any Subsidiary)
within the meaning of Code Section 409A, except to the
extent otherwise specifically provided in the Award Agreement.
2.29 SHARE OR
SHARES means Shares of common stock of the
Corporation.
2.30 STOCK APPRECIATION RIGHT OR
SAR means a right, designated as an SAR, to
receive the appreciation in the Fair Market Value of Shares
pursuant to the terms of Section 7.
2.31 SUBSIDIARY means any
affiliate of the Corporation; provided, however, that
with respect to any ISO Subsidiary means any
Corporation during any period in which it is a parent
corporation (as that term is defined in Code
Section 424(e)) with respect to the corporation or a
subsidiary corporation (as that term is defined in
Code Section 424(f)) with respect to the Corporation.
SECTION 3.
ADMINISTRATION
3.1 PLAN ADMINISTRATION. The
Committee shall administer the Plan. The Committee shall consist
of not fewer than two Directors who are non-Employee Directors
of the Corporation, within the meaning of
Rule 16b-3
of the Exchange Act; outside directors, as defined
in Code Section 162(m)(4)(c)(i); and independent
directors for purposes of the rules of the exchange on
which the Shares are traded; provided, however, that if
at any time any member of the Committee is not an outside
director, as so defined, the Committee may establish a
subcommittee, consisting of all members who are outside
directors, to carry out the duties of the Committee for all
purposes relating to any Award to a Named Executive Officer,
unless the Committee determines that such an Award is not
intended to qualify for the Performance-Based Exception. The
Board may, from time to time, remove members from, or add
members to, the Committee. Any vacancies on the Committee shall
be filled by members of the Board.
Acts of a majority of the Committee at which a quorum is
present, or acts reduced to or approved in writing by unanimous
consent of the members of the Committee, shall be valid acts of
the Committee.
3.2 AUTHORITY OF THE
COMMITTEE. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Corporation, and
subject to the provisions herein, the Committee shall have full
power to select Employees, prospective Employees and Directors
who shall participate in the Plan; determine the sizes and types
of Awards; determine the terms and conditions of Awards in a
manner consistent with the Plan; decide whether and to what
extent Awards shall be structured to conform with Code
Section 162(m) requirements for the Performance-Based
Exception; construe and interpret the Plan and any agreement or
instrument entered into under the Plan; establish, amend, or
waive rules and regulations consistent with the terms of the
Plan for the Plans administration; and amend the terms and
conditions of any outstanding Award to the extent such terms and
conditions are within the sole discretion of the Committee as
provided in the Plan and subject to Section 15;
provided that the Committee shall not have the authority
to amend any Option or SAR to reduce its Option Price or base
price except in accordance with Sections 4.3 and 4.4.
Further, the Committee shall make all other determinations which
may be necessary or advisable for the administration of the
Plan, including establishing administrative methods for the
exercise of Options and SARs. The
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Committees determinations, interpretations and actions
under the Plan need not be uniform and may be made selectively
among Employees, prospective Employees, Directors and their
beneficiaries.
3.3 DECISIONS BINDING. All
determinations and decisions made by the Committee (or its
delegate) pursuant to the provisions of the Plan and all related
orders and resolutions of the Board shall be final, conclusive
and binding on all persons, including the Corporation, its
stockholders, Employees, Directors, Participants, and their
estates and beneficiaries.
3.4 DELEGATION BY COMMITTEE. Unless
prohibited by applicable law or the applicable rules of a stock
exchange, the Committee may delegate all or some of its
responsibilities and powers to any one or more of its members.
The Committee also may delegate some or all of it administrative
duties and powers to any Employee, including officers of the
Corporation. The Committee may delegate to an executive officer
of the Corporation the authority to grant Awards under the Plan
to Employees who are not officers of the Corporation or any
Subsidiaries, provided that the terms and conditions of
such Awards shall be set forth in an Award Agreement approved by
the Committee prior to the grant of said Awards, the Committee
in its delegation shall specify the maximum Shares that may be
awarded to one Participant pursuant to such delegation in any
calendar year, and the executive officer shall report any such
grants to the Committee at its next meeting. In the case of any
such delegation, references in this Plan to the
Committee shall include any such delegate, as
applicable. The Committee hereby delegates to each of the
Corporations Corporate Secretary and General Counsel the
authority to document any and all Awards made by the Committee
and/or an
authorized executive officer under the Plan. The Committee may
revoke any such allocation or delegation at any time.
3.5 INFORMATION TO BE FURNISHED TO
COMMITTEE. The records of the Corporation and
Subsidiaries as to an Employees, Directors or
Participants employment, termination of employment,
performance of Services, termination of Services, leave of
absence, reemployment and compensation shall be conclusive on
all persons unless determined to be manifestly incorrect.
Participants and other persons entitled to benefits under the
Plan must, as a condition to the receipt or settlement of any
Award hereunder, furnish the Committee with such evidence, data
or information as the Committee reasonably considers desirable
to carry out the terms of the Plan.
3.6 INDEMNIFICATION. In addition to
such other rights of indemnification that they have as members
of the Board or the Committee, the Corporation shall indemnify
the members of the Committee (and any delegates of the
Committee, as permitted under Section 3.4, to the extent
permitted by applicable law, against reasonable expenses
(including, without limitation, attorneys fees) actually
and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal, to
which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan or
any Award awarded hereunder, and against all amounts paid by
them in settlement thereof (provided such settlement is
approved to the extent required by and in the manner provided by
the Articles of Incorporation or the Bylaws of the Corporation
relating to indemnification of the members of the Board) or paid
by them in satisfaction of a judgment in any such action, suit
or proceeding, except in relation to such matters as to which it
is adjudged in such action, suit or proceeding that such
Committee member or members (or their delegates) did not act in
good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the Corporation.
SECTION 4.
SHARES SUBJECT
TO THE PLAN AND MAXIMUM AWARDS
4.1 SHARES AVAILABLE FOR AWARDS.
(a) The Shares available for Awards may be either
authorized and unissued Shares or Shares held in or acquired for
the treasury of the Corporation. The aggregate number of Shares
that may be issued or used for reference purposes under the Plan
or with respect to which Awards may be granted shall not exceed
1,200,000 Shares, all of which may be issued pursuant to
Incentive Stock Options and are subject to adjustment as
provided in Section 4.3. The number of Shares reserved for
issuance under this Plan, as set forth
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above, shall be increased by reserved but unissued shares under
the Prior Plans, and no additional awards shall be granted under
the Prior Plans. In no event shall fractional Shares be issued
under the Plan.
(b) Upon:
(i) a payout of a SAR, RSU, or Performance Unit Award under
this Plan or comparable awards under either of the Prior Plans
in the form of cash; or
(ii) a cancellation, termination, expiration without
exercise, forfeiture, or lapse for any reason, of any Award
under this Plan or any award granted under either of the Prior
Plans; the number of Shares underlying any such Award (or Prior
Plan award) that were not issued as a result of any of the
foregoing actions shall again be available for the purposes of
Awards under the Plan. In addition, in the case of any Award
granted in substitution for an award of a company or business
acquired by the Corporation or a Subsidiary, Shares issued or
issuable in connection with such substitute Award shall not be
counted against the number of Shares reserved under the Plan,
but shall be available under the Plan by virtue of the
Corporations assumption of the plan or arrangement of the
acquired company or business.
All Restricted Shares which vest, and all Shares issued in
settlement of an Option, SAR, Restricted Stock Unit, or
Performance Share Award, or withheld for payment of the Option
Price or any tax imposed upon the exercise or settlement of the
Award, shall reduce the total number of Shares available under
the Plan and shall not again be available for the grant of any
Award hereunder.
Notwithstanding the foregoing, when a stock-settled SAR is
exercised under the Plan or either of the Prior Plans, the total
number of Shares subject to the SAR shall not be available for
subsequent issuance under the Plan, regardless of the number of
Shares used the settle the SAR.
4.2 INDIVIDUAL PARTICIPANT
LIMITATIONS. Unless and until the Committee
determines that an Award to a Named Executive Officer shall not
be designed to comply with the Performance-Based Exception, the
following rules shall apply to grants of such Awards under the
Plan:
(a) Subject to adjustment as provided in Section 4.3,
the maximum aggregate number of Shares (including Options,
Restricted Stock, Restricted Stock Units and Performance Shares)
that may be granted to a Named Executive Officer in any year
shall be 200,000 Shares.
(b) The maximum aggregate cash payout with respect to any
Award to any Named Executive Officer in any year shall be
$3,000,000.
4.3 ADJUSTMENTS. (a) Recapitalization. Notwithstanding
any other provision of the Plan, if the Corporation is involved
in a corporate transaction or any other event which affects the
Shares (including, without limitation, any recapitalization,
reclassification, reverse or forward stock split, stock
dividend, extraordinary cash dividend,
split-up,
spin-off, combination or exchange of shares), then the Committee
shall make or provide for such adjustments to Awards to prevent
the dilution or enlargement of rights of the Awards as follows:
(i) The Committee shall take action to adjust the number
and kind of Shares that are issuable under the Plan and the
maximum limits for each type of Award;
(ii) The Committee shall take action to adjust the number
and kind of Shares subject to outstanding Awards;
(iii) The Committee shall take action to adjust the
Exercise Price or base price of outstanding Options and Stock
Appreciation Rights; and
(iv) The Committee shall make any other equitable
adjustments.
Only whole Shares shall be issued in making the above
adjustments. Further, the number of Shares available under the
Plan or the number of Shares subject to any outstanding Awards
shall be the next lower number of Shares, so that fractions are
rounded downward. Any adjustment to or assumption of ISOs under
this Section shall be made in accordance with Code
Section 424. If the Corporation issues any rights to
subscribe for additional Shares pro rata to holders of
outstanding Shares of the class or classes of stock then
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set aside for the Plan, then each Participant shall be entitled
to the same rights on the same basis as holders of outstanding
Shares with respect to such portion of the Participants
Award as is exercised on or prior to the record date for
determining stockholders entitled to receive or exercise such
rights.
(b) Reorganization. If the Corporation is
part of any reorganization involving merger, consolidation,
acquisition of the Stock or acquisition of the assets of the
Corporation, the Committee, in its discretion, may decide that:
(i) any or all outstanding Awards shall pertain to and
apply, with appropriate adjustment as determined by the
Committee, to the securities of the resulting corporation to
which a holder of the number of Shares subject to each such
Award would have been entitled;
(ii) any or all outstanding Options or SARs shall become
immediately fully exercisable (to the extent permitted under
federal or state securities laws) and shall remain exercisable
for the remaining term of the Options or SARs under the terms of
the Plan;
(iii) any or all Options or SARs shall become immediately
fully exercisable (to the extent permitted under federal or
state securities laws) and shall be terminated after giving at
least 30 days notice to the Participants to whom such
Options or SARs have been granted; and/or
(iv) any or all unvested Restricted Stock Units and
Restricted Stock on which restrictions have not yet lapsed shall
become immediately fully vested, nonforfeitable and payable.
(c) Limits on Adjustments. Any issuance
by the Corporation of stock of any class other than the Stock,
or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be
made with respect to, the number or price of Shares subject to
any Award, except as specifically provided otherwise in this
Plan. The grant of Awards under the Plan shall not affect in any
way the right or authority of the Corporation to make
adjustments, reclassifications, reorganizations or changes of
its capital or business structure or to merge, consolidate or
dissolve, or to liquidate, sell or transfer all or any part of
its business or assets. All adjustments the Committee makes
under this Plan shall be conclusive.
4.4 PROHIBITION ON
REPRICING. Anything else contained herein to the
contrary notwithstanding, except as provided in
Section 4.3, the Committee shall not amend any Option or
SAR to reduce its Option Price or base price, and shall not
issue to any Participant a new Award in exchange for the
surrender and cancellation of any other Award, if such new Award
has an Option Price or base price (as applicable) lower than
that of the Award for which it is exchanged, or take any other
action that would have the effect of reducing the Option Price
or base price of an Option or SAR.
SECTION 5.
ELIGIBILITY
AND PARTICIPATION
5.1 ELIGIBILITY. Persons eligible
to participate in the Plan include current and future
U.S. and
non-U.S. Employees
(including officers), persons who have been offered employment
by the Corporation or a Subsidiary (provided that such
prospective Employee may not receive any payment or exercise any
right relating to an Award until such person begins employment
with the Corporation or Subsidiary), and Directors, as
designated by the Committee; provided, however, that ISOs
may only be granted to U.S. Employees.
5.2 PARTICIPATION. Subject to the
provisions of the Plan, the Committee, shall determine and
designate, from time to time, the Employees, prospective
Employees and Directors to whom Awards shall be granted, the
terms of such Awards, and the number of Shares subject to such
Award.
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SECTION 6.
STOCK OPTIONS
6.1 GRANT OF OPTIONS AND AWARD AGREEMENT.
(a) Option Grant. Subject to the terms
and provisions of the Plan, Options may be granted to one or
more Participants in such number, upon such terms and
provisions, and at any time and from time to time, as determined
by the Committee, in its sole discretion. The Committee may
grant either Nonqualified Stock Options or Incentive Stock
Options, and shall have complete discretion in determining the
number of Options of each granted to each Participant, subject
to the limitations of Section 4.
(b) Award Agreement. Each Award shall be
evidenced by an Award Agreement, effective as of the grant date,
which shall specify the Option Price, the term of the Option,
the number of Shares subject to the Option, and such other
provisions as the Committee shall determine, and which are not
inconsistent with the terms and provisions of the Plan. The
Award Agreement shall also specify whether the Option is to be
treated as an ISO within the meaning of Code Section 422.
If such Option is not designated as an ISO, such Option shall be
deemed an NSO. No ISO may be granted to any person more than
10 years after the Effective Date of the Plan.
6.2 OPTION PRICE. The Committee
shall designate the Option Price for each Share subject to an
Option under the Plan, provided that such Option Price
shall not be less than 100% of the Fair Market Value of Shares
subject to an Option on the date the Option is granted, and
which Option Price may not be subsequently decreased by the
Committee except pursuant to Section 4.3 and in compliance
with Code Section 409A. With respect to a Participant who
owns, directly or indirectly, more than 10% of the total
combined voting power of all classes of the stock of the
Corporation or any Subsidiary, the Option Price of Shares
subject to an ISO shall be at least 110% of the Fair Market
Value of such Shares on the ISOs grant date.
6.3 TERM OF OPTIONS. Each Option
granted to a Participant shall expire at such time as the
Committee shall determine at the time of grant, but in no event
shall be exercisable later than the 10th anniversary of the
grant date. Notwithstanding the foregoing, with respect to ISOs,
in the case of a Participant who owns, directly or indirectly,
more than 10% of the total combined voting power of all classes
of the stock of the Corporation or any Subsidiary, no such ISO
shall be exercisable later than the fifth anniversary of the
grant date.
6.4 EXERCISE OF OPTIONS. Options
granted under this Section 6 shall be exercisable at such
times and be subject to such restrictions and conditions as the
Committee shall in each instance approve, which need not be the
same for each Award or for each Participant, and shall be set
forth in the applicable Award Agreement, subject to
Section 11. Notwithstanding the preceding sentence, the
Fair Market Value of Shares to which ISOs are exercisable for
the first time by any Participant during any calendar year may
not exceed $100,000. Any ISOs that become exercisable in excess
of such amount shall be deemed NSOs to the extent of such
excess. The Committee, in its sole discretion and at any time,
may establish procedures setting a minimum number of Shares that
must be exercised at any one time.
6.5 EXERCISE AND PAYMENT. Options
granted under this Section 6 shall be exercised by the
delivery of a written (or electronic) notice of exercise to the
Corporation, setting forth the number of Shares with respect to
which the Option is to be exercised, accompanied by full payment
for the Shares and all applicable tax withholding. The Option
Price and applicable tax withholding upon exercise of any Option
shall be payable to the Corporation in full either:
(a) in cash or its equivalent,
(b) by tendering previously acquired Shares (held for any
minimum period needed to avoid adverse impacts to the
Corporations earnings for financial reporting purpose),
valued at their Fair Market Value at the time of exercise, with
such documentation as the Committee may require, or
(c) a combination of (a) and (b).
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In addition, payment of the Option Price and applicable tax
withholding may be payable by one or more of the following
methods either upon written consent from the Committee or if one
or more of the following methods will not result in a charge to
the Corporations earnings for financial reporting purposes:
(a) by withholding Shares that otherwise would be acquired
on exercise (valued at their Fair Market Value at the time of
exercise),
(b) by tendering other Awards payable under the
Plan, or
(c) by cashless exercise through delivery of irrevocable
instructions to a broker to promptly deliver to the Corporation
the amount of proceeds from a sale of all or a portion of the
Shares being exercised.
As soon as practicable after receipt of a written (or
electronic) notification of exercise and full payment, the
Corporation shall deliver, electronically or in paper form, the
Shares to the Participant. No Participant shall have any rights
of a shareholder with respect to Shares subject to an Option,
including any right to receive dividends, to vote, or to
participate in the equity of the Company, until such Option has
been exercised and payment made in full as provided herein.
SECTION 7.
STOCK
APPRECIATION RIGHTS
7.1 GRANT OF SARS AND AWARD AGREEMENT.
(a) SAR Grant. Subject to the terms and
conditions of the Plan, SARs may be granted to Participants and
at any time and from time to time, as determined by the
Committee, in its sole discretion. The Committee shall have
complete discretion in determining the number of SARs granted to
each Participant (subject to Section 4) and,
consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such SARs. The Committee
shall designate, at the time of grant, the base price of the
SAR, which base price shall be at least equal to the Fair Market
Value of a Share on the grant date of the SAR. Base prices of
SARs shall not subsequently be decreased by the Committee,
except pursuant to Section 4.3. The Committee, in its sole
discretion, may provide a maximum dollar limit on the total
aggregate payment due under a SAR.
(b) Award Agreement. Each Award shall be
evidenced by an Award Agreement that shall specify the base
price, the term of the SAR, and such other provisions as the
Committee shall determine, and which are not inconsistent with
the terms and provisions of the Plan.
7.2 TERM OF SARS. The term of a SAR
granted under the Plan shall be determined by the Committee, in
its sole discretion; provided, however, that unless
otherwise designated by the Committee, such term shall not
exceed ten years from the grant date.
7.3 EXERCISE OF SARS. SARs shall be
exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance approve,
which need not be the same for each Award or for each
Participant, and shall be set forth in the applicable Award
Agreement, subject to Section 11. The Committee, in its
sole discretion and at any time, may establish procedures
setting a minimum number of Shares with respect to which the SAR
must be exercised at any one time.
7.4 EXERCISE AND PAYMENT. SARs
granted under this Section 7 shall be exercised by the
delivery of a written (or electronic) notice of exercise to the
Corporation, setting forth the number of Shares with respect to
which the SAR is to be exercised, accompanied by full payment
for all applicable tax withholding. The applicable tax
withholding upon exercise of any SAR shall be payable to the
Corporation in full in the same manner as set forth in
Section 6.5 above. As soon as administratively practicable
following exercise of a SAR, a Participant shall be entitled to
receive payment from the Corporation in an amount determined by
multiplying:
(a) The excess of the Fair Market Value of a Share on the
date of exercise over the base price per Share; by
(b) The number of Shares with respect to which the SAR is
exercised.
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At the sole discretion of the Committee, exercisable at any
time, the payment upon SAR exercise may be in cash, in Shares of
equivalent value, or in some combination thereof.
SECTION 8.
RESTRICTED
STOCK AND RESTRICTED STOCK UNITS
8.1 GRANT OF RESTRICTED STOCK OR RSUS AND AWARD
AGREEMENT.
(a) Grant of Restricted Stock/Restricted Stock
Units. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may
grant Shares of Restricted Stock or RSUs to Participants in such
amounts as the Committee shall determine in its sole discretion.
The Committee shall have complete discretion in determining the
number of Shares underlying each Award (subject to
Section 4) and, consistent with the provisions of the
Plan, in determining the terms and conditions, including the
Period of Restriction or vesting, pertaining to such Restricted
Stock or RSU. The Committee may designate an RSU as payable in
cash, Stock, or a combination thereof.
(b) Award Agreement. Each Award shall be
evidenced by an Award Agreement that shall specify the Period of
Restriction or vesting, the number of Shares granted, and such
other provisions as the Committee shall determine pursuant to
Section 8.3 or otherwise, and which shall not be
inconsistent with the terms and provisions of the Plan.
8.2 TRANSFERABILITY OF RESTRICTED
STOCK. Except as provided in this Section 8,
the Shares of Restricted Stock granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, voluntarily or involuntarily, until the end of the
applicable Period of Restriction established by the Committee
(subject to Section 11) and specified in the Award
Agreement, or upon earlier satisfaction of any other conditions,
as specified by the Committee in its sole discretion (subject to
Section 11) and set forth in the Award Agreement.
8.3 SETTLEMENT OF AWARD. Except as
otherwise provided in Section 18.7 or in any Award
Agreement, and subject to any deferral elected pursuant to
Section 13.2, the Corporation shall retain the certificates
representing Shares of Restricted Stock in the
Corporations possession, or may deposit or transfer such
Shares electronically to a custodian designated by the
Committee, until such time as all conditions
and/or
restrictions applicable to such Shares have been satisfied as
soon as administratively practicable after the last day of the
applicable Period of Restriction on a Restricted Stock Award or
following vesting of an RSU Award, Shares covered by such
Restricted Stock Award or, in the case of RSUs, cash, Shares, or
a combination thereof, shall be delivered (in the case of
Shares, electronically or in paper form) to the Participant.
8.4 SHAREHOLDER RIGHTS. Unless
otherwise designated by the Committee in the Award Agreement,
the Participant shall have no shareholder rights with respect to
the Shares subject to the Restricted Stock or RSU Award,
including voting and cash dividend rights, until after the last
day of the Period of Restriction on the Restricted Stock or
vesting of the RSU and the Participant has received and become a
holder of record of the Shares; provided, however, that
in the event that any dividend constitutes a derivative security
or an equity security pursuant to the rules under
Section 16 of the Exchange Act, such dividend shall be
added to the Restricted Stock Award and subject to a Period of
Restriction equal to the remaining Period of Restriction
applicable to the Shares of Restricted Stock with respect to
which the dividend is paid. As a condition to receipt of Shares
of Restricted Stock, the Participant shall execute any voting
proxies or other similar documents requested by the Committee.
SECTION 9.
PERFORMANCE
UNITS AND PERFORMANCE SHARES
9.1 GRANT OF PERFORMANCE UNITS/SHARES AND
AWARD AGREEMENT.
(a) Grant of Performance
Unit/Shares. Subject to the terms of the Plan,
Performance Units
and/or
Performance Shares may be granted to Participants in such
amounts and upon such terms, and at any time and
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from time to time, as shall be determined by the Committee in
its sole discretion, which shall not be inconsistent with the
terms and provisions of the Plan and shall be set forth in an
Award Agreement.
(b) Award Agreement. Each Award shall be
evidenced by an Award Agreement that shall specify the initial
value of the Award, the performance goals and the Performance
Period, as the Committee shall determine, and which are not
inconsistent with the terms and provisions of the Plan.
9.2 VALUE OF PERFORMANCE
UNITS/SHARES. Each Performance Share shall
represent the Participants right to receive a Share
(subject to Section 9.4), upon satisfaction of performance
goals established by the Committee. Each Performance Unit shall
represent the Participants right to receive a cash payment
equal to the value of the Performance Unit (as determined by the
Committee on the grant date, and subject to Section 9.4),
upon satisfaction of the performance goals established by the
Committee. The Committee shall set performance goals in its sole
discretion which, depending on the extent to which they are met,
will determine the number
and/or value
of Performance Shares
and/or
Performance Units that will be paid out to the Participant. For
purposes of this Section 9, the time period during which
the performance goals must be met shall be called a Performance
Period.
9.3 EARNING OF PERFORMANCE
UNITS/SHARES. Subject to the terms of the Plan,
after the applicable Performance Period has ended, the holder of
Performance Units
and/or
Performance Shares shall be entitled to receive payment on his
or her Performance Units
and/or
Performance Shares earned by the Participant over the
Performance Period, based on the extent to which the
corresponding performance goals have been achieved, as
determined by the Committee.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE
UNITS/SHARES. Except as provided below, and
subject to any deferral elected pursuant to Section 13.2,
payment of earned Performance Units
and/or
Performance Shares shall be made in a single lump sum as soon as
reasonably practicable following the close of the applicable
Performance Period. Any Shares paid to a Participant may be
subject to any restrictions deemed appropriate by the Committee.
9.5 SHAREHOLDER RIGHTS. Unless
otherwise designated by the Committee in the Award Agreement,
the Participant shall have no shareholder rights with respect to
the Shares subject to the Performance Share Award, including
voting and cash dividend rights, until after the Award has
vested and the Participant has received and become a holder of
record of the Shares; provided, however, that in the
event that any dividend constitutes a derivative security or an
equity security pursuant to the rules under Section 16 of
the Exchange Act, such dividend shall be added to the Award and
subject to the same accrual, forfeiture, and payout restrictions
as apply to the underlying Award with respect to which the
dividend is paid.
SECTION 10.
PERFORMANCE
MEASURES
Unless and until the Committee proposes for stockholder vote and
stockholders approve a change in the general performance
measures set forth in this Section 10, the attainment of
which may determine the degree of payout
and/or
vesting with respect to Awards to Named Executive Officers that
are designed to qualify for the Performance-Based Exception, the
performance goals to be used for purposes of such grants shall
be established by the Committee in writing and stated in terms
of the attainment of specified levels of or percentage changes
in any one or more of the following measurements: revenue;
primary or fully-diluted earnings per Share; earnings before
interest, taxes, depreciation,
and/or
amortization; pretax income; operating income; cash flow from
operations; total cash flow; return on equity; return on
capital; return on assets; net operating profits after taxes;
economic value added; capital expenditures; expense levels;
stock price; debt levels; market share; total stockholder return
or return on sales; or any individual performance objective
which is measured solely in terms of quantitative targets
related to the Corporation or the Corporations business;
or any combination thereof. In addition, such performance goals
may be based in whole or in part upon the performance of the
Corporation, a Subsidiary, division
and/or other
operational unit under one or more of such measures.
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The degree of payout
and/or
vesting of such Awards designed to qualify for the
Performance-Based Exception shall be determined based upon the
written certification of the Committee as to the extent to which
the performance goals and any other material terms and
conditions precedent to such payment
and/or
vesting have been satisfied. The Committee shall have the sole
discretion to adjust the determinations of the degree of
attainment of the preestablished performance goals; provided,
however, that the performance goals applicable to Awards which
are designed to qualify for the Performance-Based Exception, and
which are held by Named Executive Officers, may not be adjusted
so as to increase the payment under the Award (the Committee
shall retain the sole discretion to adjust such performance
goals upward, or to otherwise reduce the amount of the payment
and/or
vesting of the Award relative to the preestablished performance
goals).
In the event that applicable tax
and/or
securities laws change to permit Committee sole discretion to
alter the governing performance measures without obtaining
stockholder approval of such changes, the Committee shall have
sole discretion to make such changes without obtaining
stockholder approval. In addition, in the event that the
Committee determines that it is advisable to grant Awards which
shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the
requirements of the Performance-Based Exception or Code
Section 162(m) and, thus, using performance measures other
than those specified above.
SECTION 11.
VESTING AND
FORFEITURES
11.1 VESTING. As part of making any
Award, the Committee may determine the time and conditions under
which the Award will vest or the Period of Restriction will
lapse. Vesting or the lapse of the Period of Restriction may, in
the Committees discretion, be based solely upon continued
employment or Service for a specified period of time, or may be
based upon the achievement of specific performance goals
(Corporation-wide, Subsidiary-wide, divisional,
and/or
individual) which are established by the Committee in its
discretion, subject to Section 10. For all purposes of this
Plan, vesting of an Award shall mean:
(a) In the case of an Option or SAR, the time at which the
Participant has the right to exercise the Award.
(b) In the case of Restricted Stock, the end of the Period
of Restriction.
(c) In the case of Restricted Stock Units, the end of the
Period of Restriction.
(d) In the case of Performance Shares or Performance Units,
the time at which the Participant has satisfied the requirements
to receive payment on such Performance Shares or Performance
Units, which shall not be less than one year from the grant
date, except as otherwise provided in Section 11.2.
Vesting or lapse provisions need not be uniform among Awards
granted at the same time or to persons similarly-situated.
Vesting and lapse requirements shall be set forth in the
applicable Award Agreement.
11.2 VESTING ON TERMINATION OF
EMPLOYMENT. Unless otherwise approved by the
Committee either at the time of grant or at some later date in
accordance with Code Sections 409A and 422, upon the
termination of the Participants employment or Service with
the Corporation and its Subsidiaries, all outstanding Awards
shall be cancelled and no longer exercisable on the date of the
termination. To the extent that the Committee approves extended
vesting or exercise provisions, such provisions need not be
uniform among all Awards issued pursuant to the Plan, and may
reflect distinctions based on the reasons for such termination.
11.3 ACCELERATION OF VESTING. The
Committee may, in its sole discretion, accelerate the vesting or
lapse of the Period of Restriction, in whole or in part, with
respect to any Award, but no such acceleration shall be
effective unless evidenced by a writing signed by a duly
authorized officer of the Corporation. In addition, the
Committee may impose additional conditions on Awards, by
inclusion of appropriate provisions in the document evidencing
or governing any such Award.
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11.4 EXTENSION OF EXERCISE PERIOD. The
Committee may, in its sole discretion, subject to the terms of
the Plan, exercisable either at the time an Award is granted or
at any time while the Award remains outstanding, to extend the
period of time for which the Option or SAR is to remain
exercisable following the Participants termination of
Service from the limited exercise period otherwise in effect for
that Option or SAR to such greater period of time as the
Committee shall deem appropriate, but in no event beyond the
expiration of the Option or SAR term,
and/or to
permit the Option or SAR to be exercised, during the applicable
post-termination exercise period, not only with respect to the
number of vested Shares for which such Option or SAR is
exercisable at the time of the Participants termination of
Service but also with respect to one or more additional
installments in which the Participant would have vested had the
Participant continued in Service. Such an extension may result
in recharacterization of an ISO as a NSO.
SECTION 12.
TRANSFERABILITY
OF AWARDS; BENEFICIARY DESIGNATION
12.1 LIMITS ON TRANSFERABILITY OF AWARDS.
(a) Except as otherwise provided below, Awards may be
exercisable only by the Participant during the
Participants lifetime, and Awards shall not be
transferable other than by will or the laws of descent and
distribution. Any purported transfer of any Award or any
interest therein that does not comply with the terms of this
Plan shall be null and void and confer no rights of any kind
upon the purported transferee.
(b) The Committee may, in its discretion, permit a
Participant to transfer any Award other than an ISO to any
family member of such Participant, subject to such restrictions
and limitations as the Committee may provide; provided,
however, that any such Award shall remain subject to all
vesting, forfeiture, and other restrictions provided herein and
in the Award Agreement to the same extent as if it had not been
transferred; and provided further that in no event shall any
transfer for value be permitted. For purposes of this
Section 12.1(b), the terms family member and
transfer for value have the same meaning as in the
General Instructions to SEC
Form S-8,
or such other form as the SEC may promulgate in replacement
thereof.
(c) To the maximum extent permitted by law, no Award shall
be subject, in whole or in part, to attachment, execution or
levy of any kind; provided, however, that nothing contained
herein shall affect the right of setoff set forth in
Section 14.3.
(d) Nothing contained in this Section 12.1 shall
preclude a Participant from transferring Restricted Shares that
have vested, or Shares that are issued in settlement of an
Option, SAR, RSU, or Award of Performance Shares or Performance
Units, subject to the remaining provisions of this Plan and
applicable law.
12.2 DESIGNATION OF
BENEFICIARY. Each Participant under the Plan may,
from time to time, name any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit
under the Plan is to be paid in case of his or her death before
he or she receives any or all of such benefit. Each such
designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Corporation,
and will be effective only when filed by the Participant in
writing (or electronically, if permitted by the Committee) with
the Secretary of the Corporation (or its designee) during the
Participants lifetime. In the absence of any such
designation, benefits remaining unpaid at the Participants
death shall be paid to the Participants estate.
SECTION 13.
DEFERRALS;
COMPLIANCE WITH SECTION 409A
13.1 PROHIBITION ON DEFERRALS OF OPTIONS, SARS,
AND RESTRICTED STOCK. No Participant shall have
the right to defer the amount of Shares or cash payable upon the
exercise or settlement of any Option or SAR, or the transfer of
any Restricted Stock upon the vesting thereof.
13.2 DEFERRALS OF RESTRICTED STOCK UNITS,
PERFORMANCE UNITS AND PERFORMANCE SHARES. The
Committee may permit a Participant to defer such
Participants receipt of the payment of cash
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or the delivery of Shares that would otherwise be due to such
Participant upon the satisfaction of any requirements or goals
with respect to Restricted Stock Units, Performance Units or
Performance Shares. If any such deferral election is required or
permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals,
subject to the following:
(a) A deferral election may be made only at one of the
following two times:
(i) In the case of an Award that cannot vest (other than by
reason of death, Disability, or a Change in Control) earlier
than the first anniversary of the date of grant, not later than
the earlier of thirty days after the date of grant or one year
prior to the earliest date on which the Award may vest.
(ii) In the case of an Award that is subject to a
Performance Period of not less than one year, and the vesting of
which is subject to the attainment of Performance Criteria that
are established within the first 90 days of the Performance
Period and that are not substantially certain of being achieved
at the time of grant, not later than six months prior to the end
of the Performance Period.
(b) A deferral election shall state the time and manner of
payment. Payment must either be on a specified date, at the time
of the Participants separation from Service with the
Corporation and its Subsidiaries as defined in Code
Section 409A, death, or Disability, or upon the occurrence
of a Change in Control. Notwithstanding the foregoing:
(i) An amount payable by reason of a separation from
Service to an Employee who is a key employee of the
Corporation, as defined in Code Section 409A, shall not be
paid until six months after the separation from service, and any
portion of such amount that would otherwise be payable during
such six month period shall be paid instead at the end of such
period.
(ii) Payment of any amount that the Corporation reasonably
determines would not be deductible by reason of Code
Section 162(m) shall be deferred until the earlier of the
earliest date on which the Corporation reasonably determines
that the deductibility of the payment will not be so limited, or
the year following the termination of employment.
(iii) Any payment that the Corporation reasonably
determines will violate a term of a loan agreement to which the
Corporation is a party, or other similar contract to which the
Corporation is a party, and such violation will cause material
harm to the Corporation shall be deferred until the earliest
date at which the Corporation reasonably anticipates that the
making of the payment will not cause such violation, or such
violation will not cause material harm to the Corporation.
(iv) Any payment that the Corporation reasonably
anticipates that will violate Federal securities laws or other
applicable law will be deferred until the earliest date at which
the Corporation reasonably anticipates that the making of the
payment will not cause such violation.
(v) The Committee may permit Participants to elect to
further defer payments, provided that any such election is made
not less than one year prior to the date on which the payment
would otherwise be made, and that the deferral is for a period
of at least five years.
(c) No payment that a Participant has elected to defer
pursuant to this Section 13.2 may be paid at any earlier
date, except in accordance with procedures adopted by the
Committee in compliance with Code Section 409A.
13.3 COMPLIANCE WITH
SECTION 409A. The provisions of this Plan,
including but not limited to this Section 13, are intended
to comply with the restrictions of Code Section 409A, and,
notwithstanding the Participant consent requirements of
Section 15.1, the Committee reserves the right to amend any
provision of this Plan, or any outstanding Award, to the extent
necessary to comply with Section 409A.
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SECTION 14.
RIGHTS AND
OBLIGATIONS OF PARTIES
14.1 NO GUARANTEE OF EMPLOYMENT OR SERVICE
RIGHTS. Nothing in the Plan shall interfere with
or limit in any way the right of the Corporation to terminate
any Participants employment or service at any time, nor
confer upon any Participant any right to continue in the employ
or service of the Corporation or any Subsidiary.
For purposes of the Plan, temporary absence from employment or
Service because of illness, vacation, approved leaves of
absence, and transfers of employment or Service among the
Corporation and its Subsidiaries, shall not be considered to
terminate employment or Service or to interrupt continuous
employment or Service. Conversion of a Participants
employment relationship to a Service arrangement, and vice
versa, shall not result in termination of previously granted
Awards.
14.2 PARTICIPATION. No Employee or
Director shall have the right to be selected to receive an Award
under the Plan, or, having been so selected, to be selected to
receive a future Award.
14.3 RIGHT OF SETOFF. The
Corporation or any Subsidiary may, to the extent permitted by
applicable law, deduct from and set off against any amounts the
Corporation or Subsidiary may owe to the Participant from time
to time, including amounts payable in connection with any Award,
owed as wages, fringe benefits, or other compensation owed to
the Participant, such amounts as may be owed by the Participant
to the Corporation, although the Participant shall remain liable
for any part of the Participants payment obligation not
satisfied through such deduction and setoff. By accepting any
Award granted hereunder, the Participant agrees to any deduction
or setoff under this Section 14.
14.4 SECTION 83(B)
ELECTION. No election under Section 83(b) of
the Code (to include in gross income in the year of transfer the
amounts specified in Code Section 83(b)) or under a similar
provision of the laws of a jurisdiction outside the
U.S. may be made, unless expressly permitted by the terms
of the Award Agreement or by action of the Committee in writing
before the making of such election. In any case in which a
Participant is permitted to make such an election in connection
with an Award, the Participant shall notify the Corporation of
such election within ten days of filing notice of the election
with the Internal Revenue Service or other governmental
authority, in addition to any filing and notification required
pursuant to regulations issued under Code Section 83(b) or
other applicable provision.
14.5 DISQUALIFYING DISPOSITION
NOTIFICATION. If any Participant shall make any
disposition of Shares delivered pursuant to the exercise of an
Incentive Stock Option under the circumstances described in Code
Section 421(b) (relating to certain disqualifying
dispositions), such Participant shall notify the Corporation of
such disposition within ten days thereof.
SECTION 15.
AMENDMENT,
MODIFICATION, AND TERMINATION
15.1 AMENDMENT, MODIFICATION, AND
TERMINATION. The Board may amend, suspend or
terminate the Plan or the Committees authority to grant
Awards under the Plan without the consent of stockholders or
Participants; provided, however, that any amendment to
the Plan shall be submitted to the Corporations
stockholders for approval not later than the earliest annual
meeting for which the record date is after the date of such
Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock
exchange or automated quotation system on which the Shares may
then be listed or quoted and the Board may otherwise, in its
sole discretion, determine to submit other amendments to the
Plan to stockholders for approval; and provided further,
that, without the consent of an affected Participant, no Board
action, other than to the extent necessary to comply with
applicable U.S. or foreign laws, may materially and
adversely affect the rights of such Participant under any
outstanding Award. The Committee shall have no authority to
waive or modify any other Award term after the Award has been
granted to the extent that the waived or modified term was
mandatory under the Plan.
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15.2 AWARDS PREVIOUSLY GRANTED. No
termination, amendment, or modification of the Plan, other than
to the extent necessary to comply with applicable U.S. or
foreign laws, shall adversely affect in any material way any
Award previously granted under the Plan, without the written (or
electronic) consent of the Participant holding such Award.
SECTION 16.
WITHHOLDING
The Corporation shall have the power and the right to deduct or
withhold from amounts due to the Participant by the Corporation,
or require a Participant to remit to the Corporation as a
condition of any Award, an amount (in cash or in kind, subject
to the approval of the Corporation) sufficient to satisfy the
minimum Federal, state and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any
taxable event arising as a result of the Plan. Notwithstanding
the above, in the case of Options or SARs, such tax withholding
shall be accomplished as set forth in Sections 6.5 and 7.4.
SECTION 17.
SUCCESSORS
All obligations of the Corporation under the Plan with respect
to Awards granted hereunder shall be binding on any successor to
the Corporation, whether the existence of such successor is the
result of a direct or indirect merger, consolidation, purchase
of all or substantially all of the business
and/or
assets of the Corporation or otherwise.
SECTION 18.
MISCELLANEOUS
18.1 UNFUNDED PLAN. 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 the obligation to
deliver Shares pursuant to an Award, nothing contained in the
Plan or any Award shall give any such Participant any rights
that are greater than those of a general creditor of the
Corporation; provided that the Committee may authorize the
creation of trusts and deposit therein cash, Shares, other
Awards or other property, or make other arrangements to meet the
Corporations obligations under the Plan. Such trusts or
other arrangements shall be consistent with the
unfunded status of the Plan unless the Committee
otherwise determines with the consent of each affected
Participant.
18.2 COMPLIANCE WITH CODE
SECTION 162(M). The Corporation intends that
Awards designated as Awards to Named Executive Officers shall
constitute qualified performance-based compensation
within the meaning of Code Section 162(m), unless otherwise
determined by the Committee at the time of allocation of an
Award. Accordingly, the terms of Sections 4.2, 6, 7, 8.5,
8.6, 9 and 10, including the definitions of Named Executive
Officer and other terms used therein, shall be interpreted in a
manner consistent with Code Section 162(m). The foregoing
notwithstanding, because the Committee cannot determine with
certainty whether a given Participant will be a Named Executive
Officer with respect to a fiscal year that has not yet been
completed, the term Named Executive Officer as used herein shall
mean only a person designated by the Committee as likely to be a
Named Executive Officer with respect to a specified fiscal year.
If any provision of the Plan or any Award Agreement relating to
a Performance Award that is designated as intended to comply
with Code Section 162(m) does not comply or is inconsistent
with the requirements of Code Section 162(m), such
provision shall be construed or deemed amended to the extent
necessary to conform to such requirements, and no provision
shall be deemed to confer upon the Committee or any other person
sole discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the
applicable performance objectives.
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18.3 AWARDS TO PARTICIPANTS OUTSIDE THE UNITED
STATES. The Committee may modify the terms of any
Award under the Plan made to or held by a Participant who is
then resident or primarily employed outside the U.S. in any
manner deemed by the Committee to be necessary or appropriate in
order that the Award shall conform to laws, regulations, and
customs of the country in which the Participant is then resident
or primarily employed, or so that the value and other benefits
of the Award to the Participant, as affected by foreign tax laws
and other restrictions applicable as a result of the
Participants residence or employment abroad, shall be
comparable to the value of such an Award to a Participant who is
resident or primarily employed in the U.S.. Such authorization
shall extend to and include establishing one or more separate
sub-plans
which include provisions not inconsistent with the Plan that
comply with statutory or regulatory requirements imposed by the
foreign country or countries in which the Participant resides.
If determined advisable by the Committee, an Award may be
modified under this Section in a manner that is inconsistent
with the express terms of the Plan, so long as such
modifications will not contravene any applicable law or result
in actual liability under Section 16(b) of the Exchange Act
for the Participant whose Award is modified.
18.4 GENDER AND NUMBER;
HEADINGS. Except where otherwise indicated by the
context, any masculine term used herein also shall include the
feminine; the plural shall include the singular and the singular
shall include the plural. Headings are included for the
convenience of reference only and shall not be used in the
interpretation or construction of any such provision contained
in the Plan.
18.5 SEVERABILITY. In the event any
provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been
included.
18.6 REQUIREMENTS OF LAW. The
granting of Awards and the issuance of Shares under the Plan
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. If at any time on or
after the Effective Date, the Committee, in its discretion,
shall determine that the requirements of any applicable federal
or state securities laws should fail to be met, no Shares
issuable under Awards and no Options or SARs shall be
exercisable until the Committee has determined that these
requirements have again been met. The Committee may suspend the
right to exercise an Options or SAR at any time when it
determines that allowing the exercise and issuance of Shares
would violate any federal or state securities or other laws, and
may provide that any time periods to exercise the Option or SAR
are extended during a period of suspension. With respect to
Insiders, transactions under this Plan are intended
to comply with all applicable conditions of
Rule 16b-3
under the Securities Exchange Act of 1934. To the extent any
provision of the Plan or action by the Committee fails to so
comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Committee. Each
Award Agreement and each certificate representing securities
granted pursuant to the Plan (including securities issuable
pursuant to the terms of derivative securities) may bear such
restrictive legend(s) as the Corporation deems necessary or
advisable under applicable law, including Federal and state
securities laws. If the date of the vesting or lapse of the
Period of Restriction with respect to any Award, other than an
Option or SAR, held by Participant who is subject to the
Corporations policy regarding trading of its Stock by its
officers and directors and Shares (the original vesting
date) is not within a window period applicable
to the Participant, as determined by the Corporation in
accordance with such policy, then the vesting or lapse of the
Period of Restriction with respect to such Award shall not occur
on such original vesting date and shall instead occur on the
first day of the next window period applicable to
the Participant pursuant to such policy.
18.7 ADDITIONAL RESTRICTIONS ON
TRANSFERS. The Committee may impose such
restrictions on any Shares acquired pursuant to an Award,
including Restricted Shares, Performance Shares, or Shares
received upon exercise of an Option or SAR or under an RSU, as
it may deem advisable.
18.8 GOVERNING LAW. To the extent
not preempted by Federal law, the Plan, and all agreements
hereunder, shall be construed in accordance with and governed by
the laws of the State of Delaware.
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