Attached files
file | filename |
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10-Q - FORM 10-Q - Superior Well Services, INC | l39665e10vq.htm |
EX-32.1 - EX-32.1 - Superior Well Services, INC | l39665exv32w1.htm |
EX-31.2 - EX-31.2 - Superior Well Services, INC | l39665exv31w2.htm |
EX-31.1 - EX-31.1 - Superior Well Services, INC | l39665exv31w1.htm |
EX-32.2 - EX-32.2 - Superior Well Services, INC | l39665exv32w2.htm |
EX-10.26 - EX-10.26 - Superior Well Services, INC | l39665exv10w26.htm |
TABLE OF
CONTENTS
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I. PURPOSE AND HISTORY
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II. DEFINITIONS
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1 | |||
III. EFFECTIVE DATE AND DURATION OF THE PLAN
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IV. ADMINISTRATION
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3 | |||
(a) Composition of Committee
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(b) Powers
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(c) Additional Powers
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V. SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF AWARDS
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(a) Shares Subject to the Plan and Award Limits
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(b) Grant of Awards
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(c) Stock Offered
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VI. ELIGIBILITY
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VII. STOCK OPTIONS
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(a) Option Period
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(b) Limitations on Exercise of Option
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(c) Special Limitations on Incentive Stock Options
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(d) Option Agreement
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(e) Option Price and Payment
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(f) Restrictions on Repricing of Options
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(g) Stockholder Rights and Privileges
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(h) Options and Rights in Substitution for Options Granted by
Other Employers
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VIII. RESTRICTED STOCK AWARDS
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(a) Forfeiture Restrictions To Be Established by the Committee
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(b) Other Terms and Conditions
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(c) Payment for Restricted Stock
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(d) Committees Discretion to Accelerate Vesting of
Restricted Stock Awards
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(e) Restricted Stock Agreements
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7 | |||
IX. PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS
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(a) Performance Conditions
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(b) Performance Awards
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(c) Annual Incentive Awards
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(d) Awards Criteria
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(e) Termination of Award
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(f) Performance Award and Annual Incentive Award Agreements
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(g) Written Determinations
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(h) Status of Paragraph IX(b) and Paragraph IX(c)
Awards under Section 162(m) of the Code
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X. PHANTOM STOCK AWARDS
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(a) Phantom Stock Awards
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(b) Award Period
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(c) Awards Criteria
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(d) Payment
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(e) Termination of Award
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(f) Phantom Stock Award Agreements
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i
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XI. BONUS STOCK AWARDS
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XII. RECAPITALIZATION OR REORGANIZATION
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(a) No Effect on Right or Power
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(b) Subdivision or Consolidation of Shares; Stock Dividends
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(c) Recapitalizations and Corporate Changes
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(d) Change of Control Value
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(e) Other Changes in the Common Stock
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(f) Stockholder Action
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(g) No Adjustments unless Otherwise Provided
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XIII. AMENDMENT AND TERMINATION OF THE PLAN
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XIV. MISCELLANEOUS
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(a) No Right To An Award
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(b) No Employment/Membership Rights Conferred
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(c) Payment Terms Applicable to All Awards
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(d) Other Laws; Withholding
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(e) No Restriction on Corporate Action
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(f) Restrictions on Transfer
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(g) Governing Law
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ii
SUPERIOR
WELL SERVICES, INC.
AMENDED AND RESTATED INCENTIVE COMPENSATION PLAN
AMENDED AND RESTATED INCENTIVE COMPENSATION PLAN
I.
PURPOSE AND HISTORY
The purpose of this Superior Well Services, Inc. Amended and
Restated Incentive Compensation Plan is to provide a means
through which SUPERIOR WELL SERVICES, INC., a Delaware
corporation (the Company), and its
Affiliates may attract able persons to serve as Directors or
Consultants or to enter the employ of the Company and its
Affiliates and to provide a means whereby those individuals upon
whom the responsibilities of the successful administration and
management of the Company and its Affiliates rest, and whose
present and potential contributions to the Company and its
Affiliates are of importance, can acquire and maintain stock
ownership, thereby strengthening their concern for the welfare
of the Company and its Affiliates. A further purpose of this
plan is to provide such individuals with additional incentive
and reward opportunities designed to enhance the profitable
growth of the Company and its Affiliates. Accordingly, this plan
provides for granting Incentive Stock Options, options that do
not constitute Incentive Stock Options, Restricted Stock Awards,
Performance Awards, Annual Incentive Awards, Phantom Stock
Awards, Bonus Stock Awards, or any combination of the foregoing,
as is best suited to the circumstances of the particular
employee, Consultant, or Director as provided herein.
This plan was initially approved by the Companys
stockholders on July 27, 2005 in connection with its
initial public offering as the Superior Well Services,
Inc. 2005 Stock Incentive Plan. This plan is now being
amended and restated to: (a) include the requisite
provisions for compliance with section 162(m) of the Code,
(b) include an additional award element to the plan in the
form of annual cash bonuses, and (c) re-title the plan as
the Superior Well Services, Inc. Amended and Restated Incentive
Compensation Plan (the Plan). The
amendment and restatement of this Plan is not, however, intended
to affect the terms of any Award granted prior to the effective
date of this Plan without the prior written consent of the
affected Participant(s).
II.
DEFINITIONS
The following definitions shall be applicable throughout the
Plan unless specifically modified by any paragraph:
(a) Affiliate means any corporation,
partnership, limited liability company or partnership,
association, trust or other organization which, directly or
indirectly, controls, is controlled by, or is under common
control with, the Company. For purposes of the preceding
sentence, control (including, with correlative
meanings, the terms controlled by and under
common control with), as used with respect to any entity
or organization, shall mean the possession, directly or
indirectly, of the power (i) to vote more than 50% of the
securities having ordinary voting power for the election of
directors of the controlled entity or organization, or
(ii) to direct or cause the direction of the management and
policies of the controlled entity or organization, whether
through the ownership of voting securities or by contract or
otherwise.
(b) Annual Incentive Award means a
conditional right granted to a Participant under
Paragraph IX of the Plan hereof to receive a cash payment,
Common Stock or other Award, as determined by the Committee,
after the end of a specified year; Annual Incentive Awards may
be designed as performance-based compensation for
purposes of section 162(m) of the Code, at the
Committees discretion.
(c) Annual Incentive Award Agreement
means a written agreement between the Company and a Participant
with respect to an Annual Incentive Award.
(d) Award means, individually or
collectively, any Option, Restricted Stock Award, Performance
Award, Annual Incentive Award, Phantom Stock Award, or Bonus
Stock Award.
(e) Board means the Board of Directors
of the Company.
(f) Bonus Stock Award means an Award
granted under Paragraph XI of the Plan.
1
(g) Code means the Internal Revenue Code
of 1986, as amended. Reference in the Plan to any section of the
Code shall be deemed to include any amendments or successor
provisions to such section and any regulations under such
section.
(h) Committee means a committee of the
Board that is selected by the Board as provided in
Paragraph IV(a).
(i) Common Stock means the common stock,
par value $0.01 per share, of the Company, or any security into
which such common stock may be changed by reason of any
transaction or event of the type described in Paragraph XII.
(j) Company means Superior Well
Services, Inc., a Delaware corporation.
(k) Consultant means any person who is
not an employee or a Director and who is providing advisory or
consulting services to the Company or any Affiliate.
(l) Corporate Change shall have the
meaning assigned to such term in Paragraph XII(c) of the
Plan.
(m) Covered Employee shall have the
meaning given to such term within section 162(m) of the
Code and the regulations thereunder (including Treasury
Regulation § 1.162-27 and successor regulations
thereto); provided, however, that as the Committee cannot
determine with certainty whether a given Participant will be a
Covered Employee with respect to a fiscal year that has not yet
been completed, the term Covered Employee as used herein shall
mean only a person designated by the Committee, at the time of
grant of Performance Awards or an Annual Incentive Award, who is
likely to be a Covered Employee with respect to that fiscal year.
(n) Director means an individual who is
a member of the Board.
(o) An employee means any person
(including a Director) in an employment relationship with the
Company or any Affiliate.
(p) Executive Officer shall mean an
executive officer of the Company that is subject to
section 16 of the 1934 Act.
(q) Fair Market Value means, as of any
specified date, the mean of the high and low sales prices of the
Common Stock (i) reported by the National Market System of
NASDAQ on that date or (ii) if the Common Stock is listed
on a national stock exchange, reported on the stock exchange
composite tape on that date (or such other reporting service
approved by the Committee); or, in either case, if no prices are
reported on that date, on the last preceding date on which such
prices of the Common Stock are so reported. If the Common Stock
is traded over the counter at the time a determination of its
fair market value is required to be made hereunder, its fair
market value shall be deemed to be equal to the average between
the reported high and low or closing bid and asked prices of
Common Stock on the most recent date on which Common Stock was
publicly traded. In the event Common Stock is not publicly
traded at the time a determination of its value is required to
be made hereunder, the determination of its fair market value
shall be made by the Committee in such manner as it deems
appropriate. Notwithstanding the foregoing, the Fair Market
Value of a share of Common Stock on the date of an initial
public offering of Common Stock shall be the offering price
under such initial public offering.
(r) Incentive Stock Option means an
incentive stock option within the meaning of section 422 of
the Code
(s) 1934 Act means the Securities
Exchange Act of 1934, as amended.
(t) Option means an Award granted under
Paragraph VII of the Plan and includes both Incentive Stock
Options to purchase Common Stock and Options that do not
constitute Incentive Stock Options to purchase Common Stock.
(u) Option Agreement means a written
agreement between the Company and a Participant with respect to
an Option.
(v) Participant means an employee,
Consultant, or Director who has been granted an Award.
2
(w) Performance Award means an Award
granted under Paragraph IX of the Plan.
(x) Performance Award Agreement means a
written agreement between the Company and a Participant with
respect to a Performance Award.
(y) Phantom Stock Award means an Award
granted under Paragraph X of the Plan.
(z) Phantom Stock Award Agreement means
a written agreement between the Company and a Participant with
respect to a Phantom Stock Award.
(aa) Plan means this Superior Well
Services, Inc. Amended and Restated Incentive Compensation Plan,
as amended from time to time.
(bb) Qualified Member means a member of
the Committee who is a nonemployee Director within
the meaning of
Rule 16b-3(b)(3)
and an outside director within the meaning of
Treasury
Regulation 1.162-27
under section 162(m) of the Code.
(cc) Restricted Stock Agreement means a
written agreement between the Company and a Participant with
respect to a Restricted Stock Award.
(dd) Restricted Stock Award means an
Award granted under Paragraph VIII of the Plan.
(ee) Rule 16b-3
means SEC
Rule 16b-3
promulgated under the 1934 Act, as such may be amended from
time to time, and any successor rule, regulation or statute
fulfilling the same or a similar function.
(ff) Stock Appreciation Right means a
right to acquire, upon exercise of the right, Common Stock
and/or, in the sole discretion of the Committee, cash having an
aggregate value equal to the then excess of the Fair Market
Value of the shares with respect to which the right is exercised
over the exercise price therefor.
III.
EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan was originally effective as of July 27, 2005. This
amendment and restatement of the Plan shall become effective
upon the date of its adoption by the Board. No further Awards
may be granted under the Plan after 10 years from the date
of the Plans original effective date, meaning that no
further Awards will be granted pursuant to the Plan following
July 27, 2015. Though no Awards may be granted past this
date, the Plan shall remain in effect until all Options granted
under the Plan have been exercised or expired, all Restricted
Stock Awards granted under the Plan have vested or been
forfeited, and all Performance Awards, Annual Incentive Awards,
Phantom Stock Awards, and Bonus Stock Awards have been satisfied
or expired.
IV.
ADMINISTRATION
(a) Composition of Committee. The
Plan shall be administered by a committee of, and appointed by,
the Board. In the absence of the Boards appointment of a
Committee to administer the Plan, the Board shall serve as the
Committee, in which case references herein to the
Committee shall be deemed to include references to
the Board. At any time that a member of a Committee
is not a Qualified Member, any action of the applicable
Committee relating to an Award granted or to be granted to a
Participant who is then an Executive Officer, or relating to an
Award intended by the Committee to qualify as
performance-based compensation within the meaning of
section 162(m) of the Code and regulations thereunder, may
be taken either (i) by a subcommittee, designated by the
Committee, composed solely of two or more Qualified Members, or
(ii) by the Committee but with each such member who is not
a Qualified Member abstaining or recusing himself or herself
from such action; provided, however, that, upon such abstention
or recusal, the Committee remains composed solely of two or more
Qualified Members. Such action, authorized by such a
subcommittee or by the Committee upon the abstention or recusal
of such non-Qualified Member(s), shall be the action of the
Committee for purposes of this Plan. Any action of the Committee
shall be final, conclusive and binding on all persons, including
the Company, its Affiliates, stockholders, Participants,
beneficiaries, and permitted transferees under the Plan or other
persons claiming rights from or through a Participant. The
express grant of any specific power to the Committee, and the
taking of any action by the Committee, shall not be construed as
limiting any power or authority of the Committee. The
3
Committee may delegate to officers or managers of the Company or
any of its Affiliates, or committees thereof, the authority,
subject to such terms as the Committee shall determine, to
perform such functions, including administrative functions, as
the Committee may determine, to the extent that such delegation
will not result in the loss of an exemption under
Rule 16b-3(d)(1)
for Awards granted to Executive Officers and will not cause
Awards intended to qualify as performance-based
compensation under section 162(m) of the Code to fail
to so qualify. The Committee may appoint agents to assist it in
administering the Plan.
(b) Powers. Subject to the express
provisions of the Plan and
Rule 16b-3,
the Committee shall have the authority, in its sole and absolute
discretion, to (i) adopt, amend, and rescind administrative
and interpretive rules and regulations relating to the Plan;
(ii) determine the eligible persons to whom, and the time
or times at which, Awards shall be granted; (iii) determine
the amount of cash and the number of shares of Common Stock, or
any combination thereof, that shall be the subject of each
Award; (iv) determine the terms and provisions of each
Award agreement (which need not be identical), including
provisions defining or otherwise relating to (A) the term
and the period or periods and extent of exercisability of the
Options, (B) the extent to which the transferability of
shares of Common Stock issued or transferred pursuant to any
Award is restricted, (C) except as otherwise provided
herein, the effect of termination of employment, or the service
relationship with the Company, of a Participant on the Award,
and (D) the effect of approved leaves of absence
(consistent with any applicable regulations of the Internal
Revenue Service); (v) accelerate the time of exercisability
of any Award that has been granted; (vi) construe the
respective Award agreements and the Plan; (vii) make
determinations of the Fair Market Value of the Common Stock
pursuant to the Plan; (viii) delegate its duties under the
Plan to such agents as it may appoint from time to time,
provided that the Committee may not delegate its duties with
respect to making Awards to individuals subject to
section 162(m) of the Code, or otherwise with respect to
Awards granted to Executive Officers; (ix) subject to the
restrictions contained within the Plan, terminate, modify or
amend the Plan, and (x) make all other determinations,
perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan,
including the delegation of those ministerial acts and
responsibilities as the Committee deems appropriate. In making
such determinations, the Committee shall take into account the
nature of the services rendered by the respective employees,
Consultants, or Directors, their present and potential
contribution to the Companys success, and such other
factors as the Committee in its sole discretion shall deem
relevant.
(c) Additional Powers. The
Committee shall have such additional powers as are delegated to
it by the other provisions of the Plan. Subject to the express
provisions of the Plan, this shall include the power to construe
the Plan and the respective agreements executed hereunder, to
prescribe rules and regulations relating to the Plan, and to
determine the terms, restrictions and provisions of the
agreement relating to each Award, including such terms,
restrictions and provisions as shall be requisite in the
judgment of the Committee to cause designated Options to qualify
as Incentive Stock Options, and to make all other determinations
necessary or advisable for administering the Plan. Subject to
Rule 16b-3
and section 162(m) of the Code, the Committee may correct
any defect, supply any omission, or reconcile any inconsistency
in the Plan, in any Award, or in any Award agreement in the
manner and to the extent it deems necessary or desirable to
carry the Plan into effect, and the Committee shall be the sole
and final judge of that necessity or desirability. The
determinations of the Committee on the matters referred to in
this Paragraph IV shall be conclusive.
V.
SHARES SUBJECT TO THE PLAN; AWARD LIMITS; GRANT OF
AWARDS
(a) Shares Subject to the Plan and Award
Limits. Subject to adjustment in the same
manner as provided in Paragraph XII with respect to shares
of Common Stock subject to Options then outstanding, the
aggregate number of shares of Common Stock that may be issued
under the Plan, and the aggregate maximum number of shares of
Common Stock that may be issued under the Plan through Incentive
Stock Options, shall not exceed 2,700,000 shares. Shares
shall be deemed to have been issued under the Plan only to the
extent actually issued and delivered pursuant to an Award. To
the extent that an Award lapses or the rights of its holder
terminate, any shares of Common Stock subject to such Award
shall again be available for the grant of an Award under the
Plan. In addition, shares issued under the Plan and forfeited
back to the Plan, shares surrendered in payment of the exercise
price or purchase price of an Award, and shares withheld for
payment of applicable employment taxes
and/or
withholding obligations associated with an Award shall again be
available for the grant of an Award under the Plan.
Notwithstanding any provision in the Plan to the contrary, the
maximum number of shares of Common Stock that
4
may be subject to Options, Restricted Stock Awards and
Performance Awards or Annual Incentive Awards denominated in
shares of Common Stock granted to any one individual during the
term of the Plan may not exceed 270,000 shares of Common
Stock, and the maximum amount of compensation that may be paid
under all Performance Awards or Annual Incentive Awards
denominated in cash (including the Fair Market Value of any
shares of Common Stock paid in satisfaction of such Performance
Awards or Annual Incentive Awards) granted to any one individual
during any calendar year may not exceed $3.5 million.
(b) Grant of Awards. The Committee
may from time to time grant Awards to one or more employees,
Consultants, or Directors determined by it to be eligible for
participation in the Plan in accordance with the terms of the
Plan.
(c) Stock Offered. Subject to the
limitations set forth in Paragraph V(a), the stock to be
offered pursuant to the grant of an Award may be authorized but
unissued Common Stock or Common Stock previously issued and
outstanding and reacquired by the Company. Any of such shares
which remain unissued and which are not subject to outstanding
Awards at the termination of the Plan shall cease to be subject
to the Plan but, until termination of the Plan, the Company
shall at all times make available a sufficient number of shares
to meet the requirements of the Plan.
VI.
ELIGIBILITY
Awards may be granted only to persons who, at the time of grant,
are employees, Consultants, or Directors. An Award may be
granted on more than one occasion to the same person, and,
subject to the limitations set forth in the Plan, such Award may
include an Incentive Stock Option, an Option that is not an
Incentive Stock Option, a Restricted Stock Award, a Performance
Award, an Annual Incentive Award, a Phantom Stock Award, a Bonus
Stock Award, or any combination thereof.
VII.
STOCK OPTIONS
(a) Option Period. The term of
each Option shall be as specified by the Committee at the date
of grant, but in no event shall an Option be exercisable after
the expiration of 10 years from the date of grant.
(b) Limitations on Exercise of
Option. An Option shall be exercisable in
whole or in such installments and at such times as determined by
the Committee.
(c) Special Limitations on Incentive Stock
Options. An Incentive Stock Option may be
granted only to an individual who is employed by the Company or
any parent or subsidiary corporation (as defined in
section 424 of the Code) at the time the Option is granted.
To the extent that the aggregate fair market value (determined
at the time the respective Incentive Stock Option is granted) of
stock with respect to which Incentive Stock Options are
exercisable for the first time by an individual during any
calendar year under all incentive stock option plans of the
Company and its parent and subsidiary corporations exceeds
$100,000, such Incentive Stock Options shall be treated as
Options which do not constitute Incentive Stock Options. The
Committee shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Participants
Incentive Stock Options will not constitute Incentive Stock
Options because of such limitation and shall notify the
Participant of such determination as soon as practicable after
such determination. No Incentive Stock Option shall be granted
to an individual if, at the time the Option is granted, such
individual owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or
of its parent or subsidiary corporation, within the meaning of
section 422(b)(6) of the Code, unless (i) at the time
such Option is granted the option price is at least 110% of the
Fair Market Value of the Common Stock subject to the Option and
(ii) such Option by its terms is not exercisable after the
expiration of five years from the date of grant. An Incentive
Stock Option shall not be transferable otherwise than by will or
the laws of descent and distribution, and shall be exercisable
during the Participants lifetime only by such Participant
or the Participants guardian or legal representative.
(d) Option Agreement. Each Option
shall be evidenced by an Option Agreement in such form and
containing such provisions not inconsistent with the provisions
of the Plan as the Committee from time to time
5
shall approve, including, without limitation, provisions to
qualify an Incentive Stock Option under section 422 of the
Code. Each Option Agreement shall specify the effect of
termination of (i) employment, (ii) the consulting or
advisory relationship, or (iii) membership on the Board, as
applicable, on the exercisability of the Option. An Option
Agreement may provide for the payment of the option price, in
whole or in part, by the delivery of a number of shares of
Common Stock (plus cash if necessary) having a Fair Market Value
equal to such option price. Moreover, an Option Agreement may
provide for a cashless exercise of the Option by
establishing procedures satisfactory to the Committee with
respect thereto. Further, an Option Agreement may provide, on
such terms and conditions as the Committee in its sole
discretion may prescribe, for the grant of a Stock Appreciation
Right in connection with the grant of an Option and, in such
case, the exercise of the Stock Appreciation Right shall result
in the surrender of the right to purchase a number of shares
under the Option equal to the number of shares with respect to
which the Stock Appreciation Right is exercised (and vice
versa). In the case of any Stock Appreciation Right that is
granted in connection with an Incentive Stock Option, such right
shall be exercisable only when the Fair Market Value of the
Common Stock exceeds the price specified therefor in the Option
or the portion thereof to be surrendered. The terms and
conditions of the respective Option Agreements need not be
identical. Subject to the consent of the Participant, the
Committee may, in its sole discretion, amend an outstanding
Option Agreement from time to time in any manner that is not
inconsistent with the provisions of the Plan (including, without
limitation, an amendment that accelerates the time at which the
Option, or a portion thereof, may be exercisable).
(e) Option Price and Payment. The
price at which a share of Common Stock may be purchased upon
exercise of an Option shall be determined by the Committee but,
subject to adjustment as provided in Paragraph XII such
purchase price shall not be less than the Fair Market Value of a
share of Common Stock on the date such Option is granted. The
Option or portion thereof may be exercised by delivery of an
irrevocable notice of exercise to the Company, as specified by
the Committee. The purchase price of the Option or portion
thereof shall be paid in full in the manner prescribed by the
Committee. Separate stock certificates shall be issued by the
Company for those shares acquired pursuant to the exercise of an
Incentive Stock Option and for those shares acquired pursuant to
the exercise of any Option that does not constitute an Incentive
Stock Option.
(f) Restrictions on Repricing of
Options. Except as provided in
Paragraph XII, the Committee may not, without approval of
the stockholders of the Company, amend any outstanding Option
Agreement to lower the option price (or cancel and replace any
outstanding Option Agreement with Option Agreements having a
lower option price).
(g) Stockholder Rights and
Privileges. The Participant shall be entitled
to all the privileges and rights of a stockholder only with
respect to such shares of Common Stock as have been purchased
under the Option and for which certificates of stock have been
registered in the Participants name.
(h) Options and Rights in Substitution for Options
Granted by Other Employers. Options and Stock
Appreciation Rights may be granted under the Plan from time to
time in substitution for options and such rights held by
individuals providing services to corporations or other entities
who become employees, Consultants, or Directors as a result of a
merger or consolidation or other business transaction with the
Company or any Affiliate.
VIII.
RESTRICTED STOCK AWARDS
(a) Forfeiture Restrictions To Be Established by the
Committee. Shares of Common Stock that are
the subject of a Restricted Stock Award shall be subject to
restrictions on disposition by the Participant and an obligation
of the Participant to forfeit and surrender the shares to the
Company under certain circumstances (the Forfeiture
Restrictions). The Forfeiture Restrictions shall
be determined by the Committee in its sole discretion, and the
Committee may provide that the Forfeiture Restrictions shall
lapse upon the attainment of one or more performance measures
established by the Committee. In the event that the Committee
determines to subject the Restricted Stock to performance
measures in order to create a performance-based
compensation award as defined in section 162(m) of
the Code, the performance conditions will be composed of and
comply with the provisions of Paragraph IX of this Plan.
Where the Restricted Stock is not intended to be
performance-based compensation under
section 162(m) of the Code, any performance measures may be
determined by the Committee in its sole
6
discretion. Each Restricted Stock Award may have different
Forfeiture Restrictions, in the discretion of the Committee.
(b) Other Terms and
Conditions. Common Stock awarded pursuant to
a Restricted Stock Award shall be represented by a stock
certificate registered in the name of the Participant. Unless
provided otherwise in a Restricted Stock Agreement, the
Participant shall have the right to receive dividends with
respect to Common Stock subject to a Restricted Stock Award, to
vote Common Stock subject thereto and to enjoy all other
stockholder rights, except that (i) the Participant shall
not be entitled to delivery of the stock certificate until the
Forfeiture Restrictions have expired, (ii) the Company
shall retain custody of the stock until the Forfeiture
Restrictions have expired, (iii) the Participant may not
sell, transfer, pledge, exchange, hypothecate or otherwise
dispose of the stock until the Forfeiture Restrictions have
expired, and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock
Agreement shall cause a forfeiture of the Restricted Stock
Award. At the time of such Award, the Committee may, in its sole
discretion, prescribe additional terms, conditions or
restrictions relating to Restricted Stock Awards, including, but
not limited to, rules pertaining to the termination of
employment or service as a Consultant or Director (by
retirement, disability, death or otherwise, such terms of which
shall be defined in the applicable Award agreement) of a
Participant prior to expiration of the Forfeitures Restrictions.
Such additional terms, conditions or restrictions shall be set
forth in a Restricted Stock Agreement made in conjunction with
the Award.
(c) Payment for Restricted
Stock. The Committee shall determine the
amount and form of any payment for Common Stock received
pursuant to a Restricted Stock Award, provided that in the
absence of such a determination, a Participant shall not be
required to make any payment for Common Stock received pursuant
to a Restricted Stock Award, except to the extent otherwise
required by law.
(d) Committees Discretion to Accelerate Vesting
of Restricted Stock Awards. The Committee
may, in its discretion and as of a date determined by the
Committee, fully vest any or all Common Stock awarded to a
Participant pursuant to a Restricted Stock Award and, upon such
vesting, all restrictions applicable to such Restricted Stock
Award shall terminate as of such date. Any action by the
Committee pursuant to this Subparagraph may vary among
individual Participants and may vary among the Restricted Stock
Awards held by any individual Participant. Notwithstanding the
preceding provisions of this Subparagraph, the Committee may not
take any action described in this Subparagraph with respect to a
Restricted Stock Award that has been granted to a Covered
Employee if such Award has been designed to meet the exception
for performance-based compensation under section 162(m) of
the Code.
(e) Restricted Stock
Agreements. At the time any Award is made
under this Paragraph VIII, the Company and the Participant
shall enter into a Restricted Stock Agreement setting forth each
of the matters contemplated hereby and such other matters as the
Committee may determine to be appropriate. The terms and
provisions of the respective Restricted Stock Agreements need
not be identical. Subject to the consent of the Participant and
the restriction set forth in the last sentence of Subparagraph
(d) above, the Committee may, in its sole discretion, amend
an outstanding Restricted Stock Agreement from time to time in
any manner that is not inconsistent with the provisions of the
Plan.
IX.
PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS
(a) Performance Conditions. The
right of a Participant to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject
to such performance conditions as may be specified by the
Committee. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in
establishing any performance conditions, and may exercise its
discretion to reduce or increase the amounts payable under any
Award subject to performance conditions, except as limited under
Paragraphs IX(b) and IX(c) hereof in the case of a
Performance Award or Annual Incentive Award intended to qualify
under section 162(m) of the Code.
(b) Performance Awards. If the
Committee determines that a Performance Award to be granted to
an eligible person who is designated by the Committee as likely
to be a Covered Employee should qualify as
performance-based compensation for purposes of
section 162(m) of the Code, the grant, exercise
and/or
settlement of such
7
Performance Award will be contingent upon achievement of
pre-established performance goals and other terms set forth in
this Paragraph IX(b). The Committee may not exercise
discretion to increase the amounts payable under any Performance
Award subject to performance conditions for Awards intended to
qualify as performance-based compensation to a
Covered Employee. For all Performance Awards granted to an
eligible person who is not designated by the Committee as likely
to be a Covered Employee, the grant, exercise
and/or
settlement of such a Performance Award may also be contingent
upon the achievement of pre-established performance goals and
other terms set forth in this Paragraph IX(b) or on any
such other performance goals and terms determined appropriate by
the Committee for the applicable performance period or eligible
person.
(i) Performance Goals
Generally. The performance goals for
Performance Awards shall consist of one or more business
criteria or individual performance criteria and a targeted level
or levels of performance with respect to each of such criteria,
as specified by the Committee consistent with this
Paragraph IX(b). Performance goals shall be objective and
shall otherwise meet the requirements of section 162(m) of
the Code and regulations thereunder (including Treasury
Regulation § 1.162-27 and successor regulations
thereto), including the requirement that the level or levels of
performance targeted by the Committee result in the achievement
of performance goals being substantially uncertain
at the time the Committee actually establishes the performance
goal or goals for grants to all eligible persons who are
designated by the Committee as likely to be Covered Employees.
The Committee may determine that such Performance Awards shall
be granted, exercised,
and/or
settled upon achievement of any one performance goal or that two
or more of the performance goals must be achieved as a condition
to grant, exercise
and/or
settlement of such Performance Awards. Performance goals may
differ for Performance Awards granted to any one Participant or
to different Participants.
(ii) Business and Individual Performance
Criteria.
A. Business Criteria. One or more of the
following business criteria for the Company, on a consolidated
basis,
and/or for
specified subsidiaries or business or geographical units of the
Company, shall be used by the Committee in establishing
performance goals for such Performance Awards: (1) earnings
per share; (2) increase in revenues; (3) increase in
cash flow; (4) return on invested capital; (5) return
on equity; (6) change in the fair market value of our
stock; (7) debt reduction; (8) operating margin;
(9) net income; (10) pretax earnings before interest,
depreciation and amortization; (11) pretax earnings;
(12) any of the above goals determined on an absolute or
relative basis or as compared to the performance of a published
or special index deemed applicable by the Committee including,
but not limited to, the Standard & Poors 500
Stock Index or a group of comparable companies. The business
criteria shall be subject to adjustment for changes in
accounting standards required by the Financial Accounting
Standards Board after the goal is established, and, to the
extent provided for in any Award agreement, shall be subject to
adjustment for specified significant extraordinary items or
events, or nonrecurring transactions or events. In this regard,
business criteria based on the price of our Common Stock shall
be proportionately adjusted for any changes in the price due to
a stock split, recapitalization or similar corporate
transaction. One or more of the foregoing business criteria
shall also be exclusively used in establishing performance goals
for Annual Incentive Awards granted to a Covered Employee under
Paragraph IX(c) hereof.
B. Individual Criteria. The grant,
exercise
and/or
settlement of Performance Awards may also be contingent upon
individual performance goals established by the Committee. If
required for compliance with section 162(m) of the Code,
such criteria shall be approved by the Companys
stockholders.
(iii) Performance Period; Timing for Establishing
Performance Awards. Achievement of
performance goals in respect of Performance Awards shall be
measured over a performance period of up to ten years, as
specified by the Committee. Performance goals shall be
established no later than the earliest of the following to
occur: (A) 90 days after the beginning of any
performance period applicable to such Performance Awards,
(B) the last date that would constitute less than 25% of
the performance period applicable to such Performance Awards, or
(C) at such other date as may be required or permitted for
performance-based compensation under
section 162(m) of the Code.
8
(iv) Performance Award Pool. The
Committee may, at its discretion, establish a Performance Award
pool(s), which shall be an unfunded pool, for purposes of
measuring performance of the Company in connection with
Performance Awards associated with any given performance period.
The amount of such Performance Award pool shall be based upon
the achievement of a performance goal or goals based on one or
more of the criteria set forth in Paragraph IX(b)(2) hereof
for eligible persons who are designated by the Committee as
likely to be a Covered Employee, or based upon performance
goal(s) as determined by the Committee for all other eligible
persons, during the given performance period as specified by the
Committee in accordance with Paragraph IX(b)(3) hereof. The
Committee may specify the amount of the Performance Award
pool(s) as a percentage of any of such criteria, a percentage
thereof in excess of a threshold amount, or as another amount
which need not bear a strictly mathematical relationship to such
criteria.
(v) Payment of Performance
Awards. After the end of each designated
performance period, the Committee shall determine the amount, if
any, of (A) the applicable Performance Award pool, and the
maximum amount of the potential Performance Award payable to
each Participant in the Performance Award pool, or (B) the
amount of the potential Performance Award otherwise payable to
each Participant. Settlement of such Performance Awards shall be
in cash, Common Stock, other Awards or other property, in the
discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be
made in connection with such Performance Awards, but may not
exercise discretion to increase any such amount payable to a
Covered Employee in respect of a Performance Award subject to
this Paragraph IX(b). The Committee shall specify the
circumstances in which such Performance Awards shall be paid or
forfeited in the event of termination of employment by the
Participant prior to the end of a performance period or
settlement of Performance Awards.
(c) Annual Incentive Awards. If
the Committee determines that an Annual Incentive Award to be
granted to an eligible person who is designated by the Committee
as likely to be a Covered Employee should qualify as
performance-based compensation for purposes of
section 162(m) of the Code, the grant, exercise
and/or
settlement of such Annual Incentive Award shall be contingent
upon achievement of pre-established performance goals and other
terms set forth in this Paragraph IX(c). The Committee may
not exercise discretion to increase the amounts payable under
any Annual Incentive Award subject to performance conditions for
Awards intended to qualify as performance-based
compensation to a Covered Employee. For all Annual
Incentive Awards granted to an eligible person who is not
designated by the Committee as likely to be a Covered Employee,
the grant, exercise
and/or
settlement of such an Annual Incentive Award may also be
contingent upon the achievement of pre-established performance
goals and other terms set forth in this Paragraph IX(c) or
on any such other performance goals and terms determined
appropriate by the Committee for the applicable performance
period or eligible person.
(i) Potential Annual Incentive
Awards. Not later than the end of the
90th day of each applicable year, or at such other date as
may be required or permitted in the case of Awards intended to
be performance-based compensation under
section 162(m) of the Code such as the last date that would
constitute less than 25% of the applicable performance period
year, the Committee shall determine the eligible persons who
will potentially receive Annual Incentive Awards, and the
amounts potentially payable thereunder, for that fiscal year,
either out of an Annual Incentive Award pool established by such
date under Paragraph IX (c)(i) hereof or as individual
Annual Incentive Awards. The amount potentially payable, with
respect to Annual Incentive Awards, shall be based upon the
achievement of a performance goal or goals based on one or more
of the business criteria set forth in Paragraph IX(b)(ii)
hereof for eligible persons who are designated by the Committee
as likely to be a Covered Employee, or based upon performance
goal(s) as determined by the Committee for all other eligible
persons, in the given performance year, as specified by the
Committee.
(ii) Annual Incentive Award
Pool. The Committee may, at its discretion,
establish an Annual Incentive Award pool(s), which shall be an
unfunded pool, for purposes of measuring performance of the
Company in connection with Annual Incentive Awards for any given
performance year. The amount of any Annual Incentive Award pool
shall be based upon the achievement of a performance goal or
goals based on one or more of the business criteria set forth in
Paragraph IX(b)(ii) hereof for eligible persons who are
designated by the Committee as likely to be a Covered Employee,
or based upon performance goal(s) as determined by the Committee
for all other eligible persons, during the given performance
period, as specified by the Committee
9
in accordance with Paragraph IX(b)(iii) hereof. The
Committee may specify the amount of the Annual Incentive Award
pool as a percentage of any of such business criteria, a
percentage thereof in excess of a threshold amount, or as
another amount which need not bear a strictly mathematical
relationship to such business criteria.
(iii) Payment of Annual Incentive
Awards. After the end of each applicable
year, the Committee shall determine the amount, if any, of
(A) the applicable Annual Incentive Award pool, and the
maximum amount of the potential Annual Incentive Award payable
to each Participant in the Annual Incentive Award pool, or
(B) the amount of the potential Annual Incentive Award
otherwise payable to each Participant. The Committee may, in its
discretion, determine that the amount payable to any Participant
as a final Annual Incentive Award shall be reduced from the
amount of his or her potential Annual Incentive Award, including
a determination to make no final Award whatsoever, but may not
exercise discretion to increase any such amount in the case of
an Annual Incentive Award intended to qualify under
section 162(m) of the Code. The Committee shall specify the
circumstances in which an Annual Incentive Award shall be paid
or forfeited in the event of termination of employment by the
Participant prior to the end of the applicable year or
settlement of such Annual Incentive Award.
(d) Awards Criteria. In
determining the value of the settlement or payment of
Performance Awards and Annual Incentive Awards, the Committee
shall take into account a Participants responsibility
level, performance, potential, other Awards, and such other
considerations as it deems appropriate. The Committee, in its
sole discretion, may provide for a reduction in the value of a
Participants Performance Award or Annual Incentive Award
during the applicable performance period.
(e) Termination of Award. A
Performance Award or an Annual Incentive Award shall terminate
if the Participant does not remain continuously in the employ of
the Company and its Affiliates or does not continue to perform
services as a Consultant or a Director for the Company and its
Affiliates at all times during the applicable performance
period, except as may be determined by the Committee subject to
the restrictions of section 162(m) of the Code.
(f) Performance Award and Annual Incentive Award
Agreements. At the time any Award is made
under this Paragraph IX, the Company and the Participant
shall enter into an Award Agreement setting forth each of the
matters contemplated hereby, and such additional matters as the
Committee may determine to be appropriate. The terms and
provisions of the respective Performance Award Agreements, or
the respective Annual Incentive Award Agreements, need not be
identical.
(g) Written Determinations. All
determinations by the Committee as to the establishment of
performance goals, the amount of any Performance Award pool or
potential individual Performance Awards, the achievement of
performance goals relating to and final settlement of
Performance Awards under Paragraph IX(b), the amount of any
Annual Incentive Award pool or potential individual Annual
Incentive Awards, the achievement of performance goals relating
to and final settlement of Annual Incentive Awards under
Paragraph IX(c) shall be made in writing in the case of any
Award intended to qualify under section 162(m) of the Code.
Notwithstanding the allowance in Paragraph IV of this Plan
regarding delegation of duties or administration, the applicable
Committee may not delegate any responsibilities described in
this Paragraph IX(g) relating to such Performance Awards or
Annual Incentive Awards.
(h) Status of Paragraph IX(b) and
Paragraph IX(c) Awards under Section 162(m) of the
Code. It is the intent of the Company that
Performance Awards and Annual Incentive Awards under
Paragraph IX(b) and Paragraph IX(c) hereof granted to
persons who are designated by the Committee as likely to be
Covered Employees shall, if so designated by the Committee,
constitute performance-based compensation within the
meaning of section 162(m) of the Code and regulations
thereunder. Accordingly, the terms of Paragraph IX, as well
as the definitions of Covered Employee and other terms used
therein, shall be interpreted in a manner consistent with
section 162(m) of the Code and regulations thereunder for
all eligible persons designated by the Committee as likely to be
Covered Employees. If any provision of this Plan as in effect on
the date of adoption of any agreements relating to Performance
Awards or Annual Incentive Awards that are designated as
intended to comply with section 162(m) of the Code does not
comply or is inconsistent with the requirements of
section 162(m) of the Code
10
or regulations thereunder, such provision shall be construed or
deemed amended to the extent necessary to conform to such
requirements.
X.
PHANTOM STOCK AWARDS
(a) Phantom Stock Awards. Phantom
Stock Awards are rights to receive shares of Common Stock (or
the Fair Market Value thereof), or rights to receive an amount
equal to any appreciation or increase in the Fair Market Value
of Common Stock over a specified period of time, which vest over
a period of time as established by the Committee, without
satisfaction of any performance criteria or objectives. The
Committee may, in its discretion, require payment or other
conditions of the Participant respecting any Phantom Stock
Award. A Phantom Stock Award may include, without limitation, a
Stock Appreciation Right that is granted independently of an
Option.
(b) Award Period. The Committee
shall establish, with respect to and at the time of each Phantom
Stock Award, a period over which the Award shall vest with
respect to the Participant.
(c) Awards Criteria. In
determining the value of Phantom Stock Awards, the Committee
shall take into account a Participants responsibility
level, performance, potential, other Awards, and such other
considerations as it deems appropriate.
(d) Payment. Following the end of
the vesting period for a Phantom Stock Award (or at such other
time as the applicable Phantom Stock Award Agreement may
provide), the holder of a Phantom Stock Award shall be entitled
to receive payment of an amount, not exceeding the maximum value
of the Phantom Stock Award, based on the then vested value of
the Award. Payment of a Phantom Stock Award may be made in cash,
Common Stock, or a combination thereof as determined by the
Committee. Payment shall be made in a lump sum or in
installments as prescribed by the Committee. Any payment to be
made in cash shall be based on the Fair Market Value of the
Common Stock on the payment date or such other date as may be
specified by the Committee in the Phantom Stock Award Agreement.
Cash dividend equivalents may be paid during or after the
vesting period with respect to a Phantom Stock Award, as
determined by the Committee.
(e) Termination of Award. A
Phantom Stock Award shall terminate if the Participant does not
remain continuously in the employ of the Company and its
Affiliates or does not continue to perform services as a
Consultant or a Director for the Company and its Affiliates at
all times during the applicable vesting period, except as may be
otherwise determined by the Committee.
(f) Phantom Stock Award
Agreements. At the time any Award is made
under this Paragraph X, the Company and the Participant
shall enter into a Phantom Stock Award Agreement setting forth
each of the matters contemplated hereby, and such additional
matters as the Committee may determine to be appropriate. The
terms and provisions of the respective Phantom Stock Award
Agreements need not be identical.
XI. BONUS
STOCK AWARDS
Each Bonus Stock Award granted to a Participant shall constitute
a transfer of unrestricted Common Stock on such terms and
conditions as the Committee shall determine. Bonus Stock Awards
shall be made in shares of Common Stock and need not be subject
to performance criteria or objectives or to forfeiture. The
purchase price, if any, for Common Stock issued in connection
with a Bonus Stock Award shall be determined by the Committee in
its sole discretion. Bonus Stock Awards may be utilized to grant
Common Stock in lieu of obligations to pay cash or deliver other
property under this Plan or under other plans or compensatory
arrangements, provided that, in the case of Executive Officers,
the amount of such grants remains within the discretion of the
Committee to the extent necessary to ensure that acquisitions of
Stock or other Awards are exempt from liability under
Rule 16b-3.
In the case of any grant of Common Stock to an officer of the
Company or any of its Affiliates in lieu of salary or other cash
compensation, the number of shares granted in place of such
compensation shall be reasonable, as determined by the Committee.
11
XII.
RECAPITALIZATION OR REORGANIZATION
(a) No Effect on Right or
Power. The existence of the Plan and the
Awards granted hereunder shall not affect in any way the right
or power of the Board or the stockholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or
other change in the Companys or any Affiliates
capital structure or its business, any merger or consolidation
of the Company or any Affiliate, any issue of debt or equity
securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any
Affiliate or any sale, lease, exchange or other disposition of
all or any part of its assets or business or any other corporate
act or proceeding.
(b) Subdivision or Consolidation of Shares; Stock
Dividends. The shares with respect to which
Awards may be granted are shares of Common Stock as presently
constituted, but if, and whenever, prior to the expiration of an
Award theretofore granted, the Company shall effect a
subdivision or consolidation of shares of Common Stock or the
payment of a stock dividend on Common Stock without receipt of
consideration by the Company, the number of shares of Common
Stock with respect to which such Award may thereafter be
exercised or satisfied, as applicable (i) in the event of
an increase in the number of outstanding shares shall be
proportionately increased, and the purchase price per share
shall be proportionately reduced, and (ii) in the event of
a reduction in the number of outstanding shares shall be
proportionately reduced, and the purchase price per share shall
be proportionately increased. Any fractional share resulting
from such adjustment shall be rounded up to the next whole share.
(c) Recapitalizations and Corporate
Changes. If the Company recapitalizes,
reclassifies its capital stock, or otherwise changes its capital
structure (a recapitalization), the
number and class of shares of Common Stock covered by an Award
theretofore granted shall be adjusted so that such Award shall
thereafter cover the number and class of shares of stock and
securities to which the Participant would have been entitled
pursuant to the terms of the recapitalization if, immediately
prior to the recapitalization, the Participant had been the
holder of record of the number of shares of Common Stock then
covered by such Award. If (i) the Company shall not be the
surviving entity in any merger or consolidation (or survives
only as a subsidiary of an entity), (ii) the Company sells,
leases or exchanges or agrees to sell, lease or exchange all or
substantially all of its assets to any other person or entity,
(iii) the Company is to be dissolved and liquidated,
(iv) any person or entity, including a group as
contemplated by Section 13(d)(3) of the 1934 Act,
acquires or gains ownership or control (including, without
limitation, power to vote) of more than 50% of the outstanding
shares of the Companys voting stock (based upon voting
power), or (v) as a result of or in connection with a
contested election of Directors, the persons who were Directors
of the Company before such election shall cease to constitute a
majority of the Board (each such event is referred to herein as
a Corporate Change), no later than
(A) 10 days after the approval by the stockholders of
the Company of such merger, consolidation, reorganization, sale,
lease or exchange of assets or dissolution or such election of
Directors or (B) 30 days after a Corporate Change of
the type described in clause (iv), the Committee, acting in its
sole discretion without the consent or approval of any
Participant, shall effect one or more of the following
alternatives, which alternatives may vary among individual
Participants and which may vary among Options held by any
individual Participant: (1) accelerate the time at which
Options then outstanding may be exercised so that such Options
may be exercised in full for a limited period of time on or
before a specified date (before or after such Corporate Change)
fixed by the Committee, after which specified date all
unexercised Options and all rights of Participants thereunder
shall terminate, (2) require the mandatory surrender to the
Company by selected Participants of some or all of the
outstanding Options held by such Participants (irrespective of
whether such Options are then exercisable under the provisions
of the Plan) as of a date, before or after such Corporate
Change, specified by the Committee, in which event the Committee
shall thereupon cancel such Options and the Company shall pay
(or cause to be paid) to each Participant an amount of cash per
share equal to the excess, if any, of the amount calculated in
Subparagraph (d) below (the Change of Control
Value) of the shares subject to such Option over
the exercise price(s) under such Options for such shares, or
(3) make such adjustments to Options then outstanding as
the Committee deems appropriate to reflect such Corporate Change
(provided, however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Options then
outstanding), including, without limitation, adjusting an Option
to provide that the number and class of shares of Common Stock
covered by such Option shall be adjusted so that such Option
shall thereafter cover securities of the surviving or acquiring
corporation or other property (including, without limitation,
cash) as determined by the Committee in its sole discretion.
12
(d) Change of Control Value. For
the purposes of clause (2) in Subparagraph (c) above,
the Change of Control Value shall equal the amount
determined in clause (i), (ii) or (iii), whichever is
applicable, as follows: (i) the per share price offered to
stockholders of the Company in any such merger, consolidation,
sale of assets or dissolution transaction, (ii) the price
per share offered to stockholders of the Company in any tender
offer or exchange offer whereby a Corporate Change takes place,
or (iii) if such Corporate Change occurs other than
pursuant to a tender or exchange offer, the fair market value
per share of the shares into which such Options being
surrendered are exercisable, as determined by the Committee as
of the date determined by the Committee to be the date of
cancellation and surrender of such Options. In the event that
the consideration offered to stockholders of the Company in any
transaction described in this Subparagraph (d) or
Subparagraph (c) above consists of anything other than
cash, the Committee shall determine the fair cash equivalent of
the portion of the consideration offered which is other than
cash.
(e) Other Changes in the Common
Stock. In the event of changes in the
outstanding Common Stock by reason of recapitalizations,
reorganizations, mergers, consolidations, combinations,
split-ups,
split-offs, spin-offs, exchanges or other relevant changes in
capitalization or distributions to the holders of Common Stock
occurring after the date of the grant of any Award and not
otherwise provided for by this Paragraph XII such Award and
any agreement evidencing such Award shall be subject to
adjustment by the Committee at its sole discretion as to the
number and price of shares of Common Stock or other
consideration subject to such Award. In the event of any such
change in the outstanding Common Stock or distribution to the
holders of Common Stock, or upon the occurrence of any other
event described in this Paragraph XII the aggregate number
of shares available under the Plan, the aggregate number of
shares that may be issued under the Plan through Incentive Stock
Options, and the maximum number of shares that may be subject to
Awards granted to any one individual may be appropriately
adjusted to the extent, if any, determined by the Committee,
whose determination shall be conclusive. Notwithstanding the
foregoing, except as otherwise provided by the Committee, upon
the occurrence of a Corporate Change, the Committee, acting in
its sole discretion without the consent or approval of any
Participant, may require the mandatory surrender to the Company
by selected Participants of some or all of the outstanding
Performance Awards, Annual Incentive Awards and Phantom Stock
Awards as of a date, before or after such Corporate Change,
specified by the Committee, in which event the Committee shall
thereupon cancel such Performance Awards, Annual Incentive
Awards and Phantom Stock Awards and the Company shall pay (or
cause to be paid) to each Participant an amount of cash equal to
the maximum value (which maximum value may be determined, if
applicable and in the discretion of the Committee, based on the
then Fair Market Value of the Common Stock) of such Performance
Award, Annual Incentive Awards or Phantom Stock Award which, in
the event the applicable performance or vesting period set forth
in such Performance Award, Annual Incentive Award or Phantom
Stock Award has not been completed, shall be multiplied by a
fraction, the numerator of which is the number of days during
the period beginning on the first day of the applicable
performance or vesting period and ending on the date of the
surrender, and the denominator of which is the aggregate number
of days in the applicable performance or vesting period;
provided, however, that the Committee will not take any such
action with regard to Performance Awards and Annual Incentive
Awards that are intended to be performance-based
compensation under section 162(m) of the Code that
would cause such Awards to fail to comply with
section 162(m) of the Code and the regulations thereunder.
(f) Stockholder Action. Any
adjustment provided for in the above Subparagraphs of this
Paragraph XII shall be subject to any required stockholder
action.
(g) No Adjustments unless Otherwise
Provided. Except as hereinbefore expressly
provided, the issuance by the Company of shares of stock of any
class or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor,
or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, and in any
case whether or not for fair value, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the
number of shares of Common Stock subject to Awards theretofore
granted or the purchase price per share, if applicable.
13
XIII.
AMENDMENT AND TERMINATION OF THE PLAN
The Board in its discretion may terminate the Plan at any time
with respect to any shares of Common Stock for which Awards have
not theretofore been granted. The Board shall have the right to
alter or amend the Plan or any part thereof from time to time;
provided that no change in the Plan may be made that would
impair the rights of a Participant with respect to an Award
theretofore granted without the consent of the Participant, and
provided, further, that the Board may not, without approval of
the stockholders of the Company, (a) amend the Plan to
increase the maximum aggregate number of shares that may be
issued under the Plan, increase the maximum number of shares
that may be issued under the Plan through Incentive Stock
Options or change the class of individuals eligible to receive
Awards under the Plan, or (b) amend or delete
Paragraph VII(f).
This amendment and restatement of the Plan is not intended to
affect the material terms of any Award granted prior to the
effective date of this amended and restated Plan without the
prior written consent of the affected Participant.
XIV.
MISCELLANEOUS
(a) No Right To An Award. Neither
the approval of the Plan nor any action of the Board or of the
Committee shall be deemed to give any individual any right to be
granted an Option, a right to a Restricted Stock Award, a right
to a Performance Award or Annual Incentive Award, a right to a
Phantom Stock Award, a right to a Bonus Stock Award, or any
other rights hereunder except as may be evidenced by an Award
agreement duly executed on behalf of the Company, and then only
to the extent and on the terms and conditions expressly set
forth therein. The Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make
any other segregation of funds or assets to assure the
performance of its obligations under any Award.
(b) No Employment/Membership Rights
Conferred. Nothing contained in the Plan
shall (i) confer upon any employee or Consultant any right
with respect to continuation of employment or of a consulting or
advisory relationship with the Company or any Affiliate or
(ii) interfere in any way with the right of the Company or
any Affiliate to terminate his or her employment or consulting
or advisory relationship at any time. Nothing contained in the
Plan shall confer upon any Director any right with respect to
continuation of membership on the Board.
(c) Payment Terms Applicable to All
Awards. Subject to the terms of this Plan and
any applicable Award agreement, payments to be made by the
Company or any of its Affiliates upon the exercise of an Option
or other Award or settlement of an Award may be made in such
forms as the Committee shall determine, including without
limitation cash, Common Stock, other Awards or other property,
and may be made in a single payment or transfer, in
installments. Except as otherwise provided herein, the
settlement of any Award may be accelerated, and cash paid in
lieu of Common Stock in connection with such settlement, in the
discretion of the Committee or upon occurrence of one or more
specified events (in addition to a Corporate Change).
Installments may be required by the Committee (subject to
Paragraph XIII of this Plan) or permitted at the election
of the Participant on terms and conditions established by the
Committee and in compliance with the rules of section 409A
of the Code and all regulations promulgated thereunder. Payments
may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment payments. This
Plan shall not constitute an employee benefit plan
for purposes of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended.
(d) Other Laws; Withholding. The
Company shall not be obligated to issue any Common Stock
pursuant to any Award granted under the Plan at any time when
the shares covered by such Award have not been registered under
the Securities Act of 1933, as amended, and such other state and
federal laws, rules and regulations as the Company or the
Committee deems applicable and, in the opinion of legal counsel
for the Company, there is no exemption from the registration
requirements of such laws, rules and regulations available for
the issuance and sale of such shares. No fractional shares of
Common Stock shall be delivered, nor shall any cash in lieu of
fractional shares be paid. The Company shall have the right to
deduct in connection with all Awards any taxes required by law
to be withheld and to require any payments required to enable it
to satisfy its withholding obligations.
(e) No Restriction on Corporate
Action. Nothing contained in the Plan shall
be construed to prevent the Company or any Affiliate from taking
any action which is deemed by the Company or such Affiliate to
be appropriate or in its best interest, whether or not such
action would have an adverse effect on the Plan or any Award
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made under the Plan. No Participant, beneficiary or other person
shall have any claim against the Company or any Affiliate as a
result of any such action.
(f) Restrictions on Transfer. An
Award (other than an Incentive Stock Option, which shall be
subject to the transfer restrictions set forth in
Paragraph VII(c)) shall not be transferable otherwise than
(i) by will or the laws of descent and distribution,
(ii) pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules
thereunder, or (iii) with the consent of the Committee.
(g) Governing Law. The Plan shall
be governed by, and construed in accordance with, the laws of
the State of Delaware, without regard to conflicts of laws
principles thereof.
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