Attached files
file | filename |
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8-K - IMH Financial Corp | v188707_8-k.htm |
EX-3.2 - IMH Financial Corp | v188707_ex3-2.htm |
EX-3.1 - IMH Financial Corp | v188707_ex3-1.htm |
EX-99.1 - IMH Financial Corp | v188707_ex99-1.htm |
2010 IMH FINANCIAL CORPORATION
EMPLOYEE STOCK INCENTIVE PLAN
1. PURPOSE OF PLAN
The purpose of this 2010 IMH Financial
Corporation Employee Stock Incentive Plan (this “Plan”) of IMH Financial Corporation, a
Delaware corporation (the “Corporation”), is to promote the success of the
Corporation and to increase stockholder value by providing an additional means
through the grant of awards to attract, motivate, retain and reward selected
employees and other eligible persons.
2. ELIGIBILITY
The Administrator (as such term is
defined in Section 3.1) may grant awards under this Plan only to those persons
that the Administrator determines to be Eligible Persons. An “Eligible
Person” is any person who
is either: (a) an officer (whether or not a director) or employee of the
Corporation or one of its Subsidiaries; (b) a director of the Corporation or one
of its Subsidiaries; or (c) an individual consultant or advisor who renders or
has rendered bona fide services (other than services in connection with the
offering or sale of securities of the Corporation or one of its Subsidiaries in
a capital-raising transaction or as a market maker or promoter of securities of
the Corporation or one of its Subsidiaries) to the Corporation or one of its
Subsidiaries and who is selected to participate in this Plan by the
Administrator; provided, however, that a person who is otherwise an Eligible
Person under clause (c) above may participate in this Plan only if such
participation would not adversely affect either the Corporation’s eligibility to
use Form S-8 to register under the Securities Act of 1933, as amended (the
“Securities
Act”), the offering and
sale of shares issuable under this Plan by the Corporation or the Corporation’s
compliance with any other applicable laws. An Eligible Person who has been
granted an award (a “participant”) may, if otherwise eligible, be granted
additional awards if the Administrator shall so determine. As used herein,
“Subsidiary” means any corporation or other entity
a majority of whose outstanding voting stock or voting power is beneficially
owned directly or indirectly by the Corporation; and “Board” means the Board of Directors of the
Corporation.
3. PLAN
ADMINISTRATION
3.1 The
Administrator. This Plan
shall be administered by and all awards under this Plan shall beauthorized by
the Administrator. The “Administrator” means the Board or one or more
committees appointed by the Board or another committee (within its delegated
authority) to administer all or certain aspects of this Plan. Any such committee
shall be comprised solely of one or more directors or such number of directors
as may be required under applicable law. A committee may delegate some or all of
its authority to another committee so constituted. The Board or a committee
comprised solely of directors may also delegate, to the extent permitted by
Section 157(c) of the Delaware General Corporation Law and any other applicable
law, to one or more officers of the Corporation, its powers under this Plan (a)
to designate the officers and employees of the Corporation and its Subsidiaries
who will receive grants of awards under this Plan, and (b) to determine the
number of shares subject to, and the other terms and conditions of, such awards.
The Board may delegate different levels of authority to different committees
with administrative and grant authority under this Plan. Unless otherwise
provided in the Bylaws of the Corporation or the applicable charter of any
Administrator: (a) a majority of the members of the acting Administrator shall
constitute a quorum, and (b) the vote of a majority of the members present
assuming the presence of a quorum or the unanimous written consent of the
members of the Administrator shall constitute action by the acting
Administrator.
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With respect to awards intended to
satisfy the requirements for performance-based compensation under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”), this Plan shall be administered by a
committee consisting solely of two or more outside directors (as this
requirement is applied under Section 162(m) of the Code); provided, however,
that the failure to satisfy such requirement shall not affect the validity of
the action of any committee otherwise duly authorized and acting in the matter.
Award grants, and transactions in or involving awards, intended to be exempt
under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), must be duly and
timely authorized by the Board or a committee consisting solely of two or more
non-employee directors (as this requirement is applied under Rule 16b-3
promulgated under the Exchange Act). To the extent required by any applicable
listing agency, this Plan shall be administered by a committee composed entirely
of independent directors (within the meaning of the applicable listing
agency).
3.2 Powers
of the Administrator.
Subject to the express provisions of this Plan, the Administrator is authorized
and empowered to do all things necessary or desirable in connection with the
authorization of awards and the administration of this Plan (in the case of a
committee or delegation to one or more officers, within the authority delegated
to that committee or person(s)), including, without limitation, the authority
to:
(a) determine eligibility and, from
among those persons determined to be eligible, the particular Eligible Persons
who will receive an award under this Plan;
(b) grant awards to Eligible Persons,
determine the price at which securities will be offered or awarded and the
number of securities to be offered or awarded to any of such persons, determine
the other specific terms and conditions of such awards consistent with the
express limits of this Plan, establish the installments (if any) in which such
awards shall become exercisable or shall vest (which may include, without
limitation, performance and/or time-based schedules), or determine that no
delayed exercisability or vesting is required, establish any applicable
performance targets, and establish the events of termination or reversion of
such awards;
(c) approve the forms of award
agreements (which need not be identical either as to type of award or among
participants);
(d) construe and interpret this Plan and
any agreements defining the rights and obligations of the Corporation, its
Subsidiaries, and participants under this Plan, further define the terms used in
this Plan, and prescribe, amend and rescind rules and regulations relating to
the administration of this Plan or the awards granted under this Plan;
(e) cancel, modify, or waive the
Corporation’s rights with respect to, to reprice or modify, discontinue,
suspend, or terminate any or all outstanding awards, subject to any required
consent under Section 8.6.5;
(f) accelerate or extend the vesting or
exercisability or extend the term of any or all such outstanding awards (in the
case of options or stock appreciation rights, within the maximum ten-year term
of such awards) in such circumstances as the Administrator may deem appropriate
(including, without limitation, in connection with a termination of employment
or services or other events of a personal nature) subject to any required
consent under Section 8.6.5;
(g) adjust the number of shares of
Common Stock subject to any award, adjust the price of any or all outstanding
awards or otherwise change previously imposed terms and conditions, in such
circumstances as the Administrator may deem appropriate, in each case subject to
Sections 4 and 8.6;
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(h) determine the date of grant of an
award, which may be a designated date after but not before the date of the
Administrator’s action (unless otherwise designated by the Administrator, the
date of grant of an award shall be the date upon which the Administrator took
the action granting an award);
(i) determine whether, and the extent to
which, adjustments are required pursuant to Section 7 hereof and authorize the
termination, conversion, substitution or succession of awards upon the
occurrence of an event of the type described in Section 7;
(j) acquire or settle (subject to
Sections 7 and 8.6) rights under awards in cash, stock of equivalent value, or
other consideration; and
(k) determine the fair market value of
the Common Stock or awards under this Plan from time to time and/or the manner
in which such value will be determined.
3.3 Binding
Determinations. Any action
taken by, or inaction of, the Corporation, any Subsidiary, or the Administrator
relating or pursuant to this Plan and within its authority hereunder or under
applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons. Neither the Board nor any
Board committee, nor any member thereof or person acting at the direction
thereof, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with this Plan (or any award made
under this Plan), and all such persons shall be entitled to indemnification and
reimbursement by the Corporation in respect of any claim, loss, damage or
expense (including, without limitation, attorneys’ fees) arising or resulting
therefrom to the fullest extent permitted by law and/or under any directors and
officers liability insurance coverage that may be in effect from time to
time.
3.4 Reliance
on Experts. In making any
determination or in taking or not taking any action under this Plan, the
Administrator may obtain and may rely upon the advice of experts, including
employees and professional advisors to the Corporation. No director, officer or
agent of the Corporation or any of its Subsidiaries shall be liable for any such
action or determination taken or made or omitted in good
faith.
3.5 Delegation. The Administrator may delegate
ministerial, non-discretionary functions to individuals who are officers or
employees of the Corporation or any of its Subsidiaries or to third
parties.
4. SHARES OF COMMON STOCK SUBJECT TO THE
PLAN; SHARE LIMITS
4.1 Shares
Available. Subject to the
provisions of Section 7.1, the capital stock that may be delivered under this
Plan shall be shares of the Corporation’s authorized but unissued Common Stock
and any shares of its Common Stock held as treasury shares. For purposes of this
Plan, “Common
Stock” shall mean the
common stock of the Corporation and such other securities or property as may
become the subject of awards under this Plan, or may become subject to such
awards, pursuant to an adjustment made under Section 7.1.
4.2 Share
Limits. The maximum number
of shares of Common Stock that may be delivered pursuant to awards granted to
Eligible Persons under this Plan is 1,200,000 shares, provided that the maximum
number of shares of Common Stock that may be delivered pursuant to awards
granted to Eligible Persons under this Plan shall automatically increase to
1,800,000 shares upon the consummation of an initial public offering of the
Corporation’s Common Stock (the “Share
Limit”).
The following limits also apply with
respect to awards granted under this Plan:
(a) The maximum number of shares of
Common Stock that may be delivered pursuant to options qualified as incentive
stock options granted under this Plan is 1,800,000 shares.
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(b) The maximum number of shares of
Common Stock subject to those options and stock appreciation rights that are
granted during any calendar year to any individual under this Plan is 600,000
shares.
(c) Additional limits with respect to
Performance-Based Awards are set forth in Section 5.2.3. Each of the foregoing
numerical limits is subject to adjustment as contemplated by Section 4.3,
Section 7.1, and Section 8.10.
4.3 Awards
Settled in Cash, Reissue of Awards and Shares. To the extent that an award granted
under this Plan is settled in cash or a form other than shares of Common Stock,
the shares that would have been delivered had there been no such cash or other
settlement shall not be counted against the shares available for issuance under
this Plan. In the event that shares of Common Stock are delivered in respect of
a dividend equivalent right granted under this Plan, the actual number of shares
delivered with respect to the award shall be counted against the share limits of
this Plan (including, for purposes of clarity, the limits of Section 4.2 of this
Plan). (For purposes of clarity, if 1,000 dividend equivalent rights are granted
and outstanding when the Corporation pays a dividend, and 50 shares are
delivered in payment of those rights with respect to that dividend, 50 shares
shall be counted against the share limits of this Plan). Shares that are subject
to or underlie awards granted under this Plan which expire or for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan shall again be available for
subsequent awards under this Plan. Shares that are exchanged by a participant or
withheld by the Corporation as full or partial payment in connection with any
award under this Plan, as well as any shares exchanged by a participant or
withheld by the Corporation or one of its Subsidiaries to satisfy the tax
withholding obligations related to any award, shall also be available for
subsequent awards under this Plan. Refer to Section 8.10 for application of the
foregoing share limits with respect to assumed awards. The foregoing adjustments
to the share limits of this Plan are subject to any applicable limitations under
Section 162(m) of the Code with respect to awards intended as performance-based
compensation thereunder.
4.4 Reservation
of Shares; No Fractional Shares; Minimum Issue. The Corporation shall at all times
reserve a number of shares of Common Stock sufficient to cover the Corporation’s
obligations and contingent obligations to deliver shares with respect to awards
then outstanding under this Plan (exclusive of any dividend equivalent
obligations to the extent the Corporation has the right to settle such rights in
cash). No fractional shares shall be delivered under this Plan. The
Administrator may pay cash in lieu of any fractional shares in settlements of
awards under this Plan. No fewer than 100 shares may be purchased on exercise of
any award (or, in the case of stock appreciation or purchase rights, no fewer
than 100 rights may be exercised at any one time) unless the total number
purchased or exercised is the total number at the time available for purchase or
exercise under the award.
5. AWARDS
5.1 Type
and Form of Awards. The
Administrator shall determine the type or types of award(s) to be made to each
selected Eligible Person. Awards may be granted singly, in combination or in
tandem. Awards also may be made in combination or in tandem with, in replacement
of, as alternatives to, or as the payment form for grants or rights under any
other employee or compensation plan of the Corporation or one of its
Subsidiaries. The types of awards that may be granted under this Plan are:
5.1.1 Stock
Options. A stock option is
the grant of a right to purchase a specified number of shares of Common Stock
during a specified period as determined by the Administrator. An option may be
intended as an incentive stock option within the meaning of Section 422 of the
Code (an “ISO”) or a nonqualified stock option (an
option not intended to be an ISO). The award agreement for an option will
indicate if the option is intended as an ISO; otherwise it will be deemed to be
a nonqualified stock option. The maximum term of each option (ISO or
nonqualified) shall be ten (10) years. The per share exercise price for each
option shall be determined by the Administrator on the date of grant of the
option. When an option is exercised, the exercise price for the shares to be
purchased shall be paid in full in cash or such other method permitted by the
Administrator consistent with Section 5.5.
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5.1.2 Additional
Rules Applicable to ISOs.
To the extent that the aggregate fair market value (determined at the time of
grant of the applicable option) of stock with respect to which ISOs first become
exercisable by a participant in any calendar year exceeds $100,000, taking into
account both Common Stock subject to ISOs under this Plan and stock subject to
ISOs under all other plans of the Corporation or one of its Subsidiaries (or any
parent or predecessor corporation to the extent required by and within the
meaning of Section 422 of the Code and the regulations promulgated thereunder),
such options shall be treated as nonqualified stock options. In reducing the
number of options treated as ISOs to meet the $100,000 limit, the most recently
granted options shall be reduced first. To the extent a reduction of
simultaneously granted options is necessary to meet the $100,000 limit, the
Administrator may, in the manner and to the extent permitted by law, designate
which shares of Common Stock are to be treated as shares acquired pursuant to
the exercise of an ISO. ISOs may only be granted to employees of the Corporation
or one of its subsidiaries (for this purpose, the term “subsidiary” is used as
defined in Section 424(f) of the Code, which generally requires an unbroken
chain of ownership of at least 50% of the total combined voting power of all
classes of stock of each subsidiary in the chain beginning with the Corporation
and ending with the subsidiary in question). ISOs may only be granted with a per
share exercise price of not less than 100% of the fair market value of a share
of Common Stock on the date of grant of the option. There shall be imposed in
any award agreement relating to ISOs such other terms and conditions as from
time to time are required in order that the option be an “incentive stock
option” as that term is defined in Section 422 of the Code. No ISO may be
granted to any person who, at the time the option is granted, owns (or is deemed
to own under Section 424(d) of the Code) shares of outstanding stock possessing
more than 10% of the total combined voting power of all classes of stock of the
Corporation, unless the exercise price of such option is at least 110% of the
fair market value of the stock subject to the option and such option by its
terms is not exercisable after the expiration of five years from the date such
option is granted.
5.1.3 Stock
Appreciation Rights. A
stock appreciation right or “SAR” is a right to receive a payment, in
cash and/or Common Stock, equal to the excess of the fair market value of a
specified number of shares of Common Stock on the date the SAR is exercised over
the “base
price” of the award, which
base price shall be determined by the Administrator on the date of grant of the
SAR and set forth in the applicable award agreement. The maximum term of a SAR
shall be ten (10) years.
5.1.4 Other
Awards. The other types of
awards that may be granted under this Plan include: (a) stock bonuses,
restricted stock, performance stock, stock units, phantom stock, dividend
equivalents, or similar rights to purchase or acquire shares, whether at a fixed
or variable price or ratio related to the Common Stock, upon the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, or any combination thereof; (b) any similar
securities with a value derived from the value of or related to the Common Stock
and/or returns thereon; or (c) cash awards.
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5.2 Section
162(m) Performance-Based Awards. Without limiting the generality of the
foregoing, any of the types of awards listed in Section 5.1.4 above may be, and
options and SARs granted to officers and employees with an exercise or base
price not less than the fair market value of a share of Common Stock on the date
of grant (“Qualifying
Options” and “Qualifying
SARS,” respectively)
typically will be, granted as awards intended to satisfy the requirements for
“performance-based compensation” within the meaning of Section 162(m) of the
Code (“Performance-Based
Awards”). The grant,
vesting, exercisability or payment of Performance-Based Awards may depend (or,
in the case of Qualifying Options or Qualifying SARs, may also depend) on the
degree of achievement of one or more performance goals relative to a
pre-established targeted level or levels using one or more of the Business
Criteria set forth below (on an absolute basis or relative to the performance of
other companies or upon comparisons of any of the indicators of performance
relative to other companies) for the Corporation on a consolidated basis or for
one or more of the Corporation’s subsidiaries, segments, divisions or business
units, or any combination of the foregoing. Any Qualifying Option or Qualifying
SAR shall be subject only to the requirements of Section 5.2.1 and 5.2.3 in
order for such award to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code. Any other Performance-Based
Award shall be subject to all of the following provisions of this Section 5.2 in
order for such award to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code.
5.2.1 Class;
Administrator. The eligible
class of persons for Performance-Based Awards under this Section 5.2 shall be
officers and employees of the Corporation or one of its Subsidiaries. The
Administrator approving Performance-Based Awards or making any certification
required pursuant to Section 5.2.4 must be constituted as provided in Section
3.1 for awards that are intended as performance-based compensation under Section
162(m) of the Code.
5.2.2 Performance
Goals. The specific
performance goals for Performance-Based Awards (other than Qualifying Options
and Qualifying SARs) shall be, on an absolute or relative basis, established
based on one or more of the following business criteria (“Business
Criteria”) as selected by
the Administrator in its sole discretion: earnings per share, cash flow (which
means cash and cash equivalents derived from either net cash flow from
operations or net cash flow from operations, financing and investing
activities), stock price, total stockholder return, gross revenue, revenue
growth, operating income (before or after taxes), net earnings (before or after
interest, taxes, depreciation and/or amortization), return on equity or on
assets or on net investment, cost containment or reduction, or any combination
thereof. These terms are used as applied under generally accepted accounting
principles or in the financial reporting of the Corporation or of its
Subsidiaries. To qualify awards as performance-based under Section 162(m), the
applicable Business Criterion (or Business Criteria, as the case may be) and
specific performance goal or goals (“targets”) must be established and approved
by the Administrator during the first 90 days of the performance period (and, in
the case of performance periods of less than one year, in no event after 25% or
more of the performance period has elapsed) and while performance relating to
such target(s) remains substantially uncertain within the meaning of Section
162(m) of the Code. The terms of the Performance-Based Awards may specify the
manner, if any, in which performance targets shall be adjusted to mitigate the
unbudgeted impact of material, unusual or nonrecurring gains and losses,
accounting changes or other extraordinary events not foreseen at the time the
targets were set unless the Administrator provides otherwise at the time of
establishing the targets. The applicable performance measurement period may not
be less than three months nor more than 10 years.
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5.2.3 Form
of Payment; Maximum Performance-Based Award. Grants or awards under this Section
5.2 may be paid in cash or shares of Common Stock or any combination thereof.
Grants of Qualifying Options and Qualifying SARs to any one
participant in any one calendar year shall be subject to the limit set forth in
Section 4.2(b). The maximum number of shares of Common Stock which may be
delivered pursuant to Performance-Based Awards (other than Qualifying Options
and Qualifying SARs, and other than cash awards covered by the following
sentence) that are granted to any one participant in any one calendar year shall
not exceed 600,000 shares, either individually or in the aggregate, subject to
adjustment as provided in Section 7.1. In addition, the aggregate amount of
compensation to be paid to any one participant in respect of all
Performance-Based Awards payable only in cash and not related to shares of
Common Stock and granted to that participant in any one calendar year shall not
exceed $20,000,000. Awards that are cancelled during the year shall be counted
against these limits to the extent required by Section 162(m) of the
Code.
5.2.4 Certification
of Payment. Before any
Performance-Based Award under this Section 5.2 (other than Qualifying Options
and Qualifying SARs) is paid and to the extent required to qualify the award as
performance-based compensation within the meaning of Section 162(m) of the Code,
the Administrator must certify in writing that the performance target(s) and any
other material terms of the Performance-Based Award were in fact timely
satisfied.
5.2.5 Reservation
of Discretion. The
Administrator will have the discretion to determine the restrictions or other
limitations of the individual awards granted under this Section 5.2 including
the authority to reduce awards, payouts or vesting or to pay no awards, in its
sole discretion, if the Administrator preserves such authority at the time of
grant by language to this effect in its authorizing resolutions or
otherwise.
5.2.6 Expiration
of Grant Authority. As
required pursuant to Section 162(m) of the Code and the regulations promulgated
thereunder, the Administrator’s authority to grant new awards that are intended
to qualify as performance-based compensation within the meaning of Section
162(m) of the Code (other than Qualifying Options and Qualifying SARs) shall
terminate upon the first meeting of the Corporation’s stockholders that occurs
in the fifth year following the year in which securityholders first approve this
Plan, subject to any subsequent extension that may be approved by
stockholders.
5.3 Award
Agreements. Each award
shall be evidenced by either (1) a written award agreement in a form approved by
the Administrator and executed by the Corporation by an officer duly authorized
to act on its behalf, or (2) an electronic notice of award grant in a form
approved by the Administrator and recorded by the Corporation (or its designee)
in an electronic recordkeeping system used for the purpose of tracking award
grants under this Plan generally (in each case, an “award agreement”), as the
Administrator may provide and, in each case and if required by the
Administrator, executed or otherwise electronically accepted by the recipient of
the award in such form and manner as the Administrator may require. The
Administrator may authorize any officer of the Corporation (other than the
particular award recipient) to execute any or all award agreements on behalf of
the Corporation. The award agreement shall set forth the material terms and
conditions of the award as established by the Administrator consistent with the
express limitations of this Plan.
5.4 Deferrals
and Settlements. Payment of
awards may be in the form of cash, Common Stock, other awards or combinations
thereof as the Administrator shall determine, and with such restrictions as it
may impose. The Administrator may also require or permit participants to elect
to defer the issuance of shares or the settlement of awards in cash under such
rules and procedures as it may establish under this Plan. The Administrator may
also provide that deferred settlements include the payment or crediting of
interest or other earnings on the deferral amounts, or the payment or crediting
of dividend equivalents where the deferred amounts are denominated in
shares.
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5.5 Consideration
for Common Stock or Awards.
The purchase price for any award granted under this Plan or the Common Stock to
be delivered pursuant to an award, as applicable, may be paid by means of any
lawful consideration as determined by the Administrator, including, without
limitation, one or a combination of the following methods:
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services rendered
by the recipient of such
award;
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cash, check
payable to the order of the Corporation, or electronic funds
transfer;
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notice and third
party payment in such manner as may be authorized by the
Administrator;
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the delivery of
previously owned shares of Common
Stock;
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by a reduction in
the number of shares otherwise deliverable pursuant to the award;
or
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subject to such
procedures as the Administrator may adopt, pursuant to a “cashless
exercise” with a third party who provides financing for the purposes of
(or who otherwise facilitates) the purchase or exercise of
awards.
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In no event shall any shares
newly-issued by the Corporation be issued for less than the minimum lawful
consideration for such shares or for consideration other than consideration
permitted by applicable state law. Shares of Common Stock used to satisfy the
exercise price of an option shall be valued at their fair market value on the
date of exercise. The Corporation will not be obligated to deliver any shares
unless and until it receives full payment of the exercise or purchase price
therefor and any related withholding obligations under Section 8.5 and any other
conditions to exercise or purchase have been satisfied. Unless otherwise
expressly provided in the applicable award agreement, the Administrator may at
any time eliminate or limit a participant’s ability to pay the purchase or
exercise price of any award or shares by any method other than cash payment to
the Corporation.
5.6 Definition
of Fair Market Value. For
purposes of this Plan, “fair market value” shall mean, unless otherwise
determined or provided by the Administrator in the circumstances, the closing
price (in regular trading) for a share of Common Stock on the New York Stock
Exchange (the “Exchange”) for the date in question or, if no
sales of Common Stock were reported by the Exchange on that date, the closing
price (in regular trading) for a share of Common Stock on the Exchange for the
next preceding day on which sales of Common Stock were reported by the Exchange.
The Administrator may, however, provide with respect to one or more awards that
the fair market value shall equal the closing price (in regular trading) for a
share of Common Stock on the Exchange on the last trading day preceding the date
in question or the average of the high and low trading prices of a share of
Common Stock on the Exchange for the date in question or the most recent trading
day. If the Common Stock is no longer listed or is no longer actively traded on
the Exchange as of the applicable date, the fair market value of the Common
Stock shall be the value as reasonably determined by the Administrator for
purposes of the award in the circumstances. The Administrator also may adopt a
different methodology for determining fair market value with respect to one or
more awards if a different methodology is necessary or advisable to secure any
intended favorable tax, legal or other treatment for the particular award(s)
(for example, and without limitation, the Administrator may provide that fair
market value for purposes of one or more awards will be based on an average of
closing prices (or the average of high and low daily trading prices) for a
specified period preceding the relevant date).
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5.7 Transfer
Restrictions.
5.7.1 Limitations
on Exercise and Transfer.
Unless otherwise expressly provided in (or pursuant to) this Section 5.7 or
required by applicable law: (a) all awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation, assignment,
pledge, encumbrance or charge; (b) awards shall be exercised only by the
participant; and (c) amounts payable or shares issuable pursuant to any award
shall be delivered only to (or for the account of) the
participant.
5.7.2 Exceptions. The Administrator may permit awards to
be exercised by and paid to, or otherwise transferred to, other persons or
entities pursuant to such conditions and procedures, including limitations on
subsequent transfers, as the Administrator may, in its sole discretion,
establish in writing. Any permitted transfer shall be subject to compliance with
applicable federal and state securities laws and shall not be for value (other
than nominal consideration, settlement of marital property rights, or for
interests in an entity in which more than 50% of the voting interests are held
by the Eligible Person or by the Eligible Person’s family
members).
5.7.3 Further
Exceptions to Limits on Transfer. The exercise and transfer restrictions
in Section 5.7.1 shall not apply to:
(a) transfers to the Corporation (for
example, in connection with the expiration or termination of the
award),
(b) the designation of a beneficiary to
receive benefits in the event of the participant’s death or, if the participant
has died, transfers to or exercise by the participant’s beneficiary, or, in the
absence of a validly designated beneficiary, transfers by will or the laws of
descent and distribution,
(c) subject to any applicable
limitations on ISOs, transfers to a family member (or former family member)
pursuant to a domestic relations order if approved or ratified by the
Administrator,
(d) if the participant has suffered a
disability, permitted transfers or exercises on behalf of the participant by his
or her legal representative, or
(e) the authorization by the
Administrator of “cashless exercise” procedures with third parties who provide
financing for the purpose of (or who otherwise facilitate) the exercise of
awards consistent with applicable laws and the express authorization of the
Administrator.
5.8 International
Awards. One or more awards
may be granted to Eligible Persons who provide services to the Corporation or
one of its Subsidiaries outside of the United States. Any awards granted to such
persons may be granted pursuant to the terms and conditions of any applicable
sub-plans, if any, appended to this Plan and approved by the
Administrator.
6. EFFECT OF TERMINATION OF EMPLOYMENT
OR SERVICE ON AWARDS
6.1 General. The Administrator shall establish the
effect of a termination of employment or service on the rights and benefits
under each award under this Plan and in so doing may make distinctions based
upon, inter alia, the cause of termination and type of award. If the participant
is not an employee of the Corporation or one of its Subsidiaries and provides
other services to the Corporation or one of its Subsidiaries, the Administrator
shall be the sole judge for purposes of this Plan (unless a contract or the
award otherwise provides) of whether the participant continues to render
services to the Corporation or one of its Subsidiaries and the date, if any,
upon which such services shall be deemed to have terminated.
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6.2 Events
Not Deemed Terminations of Service. Unless the express policy of the
Corporation or one of its Subsidiaries, or the Administrator, otherwise
provides, the employment relationship shall not be considered terminated in the
case of (a) sick leave, (b) military leave, or (c) any other leave of absence
authorized by the Corporation or one of its Subsidiaries, or the Administrator;
provided that, unless reemployment upon the expiration of such leave is
guaranteed by contract or law or the Administrator otherwise provides, such
leave is for a period of not more than three months. In the case of any employee
of the Corporation or one of its Subsidiaries on an approved leave of absence,
continued vesting of the award while on leave from the employ of the Corporation
or one of its Subsidiaries may be suspended until the employee returns to
service, unless the Administrator otherwise provides or applicable law otherwise
requires. In no event shall an award be exercised after the expiration of the
term set forth in the applicable award agreement.
6.3 Effect
of Change of Subsidiary Status. For purposes of this Plan and any
award, if an entity ceases to be a Subsidiary of the Corporation a termination
of employment or service shall be deemed to have occurred with respect to each
Eligible Person in respect of such Subsidiary who does not continue as an
Eligible Person in respect of the Corporation or another Subsidiary that
continues as such after giving effect to the transaction or other event giving
rise to the change in status.
7. ADJUSTMENTS;
ACCELERATION
7.1 Adjustments. Subject to Section 7.2, upon (or, as
may be necessary to effect the adjustment, immediately prior to): any
reclassification, recapitalization, stock split (including a stock split in the
form of a stock dividend) or reverse stock split; any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock; or any
exchange of Common Stock or other securities of the Corporation, or any similar,
unusual or extraordinary corporate transaction in respect of the Common Stock or
other stock of the Corporation; then the Administrator shall equitably and
proportionately adjust (1) the number and type of shares of Common Stock (or
other securities) that thereafter may be made the subject of awards (including
the specific share limits, maximums and numbers of shares set forth elsewhere in
this Plan), (2) the number, amount and type of shares of Common Stock (or other
securities or property) subject to any outstanding awards, (3) the grant,
purchase, or exercise price (which term includes the base price of any SAR or
similar right) of any outstanding awards, and/or (4) the securities, cash or
other property deliverable upon exercise or payment of any outstanding awards,
in each case to the extent necessary to preserve (but not increase) the level of
incentives intended by this Plan and the then-outstanding
awards.
Unless otherwise expressly provided in
the applicable award agreement, upon (or, as may be necessary to effect the
adjustment, immediately prior to) any event or transaction described in the
preceding paragraph or a sale of all or substantially all of the business or
assets of the Corporation as an entirety, the Administrator shall equitably and
proportionately adjust the performance standards applicable to any
then-outstanding performance-based awards to the extent necessary to preserve
(but not increase) the level of incentives intended by this Plan and the
then-outstanding performance-based awards.
It is intended that, if possible, any
adjustments contemplated by the preceding two paragraphs be made in a manner
that satisfies applicable U.S. legal, tax (including, without limitation and as
applicable in the circumstances, Section 424 of the Code, Section 409A of the
Code and Section 162(m) of the Code) and accounting (so as to not trigger any
charge to earnings with respect to such adjustment)
requirements.
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Without limiting the generality of
Section 3.3, any good faith determination by the Administrator as to whether an
adjustment is required in the circumstances pursuant to this Section 7.1, and
the extent and nature of any such adjustment, shall be conclusive and binding on
all persons.
7.2 Corporate
Transactions - Assumption and Termination of Awards. Upon the occurrence of any of the
following: any merger, combination, consolidation, or other reorganization in
connection with which the Corporation does not survive (or does not survive as a
public company in respect of its Common Stock); any exchange of Common Stock or
other securities of the Corporation in connection with which the Corporation
does not survive (or does not survive as a public company in respect of its
Common Stock); a sale of all or substantially all the business, stock or assets
of the Corporation in connection with which the Corporation does not survive (or
does not survive as a public company in respect of its Common Stock); a
dissolution of the Corporation; or any other event in which the Corporation does
not survive (or does not survive as a public company in respect of its Common
Stock); then the Administrator may make provision for a cash payment in
settlement of, or for the assumption, substitution or exchange of any or all
outstanding share-based awards or the cash, securities or property deliverable
to the holder of any or all outstanding share-based awards, based upon, to the
extent relevant under the circumstances, the distribution or consideration
payable to holders of the Common Stock upon or in respect of such event. Upon
the occurrence of any event described in the preceding sentence, then, unless
the Administrator has made a provision for the substitution, assumption,
exchange or other continuation or settlement of the award or the award would
otherwise continue in accordance with its terms in the circumstances: (1) unless
otherwise provided in the applicable award agreement, each then-outstanding
option and SAR shall become fully vested, all shares of restricted stock then
outstanding shall fully vest free of restrictions, and each other award granted
under this Plan that is then outstanding shall become payable to the holder of
such award; and (2) each award shall terminate upon the related event; provided
that the holder of an option or SAR shall be given reasonable advance notice of
the impending termination and a reasonable opportunity to exercise his or her
outstanding vested options and SARs (after giving effect to any accelerated
vesting required in the circumstances) in accordance with their terms before the
termination of such awards (except that in no case shall more than ten days’
notice of the impending termination be required and any acceleration of vesting
and any exercise of any portion of an award that is so accelerated may be made
contingent upon the actual occurrence of the event).
Without limiting the preceding
paragraph, in connection with any event referred to in the preceding paragraph
or any change in control event defined in any applicable award agreement, the
Administrator may, in its discretion, provide for the accelerated vesting of any
award or awards as and to the extent determined by the Administrator in the
circumstances.
The Administrator may adopt such
valuation methodologies for outstanding awards as it deems reasonable in the
event of a cash or property settlement and, in the case of options, SARs or
similar rights, but without limitation on other methodologies, may base such
settlement solely upon the excess if any of the per share amount payable upon or
in respect of such event over the exercise or base price of the
award.
In any of the events referred to in this
Section 7.2, the Administrator may take such action contemplated by this Section
7.2 prior to such event (as opposed to on the occurrence of such event) to the
extent that the Administrator deems the action necessary to permit the
participant to realize the benefits intended to be conveyed with
respect to the underlying shares. Without limiting the generality of the
foregoing, the Administrator may deem an acceleration to occur immediately prior
to the applicable event and/or reinstate the original terms of the award if an
event giving rise to an acceleration does not
occur.
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Without limiting the generality of
Section 3.3, any good faith determination by the Administrator pursuant to its
authority under this Section 7.2 shall be conclusive and binding on all
persons.
7.3 Other
Acceleration Rules. The
Administrator may override the provisions of Section 7.2 by express provision in
the award agreement and may accord any Eligible Person a right to refuse any
acceleration, whether pursuant to the award agreement or otherwise, in such
circumstances as the Administrator may approve. The portion of any ISO
accelerated in connection with an event referred to in Section 7.2 (or such
other circumstances as may trigger accelerated vesting of the award) shall
remain exercisable as an ISO only to the extent the applicable $100,000
limitation on ISOs is not exceeded. To the extent exceeded, the accelerated
portion of the option shall be exercisable as a non-qualified stock option under
the Code.
8. OTHER PROVISIONS
8.1 Compliance
with Laws. This Plan, the
granting and vesting of awards under this Plan, the offer, issuance and delivery
of shares of Common Stock, and/or the payment of money under this Plan or under
awards are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Plan will, if requested by the Corporation
or one of its Subsidiaries, provide such assurances and representations to the
Corporation or one of its Subsidiaries as the Administrator may deem necessary
or desirable to assure compliance with all applicable legal and accounting
requirements.
8.2 No
Rights to Award. No person
shall have any claim or rights to be granted an award (or additional awards, as
the case may be) under this Plan, subject to any express contractual rights (set
forth in a document other than this Plan) to the contrary.
8.3 No
Employment/Service Contract. Nothing contained in this Plan (or in
any other documents under this Plan or in any award) shall confer upon any
Eligible Person or other participant any right to continue in the employ or
other service of the Corporation or one of its Subsidiaries, constitute any
contract or agreement of employment or other service or affect an employee’s
status as an employee at will, nor shall interfere in any way with the right of
the Corporation or one of its Subsidiaries to change a person’s compensation or
other benefits, or to terminate his or her employment or other service, with or
without cause. Nothing in this Section 8.3, however, is intended to adversely
affect any express independent right of such person under a separate employment
or service contract other than an award agreement.
8.4 Plan
Not Funded. Awards payable
under this Plan shall be payable in shares or from the general assets of the
Corporation, and no special or separate reserve, fund or deposit shall be made
to assure payment of such awards. No participant, beneficiary or other person
shall have any right, title or interest in any fund or in any specific asset
(including shares of Common Stock, except as expressly otherwise provided) of
the Corporation or one of its Subsidiaries by reason of any award hereunder.
Neither the provisions of this Plan (or of any related documents), nor the
creation or adoption of this Plan, nor any action taken pursuant to
the provisions of this Plan shall create, or be construed to create, a trust of
any kind or a fiduciary relationship between the Corporation or one of its
Subsidiaries and any participant, beneficiary or other person. To the extent
that a participant, beneficiary or other person acquires a right to receive
payment pursuant to any award hereunder, such right shall be no greater than the
right of any unsecured general creditor of the
Corporation.
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8.5 Tax
Withholding. Upon any
exercise, vesting, or payment of any award, or upon the disposition of shares of
Common Stock acquired pursuant to the exercise of an ISO prior to satisfaction
of the holding period requirements of Section 422 of the Code, or upon any other
tax withholding event with respect to any award, the Corporation or one of its
Subsidiaries shall have the right at its option to:
(a) require the participant (or the
participant’s personal representative or beneficiary, as the case may be) to pay
or provide for payment of at least the minimum amount of any taxes which the
Corporation or one of its Subsidiaries may be required to withhold with respect
to such award event or payment; or
(b) deduct from any amount otherwise
payable in cash (whether related to the award or otherwise) to the participant
(or the participant’s personal representative or beneficiary, as the case may
be) the minimum amount of any taxes which the Corporation or one of its
Subsidiaries may be required to withhold with respect to such award event or
payment.
In any case where a tax is required to
be withheld in connection with the delivery of shares of Common Stock under this
Plan, the Administrator may in its sole discretion (subject to Section 8.1)
require or grant (either at the time of the award or thereafter) to the
participant the right to elect, pursuant to such rules and subject to such
conditions as the Administrator may establish, that the Corporation reduce the
number of shares to be delivered by (or otherwise reacquire) the appropriate
number of shares, valued in a consistent manner at their fair market value or at
the sales price in accordance with authorized procedures for cashless exercises,
necessary to satisfy the minimum applicable withholding obligation on exercise,
vesting or payment. In no event shall the shares withheld exceed the minimum
whole number of shares required for tax withholding under applicable
law.
8.6 Effective
Date, Termination and Suspension, Amendments.
8.6.1 Effective
Date. This Plan is
effective as of [__________], 2010, the date of its approval (the
“Effective
Date”). This Plan shall be
submitted for and subject to approval by the applicable number of
securityholders no later than twelve months after the Effective Date. Unless
earlier terminated by the Board, this Plan shall terminate at the close of
business on the day before the tenth anniversary of the Effective Date. After
the termination of this Plan either upon such stated expiration date or its
earlier termination by the Board, no additional awards may be granted under this
Plan, but previously granted awards (and the authority of the Administrator with
respect thereto, including the authority to amend such awards) shall remain
outstanding in accordance with their applicable terms and conditions and the
terms and conditions of this Plan.
8.6.2 Board
Authorization. The Board
may, at any time, terminate or, from time to time, amend, modify or suspend this
Plan, in whole or in part. No awards may be granted during any period that the
Board suspends this Plan.
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8.6.3 Stockholder
Approval. To the extent
then required by applicable law or any applicable listing agency or required
under Sections 162, 422 or 424 of the Code to preserve the intended tax
consequences of this Plan, or deemed necessary or advisable by the Board, any
amendment to this Plan shall be subject to stockholder
approval.
8.6.4 Amendments
to Awards. Without limiting
any other express authority of the Administrator under (but subject to) the
express limits of this Plan, the Administrator by agreement or resolution may
waive conditions of or limitations on awards to participants that the
Administrator in the prior exercise of its discretion has imposed, without the
consent of a participant, and (subject to the requirements of Sections 3.2 and
8.6.5) may make other changes to the terms and conditions of
awards.
8.6.5 Limitations
on Amendments to Plan and Awards. No amendment, suspension or
termination of this Plan or amendment of any outstanding award agreement shall,
without written consent of the participant, affect in any manner materially
adverse to the participant any rights or benefits of the participant or
obligations of the Corporation under any award granted under this Plan prior to
the effective date of such change. Changes, settlements and other actions
contemplated by Section 7 shall not be deemed to constitute changes or
amendments for purposes of this Section 8.6.
8.7 Privileges
of Stock Ownership. Except
as otherwise expressly authorized by the Administrator, a participant shall not
be entitled to any privilege of stock ownership as to any shares of Common Stock
not actually delivered to and held of record by the participant. Except as
expressly required by Section 7.1 or otherwise expressly provided by the
Administrator, no adjustment will be made for dividends or other rights as a
stockholder for which a record date is prior to such date of
delivery.
8.8 Governing
Law; Construction; Severability.
8.8.1 Choice
of Law. This Plan, the
awards, all documents evidencing awards and all other related documents shall be
governed by, and construed in accordance with the laws of the State of Delaware.
8.8.2 Severability. If a court of competent jurisdiction
holds any provision invalid and unenforceable, the remaining provisions of this
Plan shall continue in effect.
8.8.3 Plan
Construction.
(a) Rule
16b-3. It is the intent of
the Corporation that the awards and transactions permitted by awards be
interpreted in a manner that, in the case of participants who are or may be
subject to Section 16 of the Exchange Act, qualify, to the maximum extent
compatible with the express terms of the award, for exemption from matching
liability under Rule 16b-3 promulgated under the Exchange Act. Notwithstanding
the foregoing, the Corporation shall have no liability to any participant for
Section 16 consequences of awards or events under awards if an award or event
does not so qualify.
(b) Section
162(m). Awards under
Section 5.1.4 to persons described in Section 5.2 that are either granted or
become vested, exercisable or payable based on attainment of one or more
performance goals related to the Business Criteria, as well as Qualifying
Options and Qualifying SARs granted to persons described in Section 5.2, that
are approved by a committee composed solely of two or more outside directors (as
this requirement is applied under Section 162(m) of the Code) shall be deemed to
be intended as performance-based compensation within the meaning of Section
162(m) of the Code unless such committee provides otherwise at the time of grant
of the award. It is the further intent of the Corporation that (to the extent
the Corporation or one of its Subsidiaries or awards under this Plan may be or
become subject to limitations on deductibility under Section 162(m) of the Code) any such
awards and any other Performance Based Awards under Section 5.2 that are granted
to or held by a person subject to Section 162(m) will qualify as
performance-based compensation or otherwise be exempt from deductibility
limitations under Section 162(m).
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8.9 Captions. Captions and headings are given to the
sections and subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material or relevant to
the construction or interpretation of this Plan or any provision
thereof.
8.10 Stock-Based
Awards in Substitution for Stock Options or Awards Granted by Other
Corporation. Awards may be
granted to Eligible Persons in substitution for or in connection with an
assumption of employee stock options, SARs, restricted stock or other
stock-based awards granted by other entities to persons who are or who will
become Eligible Persons in respect of the Corporation or one of its
Subsidiaries, in connection with a distribution, merger or other reorganization
by or with the granting entity or an affiliated entity, or the acquisition by
the Corporation or one of its Subsidiaries, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity. The awards so
granted need not comply with other specific terms of this Plan, provided the
awards reflect only adjustments giving effect to the assumption or substitution
consistent with the conversion applicable to the Common Stock in the transaction
and any change in the issuer of the security. Any shares that are delivered and
any awards that are granted by, or become obligations of, the Corporation, as a
result of the assumption by the Corporation of, or in substitution for,
outstanding awards previously granted by an acquired company (or previously
granted by a predecessor employer (or direct or indirect parent thereof) in the
case of persons that become employed by the Corporation or one of its
Subsidiaries in connection with a business or asset acquisition or similar
transaction) shall not be counted against the Share Limit or other limits on the
number of shares available for issuance under this Plan.
8.11 Non-Exclusivity
of Plan. Nothing in this
Plan shall limit or be deemed to limit the authority of the Board or the
Administrator to grant awards or authorize any other compensation, with or
without reference to the Common Stock, under any other plan or
authority.
8.12 No
Corporate Action Restriction. The existence of this Plan, the award
agreements and the awards granted hereunder shall not limit, affect or restrict
in any way the right or power of the Board or the stockholders of the
Corporation to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Corporation or any Subsidiary, (b) any merger, amalgamation, consolidation or
change in the ownership of the Corporation or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stock ahead of or
affecting the capital stock (or the rights thereof) of the Corporation or any
Subsidiary, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the assets or
business of the Corporation or any Subsidiary, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary. No participant, beneficiary or
any other person shall have any claim under any award or award agreement against
any member of the Board or the Administrator, or the Corporation or any
employees, officers or agents of the Corporation or any Subsidiary, as a result
of any such action.
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8.13 Other
Company Benefit and Compensation Programs. Payments and other benefits received
by a participant under an award made pursuant to this Plan shall not be deemed a
part of a participant’s compensation for purposes of the determination of
benefits under any other employee welfare or benefit plans or arrangements, if
any, provided by the Corporation or any Subsidiary, except where the
Administrator expressly otherwise provides or authorizes in writing. Awards
under this Plan may be made in addition to, in combination with, as alternatives
to or in payment of grants, awards or commitments under any other plans or
arrangements of the Corporation or its Subsidiaries.
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