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8-K - Avantair, Inc | v208615_8k.htm |
AVANTAIR,
INC.
2006
LONG-TERM INCENTIVE PLAN
Amended
and Restated as of January 11, 2011
1.
PURPOSE. The purpose of the 2006 Long-Term Incentive Plan (the “Plan”) is to
further and promote the interests of Avantair, Inc. (the “Company”), its
Subsidiaries (as defined below) and its stockholders by enabling the Company and
its Subsidiaries to attract, retain and motivate employees, non-employee
directors and consultants or those who will become employees, non-employee
directors or consultants, and to align the interests of those individuals and
the Company’s stockholders.
2.
DEFINITIONS. For purposes of the Plan, the following terms shall have the
meanings set forth below:
2.1
“AWARD” means an award or grant made to a Participant under Sections 6, 7, 8
and/or 9 of the Plan.
2.2
“AWARD AGREEMENT” means the agreement executed by a Participant pursuant to
Sections 3.2 and 15.6 of the Plan in connection with the granting of an
Award.
2.3
“BOARD” means the Board of Directors of the Company, as constituted from time to
time.
2.4
“CODE” means the Internal Revenue Code of 1986, as in effect and as amended from
time to time, or any successor statute thereto, together with any rules,
regulations and interpretations promulgated thereunder or with respect
thereto.
2.5
“COMMITTEE” means the committee of the Board established to administer the Plan,
as described in Section 3 of the Plan.
2.6
“COMMON STOCK” means the Common Stock, par value $0.0001 per share, of the
Company or any security of the Company issued by the Company in substitution or
exchange therefor.
2.7
“COMPANY” means Avantair, Inc., a Delaware corporation, or any successor
corporation to Avantair, Inc.
2.8
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as in effect and as
amended from time to time, or any successor statute thereto, together with any
rules, regulations and interpretations promulgated thereunder or with respect
thereto.
2.9 “FAIR
MARKET VALUE” of the Company’s Common Stock on a Trading Day means the last
reported sale price for Common Stock or, in case no such reported sale takes
place on such Trading Day, the average of the closing bid and asked prices for
the Common Stock for such Trading Day, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or if the Common Stock is not listed or admitted to trading on any national
securities exchange, but is traded in the over the counter market, the closing
sale price of the Common Stock or, if no sale is publicly reported, the average
of the closing bid and asked quotations for the Common Stock, as reported by the
National Association of Securities Dealers Automated Quotation System (“NASDAQ”)
or any comparable system or, if the Common Stock is not listed on NASDAQ or a
comparable system, the closing sale price of the Common Stock or, if no sale is
publicly reported, the average of the closing bid and asked prices, as furnished
by two members of the National Association of Securities Dealers, Inc. who make
a market in the Common Stock selected from time to time by the Company for that
purpose. In addition, for purposes of this definition, a “Trading Day” shall
mean, if the Common Stock is listed on any national securities exchange, a
business day during which such exchange was open for trading and at least one
trade of Common Stock was effected on such exchange on such business day, or, if
the Common Stock is not listed on any national securities exchange but is traded
in the over the counter market, a business day during which the over the counter
market was open for trading and at least one “eligible dealer” quoted both a bid
and asked price for the Common Stock. An “eligible dealer” for any day shall
include any broker dealer who quoted both a bid and asked price for such day,
but shall not include any broker dealer who quoted only a bid or only an asked
price for such day. In the event the Company’s Common Stock is not publicly
traded, the Fair Market Value of such Common Stock shall be determined by the
Committee in good faith in whatever manner it considers
appropriate.
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2.10
“INCENTIVE STOCK OPTION” means any stock option granted pursuant to the
provisions of Section 6 of the Plan (and the relevant Award Agreement) that
is intended to be (and is specifically designated as) an “incentive stock
option” within the meaning of Section 422 of the Code.
2.11
“NON-QUALIFIED STOCK OPTION” means any stock option granted pursuant to the
provisions of Section 6 of the Plan (and the relevant Award Agreement) that
is not (and is specifically designated as not being) an Incentive Stock
Option.
2.12
“PARTICIPANT” means any individual who is selected from time to time under
Section 5 to receive an Award under the Plan.
2.13
“PERFORMANCE UNITS” means the monetary units granted under Section 9 of the
Plan and the relevant Award Agreement.
2.14
“PLAN” means the Avantair, Inc. 2006 Long-Term Incentive Plan, as set forth
herein and as in effect and as amended from time to time (together with any
rules and regulations promulgated by the Committee with respect
thereto).
2.15
“RESTRICTED SHARES” means the restricted shares of Common Stock granted pursuant
to the provisions of Section 8 of the Plan and the relevant Award
Agreement.
2.16
“RESTRICTED STOCK UNIT” means an Award granted to a Participant pursuant to the
provisions of Section 8 of the Plan and the relevant Award Agreement,
except no shares of Common Stock are actually awarded to the Participant on the
date of grant.
2.17
“STOCK APPRECIATION RIGHT” means an Award described in Section 7.2 of the
Plan and granted pursuant to the provisions of Section 7 of the
Plan.
2.18
“SUBSIDIARY(IES)” means any corporation (other than the Company), partnership or
limited liability company in an unbroken chain of entities, including and
beginning with the Company, if each of such entities, other than the last entity
in the unbroken chain, owns, directly or indirectly, more than fifty percent
(50%) of the voting stock, partnership or membership interests in one of
the other entities in such chain.
3.
ADMINISTRATION.
3.1 THE
COMMITTEE. The Plan shall be administered by the Committee. The Committee shall
be appointed from time to time by the Board and shall be comprised solely of not
less than two (2) of the then members of the Board who are Non-Employee
Directors (within the meaning of SEC Rule 16b-3(b)(3)) of the Company and
Outside Directors (within the meaning of Section 162(m) of the Code).
Consistent with the Bylaws of the Company, members of the Committee shall serve
at the pleasure of the Board and the Board, subject to the immediately preceding
sentence, may at any time and from time to time remove members from, or add
members to, the Committee.
3.2 PLAN
ADMINISTRATION AND PLAN RULES. The Committee is authorized to construe and
interpret the Plan and to promulgate, amend and rescind rules and regulations
relating to the implementation, administration and maintenance of the Plan.
Subject to the terms and conditions of the Plan, the Committee shall make all
determinations necessary or advisable for the implementation, administration and
maintenance of the Plan including, without limitation, (a) selecting the
Plan’s Participants, (b) making Awards in such amounts and in such forms as
the Committee shall determine, (c) imposing such restrictions, terms and
conditions upon such Awards as the Committee shall deem appropriate, (d)
accelerating the vesting or exercisability of, payment for or lapse of
restrictions on, Awards; and (e) correcting any technical defect(s) or
technical omission(s), or reconciling any technical inconsistency(ies), in the
Plan, any Award Agreement, and/or any other applicable agreement. The Committee
may designate persons other than members of the Committee to carry out the
day-to-day ministerial administration of the Plan under such conditions and
limitations as it may prescribe, except that the Committee shall not delegate
its authority with regard to the selection for participation in the Plan and/or
the granting of any Awards to Participants. The Committee’s determinations under
the Plan need not be uniform and may be made selectively among Participants,
whether or not such Participants are similarly situated. Any determination,
decision or action of the Committee in connection with the construction,
interpretation, administration, implementation or maintenance of the Plan shall
be final, conclusive and binding upon all Participants and any person(s)
claiming under or through any Participants. The Company shall effect the
granting of Awards under the Plan, in accordance with the determinations made by
the Committee, by execution of written agreements and/or other instruments in
such forms as are approved by the Committee.
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3.3
LIABILITY LIMITATION. Neither the Board nor the Committee, nor any member of
either, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with the Plan (or any Award
Agreement), and the members of the Board and the Committee shall be entitled to
indemnification and reimbursement by the Company 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 which may be in effect from
time to time.
4. TERM
OF PLAN/COMMON STOCK SUBJECT TO PLAN.
4.1 TERM.
The Plan shall terminate on the tenth anniversary of the Board’s approval of the
Plan, except with respect to Awards then outstanding. After such date no further
Awards shall be granted under the Plan.
4.2
COMMON STOCK. The maximum number of shares of Common Stock in respect of which
Awards may be granted or paid out under the Plan, subject to adjustment as
provided in Section 13.2 of the Plan, shall not exceed 3.5 million
shares of Common Stock. In the event of a change in the Common Stock of the
Company that is limited to a change in the designation thereof to “Capital
Stock” or other similar designation, or to a change in the par value thereof, or
from par value to no par value, without increase or decrease in the number of
issued shares, the shares resulting from any such change shall be deemed to be
the Common Stock for purposes of the Plan. Common Stock which may be issued
under the Plan may be either authorized and unissued shares or issued shares
which have been reacquired by the Company (in the open-market or in private
transactions) and which are being held as treasury shares. No fractional shares
of Common Stock shall be issued under the Plan.
4.3
COMPUTATION OF AVAILABLE SHARES. For the purpose of computing the total number
of shares of Common Stock available for Awards under the Plan, there shall be
counted against the limitations set forth in Section 4.2 of the Plan the
maximum number of shares of Common Stock potentially subject to issuance upon
exercise or settlement of Awards granted under Sections 6 and 7 of the Plan, the
number of shares of Common Stock issued under grants of Restricted Shares and
Restricted Stock Units pursuant to Section 8 of the Plan and the maximum
number of shares of Common Stock potentially issuable under grants or payments
of Performance Units pursuant to Section 9 of the Plan, in each case
determined as of the date on which such Awards are granted. If any Awards expire
unexercised or are forfeited, surrendered, cancelled, terminated or settled in
cash in lieu of Common Stock, the shares of Common Stock which were theretofore
subject (or potentially subject) to such Awards shall again be available for
Awards under the Plan to the extent of such expiration, forfeiture, surrender,
cancellation, termination or settlement of such Awards.
5.
ELIGIBILITY. Individuals eligible for Awards under the Plan shall be determined
by the Committee in its sole discretion and shall be limited to the employees,
non-employee directors of, and consultants to the Company and its
Subsidiaries.
6. STOCK
OPTIONS.
6.1 TERMS
AND CONDITIONS. Stock options granted under the Plan shall be in respect of
Common Stock and may be in the form of Incentive Stock Options or Non-Qualified
Stock Options (sometimes referred to collectively herein as the “Stock
Option(s))”. Such Stock Options shall be subject to the terms and conditions set
forth in this Section 6 and any additional terms and conditions, not
inconsistent with the express terms and provisions of the Plan, as the Committee
shall set forth in the relevant Award Agreement. The Committee may also provide
that certain Stock Options shall be automatically exercised and settled on one
or more fixed dates specified therein by the Committee (in such a situation, the
Committee may provide that a number of shares of Common Stock with a Fair Market
Value equal to or greater than the total exercise price be withheld to satisfy
the exercise price and, in the event the Fair Market Value of the shares of
Common Stock withheld exceeded the total exercise price, the Committee may
provide that any excess be paid to the Participant in cash, securities or other
property).
6.2
GRANT. Stock Options may be granted under the Plan in such form as the Committee
may from time to time approve. Stock Options may be granted alone or in addition
to other Awards under the Plan or in tandem with Stock Appreciation Rights.
Special provisions shall apply to Incentive Stock Options granted to any
employee who owns (within the meaning of Section 422(b)(6) of the Code)
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or its parent corporation or any subsidiary of
the Company, within the meaning of Sections 424(e) and (f) of the Code (a
“10% Shareholder”).
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6.3
EXERCISE PRICE. The exercise price per share of Common Stock subject to a Stock
Option shall be determined by the Committee, including, without limitation, a
determination based on a formula determined by the Committee; PROVIDED, HOWEVER,
that the exercise price of a Stock Option shall not be less than one hundred
percent (100%) of the Fair Market Value of the Common Stock on the date of
the grant of such Incentive Stock Option; PROVIDED, FURTHER, HOWEVER, that, in
the case of a 10% Shareholder, the exercise price of an Incentive Stock Option
shall not be less than one hundred ten percent (110%) of the Fair Market
Value of the Common Stock on the date of grant.
6.4
VESTING. Unless otherwise provided by the Committee in an Award Agreement:
(i) a Stock Option shall vest and become exercisable over the three (3)
year period following the date of grant in such increments as determined by the
Committee and set forth in an Award Agreement; (ii) the unvested portion of
a Stock Option shall expire upon termination of employment or service of the
Participant granted the Stock Option, and the vested portion of such Stock
Option shall remain exercisable for (A) twelve (12) months following
termination of employment or service by reason of such Participant’s death or
Total and Permanent Disability (as defined in the Award Agreement), but not
later than the expiration date of the Stock Option or (B) ninety (90) days
following termination of employment or service for any reason other than such
Participant’s death or Total and Permanent Disability, and other than such
Participant’s termination of employment or service for Cause (as defined in the
Award Agreement) or other misconduct (as determined by the Committee), but not
later than the expiration date of the Stock Option; and (iii) both the
unvested and the vested portion of a Stock Option shall expire upon the
termination of the Participant’s employment or service by the Company for Cause
or other misconduct.
6.5 TERM.
The term of each Stock Option shall be such period of time as is fixed by the
Committee; PROVIDED, HOWEVER, that the term of any Incentive Stock Option shall
not exceed ten (10) years (five (5) years, in the case of a 10%
Shareholder) after the date immediately preceding the date on which the
Incentive Stock Option is granted.
6.6
METHOD OF EXERCISE. A Stock Option may be exercised, in whole or in part, by
giving written notice of exercise to the Secretary of the Company, or such other
person as may be designated by the Company, specifying the number of shares to
be purchased. Such notice shall be accompanied by payment in full of the
exercise price in cash, by certified check, bank draft, or money order payable
to the order of the Company, or by payment through any other mechanism permitted
by the Committee, including, if the Committee so determines, by delivery of
shares of Common Stock. The proceeds received by the Company upon exercise of
any Stock Option may be used by the Company for general corporate purposes. Any
portion of a Stock Option that is exercised may not be exercised
again.
6.7
TANDEM GRANTS. If Non-Qualified Stock Options and Stock Appreciation Rights are
granted in tandem, as designated in the relevant Award Agreements, the right of
a Participant to exercise any such tandem Stock Option shall terminate to the
extent such Participant exercises the Stock Appreciation Right to which such
Stock Appreciation Right is related.
7. STOCK
APPRECIATION RIGHTS.
7.1 TERMS
AND CONDITIONS. The grant of Stock Appreciation Rights under the Plan shall be
subject to the terms and conditions set forth in this Section 7 and any
additional terms and conditions, not inconsistent with the express terms and
provisions of the Plan, as the Committee shall set forth in the relevant Award
Agreement.
7.2 STOCK
APPRECIATION RIGHTS. A Stock Appreciation Right is an Award granted with respect
to a specified number of shares of Common Stock entitling a Participant to
receive an amount equal to the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Fair Market Value of a share of
Common Stock on the date of grant of the Stock Appreciation Right, multiplied by
the number of shares of Common Stock with respect to which the Stock
Appreciation Right shall have been exercised.
7.3
GRANT. Stock Appreciation Rights may be granted under the Plan in such form as
the Committee may from time to time approve. A Stock Appreciation Right may be
granted in addition to any other Award under the Plan or in tandem with or
independent of a Non-Qualified Stock Option.
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7.4
VESTING. Unless otherwise provided by the Committee in an Award Agreement:
(i) a Stock Appreciation Right shall vest and become exercisable over the
three (3) year period following the date of grant in such increments as
determined by the Committee and set forth in an Award Agreement; (ii) the
unvested portion of a Stock Appreciation Right shall expire upon termination of
employment or service of the Participant granted the Stock Appreciation Right,
and the vested portion of such Stock Appreciation Right shall remain exercisable
for (A) twelve (12) months following termination of employment or service
by reason of such Participant’s death or Total and Permanent Disability (as
defined in the Award Agreement), but not later than the expiration date of the
Stock Appreciation Right or (B) ninety (90) days following termination of
employment or service for any reason other than such Participant’s death or
Total and Permanent Disability, and other than such Participant’s termination of
employment or service for Cause (as defined in the Award Agreement) or other
misconduct (as determined by the Committee), but not later than the expiration
date of the Stock Appreciation Right; and (iii) both the unvested and the
vested portion of a Stock Appreciation Right shall expire upon the termination
of the Participant’s employment or service by the Company for Cause or other
misconduct.
7.5 TERM.
The term of each Stock Appreciation Right shall be such period of time as is
fixed by the Committee.
7.6
METHOD OF EXERCISE. A Stock Appreciation Right may be exercised, in whole or in
part, by giving written notice of exercise to the Secretary of the Company, or
such other person as may be designated by the Company, specifying the number of
shares for which the Stock Appreciation Right is being exercised. Any portion of
a Stock Appreciation that is exercised may not be exercised again.
7.7
TANDEM GRANTS. If Non-Qualified Stock Options and Stock Appreciation Rights are
granted in tandem, as designated in the relevant Award Agreements, the right of
a Participant to exercise a tandem Stock Appreciation Right shall terminate to
the extent such Participant exercises the Non-Qualified Stock Option to which
such Stock Appreciation Right is related.
8.
RESTRICTED SHARES AND RESTRICTED STOCK UNITS.
8.1 TERMS
AND CONDITIONS. Awards of Restricted Shares and/or Restricted Stock Units shall
be subject to the terms and conditions set forth in this Section 8 and any
additional terms and conditions, not inconsistent with the express terms and
provisions of the Plan, as the Committee shall set forth in the relevant Award
Agreement or other applicable agreement. Subject to the terms of the Plan, the
Committee shall determine the number of Restricted Shares and/or Restricted
Stock Units to be granted to a Participant and the Committee may provide or
impose different terms and conditions on any particular Restricted Shares and/or
Restricted Stock Units grant made to any Participant. With respect to each
Participant receiving an Award of Restricted Shares, there shall be issued a
stock certificate (or certificates) in respect of such Restricted Shares. Such
stock certificate(s) shall be registered in the name of the Participant, and
shall bear, among other required legends, the following legend (or such other
legends as the Committee shall, in its sole discretion, determine):
“THE
TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY
ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING, WITHOUT LIMITATION,
FORFEITURE EVENTS) CONTAINED IN THE AVANTAIR, INC. 2006 LONG-TERM INCENTIVE PLAN
AND AN AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER HEREOF AND
AVANTAIR, INC. COPIES OF SUCH PLAN AND AWARD AGREEMENT ARE ON FILE IN THE OFFICE
OF THE SECRETARY OF AVANTAIR, INC., 4311 GENERAL HOWARD DRIVE, CLEARWATER, FL.
33762. AVANTAIR, INC. WILL FURNISH TO THE RECORD HOLDER OF THE
CERTIFICATE, WITHOUT CHARGE AND UPON WRITTEN REQUEST AT ITS PRINCIPAL PLACE OF
BUSINESS, A COPY OF SUCH PLAN AND AWARD AGREEMENT. AVANTAIR, INC. RESERVES THE
RIGHT TO REFUSE TO RECORD THE TRANSFER OF THIS CERTIFICATE UNTIL ALL SUCH
RESTRICTIONS ARE SATISFIED, ALL SUCH TERMS ARE COMPLIED WITH AND ALL SUCH
CONDITIONS ARE SATISFIED.”
The stock
certificate evidencing Restricted Shares shall, in the sole discretion of the
Committee, be deposited with and held in custody by the Company until the
restrictions thereon shall have lapsed and all of the terms and conditions
applicable to such grant shall have been satisfied.
8.2
RESTRICTED SHARE AND/OR RESTRICTED STOCK UNIT GRANTS. A grant of Restricted
Shares is an Award of shares of Common Stock granted to a Participant, subject
to such restrictions, terms and conditions, if any, as the Committee deems
appropriate, including, without limitation, (a) restrictions on the sale,
assignment, transfer, hypothecation or other disposition of such shares,
(b) the requirement that the Participant deposit such shares with the
Company while such shares are subject to such restrictions, and (c) the
requirement that such shares be forfeited upon termination of employment or
service for any reason or for specified reasons within a specified period of
time (including, without limitation, the failure to achieve designated
performance goals). Restricted Stock Units shall be similar to Restricted Shares
except that no shares of Common Stock are actually awarded to the Participant on
the date of grant.
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8.3
RESTRICTION PERIOD. In accordance with Sections 8.1 and 8.2 of the Plan and
unless otherwise determined by the Committee (in its sole discretion) at any
time and from time to time, Restricted Shares and/or Restricted Stock Units
shall only become unrestricted and vested in the Participant in accordance with
such vesting schedule and any other applicable restrictions, terms and
conditions relating to such Restricted Shares and/or Restricted Stock Units, if
any, as the Committee may establish in the relevant Award Agreement or other
applicable agreement (the “Restriction Period”). Unless otherwise provided
by the Committee in an Award Agreement, the Restriction Period shall lapse over
the three (3) year period following the date of grant, in such increments as
determined by the Committee in the Award Agreement. During the Restriction
Period, such stock shall be and remain unvested and a Participant may not sell,
assign, transfer, pledge, encumber or otherwise dispose of or hypothecate such
Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Participant shall be entitled to receive
the Restricted Shares and/or Restricted Stock Units or a portion thereof, as the
case may be, as provided in Section 8.4 of the Plan.
8.4
PAYMENT OF RESTRICTED SHARE AND/OR RESTRICTED STOCK UNIT GRANTS. After the
satisfaction and/or lapse of the restrictions, terms and conditions established
by the Committee in respect of a grant of Restricted Shares, a new certificate,
without the legend set forth in Section 8.1 hereof, for the number of
shares of Common Stock which are no longer subject to such restrictions, terms
and conditions shall, as soon as practicable thereafter, be delivered to the
Participant. Except as otherwise provided in this Section 8 or under
applicable law, Restricted Stock Units shall be paid on such date and in such
form (e.g., cash, shares, or a combination of cash and shares) as the Committee,
in its sole discretion, shall determine.
8.5
STOCKHOLDER RIGHTS. A Participant shall have, with respect to the shares of
Common Stock underlying a grant of Restricted Shares, all of the rights of a
stockholder of such stock (except as such rights (including the right to receive
dividends), in the Committee’s discretion, are limited or restricted under the
Plan or in the relevant Award Agreement or in any other applicable agreement).
Any stock dividends paid in respect of unvested Restricted Shares shall (to the
extent the unvested Restricted Shares are entitled to receive dividends) be
treated as additional Restricted Shares and shall be subject to the same
restrictions and other terms and conditions that apply to the unvested
Restricted Shares in respect of which such stock dividends are issued. There
shall be no stockholder rights with respect to any Restricted Stock Units
granted hereunder.
9.
PERFORMANCE UNITS.
9.1 TERMS
AND CONDITIONS. Performance Units shall be subject to the terms and conditions
set forth in this Section 9 and any additional terms and conditions, not
inconsistent with the express provisions of the Plan, as the Committee shall set
forth in the relevant Award Agreement.
9.2
PERFORMANCE UNIT GRANTS. A Performance Unit is an Award of units (with each unit
representing such monetary amount as is designated by the Committee in the Award
Agreement) granted to a Participant, subject to such terms and conditions as the
Committee deems appropriate, including, without limitation, the requirement that
the Participant forfeit such units (or a portion thereof) in the event certain
performance criteria or other conditions are not met within a designated period
of time.
9.3
GRANTS. Performance Units may be granted alone or in addition to any other
Awards under the Plan. Subject to the terms of the Plan, the Committee shall
determine the number of Performance Units to be granted to a Participant and the
Committee may impose different terms and conditions on any particular
Performance Units granted to any Participant.
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9.4
PERFORMANCE GOALS AND PERFORMANCE PERIODS. Participants receiving a grant of
Performance Units shall only earn into and be entitled to payment in respect of
such Awards if the Company and/or the Participant achieves certain performance
goals (the “Performance Goals”) during and in respect of a designated
performance period of not less than one (1) year (the “Performance Period”). The
Performance Goals and the Performance Period shall be established by the
Committee, in its sole discretion; provided, that, in no event
shall the Performance Period be a period of less than one (1) year. The
Committee shall establish Performance Goals for each Performance Period prior
to, or as soon as practicable after, the commencement of such Performance
Period. The Committee shall also establish a schedule or schedules for
Performance Units setting forth the portion of the Award which will be earned or
forfeited based on the degree of achievement, or lack thereof, of the
Performance Goals at the end of the relevant Performance Period. In setting
Performance Goals, the Committee may use, but shall not be limited to, such
measures as level of sales, earnings per share, income before income taxes and
cumulative effect of accounting changes, income before cumulative effect of
accounting changes, net income, earnings before interest and taxes, return on
assets, return on equity, return on capital employed, total stockholder return,
market valuation, cash flow, cash EBITDA, completion of acquisitions and/or
divestitures, comparisons to peer companies, individual or aggregate Participant
performance or such other measure or measures of performance as the Committee,
in its sole discretion, may deem appropriate. Such performance measures shall be
defined as to their respective components and meaning by the Committee (in its
sole discretion). During any Performance Period, the Committee shall have the
authority to adjust the Performance Goals and/or the Performance Period in such
manner as the Committee, in its sole discretion, deems appropriate at any time
and from time to time.
9.5
PAYMENT OF UNITS. With respect to each Performance Unit, the Participant shall,
if the applicable Performance Goals have been achieved, or partially achieved,
as determined by the Committee in its sole discretion, by the Company and/or the
Participant during the relevant Performance Period, be entitled to receive
payment in an amount equal to the designated value of each Performance Unit
times the number of such units so earned. Payment in settlement of earned
Performance Units shall be made as soon as practicable following the conclusion
of the respective Performance Period in cash, in unrestricted Common Stock, or
in Restricted Shares, or in any combination thereof, as the Committee in its
sole discretion, shall determine and provide in the relevant Award
Agreement.
10.
162(M) PROVISIONS.
10.1
PERFORMANCE-BASED AWARDS. Performance Units, Restricted Shares, Restricted Stock
Units and other Awards subject to performance criteria that are intended to be
“qualified performance-based compensation” within the meaning of
Section 162(m) of the Code shall be paid solely on account of the
attainment of one or more preestablished, objective performance goals within the
meaning of Section 162(m) and the regulations thereunder. These performance
goals shall be based on any of the following performance criteria, either alone
or in any combination, on either a consolidated or business unit or divisional
level, as the Committee may determine: level of sales, earnings per share,
income before income taxes and cumulative effect of accounting changes, income
before cumulative effect of accounting changes, net income, earnings before
interest and taxes, return on assets, return on equity, return on capital
employed, total stockholder return, market valuation, cash flow, cash EBITDA,
comparisons to peer companies, and completion of acquisitions and/or
divestitures. The foregoing criteria shall have any reasonable definitions that
the Committee may specify, which may include or exclude any or all of the
following items, as the Committee may specify: extraordinary, unusual or
non-recurring items; effects of accounting changes; effects of currency
fluctuations; effects of financing activities (e.g., effect on earnings per
share of issuing convertible debt securities); expenses for restructuring or
productivity initiatives; non-operating items; acquisition expenses; and effects
of divestitures. Any such performance criterion or combination of such criteria
may apply to a Participant’s award opportunity in its entirety or to any
designated portion or portions of the award opportunity, as the Committee may
specify. The payout of any such Award to a Covered Employee may be reduced, but
not increased, based on the degree of attainment of other performance criteria
or otherwise at the discretion of the Committee. For purposes of the Plan,
“Covered Employee” has the same meaning as set forth in Section 162(m) of
the Code.
10.2
MAXIMUM YEARLY AWARDS. The maximum annual Common Stock amounts in this
Section 10.2 are subject to adjustment under Section 13.2 and are
subject to the Plan maximum under Section 4.2.
10.2.1
PERFORMANCE-BASED AWARDS. No more than 150,000 shares of Common Stock (or the
then equivalent Fair Market Value thereof) may be granted to any individual
Participant in any calendar year in Performance Units, performance-based
Restricted Shares, Restricted Stock Units and other Awards (other than Stock
Options and Stock Appreciation Rights), in each case, which are intended to
qualify as “qualified performance-based compensation” under Code
Section 162(m). This Section shall not limit the Committee’s ability to
grant Awards which are not intended to qualify as “qualified performance-based
compensation” under Code Section 162(m).
10.2.2
STOCK OPTIONS AND SARS. No Participant may receive in any calendar year Awards
of Stock Options or Stock Appreciation Rights, which are intended to qualify as
“qualified performance-based compensation” under Code Section 162(m),
exceeding 150,000 underlying shares of Common Stock. This Section shall not
limit the Committee’s ability to grant Awards of Stock Options or Stock
Appreciation Rights which are not intended to qualify as “qualified
performance-based compensation” under Code Section 162(m).
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11.
DIVIDEND EQUIVALENTS. In addition to the provisions of Section 8.5 of the
Plan, Awards of Stock Options, and/or Stock Appreciation Rights, may, in the
sole discretion of the Committee and if provided for in the relevant Award
Agreement, earn dividend equivalents. In respect of any such Award which is
outstanding on a dividend record date for Common Stock, the Participant shall be
credited with an amount equal to the amount of cash or stock dividends that
would have been paid on the shares of Common Stock covered by such Award had
such covered shares been issued and outstanding on such dividend record date.
The Committee shall establish such rules and procedures governing the crediting
of such dividend equivalents, including, without limitation, the amount, the
timing, form of payment and payment contingencies and/or restrictions of such
dividend equivalents, as it deems appropriate or necessary.
12.
NON-TRANSFERABILITY OF AWARDS. Unless otherwise provided in the Award Agreement,
no Award under the Plan or any Award Agreement, and no rights or interests
herein or therein, shall or may be assigned, transferred, sold, exchanged,
encumbered, pledged, or otherwise hypothecated or disposed of by a Participant
or any beneficiary(ies) of any Participant, except by testamentary disposition
by the Participant or the laws of intestate succession. No such interest shall
be subject to execution, attachment or similar legal process, including, without
limitation, seizure for the payment of the Participant’s debts, judgments,
alimony, or separate maintenance. Unless otherwise provided in the Award
Agreement, during the lifetime of a Participant, Stock Options and Stock
Appreciation Rights are exercisable only by the Participant.
13.
CHANGES IN CAPITALIZATION AND OTHER MATTERS.
13.1 NO
CORPORATE ACTION RESTRICTION. The existence of the Plan, any Award Agreement
and/or 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 Company to make
or authorize (a) any adjustment, recapitalization, reorganization or other
change in the Company’s or any Subsidiary’s capital structure or its business,
(b) any merger, consolidation or change in the ownership of the Company or
any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or
prior preference stocks ahead of or affecting the Company’s or any Subsidiary’s
capital stock or the rights thereof, (d) any dissolution or liquidation of
the Company or any Subsidiary, (e) any sale or transfer of all or any part
of the Company’s or any Subsidiary’s assets or business, or (f) any other
corporate act or proceeding by the Company or any Subsidiary. No Participant,
beneficiary or any other person shall have any claim against any member of the
Board or the Committee, the Company or any Subsidiary, or any employees,
officers, stockholders or agents of the Company or any subsidiary, as a result
of any such action.
13.2
CHANGES IN CAPITAL STRUCTURE. Awards granted under the Plan, any agreements
evidencing such Awards and the maximum number of shares of Common Stock subject
to all Awards stated in Section 4.2 and subject to individual calendar year
Awards in Section 10.2 shall be subject to adjustment or substitution, as
determined by the Board in its sole discretion, as to the number, price or kind
of a share of stock or other consideration subject to such Awards or as
otherwise determined by the Board to be equitable (i) in the event of
changes in the outstanding stock or in the capital structure of the Company by
reason of stock or extraordinary cash dividends, stock splits, reverse stock
splits, recapitalization, reorganizations, mergers, consolidations,
combinations, exchanges, or other relevant changes in capitalization occurring
after the date of grant of any such Award or (ii) in the event of any
change in applicable laws or any change in circumstances which results in or
would result in any substantial dilution or enlargement of the rights granted
to, or available for, Participants, or which otherwise warrants equitable
adjustment because it interferes with the intended operation of the Plan. The
Company shall give each Participant notice of an adjustment hereunder and, upon
notice, such adjustment shall be conclusive and binding for all
purposes.
Notwithstanding
the above, in the event of any of the following,
A.
|
The
Company is merged into or consolidated with another corporation or
entity;
|
B.
|
All
or substantially all of the assets of the Company are acquired by another
person;
|
C.
|
The
reorganization or liquidation of the
Company;
|
then the
Board may, in its discretion and upon at least ten (10) days advance notice
to the affected persons, cancel any outstanding Awards and cause the holders
thereof to be paid, in cash, securities or other property (including any
securities or other property of a successor or acquirer), or any combination
thereof, the value of such Awards as determined by the Board in its sole
discretion (e.g., in the case of Stock Options, based upon the excess of the
value of a share of Common Stock over the exercise price per share). The Board
may, in its sole discretion, provide that such cash, securities or other
property is subject to vesting and/or exercisability terms similar to the Award
being cancelled.
8
14.
AMENDMENT, SUSPENSION AND TERMINATION.
14.1 IN
GENERAL. The Board may suspend or terminate the Plan (or any portion thereof) at
any time and may amend the Plan at any time and from time to time in such
respects as the Board may deem advisable or to be in the best interests of the
Company or any Subsidiary. No such amendment, suspension or termination shall
(x) materially and adversely affect the rights of any Participant under any
Award, without the consent of such Participant or (y) increase the number
of shares available for Awards pursuant to Section 4.2 without stockholder
approval; PROVIDED, HOWEVER, that the Board may amend the Plan, without the
consent of any Participants, in any way it deems appropriate to satisfy Code
Section 409A and any regulations or other authority promulgated thereunder,
including any amendment of the Plan to cause certain Awards not to be subject to
Code Section 409A.
14.2
AWARD AGREEMENT MODIFICATIONS. The Committee may, to the extent consistent with
the terms of any applicable Award Agreement, waive any conditions or rights
under, amend any terms of, or alter, suspend, discontinue, cancel or terminate,
any Award theretofore granted or the associated Award Agreement, prospectively
or retroactively; provided that any
such waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would materially and adversely affect the rights of any
Participant with respect to any Award theretofore granted shall not to that
extent be effective without the consent of the affected Participant; provided, further, that without
stockholder approval, except as otherwise permitted under Section 13.2 of
the Plan, (i) no amendment or modification may reduce the exercise price of
any Stock Option or Stock Appreciation Right, (ii) the Committee may not
cancel any outstanding Stock Option or Stock Appreciation Right and replace it
with a new Stock Option or Stock Appreciation Right, another Award or cash and
(iii) the Committee may not take any other action that is considered a
“repricing” for purposes of the stockholder approval rules of the applicable
securities exchange or inter-dealer quotation system on which the shares of
Common Stock are listed or quoted.
15.
MISCELLANEOUS.
15.1 TAX
WITHHOLDING. The Company shall have the right to deduct from any payment or
settlement under the Plan, including, without limitation, the exercise of any
Stock Option or Stock Appreciation Right, or the delivery, transfer or vesting
of any Common Stock or Restricted Shares, any federal, state, local, foreign or
other taxes of any kind which the Committee, in its sole discretion, deems
necessary to be withheld to comply with the Code and/or any other applicable
law, rule or regulation. In addition, the Company shall have the right to
require payment from a Participant to cover any applicable withholding or other
employment taxes due upon any payment or settlement under the Plan.
15.2 NO
RIGHT TO EMPLOYMENT. Neither the adoption of the Plan, the granting of any
Award, nor the execution of any Award Agreement, shall confer upon any employee,
director or consultant of the Company or any Subsidiary any right to continued
employment, Board membership or consulting relationship with the Company or any
Subsidiary, as the case may be, nor shall it interfere in any way with the
right, if any, of the Company or any Subsidiary to terminate the employment,
directorship or consulting relationship of any employee, director or consultant
at any time for any reason, even if such termination adversely affects such
Participant’s Awards.
15.3
UNFUNDED PLAN. The Plan shall be unfunded and the Company shall not be required
to segregate any assets in connection with any Awards under the Plan. Any
liability of the Company to any person with respect to any Award under the Plan
or any Award Agreement shall be based solely upon the contractual obligations
that may be created as a result of the Plan or any such award or agreement. No
such obligation of the Company shall be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or
any Subsidiary. Nothing contained in the Plan, any Award Agreement or any
applicable agreement, shall be construed as creating in respect of any
Participant (or beneficiary thereof or any other person) any equity or other
interest of any kind in any assets of the Company or any Subsidiary or creating
a trust of any kind or a fiduciary relationship of any kind between the Company,
any Subsidiary and/or any such Participant, any beneficiary thereof or any other
person.
9
15.4
OTHER COMPANY BENEFIT AND COMPENSATION PROGRAMS. Payments and other benefits
received by a Participant under an Award made pursuant to the 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 Company or any Subsidiary unless expressly provided in
such other plans or arrangements, or except where the Board expressly determines
in writing that inclusion of an Award or portion of an Award should be included
to accurately reflect competitive compensation practices or to recognize that an
Award has been made in lieu of a portion of competitive annual base salary or
other cash compensation. Awards under the Plan may be made in addition to, in
combination with, or as alternatives to, grants, awards or payments under any
other plans or arrangements of the Company or its Subsidiaries. The existence of
the Plan notwithstanding, the Company or any Subsidiary may adopt such other
compensation plans or programs and additional compensation arrangements as it
deems necessary to attract, retain and motivate employees, non-employee
directors and consultants.
15.5
LISTING, REGISTRATION AND OTHER LEGAL COMPLIANCE. No Awards or shares of the
Common Stock shall be required to be issued or granted under the Plan or any
Award Agreement unless legal counsel for the Company shall be satisfied that
such issuance or grant will be in compliance with all applicable federal and
state securities laws and regulations and any other applicable laws or
regulations. The Committee may require, as a condition of any payment or share
issuance, that certain agreements, undertakings, representations, certificates,
and/or information, as the Committee may deem necessary or advisable, be
executed or provided to the Company to assure compliance with all such
applicable laws or regulations. Certificates for shares of the Restricted Shares
and/or Common Stock delivered under the Plan may bear appropriate legends and
may be subject to such stock-transfer orders and such other restrictions as the
Committee may deem advisable under the rules, regulations, or other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable federal or state securities law.
In addition, if, at any time specified herein (or in any Award Agreement or
otherwise) for (a) the making of any Award, or the making of any
determination, (b) the issuance or other distribution of Restricted Shares
and/or Common Stock, or (c) the payment of amounts to or through a
Participant with respect to any Award, any law, rule, regulation or other
requirement of any governmental authority or agency shall require either the
Company, any Subsidiary or any Participant (or any estate, designated
beneficiary or other legal representative thereof) to take any action in
connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the
case may be, shall be deferred until such required action is taken. With respect
to persons subject to Section 16 of the Exchange Act, transactions under
the Plan are intended to comply with all applicable conditions of SEC Rule
16b-3.
15.6
AWARD AGREEMENTS. Each Participant receiving an Award under the Plan shall enter
into an Award Agreement and any other agreement with the Company and/or its
Subsidiaries as may be required by the Committee in such forms as determined by
the Committee. Each Participant shall agree to the restrictions, terms and
conditions of the Award set forth therein and in the Plan.
15.7
DESIGNATION OF BENEFICIARY. Each Participant to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Stock Option or Stock Appreciation Right or to receive any payment which under
the terms of the Plan and the relevant Award Agreement may become exercisable or
payable on or after the Participant’s death. At any time, and from time to time,
any such designation may be changed or cancelled by the Participant without the
consent of any such beneficiary. Any such designation, change or cancellation
must be on a form provided for that purpose by the Committee and shall not be
effective until received by the Committee. If no beneficiary has been designated
by a deceased Participant, or if the designated beneficiaries have predeceased
the Participant, the beneficiary shall be the Participant’s estate. If the
Participant designates more than one beneficiary, any payments under the Plan to
such beneficiaries shall be made in equal shares unless the Participant has
expressly designated otherwise, in which case the payments shall be made in the
shares designated by the Participant.
15.8
LEAVES OF ABSENCE/TRANSFERS. The Committee shall have the power to promulgate
rules and regulations and to make determinations, as it deems appropriate, under
the Plan in respect of any leave of absence from the Company or any Subsidiary
granted to a Participant. Without limiting the generality of the foregoing, the
Committee may determine whether any such leave of absence shall be treated as if
the Participant has terminated employment with the Company or any such
Subsidiary. If a Participant transfers within the Company, or to or from any
Subsidiary, such Participant shall not be deemed to have terminated employment
as a result of such transfer.
10
15.9
GOVERNING LAW. The Plan and all actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of New York, without
reference to the principles of conflict of laws thereof. Any titles and headings
herein are for reference purposes only, and shall in no way limit, define or
otherwise affect the meaning, construction or interpretation of any provisions
of the Plan.
15.10
EFFECTIVE DATE. The Plan became effective on February 22, 2007.
IN
WITNESS WHEREOF, this amendment and restatement of the Plan is adopted by the
Company on this 11th day of
January, 2011, subject to the approval of the Plan by the Company’s
stockholders.
AVANTAIR,
INC.
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||
By
|
/s/
Steven Santo
|
|
Name:
|
Steven
Santo
|
|
Title:
|
Chief
Executive Officer
|
11