Attached files
Exhibit 99.1
ROFIN-SINAR TECHNOLOGIES INC.
2007 INCENTIVE STOCK PLAN
Section 1
1. Background and Purpose
The purpose of this Plan is to promote the interest of the Company by
authorizing the Committee to grant Options and Stock Appreciation Rights
and to make Stock Grants and Stock Unit Grants to Eligible Employees and
Directors in order (1) to attract and retain Eligible Employees and
Directors, (2) to provide an additional incentive to each Eligible
Employee or Director to work to increase the value of Stock and (3) to
provide each Eligible Employee or Director with a stake in the future of
the Company which corresponds to the stake of each of the Company's
shareholders.
Section 2
2. Definitions
2.1 Affiliate - means any organization (other than a Subsidiary) that
would be treated as under common control with the Company under
Section 414(c) of the Code if "50 percent" were substituted for "80
percent" in the income tax regulations under Section 414(c) of the
Code.
2.2 Board - means the Board of Directors of the Company.
2.3 Cause - means either (a) an Eligible Employee is convicted of,
pleads guilty to, or confesses or otherwise admits to any felony,
(b) an Eligible Employee or Director engages in any act of fraud or
embezzlement or (c) there is any act or omission by the Eligible
Employee or Director involving malfeasance or gross negligence in
the performance of such Eligible Employee's or Director's duties
and responsibilities to the material detriment of the Company.
2.4 Change Effective Date - means either the date which includes the
"closing" of the transaction which makes a Change in Control
effective if the Change in Control is made effective through a
transaction which has a "closing" or the date a Change in Control
is reported in accordance with applicable law as effective to the
Securities and Exchange Commission if the Change in Control is made
effective other than through a transaction which has a "closing".
2.5 Change in Control - means a change in control of the Company of a
nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the 1934
Act as in effect at the time of such "change in control", provided
that such a change in control shall be deemed to have occurred at
such time as
(a) any "person" (as that term is used in Sections 13(d) and
14(d)(2) of the 1934 Act), is or becomes the beneficial owner
(as defined in Rule 13d-3 under the 1934 Act) directly or
indirectly, of securities representing 20% or more of the
combined voting power for election of directors of the then
outstanding securities of the Company or any successor to the
Company (except pursuant to an offer for all outstanding
shares of common stock of the Company at a price and upon such
terms and conditions as a majority of the Continuing Directors
(as defined below) determine to be in the best interests of
the Company and its shareholders (excluding the person who is
making the offer or on whose behalf the offer is being made);
(b) during any period of two consecutive years or less,
individuals who at the beginning of such period constitute the
Board cease, for any reason, to constitute at least a majority
of the Board, unless the election or nomination for election
of each new director was approved by a vote of at least a
majority of the directors then still in office who were
directors at the beginning of the period (each director in
office at the beginning of the period and each director so
approved a "Continuing Director");
(c) the consummation of any reorganization, merger, consolidation
or share exchange as a result of which the common stock of
the Company shall be changed, converted or exchanged into
or for securities of another corporation (other than a
merger with a wholly-owned subsidiary of the Company)
or any dissolution or liquidation of the Company or any sale
or the disposition of all or substantially all of the assets
or business or businesses of the Company; provided, however,
that a Change in Control shall not be deemed to have occurred
in the event of a sale or disposition in which the Company
continues as a holding company of an entity or entities that
conduct all or substantially all of the business or businesses
formerly conducted by the Company; or
(d) the consummation of any reorganization, merger, consolidation
or share exchange unless (A) the persons who were the
beneficial owners of the outstanding shares of the common
stock of the Company immediately before the consummation of
such transaction beneficially own more than 80% of the
outstanding shares of the common stock of the successor or
survivor corporation in such transaction immediately following
the consummation of such transaction and (B) the number of
shares of the common stock of such successor or survivor
corporation beneficially owned by the persons described in
Section 2.4(d)(A) immediately following the consummation of
such transaction is beneficially owned by each such person
in substantially the same proportion that each such person
had beneficially owned shares of the Company common stock
immediately before the consummation of such transaction,
provided (C) the percentage described in Section 2.4(d)(A)
of the beneficially owned shares of the successor or survivor
corporation and the number described in Section 2.4 (d)(B)
of the beneficially owned shares of the successor or survivor
corporation shall be determined exclusively by reference
to the shares of the successor or survivor corporation
which result from the beneficial ownership of shares of
common stock of the Company by the persons described in
Section 2.4(d)(A) immediately before the consummation of
such transaction.
2.6 Code - means the Internal Revenue Code of 1986, as amended.
2.7 Committee - means the compensation committee of the Board, any
successor to the compensation committee of the Board, or any other
committee appointed from time to time by the Board to administer the
Plan, which shall have at least 2 members, each of whom shall be
appointed by and shall serve at the pleasure of the Board and shall
come within the definition of a "non-employee director" under Rule
16b-3 and an "outside director" under Section 162(m) of the Code.
2.8 Company - means Rofin-Sinar Technologies, Inc. and any successor to
Rofin-Sinar Technologies, Inc.
2.9 Director - means any member of the Board who is not an employee of
the Company or a Parent or Subsidiary or affiliate (as such term is
defined in Rule 405 of the 1933 Act) of the Company.
2.10 Disability - means, with respect to any Eligible Employee or
Director, that, as a result of incapacity due to physical or mental
illness, such Eligible Employee or Director is, or is reasonably
likely to become, unable to perform his or her duties for more than
six (6) consecutive months or six (6) months in the aggregate during
any twelve (12) month period.
2.11 Exercise Period - shall have the meaning given in Section 10.1.
2.12 Eligible Employee - means an employee of the Company or any
Subsidiary or Parent or Affiliate to whom the Committee decides for
reasons sufficient to the Committee to make a grant under this Plan.
2.13 Fair Market Value - means on any given date, the closing price of
the shares of Stock, as reported on the Nasdaq National Market for
such date or, if Stock was not traded on such date, on the next
preceding day on which Stock was traded; provided that if the Stock
is not then traded on the Nasdaq National Market, Fair Market Value
means the price which the Committee acting in good faith determines
through any reasonable valuation method that a share of Stock might
change hands between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell and both having
reasonable knowledge of the relevant facts.
2.14 Good Reason - has the meaning ascribed to such term or words of
similar import in the Eligible Employee's or Director's written
employment or service contract with the Company and, in the absence
of such agreement or definition, means any of the following that
occurs coincident with or following a Change in Control, if not
cured and corrected by the Company or its successor within 10
business days after written notice thereof by the holder to the
Company or its successor: (i) material diminution in the holder's
authority, duties, or responsibilities as compared to immediately
prior to the occurrence of the Change in Control; (ii) material
reduction in the Eligible Employee's annual base salary as in effect
on the effective date of the Change in Control; or (iii) any
requirement that the holder relocate, by more than 50 miles, the
principal location from which the holder performs services for the
Company as compared to such location immediately prior to the
occurrence of the Change in Control
2.15 ISO - means an option granted under this Plan to purchase Stock
which is intended to satisfy the requirements of Section 422 of the
Code.
2.16 1933 Act - means the Securities Act of 1933, as amended.
2.17 1934 Act - means the Securities Exchange Act of 1934, as amended.
2.18 Non-ISO - means an option granted under this Plan to purchase Stock
which is intended to fail to satisfy the requirements of Section
422 of the Code.
2.19 Option - means an ISO or a Non-ISO which is granted under Section
7.
2.20 Option Certificate - means the certificate (whether in electronic
or written form) which sets forth the terms and conditions of an
Option granted under this Plan.
2.21 Option Price - means the price which shall be paid to purchase one
share of Stock upon the exercise of an Option granted under this
Plan.
2.22 Parent - means any corporation which is a parent corporation
within the meaning of Section 424(e) of the Code) of the Company.
2.23 Plan - means this Rofin-Technologies, Inc. 2007 Incentive Stock Plan
as effective as of the date approved by the shareholders of the
Company and as amended from time to time thereafter.
2.24 Retirement - means retirement from active employment with the
Company and its Subsidiaries on or after the attainment of age 55,
or such other retirement date as may be approved by the Committee
for purposes of the Plan and specified in the related Option
Certificate, Stock Appreciation Right Certificate or Stock Grant
Certificate.
2.25 Rule 16b-3 - means the exemption under Rule 16b-3 to Section 16(b)
of the 1934 Act or any successor to such rule.
2.26 SAR Value - means the value assigned by the Committee to a share of
Stock in connection with the grant of a Stock Appreciation Right
under Section 8.
2.27 Stock - means the common stock, par value $.01 per share, of the
Company.
2.28 Stock Appreciation Right - means a right which is granted under
Section 8 to receive the appreciation in a share of Stock.
2.29 Stock Appreciation Right Certificate - means the certificate
(whether in electronic or written form) which sets forth the terms
and conditions of a Stock Appreciation Right which is not granted as
part of an Option.
2.30 Stock Grant - means a grant under Section 9 which is designed to
result in the issuance of the number of shares of Stock described in
such grant.
2.31 Stock Grant Certificate - means the certificate (whether in
electronic or written form) which sets forth the terms and
conditions of a Stock Grant or a Stock Unit Grant.
2.32 Stock Unit Grant - means a grant under Section 9 of a contractual
right to receive at exercise either (a) a cash payment based on the
Fair Market Value of the number of shares of Stock described in such
grant or (b) shares of Stock based on the number of shares of Stock
described in such grant.
2.33 Subsidiary - means a corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) of the Company.
2.34 Ten Percent Shareholder - means a person who owns (after taking into
account the attribution rules of Section 424(d) of the Code) more
than ten percent of the total combined voting power of all classes
of stock of either the Company, a Subsidiary or Parent.
Section 3
SHARES AND GRANT LIMITS
3.1 Shares Reserved. There shall (subject to Section 14) be reserved
for issuance under this Plan 3,100,000 shares of Stock, which shall
be available to be issued in connection with the exercise of ISOs.
3.2 Source of Shares. The shares of Stock described in Section 3.1
shall be reserved to the extent that the Company deems appropriate
from authorized but unissued shares of Stock and from shares of
Stock which have been reacquired by the Company. All shares of
Stock described in Section 3.1 shall remain available for issuance
under this Plan until issued pursuant to the exercise of an Option
or a Stock Appreciation Right or a Stock Unit Grant or issued
pursuant to a Stock Grant, and any such shares of stock which are
issued pursuant to an Option, a Stock Appreciation Right, a Stock
Unit Grant or a Stock Grant which are forfeited thereafter shall
again become available for issuance under this Plan. Notwithstanding
the foregoing, in no event shall any shares of Stock issued under
this Plan which are used to pay in whole or in part of the Option
Price under an Option or tendered to the Company in satisfaction of
any condition to a Stock Grant be available for issuance under this
Plan.
3.3 Use of Proceeds. The proceeds which the Company receives from the
sale of any shares of Stock under this Plan shall be used for
general corporate purposes and shall be added to the general funds
of the Company.
3.4 Grant Limits. No Eligible Employee or Director in any calendar year
shall be granted an Option to purchase (subject to Section 14) more
than 200,000 shares of Stock or a Stock Appreciation Right based on
the appreciation with respect to (subject to Section 14) more than
200,000 shares of Stock, and no Stock Grant or Stock Unit Grant shall
be made to any Eligible Employee or Director in any calendar year
where the Fair Market Value of the Stock subject to such grant on
the date of the grant exceeds $2,000,000. No more than 600,000 non-
forfeitable shares of Stock shall (subject to Section 14) be issued
pursuant to Stock Grants or Stock Unit Grants under Section 9.
Section 4
EFFECTIVE DATE
The effective date of this Plan shall be the date the shareholders of the
Company (acting at a duly called meeting of such shareholders) approve the
adoption of this Plan.
Section 5
COMMITTEE
This Plan shall be administered by the Committee. The Committee acting in
its absolute discretion shall exercise such powers and take such action as
expressly called for under this Plan and, further, the Committee shall have
the power to interpret this Plan and (subject to Section 15 and Section 16
and Rule 16b-3) to take such other action in the administration and operation
of this Plan as the Committee deems equitable under the circumstances, which
action shall be binding on the Company, on each affected Eligible Employee or
Director and on each other person directly or indirectly affected by such
action. Furthermore, the Committee as a condition to making any grant under
this Plan to any Eligible Employee or Director shall have the right to
require him or her to execute an agreement which makes the Eligible Employee
or Director subject to non-competition provisions and other restrictive
covenants which run in favor of the Company.
Section 6
ELIGIBILITY
Only Eligible Employees who are employed by the Company or a Subsidiary or
Parent shall be eligible for the grant of ISOs under this Plan. All Eligible
Employees and all Directors shall be eligible for the grant of Non-ISOs and
Stock Appreciation Rights and for Stock Grants and Stock Unit Grants under
this Plan.
Section 7
OPTIONS
7.1 Committee Action. The Committee acting in its absolute discretion
shall have the right to grant Options to Eligible Employees and to
Directors under this Plan from time to time to purchase shares of
Stock, but the Committee shall not (subject to Section 14) take any
action, whether through amendment, cancellation, replacement grants,
or any other means, to reduce the Option Price of any outstanding
Options absent the approval of the Company's shareholders. Each
grant of an Option to a Eligible Employee or Director shall be
evidenced by an Option Certificate, and each Option Certificate
shall set forth whether the Option is an ISO or a Non-ISO and shall
set forth such other terms and conditions of such grant as the
Committee acting in its absolute discretion deems consistent with
the terms of this Plan; provided, however, if the Committee grants
an ISO and a Non-ISO to a Eligible Employee on the same date, the
right of the Eligible Employee to exercise the ISO shall not be
conditioned on his or her failure to exercise the Non-ISO.
7.2 $100,000 Limit. No Option shall be treated as an ISO to the extent
that the aggregate Fair Market Value of the Stock subject to the
Option which would first become exercisable in any calendar year
exceeds $100,000. Any such excess shall instead automatically be
treated as a Non-ISO. The Committee shall interpret and administer
the ISO limitation set forth in this Section 7.2 in accordance with
Section 422(d) of the Code, and the Committee shall treat this
Section 7.2 as in effect only for those periods for which Section
422(d) of the Code is in effect.
7.3 Option Price. The Option Price for each share of Stock subject to
an Option shall be no less than the Fair Market Value of a share of
Stock on the date the Option is granted; provided, however, if the
Option is an ISO granted to an Eligible Employee who is a Ten
Percent Shareholder, the Option Price for each share of Stock
subject to such ISO shall be no less than 110% of the Fair Market
Value of a share of Stock on the date such ISO is granted.
7.4 Payment. The Option Price shall be payable in full upon the
exercise of any Option and, at the discretion of the Committee, an
Option Certificate can provide for the payment of the Option Price
either in cash, by check or in Stock which has been held for at
least 6 months and which is acceptable to the Committee, through
any cashless exercise procedure which is effected by an unrelated
broker through a sale of Stock in the open market and which is
acceptable to the Committee, or by net share settlement, or in any
combination of such forms of payment.
7.5 Exercise.
(a) Vesting. Unless the Committee determines that another vesting
schedule (including immediate vesting) better serves the
Company's interest and provides for such other vesting
schedule in the related Option Certificate, each Option shall
vest and become exercisable with respect to twenty (20)
percent of the Stock subject to such Option (rounded down to
the next whole share of Stock) on each of the first four
anniversaries of the date the Option is granted, and shall
vest and become exercisable with respect to all remaining
shares of Stock subject to such Option on the fifth
anniversary of the date the Option is granted, provided that
the Eligible Employee or Director to whom the Option is
granted remains continuously employed by or provides
continuous service as a Director to the Company, a Subsidiary,
Parent or Affiliate through the applicable anniversary date.
(b) Exercise Period. Each Option granted under this Plan shall be
exercisable in whole or in part at such time or times as set
forth above or in the related Option Certificate. No Option
Certificate shall make an Option exercisable on or after the
earlier of
(1) the date which is the fifth anniversary of the date the
Option is granted, if the Option is an ISO and the
Eligible Employee is a Ten Percent Shareholder on the
date the Option is granted, or
(2) the date which is the tenth anniversary of the date the
Option is granted, if the Option is (a) a Non-ISO or (b)
an ISO which is granted to an Eligible Employee who is
not a Ten Percent Shareholder on the date the Option is
granted.
Section 8
STOCK APPRECIATION RIGHTS
8.1 Committee Action. The Committee acting in its absolute discretion
shall have the right to grant Stock Appreciation Rights to Eligible
Employees and to Directors under this Plan from time to time, and
each Stock Appreciation Right grant shall be evidenced by a Stock
Appreciation Right Certificate or, if such Stock Appreciation Right
is granted as part of an Option, shall be evidenced by the Option
Certificate for the related Option.
8.2 Terms and Conditions.
(a) Stock Appreciation Right Certificate. If a Stock Appreciation
Right is granted independent of an Option, such Stock
Appreciation Right shall be evidenced by a Stock Appreciation
Right Certificate, and such certificate shall set forth the
number of shares of Stock on which the Eligible Employee's or
Director's right to appreciation shall be based and the SAR
Value of each share of Stock. Such SAR Value shall be no less
than the Fair Market Value of a share of Stock on the date
that the Stock Appreciation Right is granted. The Stock
Appreciation Right Certificate shall set forth such other
terms and conditions for the exercise of the Stock
Appreciation Right as the Committee deems appropriate under
the circumstances, but no Stock Appreciation Right Certificate
shall make a Stock Appreciation Right exercisable on or after
the date which is the tenth anniversary of the date such Stock
Appreciation Right is granted.
(b) Option Certificate. If a Stock Appreciation Right is granted
together with an Option, such Stock Appreciation Right shall
be evidenced by an Option Certificate, the number of shares of
Stock on which the Eligible Employee's or Director's right to
appreciation shall be based shall be the same as the number of
shares of Stock subject to the related Option, and the SAR
Value for each such share of Stock shall be no less than the
Option Price under the related Option. Each such Option
Certificate shall provide that the exercise of the Stock
Appreciation Right with respect to any share of Stock shall
cancel the Eligible Employee's or Director's right to exercise
his or her Option with respect to such share and, conversely,
that the exercise of the Option with respect to any share of
Stock shall cancel the Eligible Employee's or Director's right
to exercise his or her Stock Appreciation Right with respect
to such share. A Stock Appreciation Right which is granted as
part of an Option shall be exercisable only while the related
Option is exercisable. The Option Certificate shall set forth
such other terms and conditions for the exercise of the Stock
Appreciation Right as the Committee deems appropriate under
the circumstances.
(c) Vesting. Unless the Committee determines that another vesting
schedule (including immediate vesting) better serves the
Company's interest and provides for such other vesting
schedule in the related Stock Appreciation Right Certificate,
each Stock Appreciation Right shall vest and become
exercisable with respect to twenty (20) percent of the Stock
subject to such Stock Appreciation Right (rounded down to the
next whole share of Stock) on each of the first four
anniversaries of the date the Stock Appreciation Right is
granted, and shall vest and become exercisable with respect to
all remaining shares of Stock subject to such Stock
Appreciation Right on the fifth anniversary of the date the
Stock Appreciation Right is granted, provided that the
Eligible Employee or Director to whom the Stock Appreciation
Right is granted remains continuously employed by or provides
continuous service as a Director to the Company, a Subsidiary,
Parent or Affiliate through the applicable anniversary date.
8.3 Exercise. A Stock Appreciation Right shall be exercisable only when
the Fair Market Value of a share of Stock on which the right to
appreciation is based exceeds the SAR Value for such share, and the
payment due on exercise shall be based on such excess with respect
to the number of shares of Stock to which the exercise relates. An
Eligible Employee or Director upon the exercise of his or her Stock
Appreciation Right shall receive a payment from the Company in cash
or in Stock issued under this Plan, or in a combination of cash and
Stock, and the number of shares of Stock issued shall be based on
the Fair Market Value of a share of Stock on the date the Stock
Appreciation Right is exercised. The Committee acting in its
absolute discretion shall have the right to determine the form and
time of any payment under this Section 8.3.
Section 9
STOCK GRANTS
9.1 Committee Action. The Committee acting in its absolute discretion
shall have the right to make Stock Grants and Stock Unit Grants to
Eligible Employees and to Directors. Each Stock Grant and each
Stock Unit Grant shall be evidenced by a Stock Grant Certificate,
and each Stock Grant Certificate shall set forth the conditions, if
any, under which Stock will be issued under the Stock Grant or Stock
Unit Grant or cash will be paid under the Stock Unit Grant and the
conditions under which the Eligible Employee's or Director's
interest in any Stock which has been issued will become non-
forfeitable.
9.2 Conditions.
(a) Conditions to Issuance of Stock. The Committee acting in its
absolute discretion may make the issuance of Stock under a
Stock Grant or Stock Unit Grant subject to the satisfaction of
one, or more than one, condition which the Committee deems
appropriate under the circumstances for Eligible Employees or
Directors generally or for an Eligible Employee or a Director
in particular, and the related Stock Grant Certificate shall
set forth each such condition and the deadline for satisfying
each such condition. Stock subject to a Stock Grant or
issuable pursuant to a Stock Unit Grant shall be issued in the
name of an Eligible Employee or Director only after each such
condition, if any, has been timely satisfied, and any Stock
which is so issued shall be held by the Company pending the
satisfaction of the forfeiture conditions, if any, under
Section 9.2(b) for the related Stock Grant.
(b) Conditions on Forfeiture of Stock or Cash Payment. The
Committee acting in its absolute discretion may make any cash
payment due under a Stock Unit Grant or Stock issued in the
name of an Eligible Employee or Director under a Stock Grant
or Stock Unit Grant non-forfeitable subject to the
satisfaction of one, or more than one, objective employment,
performance or other condition that the Committee acting in
its absolute discretion deems appropriate under the
circumstances for Eligible Employees or Directors generally or
for an Eligible Employee or a Director in particular, and the
related Stock Grant Certificate shall set forth each such
condition, if any, and the deadline, if any, for satisfying
each such condition. An Eligible Employee's or a Director's
non-forfeitable interest in the shares of Stock underlying a
Stock Grant or issuable pursuant to a Stock Unit Grant or the
cash payable under a Stock Unit Grant shall depend on the
extent to which he or she timely satisfies each such
condition. If a share of Stock is issued under this Section
9.2(b) before a Eligible Employee's or Director's interest in
such share of Stock is non-forfeitable, (1) such share of
Stock shall not be available for re-issuance under Section 3
until such time, if any, as such share of Stock thereafter is
forfeited as a result of a failure to timely satisfy a
forfeiture condition and (2) the Company shall have the right
to condition any such issuance on the Eligible Employee or
Director first signing an irrevocable stock power in favor of
the Company with respect to the forfeitable shares of Stock
issued to such Eligible Employee or Director in order for the
Company to effect any forfeiture called for under the related
Stock Grant Certificate.
(c) Vesting. Unless the Committee determines that another vesting
schedule (including immediate vesting) better serves the
Company's interest and provides for such other vesting
schedule in the related Stock Grant Certificate, each Stock
Grant or Stock Unit Grant shall vest with respect to twenty
(20) percent of the Stock subject to such Stock Grant or Stock
Unit Grant (rounded down to the next whole share of Stock) on
each of the first four anniversaries of the date the Stock
Grant or Stock Unit Grant is granted, and shall vest with
respect to all remaining shares of Stock subject to such Stock
Grant or Stock Unit Grant on the fifth anniversary of the date
the Stock Grant or Stock Unit Grant is granted, provided that
the Eligible Employee or Director to whom the Stock Grant or
Stock Unit Grant is granted remains continuously employed by
or provides continuous service as a Director to the Company, a
Subsidiary, Parent or Affiliate through the applicable
anniversary date. Notwithstanding the foregoing, unless the
Committee determines that another vesting schedule better serves
the Company's interest and provides for such other vesting
schedule in the related Stock Grant Certificate, the annual
Stock Grant to Directors for their service as members of the
Board will be fully vested upon grant.
9.3 Dividends, Voting Rights and Creditor Status.
(a) Cash Dividends. Except as otherwise set forth in a Stock
Grant Certificate, if a dividend is paid in cash on a share of
Stock after such Stock has been issued under a Stock Grant or
pursuant to a Stock Unit Grant but before the first date that
an Eligible Employee's or a Director's interest in such Stock
(1) is forfeited completely or (2) becomes completely non-
forfeitable, the Company shall pay such cash dividend directly
to such Eligible Employee or Director.
(b) Stock Dividends. If a dividend is paid on a share of Stock in
Stock after such Stock has been issued under a Stock Grant or
pursuant to a Stock Unit Grant but before the first date that
an Eligible Employee's or a Director's interest in such Stock
(1) is forfeited completely or (2) becomes completely non-
forfeitable, the Company shall hold such dividend Stock
subject to the same conditions under Section 9.2(b) as the
related Stock Grant or Stock Unit Grant.
(c) Other. If a dividend (other than a dividend described in
Section 9.3(a) or Section 9.3(b)) is paid with respect to a
share of Stock after such Stock has been issued under a Stock
Grant or pursuant to a Stock Unit Grant but before the first
date that an Eligible Employee's or a Director's interest in
such Stock (1) is forfeited completely or (2) becomes
completely non-forfeitable, the Company shall distribute or
hold such dividend in accordance with such rules as the
Committee shall adopt with respect to each such dividend.
(d) Voting. Except as otherwise set forth in a Stock Grant
Certificate, an Eligible Employee or a Director shall have the
right to vote the Stock issued under his or her Stock Grant
during the period which comes after such Stock has been issued
under a Stock Grant or pursuant to his or her Stock Unit Grant
but before the first date that an Eligible Employee's or
Director's interest in such Stock (1) is forfeited completely
or (2) becomes completely non-forfeitable.
(e) General Creditor Status. Each Eligible Employee and each
Director to whom a Stock Unit Grant is made shall be no more
than a general and unsecured creditor of the Company with
respect to any cash payable under and any Stock issuable
pursuant to such Stock Unit Grant.
9.4 Satisfaction of Forfeiture Conditions. A share of Stock shall cease
to be subject to a Stock Grant or Stock Unit Grant at such time as
an Eligible Employee's or a Director's interest in such Stock
becomes non-forfeitable under this Plan, and the certificate or
other evidence of ownership representing such share shall be
transferred to the Eligible Employee or Director as soon as
practicable thereafter.
9.5 Income Tax Deduction.
(a) General. The Committee shall (where the Committee under the
circumstances deems in the Company's best interest) either (1)
make Stock Grants and Stock Unit Grants to Eligible Employees
subject to at least one condition related to one, or more than
one, performance goal based on the performance goals described
in Section 9.5(b) which seems likely to result in the Stock
Grant or Stock Unit Grant qualifying as "performance-based
compensation" under Section 162(m) of the Code or (2) make
Stock Grants and Stock Unit Grants to Eligible Employees under
such other circumstances as the Committee deems likely to
result in an income tax deduction for the Company with respect
such Stock Grant or Stock Unit Grant. A performance goal may
be set in any manner determined by the Committee, including
looking to achievement on an absolute or relative basis in
relation to peer groups or indexes, and no change may be made
to a performance goal after the goal has been set.
(b) Performance Goals. A performance goal is described in this
Section 9.5(b) if such goal relates to (1) the Company's
return over capital costs or increases in return over capital
costs, (2) the Company's total earnings or the growth in such
earnings, (3) the Company's consolidated earnings or the
growth in such earnings, (4) the Company's earnings per share
or the growth in such earnings, (5) the Company's net earnings
or the growth in such earnings, (6) the Company's earnings
before interest expense, taxes, depreciation, amortization and
other non-cash items or the growth in such earnings, (7) the
Company's earnings before interest and taxes or the growth in
such earnings, (8) the Company's consolidated net income or
the growth in such income, (9) the value of the Company's
stock or the growth in such value, (10) the Company's stock
price or the growth in such price, (11) the Company's return
on assets or the growth on such return, (12) the Company's
cash flow or the growth in such cash flow, (13) the Company's
total shareholder return or the growth in such return, (14)
the Company's expenses or the reduction of such expenses, (15)
the Company's sales growth, (16) the Company's overhead ratios
or changes in such ratios, (17) the Company's expense-to-sales
ratios or the changes in such ratios, or (18) the Company's
economic value added or changes in such value added.
(c) Adjustments. When the Committee determines whether a
performance goal has been satisfied for any period, the
Committee where the Committee deems appropriate may make such
determination using calculations which alternatively include
and exclude one, or more than one, "extraordinary items" as
determined under U.S. generally accepted accounting
principles, and the Committee may determine whether a
performance goal has been satisfied for any period taking into
account the alternative which the Committee deems appropriate
under the circumstances. The Committee also may take into
account any other unusual or non-recurring items, including,
without limitation, the charges or costs associated with
restructurings of the Company, discontinued operations, and
the cumulative effects of accounting changes and, further, may
take into account any unusual or non-recurring events
affecting the Company, changes in applicable tax laws or
accounting principles or such other factors as the Committee
may determine reasonable and appropriate under the
circumstances (including, without limitation, any factors that
could result in the Company's paying non-deductible
compensation to an Eligible Employee).
Section 10
TERMINATION OF EMPLOYMENT
10.1 Disability or Retirement. Except as may otherwise be provided by
the Committee in its sole discretion in the related Option
Certificate, Stock Appreciation Right Certificate or Stock Grant
Certificate, if an Eligible Employee's employment or a Director's
service with the Company and each Subsidiary, Parent or Affiliate
terminates by reason of Disability or Retirement, (i) any Option
held by the Eligible Employee or Director may thereafter be
exercised, to the extent it was exercisable on the date of
termination, for a period (the "Exercise Period") of one year from
the date of such Disability or Retirement or until the expiration of
the stated term of the Option, whichever period is shorter, and to
the extent not exercisable on the date of termination of employment
or service as a Director, such Option shall be forfeited; provided,
however, that if an Eligible Employee terminates employment by
reason of Retirement and such Eligible Employee holds an ISO, the
Exercise Period shall not exceed the shorter of three months from
the date of Retirement and the remainder of the stated term of such
ISO; provided further, however, that if the Eligible Employee or
Director dies during the Exercise Period, any unexercised Option
held by such Eligible Employee or Director may thereafter be
exercised to the extent it was exercisable on the date of Disability
or Retirement, by the legal representative of the estate or legatee
of the Eligible Employee or Director under the will of the Eligible
Employee or Director, for a period of one year from the date of such
death or until the expiration of the stated term of such Option,
whichever period is shorter (or, in the case of an ISO, for a period
equal to the remainder of the Exercise Period), and (ii) if such
termination is prior to the end of any applicable restriction period
(with respect to a Stock Grant or Stock Unit Grant), the Stock Grant
or Stock Unit Grant shall be forfeited with respect to such number
of shares of Stock as have not been earned as of the date of
Disability or Retirement. In determining whether to exercise its
discretion under the first sentence of this Section 10.1 with
respect to an ISO the Committee may consider the provisions of
Section 422 of the Code.
10.2 Death. Except as may otherwise be provided by the Committee in its
sole discretion in the related Option Certificate, Stock
Appreciation Right Certificate or Stock Grant Certificate, if an
Eligible Employee's employment or Director's service as a Director
with the Company and each Subsidiary, Parent or Affiliate terminates
by reason of death, (i) any Option held by the Eligible Employee or
Director may thereafter be exercised, to the extent it was
exercisable on the date of death, by the legal representative of the
state or legatee of the Eligible Employee or Director under the will
of the Eligible Employee or Director, for a period of one year from
the date of the Eligible Employee's or Director's death or until the
expiration of the stated term of such Option, whichever period is
shorter, and to the extent not exercisable on the date of death,
such Option shall be forfeited and (ii) if such termination is prior
to the end of any applicable restriction period (with respect to a
Stock Grant or Stock Unit Grant) the Stock Grant or Stock Unit Grant
shall be forfeited with respect to such number of shares of Stock as
have not been earned as of the date of death.
10.3 Other Terminations.
(a) Except as may otherwise be provided by the Committee in its
sole discretion in the related Option Certificate, Stock
Appreciation Right Certificate or Stock Grant Certificate, if
an Eligible Employee's employment or Director's service as a
Director with the Company and each Subsidiary, Parent or
Affiliate terminates for any reason other than death,
Disability, Retirement or for Cause, (i) any Option or Stock
Appreciation Right held by the Eligible Employee or Director
may thereafter be exercised, to the extent it was exercisable
on the date of termination, for a period of sixty (60) days
from the date of such termination of employment or service or
until the expiration of the stated term of such Option or
Stock Appreciation Right, whichever period is shorter, and to
the extent not exercisable on the date of termination of
employment, such Option or Stock Appreciation Right shall be
forfeited, and (ii) if such termination is prior to the end of
any applicable restriction period (with respect to a Stock
Grant or Stock Unit Grant) the Stock Grant or Stock Unit Grant
shall be forfeited with respect to such number of shares of
Stock as have not been earned as of the date of death. In
determining whether to exercise its discretion under the first
sentence of this Section 10.3(a) with respect to an Incentive
Stock Option, the Committee may consider the provisions of
Section 422 of the Code.
(b) If an Eligible Employee's employment or Director's service as
a Director with the Company and each Subsidiary, Parent or
Affiliate terminates for Cause, all Options and Stock
Appreciation Rights held by the Eligible Employee or Director
shall expire and all Stock Grants and Stock Unit Grants as
have not been earned as of the date of termination of Eligible
Employee's employment or Director's service shall be forfeited
as of the effective time of the Eligible Employee's or
Director's termination for Cause.
Section 11
NON-TRANSFERABILITY
No Option, Stock Grant, Stock Unit Grant or Stock Appreciation Right shall
(absent the Committee's consent) be transferable by an Eligible Employee or a
Director other than by will or by the laws of descent and distribution, and
any Option or Stock Appreciation Right shall (absent the Committee's consent)
be exercisable during a Eligible Employee's or Director's lifetime only by
the Eligible Employee or Director. The person or persons to whom an Option
or Stock Grant or Stock Unit Grant or Stock Appreciation Right is transferred
by will or by the laws of descent and distribution (or with the Committee's
consent) thereafter shall be treated as the Eligible Employee or Director.
Section 12
SECURITIES REGISTRATION
As a condition to the receipt of shares of Stock under this Plan, the
Eligible Employee or Director shall, if so requested by the Company, agree to
hold such shares of Stock for investment and not with a view of resale or
distribution to the public and, if so requested by the Company, shall deliver
to the Company a written statement satisfactory to the Company to that
effect. Furthermore, if so requested by the Company, the Eligible Employee
or Director shall make a written representation to the Company that he or she
will not sell or offer for sale any of such Stock unless a registration
statement shall be in effect with respect to such Stock under the 1933 Act
and any applicable state securities law or he or she shall have furnished to
the Company an opinion in form and substance satisfactory to the Company of
legal counsel satisfactory to the Company that such registration is not
required. Certificates or other evidence of ownership representing the Stock
transferred upon the exercise of an Option or Stock Appreciation Right or
upon the lapse of the forfeiture conditions, if any, on any Stock Grant or
Stock Unit Grant may at the discretion of the Company bear a legend to the
effect that such Stock has not been registered under the 1933 Act or any
applicable state securities law and that such Stock cannot be sold or offered
for sale in the absence of an effective registration statement as to such
Stock under the 1933 Act and any applicable state securities law or an
opinion in form and substance satisfactory to the Company of legal counsel
satisfactory to the Company that such registration is not required.
Section 13
LIFE OF PLAN
No Option or Stock Appreciation Right shall be granted or Stock Grant or
Stock Unit Grant made under this Plan on or after the earlier of:
(a) the tenth anniversary of the effective date of this Plan (as
determined under Section 4), in which event this Plan otherwise
thereafter shall continue in effect until all outstanding Options
and Stock Appreciation Rights have been exercised in full or no
longer are exercisable and all Stock issued under any Stock Grants
or Stock Unit Grants under this Plan have been forfeited or have
become non-forfeitable, or
(b) the date on which all of the Stock reserved under Section 3 has (as
a result of the exercise of Options or Stock Appreciation Rights
granted under this Plan or the satisfaction of the forfeiture
conditions, if any, on Stock Grants or other conditions on Stock
Unit Grants) been issued or no longer is available for use under
this Plan, in which event this Plan also shall terminate on such
date.
Section 14
ADJUSTMENT
14.1 Capital Structure. The grant caps described in Section 3.4, the
number, kind or class (or any combination thereof) of shares of
Stock subject to outstanding Options and Stock Appreciation Rights
granted under this Plan and the Option Price of such Options and
the SAR Value of such Stock Appreciation Rights as well as the
number, kind or class (or any combination thereof) of shares of
Stock subject to outstanding Stock Grants and Stock Unit Grants
made under this Plan shall be adjusted by the Committee in a
reasonable and equitable manner to preserve immediately after
(a) any equity restructuring or change in the capitalization of
the Company, including, but not limited to, spin offs, stock
dividends, large non-reoccurring dividends, rights offerings
or stock splits, or
(b) any other transaction described in Section 424(a) of the Code
which does not constitute a Change in Control of the Company
the aggregate intrinsic value of each such outstanding Option, Stock
Appreciation Right, Stock Grant and Stock Unit Grant immediately before such
restructuring or recapitalization or other transaction.
14.2 Available Shares. If any adjustment is made with respect to any
outstanding Option, Stock Appreciation Right, Stock Grant or Stock
Unit Grant under Section 14.1, then the Committee shall adjust the
number, kind or class (or any combination thereof) of shares of
Stock reserved under Section 3.1 in a reasonable and equitable
manner so that there is a sufficient number, kind and class of
shares of Stock available for issuance pursuant to each such
Option, Stock Appreciation Right, Stock Grant and Stock Unit Grant
as adjusted under Section 14.1 without seeking the approval of the
Company's shareholders for such adjustment unless such approval is
required under applicable law or the rules of the stock exchange on
which shares of Stock are traded.
14.3 Transactions Described in Section 424 of the Code. If there is a
corporate transaction described in Section 424(a) of the Code which
does not constitute a Change in Control of the Company, the
Committee as part of any such transaction shall have right to make
Stock Grants, Stock Unit Grants and Option and Stock Appreciation
Right grants (without regard to any limitations set forth under 3.4
of this Plan) to effect the assumption of, or the substitution for,
outstanding stock grants, stock unit grants and option and stock
appreciation right grants previously made by any other corporation
to the extent that such corporate transaction calls for such
substitution or assumption of such outstanding stock grants, stock
unit grants and stock option and stock appreciation right grants.
Furthermore, if the Committee makes any such grants as part of any
such transaction, the Committee shall have the right to increase
the number of shares of Stock available for issuance under Section
3.1 by the number of shares of Stock subject to such grants without
seeking the approval of the Company's shareholders for such
adjustment unless such approval is required under applicable law or
the rules of the stock exchange on which shares of Stock are
traded.
14.4 Fractional Shares. If any adjustment under this Section 14 would
create a fractional share of Stock or a right to acquire a
fractional share of Stock under any Option, Stock Appreciation
Right, Stock Grant or Stock Unit Grant, such fractional share shall
be disregarded and the number of shares of Stock reserved under
this Plan and the number subject to any Options, Stock Appreciation
Right grants, Stock Grants, and Stock Unit Grants shall be the next
lower number of shares of Stock, rounding all fractions downward.
An adjustment made under this Section 14 by the Committee shall be
conclusive and binding on all affected persons.
Section 15
CHANGE IN CONTROL
If there is a Change in Control of the Company, then the Board shall have
the right (to the extent expressly required as part of such transaction) to
cancel all outstanding Options, Stock Appreciation Rights, Stock Grants and
Stock Unit Grants after providing each Eligible Employee and Director a
reasonable period to exercise his or her Options and Stock Appreciation
Rights and to take such other action as necessary or appropriate to receive
the Stock subject to any Stock Grants or Stock Unit Grants and the cash
payable under any Stock Unit Grants.
Except as otherwise provided in the applicable award agreement, and to the
extent permitted under Section 409A of the Code, if an award granted under
this Plan is assumed, continued, or replaced by the Company or successor
after the Change Effective Date of a Change in Control, and if the holder's
service with the Company or its successor is terminated coincident with or
within one year following the Change Effective Date either by the Company or
its successor without Cause or by the holder for Good Reason, then all
conditions to the exercise of such holder's outstanding Options and Stock
Appreciation Rights on the date of termination and any and all outstanding
issuance and forfeiture conditions on any Stock Grants and Stock Unit Grants
held by the holder on such date automatically shall be deemed 100% satisfied
as of the date of such termination of service.
Section 16
AMENDMENT OR TERMINATION
This Plan may be amended by the Board from time to time to the extent that
the Board deems necessary or appropriate; provided, however, (a) no amendment
shall be made absent the approval of the shareholders of the Company to the
extent such approval is required under applicable law or the rules of the
stock exchange on which shares of Stock are listed and (b) no amendment shall
be made to Section 15 on or after the date of any Change in Control which
might adversely affect any rights which otherwise would vest on the related
Change Effective Date. The Board also may suspend granting Options or Stock
Appreciation Rights or making Stock Grants or Stock Unit Grants under this
Plan at any time and may terminate this Plan at any time; provided, however,
the Board shall not have the right in connection with any such suspension or
termination to unilaterally to modify, amend or cancel any Option or Stock
Appreciation Right granted, Stock Grant or Stock Unit Grant unless (1) the
Eligible Employee or Director consents in writing to such modification,
amendment or cancellation or (2) there is a dissolution or liquidation of the
Company or a transaction described in Section 15.
Section 17
MISCELLANEOUS
17.1 Shareholder Rights. No Eligible Employee or Director shall have any
rights as a shareholder of the Company as a result of the grant of
an Option, a Stock Appreciation Right or Stock Unit Grant pending
the actual delivery of the Stock subject to such Option, Stock
Appreciation Right, or Stock Unit Grant to such Eligible Employee or
Director. An Eligible Employee's or a Director's rights as a
shareholder in the shares of Stock which remain subject to
forfeiture under Section 9.2(b) shall be set forth in the related
Stock Grant Certificate.
17.2 No Contract of Employment. The grant of an Option or a Stock
Appreciation Right or a Stock Grant or Stock Unit Grant to an
Eligible Employee or Director under this Plan shall not constitute a
contract of employment or a right to continue to serve on the Board
and shall not confer on an Eligible Employee or Director any rights
upon his or her termination of employment or service in addition to
those rights, if any, expressly set forth in this Plan or the
related Option Certificate, Stock Appreciation Right Certificate, or
Stock Grant Certificate.
17.3 Withholding. Each Option, Stock Appreciation Right, Stock Grant and
Stock Unit Grant shall be made subject to the condition that the
Eligible Employee or Director consents to whatever action the
Committee directs to satisfy the minimum statutory federal and state
tax withholding requirements, if any, which the Company determines
are applicable to the exercise of such Option or Stock Appreciation
Right or to the satisfaction of any forfeiture conditions with
respect to Stock subject to a Stock Grant or Stock Unit Grant issued
in the name of the Eligible Employee or Director. No withholding
shall be effected under this Plan which exceeds the minimum
statutory federal and state withholding requirements.
17.4 Construction. All references to sections (section symbol) are to
sections (section symbol) of this Plan unless otherwise indicated.
This Plan shall be construed under the laws of the State of
Delaware. Each term set forth in Section 2 shall, unless otherwise
stated, have the meaning set forth opposite such term for purposes
of this Plan and, for purposes of such definitions, the singular
shall include the plural and the plural shall include the singular.
Finally, if there is any conflict between the terms of this Plan and
the terms of any Option Certificate, Stock Appreciation Right
Certificate or Stock Grant Certificate, the terms of this Plan shall
control.
17.5 Other Conditions. Each Option Certificate, Stock Appreciation Right
Certificate or Stock Grant Certificate may require that an Eligible
Employee or a Director (as a condition to the exercise of an Option
or a Stock Appreciation Right or the issuance of Stock subject to a
Stock Grant or pursuant to a Stock Unit Grant) enter into any
agreement or make such representations prepared by the Company,
including (without limitation) any agreement which restricts the
transfer of Stock acquired pursuant to the exercise of an Option or
a Stock Appreciation Right or a Stock Grant or a Stock Unit Grant or
provides for the repurchase of such Stock by the Company.
17.6 Rule 16b-3. The Committee shall have the right to amend any Option,
Stock Grant, Stock Unit Grant or Stock Appreciation Right to
withhold or otherwise restrict the transfer of any Stock or cash
under this Plan to an Eligible Employee or Director as the Committee
deems appropriate in order to satisfy any condition or requirement
under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be
applicable to such grant or transfer.
17.7 Coordination with Employment Agreements and Other Agreements. If
the Company enters into an employment agreement or other agreement
with an Eligible Employee or Director which expressly provides for
the acceleration in vesting of an outstanding Option, Stock
Appreciation Right, Stock Grant or Stock Unit Grant or for the
extension of the deadline to exercise any rights under an
outstanding Option, Stock Appreciation Right, Stock Grant or Stock
Unit Grant, any such acceleration or extension shall be deemed
effected pursuant to, and in accordance with, the terms of such
outstanding Option, Stock Appreciation Right, Stock Grant or Stock
Unit Grant and this Plan even if such employment agreement or other
agreement is first effective after the date the outstanding Option
or Stock Appreciation Right was granted or the Stock Grant or Stock
Unit Grant was made.
17.8 409A. The terms and conditions of all grants under the Plan shall
be designed to comply with the applicable requirements, if any, of
Section 409A of the Code.
