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8-K - FORM 8-K - ATHERSYS, INC / NEW | c18885e8vk.htm |
Exhibit 10.1
ATHERSYS, INC. AMENDED AND RESTATED 2007 LONG-TERM INCENTIVE
PLAN (AMENDED AND RESTATED EFFECTIVE JUNE 16, 2011)
PLAN (AMENDED AND RESTATED EFFECTIVE JUNE 16, 2011)
1. Purpose. The purpose of this Amended and Restated 2007 Long-Term Incentive Plan (as
Amended and Restated Effective June 16, 2011) (the Plan) is to attract and retain officers, other
employees, Directors, consultants and other independent contractors of Athersys, Inc., a Delaware
corporation (the Company), and its Subsidiaries and to provide to such persons incentives and
rewards for performance.
2. Definitions. As used in this Plan,
(a) Administrator means, (i) with respect to awards granted to executive officers of the
Company (as defined in Rule 3b-7 under the Exchange Act) and to Non-Employee Directors under
Section 9 of this Plan, the Board, and (ii) with respect to awards granted to all other
Participants, the Compensation Committee.
(b) Appreciation Right means a right granted pursuant to Section 5 or Section 9 of this
Plan, and will include both Free-Standing Appreciation Rights and Tandem Appreciation Rights.
(c) Base Price means the price to be used as the basis for determining the Spread upon the
exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.
(d) Board means the Board of Directors of the Company and, to the extent of any delegation
by the Board to a committee (or subcommittee thereof) pursuant to Section 11 of this Plan, such
committee (or subcommittee).
(e) Change in Control has the meaning set forth in Section 13 of this Plan.
(f) Code means the Internal Revenue Code of 1986, as amended from time to time.
(g) Common Shares means the shares of common stock, par value $0.001 per share, of the
Company or any security into which such Common Shares may be changed by reason of any transaction
or event of the type referred to in Section 12 of this Plan.
(h) Company means Athersys, Inc., a Delaware corporation and its successors.
(i) Compensation Committee means the Compensation Committee (or any successor committee)
appointed by the Board in accordance with the regulations of the Company consisting of at least
three Directors who each qualify as (i) a person who is a Non-Employee Director of the Company
within the meaning of Rule 16b-3 of the Securities and Exchange Commission promulgated under the
Exchange Act and (ii) an outside director within the meaning of Section 162(m) of the Code, and
who satisfy any applicable standards of independence under the federal securities and tax laws and
the listing standards of the
NASDAQ Stock Market or any other national securities exchange on which the Common Shares are
listed, as in effect from time to time.
(j) Covered Employee means a Participant who is, or is determined by the Board or
Compensation Committee to be likely to become, a covered employee within the meaning of Section
162(m) of the Code (or any successor provision).
(k) Date of Grant means the date specified by the Administrator on which a grant of Option
Rights, Appreciation Rights, Performance Shares, Performance Units or other awards contemplated by
Section 10 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock Units, or other
awards contemplated by Section 10 of this Plan will become effective (which date will not be
earlier than the date on which the Administrator takes action with respect thereto).
(l) Director means a member of the Board of Directors of the Company.
(m) Effective Date means the date of approval of this Plan by the Companys stockholders.
(n) Evidence of Award means an agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Administrator that sets forth the terms and conditions of
the awards granted. An Evidence of Award may be in an electronic medium, may be limited to
notation on the books and records of the Company and, with the approval of the Administrator, need
not be signed by a representative of the Company or a Participant.
(o) Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.
(p) Free-Standing Appreciation Right means an Appreciation Right granted pursuant to Section
5 or Section 9 of this Plan that is not granted in tandem with an Option Right.
(q) Incentive Stock Options means Option Rights that are intended to qualify as incentive
stock options under Section 422 of the Code or any successor provision.
(r) Incumbent Directors means the individuals who, as of the Effective Date, are Directors
of the Company and any individual becoming a Director subsequent to the Effective Date whose
election, nomination for election by the Companys stockholders, or appointment was approved by a
vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as a nominee for
director, without objection to such nomination); provided, however, that an
individual shall not be an Incumbent Director if such individuals election or appointment to the
Board occurs as a result of an actual or threatened election contest (as described in Rule
14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board.
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(s) Management Objectives means the measurable performance objective or objectives
established pursuant to this Plan for Participants who have received grants of Performance Shares
or Performance Units or, when so determined by the Administrator, Option Rights, Appreciation
Rights, Restricted Stock, Restricted Stock Units, dividend credits or other awards pursuant to this
Plan. Management Objectives may be described in terms of Company-wide objectives or objectives that
are related to the performance of the individual Participant or of the Subsidiary, division,
department, region or function within the Company or Subsidiary in which the Participant is
employed. The Management Objectives may be made relative to the performance of other companies or
subsidiaries, divisions, departments, regions or functions within such other companies, and may be
made relative to an index or one or more of the performance criteria themselves. The Administrator
may grant awards subject to Management Objectives that are either Qualified Performance-Based
Awards or are not Qualified Performance-Based Awards. The Management Objectives applicable to any
Qualified Performance-Based Award to a Covered Employee will be based on one or more, or a
combination, of the following criteria:
| Strategic Initiative Key Deliverable Metrics consisting of one or more of the following: product development; strategic partnering; research and development; vitality index; market penetration; geographic business expansion goals; cost targets; customer satisfaction; employee satisfaction; management of employment practices and employee benefits; supervision of litigation and information technology; goals relating to acquisitions or divestitures of subsidiaries, affiliates and joint ventures; achievement of drug development milestones; regulatory achievements including approval of a compound; progress of internal research or clinical programs; progress of partnered programs; completing phases of a clinical study (including the treatment phase); announcing or presenting preliminary or final data from clinical studies (in each case whether on particular timelines or generally); timely completion of clinical trials; submission of INDs and NDAs and other regulatory achievements; financing, investor relation, analysts and communication; manufacturing achievements (including obtaining particular yields from manufacturing runs and other measurable objectives related to process development activities); strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); co-development, co-marketing, profit sharing, joint venture or other similar arrangements; and financing and other capital raising transactions (including sales of the Companys equity or debt securities); |
| Operations (e.g., economic value-added; productivity; operating efficiency; cost reductions; recruiting and retaining personnel; implementation or completion of projects and processes; internal controls; implementation, completion or attainment of measurable objectives with respect to research, development, manufacturing, commercialization, products or projects, production volume levels, acquisitions and divestitures); |
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| Cash Flow (e.g., EBITDA; free cash flow; free cash flow with or without specific capital expenditure target or range, including or excluding divestments and/or acquisitions; total cash flow; cash flow in excess of cost of capital or residual cash flow or cash flow return on investment, budget management); |
| Working Capital (e.g., working capital divided by sales; days sales outstanding; days sales inventory; days sales in payables; improvement in or attainment of expense levels or working capital levels); |
| Liquidity Measures (e.g., debt-to-capital; debt-to-EBITDA; total debt ratio; debt reduction); |
| Sales Growth, Gross Margin Growth, Cost Initiative and Stock Price Metrics (e.g., revenues; revenue growth; revenue growth outside the United States; gross margin and gross margin growth; material margin and material margin growth; stock price appreciation; total return to stockholders; sales and administrative costs divided by sales; sales and administrative costs divided by profits); |
| Profits (e.g., operating income; EBIT; EBT; net income, earnings per share; residual or economic earnings; economic profit these profitability metrics could be measured before certain specified special items and/or subject to GAAP definition); |
| Profit Margins (e.g., Profits divided by revenues; gross margins and material margins divided by revenues; material margin divided by sales units); and |
| Returns (e.g., Profits or Cash Flow returns on: assets, invested capital, net capital employed, and equity). |
If the Compensation Committee determines that a change in the business, operations, corporate
structure or capital structure of the Company, or the manner in which it conducts its business, or
other events or circumstances render the Management Objectives unsuitable, the Compensation
Committee may in its discretion modify such Management Objectives or the related minimum acceptable
level of achievement, in whole or in part, as the Compensation Committee deems appropriate and
equitable, except in the case of a Qualified Performance-Based Award (other than in connection with
a Change in Control) where such action would result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code. In such case, the Compensation Committee
will not make any modification of the Management Objectives or minimum acceptable level of
achievement with respect to a Covered Employee.
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(t) Market Value per Share means, as of any particular date, the closing sales price of the
Common Shares or, as determined by the Administrator, the average closing sales price of the Common
Shares over a period of time, either before or after any particular date, of one to ten days, as
reported on the NASDAQ Stock Market (including, without
limitation, the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital
Market, as applicable) or, if not listed on such exchange, on any other national securities
exchange on which the Common Shares are listed or, if not listed on any such other national
securities exchange, the NASD OTC Bulletin Board or any other quotation facility on which the
Common Shares are quoted. If there is no regular trading market for such Common Shares, the Market
Value per Share shall be determined by the Administrator.
(u) Non-Employee Director means a Director who is not an employee of the Company or any
Subsidiary.
(v) Optionee means the optionee named in an Evidence of Award evidencing an outstanding
Option Right.
(w) Option Price means the purchase price payable on exercise of an Option Right.
(x) Option Right means the right to purchase Common Shares upon exercise of an option
granted pursuant to Section 4 or Section 9 of this Plan.
(y) Participant means a person who is selected by the Administrator to receive benefits
under this Plan and who is at the time an officer or other employee of the Company or any one or
more of its Subsidiaries, or who has agreed to commence serving in such capacities within 90 days
of the Date of Grant, or who is a consultant or other independent contractor, or a Non-Employee
Director who receives Common Shares or an award of Option Rights, Appreciation Rights, Restricted
Stock, Restricted Stock Units or other awards under this Plan. The term Participant shall also
include any person who provides services to the Company or a Subsidiary that are equivalent to
those typically provided by an employee.
(z) Performance Period means, in respect of a Performance Share or Performance Unit, a
period of time established pursuant to Section 8 of this Plan within which the Management
Objectives relating to such Performance Share or Performance Unit are to be achieved.
(aa) Performance Share means a bookkeeping entry that records the equivalent of one Common
Share awarded pursuant to Section 8 of this Plan.
(bb) Performance Unit means a bookkeeping entry awarded pursuant to Section 8 of this Plan
that records a unit equivalent to $1.00 or such other value as is determined by the Administrator.
(cc) Plan means this Athersys, Inc. Amended and Restated 2007 Long-Term Incentive Plan (as
Amended and Restated Effective June 16, 2011), as it may be amended from time to time.
(dd) Qualified Performance-Based Award means any award of Performance Shares, Performance
Units, Restricted Stock, Restricted Stock Units, or other awards contemplated under Section 10 of
this Plan, or portion of such award, to a Covered Employee
that is intended to satisfy the requirements for qualified performance-based compensation
under Section 162(m) of the Code.
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(ee) Restricted Stock means Common Shares granted or sold pursuant to Section 6 or Section 9
of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on
transfers has expired.
(ff) Restriction Period means the period of time during which Restricted Stock Units are
subject to restrictions, as provided in Section 7 or Section 9 of this Plan.
(gg) Restricted Stock Unit means an award made pursuant to Section 7 or Section 9 of this
Plan of the right to receive Common Shares or cash at the end of a specified period.
(hh) Spread means the excess of the Market Value per Share on the date when an Appreciation
Right is exercised, or on the date when Option Rights are surrendered in payment of the Option
Price of other Option Rights, over the Option Price or Base Price provided for in the related
Option Right or Free-Standing Appreciation Right, respectively.
(ii) Subsidiary means a corporation, company or other entity (i) at least 50 percent of
whose outstanding shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated association), but
at least 50 percent of whose ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the
Company except that for purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, Subsidiary means any corporation in which at
the time the Company owns or controls, directly or indirectly, at least 50 percent of the total
combined voting power represented by all classes of stock issued by such corporation.
(jj) Tandem Appreciation Right means an Appreciation Right granted pursuant to Section 5 or
Section 9 of this Plan that is granted in tandem with an Option Right.
(kk) Voting Stock means securities entitled to vote generally in the election of directors.
3. Shares Available Under the Plan.
(a) Maximum Shares Available Under Plan.
(i) | Subject to adjustment as provided in Section 12 of this Plan, the number of Common Shares that may be issued or transferred (A) upon the exercise of Option Rights or Appreciation Rights, (B) as Restricted Stock and released from substantial risks of forfeiture thereof, (C) in payment of Restricted Stock Units, (D) in payment of Performance Shares or Performance Units that have been earned, (E) as awards to Non-Employee Directors, (F) as other awards contemplated by Section 10 of this Plan, or (G) in payment of dividend equivalents paid with respect to awards made under this Plan, will not exceed in the aggregate 4,035,000 Common Shares (which includes 3,035,000 shares approved for the 2007 Long-Term Incentive Plan and 1,000,000 shares approved as of this amendment and restatement), plus any Common Shares relating to awards that expire or are forfeited or cancelled under this Plan. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. |
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(ii) | Common Shares covered by an award granted under this Plan shall not be counted as used unless and until they are actually issued and delivered to a Participant and, therefore, the total number of shares available under this Plan as of a given date shall not be reduced by any shares relating to prior awards that have expired or have been forfeited or cancelled. Upon payment in cash of the benefit provided by any award granted under this Plan, any Common Shares that were covered by that award will be available for issue or transfer hereunder. Notwithstanding anything to the contrary contained herein: (A) if Common Shares are tendered or otherwise used in payment of the Option Price of an Option Right, the total number of shares covered by the Option Right being exercised shall count against the aggregate plan limit described above; (B) Common Shares withheld by the Company to satisfy the tax withholding obligation shall count against the aggregate plan limit described above; and (C) the number of Common Shares covered by an Appreciation Right, to the extent that it is exercised and settled in Common Shares, and whether or not shares are actually issued to the Participant upon exercise of the Appreciation Right, shall be considered issued or transferred pursuant to this Plan. In the event that the Company repurchases shares with Option Right proceeds, those shares will not be added to the aggregate plan limit described above. If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for Common Shares based on fair market value, such Common Shares will not count against the aggregate plan limit described above. |
(b) Life of Plan Limits.
(i) | Notwithstanding anything in this Section 3, or elsewhere in this Plan, to the contrary and subject to adjustment as provided in Section 12 of this Plan, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 4,035.000 Common Shares. |
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(ii) | The number of shares issued as Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units and other awards under Section 10 of this Plan (after taking into account any forfeitures and cancellations) will not during the life of this Plan in the aggregate exceed 4,035,000 Common Shares. |
(iii) | Awards will not be granted under Section 9 and Section 10 of this Plan to the extent they would involve the issuance of more than 4,035,000 shares in the aggregate. |
(c) Individual Participant Limits. Notwithstanding anything in this Section 3, or
elsewhere in this Plan to the contrary, and subject to adjustment as provided in Section 12 of this
Plan:
(i) | No Participant will be granted Option Rights or Appreciation Rights, in the aggregate, for more than 750,000 Common Shares during any calendar year. |
(ii) | No Participant will be granted Qualified Performance-Based Awards of Restricted Stock or Restricted Stock Units, Performance Shares or other awards under Section 10 of this Plan, in the aggregate, for more than 750,000 Common Shares during any calendar year. |
(iii) | Notwithstanding any other provision of this Plan to the contrary, in no event will any Participant in any calendar year receive a Qualified Performance-Based Award of Performance Units having an aggregate maximum value as of their respective Dates of Grant in excess of $3,000,000. |
4. Option Rights. The Administrator may, from time to time and upon such terms and conditions
as it may determine, authorize the granting to Participants of options to purchase Common Shares.
Each such grant will be subject to all of the requirements contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which it pertains subject to the
limitations set forth in Section 3 of this Plan.
(b) Each grant will specify an Option Price per share, which may not be less than the Market
Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check
acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee having a value at the
time of exercise equal to the total Option Price (or other consideration authorized pursuant to
Section 4(d)), (iii) by a combination of such methods of payment, or (iv) by such other methods as
may be approved by the Administrator.
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(d) The Administrator may determine, at the Date of Grant, that payment of the Option Price of
any Option Right (other than an Incentive Stock Option) may also be made in whole or in part in the
form of Restricted Shares or other Common Shares that are forfeitable or subject to restrictions on
transfer. Unless otherwise determined by the Administrator at the Date of Grant, whenever any
Option Price is paid in whole or in part by means of any of the forms of consideration specified in
this Section 4(d), the Common Shares received upon the exercise of the Option Rights shall be
subject to the same risks of forfeiture or restrictions on transfer as may correspond to any that
apply to the consideration surrendered; provided, however, that such risks of
forfeiture or restrictions on transfer shall apply only to the same number of Common Shares
received by the Optionee as applied to the forfeitable or restricted Common Shares surrendered by
the Optionee.
(e) To the extent permitted by law, any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of
some or all of the shares to which such exercise relates.
(f) To the extent permitted by law, any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments, with or without interest, upon terms determined by
the Administrator.
(g) Successive grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.
(h) Each grant will specify the period or periods of continuous service by the Optionee with
the Company or any Subsidiary that is necessary before the Option Rights or installments thereof
will become exercisable. A grant of Option Rights may provide for the earlier exercise of such
Option Rights in the event of the retirement, death or disability of a Participant or a Change in
Control.
(i) Any grant of Option Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.
(j) Option Rights granted under this Plan may be (i) options, including, without limitation,
Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii)
options that are not intended so to qualify, or (iii) combinations of the foregoing. Incentive
Stock Options may only be granted to Participants who meet the definition of employees under
Section 3401(c) of the Code.
(k) The exercise of an Option Right will result in the cancellation on a share- for-share
basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.
(l) No Option Right will be exercisable more than 10 years from the Date of Grant.
(m) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of
Award shall be subject to this Plan and shall contain such terms and provisions, consistent with
this Plan, as the Administrator may approve.
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5. Appreciation Rights.
(a) The Administrator may also authorize the granting (i) to any Optionee, of Tandem
Appreciation Rights in respect of Option Rights granted hereunder, and (ii) to any Participant, of
Free-Standing Appreciation Rights. A Tandem Appreciation Right will be a right of the Optionee,
exercisable by surrender of the related Option Right, to receive from the Company an amount
determined by the Administrator, which will be expressed as a percentage of the Spread (not
exceeding 100 percent) at the time of exercise. Tandem Appreciation Rights may be granted at any
time prior to the exercise or termination of the related Option Rights; provided,
however, that a Tandem Appreciation Right awarded in relation to an Incentive Stock Option
must be granted concurrently with such Incentive Stock Option. A Free-Standing Appreciation Right
will be a right of the Participant to receive from the Company an amount determined by the
Administrator, which will be expressed as a percentage of the Spread (not exceeding 100 percent) at
the time of exercise.
(b) Each grant of Appreciation Rights will be subject to all of the requirements contained in
the following provisions:
(i) | Any grant may specify that the amount payable on exercise of an Appreciation Right may be paid by the Company in cash, in Common Shares or in any combination thereof and may either grant to the Participant or retain in the Administrator the right to elect among those alternatives. |
(ii) | Any grant may specify that the amount payable on exercise of an Appreciation Right may not exceed a maximum specified by the Administrator at the Date of Grant. |
(iii) | Any grant may specify waiting periods before exercise and permissible exercise dates or periods. |
(iv) | Any grant may specify that such Appreciation Right may be exercised only in the event of, or earlier in the event of, the retirement, death or disability of a Participant or a Change in Control. |
(v) | Any grant of Appreciation Rights may specify Management Objectives that must be achieved as a condition of the exercise of such Appreciation Rights. |
(vi) | Each grant of Appreciation Rights will be evidenced by an Evidence of Award, which Evidence of Award will describe such Appreciation Rights, identify the related Option Rights (if applicable), and contain such other terms and provisions, consistent with this Plan, as the Administrator may approve. |
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(c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights
may be exercised only at a time when the related Option Right is also exercisable and at a time
when the Spread is positive, and by surrender of the related Option
Right for cancellation. Successive grants of Tandem Appreciation Rights may be made to the
same Participant regardless of whether any Tandem Appreciation Rights previously granted to the
Participant remain unexercised.
(d) Regarding Free-Standing Appreciation Rights only:
(i) | Each grant will specify in respect of each Free-Standing Appreciation Right a Base Price, which may not be less than the Market Value per Share on the Date of Grant; |
(ii) | Successive grants may be made to the same Participant regardless of whether any Free-Standing Appreciation Rights previously granted to the Participant remain unexercised; and |
(iii) | No Free-Standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. |
6. Restricted Stock. The Administrator may also authorize the grant or sale of Restricted
Stock to Participants. Each such grant or sale will be subject to all of the requirements contained
in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common
Shares to the Participant in consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but subject to the substantial risk of
forfeiture and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or
sale that vests upon the passage of time will be subject to a substantial risk of forfeiture
within the meaning of Section 83 of the Code for a period to be determined by the Administrator at
the Date of Grant, or may provide that the Restricted Stock will vest upon the achievement of
Management Objectives (as provided in Section 6(e) below); provided, however, that
if Restricted Stock vests based on the passage of time rather than the achievement of Management
Objectives, the period of time will be no shorter than three years, except that the restrictions
may be removed ratably on at least an annual basis during the three year period.
(d) Each such grant or sale will provide that during or after the period for which such
substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be
prohibited or restricted in the manner and to the extent prescribed by the Administrator at the
Date of Grant (which restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Stock to a continuing substantial
risk of forfeiture in the hands of any transferee).
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(e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will
result in termination or early termination of the restrictions applicable to such
Restricted Stock; provided, however, that notwithstanding subparagraph (c)
above, restrictions relating to Restricted Stock that vests upon the achievement of Management
Objectives may not terminate sooner than one year from the Date of Grant. Each grant may specify
in respect of such Management Objectives a minimum acceptable level of achievement and may set
forth a formula for determining the number of shares of Restricted Stock on which restrictions will
terminate if performance is at or above the minimum level, but falls short of maximum achievement
of the specified Management Objectives. The grant of Restricted Stock will specify that, before
the termination or early termination of restrictions applicable to such Restricted Stock, the
Compensation Committee must determine that the Management Objectives have been satisfied;
provided, however, that notwithstanding Section 6(c) above, the substantial risk of
forfeiture relating to Restricted Stock that vests upon the achievement of Management Objectives
may not terminate sooner than one year from the Date of Grant.
(f) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock may provide for the earlier lapse of the substantial risk of forfeiture in the
event of the retirement, death or disability of a Participant or a Change in Control.
(g) Any such grant or sale of Restricted Stock may require that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and
reinvested in additional shares of Restricted Stock, which may be subject to the same restrictions
as the underlying award; provided, however, that dividends or other distributions
on Restricted Stock with restrictions that lapse as a result of the achievement of Management
Objectives shall be deferred until and paid contingent upon the achievement of the applicable
Management Objectives.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will
contain such terms and provisions, consistent with this Plan, as the Administrator may approve.
Unless otherwise directed by the Administrator, (i) all certificates representing shares of
Restricted Stock will be held in custody by the Company until all restrictions thereon will have
lapsed, together with a stock power or powers executed by the Participant in whose name such
certificates are registered, endorsed in blank and covering such Shares, or (ii) all shares of
Restricted Stock will be held at the Companys transfer agent in book entry form with appropriate
restrictions relating to the transfer of such shares of Restricted Stock.
7. Restricted Stock Units. The Administrator may also authorize the granting or sale of
Restricted Stock Units to Participants. Each such grant or sale will be subject to all of the
requirements contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver Common
Shares or cash to the Participant in the future in consideration of the performance of services,
but subject to the fulfillment of such conditions (which may include the achievement of Management
Objectives) during the Restriction Period as the Administrator may specify. If a grant of
Restricted Stock Units specifies that the Restriction Period will terminate upon the achievement of
Management Objectives, then, notwithstanding anything to the contrary contained in subparagraph (c)
below, such Restriction Period may not terminate
sooner than one year from the Date of Grant. Each grant may specify in respect of such
Management Objectives a minimum acceptable level of achievement and may set forth a formula for
determining the number of Restricted Stock Units on which restrictions will terminate if
performance is at or above the minimum level, but falls short of maximum achievement of the
specified Management Objectives. The grant of such Restricted Stock Units will specify that,
before the termination or early termination of restrictions applicable to such Restricted Stock
Units, the Compensation Committee must determine that the Management Objectives have been
satisfied.
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(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) If the Restriction Period lapses only by the passage of time rather than the achievement
of Management Objectives as provided in subparagraph (a) above, each such grant or sale will be
subject to a Restriction Period of not less than one year.
(d) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock Units may provide for the earlier lapse or other modification of the Restriction
Period in the event of the retirement, death or disability of a Participant or a Change in Control.
(e) During the Restriction Period, the Participant will have no right to transfer any rights
under his or her award and will have no rights of ownership in the Common Shares deliverable upon
payment of the Restricted Stock Units and will have no right to vote them, but the Administrator
may at the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock
Units on either a current or deferred or contingent basis, either in cash or in additional Common
Shares; provided, however, that dividends or other distributions on Common Shares
underlying Restricted Stock Units with restrictions that lapse as a result of the achievement of
Management Objectives shall be deferred until and paid contingent upon the achievement of the
applicable Management Objectives.
(f) Each grant or sale of Restricted Stock Units will specify the time and manner of payment
of the Restricted Stock Units that have been earned. Any grant or sale may specify that the amount
payable with respect thereto may be paid by the Company in cash, in Common Shares or in any
combination thereof and may either grant to the Participant or retain in the Administrator the
right to elect among those alternatives.
(g) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with this Plan, as the Administrator may
approve.
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8. Performance Shares and Performance Units. The Administrator may also authorize the
granting of Performance Shares and Performance Units that will become payable to a Participant upon
achievement of specified Management Objectives during the Performance Period. Each such grant will
be subject to all of the requirements contained in the following provisions:
(a) Each grant will specify the number of Performance Shares or Performance Units to which it
pertains, which number may be subject to adjustment to reflect changes in compensation or other
factors; provided, however, that no such adjustment will be made in the case of a
Qualified Performance-Based Award (other than in connection with the death or disability of the
Participant or a Change in Control) where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Performance Share or Performance Unit will be
such period of time (not less than one year) commencing on the Date of Grant as will be determined
by the Administrator at the time of grant, which may be subject to earlier lapse or other
modification in the event of the retirement, death or disability of a Participant or a Change in
Control.
(c) Any grant of Performance Shares or Performance Units will specify Management Objectives
which, if achieved, will result in payment or early payment of the award, and each grant may
specify in respect of such specified Management Objectives a level or levels of achievement and
will set forth a formula for determining the number of Performance Shares or Performance Units that
will be earned if performance is at or above the minimum level or levels, but falls short of
maximum achievement of the specified Management Objectives. The grant of Performance Shares or
Performance Units will specify that, before the Performance Shares or Performance Units will be
earned and paid, the Compensation Committee must determine that the Management Objectives have been
satisfied.
(d) Each grant will specify the time and manner of payment of Performance Shares or
Performance Units that have been earned. Any grant may specify that the amount payable with
respect thereto may be paid by the Company in cash, in Common Shares or in any combination thereof
and may either grant to the Participant or retain in the Administrator the right to elect among
those alternatives.
(e) Any grant of Performance Shares may specify that the amount payable with respect thereto
may not exceed a maximum specified by the Administrator at the Date of Grant. Any grant of
Performance Units may specify that the amount payable or the number of Common Shares issued with
respect thereto may not exceed maximums specified by the Administrator at the Date of Grant.
(f) The Administrator may, at the Date of Grant of Performance Shares, provide for the payment
of dividend equivalents to the holder thereof either in cash or in additional Common Shares,
subject in all cases to deferral and payment on a contingent basis based on the Participants
earning of the Performance Shares with respect to which such dividend equivalents are paid.
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(g) Each grant of Performance Shares or Performance Units will be evidenced by an Evidence of
Award and will contain such other terms and provisions, consistent with this Plan, as the
Administrator may approve.
9. Awards to Non-Employee Directors. The Administrator may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to Non-Employee Directors of
Option Rights, Appreciation Rights or other awards contemplated by Section 10 of this Plan and may
also authorize the grant or sale of Common Shares, Restricted Stock or Restricted Stock Units to
Non-Employee Directors. Each grant of an award to a Non-Employee Director will be upon such terms
and conditions as approved by the Administrator, will not be required to be subject to any minimum
vesting period, and will be evidenced by an Evidence of Award in such form as will be approved by
the Administrator. Each grant will specify in the case of an Option Right, an Option Price per
share, and in the case of a Free-Standing Appreciation Right, a Base Price per share, which will
not be less than the Market Value per Share on the Date of Grant. Each Option Right and
Free-Standing Appreciation Right granted under this Plan to a Non-Employee Director will expire not
more than 10 years from the Date of Grant and will be subject to earlier termination as hereinafter
provided. If a Non-Employee Director subsequently becomes an employee of the Company or a
Subsidiary while remaining a member of the Board, any award held under this Plan by such individual
at the time of such commencement of employment will not be affected thereby. Non-Employee
Directors, pursuant to this Section 9, may be awarded, or may be permitted to elect to receive,
pursuant to procedures established by the Administrator, all or any portion of their annual
retainer, meeting fees or other fees in Common Shares, Restricted Stock, Restricted Stock Units or
other awards under this Plan in lieu of cash.
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10. Other Awards.
(a) The Administrator may, subject to limitations under applicable law, grant to any
Participant such other awards that may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Common Shares or factors that may influence the
value of such shares, including, without limitation, convertible or exchangeable debt securities,
other rights convertible or exchangeable into Common Shares, purchase rights for Common Shares,
awards with value and payment contingent upon performance of the Company or specified Subsidiaries,
affiliates or other business units thereof or any other factors designated by the Administrator,
and awards valued by reference to the book value of Common Shares or the value of securities of, or
the performance of specified Subsidiaries or affiliates or other business units of the Company.
The Administrator shall determine the terms and conditions of such awards. Common Shares delivered
pursuant to an award in the nature of a purchase right granted under this Section 10 shall be
purchased for such consideration, paid for at such time, by such methods, and in such forms,
including, without limitation, cash, Common Shares, other awards, notes or other property, as the
Administrator shall determine.
(b) Cash awards, as an element of or supplement to any other award granted under this Plan,
may also be granted pursuant to this Section 10 of this Plan.
(c) The Administrator may grant Common Shares as a bonus, or may grant other awards in lieu of
obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or
under other plans or compensatory arrangements, subject to such terms as shall be determined by the
Administrator.
11. Administration of the Plan.
(a) This Plan will be administered by the Administrator. To the extent the Compensation
Committee is the Administrator, the Compensation Committee may from time to time delegate all or
any part of its authority under this Plan to any subcommittee thereof. To the extent of any such
delegation, references in this Plan to the Administrator will be deemed to be references to such
subcommittee. A majority of the Administrator (or subcommittee) will constitute a quorum, and the
action of the members of the Administrator (or subcommittee) present at any meeting at which a
quorum is present, or acts unanimously approved in writing, will be the acts of the Administrator
(or subcommittee).
(b) The interpretation and construction by the Administrator of any provision of this Plan or
of any agreement, notification or document evidencing the grant of Option Rights, Appreciation
Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or other
awards pursuant to Section 10 of this Plan and any determination by the Administrator pursuant to
any provision of this Plan or of any such agreement, notification or document will be final and
conclusive. No member of the Administrator will be liable for any such action or determination made
in good faith.
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(c) The Administrator or, to the extent of any delegation as provided in Section 11(a), the
subcommittee, may delegate to one or more of its members or to one or more
officers of the Company, or to one or more agents or advisors, such administrative duties or
powers as it may deem advisable, and the Administrator, the subcommittee, or any person to whom
duties or powers have been delegated as aforesaid, may employ one or more persons to render advice
with respect to any responsibility the Administrator, the subcommittee or such person may have
under this Plan. The Administrator or the subcommittee may, by resolution, authorize one or more
officers of the Company to do one or both of the following on the same basis as the Administrator
or the subcommittee: (i) designate employees to be recipients of awards under this Plan; and (ii)
determine the size of any such awards; provided, however, that (A) the
Administrator or the subcommittee shall not delegate such responsibilities to any such officer for
awards granted to an employee who is an officer, Director, or more than 10% beneficial owner of any
class of the Companys equity securities that is registered pursuant to Section 12 of the Exchange
Act, as determined by the Administrator in accordance with Section 16 of the Exchange Act; (B) the
resolution providing for such authorization sets forth the total number of Common Shares such
officer(s) may grant; and (C) the officer(s) shall report periodically to the Administrator or the
subcommittee, as the case may be, regarding the nature and scope of the awards granted pursuant to
the authority delegated.
12. Adjustments. The Compensation Committee shall make or provide for such adjustments in the
numbers of Common Shares authorized under this Plan, subject to limits contained in Section 3 of
this Plan, and covered by outstanding Option Rights, Appreciation Rights, Restricted Stock Units,
Performance Shares and Performance Units granted hereunder and, if applicable, in the number of
Common Shares covered by other awards granted pursuant to Section 10 hereof, in the Option Price
and Base Price, and in the kind of shares covered thereby, as the Compensation Committee, in its
sole discretion may determine is equitably required to prevent dilution or enlargement of the
rights of Participants or Optionees that otherwise would result from (a) any stock dividend,
extraordinary dividend, stock split, combination of shares, recapitalization or other change in the
capital structure of the Company, or (b) any Change in Control, merger, consolidation, spin-off,
split- off, spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the
event of any such transaction or event, the Compensation Committee, in its discretion, may provide
in substitution for any or all outstanding awards under this Plan such alternative consideration
(including cash), if any, as it may determine to be equitable in the circumstances and may require
in connection therewith the surrender of all awards so replaced. The Compensation Committee shall
also make or provide for such adjustments in the numbers of shares specified in Section 3 of this
Plan as the Compensation Committee in its sole discretion, exercised in good faith, may determine
is appropriate to reflect any transaction or event described in this Section 12; provided,
however, that any such adjustment to the number specified in Section 3(b) will be made only
if and to the extent that (i) such adjustment would not cause any option intended to qualify as an
Incentive Stock Option to fail so to qualify and (ii) such adjustment would not result in negative
tax consequences under Section 409A of the Code. Without limiting the generality of the foregoing,
in the event that the Company issues warrants or other rights to acquire Common Shares on a pro
rata basis to all stockholders, the Compensation Committee shall make such adjustments in the
number of Common Shares authorized under this Plan and in the limits contained herein as it may
deem to be equitable, including, without limitation, proportionately increasing the number of
authorized Common Shares or any such limit.
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13. Change in Control. For purposes of this Plan, except as may be otherwise prescribed by
the Administrator in an Evidence of Award made under this Plan, a Change in Control shall be
deemed to have occurred upon the occurrence of any of the following events:
(a) any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a Person) is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of the combined voting power of the
then-outstanding Voting Stock of the Company; provided, however, that:
(i) | for purposes of this Section 13(a), the following acquisitions shall not constitute a Change in Control: (A) any acquisition of Voting Stock of the Company directly from the Company that is approved by a majority of the Incumbent Directors, (B) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (C) any acquisition of Voting Stock of the Company by the trustee or other fiduciary holding securities under any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary, and (D) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Transaction that complies with clauses (i), (ii) and (iii) of Section 13(c) below; |
(ii) | a Change in Control will not be deemed to have occurred if a Person is or becomes the beneficial owner of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding pursuant to a transaction or series of transactions that is approved by a majority of the Incumbent Directors unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and |
(iii) | if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable but no later than the date, if any, set by the Incumbent Board a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Persons acquisition; or |
(b) a majority of the Board ceases to be comprised of Incumbent Directors; or
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(c) the consummation of a reorganization, merger or consolidation, or sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of the
stock or assets of another corporation, or other transaction (each, a Business Transaction),
unless, in each case, immediately following such Business Transaction (i) the Voting Stock of
the Company outstanding immediately prior to such Business Transaction continues to represent
(either by remaining outstanding or by being converted into Voting Stock of the surviving entity or
any parent thereof), more than 60% of the combined voting power of the then outstanding shares of
Voting Stock of the entity resulting from such Business Transaction (including, without limitation,
an entity which as a result of such transaction owns the Company or all or substantially all of the
Companys assets either directly or through one or more subsidiaries), (ii) no Person (other than
the Company, such entity resulting from such Business Transaction or any employee benefit plan (or
related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from
such Business Transaction) beneficially owns, directly or indirectly, 50% or more of the combined
voting power of the then outstanding shares of Voting Stock of the entity resulting from such
Business Transaction, and (iii) at least a majority of the members of the Board of Directors of the
entity resulting from such Business Transaction were Incumbent Directors at the time of the
execution of the initial agreement or of the action of the Board providing for such Business
Transaction; or
(d) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company, except pursuant to a Business Transaction that complies with clauses (i), (ii) and
(iii) of Section 13(c) above.
14. Non U.S. Participants. In order to facilitate the making of any grant or combination of
grants under this Plan, the Administrator may provide for such special terms for awards to
Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside
of the United States of America or who provide services to the Company under an agreement with a
foreign nation or agency, as the Administrator may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Moreover, the Administrator may approve such
supplements to or amendments, restatements or alternative versions of this Plan (including, without
limitation, sub-plans) as it may consider necessary or appropriate for such purposes, without
thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or
other appropriate officer of the Company may certify any such document as having been approved and
adopted in the same manner as this Plan. No such special terms, supplements, amendments or
restatements, however, will include any provisions that are inconsistent with the terms of this
Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency
without further approval by the stockholders of the Company.
15. Transferability.
(a) Except as otherwise determined by the Administrator, no Option Right, Appreciation Right
or other derivative security granted under this Plan shall be transferable by the Participant
except by will or the laws of descent and distribution. Except as otherwise determined by the
Administrator, Option Rights and Appreciation Rights will be exercisable during the Participants
lifetime only by him or her or, in the event of the Participants legal incapacity to do so, by his
or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity
under state law and/or court supervision.
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(b) The Administrator may specify at the Date of Grant that part or all of the Common Shares
that are (i) to be issued or transferred by the Company upon the exercise of
Option Rights or Appreciation Rights, upon the termination of the Restriction Period
applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or
Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions
on transfer referred to in Section 6 of this Plan, will be subject to further restrictions on
transfer.
16. Withholding Taxes. To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under this Plan, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld, which arrangements (in the discretion
of the Administrator) may include relinquishment of a portion of such benefit. If a Participants
benefit is to be received in the form of Common Shares, and such Participant fails to make
arrangements for the payment of tax, the Company shall withhold such Common Shares having a value
equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is
required to pay the Company an amount required to be withheld under applicable income and
employment tax laws, the Participant may elect to satisfy the obligation, in whole or in part, by
electing to have withheld, from the shares required to be delivered to the Participant, Common
Shares having a value equal to the amount required to be withheld (except in the case of Restricted
Stock where an election under Section 83(b) of the Code has been made), or by delivering to the
Company other Common Shares held by such Participant. The shares used for tax withholding will be
valued at an amount equal to the Market Value per Share of such Common Shares on the date the
benefit is to be included in Participants income. In no event shall the Market Value per Share of
the Common Shares to be withheld and/or delivered pursuant to this Section 16 to satisfy applicable
withholding taxes in connection with the benefit exceed the minimum amount of taxes required to be
withheld. Participants shall also make such arrangements as the Company may require for the
payment of any withholding tax obligation that may arise in connection with the disposition of
Common Shares acquired upon the exercise of Option Rights.
17. Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of
Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made
hereunder shall be administered in a manner consistent with this intent. Any reference in this Plan
to Section 409A of the Code will also include any regulations or any other formal guidance
promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal
Revenue Service.
(b) Neither a Participant nor any of a Participants creditors or beneficiaries shall have the
right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable
under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code,
any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant
or for a Participants benefit under this Plan and
grants hereunder may not be reduced by, or offset against, any amount owing by a Participant
to the Company or any of its affiliates.
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(c) If, at the time of a Participants separation from service (within the meaning of Section
409A of the Code), (i) the Participant shall be a specified employee (within the meaning of Section
409A of the Code and using the identification methodology selected by the Company from time to
time) and (ii) the Company shall make a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of
which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of
the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company
shall not pay such amount on the otherwise scheduled payment date but shall instead pay it, without
interest, on the tenth business day of the seventh month after such separation from service.
(d) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light
of the uncertainty with respect to the proper application of Section 409A of the Code, the Company
reserves the right to make amendments to this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the
Code. In any case, a Participant shall be solely responsible and liable for the satisfaction of all
taxes and penalties that may be imposed on a Participant or for a Participants account in
connection with this Plan and grants hereunder (including any taxes and penalties under Section
409A of the Code), and neither the Company nor any of its affiliates shall have any obligation to
indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
18. Amendments.
(a) The Board may at any time and from time to time amend this Plan in whole or in part;
provided, however, that if an amendment to this Plan (i) would materially increase
the benefits accruing to participants under this Plan, (ii) would materially increase the number of
securities which may be issued under this Plan, (iii) would materially modify the requirements for
participation in this Plan or (iv) must otherwise be approved by the stockholders of the Company in
order to comply with applicable law or the rules of the NASDAQ Stock Market or, if the Common
Shares are not traded on the NASDAQ Stock Market, the principal national securities exchange upon
which the Common Shares are traded or quoted, then, such amendment will be subject to stockholder
approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described in Section 12 of this
Plan, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding
Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding Option
Rights or Appreciation Rights in exchange for cash, other awards or Option Rights or Appreciation
Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the
original Option Rights or Base Price of the original Appreciation Rights, as applicable, without
stockholder approval. This Section 18(b) is intended to prohibit the repricing of underwater
Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments
provided for in Section 12 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be
amended without approval by the Companys stockholders.
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(c) If permitted by Section 409A of the Code and Section 162(m), but subject to the paragraph
that follows, in case of termination of employment by reason of death, disability or normal or
early retirement, or in the case of unforeseeable emergency or other special circumstances, of a
Participant who holds an Option Right or Appreciation Right not immediately exercisable in full, or
any shares of Restricted Stock as to which the substantial risk of forfeiture or the prohibition or
restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction
Period has not been completed, or any Performance Shares or Performance Units which have not been
fully earned, or any other awards made pursuant to Section 10 subject to any vesting schedule or
transfer restriction, or who holds Common Shares subject to any transfer restriction imposed
pursuant to Section 15(b) of this Plan, the Administrator may, in its sole discretion, accelerate
the time at which such Option Right, Appreciation Right or other award may be exercised or the time
at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse
or the time when such Restriction Period will end or the time at which such Performance Shares or
Performance Units will be deemed to have been fully earned or the time when such transfer
restriction will terminate or may waive any other limitation or requirement under any such award.
Subject to Section 18(b) hereof, the Administrator may amend the terms of any award theretofore
granted under this Plan prospectively or retroactively, except in the case of a Qualified
Performance-Based Award (other than in connection with the Participants death or disability, or a
Change in Control) where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code. In such case, the Board will not make any
modification of the Management Objectives or the level or levels of achievement with respect to
such Qualified Performance-Based Award. Subject to Section 12 above, no such amendment shall
impair the rights of any Participant without his or her consent. The Board may, in its discretion,
terminate this Plan at any time. Termination of this Plan will not affect the rights of
Participants or their successors under any awards outstanding hereunder and not exercised in full
on the date of termination.
19. Governing Law. The Plan and all grants and awards and actions taken thereunder shall be
governed by and construed in accordance with the internal substantive laws of the State of
Delaware.
20. Effective Date/Termination. This Plan will be effective as of the Effective Date. No
grant will be made under this Plan more than 10 years after the Effective Date, but all grants made
on or prior to such date will continue in effect thereafter subject to the terms thereof and of
this Plan.
21. Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional Common Shares pursuant to this
Plan. The Administrator may provide for the elimination of fractions or for the settlement of
fractions in cash.
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(b) This Plan will not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise have to terminate such Participants
employment or other service at any time.
(c) To the extent that any provision of this Plan would prevent any Option Right that was
intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be
null and void with respect to such Option Right. Such provision, however, will remain in effect
for other Option Rights and there will be no further effect on any provision of this Plan.
(d) Any Evidence of Award may provide, in the event that the Participant engages in any
activity that is detrimental to the Company (as such activity may be defined in any Evidence of
Award): (i) for the forfeiture of any award granted under this Plan, (ii) that the Participant
return to the Company any Common Shares that the Participant has not disposed of that were offered
pursuant to this Plan, and/or (iii) that the Participant pay to the Company in cash the difference
between any amount actually paid by a Participant for any Common Shares received under this Plan
that the Participant has disposed of and the Market Value per Share of the Common Shares on the
date the Participant acquired the Common Shares under this Plan.
(e) No award under this Plan may be exercised by the holder thereof if such exercise, and the
receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Board or
Compensation Committee, contrary to law or the regulations of any duly constituted authority having
jurisdiction over this Plan.
(f) Absence on leave approved by a duly constituted officer of the Company or any of its
Subsidiaries shall not be considered interruption or termination of service of any employee for any
purposes of this Plan or awards granted hereunder.
(g) No Participant shall have any rights as a stockholder with respect to any shares subject
to awards granted to him or her under this Plan prior to the date as of which he or she is actually
recorded as the holder of such shares upon the stock records of the Company.
(h) The Administrator may condition the grant of any award or combination of awards authorized
under this Plan on the surrender or deferral by the Participant of his or her right to receive a
cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the
Participant.
(i) Participants shall provide the Company with a written election form setting forth the name
and contact information of the person who will have beneficial ownership rights upon the death of
the Participant.
(j) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the
Board or Compensation Committee, such provision shall be construed or deemed amended or limited in
scope to conform to applicable laws or, in the discretion of the Administrator, it shall be
stricken and the remainder of this Plan shall remain in full force and effect.
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