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8-K - FORM 8-K - BIG 5 SPORTING GOODS Corp | v59771e8vk.htm |
EX-10.2 - EX-10.2 - BIG 5 SPORTING GOODS Corp | v59771exv10w2.htm |
Exhibit 10.1
BIG 5 SPORTING GOODS CORPORATION
2007 EQUITY AND PERFORMANCE INCENTIVE PLAN
(AMENDED AND RESTATED AS OF APRIL 26, 2011)
2007 EQUITY AND PERFORMANCE INCENTIVE PLAN
(AMENDED AND RESTATED AS OF APRIL 26, 2011)
BIG 5 SPORTING GOODS CORPORATION, a corporation existing under the laws of the State of
Delaware (the Company), established and adopted the Companys 2007 Equity and Performance
Incentive Plan, effective as of April 24, 2007 (the Original Plan). The Original Plan is hereby
amended and restated as the Big 5 Sporting Goods Corporation 2007 Equity and Performance Incentive
Plan (Amended and Restated as of April 26, 2011) (the Plan). Certain capitalized terms used in
the Plan are defined in Article II.
RECITALS
WHEREAS, the Company desires to encourage high levels of performance by those individuals who
are key to the success of the Company, to attract new individuals who are highly motivated and who
are expected to contribute to the success of the Company and to encourage such individuals to
remain as directors, employees, consultants and/or advisors of the Company and its Affiliates by
increasing their proprietary interest in the Companys growth and success;
WHEREAS, to attain these ends, the Company established and maintained the Original Plan to
authorize the granting of Awards to Participants whose judgment, initiative and efforts are or have
been or are expected to be responsible for the success of the Company; and
WHEREAS, the Company has determined to amend and restate the Original Plan to, among other
things, increase the number of Shares authorized for grant under the Plan and to provide the
Company greater flexibility in determining the restrictions applicable to certain Awards granted
under the Plan.
NOW, THEREFORE, the Company hereby amends and restates the Original Plan and agrees to the
following provisions:
ARTICLE I
PURPOSE OF THE PLAN
PURPOSE OF THE PLAN
1.1 Purpose. The purpose of the Plan is to assist the Company and its Affiliates in
attracting and retaining selected individuals to serve as directors, employees, consultants and/or
advisors of the Company who are expected to contribute to the Companys success and to achieve
long-term objectives which will inure to the benefit of all stockholders of the Company through the
additional incentives inherent in the Awards hereunder.
ARTICLE II
DEFINITIONS
DEFINITIONS
2.1 Affiliate shall mean (i) any person or entity that directly, or through one or more
intermediaries, controls, or is controlled by, or is under common control with, the Company
(including any Parent or Subsidiary) or (ii) any entity in which the Company has a significant
equity interest, as determined by the Committee.
2.2 Applicable Laws means the legal requirements relating to the administration of and
issuance of securities under stock incentive plans, including, without limitation, the requirements
of state corporations law, federal and state securities law, federal and state tax law, and the
requirements of any stock exchange or quotation system upon which the Shares may then be listed or
quoted. For all purposes of this Plan, references to statutes and regulations shall be deemed to
include any successor statutes and regulations, to the extent reasonably appropriate as determined
by the Committee.
2.3 Award shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Performance Award, Dividend Equivalent, Other Stock Unit Award or any other right, interest or
option relating to Shares or other property (including cash) granted pursuant to the provisions of
the Plan.
2.4 Award Agreement shall mean any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder.
2.5 Board shall mean the board of directors of the Company.
2.6 Cause shall have the meaning set forth in a Participants employment or consulting
agreement with the Company (if any), or if not defined therein, shall mean (i) acts or omissions by
the Participant which constitute intentional material misconduct or a knowing violation of a
material policy of the Company or any of its subsidiaries, (ii) the Participant personally
receiving a benefit in money, property or services from the Company or any of its subsidiaries or
from another person dealing with the Company or any of its subsidiaries, in material violation of
applicable law or Company policy, (iii) an act of fraud, conversion, misappropriation, or
embezzlement by the Participant or his conviction of, or entering a guilty plea or plea of no
contest with respect to, a felony, or the equivalent thereof (other than DUI), or (iv) any
deliberate and material misuse or improper disclosure of confidential or proprietary information of
the Company.
2.7 Change of Control shall mean the occurrence of any of the following events:
(i) The direct or indirect acquisition by an unrelated Person or Group of Beneficial
Ownership (as such terms are defined below) of more than 50% of the voting power of the Companys
issued and outstanding voting securities in a single transaction or a series of related
transactions;
(ii) The direct or indirect sale or transfer by the Company of substantially all of its assets
to one or more unrelated Persons or Groups in a single transaction or a series of related
transactions;
(iii) The merger, consolidation or reorganization of the Company with or into another
corporation or other entity in which the Beneficial Owners of more than 50% of the voting power of
the Companys issued and outstanding voting securities immediately before such merger or
consolidation do not own more than 50% of the voting power of the issued and outstanding voting
securities of the surviving corporation or other entity immediately after such merger,
consolidation or reorganization (or, if applicable, the ultimate parent corporation that
directly or indirectly has Beneficial Ownership of 100% of the voting securities eligible to elect
directors of the surviving corporation); or
(iv) During any consecutive two-year period, individuals who at the beginning of such period
constituted the Board of the Company (together with any new Directors whose election to such Board
or whose nomination for election by the stockholders of the Company was approved by a vote of a
majority of the Directors of the Company then still in office who were either Directors at the
beginning of such period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of the Company then in office.
None of the foregoing events, however, shall constitute a Change of Control if such event is
not a Change in Control Event under Treasury Regulations Section 1.409A-3(i)(5). For purposes of
determining whether a Change of Control has occurred, the following Persons and Groups shall not be
deemed to be unrelated: (A) such Person or Group directly or indirectly has Beneficial Ownership
of more than 50% of the issued and outstanding voting power of the Companys voting securities
immediately before the transaction in question, (B) the Company has Beneficial Ownership of more
than 50% of the voting power of the issued and outstanding voting securities of such Person or
Group, or (C) more than 50% of the voting power of the issued and outstanding voting securities of
such Person or Group are owned, directly or indirectly, by Beneficial Owners of more than 50% of
the issued and outstanding voting power of the Companys voting securities immediately before the
transaction in question. The terms Person, Group, Beneficial Owner, and Beneficial
Ownership shall have the meanings used in the Exchange Act.
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2.8 Code shall mean the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.
2.9 Committee shall mean the Committee constituted under Section 4.2 to administer this
Plan.
2.10 Company has the meaning set forth in introductory paragraph of the Plan.
2.11 Consultant means any person, including an advisor, who (i) is a natural person, (ii)
provides bona fide services to the Company or a Parent or Subsidiary, and (iii) provides services
that are not in connection with the offer or sale of securities in a capital-raising transaction,
and that do not directly or indirectly promote or maintain a market for the securities of the
Company; provided that the term Consultant does not include (i) Employees or (ii) Directors who
are paid only a directors fee by the Company or who are not compensated by the Company for their
services as Directors.
2.12 Continuous Status as an Employee, Director or Consultant means that the employment,
director or consulting relationship is not interrupted or terminated by the Company, any Parent or
Subsidiary, or by the Employee, Director or Consultant. Continuous Status as an Employee, Director
or Consultant will not be considered interrupted in the case of: (i) any leave of absence approved
by the Board, including sick leave, military leave, or any other personal leave, provided, that for
purposes of Incentive Stock Options, any such leave may not exceed 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain Company policies) or
statute; (ii) transfers between locations of the Company or between the Company, its Parent, its
Subsidiaries or its successor; or (iii) in the case of an Award other than an Incentive Stock
Option, the ceasing of a person to be an Employee while such person remains a Director or
Consultant, the ceasing of a person to be a Director while such person remains an Employee or
Consultant or the ceasing of a person to be a Consultant while such person remains an Employee or
Director.
2.13 Covered Employee shall mean a covered employee within the meaning of Section
162(m)(3) of the Code, or any successor provision thereto.
2.14 Director shall mean a non-employee member of the Board or a non-employee member of the
board of directors of a Parent or Subsidiary.
2.15 Disability shall mean total and permanent disability as defined in Section 22(e)(3) of
the Code.
2.16 Dividend Equivalents shall have the meaning set forth in Section 12.5.
2.17 Employee shall mean any employee of the Company or any Parent or Subsidiary.
2.18 Exchange Act shall mean the Securities Exchange Act of 1934 and the rules promulgated
thereunder, as amended.
2.19 Fair Market Value shall mean, with respect to any property other than Shares, the
market value of such property determined by such methods or procedures as shall be established from
time to time by the Committee. The Fair Market Value of Shares as of any date shall be determined
as follows:
(i) If the Shares are listed on any established stock exchange or a national market system,
including without limitation, the National Market System of NASDAQ, the Fair Market Value of a
Share will be (i) the closing sales price for such Shares (or the closing bid, if no sales are
reported) as quoted on that system or exchange (or the system or exchange with the greatest volume
of trading in Shares) on the last market trading day prior to the day of determination or (ii) any
sales price for such Shares (or the closing bid, if no sales are reported) as quoted on that system
or exchange (or the system or exchange with the greatest volume of trading in Shares) on the day of
determination, as the Committee may select, in each case as reported in the Wall Street Journal or
any other source the Committee considers reliable.
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(ii) If the Shares are quoted on the NASDAQ System (but not on the NASDAQ National Market
System) or are regularly quoted by recognized securities dealers but selling prices are not
reported, the Fair Market Value of a Share will be the mean between the high bid and low asked
prices for the Shares on (i)
the last market trading day prior to the day of determination or (ii) the day of determination, as
the Committee may select, in each case as reported in the Wall Street Journal or any other source
the Committee considers reliable.
(iii) If the Shares are not traded as set forth above, the Fair Market Value will be
determined in good faith by the Committee with reference to the earnings history, book value and
prospects of the Company in light of market conditions generally, and any other factors the
Committee considers appropriate, such determination by the Committee to be final, conclusive and
binding.
2.20 Family Member means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Participants household (other than a tenant or employee), a trust in which these
persons (or the Participant) control the management of assets, and any other entity in which these
persons (or the Participant) own more than 50 percent of the voting interests.
2.21 Incentive Stock Option means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
2.22 Limitations shall have the meaning set forth in Section 3.2.
2.23 Option shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period or periods as the
Committee shall determine.
2.24 Original Plan has the meaning set forth in the introductory paragraph of the Plan.
2.25 Other Stock Unit Award shall have the meaning set forth in Section 8.1.
2.26 Parent means a parent corporation with respect to the Company, whether now or later
existing, as defined in Section 424(e) of the Code.
2.27 Participant shall mean an Employee, Director or Consultant who is selected by the
Committee to receive an Award under the Plan.
2.28 Payee shall have the meaning set forth in Section 13.1.
2.29 Performance Award shall mean any Award of Performance Shares or Performance Units
granted pursuant to Article 9.
2.30 Performance Period shall mean that period established by the Committee at the time any
Performance Award is granted or at any time thereafter during which any performance goals specified
by the Committee with respect to such Award are to be measured.
2.31 Performance Share shall mean any grant pursuant to Article 9 of a unit valued by
reference to a designated number of Shares, which value may be paid to the Participant by delivery
of such property as the Committee shall determine, including cash, Shares, other property, or any
combination thereof, upon achievement of such performance goals during the Performance Period as
the Committee shall establish at the time of such grant or thereafter.
2.32 Performance Unit shall mean any grant pursuant to Article 9 of a unit valued by
reference to a designated amount of property (including cash) other than Shares, which value may be
paid to the Participant by delivery of such property as the Committee shall determine, including
cash, Shares, other property, or any
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combination thereof, upon achievement of such performance
goals during the Performance Period as the Committee shall establish at the time of such grant or
thereafter.
2.33 Prior Plans shall mean, collectively, the Companys 1997 Management Equity Plan and
2002 Stock Incentive Plan, as amended.
2.34 Restricted Stock shall mean any Share issued with the restriction that the holder may
not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee,
in its sole discretion, may impose (including any restriction on the right to vote such Share and
the right to receive any dividends), which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem appropriate.
2.35 Restricted Period shall have the meaning set forth in Section 7.1.
2.36 Restricted Stock Award shall have the meaning set forth in Section 7.1.
2.37 Shares shall mean the shares of common stock of the Company, par value $0.01 per share.
2.38 Stock Appreciation Right shall mean the right granted to a Participant pursuant to
Article 6.
2.39 Subsidiary shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the time of the granting of the Award, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
the chain.
2.40 Substitute Awards shall mean Awards granted or Shares issued by the Company in
assumption of, or in substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, by a company acquired by the Company or any Subsidiary or with
which the Company or any Subsidiary combines.
ARTICLE III
SHARES SUBJECT TO THE PLAN
SHARES SUBJECT TO THE PLAN
3.1 Number of Shares.
(a) Subject to adjustment as provided in Section 12.2, the total number of Shares authorized
for grant under this Plan shall be (i) 3,649,250 Shares (representing an increase of 1,250,000
Shares over the amount of Shares authorized under the Original Plan) plus (ii) any Shares subject
to awards granted under the Prior Plans, which such awards were outstanding as of April 24, 2007
and which have subsequently been forfeited, have expired or have otherwise terminated, or which
hereafter are forfeited, expire or otherwise terminate, without issuance of Shares, or were or are
settled for cash or otherwise did not and do not result in the issuance of Shares. Any Shares that
are subject to Awards of Options or Stock Appreciation Rights shall be counted against this limit
as one Share for every one Share granted, regardless of the number of shares actually delivered
pursuant to such Awards. Any Shares that are subject to Awards other than Options or Stock
Appreciation Rights (including, but not limited to, Shares delivered in satisfaction of Dividend
Equivalents) shall be counted against this limit as 2.5 Shares for every one Share granted.
(b) If any Shares subject to an Award or to an award under the Prior Plans are forfeited,
expire or otherwise terminate without issuance of such Shares, or any Award or award under the
Prior Plans is settled for cash or otherwise does not result in the issuance of all or a portion of
the Shares subject to such Award, the Shares shall, to the extent of such forfeiture, expiration,
termination, cash settlement or non-issuance, again be available for Awards under the Plan, subject
to Section 3.1(e) below.
(c) In the event that (i) any Option or other Award granted under this Plan or any option or
award granted under the Prior Plans is exercised through the tendering of Shares (either actually,
by attestation, or by the giving of instructions to a broker to remit to the Company that portion
of the sales price required to pay the exercise price) or by the withholding of Shares by the
Company, or (ii) withholding tax liabilities arising from such Options or Awards under this Plan or
options or awards under a Prior Plan are satisfied by the
tendering of Shares (either actually, by attestation,
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or by the giving of instructions to a
broker to remit to the Company that portion of the sales price required to pay the exercise price)
or by the withholding of Shares by the Company, then the Shares so tendered or withheld shall not
again be available for Awards under the Plan.
(d) Substitute Awards shall not reduce the Shares authorized for issuance under the Plan or
authorized for grant to a Participant in any calendar year. Additionally, in the event that a
company acquired by the Company or any Subsidiary, or with which the Company or any Subsidiary
combines, has shares available under a pre-existing plan approved by shareholders and not adopted
in contemplation of such acquisition or combination, the shares available for grant pursuant to the
terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio
or other adjustment or valuation ratio or formula used in such acquisition or combination to
determine the consideration payable to the holders of common stock of the entities party to such
acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares
authorized for issuance under the Plan; provided that Awards using such available shares shall not
be made after the date awards or grants could have been made under the terms of the pre-existing
plan, absent the acquisition or combination, and shall only be made to individuals who were
employees, directors or consultants of such acquired or combined company before such acquisition or
combination.
(e) Any Shares that again become available for grant pursuant to this Article 3 shall be added
back as one Share if such Shares were subject to Options or Stock Appreciation Rights granted under
the Plan or options or stock appreciation rights granted under the Prior Plans, and as 2.5 Shares
if such Shares were subject to Awards other than Options or Stock Appreciation Rights granted under
the Plan.
3.2 Limitations on Grants to Individual Participant. Subject to adjustment as
provided in Section 12.2, no Participant may be granted (i) Options or Stock Appreciation Rights
during any fiscal year of the Company with respect to more than 500,000 Shares, or (ii) Restricted
Stock, Performance Awards and/or Other Stock Unit Awards that are denominated in Shares in any
fiscal year of the Company with respect to more than 250,000 Shares (the Limitations). In
addition to the foregoing, the maximum dollar value payable to any Participant in any fiscal year
of the Company with respect to Performance Awards and/or Other Stock Unit Awards that are valued
with reference to cash or property other than Shares is $2,000,000. If an Award is cancelled, the
cancelled Award shall continue to be counted toward the applicable Limitations.
3.3 Character of Shares. Any Shares issued hereunder may consist, in whole or in
part, of authorized and unissued shares, treasury shares or shares purchased in the open market or
otherwise.
ARTICLE IV
ELIGIBILITY AND ADMINISTRATION
ELIGIBILITY AND ADMINISTRATION
4.1 Eligibility. Any Employee, Director or Consultant shall be eligible to be
selected as a Participant. Only Employees may receive awards of Incentive Stock Options.
4.2 Administration.
(a) The Plan shall be administered by the Committee, constituted as follows:
(i) The Committee will consist of the Board, or a committee designated by the Board,
which Committee will be constituted to satisfy Applicable Laws. Once appointed, a Committee
will serve in its designated capacity until otherwise directed by the Board. The Board may
increase the size of the Committee and appoint additional members, remove members (with or
without cause) and substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan. Notwithstanding the
foregoing, unless the Board expressly resolves to the contrary, while the Company is
registered pursuant to Section 12 of the Exchange Act, the Plan will be administered only by
the Compensation Committee of the Board (or such other
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committee designated by the
Compensation Committee of the Board), consisting of no fewer than two Directors, each of
whom is (A) a non-employee director within the meaning of Rule 16b-3 (or any successor
rule) of the Exchange Act, (B) an outside director within the meaning of Section
162(m)(4)(C)(i) of the Code, and (C) an independent director for purpose of the rules
and regulations of the NASDAQ National Market System or other exchange or quotation system
on which the Shares are principally traded; provided, however, (X) so long as the Committee
has at least two directors that meet the above requirements, the Committee may contain one
additional director who is not a non-employee director, outside director or independent
director, but only if such director abstains from voting on all grants or awards to Covered
Employees and to those Participants who have been designated by the Board of Directors as
being officers for purposes of Section 16 of the Exchange Act and the rules promulgated
thereunder and (Y) the failure of the Committee to be composed solely of individuals who are
non-employee directors, outside directors, and independent directors, whether pursuant
to clause (X) above or otherwise, shall not render ineffective or void any awards or grants
made by, or other actions taken by, such Committee.
(ii) The Plan may be administered by different bodies with respect to Directors,
officers who are not Directors, and Employees and Consultants who are neither Directors nor
officers, and Covered Employees.
(b) The Committee shall have full discretion, power and authority, subject to the provisions
of the Plan and subject to such orders or resolutions not inconsistent with the provisions of the
Plan as may from time to time be adopted by the Board, to: (i) select the Employees, Consultants
and Directors to whom Awards may from time to time be granted hereunder; (ii) determine the type or
types of Awards, not inconsistent with the provisions of the Plan, to be granted to each
Participant hereunder; (iii) determine the number of Shares to be covered by each Award granted
hereunder; (iv) determine the terms and conditions, not inconsistent with the provisions of the
Plan, of any Award granted hereunder and the form and content of any Award Agreement; (v) determine
whether, to what extent and under what circumstances Awards may be settled in cash, Shares or other
property, subject to the provisions of the Plan; (vi) determine whether, to what extent and under
what circumstances any Award shall be modified, amended, canceled or suspended; (vii) interpret and
administer the Plan and any instrument or agreement entered into under or in connection with the
Plan, including any Award Agreement; (viii) correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent that the Committee shall
deem desirable to carry it into effect; (ix) establish such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan; (x) determine
whether any Award will have Dividend Equivalents; (xi) determine whether, to what extent, and under
what circumstances cash, Shares, or other property payable with respect to an Award shall be
deferred either automatically or at the election of the Participant; provided that the Committee
shall take no action that would subject the Participant to a penalty tax under Section 409A of the
Code; and (xii) make any other determination and take any other action that the Committee deems
necessary or desirable for administration of the Plan.
(c) Decisions of the Committee shall be final, conclusive and binding on all persons or
entities, including the Company, any Participant, any stockholder and any Employee or any
Affiliate. A majority of the members of the Committee may determine its actions and fix the time
and place of its meetings.
(d) The Committee may delegate to a committee of one or more Directors of the Company or, to
the extent permitted by Applicable Law, to one or more officers or a committee of officers, the
authority to grant Awards to Employees and officers of the Company who are not Directors, Covered
Employees, or officers, as such term is defined by Rule 16a-1(f) of the Exchange Act,
and to cancel or suspend Awards to Employees and officers of the Company who are not Directors,
Covered Employees, or officers, as such term is defined by Rule 16a-1(f) of the
Exchange Act.
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ARTICLE V
OPTIONS
OPTIONS
5.1 Grant of Options. Options may be granted hereunder to Participants either alone
or in addition to other Awards granted under the Plan. Any Option shall be subject to the terms
and conditions of this Article 5 and to such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall deem desirable.
5.2 Award Agreements. All Options granted pursuant to this Article 5 shall be
evidenced by a written Award Agreement in such form and containing such terms and conditions as the
Committee shall determine which are not inconsistent with the provisions of the Plan. Granting of
an Option pursuant to the Plan shall impose no obligation on the recipient to exercise such Option.
Any individual who is granted an Option pursuant to this Article 5 may hold more than one Option
granted pursuant to the Plan at the same time.
5.3 Option Price. Other than in connection with Substitute Awards, the option price
per each Share purchasable under any Option granted pursuant to this Article 5 shall not be less
than 100% of the Fair Market Value of such Share on the date of grant of such Option. Other than
pursuant to Section 12.2, the Committee shall not be permitted to (a) lower the option price per
Share of an Option after it is granted, (b) cancel an Option when the option price per Share
exceeds the Fair Market Value of the underlying Shares in exchange for cash or for another Award
(other than in connection with Substitute Awards), and (c) take any other action with respect to an
Option that may be treated as a repricing under the rules and regulations of the NASDAQ National
Market System or other exchange or quotation system on which the Shares are principally traded.
5.4 Option Period. The term of each Option shall be fixed by the Committee in its
sole discretion; provided that no Option shall be exercisable after the expiration of ten years
from the date the Option is granted.
5.5 Exercise of Options. Vested Options granted under the Plan shall be exercised by
the Participant or by a Permitted Assignee thereof (or by the Participants executors,
administrators, guardian, beneficiary, or legal representative, or Family Members, as may be
provided in an Award Agreement) as to all or part of the Shares covered thereby, by the giving of
written notice of exercise to the Company or its designated agent, specifying the number of Shares
to be purchased, accompanied by payment of the full purchase price for the Shares being purchased.
Unless otherwise provided in an Award Agreement, full payment of such purchase price shall be made
at the time of exercise and shall be made (a) in cash or by certified check or bank check or wire
transfer of immediately available funds, (b) with the consent of the Committee, by tendering
previously acquired Shares (either actually or by attestation, valued at their then Fair Market
Value) that have been owned for a period of at least six months (or such other period to avoid
accounting charges against the Companys earnings), (c) with the consent of the Committee, by
delivery of other consideration (including, where permitted by law and the Committee, other Awards)
having a Fair Market Value on the exercise date equal to the total purchase price, (d) with the
consent of the Committee, by withholding Shares otherwise issuable in connection with the exercise
of the Option, (e) with the consent of the Committee, by delivery of a properly executed exercise
notice together with any other documentation as the Committee and the Participants broker, if
applicable, require to effect an exercise of the Option and delivery to the Company of the sale or
other proceeds (as permitted by Applicable Law) required to pay the exercise price, (f) through any
other method specified in an Award Agreement, or (g) any combination of any of the foregoing. In
connection with a tender of previously acquired Shares pursuant to clause (b) above, the Committee,
in its sole discretion, may permit the Participant to constructively exchange Shares already owned
by the Participant in lieu of actually tendering such Shares to the Company, provided that adequate
documentation concerning the ownership of the Shares to be constructively tendered is furnished in
form satisfactory to the Committee. The notice of exercise, accompanied by such payment, shall be
delivered to the Company at its principal business office or such other office as the Committee may
from time to time direct, and shall be in such form, containing such further provisions consistent
with the provisions of the Plan, as the Committee may from time to time prescribe. In no event may
any Option granted hereunder be exercised for a fraction of a Share. No adjustment shall be made
for cash dividends or other rights for which the record date is prior to the date of such issuance.
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5.6 Form of Settlement. In its sole discretion, the Committee may provide, at the
time of grant, that the Shares to be issued upon an Options exercise shall be in the form of
Restricted Stock or other similar securities, or may reserve the right so to provide after the time
of grant.
5.7 Incentive Stock Options. With respect to the Options that may be granted by the
Committee under the Plan, the Committee may grant Options intended to qualify as Incentive Stock
Options to any Employee of the Company or any Parent or Subsidiary, subject to the requirements of
Section 422 of the Code. The Award Agreement of an Option intended to qualify as an Incentive
Stock Option shall designate the Option as an Incentive Stock Option. Notwithstanding anything in
Section 3.1 to the contrary and solely for the purposes of determining whether Shares are available
for the grant of Incentive Stock Options under the Plan, the maximum aggregate number of Shares
with respect to which Incentive Stock Options may be granted under the Plan shall be 2,399,250
Shares. Notwithstanding the provisions of Section 5.3, in the case of an Incentive Stock Option
granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent of the voting power of all classes of capital stock of the
Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the
Fair Market Value per Share on the date of grant. Notwithstanding the provisions of Section 5.4,
in the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent of the voting power of all
classes of capital stock of the Company or any Parent or Subsidiary, the term of the Incentive
Stock Option will be five years from the date of grant or any shorter term specified in the Award
Agreement. Notwithstanding the foregoing, if the Shares subject to an Employees Incentive Stock
Options (granted under all plans of the Company or any Parent or Subsidiary), which become
exercisable for the first time during any calendar year, have a Fair Market Value in excess of
$100,000, the Options accounting for this excess will be not be treated as Incentive Stock Options.
For purposes of the preceding sentence, Incentive Stock Options will be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares will be determined as of
the time of grant.
5.8 Termination of Employment or Consulting Relationship or Directorship. If a
Participant holds exercisable Options on the date his or her Continuous Status as an Employee,
Director or Consultant terminates (other than because of termination due to Cause, but including
death or Disability), the Participant may exercise the Options that were vested and exercisable as
of the date of termination until the end of the original term or for the period set forth in the
Award Agreement or determined by the Committee, whichever is earlier. If the Participant is not
entitled to exercise his or her entire Option at the date of such termination, the Shares covered
by the unexercisable portion of the Option will revert to the Plan, unless otherwise set forth in
the Award Agreement or determined by the Committee. The Committee may determine in its sole
discretion that such unexercisable portion of the Option will become exercisable at such times and
on such terms as the Committee may determine in its sole discretion. If the Participant does not
exercise an Option within the time specified after termination, that Option will expire, and the
Shares covered by it will revert to the Plan, except as otherwise determined by the Committee.
ARTICLE VI
STOCK APPRECIATION RIGHTS
STOCK APPRECIATION RIGHTS
6.1 Grant and Exercise. The Committee may provide Stock Appreciation Rights either
alone or in addition to other Awards upon such terms and conditions as the Committee may establish
in its sole discretion.
6.2 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms
and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time
to time by the Committee, including the following:
(a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to
receive the excess of (i) the Fair Market Value of one Share on the date of exercise or such other
amount as the Committee shall so determine at any time during a specified period before the date of
exercise over (ii) the grant price of the right on the date of grant, which, except in the case of
Substitute Awards or in connection with an adjustment provided in Section 12.2, shall not be less
than the Fair Market Value of one Share on such date of grant of the right.
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(b) Upon the exercise of a Stock Appreciation Right, payment shall be made in whole Shares or
cash as determined by the Committee.
(c) The provisions of Stock Appreciation Rights need not be the same with respect to each
recipient.
(d) The Committee may impose such other conditions or restrictions on the terms of exercise
and the exercise price of any Stock Appreciation Right, as it shall deem appropriate. In
connection with the foregoing, the Committee shall consider the applicability and effect of Section
162(m) of the Code. Notwithstanding the foregoing provisions of this Section 6.2, but subject to
Section 12.2, a Stock Appreciation Right shall not have (i) an exercise price less than Fair Market
Value on the date of grant, or (ii) a term of greater than ten years. In addition to the
foregoing, but subject to Section 12.2, the base amount of any Stock Appreciation Right shall not
be reduced after the date of grant.
6.3 Termination of Employment or Consulting Relationship or Directorship. If a
Participant holds exercisable Stock Appreciation Rights on the date his or her Continuous Status as
an Employee, Director or Consultant terminates (other than because of termination due to Cause, but
including death or Disability), the Participant may exercise the Stock Appreciation Rights that
were vested and exercisable as of the date of termination until the end of the original term or for
the period set forth in the Award Agreement or determined by the Committee, whichever is earlier.
If the Participant is not entitled to exercise his or her entire Stock Appreciation Right at the
date of such termination, the Shares covered by the unexercisable portion of the Stock Appreciation
Right will revert to the Plan, unless otherwise set forth in the Award Agreement or determined by
the Committee. The Committee may determine in its sole discretion that such unexercisable portion
of the Stock Appreciation Right will become exercisable at such times and on such terms as the
Committee may determine in its sole discretion. If the Participant does not exercise a Stock
Appreciation Right within the time specified after termination, that Stock Appreciation Right will
expire, and the Shares covered by it will revert to the Plan, except as otherwise determined by the
Committee.
ARTICLE VII
RESTRICTED STOCK AWARDS
RESTRICTED STOCK AWARDS
7.1 Grants. Awards of Restricted Stock may be issued hereunder to Participants either
alone or in addition to other Awards granted under the Plan (a Restricted Stock Award). A
Restricted Stock Award shall be subject to restrictions imposed by the Committee covering a period
of time specified by the Committee (the Restricted Period); provided, however, that, in the case
of Restricted Stock as to which restrictions lapse based solely on the recipients Continuous
Status as an Employee, Director, or Consultant, the Restricted Period over which the restrictions
may fully lapse shall not be less than three years, but the restrictions may lapse ratably over
such Restricted Period. At the Committees sole and absolute discretion, the three year
restriction in the preceding sentence shall not be applicable to Restricted Stock Award grants of
up to 10% of the number of Shares authorized for Awards under Section 3.1(a) of the Plan (for this
purpose, the 10% limit shall be computed by taking into account grants under Sections 8 and 9 of
the Plan that are subject to the 10% limit). The provisions of Restricted Stock Awards need not be
the same with respect to each recipient. The Committee has absolute discretion to determine
whether any consideration (other than services) is to be received by the Company or any Affiliate
as a condition precedent to the issuance of Restricted Stock.
7.2 Award Agreements. The terms of any Restricted Stock Award granted under the Plan
shall be set forth in a written Award Agreement which shall contain provisions determined by the
Committee and not inconsistent with the Plan.
7.3 Rights of Holders of Restricted Stock. Except as otherwise provided in the Award
Agreement, beginning on the date of grant of the Restricted Stock Award and subject to execution of
the Award Agreement, the Participant shall become a shareholder of the Company with respect to all
Shares subject to the Award Agreement and shall have all of the rights of a shareholder, including
the right to vote such Shares and the right to receive distributions made with respect to such
Shares; provided, however that the Award Agreement may provide that any Shares or any other
property (including cash) distributed as a dividend or otherwise with
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respect to any Restricted Shares as to which the restrictions have not yet lapsed shall be
subject to the same restrictions as such Restricted Shares.
ARTICLE VIII
OTHER STOCK UNIT AWARDS
OTHER STOCK UNIT AWARDS
8.1 Other Stock Unit Awards. Other Awards of Shares and other Awards that are valued
in whole or in part by reference to, or are otherwise based on, Shares or other property (Other
Stock Unit Awards) may be granted hereunder to Participants, either alone or in addition to other
Awards granted under the Plan, and such Other Stock Unit Awards shall also be available as a form
of payment in the settlement of other Awards granted under the Plan. Other Stock Unit Awards shall
be paid in Shares or cash. Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Employees, Consultants and Directors to whom and the time
or times at which such Other Stock Unit Awards shall be made, the number of Shares to be granted
pursuant to such Awards, and all other conditions of the Awards; provided, however, that if the
vesting of an Other Stock Unit Award is based solely on the recipients Continuous Status as an
Employee, Director, or Consultant, the period over which such Other Stock Unit Award fully vests
shall not be less than three years, but vesting may occur ratably over such vesting period. At the
Committees sole and absolute discretion, the three year restriction in the preceding sentence
shall not be applicable to Other Stock Unit Award grants of up to 10% of the number of Shares
authorized for Awards under Section 3.1(a) of the Plan (for this purpose, the 10% limit shall be
computed by taking into account grants under Sections 7 and 9 of the Plan that are subject to the
10% limit). The provisions of Other Stock Unit Awards need not be the same with respect to each
recipient.
8.2 Terms and Conditions. Shares (including securities convertible into Shares)
subject to Awards granted under this Article 8 may be issued for no consideration or for such
minimum consideration as may be required by Applicable Law. Shares (including securities
convertible into Shares) purchased pursuant to a purchase right awarded under this Article 8 shall
be purchased for such consideration as the Committee shall determine in its sole discretion.
ARTICLE IX
PERFORMANCE AWARDS
PERFORMANCE AWARDS
9.1 Terms of Performance Awards. Performance Awards may be issued hereunder to
Participants, for no consideration or for such minimum consideration as may be required by
Applicable Law, either alone or in addition to other Awards granted under the Plan. The
performance criteria to be achieved during any Performance Period and the length of the Performance
Period shall be determined by the Committee upon the grant of each Performance Award; provided,
however, that a Performance Period shall not be shorter than one year nor longer than five years.
At the Committees sole and absolute discretion, the restrictions set forth in the preceding
sentence shall not be applicable to grants of up to 10% of the number of Shares authorized for
Awards under Section 3.1(a) of the Plan (for this purpose, the 10% limit shall be computed by
taking into account grants under Sections 7 and 8 of the Plan that are subject to the 10% limit).
Except as provided in Article 11 or as may be provided in an Award Agreement, Performance Awards
will be distributed only after the end of the relevant Performance Period. Performance Awards may
be paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the
Committee at the time of payment. The performance goals to be achieved for each Performance Period
shall be conclusively determined by the Committee and may be based upon the criteria set forth in
Section 10.2. The amount of the Award to be distributed shall be conclusively determined by the
Committee. The terms of a Performance Award may provide that it will be paid in a lump sum or in
installments following the close of the Performance Period.
ARTICLE X
CODE SECTION 162(m) PROVISIONS
CODE SECTION 162(m) PROVISIONS
10.1 Covered Employees. Notwithstanding any other provision of the Plan, if the
Committee determines at the time Restricted Stock, a Performance Award or an Other Stock Unit Award
is granted to a Participant who is, or may be, as of the end of the tax year in which the Company
would claim a tax deduction
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in connection with such Award, a Covered Employee, and that the deduction limit of Section
162(m) of the Code might apply to such Award, then the Committee may provide that this Article 10
is applicable to such Award.
10.2 Performance Criteria. If Restricted Stock, a Performance Award or an Other Stock
Unit Award is subject to this Article 10, then the lapsing of restrictions thereon and the
distribution of cash, Shares or other property pursuant thereto, as applicable, shall be subject to
the achievement of one or more objective performance goals established by the Committee, which
shall be based on the attainment of specified levels, or growth, of one or any combination of the
following factors, or an objective formula that is determined at the time of the Award that is
based on modified or unmodified calculations of one or any combination of the following factors:
net sales; pretax income before or after allocation of corporate overhead and bonus; earnings per
share; net income; division, group or corporate financial goals; return on stockholders equity;
return on assets; attainment of strategic and operational initiatives; appreciation in and/or
maintenance of the price of the Shares or any other publicly-traded securities of the Company;
market share; gross profits; earnings before taxes; earnings before interest and taxes; earnings
before interest, taxes, depreciation and amortization (EBITDA); an adjusted formula of EBITDA
determined by the Committee; economic value-added models; comparisons with various stock market
indices; reductions in costs, and/or return on invested capital of the Company or any Affiliate,
division or business unit of the Company for or within which the Participant is primarily employed.
Such performance goals also may be based solely by reference to the Companys performance or the
performance of an Affiliate, division or business unit of the Company, or based upon the relative
performance of other companies or upon comparisons of any of the indicators of performance relative
to other companies. Unless the Committee specifies otherwise when it sets the performance goals
for an award, objective adjustments shall be made to any of the foregoing measures for items that
will not properly reflect the Companys financial performance for these purposes, such as the
write-off of debt issuance costs, pre-opening and development costs, gain or loss from asset
dispositions, asset or other impairment charges, litigation settlement costs, and other non-routine
items that the Committee foresees may occur during the Performance Period. Also, unless the
Committee determines otherwise in setting the performance goals for an Award, such performance
goals shall be applied by excluding the impact of (a) restructurings, discontinued operations and
charges for extraordinary items, (b) an event either not directly related to the operations of the
Company or not within the reasonable control of the Companys management, or (c) a change in
accounting standards required by generally accepted accounting principles. Such performance goals
shall be set by the Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m) of the Code, or any successor provision thereto, and the
regulations thereunder.
10.3 Adjustments. Notwithstanding any provision of the Plan (other than Article 11),
with respect to any Restricted Stock, Performance Award or Other Stock Unit Award that is subject
to this Article 10, the Committee may adjust downward, but not upward, the amount payable pursuant
to such Award, and the Committee may not waive the achievement of the applicable performance goals,
except in the case of the death or Disability of the Participant or the occurrence of a Change of
Control.
10.4 Determination of Performance. Prior to the vesting, payment, settlement or
lapsing of any restrictions with respect to any Restricted Stock, Performance Award or Other Stock
Unit Award that is subject to this Article 10, the Committee shall certify in writing that the
applicable performance goals have been achieved to the extent necessary for such Award to qualify
as performance based compensation within the meaning of Section 162(m)(4)(C) of the Code.
10.5 Restrictions. The Committee shall have the power to impose such other
restrictions on Awards subject to this Article 10 as it may deem necessary or appropriate to ensure
that such Awards satisfy all requirements for performance-based compensation within the meaning
of Section 162(m)(4)(C) of the Code, or which are not inconsistent with such requirements. To the
extent the terms of an Award subject to this Article 10 are inconsistent with the requirements set
forth herein, such inconsistent terms shall be deemed amended to comply with Section 162(m) of the
Code in the manner is most consistent with the pre-amendment terms.
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ARTICLE XI
CHANGE OF CONTROL PROVISIONS
CHANGE OF CONTROL PROVISIONS
11.1 Impact of Change of Control. The terms of any Award may provide in the Award
Agreement evidencing the Award, or the Committee may determine in its discretion, that, upon a
Change of Control of the Company, (a) Options and Stock Appreciation Rights outstanding as of the
date of the Change of Control immediately vest and become exercisable in full or in part, (b)
restrictions and deferral limitations on Restricted Stock lapse and the Restricted Stock becomes
free of some or all restrictions and limitations and becomes partially or fully vested, (c)
Performance Awards shall be considered to be earned and payable (either in full or pro-rata based
on the portion of Performance Period completed as of the date of the Change of Control), and any
deferral or other restriction shall lapse and such Performance Awards shall be immediately settled
or distributed, (d) the restrictions and deferral limitations and other conditions applicable to
any Other Stock Unit Awards or any other Awards shall lapse in full or in part, and such Other
Stock Unit Awards or such other Awards shall become free of some or all restrictions, limitations
or conditions and become partially or fully vested and transferable, and (e) such other additional
benefits, changes or adjustments as the Committee deems appropriate shall apply, subject in each
case to any terms and conditions contained in the Award Agreement evidencing such Award.
Notwithstanding any other provision of the Plan, the Committee, in its discretion, may determine
that, upon the occurrence of a Change of Control of the Company, (a) each Option and Stock
Appreciation Right shall remain exercisable for only a limited period of time determined by the
Committee (provided that they remain exercisable for at least 30 days after notice of such action
is given to the Participants), or (b) each Option and Stock Appreciation Right outstanding shall
terminate within a specified number of days after notice to the Participant, and such Participant
shall receive, with respect to each Share subject to such Option or Stock Appreciation Right, an
amount equal to the excess of the Fair Market Value of such Share immediately prior to the
occurrence of such Change of Control over the exercise price per share of such Option and/or Stock
Appreciation Right; such amount to be payable in cash, in one or more kinds of stock or property
(including the stock or property, if any, payable in the transaction) or in a combination thereof,
as the Committee, in its discretion, shall determine. Notwithstanding the foregoing and the
provisions of Section 11.2, the Committee will take no action that would subject any Participant to
a penalty tax under Section 409A of the Code.
11.2 Assumption Upon Change of Control. The terms of any Award Agreement may also
provide that, if in the event of a Change of Control the successor company assumes or substitutes
for an Option, Stock Appreciation Right, Share of Restricted Stock or Other Stock Unit Award, then
each outstanding Option, Stock Appreciation Right, Share of Restricted Stock or Other Stock Unit
Award shall not be accelerated as described in Sections 11.1(a), (b) and (d). For the purposes of
this Section 11.2, an Option, Stock Appreciation Right, Share of Restricted Stock or Other Stock
Unit Award shall be considered assumed or substituted for if following the Change of Control the
award confers the right to purchase or receive, for each Share subject to the Option, Stock
Appreciation Right, Restricted Stock Award or Other Stock Unit Award immediately prior to the
Change of Control, the consideration (whether stock, cash or other securities or property) received
in the transaction constituting a Change of Control by holders of Shares for each Share held on the
effective date of such transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding shares); provided, however,
that if such consideration received in the transaction constituting a Change of Control is not
solely common stock of the successor company, the Committee may, with the consent of the successor
company, provide that the consideration to be received upon the exercise or vesting of an Option,
Stock Appreciation Right, Restricted Stock Award or Other Stock Unit Award, for each Share subject
thereto, will be solely common stock of the successor company substantially equal in fair market
value to the per share consideration received by holders of Shares in the transaction constituting
a Change of Control. The determination of such substantial equality of value of consideration
shall be made by the Committee in its sole discretion and its determination shall be conclusive and
binding. Any assumption or substitution of an Incentive Stock Option will be made in a manner that
will not be considered a modification under the provisions of Section 424(h)(3) of the Code.
Notwithstanding the foregoing, an Award Agreement may provide that, in the event of a termination
of a Participants employment in such successor company within a specified time period following
such Change of Control, all or part of any such Award held by such Participant at the time of the
Change of Control shall be accelerated as described in Sections 11.1(a), (b) and (d) above.
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ARTICLE XII
GENERALLY APPLICABLE PROVISIONS
GENERALLY APPLICABLE PROVISIONS
12.1 Amendment and Modification of the Plan. The Board may, from time to time, alter,
amend, suspend or terminate the Plan as it shall deem advisable, subject to any requirement for
stockholder approval imposed by Applicable Law; provided that the Board may not amend the Plan in
any manner that would result in noncompliance with Rule 16b-3 of the Exchange Act; and further
provided that the Board may not, without the approval of the Companys stockholders, amend the Plan
to (a) increase the number of Shares that may be the subject of Awards under the Plan (except for
adjustments pursuant to Section 12.2), (b) expand the types of awards available under the Plan, (c)
materially expand the class of persons eligible to participate in the Plan, (d) amend any provision
of Section 5.3, (e) increase the maximum permissible term of any Option specified by Section 5.4,
or (f) amend any provision of Section 3.2. In addition, no amendments to, or termination of, the
Plan (other than by reason of the failure of stockholders to approve the Plan in the manner set
forth in Section 13.12) shall in any way impair the rights of a Participant under any Award
previously granted without such Participants consent.
12.2 Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other property), stock
split, reverse stock split, spin-off or similar transaction or other change in corporate structure
affecting the Shares or the value thereof, such adjustments and other substitutions shall be made
to the Plan and to Awards as the Committee, in its sole discretion, deems equitable or appropriate,
including such adjustments in the aggregate number, class and kind of securities that may be
delivered under the Plan and, in the aggregate or to any one Participant, in the number, class,
kind and option or exercise price of securities subject to outstanding Awards granted under the
Plan (including, if the Committee deems appropriate, the substitution of similar options to
purchase the shares of, or other awards denominated in the shares of, another company) as the
Committee may determine to be appropriate in its sole discretion; provided, however, that the
number of Shares subject to any Award shall always be a whole number. Where an adjustment under
this Section 12.2 is made to an Incentive Stock Option, the adjustment will be made in a manner
which will not be considered a modification under the provisions of Sections 409A or 424(h)(3) of
the Code.
12.3 Transferability of Awards. Except as provided below, no Award, and no Shares
subject to Awards that have not been issued or as to which any applicable restriction, performance
or deferral period has not lapsed, may be sold, assigned, transferred, pledged or otherwise
encumbered, other than by will or the laws of descent and distribution, and such Award may be
exercised during the life of the Participant only by the Participant or the Participants guardian
or legal representative. Notwithstanding the foregoing, to the extent that the Committee so
authorizes in the Award Agreement or otherwise, an Award other than an Incentive Stock Option may
be assigned, in whole or in part, during the Participants lifetime to one or more Family Members
of the Participant. Rights under the assigned portion may be exercised by the Family Member(s) who
acquire a proprietary interest in such Award pursuant to the assignment. The terms applicable to
the assigned portion shall be the same as those in effect for the Award immediately before such
assignment and shall be set forth in such documents issued to the assignee as the Committee deems
appropriate.
(a) Designation of Beneficiary. A Participant may file a written designation of a
beneficiary who is to receive any Awards that remain unexercised in the event of the Participants
death. If a Participant is married and the designated beneficiary is not the spouse, spousal
consent will be required for the designation to be effective. The Participant may change such
designation of beneficiary at any time by written notice to the Committee, subject to the above
spousal consent requirement.
(b) Effect of No Designation. If a Participant dies and there is no beneficiary
validly designated and living at the time of the Participants death, the Company will deliver such
Participants Awards to the executor or administrator of his or her estate, or if no such executor
or administrator has been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such Awards to the spouse or to any one or more dependents or relatives of
the Participant, or if no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.
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(c) Death of Spouse or Dissolution of Marriage. If a Participant designates his or
her spouse as beneficiary, that designation will be deemed automatically revoked if the
Participants marriage is later dissolved. Similarly, any designation of a beneficiary will be
deemed automatically revoked upon the death of the beneficiary if the beneficiary predeceases the
Participant. Without limiting the generality of the preceding sentence, the interest in Awards of
a spouse of a Participant who has predeceased the Participant or whose marriage has been dissolved
will automatically pass to the Participant, and will not be transferable by such spouse in any
manner, including but not limited to such spouses will, nor will any such interest pass under the
laws of intestate succession.
12.4 Termination of Employment. The Committee shall determine and set forth in each
Award Agreement whether any Awards granted in such Award Agreement will continue to be exercisable,
and the terms of such exercise, on and after the date that a Participants Continuous Status as an
Employee, Director, or Consultant ceases, whether by reason of death, disability, voluntary or
involuntary termination of employment or services, or otherwise. The date of termination of a
Participants Continuous Status as an Employee, Director or Consultant will be determined by the
Committee, which determination will be final.
12.5 Dividend Equivalents. Subject to the provisions of the Plan and any Award
Agreement, the recipient of an Award (including any deferred Award) may, if so determined by the
Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property
dividends, or cash payments in amounts equivalent to stock or other property dividends on Shares
(Dividend Equivalents) with respect to the number of Shares covered by the Award, as determined
by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any)
shall be deemed to have been reinvested in additional Shares or otherwise reinvested.
Notwithstanding the foregoing, Dividend Equivalents credited in connection with Awards subject to
Section 10 of the Plan shall be subject to the same restrictions and risks of forfeiture as the
Awards with respect to which such Dividend Equivalents have been credited.
ARTICLE XIII
MISCELLANEOUS
MISCELLANEOUS
13.1 Tax Withholding. The Company shall have the right to make all payments or
distributions pursuant to the Plan to a Participant (or to the Participants executors,
administrators, guardian, beneficiary, or legal representative, or Family Members) (any such
person, a Payee) net of any applicable Federal, State and local taxes required to be paid or
withheld as a result of (a) the grant of any Award, (b) the exercise of an Option or Stock
Appreciation Rights, (c) the delivery of Shares or cash, (d) the lapse of any restrictions in
connection with any Award, or (e) any other event occurring pursuant to the Plan. The Company or
any Affiliate shall have the right to withhold from wages or other amounts otherwise payable to
such Payee such withholding taxes as may be required by law, or to otherwise require the Payee to
pay such withholding taxes. If the Payee shall fail to make such tax payments as are required, the
Company or its Affiliates shall, to the extent permitted by law, have the right to deduct any such
taxes from any payment of any kind otherwise due to such Payee or to take such other action as may
be necessary to satisfy such withholding obligations. The Committee shall be authorized to
establish procedures for election by Participants to satisfy such obligation for the payment of
such taxes by tendering previously acquired Shares (either actually or by attestation, valued at
their then Fair Market Value) that have been owned for a period of at least six months (or such
other period to avoid accounting charges against the Companys earnings), or by directing the
Company to retain Shares (up to the employees minimum required tax withholding rate) otherwise
deliverable in connection with the Award. If Shares acquired upon exercise of any Incentive Stock
Option are disposed of in a disposition that, under Section 422 of the Code, disqualifies the
holder from the application of Section 421(a) of the Code, the holder of the Shares immediately
before the disposition will comply with any requirements imposed by the Company in order to enable
the Company to secure the related income tax deduction to which it is entitled in such event.
13.2 Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant
of an Award hereunder shall confer upon any Employee, Consultant or Director the right to continue
in the employment or service of the Company or any Affiliate or affect any right that the Company
or any Affiliate may have to terminate the employment or service of (or to demote or to exclude
from future Awards under the Plan) any
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such Employee, Consultant or Director at any time for any reason. The Company shall not be
liable for the loss of existing or potential profit from an Award granted in the event of
termination of an employment or other relationship. No Employee or Participant shall have any
claim to be granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Employees or Participants under the Plan.
13.3 Prospective Recipient. The prospective recipient of any Award under the Plan
shall not, with respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless such recipient shall have executed an agreement
or other instrument evidencing the Award and delivered a copy thereof to the Company, and otherwise
complied with the then applicable terms and conditions.
13.4 Cancellation of Award. Notwithstanding anything to the contrary contained
herein, all outstanding Awards granted to any Participant may be canceled in the discretion of the
Committee if the Participants Continuous Status as an Employee, Director or Consultant is
terminated for Cause, or if, after the termination of the Participants Continuous Status as an
Employee, Director, or Consultant, the Committee determines that Cause existed before such
termination.
13.5 Stop Transfer Orders. All certificates for Shares delivered under the Plan
pursuant to any Award shall be subject to such stop-transfer orders and other restrictions as the
Committee may deem advisable under the provisions of this Plan, the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares
are then listed, and any applicable federal or state securities law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate reference to such
restrictions.
13.6 Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company or any Affiliate, division or business unit
of the Company. Any income or gain realized pursuant to Awards under the Plan and any Stock
Appreciation Rights constitute a special incentive payment to the Participant and shall not be
taken into account, to the extent permissible under Applicable Law, as compensation for purposes of
any of the employee benefit plans of the Company or any Affiliate except as may be determined by
the Committee or by the Board or board of directors of the applicable Affiliate.
13.7 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.
13.8 Severability. If any provision of the Plan shall be held unlawful or otherwise
invalid or unenforceable in whole or in part by a court of competent jurisdiction, such provision
shall (a) be deemed limited to the extent that such court of competent jurisdiction deems it
lawful, valid and/or enforceable and as so limited shall remain in full force and effect, and (b)
not affect any other provision of the Plan or part thereof, each of which shall remain in full
force and effect. If the making of any payment or the provision of any other benefit required
under the Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent
jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment
or benefit from being made or provided under the Plan, and if the making of any payment in full or
the provision of any other benefit required under the Plan in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent
such payment or benefit from being made or provided in part, to the extent that it would not be
unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.
13.9 Construction. All references in the Plan to Section, Sections, or Article
are intended to refer to the Section, Sections or Article, as the case may be, of the Plan. As
used in the Plan, the words include and including, and variations thereof, shall not be deemed
to be terms of limitation, but rather shall be deemed to be followed by the words without
limitation.
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13.10 Unfunded Status of the Plan. The Plan is intended to constitute an unfunded
plan for incentive and deferred compensation. With respect to any payments not yet made to a
Participant by the Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver the Shares or payments in lieu of or with respect to Awards
hereunder; provided, however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.
13.11 Governing Law. The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the United States,
shall be governed by the laws of the State of Delaware and construed accordingly.
13.12 Effective Date of Plan; Termination of Plan. The Plan shall be effective as of
April 26, 2011, subject to the approval of the Plan, within 12 months thereafter, by affirmative
votes representing a majority of the votes cast under Applicable Laws at a duly constituted meeting
of the stockholders of the Company. Notwithstanding any other provision of the Plan to the
contrary, if stockholders of the Company do not approve the Plan, the Plan shall be void and null
ab initio and the Original Plan shall continue in full force and effect. If the stockholders of
the Company do not approve the Plan in the manner set forth herein, all Awards granted under the
Plan shall be subject to the terms of the Original Plan. If the Companys stockholders approve the
Plan as set forth above, Awards may be granted under the Plan at any time and from time to time on
or prior to the tenth anniversary of the effective date of the Plan (unless the Board sooner
suspends or terminates the Plan under Section 12.1), on which date the Plan will expire except as
to Awards then outstanding under the Plan (which Awards shall remain in effect until they have been
exercised or terminated, or have expired). Assuming approval by the stockholders of the Plan and
notwithstanding the foregoing, unless affirmative votes representing a majority of the votes cast
under Applicable Laws approve the continuation of Article 10 at the first duly constituted meeting
of the stockholders of the Company that occurs in the fifth year following the effective date of
the Plan, no Awards other than Options or Stock Appreciation Rights, or Restricted Stock that is
not intended to satisfy the requirements of Article 10, shall be made to Covered Employees
following the date of such meeting.
13.13 Foreign Employees. Awards may be granted to Participants who are foreign
nationals or employed outside the United States, or both, on such terms and conditions different
from those applicable to Awards to Employees employed in the United States as may, in the judgment
of the Committee, be necessary or desirable in order to recognize differences in local law or tax
policy. The Committee also may impose conditions on the exercise or vesting of Awards in order to
minimize the Companys obligation with respect to tax equalization for Employees on assignments
outside their home country.
13.14 Prior Plans. Upon approval of the Original Plan by the Companys stockholders
on June 19, 2007, the Prior Plans were automatically cancelled, effective as of April 24, 2007 (the
effective date of the Original Plan), and no further grants or awards could thereafter be made
under the Prior Plans. Grants and awards made under the Prior Plans before the date of such
cancellation, however, shall continue in effect in accordance with their terms.
13.15 Other Company Compensation Plans. Shares available for Awards under the Plan
may be used by the Company as a form of payment of compensation under other Company compensation
plans, whether or not existing on the date hereof. To the extent any Shares are used as such by
the Company, such Shares will reduce the then number of Shares available under Article 3 of the
Plan for future Awards.
13.16 Captions. The captions in the Plan are for convenience of reference only, and
are not intended to narrow, limit or affect the substance or interpretation of the provisions
contained herein.
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