Attached files
file | filename |
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10-Q - FORM 10-Q - JETBLUE AIRWAYS CORP | y04994e10vq.htm |
EX-10.1.Y - EX-10.1.Y - JETBLUE AIRWAYS CORP | y04994exv10w1wy.htm |
EXCEL - IDEA: XBRL DOCUMENT - JETBLUE AIRWAYS CORP | Financial_Report.xls |
EX-32 - EX-32 - JETBLUE AIRWAYS CORP | y04994exv32.htm |
EX-12.1 - EX-12.1 - JETBLUE AIRWAYS CORP | y04994exv12w1.htm |
EX-31.1 - EX-31.1 - JETBLUE AIRWAYS CORP | y04994exv31w1.htm |
EX-31.2 - EX-31.2 - JETBLUE AIRWAYS CORP | y04994exv31w2.htm |
EX-10.32 - EX-10.32 - JETBLUE AIRWAYS CORP | y04994exv10w32.htm |
EX-10.31.B - EX-10.31.B - JETBLUE AIRWAYS CORP | y04994exv10w31wb.htm |
Exhibit 10.31(a)
JETBLUE
AIRWAYS CORPORATION
2011 INCENTIVE COMPENSATION PLAN
2011 INCENTIVE COMPENSATION PLAN
1. Establishment; Effective Date; Purposes; and
Duration.
(a) Establishment of the Plan; Effective Date.
JetBlue Airways Corporation, a Delaware corporation (the
Company), hereby establishes this incentive
compensation plan to be known as the JetBlue Airways
Corporation 2011 Incentive Compensation Plan, as set forth
in this document (the Plan). The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted
Stock Units, Other Stock-Based Awards, Dividend Equivalents and
Cash-Based Awards. The Plan shall become effective upon the date
on which the Plan is approved by the affirmative vote of the
holders of a majority of the Shares which are present or
represented and entitled to vote and voted at a meeting (the
Effective Date), which approval must occur
within the period ending twelve (12) months before or after
the date the Plan is adopted by the Board. The Plan shall remain
in effect as provided in Section 1(c).
(b) Purposes of the Plan. The purposes of the Plan
are: (i) to enhance the Companys and the
Affiliates ability to attract highly qualified personnel;
(ii) to strengthen their retention capabilities;
(iii) to enhance the long-term performance and
competitiveness of the Company and the Affiliates; and
(iv) to align the interests of Plan participants with those
of the Companys shareholders. To accomplish such purposes,
the Plan provides that the Company may grant Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock, Restricted Stock Units, Other Stock-Based
Awards, Dividend Equivalents and Cash-Based Awards.
(c) Duration of the Plan. The Plan shall commence on
the Effective Date and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan
at any time pursuant to Section 16, until all Shares
subject to it shall have been delivered, and any restrictions on
such Shares have lapsed, pursuant to the Plans provisions.
However, in no event may an Award be granted under the Plan on
or after ten years from the Effective Date.
2. Definitions.
Certain terms used herein have the definitions given to them in
the first instance in which they are used. In addition, for
purposes of the Plan, the following terms are defined as set
forth below:
(a) Affiliate (i) any Subsidiary;
(ii) any Person that directly or indirectly controls, is
controlled by or is under common control with the Company;
and/or
(iii) to the extent provided by the Committee, any Person
in which the Company has a significant interest. The term
control (including, with correlative meaning, the
terms controlled by and under common control
with), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether
through the ownership of voting or other securities, by contract
or otherwise.
(b) Applicable Exchange means the Nasdaq
Stock Exchange or such other securities exchange or inter-dealer
quotation system as may at the applicable time be the principal
market for the Common Stock.
(c) Award means, individually or
collectively, a grant under the Plan of Nonqualified Stock
Options, Incentive Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Restricted Stock Units, Other
Stock-Based Awards, Dividend Equivalents and Cash-Based Awards.
(d) Award Agreement means either:
(a) a written agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to
an Award granted under the Plan, or (b) a written or
electronic statement issued by the Company to a Participant
describing the terms and provisions of such Award, including any
amendment or modification thereof. The Committee may provide for
the use of electronic, internet or other non-paper Award
Agreements, and the use of
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electronic, internet or other non-paper means for the acceptance
thereof and actions thereunder by a Participant.
(e) Board or Board of
Directors means the Board of Directors of the Company.
(f) Cash-Based Award means an Award,
whose value is determined by the Committee, granted to a
Participant, as described in Section 11.
(g) Cause means a Participants
(i) conviction of, or plea of no contest to, a felony or
other crime involving moral turpitude or dishonesty;
(ii) participation in a fraud or willful act of dishonesty
against the Company or an Affiliate that adversely affects the
Company or such Affiliate in a material way; (iii) willful
breach of the Companys or an Affiliates policies
that affects the Company or such Affiliate in a material way;
(iv) causing intentional damage to the Companys or an
Affiliates property or business; (v) habitual conduct
that constitutes gross insubordination; or (vi) habitual
neglect of his or her duties with the Company or an Affiliate.
(h) Change in Control means the
occurrence of any of the following:
(i) Any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
Person) becomes the beneficial owner (within
the meaning of
Rule 13d-3
promulgated under the Exchange Act) of 30% or more of either
(A) the then-outstanding shares of common stock of the
Company (the Outstanding Company Common
Stock) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to
vote generally in the election of directors (the
Outstanding Company Voting Securities);
provided, however, that, for purposes of this
Section 2(h), the following acquisitions shall not
constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the
Company, or (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company
or any Affiliate;
(ii) Any time at which individuals who, as of the Effective
Date, constitute the Board (the Incumbent
Board) cease for any reason to constitute at least a
majority of the Board; provided, however, that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Companys
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result
of an actual or threatened election contest 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;
(iii) Consummation of a reorganization, merger, statutory
share exchange or consolidation or similar transaction involving
the Company or any Affiliate, a sale or other disposition of all
or substantially all of the assets of the Company, or the
acquisition of assets or stock of another entity by the Company
or any Affiliate (each, a Business
Combination), in each case unless, following such
Business Combination, all or substantially all of the
individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock (or, for a non-corporate
entity, equivalent securities) and the combined voting power of
the then-outstanding voting securities entitled to vote
generally in the election of directors (or, for a non-corporate
entity, equivalent governing body), as the case may be, of the
entity resulting from such Business Combination (including,
without limitation, an entity that, 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) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be; or
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(iv) The consummation of a plan of complete liquidation or
dissolution of the Company.
(i) Change in Control Price means the
price per share offered in respect of the Common Stock in
conjunction with any transaction resulting in a Change in
Control on a fully-diluted basis (as determined by the Board or
the Committee as constituted before the Change in Control, if
any part of the offered price is payable other than in cash) or,
in the case of a Change in Control occurring solely by reason of
a change in the composition of the Board, the highest Fair
Market Value of a Share on any of the 30 trading days
immediately preceding the date on which a Change in Control
occurs, provided that if the use of such highest Fair
Market Value in respect of a particular Award would cause an
additional tax to be due and payable by the Participant under
Section 409A of the Code, the Board or Committee shall
determine the Change in Control Price in respect of such Award
in a manner that does not have such result.
(j) Code means the Internal Revenue Code
of 1986, as it may be amended from time to time, including rules
and regulations promulgated thereunder and successor provisions
and rules and regulations thereto.
(k) Committee means the Compensation
Committee of the Board of Directors or a subcommittee thereof,
or such other committee designated by the Board to administer
the Plan.
(l) Common Stock means common stock, par
value $0.01 per share, of the Company. In the event of any
adjustment pursuant to Section 4(d), the stock or security
resulting from such adjustment shall be deemed to be Common
Stock within the meaning of the Plan.
(m) Consultant means a consultant,
advisor or other independent contractor who is a natural person
and performs services for the Company or an Affiliate in a
capacity other than as an Employee or Director.
(n) Director means any individual who is
a member of the Board of Directors of the Company.
(o) Disaffiliation means an
Affiliates ceasing to be an Affiliate for any reason
(including as a result of a public offering, or a spin-off or
sale by the Company, of the stock of the Affiliate) or a sale of
a division of the Company or an Affiliate.
(p) Dividend Equivalent means a right to
receive the equivalent value (in cash or Shares) of dividends
that would otherwise be paid on the Shares subject to an Award
but that have not been issued or delivered, awarded under
Section 10.
(q) Effective Date shall have the
meaning ascribed to such term in Section 1(a).
(r) Eligible Individual means any
Employee, Non-Employee Director or Consultant, and any
prospective Employee and Consultant who has accepted an offer of
employment or consultancy from the Company or any Affiliate.
(s) Employee means any person designated
as an employee of the Company
and/or an
Affiliate on the payroll records thereof. An Employee shall not
include any individual during any period he or she is classified
or treated by the Company or an Affiliate as an independent
contractor, a consultant, or any employee of an employment,
consulting, or temporary agency or any other entity other than
the Company
and/or an
Affiliate without regard to whether such individual is
subsequently determined to have been, or is subsequently
retroactively reclassified as a common-law employee of the
Company
and/or an
Affiliate during such period. For the avoidance of doubt, a
Director who would otherwise be an Employee within
the meaning of this Section 2(s) shall be considered an
Employee for purposes of the Plan.
(t) Exchange Act means the Securities
Exchange Act of 1934, as it may be amended from time to time,
including the rules and regulations promulgated thereunder and
successor provisions and rules and regulations thereto.
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(u) Fair Market Value means, if the
Common Stock is listed on a national securities exchange, as of
any given date, the closing price for the Common Stock on such
date on the Applicable Exchange, or if Shares were not traded on
the Applicable Exchange on such measurement date, then on the
next preceding date on which Shares are traded, all as reported
by such source as the Committee may select. If the Common Stock
is not listed on a national securities exchange, Fair Market
Value shall be determined by the Committee in its good faith
discretion.
(v) Fiscal Year means the calendar year,
or such other consecutive twelve-month period as the Committee
may select.
(w) Freestanding SAR means an SAR that
is granted independently of any Options, as described in
Section 7.
(x) Good Reason means the termination of
employment by a Participant because of any of the following
events: (i) a 10% reduction by the Company or an Affiliate
(other than in connection with a Company or Affiliate-wide
across the board reduction), in (x) his or her annual base
pay or bonus opportunity as in effect immediately prior to the
date of a Change in Control or (y) his or her bonus
opportunity or 12 times his or her average monthly Salary, or as
same may be increased from time to time thereafter; (ii) a
material reduction in the duties or responsibilities of the
Participant from those in effect prior to the date of a Change
in Control; or (iii) the Company or an Affiliate requiring
the Participant to relocate from the office of the Company or
such Affiliate where the Participant is principally employed
immediately prior to the date of a Change in Control to a
location that is more than 50 miles from such office of the
Company or such Affiliate (except for required travel on the
Companys or Affiliates business to an extent
substantially consistent with such Participants customary
business travel obligations in the ordinary course of business
prior to the date of such Change in Control.
(y) Grant Date means the later of:
(a) the date on which the Committee (or its designee) by
resolution, written consent or other appropriate action selects
an Eligible Individual to receive a grant of an Award,
determines the number of Shares or other amount to be subject to
such Award and, if applicable, determines the Option Price or
Grant Price of such Award, provided that as soon reasonably
practical thereafter the Committee (or its designee) both
notifies the Eligible Individual of the Award and enters into an
Award Agreement with the Eligible Individual, or (b) the
date designated as the grant date in an Award
Agreement.
(z) Grant Price means the price
established as of the Grant Date of an SAR pursuant to
Section 7 used to determine whether there is any payment
due upon exercise of the SAR.
(aa) Incentive Stock Option or
ISO means a right to purchase Shares under
the Plan in accordance with the terms and conditions set forth
in Section 6 and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of
Section 422 of the Code.
(bb) Individual Agreement means an
employment, change of control, consulting or similar agreement
between a Participant and the Company or an Affiliate that is in
effect as of the Grant Date of an Award hereunder.
(cc) Insider means an individual who is,
on the relevant date, an officer, director or ten percent (10%)
beneficial owner (within the meaning of
Rule 13d-3
promulgated under the Exchange Act) of any class of the
Companys equity securities that is registered pursuant to
Section 12 of the Exchange Act, as determined by the
Committee in accordance with Section 16 of the Exchange Act.
(dd) New Employer means, after a Change
in Control, a Participants employer, or any direct or
indirect parent or any direct or indirect majority-owned
subsidiary of such employer.
(ee) Non-Employee Director means a
Director who is not an Employee.
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(ff) Nonqualified Stock Option or
NQSO means a right to purchase Shares under
the Plan in accordance with the terms and conditions set forth
in Section 6 and which is not intended to meet the
requirements of Section 422 of the Code or otherwise does
not meet such requirements.
(gg) Notice means notice provided by a
Participant to the Company in a manner prescribed by the
Committee.
(hh) Option or Stock
Option means an Incentive Stock Option or a
Nonqualified Stock Option, as described in Section 6.
(ii) Option Price means the price at
which a Share may be purchased by a Participant pursuant to an
Option.
(jj) Other Stock-Based Award means an
equity-based or equity-related Award, other than an Option, SAR,
Restricted Stock, Restricted Stock Unit or Dividend Equivalent,
granted in accordance with the terms and conditions set forth in
Section 9.
(kk) Participant means any eligible
individual as set forth in Section 5 who holds one or more
outstanding Awards.
(ll) Performance Compensation Award
means any Award designated by the Committee as a Performance
Compensation Award pursuant to Section 12 of the Plan.
(mm) Performance Formula shall mean, for
a Performance Period, the one or more objective formulae applied
against the relevant Performance Goal to determine, with regard
to the Performance Compensation Award of a particular
Participant, whether all, some portion but less than all, or
none of the Performance Compensation Award has been earned for
the Performance Period.
(nn) Performance Goals shall mean, for a
Performance Period, the one or more goals established by the
Committee for the Performance Period based upon the relevant
Performance Measures.
(oo) Performance Measure means any
performance criteria or measures as described in
Section 12(c) on which the performance goals described in
Section 12 for Performance Compensation Awards are based,
and which criteria or measures are approved by the
Companys shareholders pursuant to the Plan.
(pp) Performance Period means the period
of time, as determined in the discretion of the Committee,
during which the performance goals must be met in order to
determine the degree of payout
and/or
vesting with respect to, or the amount or entitlement to, an
Award.
(qq) Period of Restriction means the
period of time during which Shares of Restricted Stock or
Restricted Stock Units are subject to a substantial risk of
forfeiture
and/or other
restrictions, or, as applicable, the period of time within which
performance is measured for purposes of determining whether such
an Award has been earned, and, in the case of Restricted Stock,
the transfer of Shares of Restricted Stock is limited in some
way, in each case in accordance with Section 8.
(rr) Restricted Stock means an Award of
Shares granted to a Participant, subject to the applicable
Period of Restriction, pursuant to Section 8.
(ss) Restricted Stock Unit means an
unfunded and unsecured promise to deliver Shares, subject to the
applicable Period of Restriction, granted pursuant to
Section 8.
(tt) Rule 16b-3
means
Rule 16b-3
under the Exchange Act, or any successor rule, as the same may
be amended from time to time.
(uu) Salary means the higher of a
Participants annual base salary or hourly wages on an
annualized basis based on a normal basic work schedule
immediately prior to (or 12 times a Participants average
monthly salary during the six (6) month period, excluding
any month(s) during which he or she worked less than a normal
schedule, immediately prior to) (i) the date of such
Participants Termination of Service, or (ii) the date
of a Change in Control.
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(vv) SEC means the Securities and
Exchange Commission.
(ww) Securities Act means the Securities
Act of 1933, as it may be amended from time to time, including
the rules and regulations promulgated thereunder and successor
provisions and rules and regulations thereto.
(xx) Share means a share of Common Stock.
(yy) Stock Appreciation Right or
SAR means an Award, granted alone (a
Freestanding SAR) or in connection with a
related Option (a Tandem SAR), designated as
an SAR, pursuant to the terms of Section 7.
(zz) Subsidiary means any present or
future corporation which is or would be a subsidiary
corporation of the Company as the term is defined in
Section 424(f) of the Code.
(aaa) Substitute Awards means Awards granted
or Shares issued by the Company in assumption of, or in
substitution or exchange for, options or other awards previously
granted, or the right or obligation to grant future options or
other awards, by a company acquired by the Company
and/or an
Affiliate or with which the Company
and/or an
Affiliate combines, or otherwise in connection with any merger,
consolidation, acquisition of property or stock, or
reorganization involving the Company or an Affiliate, including
a transaction described in Code Section 424(a).
(bbb) Termination of Service means the
termination of the applicable Participants employment
with, or performance of services for, the Company or any
Affiliate under any circumstances. Unless otherwise determined
by the Committee (and subject to the limitations applicable to
ISOs under the Code), a Termination of Service shall not be
considered to have occurred in the case of: (i) sick leave;
(ii) military leave; (iii) any other leave of absence
approved by the Committee, provided that such leave is
for a period of not more than 90 days, unless reemployment
upon the expiration of such leave is guaranteed by contract or
statute, or unless provided otherwise pursuant to an applicable
Company or Affiliate policy adopted from time to time;
(iv) changes in status from Director to advisory director
or emeritus status; or (v) transfers between locations of
the Company or between or among the Company
and/or an
Affiliate or Affiliates. Changes in status between service as an
Employee, Director, and a Consultant will not constitute a
Termination of Service if the individual continues to perform
bona fide services for the Company or an Affiliate
(subject to the limitations applicable to ISOs under the Code).
A Participant employed by, or performing services for, an
Affiliate or a division of the Company or of an Affiliate shall
be deemed to incur a Termination of Service if, as a result of a
Disaffiliation, such Affiliate or division ceases to be an
Affiliate or such a division, as the case may be, and the
Participant does not immediately thereafter become an employee
of, or service provider for, the Company or another Affiliate.
The Committee shall have the discretion to determine whether and
to what extent the vesting of any Awards shall be tolled during
any paid or unpaid leave of absence; provided,
however, that, in the absence of such determination,
vesting for all Awards shall be tolled during any such unpaid
leave (but not for a paid leave).
3. Administration.
(a) General. The Committee shall have exclusive
authority to operate, manage and administer the Plan in
accordance with its terms and conditions. Notwithstanding the
foregoing, in its absolute discretion, the Board may at any time
and from time to time exercise any and all rights, duties and
responsibilities of the Committee under the Plan, including
establishing procedures to be followed by the Committee, but
excluding matters which under any applicable law, regulation or
rule, including any exemptive rule under Section 16 of the
Exchange Act (including
Rule 16b-3),
are required to be determined in the sole discretion of the
Committee. If and to the extent that the Committee does not
exist or cannot function, the Board may take any action under
the Plan that would otherwise be the responsibility of the
Committee, subject to the limitations set forth in the
immediately preceding sentence.
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(b) Committee. The members of the Committee shall be
appointed from time to time by, and shall serve at the
discretion of, the Board of Directors. The Committee shall
consist of not less than two (2) non-employee members of
the Board, each of whom satisfies such criteria of independence
as the Board may establish and such additional regulatory or
listing requirements as the Board may determine to be applicable
or appropriate. Appointment of Committee members shall be
effective upon their acceptance of such appointment. Committee
members may be removed by the Board at any time either with or
without cause, and such members may resign at any time by
delivering notice thereof to the Board. Any vacancy on the
Committee, whether due to action of the Board or any other
reason, shall be filled by the Board. The Committee shall keep
minutes of its meetings. A majority of the Committee shall
constitute a quorum and a majority of a quorum may authorize any
action. Any decision reduced to writing and signed by a majority
of the members of the Committee shall be fully effective as if
it has been made at a meeting duly held.
(c) Authority of the Committee. The Committee shall
have full discretionary authority to grant, pursuant to the
terms of the Plan, Awards to those individuals who are eligible
to receive Awards under the Plan. Except as limited by law or by
the Certificate of Incorporation or By-Laws of the Company, and
subject to the provisions herein, the Committee shall have full
power, in accordance with the other terms and provisions of the
Plan, to:
(i) select Eligible Individuals who may receive Awards
under the Plan and become Participants;
(ii) determine eligibility for participation in the Plan
and decide all questions concerning eligibility for, and the
amount of, Awards under the Plan;
(iii) determine the sizes and types of Awards;
(iv) determine the terms and conditions of Awards,
including the Option Prices of Options and the Grant Prices of
SARs;
(v) grant Awards as an alternative to, or as the form of
payment for grants or rights earned or payable under, other
bonus or compensation plans, arrangements or policies of the
Company or an Affiliate;
(vi) grant Substitute Awards on such terms and conditions
as the Committee may prescribe, subject to compliance with the
ISO rules under Code Section 422 and the nonqualified
deferred compensation rules under Code Section 409A, where
applicable;
(vii) make all determinations under the Plan concerning
Termination of Service of any Participants employment or
service with the Company or an Affiliate, including whether such
Termination of Service occurs by reason of Cause, Good Reason,
disability, retirement or in connection with a Change in
Control, and whether a leave constitutes a Termination of
Service;
(viii) determine whether a Change in Control shall have
occurred;
(ix) construe and interpret the Plan and any agreement or
instrument entered into under the Plan, including any Award
Agreement;
(x) establish and administer any terms, conditions,
restrictions, limitations, forfeiture, vesting or exercise
schedule, and other provisions of or relating to any Award;
(xi) establish and administer any performance goals in
connection with any Awards, including related Performance Goals
and Performance Measures or other performance criteria and
applicable Performance Periods, determine the extent to which
any performance goals
and/or other
terms and conditions of an Award are attained or are not
attained, and certify whether, and to what extent, any such
performance goals and other material terms applicable to any
Award intended to qualify as a Performance Compensation Award
were in fact satisfied;
7
(xii) construe any ambiguous provisions, correct any
defects, supply any omissions and reconcile any inconsistencies
in the Plan
and/or any
Award Agreement or any other instrument relating to any Awards;
(xiii) establish, adopt, amend, waive
and/or
rescind rules, regulations, procedures, guidelines, forms
and/or
instruments for the Plans operation or administration;
(xiv) make all valuation determinations relating to Awards
and the payment or settlement thereof;
(xv) grant waivers of terms, conditions, restrictions and
limitations under the Plan or applicable to any Award, or
accelerate the vesting or exercisability of any Award;
(xvi) amend or adjust the terms and conditions of any
outstanding Award
and/or
adjust the number
and/or class
of shares of stock subject to any outstanding Award;
(xvii) at any time and from time to time after the granting
of an Award, specify such additional terms, conditions and
restrictions with respect to such Award as may be deemed
necessary or appropriate to ensure compliance with any and all
applicable laws or rules, including terms, restrictions and
conditions for compliance with applicable securities laws or
listing rules, methods of withholding or providing for the
payment of required taxes and restrictions regarding a
Participants ability to exercise Options through a
cashless (broker-assisted) exercise;
(xviii) establish any blackout period that the
Committee in its sole discretion deems necessary or advisable
(without derogating from any authority of the Board or any
Company official to establish any blackout period); and
(xix) exercise all such other authorities, take all such
other actions and make all such other determinations as it deems
necessary or advisable for the proper operation
and/or
administration of the Plan.
(d) Award Agreements. The Committee shall, subject
to applicable laws and rules, determine the date an Award is
granted. Each Award shall be evidenced by an Award Agreement;
however, two or more Awards granted to a single
Participant may be combined in a single Award Agreement. An
Award Agreement shall not be a precondition to the granting of
an Award; provided, however, that (i) the
Committee may, but need not, require as a condition to any Award
Agreements effectiveness, that such Award Agreement be
executed on behalf of the Company
and/or by
the Participant to whom the Award evidenced thereby shall have
been granted (including by electronic signature or other
electronic indication of acceptance), and such executed Award
Agreement be delivered to the Company, and (ii) no person
shall have any rights under any Award unless and until the
Participant to whom such Award shall have been granted has
complied with the applicable terms and conditions of the Award.
The Committee shall prescribe the form of all Award Agreements,
and, subject to the terms and conditions of the Plan, shall
determine the content of all Award Agreements. Subject to the
other provisions of the Plan, any Award Agreement may be
supplemented or amended in writing from time to time as approved
by the Committee; provided that the terms and conditions
of any such Award Agreement as supplemented or amended are not
inconsistent with the provisions of the Plan. In the event of
any dispute or discrepancy concerning the terms of an Award, the
records of the Committee or its designee shall be determinative.
(e) Discretionary Authority; Decisions Binding. The
Committee shall have full discretionary authority in all matters
related to the discharge of its responsibilities and the
exercise of its authority under the Plan. All determinations,
decisions, actions and interpretations by the Committee with
respect to the Plan and any Award Agreement, and all related
orders and resolutions of the Committee shall be final,
conclusive and binding on all Participants, the Company and its
stockholders, any Affiliate and all persons having or claiming
to have any right or interest in or under the Plan
and/or any
Award Agreement. The Committee shall consider such factors as it
deems relevant to making or taking such decisions,
determinations, actions and interpretations, including the
recommendations or
8
advice of any Director or officer or employee of the Company,
any director, officer or employee of an Affiliate and such
attorneys, consultants and accountants as the Committee may
select. A Participant or other holder of an Award may contest a
decision or action by the Committee with respect to such person
or Award only on the grounds that such decision or action was
arbitrary or capricious or was unlawful, and any review of such
decision or action shall be limited to determining whether the
Committees decision or action was arbitrary or capricious
or was unlawful.
(f) Attorneys; Consultants. The Committee may
consult with counsel who may be counsel to the Company. The
Committee may, with the approval of the Board, employ such other
attorneys
and/or
consultants, accountants, appraisers, brokers, agents and other
persons, any of whom may be an Eligible Individual, as the
Committee deems necessary or appropriate. The Committee, the
Company and its officers and Directors shall be entitled to rely
upon the advice, opinions or valuations of any such persons. The
Committee shall not incur any liability for any action taken in
good faith in reliance upon the advice of such counsel or other
persons.
(g) Delegation of Administration. Except to the
extent prohibited by applicable law, including any applicable
exemptive rule under Section 16 of the Exchange Act
(including
Rule 16b-3)
and the rules of Code Section 162(m) applicable to any
Performance Compensation Award, or the applicable rules of a
stock exchange, the Committee may, in its discretion, allocate
all or any portion of its responsibilities and powers under this
Section 3 to any one or more of its members
and/or
delegate all or any part of its responsibilities and powers
under this Section 3 to any person or persons selected by
it; provided, however, that the Committee may not
(i) delegate to any executive officer of the Company or an
Affiliate, or a committee that includes any such executive
officer, the Committees authority to grant Awards, or the
Committees authority otherwise concerning Awards, awarded
to executive officers of the Company or an Affiliate;
(ii) delegate the Committees authority to grant
Awards to consultants unless any such Award is subject to
approval by the Committee; or (iii) delegate its authority
to correct defects, omissions or inconsistencies in the Plan.
Any such authority delegated or allocated by the Committee under
this Section 3(g) shall be exercised in accordance with the
terms and conditions of the Plan and any rules, regulations or
administrative guidelines that may from time to time be
established by the Committee, and any such allocation or
delegation may be revoked by the Committee at any time.
4. Shares Subject To The Plan.
(a) Number of Shares Available for Grants. The
shares of stock subject to Awards granted under the Plan shall
be Shares. Such Shares subject to the Plan may be authorized and
unissued shares (which will not be subject to preemptive
rights), Shares held in treasury by the Company, Shares
purchased on the open market or by private purchase or any
combination of the foregoing. Subject to adjustment as provided
in Section 4(d), the total number of Shares that may be
issued pursuant to Awards under the Plan shall be
15,000,000 Shares. From and after the Effective Date, no
further grants or awards shall be made under the Companys
Amended and Restated 2002 Stock Incentive Plan (the Prior
Plan); however, grants or awards made under the
Prior Plan before the Effective Date shall continue in effect in
accordance with their terms.
(b) Rules for Calculating Shares Issued.
(i) Shares underlying Awards that are forfeited (including
any Shares subject to an Award that are repurchased by the
Company due to failure to meet any applicable condition),
cancelled, expire unexercised or are settled for cash shall be
available for issuance pursuant to future Awards.
(ii) Any Shares used to pay the Option Price of an Option
or other purchase price of an Award, or withholding tax
obligations with respect to an Award, shall not be available for
issuance pursuant to future Awards.
(iii) If any Shares subject to an Award are not delivered
to a Participant because (A) such Shares are withheld to
pay the Option Price or other purchase price of such Award, or
withholding
9
tax obligations with respect to such Award, or (B) a
payment upon exercise of a Stock Appreciation Right is made in
Shares, the number of Shares subject to the exercised or
purchased portion of any such Award that are not delivered to
the Participant shall not be available for issuance pursuant to
future Awards.
(iv) Any Shares delivered under the Plan upon exercise or
satisfaction of Substitute Awards shall not reduce the Shares
available for issuance under the Plan; provided,
however, that the total number of Shares that may be
issued pursuant to Incentive Stock Options granted under the
Plan shall be 15,000,000, as adjusted pursuant to this
Section 4(b), but without application of the foregoing
provisions of this sentence.
(c) Award Limits. The following limits shall apply
to grants of the following Awards under the Plan (subject to
adjustment as provided in Section 4(d)):
(i) Options: The maximum aggregate number of Shares
that may be subject to Options granted in any Fiscal Year to any
one Participant shall be 2,500,000 Shares.
(ii) SARs: The maximum aggregate number of Shares
that may be subject to Stock Appreciation Rights granted in any
Fiscal Year to any one Participant shall be
2,500,000 Shares. Any Shares covered by Options which
include Tandem SARs granted to one Participant in any Fiscal
Year shall reduce this limit on the number of Shares subject to
SARs that can be granted to such Participant in such Fiscal Year.
(iii) Performance Compensation Awards: No more than
2,000,000 Shares may be earned in respect of Performance
Compensation Awards granted to any one Participant for a single
Fiscal Year during a Performance Period (or, in the event such
Performance Compensation Award is settled in cash, other
securities, other Awards or other property, no more than the
Fair Market Value of such number of Shares, calculated as of the
last day of the Performance Period to which such Award relates).
If a Performance Compensation Award is not denominated in
Shares, the maximum amount that can be paid to any one
Participant in any one Fiscal Year in respect of such Award
shall be $4,000,000.
To the extent required by Section 162(m) of the Code,
Shares subject to Options or SARs which are canceled shall
continue to be counted against the limits set forth in
paragraphs (i) and (ii) immediately preceding.
(d) Adjustment Provisions. In the event of
(i) any dividend (excluding any ordinary dividend) or other
distribution (whether in the form of cash, Shares, other
securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation,
split-up,
split-off, combination, repurchase or exchange of Shares or
other securities of the Company, issuance of warrants or other
rights to acquire Shares or other securities of the Company, or
other similar corporate transaction or event (including a Change
in Control) that affects the shares of Common Stock, or
(ii) any unusual or nonrecurring events (including a Change
in Control) affecting the Company, any Affiliate, or the
financial statements of the Company or any Affiliate, or changes
in applicable rules, rulings, regulations or other requirements
of any governmental body or securities exchange or inter-dealer
quotation system, accounting principles or law, such that in
either case an adjustment is determined by the Committee in its
sole discretion to be necessary or appropriate, then the
Committee shall make any such adjustments in such manner as it
may deem equitable, including any or all of the following:
(i) adjusting any or all of (A) the number of Shares
or other securities of the Company (or number and kind of other
securities or other property) that may be delivered in respect
of Awards or with respect to which Awards may be granted under
the Plan (including adjusting any or all of the limits under
Section 4(c)) and (B) the terms of any outstanding
Award, including (1) the number of Shares or other
securities of the Company (or number and kind of other
securities or other property) subject to outstanding Awards or
to which outstanding Awards relate, (2) the Option Price or
Grant Price with respect to any Award or (3) any applicable
performance measures (including Performance Measures and
Performance Goals);
10
(ii) providing for a substitution or assumption of Awards,
accelerating the exercisability of, lapse of restrictions
(including any Period of Restriction) on, or termination of,
Awards or providing for a period of time for exercise prior to
the occurrence of such event; and
(iii) cancelling any one or more outstanding Awards and
causing to be paid to the holders thereof, in cash, Shares,
other securities or other property, or any combination thereof,
the value of such Awards, if any, as determined by the Committee
(which, if applicable, may be based upon the price per Share
received or to be received by other stockholders of the Company
in such event), including, in the case of an outstanding Option
or SAR, a cash payment in an amount equal to the excess, if any,
of the Fair Market Value (as of a date specified by the
Committee) of the Shares subject to such Option or SAR over the
aggregate Option Price or Grant Price of such Option or SAR,
respectively (it being understood that, in such event, any
Option or SAR having a per share Option Price or Grant Price
equal to, or in excess of, the Fair Market Value of a Share may
be canceled and terminated without any payment or consideration
therefor);
provided, however, that in the case of any
equity restructuring (within the meaning of
Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Compensation Stock
Compensation (or any successor pronouncement)), the Committee
shall make an equitable or proportionate adjustment to
outstanding Awards to reflect such equity restructuring. The
Committee shall determine any adjustment pursuant to this
Section 4(d): (i) after taking into account, among
other things, to the extent applicable, the provisions of the
Code applicable to Incentive Stock Options and Performance
Compensation Awards and (ii) subject to
Section 17(g)(v). Any adjustments under this
Section 4(d) shall be made in a manner that does not
adversely affect the exemption provided pursuant to
Rule 16b-3
under the Exchange Act, to the extent applicable. All
determinations of the Committee as to adjustments, if any, under
this Section 4(d) shall be conclusive and binding for all
purposes.
(e) No Limitation on Corporate Actions. The
existence of the Plan and any Awards granted hereunder shall not
affect in any way the right or power of the Company or any
Affiliate to make or authorize any adjustment, recapitalization,
reorganization or other change in its capital structure or
business structure, any merger or consolidation, any issuance of
debt, preferred or prior preference stock ahead of or affecting
the Shares, additional shares of capital stock or other
securities or subscription rights thereto, any dissolution or
liquidation, any sale or transfer of all or part of its assets
or business or any other corporate act or proceeding.
5. Eligibility and Participation.
(a) Eligibility. Eligible Individuals shall be
eligible to become Participants and receive Awards in accordance
with the terms and conditions of the Plan, subject to the
limitations on the granting of ISOs set forth in
Section 6(i)(i).
(b) Actual Participation. Subject to the provisions
of the Plan, the Committee may, from time to time, select
Participants from all Eligible Individuals and shall determine
the nature and amount of each Award.
6. Stock Options.
(a) Grant of Options. Subject to the terms and
provisions of the Plan, Options may be granted to Participants
in such number (subject to Section 4), and upon such terms,
and at any time and from time to time as shall be determined by
the Committee. The Committee may grant an Option or provide for
the grant of an Option, either from time to time in the
discretion of the Committee or automatically upon the occurrence
of specified events, including the achievement of performance
goals, the satisfaction of an event or condition within the
control of the recipient of the Option or within the control of
others.
(b) Award Agreement. Each Option grant shall be
evidenced by an Award Agreement that shall specify the Option
Price, the maximum duration of the Option, the number of Shares
to which the Option pertains, the conditions upon which the
Option shall become exercisable and such other
11
provisions as the Committee shall determine, which are not
inconsistent with the terms of the Plan. The Award Agreement
also shall specify whether the Option is intended to be an ISO
or an NQSO. To the extent that any Option does not qualify as an
ISO (whether because of its provisions or the time or manner of
its exercise or otherwise), such Option, or the portion thereof
which does not so qualify, shall constitute a separate NQSO.
(c) Option Price. The Option Price for each Option
shall be determined by the Committee and set forth in the Award
Agreement; provided that, subject to
Section 6(i)(iii), the Option Price of an Option shall be
not less than one hundred percent (100%) of the Fair Market
Value of a Share on the Grant Date of such Option;
provided further, that Substitute Awards or Awards
granted in connection with an adjustment provided for in
Section 4(d), in the form of stock options, shall have an
Option Price per Share that is intended to maintain the economic
value of the Award that was replaced or adjusted, as determined
by the Committee.
(d) Duration of Options. Each Option granted to a
Participant shall expire at such time as the Committee shall
determine as of the Grant Date and set forth in the Award
Agreement; provided, however, that no Incentive
Stock Option shall be exercisable later than the tenth (10th)
anniversary of its Grant Date. The period of time over which a
Nonqualified Stock Option may be exercised shall be
automatically extended if on the scheduled expiration date of
such Option the Participants exercise of such Option would
violate an applicable law; provided, however, that
during such extended exercise period the Option may only be
exercised to the extent the Option was exercisable in accordance
with its terms immediately prior to such scheduled expiration
date; provided further, however, that such
extended exercise period shall end not later than thirty
(30) days after the exercise of such Option first would no
longer violate such law.
(e) Exercise of Options. Options shall be
exercisable at such times and be subject to such restrictions
and conditions as the Committee shall in each instance determine
and set forth in the Award Agreement, which need not be the same
for each grant or for each Option or Participant. The Committee,
in its discretion, may allow a Participant to exercise an Option
that has not otherwise become exercisable pursuant to the
applicable Award Agreement, in which case the Shares then issued
shall be Shares of Restricted Stock having a Period of
Restriction analogous to the exercisability provisions of the
Option.
(f) Payment. Options shall be exercised by the
delivery of a written notice of exercise to the Company, in a
form specified or accepted by the Committee, or by complying
with any alternative exercise procedures that may be authorized
by the Committee, setting forth the number of Shares with
respect to which the Option is to be exercised, accompanied by
full payment for such Shares, which shall include applicable
taxes, if any, in accordance with Section 17. The Option
Price upon exercise of any Option shall be payable to the
Company in full by cash, check or such cash equivalent as the
Committee may accept. If approved by the Committee, and subject
to any such terms, conditions and limitations as the Committee
may prescribe and to the extent permitted by applicable law,
payment of the Option Price, in full or in part, may also be
made as follows:
(i) Payment may be made in the form of unrestricted and
unencumbered Shares (by actual delivery of such Shares or by
attestation) already owned by the Participant exercising such
Option, or by such Participant and his or her spouse jointly
(based on the Fair Market Value of the Common Stock on the date
the Option is exercised); provided, however, that,
in the case of an Incentive Stock Option, the right to make a
payment in the form of such already owned Shares may be
authorized only as of the Grant Date of such Incentive Stock
Option and provided further that such already
owned Shares must have been either previously acquired by the
Participant on the open market or held by the Participant for at
least six (6) months at the time of exercise (or meet any
such other requirements as the Committee may determine are
necessary in order to avoid an accounting earnings charge on
account of the use of such Shares to pay the Option Price).
12
(ii) Payment may be made by means of a broker-assisted
cashless exercise pursuant to which a Participant
may elect to deliver a properly executed exercise notice to the
Company, together with a copy of irrevocable instructions to a
broker to deliver promptly to the Company the amount of Share
sale or loan proceeds necessary to pay the Option Price, and, if
requested, the amount of any federal, state, local or
non-United
States withholding taxes.
(iii) Payment may be made by instructing the Company to
withhold a number of Shares otherwise deliverable to the
Participant pursuant to the Option having an aggregate Fair
Market Value on the date of exercise equal to the product of:
(1) Option Price multiplied by (2) the number of
Shares in respect of which the Option shall have been exercised.
(iv) Payment may be made by any other method approved or
accepted by the Committee in its discretion.
Subject to any governing rules or regulations, as soon as
practicable after receipt of a written notification of exercise
and full payment in accordance with the preceding provisions of
this Section 6(f) and satisfaction of tax obligations in
accordance with Section 17, the Company shall deliver to
the Participant exercising an Option, in the Participants
name, evidence of book entry Shares, or, upon the
Participants request, Share certificates, in an
appropriate amount based upon the number of Shares purchased
under the Option, subject to Section 22(g). Unless
otherwise determined by the Committee, all payments under all of
the methods described above shall be paid in United States
dollars.
(g) Rights as a Stockholder. No Participant or other
person shall become the beneficial owner of any Shares subject
to an Option, nor have any rights to dividends or other rights
of a stockholder with respect to any such Shares, until the
Participant has actually received such Shares following exercise
of his or her Option in accordance with the provisions of the
Plan and the applicable Award Agreement.
(h) Termination of Service. The Committee may
establish and set forth in the applicable Award Agreement the
terms and conditions on which an Option shall remain
exercisable, if at all, upon a Participants Termination of
Service. To the extent that a Participant is not entitled to
exercise an Option at the date of his or her Termination of
Service, or if the Participant (or other person entitled to
exercise the Option) does not exercise the Option to the extent
so entitled within the time period specified in the Award
Agreement or below (as applicable), effective as of the date of
such Termination of Service or expiration of such time period
(as applicable), the Option shall terminate and cease to be
exercisable. Notwithstanding the foregoing provisions of this
Section 6(h) to the contrary, the Committee may determine
in its discretion that an Option may be exercised following any
such Termination of Service, whether or not exercisable at the
time of such Termination of Service. If there is an SEC blackout
period (or a Committee-imposed blackout period) that prohibits
the buying or selling of Shares during any part of the ten day
period before termination of any Option based on the Termination
of Service of a Participant, the period for exercising such
Option shall be automatically extended until ten days beyond
when such blackout period ends. Notwithstanding any provision of
the Plan or an Award Agreement, in no event may an Option be
exercised after the expiration date of the original term of such
Option set forth in the applicable Award Agreement, except as
provided in the last sentence of Section 6(d). Subject to
the last sentence of this Section 6(h), a
Participants Option shall be forfeited upon his or her
Termination of Service, except as set forth below:
(i) Not for Cause. Upon a Participants
Termination of Service for any reason other than for Cause, any
Option held by such Participant that was exercisable immediately
before such Termination of Service may be exercised at any time
until the earlier of (A) the ninetieth (90th) day following
such Termination of Service and (B) the expiration date of
the original term of such Option set forth in the applicable
Award Agreement. The Committee may, in its discretion, extend
the period of time over which a Nonqualified Stock Option may be
exercised beyond the period specified in the immediately
preceding sentence, but not beyond the earlier to occur of
(I) one (1) year following the time specified in
clause (A) of such sentence and (II) the expiration
date of the original term of such Option set forth in the
applicable Award Agreement.
13
(ii) Cause. Upon a Participants Termination of
Service for Cause, any Option held by such Participant shall be
forfeited, effective as of such Termination of Service.
Notwithstanding the foregoing provisions of this
Section 6(h), the Committee shall have the power, in its
discretion, to apply different rules concerning the consequences
of a Termination of Service; provided, however,
that such rules shall be set forth in the applicable Award
Agreement.
(i) Limitations on Incentive Stock Options.
(i) General. No ISO shall be granted to any Eligible
Individual who is not an Employee of the Company or a Subsidiary
on the Grant Date of such Option. Any ISO granted under the Plan
shall contain such terms and conditions, consistent with the
Plan, as the Committee may determine to be necessary to qualify
such Option as an incentive stock option under
Section 422 of the Code. Any ISO granted under the Plan may
be modified by the Committee to disqualify such Option from
treatment as an incentive stock option under
Section 422 of the Code.
(ii) $100,000 Per Year Limitation. Notwithstanding
any intent to grant ISOs, an Option granted under the Plan will
not be considered an ISO to the extent that it, together with
any other incentive stock options (within the
meaning of Section 422 of the Code, but without regard to
subsection (d) of such Section) under the Plan and any
other incentive stock option plans of the Company,
any Subsidiary and any parent corporation of the
Company within the meaning of Section 424(e) of the Code,
are exercisable for the first time by any Participant during any
calendar year with respect to Shares having an aggregate Fair
Market Value in excess of $100,000 (or such other limit as may
be required by the Code) as of the Grant Date of the Option with
respect to such Shares. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the
order in which they were granted.
(iii) Options Granted to Certain Stockholders. No
ISO shall be granted to an individual otherwise eligible to
participate in the Plan who owns (within the meaning of
Section 424(d) of the Code), at the Grant Date of such
Option, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or a Subsidiary or
any parent corporation of the Company within the
meaning of Section 424(e) of the Code. This restriction
does not apply if at the Grant Date of such ISO the Option Price
of the ISO is at least 110% of the Fair Market Value of a Share
on the Grant Date such ISO, and the ISO by its terms is not
exercisable after the expiration of five years from such Grant
Date.
7. Stock Appreciation Rights.
(a) Grant of SARs. Subject to the terms and
conditions of the Plan, SARs may be granted to Participants at
any time and from time to time as shall be determined by the
Committee. The Committee may grant an SAR (i) in connection
with, and at the Grant Date of, a related Option (a
Tandem SAR), or (ii) independent of, and
unrelated to, an Option (a Freestanding SAR).
The Committee shall have complete discretion in determining the
number of Shares to which a SAR pertains (subject to
Section 4) and, consistent with the provisions of the
Plan, in determining the terms and conditions pertaining to any
SAR.
(b) Grant Price. The Grant Price for each SAR shall
be determined by the Committee and set forth in the Award
Agreement, subject to the limitations of this Section 7(b).
The Grant Price for each Freestanding SAR shall be not less than
one hundred percent (100%) of the Fair Market Value of a Share
on the Grant Date of such Freestanding SAR, except in the case
of Substitute Awards or Awards granted in connection with an
adjustment provided for in Section 4(d). The Grant Price of
a Tandem SAR shall be equal to the Option Price of the related
Option.
(c) Exercise of Tandem SARs. Tandem SARs may be
exercised for all or part of the Shares subject to the related
Option upon the surrender of the right to exercise the
equivalent portion of the related Option. A Tandem SAR shall be
exercisable only when and to the extent the related Option is
exercisable and may be exercised only with respect to the Shares
for which the related Option is then
14
exercisable. A Tandem SAR shall entitle a Participant to elect,
in the manner set forth in the Plan and the applicable Award
Agreement, in lieu of exercising his or her unexercised related
Option for all or a portion of the Shares for which such Option
is then exercisable pursuant to its terms, to surrender such
Option to the Company with respect to any or all of such Shares
and to receive from the Company in exchange therefor a payment
described in Section 7(g). An Option with respect to which
a Participant has elected to exercise a Tandem SAR shall, to the
extent of the Shares covered by such exercise, be canceled
automatically and surrendered to the Company. Such Option shall
thereafter remain exercisable according to its terms only with
respect to the number of Shares as to which it would otherwise
be exercisable, less the number of Shares with respect to which
such Tandem SAR has been so exercised. Notwithstanding any other
provision of the Plan to the contrary, with respect to a Tandem
SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the related ISO;
(ii) the value of the payment with respect to the Tandem
SAR may not exceed the difference between the Fair Market Value
of the Shares subject to the related ISO at the time the Tandem
SAR is exercised and the Option Price of the related ISO; and
(iii) the Tandem SAR may be exercised only when the Fair
Market Value of the Shares subject to the ISO exceeds the Option
Price of the ISO.
(d) Exercise of Freestanding SARs. Freestanding SARs
may be exercised upon whatever terms and conditions the
Committee, in its sole discretion, in accordance with the Plan,
determines and sets forth in the Award Agreement. An Agreement
may provide that the period of time over which a Freestanding
SAR may be exercised shall be automatically extended if on the
scheduled expiration date of such SAR the Participants
exercise of such SAR would violate an applicable law;
provided, however, that during such extended
exercise period the SAR may only be exercised to the extent the
SAR was exercisable in accordance with its terms immediately
prior to such scheduled expiration date; provided
further, however, that such extended exercise
period shall end not later than thirty (30) days after the
exercise of such SAR first would no longer violate such law.
(e) Award Agreement. Each SAR grant shall be
evidenced by an Award Agreement that shall specify the number of
Shares to which the SAR pertains, the Grant Price, the term of
the SAR, and such other terms and conditions as the Committee
shall determine in accordance with the Plan.
(f) Term of SARs. The term of a SAR granted under
the Plan shall be determined by the Committee, in its sole
discretion; provided, however, that the term of
any Tandem SAR shall be the same as the related Option.
(g) Payment of SAR Amount. An election to exercise
SARs shall be deemed to have been made on the date of Notice of
such election to the Company. As soon as practicable following
such Notice, the Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:
(i) The excess of the Fair Market Value of a Share on the
date of exercise over the Grant Price of the SAR; by
(ii) The number of Shares with respect to which the SAR is
exercised.
Notwithstanding the foregoing provisions of this
Section 7(g) to the contrary, the Committee may establish
and set forth in the applicable Award Agreement a maximum amount
per Share that will be payable upon the exercise of a SAR. At
the discretion of the Committee, such payment upon exercise of a
SAR shall be in cash, in Shares of equivalent Fair Market Value
as of the date of such exercise or in some combination thereof.
(h) Rights as a Stockholder. A Participant receiving
a SAR shall have the rights of a stockholder only as to Shares,
if any, actually issued to such Participant upon satisfaction or
achievement of the terms and conditions of the Award, and in
accordance with the provisions of the Plan and the
15
applicable Award Agreement, and not with respect to Shares to
which such Award relates but which are not actually issued to
such Participant.
(i) Termination of Service. The provisions of
Section 6(h) above shall apply to any SAR upon and after
the Termination of Service of the Participant holding such SAR,
except that in the case of any Freestanding SAR, the reference
to the last sentence of Section 6(d) therein shall be
deemed a reference to Section 7(d).
8. Restricted Stock and Restricted Stock
Units.
(a) Awards of Restricted Stock and Restricted Stock
Units. Subject to the terms and provisions of the Plan, the
Committee, at any time and from time to time, may grant Shares
of Restricted Stock
and/or
Restricted Stock Units to Participants in such amounts as the
Committee shall determine. Awards of Restricted Stock may be
made with or without the requirement of a cash payment from the
Participant to whom such Award is made in exchange for, or as a
condition precedent to, the completion of such Award and the
issuance of Shares of Restricted Stock, and any such required
cash payment shall be set forth in the applicable Agreement.
Subject to the terms and conditions of this Section 8 and
the Award Agreement, upon delivery of Shares of Restricted Stock
to a Participant, or creation of a book entry evidencing a
Participants ownership of Shares of Restricted Stock,
pursuant to Section 8(f), the Participant shall have all of
the rights of a stockholder with respect to such Shares, subject
to the terms and restrictions set forth in this Section 8
or the applicable Award Agreement or as determined by the
Committee.
(b) Award Agreement. Each Restricted Stock
and/or
Restricted Stock Unit Award shall be evidenced by an Award
Agreement that shall specify the Period of Restriction, the
number of Shares of Restricted Stock or the number of Restricted
Stock Units granted, and such other provisions as the Committee
shall determine in accordance with the Plan.
(c) Nontransferability of Restricted Stock. Except
as provided in this Section 8, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, encumbered,
alienated, hypothecated or otherwise disposed of until the end
of the applicable Period of Restriction established by the
Committee and specified in the Restricted Stock Award Agreement.
(d) Period of Restriction and Other Restrictions.
The Period of Restriction shall lapse with respect to an Award
of Restricted Stock or Restricted Stock Units based on a
Participants continuing service or employment with the
Company or an Affiliate, the achievement of performance goals,
the satisfaction of other conditions or restrictions or upon the
occurrence of other events, in each case, as determined by the
Committee, at its discretion, and stated in the Award Agreement;
provided, however, that, except with respect to
Awards of Restricted Stock
and/or
Restricted Stock Units of up to an aggregate of
1,500,000 Shares granted during the term of the Plan, such
Period of Restriction shall lapse: (i) in full with respect
to all Shares underlying such Award at the expiration of a
period not less than three years from the Grant Date of such
Award; (y) proportionally in equal installments of the
Shares underlying such Award over a period not less than three
years from the Grant Date of such Award; or (z) in the case
an Award subject to the achievement of performance goals, a
Performance Period of not less than one year with respect to
which it is to be determined whether the performance goals
applicable to such Award have been achieved, except that the
Period of Restriction may lapse earlier in the event of the
death or disability of the Participant, on such terms as the
Committee shall determine, or in accordance with Section 15
hereof. The Committee shall not have the authority to otherwise
accelerate the lapse of the Period of Restriction with respect
to an Award of Restricted Stock or Restricted Stock Units.
(e) Delivery of Shares and Settlement of Restricted
Stock Units. Upon the expiration of the Period of
Restriction with respect to any Shares of Restricted Stock, the
restrictions set forth in the applicable Award Agreement shall
be of no further force or effect with respect to such Shares,
except as set forth in such Award Agreement. If applicable stock
certificates are held by the Secretary of the Company or an
escrow holder, upon such expiration, the Company shall deliver
to the Participant, or
16
his beneficiary, without charge, the stock certificate
evidencing the Shares of Restricted Stock that have not then
been forfeited and with respect to which the Period of
Restriction has expired. Unless otherwise provided by the
Committee in an Award Agreement, upon the expiration of the
Period of Restriction with respect to any outstanding Restricted
Stock Units, the Company shall deliver to the Participant, or
his beneficiary, without charge, one Share for each such
outstanding Restricted Stock Unit; provided,
however, that the Committee may, in its discretion, elect
to: (i) pay cash or part cash and part Shares in lieu
of delivering only Shares in respect of such Restricted Stock
Units or (ii) defer the delivery of Shares beyond the
expiration of the Period of Restriction. If a cash payment is
made in lieu of delivering Shares, the amount of such payment
shall be equal to the Fair Market Value of such Shares as of the
date on which the Period of Restriction lapsed with respect to
such Restricted Stock Units less applicable tax withholdings in
accordance with Section 17.
(f) Forms of Restricted Stock Awards. Each
Participant who receives an Award of Shares of Restricted Stock
shall be issued a stock certificate or certificates evidencing
the Shares covered by such Award registered in the name of such
Participant, which certificate or certificates shall bear an
appropriate legend, and, if the Committee determines that the
Shares of Restricted Stock shall be held by the Company or in
escrow rather than delivered to the Participant pending
expiration of the Period of Restriction, the Committee may
require the Participant to additionally execute and deliver to
the Company: (i) an escrow agreement satisfactory to the
Committee, if applicable, and (ii) the appropriate stock
power (endorsed in blank) with respect to such Shares of
Restricted Stock. If a Participant shall fail to execute an
Award Agreement evidencing an Award of Restricted Stock and, if
applicable, an escrow agreement and blank stock power within the
amount of time specified by the Committee, the Award shall be
null and void. The Committee may require a Participant who
receives a certificate or certificates evidencing a Restricted
Stock Award to immediately deposit such certificate or
certificates, together with a stock power or other appropriate
instrument of transfer, endorsed in blank by the Participant,
with signatures guaranteed in accordance with the Exchange Act
if required by the Committee, with the Secretary of the Company
or an escrow holder as provided in the immediately following
sentence. The Secretary of the Company or such escrow holder as
the Committee may appoint shall retain physical custody of each
certificate representing a Restricted Stock Award until the
Period of Restriction and any other restrictions imposed by the
Committee or under the Award Agreement with respect to the
Shares evidenced by such certificate expire or shall have been
removed. The foregoing to the contrary notwithstanding, the
Committee may, in its discretion, provide that a
Participants ownership of Shares of Restricted Stock prior
to the lapse of the Period of Restriction or any other
applicable restrictions shall, in lieu of such certificates, be
evidenced by a book entry (i.e., a
computerized or manual entry) in the records of the Company or
its designated agent in the name of the Participant who has
received such Award. Such records of the Company or such agent
shall, absent manifest error, be binding on all Participants who
receive Restricted Stock Awards evidenced in such manner. The
holding of Shares of Restricted Stock by the Company or such an
escrow holder, or the use of book entries to evidence the
ownership of Shares of Restricted Stock, in accordance with this
Section 8(f), shall not affect the rights of Participants
as owners of the Shares of Restricted Stock awarded to them, nor
affect the restrictions applicable to such shares under the
Award Agreement or the Plan, including the Period of Restriction.
(g) Rights as a Stockholder. Unless otherwise
determined by the Committee and set forth in a
Participants Award Agreement, to the extent permitted or
required by law, as determined by the Committee, Participants
holding Shares of Restricted Stock shall have the right to
exercise full voting rights with respect to those Shares during
the Period of Restriction. A Participant receiving Restricted
Stock Units shall have the rights of a stockholder only as to
Shares, if any, actually issued to such Participant upon
expiration of the Period of Restriction and satisfaction or
achievement of the terms and conditions of the Award, and in
accordance with the provisions of the Plan and the applicable
Award Agreement, and not with respect to Shares to which such
Award relates but which are not actually issued to such
Participant.
17
(h) Dividends and Other Distributions. During the
Period of Restriction, Participants holding Shares of Restricted
Stock shall be credited with any cash dividends paid with
respect to such Shares while they are so held, unless determined
otherwise by the Committee and set forth in the Award Agreement.
The Committee may apply any restrictions to such dividends that
the Committee deems appropriate. Except as set forth in the
Award Agreement, in the event of (i) any adjustment as
provided in Section 4(d), or (ii) any shares or
securities are received as a dividend, or an extraordinary
dividend is paid in cash, on Shares of Restricted Stock, any new
or additional Shares or securities or any extraordinary
dividends paid in cash received by a recipient of Restricted
Stock shall be subject to the same terms and conditions,
including the Period of Restriction, as relate to the original
Shares of Restricted Stock.
(i) Termination of Service; Forfeiture. Except as
otherwise provided in this Section 8(i), during the Period
of Restriction, any Restricted Stock Units
and/or
Shares of Restricted Stock held by a Participant shall be
forfeited and revert to the Company (or, if Shares of Restricted
Sock were sold to the Participant, the Participant shall be
required to resell such Shares to the Company at cost) upon the
Participants Termination of Service or the failure to meet
or satisfy any applicable performance goals or other terms,
conditions and restrictions to the extent set forth in the
applicable Award Agreement. To the extent Shares of Restricted
Stock are forfeited, any stock certificates issued to the
Participant evidencing such Shares shall be returned to the
Company, and all rights of the Participant to such Shares and as
a stockholder with respect thereto shall terminate without
further obligation on the part of the Company. Each applicable
Award Agreement shall set forth the extent to which, if any, the
Participant shall have the right to retain Restricted Stock
Units and/or
Shares of Restricted Stock, then subject to the Period of
Restriction, following such Participants Termination of
Service. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the applicable
Award Agreement, need not be uniform among all such Awards
issued pursuant to the Plan, and may reflect distinctions based
on the reasons for, or circumstances of, such Termination of
Service.
9. Other Stock-Based Awards.
(a) Other Stock-Based Awards. The Committee may
grant types of equity-based or equity-related Awards not
otherwise described by the terms of the Plan (including the
grant or offer for sale of unrestricted Shares), in such amounts
and subject to such terms and conditions, as the Committee shall
determine. Such Other Stock-Based Awards may involve the
transfer of actual Shares to Participants, or payment in cash or
otherwise of amounts based on the value of Shares. The terms and
conditions of such Awards shall be consistent with the Plan and
set forth in the Award Agreement and need not be uniform among
all such Awards or all Participants receiving such Awards.
(b) Value of Other Stock-Based Awards. Each Other
Stock-Based Award shall be expressed in terms of Shares or units
based on Shares, as determined by the Committee. The Committee
may establish performance goals in its discretion, and any such
performance goals shall be set forth in the applicable Award
Agreement. If the Committee exercises its discretion to
establish performance goals, the number
and/or value
of Other Stock-Based Awards that will be paid out to the
Participant will depend on the extent to which such performance
goals are met.
(c) Payment of Other Stock-Based Awards. Payment, if
any, with respect to an Other Stock-Based Award shall be made in
accordance with the terms of the Award, as set forth in the
Award Agreement, in cash, Shares or a combination of cash and
Shares, as the Committee determines.
(d) Rights as a Stockholder. A Participant receiving
an Other Stock-Based Award shall have the rights of a
stockholder only as to Shares, if any, actually issued to such
Participant upon satisfaction or achievement of the terms and
conditions of the Award, and in accordance with the provisions
of the Plan and the applicable Award Agreement, and not with
respect to Shares to which such Award relates but which are not
actually issued to such Participant.
(e) Termination of Service. The Committee shall
determine the extent to which the Participant shall have the
right to receive Other Stock-Based Awards following the
Participants Termination of
18
Service. Such provisions shall be determined in the sole
discretion of the Committee, such provisions may be included in
the applicable Award Agreement, but need not be uniform among
all Other Stock-Based Awards issued pursuant to the Plan, and
may reflect distinctions based on the reasons for Termination of
Service.
10. Dividend Equivalents. Unless otherwise
provided by the Committee, no adjustment shall be made in the
Shares issuable or taken into account under Awards on account of
cash dividends that may be paid or other rights that may be
issued to the holders of Shares prior to issuance of such Shares
under such Award. The Committee may grant Dividend Equivalents
based on the dividends declared on Shares that are subject to
any Award, including any Award the payment or settlement of
which is deferred pursuant to Section 22(d). Any Award of
Dividend Equivalents may be credited as of the dividend payment
dates, during the period between the Grant Date of the Award and
the date the Award becomes payable or terminates or expires, as
determined by the Committee. Dividend Equivalents may be subject
to any limitations
and/or
restrictions determined by the Committee. Dividend Equivalents
shall be converted to cash or additional Shares by such formula
and at such time, and shall be paid at such times, as may be
determined by the Committee.
11. Cash-Based Awards.
(a) Grant of Cash-Based Awards. Subject to the terms
of the Plan, Cash-Based Awards may be granted to Participants in
such amounts and upon such terms, and at any time and from time
to time, as shall be determined by the Committee, in accordance
with the Plan. A Cash-Based Award entitles the Participant who
receives such Award to receive a payment in cash upon the
attainment of applicable performance goals for the applicable
Performance Period,
and/or
satisfaction of other terms and conditions, in each case
determined by the Committee, and which shall be set forth in the
Award Agreement. The terms and conditions of such Awards shall
be consistent with the Plan and set forth in the Award Agreement
and need not be uniform among all such Awards or all
Participants receiving such Awards.
(b) Earning and Payment of Cash-Based Awards.
Cash-Based Awards shall become earned, in whole or in part,
based upon the attainment of performance goals specified by the
Committee
and/or the
occurrence of any event or events
and/or
satisfaction of such terms and conditions, including a Change in
Control, as the Committee shall determine, either at or after
the Grant Date. The Committee shall determine the extent to
which any applicable performance goals
and/or other
terms and conditions of a Cash-Based Award are attained or not
attained following conclusion of the applicable Performance
Period. The Committee may, in its discretion, waive any such
performance goals
and/or other
terms and conditions relating to any such Award, subject to
Section 12, if applicable. Payment of earned Cash-Based
Awards shall be as determined by the Committee and set forth in
the Award Agreement.
(c) Termination of Service. Each Award Agreement
shall set forth the extent to which the Participant shall have
the right to retain any Cash-Based Award following such
Participants Termination of Service. Such provisions shall
be determined in the sole discretion of the Committee, shall be
included in the applicable Award Agreement, need not be uniform
among all such Awards issued pursuant to the Plan, and may
reflect distinctions based on the reasons for Termination of
Service.
12. Performance Compensation Awards.
(a) Generally. The Committee shall have authority,
at the time of grant of any Award under Sections 8, 9 and
11 of the Plan to designate such Award as a Performance
Compensation Award. A Performance Compensation Award is intended
to qualify as qualified performance-based
compensation under Section 162(m) of the Code. In the
event that the Committee determines, in its discretion, to grant
Awards that are not designated as Performance Compensation
Awards, the Committee may make such grants without satisfying
the requirements of Code Section 162(m) and may, in its
discretion, base earning of such Awards on performance measures
other than those set forth in Section 12(c).
19
(b) Discretion of Committee with Respect to Performance
Compensation Awards. With regard to a particular Performance
Period, the Committee shall have discretion to select the length
of such Performance Period, the type or types of Performance
Compensation Awards to be issued, the Performance Measure or
Performance Measures that will be used to establish the
Performance Goal or Performance Goals, the kinds
and/or
levels of the Performance Goal or Performance Goals that is or
are to apply and the Performance Formula. Within the first
90 days of a Performance Period (or, if longer or shorter,
within the maximum period allowed under Section 162(m) of
the Code), the Committee shall, with regard to the Performance
Compensation Awards to be issued for such Performance Period,
exercise its discretion with respect to each of the matters
enumerated in the immediately preceding sentence and record the
same in writing.
(c) Performance Measures. The Performance Measures
that shall be used to establish the Performance Goals shall be
based on the attainment of specific levels of performance of the
Company (and/or one or more Affiliates, divisions or operational
units, or any combination of the foregoing) and shall include
the following: (i) net earnings or net income (before or
after interest, taxes
and/or other
adjustments); (ii) basic or diluted earnings per share
(before or after interest, taxes
and/or other
adjustments); (iii) book value per share; (iv) net
revenue or revenue growth; (v) net interest margin;
(vi) operating profit (before or after taxes);
(vii) return on assets, equity, capital, revenue or similar
measure; (viii) cash flow (including operating cash flow
and free cash flow); (ix) share price (including growth
measures and total shareholder return); (x) working
capital; (xi) expense targets, including fuel;
(xii) margins; (xiii) operating efficiency;
(xiv) measures of economic value added; (xv) asset
quality; (xvi) enterprise value; (xvii) employee
retention; (xviii) attainment of strategic or operational
initiatives; (xix) asset growth; (xx) dividend yield;
(xxi) market share, mergers, acquisitions, or sales of
assets; (xxii) cost per available seat mile;
(xxiii) revenue per seat mile available;
(xxiv) revenue per seat mile; (xxv) percentage of
flights completed on time; (xxvi) percentage of scheduled
flights completed; (xxvii) lost passenger baggage;
(xxviii) aircraft utilization; (xxix) revenue per
employee; (xxx) employee satisfaction/engagement/net
promoter score; (xxxi) customer
satisfaction / net promoter score; or (xxxii) any
combination of the foregoing. Any one or more of the Performance
Measures may be used on an absolute or relative basis to measure
the performance of the Company
and/or one
or more Affiliates as a whole or any business unit(s) of the
Company
and/or one
or more Affiliates or any combination thereof, as the Committee
may determine in its discretion, or any of the above Performance
Measures may be compared to the performance of a selected group
of comparison companies, or a published or special index that
the Committee, in its discretion, determines, or as compared to
various stock market indices. To the extent required under
Section 162(m) of the Code, the Committee shall, within the
first 90 days of a Performance Period (or, if longer or
shorter, within the maximum period allowed under
Section 162(m) of the Code), define in an objective fashion
the manner of calculating the relevant Performance Measures and
Performance Goals it selects to use for such Performance Period
and thereafter communicate such Performance Measures and
Performance Goals to the Participant.
(d) Modification of Performance Goals. In the event
that applicable tax
and/or
securities laws change to permit Committee discretion to alter
the governing Performance Measures without obtaining stockholder
approval of such alterations, the Committee shall have
discretion to make such alterations without obtaining
stockholder approval. The Committee is authorized at any time
during the first 90 days of a Performance Period (or, if
longer or shorter, within the maximum period allowed under
Section 162(m) of the Code), or at any time thereafter to
the extent the exercise of such authority at such time would not
cause the Performance Compensation Awards granted to any
Participant for such Performance Period to fail to qualify as
qualified performance-based compensation under
Section 162(m) of the Code, in its discretion, to adjust or
modify the calculation of a Performance Goal for such
Performance Period, based on and in order to appropriately
reflect the following events: (i) asset write-downs;
(ii) litigation or claim judgments or settlements;
(iii) the effect of changes in tax laws, accounting
principles, or other laws or regulatory rules affecting reported
results; (iv) any reorganization and restructuring
programs; (v) the cumulative effect of changes in
accounting principles; (vi) extraordinary nonrecurring
items as described in Accounting Principles Board Opinion
20
No. 30 (or any successor pronouncement thereto);
(vii) acquisitions, divestitures or discontinued
operations; (viii) gains or losses on refinancing or
extinguishment of debt; (ix) foreign exchange gains and
losses; (x) a change in the Companys fiscal year;
(xi) any other specific unusual events, or objectively
determinable category thereof and (xii) any other specific
nonrecurring events, or objectively determinable category
thereof.
(e) Payment of Performance Compensation Awards. A
Participant shall be eligible to receive payment in respect of a
Performance Compensation Award only to the extent that the
Performance Goals for such Award are achieved and the
Performance Formula as applied against such Performance Goals
determines that all or some portion of such Participants
Award has been earned for the Performance Period. After the
close of each Performance Period, the Committee shall review and
certify in writing whether, and to what extent, the Performance
Goals for such Performance Period have been achieved and, if so,
determine and certify in writing the amount of the Performance
Compensation Award to be paid to the Participant and, in so
doing, the Committee may use negative discretion, consistent
with Section 162(m), to eliminate or reduce, but not
increase, the amount of the Award otherwise payable to the
Participant based upon such performance. The Committee shall not
have discretion to (i) waive the achievement of Performance
Goals applicable to any Performance Compensation Award, except
in the case of the Participants death, disability or a
Change in Control or (ii) increase a Performance
Compensation Award above the applicable limits set forth in
Section 4(c), except as otherwise provided in the Plan.
13. Transferability Of Awards; Beneficiary
Designation.
(a) Transferability of Incentive Stock Options. No
ISO or Tandem SAR granted in connection with an ISO may be sold,
transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution or in accordance with Section 13(c). Further,
all ISOs and Tandem SARs granted in connection with ISOs granted
to a Participant shall be exercisable during his or her lifetime
only by such Participant.
(b) All Other Awards. Except as otherwise provided
in Section 8(e) or Section 13(c) or a
Participants Award Agreement or otherwise determined at
any time by the Committee, no Award granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent
and distribution; provided that the Committee may permit
further transferability, on a general or a specific basis, and
may impose conditions and limitations on any permitted
transferability, subject to Section 13(a) and any
applicable Period of Restriction; provided
further, however, that no Award may be transferred
for value or other consideration without first obtaining
approval thereof by the stockholders of the Company. Further,
except as otherwise provided in a Participants Award
Agreement or otherwise determined at any time by the Committee,
or unless the Committee decides to permit further
transferability, subject to Section 13(a) and any
applicable Period of Restriction, all Awards granted to a
Participant under the Plan, and all rights with respect to such
Awards, shall be exercisable or available during his or her
lifetime only by or to such Participant. With respect to those
Awards, if any, that are permitted to be transferred to another
individual, references in the Plan to exercise or payment
related to such Awards by or to the Participant shall be deemed
to include, as determined by the Committee, the
Participants permitted transferee. In the event any Award
is exercised by or otherwise paid to the executors,
administrators, heirs or distributees of the estate of a
deceased Participant, or such a Participants beneficiary,
or the transferee of an Award, in any such case, pursuant to the
terms and conditions of the Plan and the applicable Agreement
and in accordance with such terms and conditions as may be
specified from time to time by the Committee, the Company shall
be under no obligation to issue Shares thereunder unless and
until the Company is satisfied, as determined in the discretion
of the Committee, that the person or persons exercising such
Award, or to receive such payment, are the duly appointed legal
representative of the deceased Participants estate or the
proper legatees or distributees thereof or the named beneficiary
of such Participant, or the valid transferee of such Award, as
applicable. Any purported assignment, transfer or encumbrance of
an Award that does not comply with this Section 13(b) shall
be void and unenforceable against the Company.
21
(c) Beneficiary Designation. Each Participant may,
from time to time, name any beneficiary or beneficiaries who
shall be permitted to exercise his or her Option or SAR or to
whom any benefit under the Plan is to be paid in case of the
Participants death before he or she fully exercises his or
her Option or SAR or receives any or all of such benefit. Each
such designation shall revoke all prior designations by the same
Participant, shall be in a form prescribed by the Company, and
will be effective only when filed by the Participant in writing
with the Company during the Participants lifetime. In the
absence of any such beneficiary designation, a
Participants unexercised Option or SAR, or amounts due but
remaining unpaid to such Participant, at the Participants
death, shall be exercised or paid as designated by the
Participant by will or by the laws of descent and distribution.
14. Rights of Participants.
(a) Rights or Claims. No person shall have any
rights or claims under the Plan except in accordance with the
provisions of the Plan and any applicable Award Agreement. The
liability of the Company and any Affiliate under the Plan is
limited to the obligations expressly set forth in the Plan, and
no term or provision of the Plan may be construed to impose any
further or additional duties, obligations, or costs on the
Company or any Affiliate thereof or the Board or the Committee
not expressly set forth in the Plan. The grant of an Award under
the Plan shall not confer any rights upon the Participant
holding such Award other than such terms, and subject to such
conditions, as are specified in the Plan as being applicable to
such type of Award, or to all Awards, or as are expressly set
forth in the Award Agreement evidencing such Award. Without
limiting the generality of the foregoing, neither the existence
of the Plan nor anything contained in the Plan or in any Award
Agreement shall be deemed to:
(i) Give any Eligible Individual the right to be retained
in the employment or service of the Company
and/or an
Affiliate, whether in any particular position, at any particular
rate of compensation, for any particular period of time or
otherwise;
(ii) Restrict in any way the right of the Company
and/or an
Affiliate to terminate, change or modify any Eligible
Individuals employment or service at any time with or
without Cause;
(iii) Confer on any Eligible Individual any right of
continued relationship with the Company
and/or an
Affiliate, or alter any relationship between them, including any
right of the Company or an Affiliate to terminate, change or
modify its relationship with an Eligible Individual;
(iv) Constitute a contract of employment or service between
the Company or any Affiliate and any Eligible Individual, nor
shall it constitute a right to remain in the employ or service
of the Company or any Affiliate;
(v) Give any Eligible Individual the right to receive any
bonus, whether payable in cash or in Shares, or in any
combination thereof, from the Company
and/or an
Affiliate, nor be construed as limiting in any way the right of
the Company
and/or an
Affiliate to determine, in its sole discretion, whether or not
it shall pay any Eligible Individual bonuses, and, if so paid,
the amount thereof and the manner of such payment; or
(vi) Give any Participant any rights whatsoever with
respect to an Award except as specifically provided in the Plan
and the Award Agreement.
(b) Adoption of the Plan. The adoption of the Plan
shall not be deemed to give any Eligible Individual or any other
individual any right to be selected as a Participant or to be
granted an Award, or, having been so selected, to be selected to
receive a future Award.
(c) Vesting. Notwithstanding any other provision of
the Plan, a Participants right or entitlement to exercise
or otherwise vest in any Award not exercisable or vested at the
Grant Date thereof shall only result from continued services as
a Non-Employee Director or Consultant or continued employment,
as the case may be, with the Company or any Affiliate, or
satisfaction of any other performance goals or other conditions
or restrictions applicable, by its terms, to such Award, except,
in each such case, as the Committee may, in its discretion,
expressly determine otherwise.
22
(d) No Effects on Benefits; No Damages. Payments and
other compensation received by a Participant under an Award are
not part of such Participants normal or expected
compensation or salary for any purpose, including calculating
termination, indemnity, severance, resignation, redundancy, end
of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments under any laws, plans,
contracts, policies, programs, arrangements or otherwise. A
Participant shall, by participating in the Plan, waive any and
all rights to compensation or damages in consequence of
Termination of Service of such Participant for any reason
whatsoever, whether lawfully or otherwise, insofar as those
rights arise or may arise from such Participant ceasing to have
rights under the Plan as a result of such Termination of
Service, or from the loss or diminution in value of such rights
or entitlements, including by reason of the operation of the
terms of the Plan or the provisions of any statute or law
relating to taxation. No claim or entitlement to compensation or
damages arises from the termination of the Plan or diminution in
value of any Award or Shares purchased or otherwise received
under the Plan.
(e) One or More Types of Awards. A particular type
of Award may be granted to a Participant either alone or in
addition to other Awards under the Plan.
15. Change In Control.
(a) Alternative Awards. The occurrence of a Change
in Control will not itself result in the cancellation,
acceleration of exercisability or vesting, lapse of any Period
of Restriction or settlement or other payment with respect to
any outstanding Award to the extent that the Board or the
Committee determines in its discretion, prior to such Change in
Control, that such outstanding Award shall be honored or
assumed, or new rights substituted therefor (such honored,
assumed or substituted Award being hereinafter referred to as an
Alternative Award) by the New Employer,
provided that any Alternative Award must:
(i) be based on securities that are traded on an
established United States securities market, or which will be so
traded within sixty (60) days following the Change in
Control;
(ii) provide the Participant (or each Participant in a
class of Participants) with rights and entitlements
substantially equivalent to or better than the rights, terms and
conditions applicable under such Award, including an identical
or better exercise or vesting schedule and identical or better
timing and methods of payment;
(iii) have substantially equivalent economic value to such
Award immediately prior to the Change in Control (as determined
by the Board or the Committee (as constituted prior to the
Change in Control), in its discretion);
(iv) have terms and conditions which provide that if the
Participant incurs a Termination of Service by the New Employer
under any circumstances other than involuntary Termination of
Service for Cause or resignation without Good Reason within
eighteen (18) months following the Change in Control,
(1) any conditions on a Participants rights under, or
any restrictions on transfer or exercisability applicable to,
such Alternative Award shall be waived or shall lapse in full,
and such Alternative Award shall become fully vested and
exercisable, as the case may be, and (2) to the extent
applicable, each such Alternative Award outstanding as of the
date of such Termination of Service may thereafter be exercised
until the later of (A) the last date on which such Award
would have been exercisable in the absence of this
Section 15(a), and (B) the earlier of (I) the
third anniversary of such Change in Control and
(II) expiration of the term of such Award; and
(v) not subject the Participant to the assessment of
additional taxes under Section 409A of the Code.
(b) Accelerated Vesting and Payment.
(i) In the event Section 15(a) does not apply, upon a
Change in Control, (1) all outstanding Awards shall become
fully vested, nonforfeitable and, to the extent applicable,
exercisable
23
immediately prior to the Change in Control; (2) the Board
or the Committee (as constituted prior the Change in Control)
shall provide that in connection with the Change in Control
(A) each outstanding Option and Stock Appreciation Right
shall be cancelled in exchange for an amount (payable in
accordance with Section 15(b)(ii)) equal to the excess, if
any, of the Fair Market Value of the Common Stock on the date of
the Change in Control over the Option Price or Grant Price
applicable to such Option or Stock Appreciation Right,
(B) each Share of Restricted Stock, each Restricted Stock
Unit and each other Award denominated in Shares shall be
cancelled in exchange for an amount (payable in accordance with
Section 15(b)(ii)) equal to the Change in Control Price
multiplied by the number of Shares covered by such Award,
(C) each Award not denominated in Shares shall be cancelled
in exchange for the full amount of such Award (payable in
accordance with Section 15(b)), and (D) any Award the
payment or settlement of which was deferred under Section 22(d)
or otherwise shall be cancelled in exchange for the full amount
of such deferred Award (payable in accordance with
Section 15(b)(ii)); (3) the target performance goals
applicable to any outstanding Awards shall be deemed to have
been attained in full (unless actual performance exceeds the
target, in which case actual performance shall be used) for the
entire applicable Performance Period then outstanding; and
(4) the Board or the Committee (as constituted prior the
Change in Control) may, in addition to the consequences
otherwise set forth in this Section 15(b)(i), make adjustments
and / or settlements of outstanding Awards as it deems
appropriate and consistent with the Plans purposes.
(ii) Payments. Payment of any amounts in accordance
with this Section 15(b) shall be made in cash or, if
determined by the Board or the Committee (as constituted prior
to the Change in Control), in securities of the New Employer
that are traded on an established United States securities
market, or which will be so traded within sixty (60) days
following the Change in Control, having an aggregate fair market
value (as determined by such Board or Committee) equal to such
amount or in a combination of such securities and cash. All
amounts payable hereunder shall be payable in full, as soon as
reasonably practicable, but in no event later than ten
(10) business days, following the Change in Control.
(c) Certain Terminations of Service Prior to Change in
Control. Any Participant who incurs a Termination of Service
under any circumstances other than involuntary Termination of
Service for Cause or resignation without Good Reason on or after
the date on which the Company entered into an agreement in
principle the consummation of which would constitute a Change in
Control, but prior to such consummation, and such Change in
Control actually occurs, shall be treated, solely for purposes
of the Plan (including this Section 15), as continuing in
the Companys, or the applicable Affiliates,
employment or service until the occurrence of such Change in
Control and to have been Terminated under such circumstances
immediately thereafter.
(d) Termination, Amendment, and Modifications of Change
in Control Provisions. Notwithstanding any other provision
of the Plan or any Award Agreement provision, the provisions of
this Section 15 may not be terminated, amended, or modified
on or after the date of a Change in Control to materially impair
any Participants Award theretofore granted and then
outstanding under the Plan without the prior written consent of
such Participant.
(e) No Implied Rights; Other Limitations. No
Participant shall have any right to prevent the consummation of
any of the acts described in Section 4(d) or this
Section 15 affecting the number of Shares available to, or
other entitlement of, such Participant under the Plan or such
Participants Award. Any actions or determinations of the
Committee under this Section 15 need not be uniform as to
all outstanding Awards, nor treat all Participants identically.
Notwithstanding the foregoing provisions of this
Section 15, the Committee shall determine the adjustments
provided in this Section 15: (i) subject to
Section 17(g)(vi), and (ii) after taking into account,
among other things, to the extent applicable, the provisions of
the Code applicable to Incentive Stock Options, and in no event
may any ISO be exercised after ten (10) years from the
Grant Date thereof.
24
16. Amendment and Termination.
(a) Amendment and Termination of the Plan. The Board
may, at any time and with or without prior notice, amend, alter,
suspend or terminate the Plan, retroactively or otherwise, but
no such amendment, alteration, suspension or termination of the
Plan shall be made which would materially impair the previously
accrued rights of any Participant with respect to a previously
granted Award without such Participants consent, except
any such amendment made to comply with applicable law, tax
rules, stock exchange rules or accounting rules. In addition, no
such amendment shall be made without the approval of the
Companys stockholders to the extent such approval is
required by any applicable law, tax rules, stock exchange rules
or accounting rules (including as necessary to comply with any
rules or requirements of any securities exchange or inter-dealer
quotation system on which the Shares may be listed or quoted or
to prevent the Company from being denied a tax deduction under
Section 162(m) of the Code).
(b) Amendment of Awards. Subject to the immediately
following sentence, the Committee may unilaterally amend or
alter the terms of any Award theretofore granted, including any
Award Agreement, retroactively or otherwise, but no such
amendment shall cause an Award that is intended to qualify as a
Performance Compensation Award not to so qualify or otherwise be
inconsistent with the terms and conditions of the Plan or
materially impair the previously accrued rights of the
Participant to whom such Award was granted with respect to such
Award without his or her consent, except such an amendment made
to cause the Plan or such Award to comply with applicable law,
tax rules, stock exchange rules or accounting rules. Except
pursuant to Section 4(d) or as approved by the
Companys stockholders, during any period that the Company
is subject to the reporting requirements of the Exchange Act,
the terms of an outstanding Option or SAR may not be amended to
reduce the Option Price or Grant Price thereof, an outstanding
Option or SAR may not be cancelled in exchange for cash, the
granting of an Option or SAR to the Participant at a lower
Option Price or Grant Price, or the granting to the Participant
another Award of a different type, and no Option or SAR shall
otherwise be subject to any action that is considered a
repricing for purposes of the stockholder approval
rules of the Applicable Exchange.
17. Tax Withholding and Other Tax Matters.
(a) Tax Withholding. The Company
and/or any
Affiliate are authorized to withhold from any Award granted or
payment due under the Plan the amount of all Federal, state,
local and
non-United
States taxes due in respect of such Award or payment and take
any such other action as may be necessary or appropriate, as
determined by the Committee, to satisfy all obligations for the
payment of such taxes. No later than the date as of which an
amount first becomes includible in the gross income or wages of
a Participant for federal, state, local, or
non-U.S. tax
purposes with respect to any Award, such Participant shall pay
to the Company, or make arrangements satisfactory to the
Committee regarding the payment of, any federal, state, local or
non-U.S. taxes
or social security (or similar) contributions of any kind
required by law to be withheld with respect to such amount. The
obligations of the Company under the Plan shall be conditional
on such payment or satisfactory arrangements (as determined by
the Committee in its discretion), and the Company and the
Affiliates shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment otherwise due to such
Participant, whether or not under the Plan.
(b) Withholding or Tendering Shares. Without
limiting the generality of Section 17(a), subject to any
applicable laws, a Participant may (unless disallowed by the
Committee) elect to satisfy or arrange to satisfy, in whole or
in part, the tax obligations incident to an Award by:
(i) electing to have the Company withhold Shares or other
property otherwise deliverable to such Participant pursuant to
his or her Award (provided, however, that the
amount of any Shares so withheld shall not exceed the amount
necessary to satisfy required Federal, state, local and
non-United
States withholding obligations using the minimum statutory
withholding rates for Federal, state, local
and/or
non-U.S. tax
purposes, including payroll taxes, that are applicable to
supplemental taxable income)
and/or
(ii) tendering to the Company Shares already owned by such
Participant (or by such Participant and his or her spouse
25
jointly) and either previously acquired by the Participant on
the open market or held by the Participant for at least six
(6) months at the time of exercise or payment (or which
meet any such other requirements as the Committee may determine
are necessary in order to avoid an accounting earnings charge on
account of the use of such Shares to satisfy such tax
obligations), based, in each case, on the Fair Market Value of
the Common Stock on the payment date as determined by the
Committee. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any
restrictions or limitations that the Committee, in its sole
discretion, deems appropriate. The Committee may establish such
procedures as it deems appropriate, including making irrevocable
elections, for settlement of withholding obligations with Common
Stock.
(c) Restrictions. The satisfaction of tax
obligations pursuant to this Section 17 shall be subject to
such restrictions as the Committee may impose, including any
restrictions required by applicable law or the rules and
regulations of the SEC, and shall be construed consistent with
an intent to comply with any such applicable laws, rule and
regulations.
(d) Special ISO Obligations. The Committee may
require a Participant to give prompt written notice to the
Company concerning any disposition of Shares received upon the
exercise of an ISO within: (i) two (2) years from the
Grant Date such ISO to such Participant or (ii) one
(1) year from the transfer of such Shares to such
Participant or (iii) such other period as the Committee may
from time to time determine. The Committee may direct that a
Participant with respect to an ISO undertake in the applicable
Award Agreement to give such written notice described in the
preceding sentence, at such time and containing such information
as the Committee may prescribe,
and/or that
the certificates evidencing Shares acquired by exercise of an
ISO refer to such requirement to give such notice.
(e) Section 83(b) Election. If a Participant
makes an election under Section 83(b) of the Code to be
taxed with respect to an Award as of the date of transfer of
Shares rather than as of the date or dates upon which the
Participant would otherwise be taxable under Section 83(a)
of the Code, such Participant shall deliver a copy of such
election to the Company upon or prior to the filing such
election with the Internal Revenue Service. Neither the Company
nor any Affiliate shall have any liability or responsibility
relating to or arising out of the filing or not filing of any
such election or any defects in its construction.
(f) No Guarantee of Favorable Tax Treatment.
Although the Company intends to administer the Plan so that
Awards will be exempt from, or will comply with, the
requirements of Code Section 409A, the Company does not
warrant that any Award under the Plan will qualify for favorable
tax treatment under Code Section 409A or any other
provision of federal, state, local, or
non-United
States law. The Company shall not be liable to any Participant
for any tax, interest, or penalties the Participant might owe as
a result of the grant, holding, vesting, exercise, or payment of
any Award under the Plan.
(g) Nonqualified Deferred Compensation.
(i) It is the intention of the Company that no Award shall
be deferred compensation subject to Code Section 409A
unless and to the extent that the Committee specifically
determines otherwise as provided in paragraph (ii) of this
Section 17(g), and the Plan and the terms and conditions of
all Awards shall be interpreted and administered accordingly.
(ii) The terms and conditions governing any Awards that the
Committee determines will be subject to Section 409A of the
Code, including any rules for payment or elective or mandatory
deferral of the payment or delivery of Shares or cash pursuant
thereto, and any rules regarding treatment of such Awards in the
event of a Change in Control, shall be set forth in the
applicable Award Agreement and shall be intended to comply in
all respects with Section 409A of the Code, and the Plan
and the terms and conditions of such Awards shall be interpreted
and administered accordingly.
(iii) The Committee shall not extend the period to exercise
an Option or Stock Appreciation Right to the extent that such
extension would cause the Option or Stock Appreciation Right to
become subject to Code Section 409A.
26
(iv) No Dividend Equivalents shall relate to Shares
underlying an Option or SAR unless such Dividend Equivalent
rights are explicitly set forth as a separate arrangement and do
not cause any such Option or SAR to be subject to Code
Section 409A.
(v) Notwithstanding the provisions of Section 4(d) to
the contrary, (1) any adjustments made pursuant to
Section 4(d) to Awards that are considered deferred
compensation subject to Section 409A of the Code
shall be made in compliance with the requirements of
Section 409A of the Code; (2) any adjustments made
pursuant to Section 4(d) to Awards that are not considered
deferred compensation subject to Section 409A
of the Code shall be made in such a manner as to ensure that
after such adjustment, the Awards either (A) continue not
to be subject to Section 409A of the Code or (B) comply
with the requirements of Section 409A of the Code; and
(3) in any event, neither the Committee nor the Board shall
have any authority to make any adjustments, substitutions or
changes pursuant to Section 4(d) to the extent the
existence of such authority would cause an Award that is not
intended to be subject to Section 409A of the Code at the
Grant Date thereof to be subject to Section 409A of the
Code.
(vi) If any Award is subject to Section 409A of the
Code, the provisions of Section 15 shall be applicable to
such Award only to the extent specifically provided in the Award
Agreement and permitted pursuant to paragraph (ii) of this
Section 17(g).
18. Limits Of Liability; Indemnification.
(a) Limits of Liability. Any liability of the
Company or an Affiliate to any Participant with respect to any
Award shall be based solely upon contractual obligations created
by the Plan and the Award Agreement.
(i) None of the Company, any Affiliate, any member of the
Board or the Committee or any other person participating in any
determination of any question under the Plan, or in the
interpretation, administration or application of the Plan, shall
have any liability, in the absence of bad faith, to any party
for any action taken or not taken in connection with the Plan,
except as may expressly be provided by statute.
(ii) Each member of the Committee, while serving as such,
shall be considered to be acting in his or her capacity as a
director of the Company. Members of the Board of Directors and
members of the Committee acting under the Plan shall be fully
protected in relying in good faith upon the advice of counsel
and shall incur no liability except for gross negligence or
willful misconduct in the performance of their duties.
(iii) The Company shall not be liable to a Participant or
any other person as to: (i) the non-issuance of Shares as
to which the Company has been unable to obtain from any
regulatory body having relevant jurisdiction the authority
deemed by the Committee or the Companys counsel to be
necessary to the lawful issuance and sale of any Shares
hereunder, and (ii) any tax consequence expected, but not
realized, by any Participant or other person due to the receipt,
exercise or settlement of any Option or other Award.
(b) Indemnification. Subject to the requirements of
Delaware law, each individual who is or shall have been a member
of the Committee or of the Board, or an officer of the Company
to whom authority was delegated in accordance with
Section 3, shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or
she may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid
by him or her in settlement thereof, with the Companys
approval, or paid by him or her in satisfaction of any judgment
in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity,
at its own expense, to handle and defend the same before he or
she undertakes to handle and defend it on his or her own behalf,
unless such loss, cost, liability, or expense is a result of the
individuals own willful misconduct or except as provided
by statute. The foregoing right of
27
indemnification shall not be exclusive of any other rights of
indemnification to which such individual may be entitled under
the Companys Certificate of Incorporation or By-Laws, as a
matter of law, or otherwise, or any power that the Company may
have to indemnify or hold harmless such individual.
19. Successors. All obligations of the
Company under the Plan with respect to Awards granted hereunder
shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all
or substantially all of the business
and/or
assets of the Company.
20. Termination, Rescission and Recapture of
Awards.
(a) Each Award under the Plan is intended to align the
Participants long-term interests with those of the
Company. Accordingly, the Company may terminate any outstanding,
unexercised, unexpired, unpaid, or deferred Awards
(Termination), rescind any exercise, payment
or delivery pursuant to the Award
(Rescission), or recapture any Shares
(whether restricted or unrestricted) or proceeds from the
Participants sale of Shares issued pursuant to the Award
(Recapture), if the Participant does not
comply with the conditions of subsections (b) and
(c) of this Section 20 (collectively, the
Conditions).
(b) A Participant shall not, without the Companys
prior written authorization, disclose to anyone outside the
Company, or use in other than the Companys business, any
proprietary or confidential information or material, as those or
other similar terms are used in any applicable patent,
confidentiality, inventions, secrecy, or other agreement between
the Participant and the Company or an Affiliate with regard to
any such proprietary or confidential information or material.
(c) If the Company determines, in its sole and absolute
discretion, that (i) a Participant has violated any of the
Conditions or (ii) during his or her employment or service
with the Company or any Affiliate, a Participant (x) has
rendered services to or otherwise directly or indirectly engaged
in or assisted, any organization or business that, in the
judgment of the Company in its sole and absolute discretion, is
or is working to become competitive with the Company or an
Affiliate; (y) has solicited any non-administrative
employee of the Company or any Affiliate to terminate employment
with the Company or such Affiliate; or (z) has engaged in
activities which are materially prejudicial to or in conflict
with the interests of the Company or an Affiliate, including any
breaches of fiduciary duty or the duty of loyalty, then the
Company may, in its sole and absolute discretion, impose a
Termination, Rescission,
and/or
Recapture with respect to any or all of the Participants
relevant Awards, Shares, and the proceeds thereof.
(d) Within ten days after receiving notice from the Company
of any such activity described in Section 20(c) above, the
Participant shall deliver to the Company the Shares acquired
pursuant to the Award, or, if Participant has sold the Shares,
the gain realized, or payment received as a result of the
rescinded exercise, payment, or delivery; provided that
if the Participant returns Shares that the Participant purchased
pursuant to the exercise of an Option (or the gains realized
from the sale of such Common Stock), the Company shall promptly
refund the exercise price, without earnings, that the
Participant paid for the Shares. Any payment by the Participant
to the Company pursuant to this Section shall be made either in
cash or by returning to the Company the number of Shares that
the Participant received in connection with the rescinded
exercise, payment, or delivery. It shall not be a basis for
Termination, Rescission or Recapture if after a
Participants Termination of Service, the Participant
purchases, as an investment or otherwise, stock or other
securities of an organization or business, so long as
(i) such stock or other securities are listed upon a
recognized securities exchange or traded over-the-counter, and
(ii) such investment does not represent more than a five
percent (5%) equity interest in the organization or business.
(e) Notwithstanding the foregoing provisions of this
Section, the Company has sole discretion not to require
Termination, Rescission
and/or
Recapture, and its determination not to require Termination,
Rescission
and/or
Recapture with respect to any particular act by a particular
Participant or Award shall not in any way reduce or eliminate
the Companys authority to require Termination, Rescission
and/or
Recapture with respect to any other act or Participant or Award.
Nothing in this Section shall
28
be construed to impose obligations on the Participant to refrain
from engaging in lawful competition with the Company after the
termination of employment that does not violate
subsections (b) or (c) of this Section, other than any
obligations that are part of any separate agreement between the
Company or an Affiliate and the Participant or that arise under
applicable law.
(f) All administrative and discretionary authority given to
the Company under this Section shall be exercised by the most
senior human resources executive of the Company or such other
person or committee (including the Committee) as the Committee
may designate from time to time.
(g) If any provision within this Section is determined to
be unenforceable or invalid under any applicable law, such
provision will be applied to the maximum extent permitted by
applicable law, and shall automatically be deemed amended in a
manner consistent with its objectives and any limitations
required under applicable law. Notwithstanding the foregoing,
but subject to any contrary terms set forth in any Award
Agreement, this Section shall not be applicable to any
Participant from and after his or her Termination of Service
after a Change in Control.
21. Recoupment of Awards. To the extent
permitted or required by applicable law, and without obtaining
the approval or consent of the Companys shareholders or of
any Participant, a Participant may be required by the Committee
to reimburse the Company for all or any portion of any Awards
granted under the Plan (Reimbursement), or
the Termination, Rescission or Recapture of any Award may be
required by the Committee, if and to the extent:
(a) the granting, vesting, or payment of such Award was
based on financial results that were subsequently the subject of
an accounting restatement due to material noncompliance of the
Company with any financial reporting requirement under the
securities laws; and
(b) a lower granting, vesting, or payment of such Award
would have occurred based on the restated results;
provided that the Company will not seek Reimbursement,
Termination, Rescission or Recapture of any such Awards that
were granted, paid and vested under the Plan more than three
years prior to the date on which the Company is required to
prepare the relevant restatement.
22. Miscellaneous.
(a) Drafting Context; Captions. Except where
otherwise indicated by the context, any masculine term used
herein also shall include the feminine; the plural shall include
the singular and the singular shall include the plural. The
words Section, and paragraph herein
shall refer to provisions of the Plan, unless expressly
indicated otherwise. The words include,
includes, and including herein shall be
deemed to be followed by without limitation whether
or not they are in fact followed by such words or words of
similar import, unless the context otherwise requires. The
headings and captions appearing herein are inserted only as a
matter of convenience. They do not define, limit, construe, or
describe the scope or intent of the provisions of the Plan.
(b) Severability. In the event any provision of the Plan
shall be held illegal or invalid for any reason, the illegality
or invalidity shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as if the illegal
or invalid provision had not been included.
(c) Exercise and Payment of Awards. An Award shall
be deemed exercised or claimed when the Secretary of the Company
or any other Company official or other person designated by the
Committee for such purpose receives appropriate Notice from a
Participant, in form acceptable to the Committee, together with
payment of the applicable Option Price, Grant Price or other
purchase price, if any, and compliance with Section 17, in
accordance with the Plan and such Participants Award
Agreement.
(d) Deferrals. Subject to applicable law, the
Committee may from time to time establish procedures pursuant to
which a Participant may defer on an elective or mandatory basis
receipt of all or a portion of the cash or Shares subject to an
Award on such terms and conditions as the Committee
29
shall determine, including those of any deferred compensation
plan of the Company or any Affiliate specified by the Committee
for such purpose.
(e) No Effect on Other Plans. Neither the adoption
of the Plan nor anything contained herein shall affect any other
compensation or incentive plans or arrangements of the Company
or any Affiliate, or prevent or limit the right of the Company
or any Affiliate to establish any other forms of incentives or
compensation for their directors, officers, eligible employees
or consultants or grant or assume options or other rights
otherwise than under the Plan.
(f) Section 16 of Exchange Act and
Section 162(m) of the Code. The provisions and
operation of the Plan are intended to ensure that no transaction
under the Plan is subject to (and not exempt from) the
short-swing profit recovery rules of Section 16(b) of the
Exchange Act. Unless otherwise stated in the Award Agreement,
notwithstanding any other provision of the Plan, any Award
granted to an Insider shall be subject to any additional
limitations set forth in any applicable exemptive rule under
Section 16(b) of the Exchange Act (including
Rule 16b-3)
that are requirements for the application of such exemptive
rule, and the Plan and the Award Agreement shall be deemed
amended to the extent necessary to conform to such limitations.
Furthermore, notwithstanding any other provision of the Plan or
an Award Agreement, any Performance Compensation Award shall be
subject to any applicable limitations set forth in Code
Section 162(m) or any regulations or rulings issued
thereunder (including any amendment to the foregoing) that are
requirements for qualification as other performance-based
compensation as described in Code
Section 162(m)(4)(C), and the Plan and the Award Agreement
shall be deemed amended to the extent necessary to conform to
such requirements and no action of the Committee that would
cause such Award not to so qualify shall be effective
(g) Requirements of Law; Limitations on Awards.
(i) The granting of Awards and the issuance of Shares under
the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies
or national securities exchanges as may be required.
(ii) If at any time the Committee shall determine, in its
discretion, that the listing, registration
and/or
qualification of Shares upon any securities exchange or under
any state, Federal or
non-United
States law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or
in connection with, the sale or purchase of Shares hereunder,
the Company shall have no obligation to allow the grant,
exercise or payment of any Award, or to issue or deliver
evidence of title for Shares issued under the Plan, in whole or
in part, unless and until such listing, registration,
qualification, consent
and/or
approval shall have been effected or obtained, or otherwise
provided for, free of any conditions not acceptable to the
Committee.
(iii) If at any time counsel to the Company shall be of the
opinion that any sale or delivery of Shares pursuant to an Award
is or may be in the circumstances unlawful or result in the
imposition of excise taxes on the Company or any Affiliate under
the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such
sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities
Act, or otherwise with respect to Shares or Awards and the right
to exercise or payment of any Option or Award shall be suspended
until, in the opinion of such counsel, such sale or delivery
shall be lawful or will not result in the imposition of excise
taxes on the Company or any Affiliate.
(iv) Upon termination of any period of suspension under
this Section 22(g), any Award affected by such suspension
which shall not then have expired or terminated shall be
reinstated as to all Shares available before such suspension and
as to the Shares which would otherwise have become available
during the period of such suspension, but no suspension shall
extend the term of any Award.
30
(v) The Committee may require each person receiving Shares
in connection with any Award under the Plan to represent and
agree with the Company in writing that such person is acquiring
such Shares for investment without a view to the distribution
thereof,
and/or
provide such other representations and agreements as the
Committee may prescribe. The Committee, in its absolute
discretion, may impose such restrictions on the ownership and
transferability of the Shares purchasable or otherwise
receivable by any person under any Award as it deems
appropriate. Any such restrictions shall be set forth in the
applicable Award Agreement, and the certificates evidencing such
shares may include any legend that the Committee deems
appropriate to reflect any such restrictions.
(vi) An Award and any Shares received upon the exercise or
payment of an Award shall be subject to such other transfer
and/or
ownership restrictions
and/or
legending requirements as the Committee may establish in its
discretion and may be referred to on the certificates evidencing
such Shares, including restrictions under applicable Federal
securities laws, under the requirements of any stock exchange or
market upon which such Shares are then listed
and/or
traded, and under any blue sky or state securities laws
applicable to such Shares.
(h) Participants Deemed to Accept Plan. By accepting
any benefit under the Plan, each Participant and each person
claiming under or through any such Participant shall be
conclusively deemed to have indicated their acceptance and
ratification of, and consent to, all of the terms and conditions
of the Plan and any action taken under the Plan by the Board,
the Committee or the Company, in any case in accordance with the
terms and conditions of the Plan.
(i) Governing Law. The Plan and each Award Agreement
shall be governed by the laws of the State of Delaware,
excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of the Plan
or an Award Agreement to the substantive law of another
jurisdiction.
(j) Plan Unfunded. The Plan shall be an unfunded
plan for incentive compensation. The Company shall not be
required to establish any special or separate fund or to make
any other segregation of assets to assure the issuance of Shares
or the payment of cash upon exercise or payment of any Award.
Proceeds from the sale of Shares pursuant to Options or other
Awards granted under the Plan shall constitute general funds of
the Company. With respect to any payments not yet made to any
person pursuant to an Award, nothing contained in the Plan or
any Award Agreement shall give such person any rights that are
greater than those of a general creditor of the Company or any
Affiliate, and a Participants rights under the Plan at all
times constitute an unsecured claim against the general assets
of the Company for the payment any amounts as they come due
under the Plan. Neither the Participant nor the
Participants duly-authorized transferee or beneficiaries
shall have any claim against or rights in any specific assets,
Shares, or other funds of the Company or any Affiliate.
(k) Administration Costs. The Company shall bear all
costs and expenses incurred in administering the Plan, including
expenses of issuing Shares pursuant to any Options or other
Awards granted hereunder.
(l) Uncertificated Shares. To the extent that the
Plan provides for issuance of certificates to reflect the
transfer of Shares, the transfer of such Shares may nevertheless
be effected on a noncertificated basis, to the extent not
prohibited by applicable law or the rules of any stock exchange.
(m) No Fractional Shares. An Option or other Award
shall not be exercisable with respect to a fractional Share or
the lesser of fifty (50) shares or the full number of
Shares then subject to the Option or other Award. No fractional
Shares shall be issued upon the exercise or payment of an Option
or other Award.
(n) Affiliate Eligible Individuals. In the case of a
grant of an Award to any Eligible Individual of an Affiliate,
the Company may, if the Committee so directs, issue or transfer
the Shares, if any, covered by the Award to such Affiliate, for
such lawful consideration as the Committee may specify, upon the
condition or understanding that such Affiliate will transfer
such Shares to such Eligible Individual in
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accordance with the terms and conditions of such Award and those
of the Plan. The Committee may also adopt procedures regarding
treatment of any Shares so transferred to an Affiliate that are
subsequently forfeited or canceled.
(o) Data Protection. By participating in the Plan, each
Participant consents to the collection, processing, transmission
and storage by the Company, in any form whatsoever, of any data
of a professional or personal nature which is necessary for the
purposes of administering the Plan. The Company may share such
information with any Affiliate, any trustee, its registrars,
brokers, other third-party administrator or any person who
obtains control of the Company or any Affiliate or any division
respectively thereof.
(p) Right of Offset. The Company and the Affiliates
shall have the right to offset against the obligations to make
payment or issue any Shares to any Participant under the Plan,
any outstanding amounts (including travel and entertainment
advance balances, loans, tax withholding amounts paid by the
employer or amounts repayable to the Company or any Affiliate
pursuant to tax equalization, housing, automobile or other
employee programs) such Participant then owes to the Company or
any Affiliate and any amounts the Committee otherwise deems
appropriate pursuant to any tax equalization policy or
agreement, in each case to the extent permitted by applicable
law and not in violation of Code Section 409A.
(q) Participants Based Outside of the United States.
The Committee may grant awards to Eligible Individuals who are
non-United
States nationals, or who reside outside the United States or who
are not compensated from a payroll maintained in the United
States or who are otherwise subject to (or could cause the
Company to be subject to) legal or regulatory provisions of
countries or jurisdictions outside the United States (and, in
any case, who are not and are not expected to be covered
employees within the meaning of Code Section 162(m)),
on such terms and conditions different from those specified in
the Plan as may, in the judgment of the Committee, be necessary
or desirable to foster and promote achievement of the purposes
of the Plan and comply with such legal or regulatory provisions,
and, in furtherance of such purposes, the Committee may make or
establish such modifications, amendments, procedures or subplans
as may be necessary or advisable to comply with such legal or
regulatory requirements (including to maximize tax efficiency).
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