BJS RESTAURANTS, INC.
2005 EQUITY INCENTIVE PLAN
(As Amended June 5, 2012)
PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES
SECTION 1. PURPOSE OF THE PLAN. The purposes of this Plan are (a) to promote the growth and success of the Companys
business, and (b) to attract and retain the most talented Employees, Officers, Directors and Consultants available, (i) by aligning the long-term interests of Employees, Officers, Directors and Consultants with those of the shareholders by
providing an opportunity to acquire an equity interest in the Company and (ii) by providing both rewards for exceptional performance and long term incentives for future contributions to the success of the Company and its Subsidiaries.
The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, SARs, and
Performance Compensation Awards (Shares and Units) at the discretion of the Committee and as reflected in the terms of the Award Agreement. Each Award will be subject to conditions specified in the Plan, such as continued employment or satisfaction
of performance criteria.
The Committee may elect to establish sub-plans or procedures governing the grants to Employees, Officers Directors
and Consultants and this Plan will serve as the framework for any such sub-plans. The awards granted under the Former Plan shall continue to be administered under the Former Plan until such time as those options are exercised, expire or become
unexercisable for any reason.
SECTION 2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) ACTIVE STATUS shall mean (i) for Employees, the absence of any interruption or termination of service as an Employee;
provided, that the Board or Committee, in its sole discretion, may determine that Active Status may continue if an Employee becomes a Consultant immediately following termination of or interruption of service as an Employee, in which case Active
Status shall thereafter be determined in accordance with clause (iii) below, (ii) for Directors, that the Director has not been removed from the Board for Misconduct and the Director has not failed to be reelected by the shareholders
following a Board determination of Misconduct by such Director, and (iii) for Consultants, the absence of any interruption, expiration, or termination of such persons consulting or advisory relationship with the Company or any Subsidiary
or the occurrence of any termination event as set forth in such persons Award Agreement. Active Status shall not be considered interrupted (A) for an Employee in the case of sick leave, maternity leave, infant care leave, medical
emergency leave, military leave, or any other leave of absence properly taken in accordance with the policies of the Company or
any applicable Subsidiary as may be in effect from time to time, and (B) for a Consultant, in the case of any temporary interruption in such persons availability to provide services to
the Company or any Subsidiary which has been granted in writing by an authorized Officer of the Company. Whenever a mandatory severance period applies under applicable law with respect to a termination of service as an Employee, Active Status shall
be considered terminated upon such Employees receipt of notice of termination in whatever form prescribed by applicable law.
(b) AWARD shall mean any award or benefits granted under the Plan, including Options, Restricted Stock, Restricted Stock Units, SARs, Performance Shares and Performance Units.
(c) AWARD AGREEMENT shall mean a written or electronic agreement between the Company and the Participant setting forth the
terms of the Award.
(d) BENEFICIAL OWNERSHIP shall have the meaning set forth in Rule 13d-3 promulgated under the
(e) BOARD shall mean the Board of Directors of the Company.
(f) CHANGE OF CONTROL shall mean the first day that any one or more of the following conditions shall have been satisfied:
(i) the sale, liquidation or other disposition of all or substantially all of the Companys assets in one or a series of
(ii) an acquisition (other than directly from the Company) of any outstanding voting securities by any
person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has Beneficial Ownership of fifty percent (50%) or more of the then outstanding voting securities of the Company, other than a
(iii) during any 36-consecutive month period, the individuals who, at the beginning of such
period, constitute the Board (Incumbent Directors) cease for any reason other than death to constitute at least a majority of the members of the Board; provided however that except as set forth in this Section 2(f)(iii), an
individual who becomes a member of the Board subsequent to the beginning of the 36-month period, shall be deemed to have satisfied such 36-month requirement and shall be deemed an Incumbent Director if such Director was elected by or on the
recommendation of or with the approval of at least two-thirds of the Directors who then qualified as Incumbent Directors either actually (because they were Directors at the beginning of such period) or by operation of the provisions of this section;
if any such individual initially assumes office as a result of or in connection with either an actual or threatened solicitation with respect to the election of Directors (as such terms are used in Rule 14a-12(c) of Regulation 14A promulgated under
the Exchange Act) or other actual or threatened solicitations of proxies or consents by or on behalf of a person other than the Board, then such individual shall not be considered an Incumbent Director; or
(iv) a merger, consolidation or reorganization of the Company, as a result of which the
shareholders of the Company immediately prior to such merger, consolidation or reorganization own directly or indirectly immediately following such merger, consolidation or reorganization less than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the entity resulting from such merger, consolidation or reorganization.
CODE shall mean the Internal Revenue Code of 1986, as amended.
(h) COMMITTEE shall mean the
Compensation Committee appointed by the Board.
(i) COMMON STOCK shall mean the common stock of the Company, no
par value per share.
(j) COMPANY shall mean BJs Restaurants, Inc., a California corporation, and any
(k) CONSULTANT shall mean any person, except an Employee, engaged by the Company or any
Subsidiary of the Company, to render personal services to such entity, including as an advisor, pursuant to the terms of a written agreement.
(l) DIRECTOR shall mean a member of the Board.
DISABILITY shall mean (i) in the case of a Participant whose employment with the Company or a Subsidiary is subject to the terms of an employment or consulting agreement that includes a definition of Disability as used
in this Plan shall have the meaning set forth in such employment or consulting agreement during the period that such employment or consulting agreement remains in effect; and (ii) in all other cases, the term Disability as used in
this Plan shall have the same meaning as set forth under the Companys long-term disability plan applicable to the Participant as may be amended from time to time, and in the event the Company does not maintain any such plan with respect to a
Participant, a physical or mental condition resulting from bodily injury, disease or mental disorder which renders the Participant incapable of continuing his or her usual and customary employment with the Company or a Subsidiary, as the case may
be, for a period of not less than 120 days or such other period as may be required by applicable law.
DATE shall mean the date on which the Companys shareholders have first approved this Plan in accordance with applicable Nasdaq rules.
(o) EMPLOYEE shall mean any person, including an Executive Officer or Officer, who is a common law employee of, receives remuneration for personal services to, is reflected on the official
human resources database as an employee of, and is on the payroll of the Company or any Subsidiary of the Company. A person is on the payroll if he or she is paid from or at the direction of the payroll department of the Company, or any Subsidiary
of the Company. Persons providing services to the Company, or to any Subsidiary of the Company, pursuant to an agreement with a staff leasing organization,
temporary workers engaged through or employed by temporary or leasing agencies, and workers who hold themselves out to the Company, or a Subsidiary to which they are providing services as being
independent contractors, or as being employed by or engaged through another company while providing the services, and persons covered by a collective bargaining agreement (unless the collective bargaining agreement applicable to the person
specifically provides for participation in this Plan) are not Employees for purposes of this Plan and do not and cannot participate in this Plan, whether or not such persons are, or may be reclassified by the courts, the Internal Revenue Service,
the U.S. Department of Labor, or other person or entity as, common law employees of the Company, or any Subsidiary, either solely or jointly with another person or entity.
(p) EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as amended.
(q) EXECUTIVE OFFICERS shall mean the officers of the Company as such term is defined in Rule 16a-1 under the Exchange Act.
(r) FAIR MARKET VALUE shall mean the closing price per share of the Common Stock on Nasdaq as to the date specified (or the
previous trading day if the date specified is a day on which no trading occurred), or if Nasdaq shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation
system as the Company elects to list or quote its shares of Common Stock and that the Committee designates as the Companys principal exchange or quotation system, or at the discretion of the Committee in the case that the Company ceases to be
(s) FASB 123(R) shall mean Statements of Financial Accounting Standards No. 123,
Stock-Based Payments, as promulgated by the Financial Accounting Standards Board.
(t) FORMER PLAN
shall mean the BJs Restaurants, Inc. Amended and Restated 1996 Stock Option Plan, as amended.
(u) GOVERNANCE AND
NOMINATION COMMITTEE shall mean the Governance and Nomination Committee appointed by the Board.
STOCK OPTION shall mean any Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
(w) INDEPENDENT DIRECTOR shall mean a Director who: (1) meets the independence requirements of Nasdaq, or if Nasdaq shall cease to be the principal exchange or quotation system upon which
the shares of Common Stock are listed or quoted, then such exchange or quotation system as the Company elects to list or quote its shares of Common Stock and that the Committee designates as the Companys principal exchange or quotation system;
(2) qualifies as an outside director under Section 162(m) of the Code; (3) qualifies as a non-employee director under Rule 16b-3 promulgated under the Exchange Act; and (4) satisfies independence criteria
under any other applicable laws or regulations relating to the issuance of Shares to Employees.
(x) MAXIMUM ANNUAL PARTICIPANT AWARD shall have the meaning set forth in
(y) MISCONDUCT shall mean any of the following; provided, however, that with respect to
Non-Employee Directors Misconduct shall mean subsection (viii) only:
(i) any material breach of an agreement
between the Participant and the Company or any Subsidiary;
(ii) willful unauthorized use or disclosure of confidential
information or trade secrets of the Company or any Subsidiary by the Participant;
(iii) the Participants continued
willful and intentional failure to satisfactorily perform Participants essential responsibilities;
failure of the Participant to comply with rules, policies or procedures of the Company or any Subsidiary as they may be amended from time to time, including, without limitation, failure to comply with (1) the Companys Code of Ethics and
Code of Conduct, (2) policies and procedures of the Company relating to use and maintenance of facilities and equipment, or (3) policies and procedures of the Company relating to the occurrence, reporting or investigation of any harassment
or discrimination allegations or complaints;
(v) Participants dishonesty, fraud or gross negligence related to the
business or property of the Company or any Subsidiary;
(vi) personal conduct that is materially detrimental to the business
of the Company or any Subsidiary;
(vii) conviction of or plea of nolo contendere to a felony;
(viii) in the case of Non-Employee Directors, (1) the removal from the Board for cause in accordance with the provisions of
Section 302 of the California Corporations Code, (2) the removal from the Board as a result of a shareholder suit in accordance with the provisions of Section 304 of the California Corporations Code, (3) the determination by at
least a majority of the disinterested members of the Board that such Non-Employee Director has materially breached his or her fiduciary duties or duties of loyalty to the Company or has grossly abused such Non-Employee Directors authority with
respect to the Company, (4) the determination by at least a majority of the disinterested members of the Board that such Non-Employee Director has committed fraudulent or dishonest acts which have or could reasonably be expected to have a
material adverse effect on the Company, or (5) the determination by at least a majority of the disinterested members of the Board that such Non-Employee Director has materially failed to comply with rules, policies or procedures of the Company
applicable to Non-Employee Directors, as they may be amended from time to time;
(ix) intentional or negligent acts or omissions that cause the Company or any Subsidiary to
be subject to a fine, citation, shut down, or other disciplinary action by any federal, state or local governmental agency, including, without limitation, any agency regulating health, occupational safety, alcoholic beverage control or immigration;
(x) Participants inducing any customer or supplier to break or terminate any contract with the Company or any
(xi) Participants inducing any principal for whom the Company or any Subsidiary acts as an agent to
terminate such agency relationship;
(xii) causes a fire, explosion or other catastrophic event involving the facilities or
equipment of the Company or any Subsidiary that could have been reasonably avoided by following the established policies of the Company or any Subsidiary;
(xiii) Participants solicitation of any of the Companys agents or employees to provide services to any other business or entity; or
(xiv) with respect to any Participant whose employment with the Company or a Subsidiary is subject to the terms of an effective
employment or consulting agreement that includes a definition of Cause, conduct by Participant that constitutes Cause.
(z) NASDAQ shall mean The Nasdaq Stock Market, Inc.
NON-EMPLOYEE DIRECTOR shall mean a Director who is not an Employee.
(bb) NONQUALIFIED STOCK OPTION
shall mean an Option that does not qualify or is not intended to qualify as an Incentive Stock Option.
OFFICER shall mean any Executive Officer of the Company as well as any president, vice president, secretary or treasurer duly appointed by the Board, or any other person designated as an officer by the Board or by the Bylaws of the
(dd) OPTION shall mean a stock option granted pursuant to Section 10 of the Plan, including a
Nonqualified Stock Option and an Incentive Stock Option.
(ee) OPTIONEE shall mean a Participant who has been
granted an Option.
(ff) PARENT shall mean a parent corporation, whether now or hereafter existing, as
defined in Section 424(e) of the Code.
(gg) PARTICIPANT shall mean an Employee, Officer, Director or
Consultant granted an Award.
(hh) PERFORMANCE COMPENSATION AWARD means any Awards designated by the Committee
as a Performance Compensation Award pursuant to Section 13 of the Plan, including Performance Shares and Performance Units.
(ii) PERFORMANCE CRITERIA shall mean one or more of the following (as selected by the Committee) criterion or criteria that the Committee shall select for purposes of establishing the
Performance Goal(s) for a Performance Period with respect to any Award under the Plan: (i) cash flow; (ii) earnings per share, including as adjusted (A) to exclude the impact of any (1) significant acquisitions or dispositions of
businesses by the Company, (2) one-time, non-operating charges, or (3) accounting changes (including the early adoption of any accounting change mandated by any governing body, organization or authority); and (B) for any stock split,
stock dividend or other recapitalization; (iii) earnings before interest, taxes, and amortization; (iv) return on equity; (v) total shareholder return; (vi) share price performance; (vii) return on capital;
(viii) return on assets or net assets; (ix) revenue; (x) income; (xi) operating income; (xii) operating profit; (xiii) profit margin; (xiv) return on operating revenue; (xv) return on invested capital;
(xvi) market price; (xvii) brand recognition/acceptance; (xviii) customer satisfaction; (xix) productivity; or (xx) sales growth and volume.
(jj) PERFORMANCE FORMULA means, for a Performance Period, one or more objective formulas or standards established by the Committee for purposes of determining whether or the extent to which a
Performance Compensation Award has been earned based on the level of performance attained or to be attained with respect to one or more Performance Goals. Performance Formulae may vary from Performance Period to Performance Period and from
Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.
PERFORMANCE GOAL means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based on the Performance Criteria. Performance Goals may be established based on Performance Criteria with
respect to the Company or any of its Subsidiaries, divisions or operational units, or any composition thereof.
PERFORMANCE PERIOD means one or more periods of time as the Committee may designate, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participants rights in respect of a
Performance Compensation Award.
(mm) PERFORMANCE SHARE means a Performance Compensation Award granted pursuant to
Section 13 of the Plan that is denominated in a specified number of Shares, which Shares or their future cash equivalent (or a combination of both) may be paid to the Participant upon achievement of applicable Performance Goals during the
relevant Performance Period as the Committee shall establish.
(nn) PERFORMANCE UNIT means a Performance
Compensation Award granted pursuant to Section 13 of the Plan that has a dollar value set by the Committee (or that is determined by reference to a Performance Formula), which value may be paid
to the Participant in cash, in Shares, or such combination of cash and Shares as the Committee may determine in its sole discretion, upon achievement of applicable Performance Goals during the
relevant Performance Period as the Committee shall establish.
(oo) PLAN shall mean this BJs Restaurants,
Inc. 2005 Equity Incentive Plan, including any amendments thereto.
(pp) REPRICE shall mean (i) the
adjustment or amendment of the exercise price of Options or SARs previously awarded whether through amendment, cancellation, replacement of grants or any other means, or (ii) the repurchase of outstanding Options for cash at a time when the
exercise price of the repurchased Options is above the Fair Market Value of the underlying Common Stock.
RESIGNATION (OR RESIGN) FOR GOOD REASON shall mean (i) in the case of a Participant whose employment with the Company or a Subsidiary is subject to the terms of an employment or consulting agreement that includes a definition of
Resignation for Good Reason (or similar terms) as used in this Plan shall have the meaning set forth in such employment or consulting agreement during the period that such employment or consulting agreement remains in effect, or
(ii) in all other cases, any voluntary termination by written resignation of the Active Status of any Officer or Employee of the Company after a Change of Control because of: (1) a material reduction in the Officers or
Employees authority, responsibilities or scope of employment; (2) an assignment of duties to the Officer or Employee inconsistent with the Officers or Employees role at the Company (including its Subsidiaries) prior to the
Change of Control, (3) a reduction in the Officers base salary; (4) solely with respect to an Officer, a material adverse change in such Officers reporting relationship, (5) a material reduction in the Officers or
Employees benefits unless such reduction applies to all Officers or Employees of comparable rank; or (6) the relocation of the Officers or Employees primary work location more than fifty (50) miles from the Officers
primary work location prior to the Change of Control; provided that the Officers or Employees written notice of voluntary resignation must be tendered within one (1) year after the Change of Control, and shall specify which of the
events described in (1) through (6) resulted in the resignation.
(rr) RESTRICTED STOCK shall mean a
grant of Shares pursuant to Section 11 of the Plan.
(ss) RESTRICTED STOCK UNITS shall mean a grant of the
right to receive Shares in the future or their cash equivalent (or both) pursuant to Section 11 of the Plan.
RETIREMENT shall mean, with respect to any Non-Employee Director, ceasing to be a Director pursuant to election by the Companys shareholders or by voluntary resignation with the approval of the Boards Chairman (or a majority
of the disinterested members of the Board) after having served continuously on the Board for at least six years.
(tt) SAR shall mean a stock appreciation right awarded pursuant to
Section 12 of the Plan.
(uu) SEC shall mean the Securities and Exchange Commission.
(vv) SHARE shall mean one share of Common Stock, as adjusted in accordance with Section 5 of the Plan.
(ww) STAND-ALONE SARS shall have the meaning set forth in Section 12(b) of the Plan.
(xx) SUBCOMMITTEE shall have the meaning set forth in Section 3(d).
(yy) SUBSIDIARY shall mean (1) in the case of an Incentive Stock Option a subsidiary corporation, whether
now or hereafter existing, as defined in Section 424(f) of the Code, and (2) in the case of a Nonqualified Stock Option, Restricted Stock, a Restricted Stock Unit, SAR, Performance Shares, or Performance Units, in addition to a subsidiary
corporation as defined in (1), (A) a limited liability company, partnership or other entity in which the Company controls fifty percent (50%) or more of the voting power or equity interests, or (B) an entity with respect to which the
Company possesses the power, directly or indirectly, to direct or cause the direction of the management and policies of that entity, whether through the Companys ownership of voting securities, by contract or otherwise.
SECTION 3. ADMINISTRATION OF THE PLAN.
(a) AUTHORITY. The Plan shall be administered by the Committee. The Committee shall have full and exclusive power to administer the Plan on behalf of the Board, subject to such terms and conditions as the
Committee may prescribe. Notwithstanding anything herein to the contrary, the Committees power to administer the Plan, and actions the Committee takes under the Plan, shall be limited by the provisions set forth in the Committees
charter, as such charter may be amended from time to time, and the further limitation that certain actions may be subject to review and approval by either the full Board or a panel consisting of all of the Independent Directors of the Company.
(b) POWERS OF THE COMMITTEE. Subject to the other provisions of this Plan, the Committee shall have the authority, in its
(i) to grant Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, SARs,
Performance Shares, Performance Units and any other Awards authorized under this Plan to Participants and to determine the terms and conditions of such Awards, including the determination of the Fair Market Value of the Shares and the exercise price
and unit price, and to modify or amend each Award, with the consent of the Participant when required;
(ii) to determine the
Participants, to whom Awards, if any, will be granted hereunder, the timing, vesting and exercisability of such Awards, and the number of Shares to be represented by each Award;
(iii) to construe and interpret the Plan and the Awards granted hereunder;
(iv) to prescribe, amend, and rescind rules and regulations relating to the Plan, including the form of Award Agreement, and manner of
acceptance of an Award, such as correcting a defect or supplying any omission, or reconciling any inconsistency so that the Plan or any Award Agreement complies with applicable law, regulations and listing requirements and to avoid unanticipated
consequences deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement;
establish performance criteria for Awards made pursuant to the Plan in accordance with a methodology established by the Committee, and to determine whether performance goals have been attained;
(vi) to accelerate or defer (with the consent of the Participant) the exercise or vested date of any Award;
(vii) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously
granted by the Committee;
(viii) to establish sub-plans, procedures or guidelines for the grant of Awards to Employees,
Executive Officers, Officers, Directors, Non-Employee Directors and Consultants; and
(ix) to make all other determinations
deemed necessary or advisable for the administration of the Plan;
Provided that, no consent of a Participant is necessary under clauses
(i) or (vi) if a modification, amendment, acceleration, or deferral, in the reasonable judgment of the Committee confers a benefit on the Participant or is made pursuant to an adjustment in accordance with Section 5.
(c) EFFECT OF COMMITTEES DECISION. All decisions, determinations, and interpretations of the Committee shall be final and binding
on all Participants, the Company (including its Subsidiaries), any shareholder and all other persons.
Consistent with the Committees charter, as such charter may be amended from time to time, the Committee may delegate (i) to one or more separate committees consisting of members of the Committee or other Directors who are Independent
Directors (any such committee a Subcommittee), or (ii) to an Executive Officer of the Company, the ability to grant Awards and take the other actions described in Section 3(b) with respect to Participants who are not Executive
Officers, and such actions shall be treated for all purposes as if taken by the Committee; provided that the grant of Awards shall be made in accordance with parameters established by the Committee. Any action by any such Subcommittee or Executive
Officer within the scope of such delegation shall be deemed for all purposes to have been taken by the Committee.
(e) ADMINISTRATION. The Committee may delegate the administration of the Plan to an Officer
or Officers of the Company, and such administrator(s) may have the authority to directly, or under their supervision, execute and distribute agreements or other documents evidencing or relating to Awards granted by the Committee under this Plan, to
maintain records relating to the grant, vesting, exercise, forfeiture or expiration of Awards, to process or oversee the issuance of Shares upon the exercise, vesting and/or settlement of an Award, to interpret the terms of Awards and to take such
other actions as the Committee may specify. Any action by any such administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and references in this Plan to the Committee shall include any
such administrator, provided that the actions and interpretations of any such administrator shall be subject to review and approval, disapproval or modification by the Committee.
(f) INDEMNIFICATION. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and
to the extent allowed by applicable law, any person(s) acting as administrator(s) and each of the administrators consultants shall be indemnified by the Company against the reasonable expenses, including attorneys fees, actually incurred
in connection with any action, suit or proceeding or in connection with any appeal therein, to which the administrator(s) or any of such administrators consultants may be party by reason of any action taken or failure to act under or in
connection with the Plan or any Award granted under the Plan, and against all amounts paid by the administrator(s) or any of such administrators consultants in settlement thereof (provided that the settlement has been approved by the Company,
which approval shall not be unreasonably withheld) or paid by the administrator(s) or any of such administrators consultants in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it
shall be adjudged in such action, suit or proceeding that such administrator(s) or any of such administrators consultants did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the
Company, and in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful; provided, however, that within sixty (60) days after institution of any such action, suit or proceeding, such
administrator(s) or any of such administrators consultants shall, in writing, offer the Company the opportunity at its own expense to handle and defend such action, suit or proceeding.
SECTION 4. SHARES SUBJECT TO THE PLAN.
(a) RESERVATION OF SHARES. The
shares of Common Stock reserved under this Plan will include reserved shares of Common Stock as to which an option award granted has been forfeited or terminated without exercise under the Former Plan plus an additional Four Million Seven Hundred
Thousand (4,700,000) shares of Common Stock (adjusted, proportionately, in the event of any stock split or stock dividend with respect to the Shares), all of which may be granted as Incentive Stock Options under the Plan. The aggregate number
of Shares available for issuance under the Plan will be reduced by one Share for each Share delivered in settlement of an Option and by one and one-half (1.5) Shares for each Share delivered in settlement of any Award of Restricted Stock,
Restricted Stock Units, SARs, or Performance Shares or Performance Units unless
a greater reduction is specified by the Committee with respect to a specific Award grant. If an Award expires, is forfeited or becomes unexercisable for any reason without having been exercised
in full, the undelivered Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future Awards under the Plan. Shares available for issuance under the Plan shall be increased by any shares of Common
Stock subject to outstanding awards under the Former Plan on the Effective Date that later cease to be subject to such awards for any reason other than such awards having been exercised, subject to adjustment from time to time as provided in
Section 5, which shares of Common Stock shall, as of the date such shares cease to be subject to such awards, cease to be available for grant and issuance under the Former Plan, but shall be available for issuance under the Plan. The Shares may
be authorized but unissued, or reacquired shares of Common Stock. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
(b) TIME OF GRANTING AWARDS. The date of grant of an Award shall, for all purposes, be the date on which the Company
completes the corporate action relating to the grant of such Award and all conditions to the grant have been satisfied, provided that conditions to the exercise of an Award shall not defer the date of grant. Notice of a grant shall be given to each
Participant to whom an Award is so granted within a reasonable time after the determination has been made.
(c) SECURITIES LAW
COMPLIANCE. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated under either such Act, and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted, and
shall be further subject to the approval of counsel for the Company with respect to such compliance.
(d) SUBSTITUTIONS AND
ASSUMPTIONS. The Board or the Committee shall have the right to substitute or assume Awards in connection with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the Code applies, provided such substitutions
and assumptions are permitted by Section 424 of the Code and the regulations promulgated thereunder. The number of Shares reserved pursuant to Section 4(a) may be increased by the corresponding number of Awards assumed and, in the case of
a substitution, by the net increase in the number of Shares subject to Awards before and after the substitution.
SECTION 5. ADJUSTMENTS TO
SHARES SUBJECT TO THE PLAN. If any change is made to the Shares by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Shares as a class without the
Companys receipt of consideration, appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities and/or the price per Share covered by
outstanding Awards under the Plan and (iii) the Maximum Annual Participant
Award. The Committee may also make adjustments described in (i)-(iii) of the previous sentence in the event of any distribution of assets to shareholders other than a normal cash dividend,
if any. In determining adjustments to be made under this Section 5, the Committee may take into account such factors as it deems appropriate, including the restrictions of applicable law and the potential tax consequences of an adjustment, and
in light of such factors may make adjustments that are not uniform or proportionate among outstanding Awards. Adjustments, if any, and any determinations or interpretations, including any determination of whether a distribution is other than a
normal cash dividend, made by the Committee shall be final, binding and conclusive. For purposes of this Section 5, conversion of any convertible securities of the Company shall not be deemed to have been effected without receipt of
Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into
shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award.
TERMS APPLICABLE TO ALL AWARDS
SECTION 6. GENERAL ELIGIBILITY.
(a) AWARDS. Awards may be granted to Participants who are Employees, Directors or Consultants; provided however that Incentive Stock Options may only be granted to Employees.
(b) MAXIMUM ANNUAL PARTICIPANT AWARD. The aggregate number of Shares with respect to which an Award or Awards may be granted to any one
Participant in any one taxable year of the Company (the Maximum Annual Participant Award) shall not exceed 500,000 shares of Common Stock (increased, proportionately, in the event of any stock split or stock dividend with respect to the
(c) NO EMPLOYMENT/SERVICE RIGHTS. Nothing in the Plan shall confer upon any Participant the right to an Award or to
continue in service as an Employee or Consultant for any period of specific duration, or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing or retaining such person), or of any Participant, which
rights are hereby expressly reserved by each, to terminate such persons services at any time for any reason, with or without cause. ).
(d) AWARDS TO NON-EMPLOYEE DIRECTORS; CONTINUATION OF AUTOMATIC GRANTS. The aggregate number of Shares with respect to which Awards may be granted to Non-Employee Directors under the Plan shall be
1,500,000 shares of Common Stock (increased proportionately in the event of any stock split or stock dividend with respect to the Shares). Unless and until amended or terminated by the Board, the Committee or the Governance and Nomination Committee
thereof, (i) upon initially joining the Board, each Non-Employee Director shall receive an Option to
acquire an aggregate of 25,000 shares of Common Stock (adjusted proportionately in the event of any stock split or stock dividend on the Common Stock) at an exercise price equal to Fair Market
Value on the date of grant (the Initial Director Grant), and (ii) on January 15 of each year, each Non-Employee Director the serving on the Board shall receive an annual grant of Stock Options valued at $40,000 (using such
valuation methodology as the Board or the Committee shall determine) (the Annual Director Grant). Unless and until otherwise determined by the Board, the Committee or the Governance and Nomination Committee thereof, and subject to the
accelerated vesting provisions in Section 10(d) (i) the Initial Director Grant shall vest one-half per year on each of the first and second year anniversary of the grant date, and (ii) the Annual Director Grant shall vest one-third
per year on each of the first three yearly anniversaries following the grant date. Unless otherwise determined by the Board or the Committee, all Non-Employee Directors shall be eligible to receive the automatic Award grants contemplated by this
Section 6(d). The Board, the Committee or the Governance and Nomination Committee reserves the right to periodically evaluate and change the amount or type of automatic Award grants made to Non-Employee Directors pursuant to this
(e) COMPLIANCE WITH SECTION 409A. It is the intention of this Plan that any Awards granted hereunder shall
satisfy the additional conditions applicable to nonqualified deferred compensation under Section 409A of the Code. No Award shall provide for deferral of compensation that does not comply with Section 409A of the Code, unless the Board or
Committee, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. In the event that an Award is determined to constitute nonqualified deferred compensation that would be
subject to the additional tax under Section 409A(a)(1)(B) of the Code (or any successor provisions), the Committee shall have the authority to impose such additional conditions as it deems necessary to avoid the imposition of the additional
tax. Notwithstanding anything to the contrary set forth in this Plan, the Company shall have no liability to any Participant or any other person (i) if an Award does not satisfy the additional conditions applicable to nonqualified deferred
compensation under Section 409A of the Code or (ii) for any other unexpected tax consequence affecting any Participant or other person due to the receipt or settlement of any Award granted hereunder.
SECTION 7. PROCEDURE FOR EXERCISE OF AWARDS; RIGHTS AS A SHAREHOLDER.
(a) PROCEDURE. An Award shall be exercised when written, electronic or verbal notice of exercise has been given to the Company, or the brokerage firm or firms approved by the Company to facilitate
exercises and sales under this Plan, in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been received by the Company or the
brokerage firm or firms, as applicable. The notification to the brokerage firm shall be made in accordance with procedures of such brokerage firm approved by the Company. Full payment may, as authorized by the Committee, consist of any consideration
and method of payment allowable under Section 7(b) of the Plan. The Company shall issue (or cause to be issued) such share certificate promptly upon
exercise of the Award. In the event that the exercise of an Award is treated in part as the exercise of an Incentive Stock Option and in part as the exercise of a Nonqualified Stock Option
pursuant to Section 10(a), the Company shall issue a share certificate evidencing the Shares treated as acquired upon the exercise of an Incentive Stock Option and a separate share certificate evidencing the Shares treated as acquired upon the
exercise of a Nonqualified Stock Option, and shall identify each such certificate accordingly in its share transfer records. No adjustment will be made for a dividend or other right for which the record date is prior to the date the share
certificate is issued, except as provided in Section 5 of the Plan.
(b) METHOD OF PAYMENT. The consideration to be paid
for any Shares to be issued upon exercise or other required settlement of an Award, including the method of payment, shall be determined by the Committee at the time of settlement and which forms may include: (i) with respect to an Option and
subject to any restrictions or limitations imposed under applicable law, a request that the Company or the designated brokerage firm conduct a cashless exercise of the Option; (ii) cash; and (iii) tender of shares of Common Stock owned by
the Participant in accordance with rules established by the Committee from time to time. Shares used to pay the exercise price shall be valued at their Fair Market Value on the exercise date. Payment of the aggregate exercise price by means of
tendering previously-owned shares of Common Stock shall not be permitted when the same may, in the reasonable opinion of the Company, cause the Company to record a loss or expense as a result thereof.
(c) WITHHOLDING OBLIGATIONS. To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a
Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any Incentive Stock Option, Nonqualified Stock Option, SAR, Restricted Stock or Restricted Stock
Units, Performance Shares, Performance Units or any sale of Shares. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied. These obligations may be satisfied by having
the Company withhold a portion of the Shares that otherwise would be issued to a Participant under such Award or by tendering Shares previously acquired by the Participant in accordance with rules established by the Committee from time to time.
(d) SHAREHOLDER RIGHTS. Except as otherwise provided in this Plan, until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the share certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares
subject to the Award, notwithstanding the exercise of the Award.
(e) NON-TRANSFERABILITY OF AWARDS. An Award may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in exchange for consideration, except that an Award may be transferred by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only
by the Participant; unless the Committee permits further transferability, on a general or specific basis, in which case the Committee may impose conditions and limitations on any permitted transferability.
SECTION 8. EXPIRATION OF AWARDS.
(a) EXPIRATION, TERMINATION OR FORFEITURE OF AWARDS. Unless otherwise provided in the applicable Award Agreement or any severance
agreement, vested Awards granted under this Plan shall expire, terminate, or otherwise be forfeited as follows:
(3) months after the effective date of termination of Active Status for a Participant other than a Non-Employee Director, other than in circumstances covered by (ii), (iii), or (iv) below; or six (6) months after the date a
Non-Employee Director ceases to be a Director or Consultant other than in circumstances covered by (ii) and (iv) below:
(ii) immediately upon termination of a Participants Active Status for Misconduct;
(iii) twelve (12) months after the date on which a Participant other than a Non-Employee Director ceased performing services as a result of his or her total and permanent Disability; and
(iv) twelve (12) months after the date of the death of a Participant whose Active Status terminated as a result of his or her death.
(b) EXTENSION OF TERM. Notwithstanding subsection (a) above, the Committee shall have the authority to extend the
expiration date of any outstanding Option, other than an Incentive Stock Option, or SAR in circumstances in which it deems such action to be appropriate (provided that no such extension shall extend the term of an Option or SAR beyond the date on
which the Option or SAR would have expired if no termination of the Employees Active Status had occurred).
SECTION 9. EFFECT OF
CHANGE OF CONTROL. Notwithstanding any other provision in the Plan to the contrary, the following provisions shall apply unless otherwise provided in the most recently executed agreement between the Participant and the Company, or specifically
prohibited under applicable laws, or by the rules and regulations of any applicable governmental agencies or national securities exchanges or quotation systems.
(a) ACCELERATION. Awards of a Participant shall be Accelerated (as defined in Section 9(b) below) as follows:
(i) With respect to Non-Employee Directors, upon the occurrence of a Change of Control described in Section 2(f);
(ii) With respect to any Employee, upon the occurrence of a Change of Control described in Section 2(f)(i);
(iii) With respect to any Employee who Resigns for Good Reason or whose Active Status is
terminated for reasons other than Misconduct, so long as such resignation or termination occurs within one year after a Change of Control described in Section 2(f)(ii), (iii) or (iv); and
(iv) With respect to any Employee, upon the occurrence of a Change of Control described in Section 2(f)(iv) in connection with which
each Award is not assumed or an equivalent award substituted by such successor entity or a parent or subsidiary of such successor entity.
(b) DEFINITION. For purposes of this Section 9, Awards of a Participant being Accelerated means, with respect to such Participant:
(i) any and all Options and SARs shall become fully vested and immediately exercisable, and shall remain exercisable for the greater of
(1) the time period specified in the original Award (but subject to termination upon termination of Active Status in accordance with the terms of the original Award) or, (2) one year following the date of such acceleration;
(ii) any restriction periods and restrictions imposed on Restricted Stock or Restricted Stock Units that are not performance-based shall
(iii) any restriction periods and restrictions imposed on Restricted Stock, Restricted Stock Units, and Performance
Compensation Awards that are performance-based shall lapse, unless such performance-based Awards remain outstanding after the Change of Control (or are assumed by any successor entity) and the applicable Performance Criteria can be accurately
tracked following the Change of Control; and
(iv) the restrictions and deferral limitations and other conditions applicable
to any other Awards shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.
SPECIFIC TERMS APPLICABLE TO OPTIONS, STOCK AWARDS AND SARS
SECTION 10. GRANT, TERMS AND CONDITIONS OF OPTIONS.
(a) DESIGNATION. Each
Option shall be designated in an Award Agreement as either an Incentive Stock Option or a Nonqualified Stock Option. However, notwithstanding such designations, to the extent that the aggregate Fair Market Value of the Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company) exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. Options
shall be taken into account in the order in which they were granted.
(b) TERMS OF OPTIONS. The term of each Option shall be no more than ten (10) years from
the date of grant. However, in the case of an Incentive Stock Option granted to a Participant who, at the time the Option is granted, owns Shares representing more than ten percent (10%) of the voting power of all classes of shares of the
Company or any Parent or Subsidiary, the term of the Option shall be no more than five (5) years from the date of grant.
(c) OPTION EXERCISE PRICES.
(i) The per Share exercise price under an Incentive Stock Option shall be as follows:
(A) If granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.
(B) If granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.
(ii) The per Share exercise price under a Nonqualified Stock Option or SAR shall be no less than one hundred percent (100%) of the
Fair Market Value per Share on the date of grant.
(iii) In no event shall the Board or the Committee be permitted to Reprice
an Option after the date of grant without shareholder approval.
(d) VESTING. Unless otherwise provided in the applicable
Award Agreement, to the extent Options vest and become exercisable in increments, such Options shall cease vesting as of the date of the Optionees Disability or termination of such Optionees Active Status for reasons other than
Retirement or death of a Non-Employee Director, in which cases such Options shall immediately vest in full.
(e) EXERCISE. Any
Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Committee at the time of grant, and as are permissible under the terms of the Plan. An Option may not be exercised for a fraction of a Share.
SECTION 11. GRANT, TERMS AND CONDITIONS OF STOCK AWARDS.
(a) DESIGNATION. Restricted Stock or Restricted Stock Units may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan. Restricted Stock or Restricted Stock Units
may include a dividend equivalent right, as permitted by Section 5. After the Committee determines that it will offer Restricted
Stock or Restricted Stock Units, it will advise the Participant in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions, including vesting, if any,
related to the offer, including the number of Shares that the Participant shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the Participant must accept the offer. The offer shall be
accepted by execution of an Award Agreement or as otherwise directed by the Committee. Restricted Stock Units may be paid as permitted by Section 7(b). The term of each award of Restricted Stock or Restricted Stock Units shall be at the
discretion of the Committee.
(b) PERFORMANCE BASED STOCK AWARDS. The Committee may elect to grant Restricted Stock and/or
Restricted Stock Units that are intended to qualify as performance based compensation under Section 162(m) of the Code. Any such performance based Restricted Stock and Restricted Stock Units shall be subject to the attainment of
Performance Goals relating to Performance Criteria selected by the Committee and specified at the time such Restricted Stock and/or Restricted Stock Units are granted.
(c) VESTING. Subject to the provisions of Section 9 of this Plan, unless the Board or Committee determines otherwise, the Award Agreement shall provide for the forfeiture of the non-vested
Shares underlying Restricted Stock or Restricted Stock Units upon the termination of a Participants Active Status for reasons other than Retirement or death of a Non-Employee Director, in which case such Awards shall immediately vest in full;
provided, however, that in no case shall any Award Agreement provide for the vesting of performance-based Restricted Stock or performance-based Restricted Stock Units prior to the expiration of one year following the applicable grant date.
The Committee shall be bound to administer Awards of Restricted Stock or Restricted Stock Units that are not performance-based with a minimum vesting period of at least three years.
SECTION 12. GRANT, TERMS AND CONDITIONS OF SARS.
(a) GRANTS. The Committee
shall have the full power and authority, exercisable in its sole discretion, to grant SARs to selected Participants. The terms of SARs shall be at the discretion of the Committee. In no event shall the Board or the Committee be permitted to Reprice
a SAR after the date of grant without shareholder approval.
(b) STAND-ALONE SARS.
(i) A Participant may be granted stand-alone stock appreciation rights (Stand-Alone SARs) that are not tied to any underlying
Option under Section 10 of the Plan. The Stand-Alone SAR shall cover a specified number of Shares and shall be exercisable upon such terms and conditions as the Committee shall establish. Upon exercise of the Stand-Alone SAR, the holder shall
be entitled to receive a distribution from the Company in an amount equal to the excess of (A) the aggregate Fair Market Value (on the exercise date) of the Shares underlying the exercised right over (B) the aggregate base price in effect
for those Shares.
(ii) The number of Shares underlying each Stand-Alone SAR and the base price in effect for
those Shares shall be determined by the Committee at the time the Stand-Alone SAR is granted. In no event, however, may the base price per Share be less than the Fair Market Value per underlying Share on the grant date.
(iii) The distribution with respect to an exercised Stand-Alone SAR may be made in Shares valued at Fair Market Value on the exercise
date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate.
(c) EXERCISED SARS. The
Shares issued in settlement of any SARs exercised under this Section 12 shall not be available for subsequent issuance under the Plan. In accordance with Section 4, Shares underlying any exercised SARs that were not issued in settlement of
the SAR shall become available for future issuance under the Plan.
||GRANT, TERMS AND CONDITIONS OF PERFORMANCE COMPENSATION AWARDS. |
(a) GRANTS. The Committee shall have the full power and authority, exercisable in its sole discretion, to grant Performance Compensation Awards in the form of Performance Units or Performance Shares to
Employees (including Officers) and shall evidence such grant in an Award Agreement that is delivered to the Participant setting forth the terms and conditions of the Award. The Committee may, at the time of grant of a Performance Compensation Award,
designate such Award as a Performance Compensation Award in order that such Award constitutes qualified performance-based compensation under Code Section 162(m), in which event the Committee shall have the power to grant such
Performance Compensation Award upon terms and conditions that qualify it as qualified performance-based compensation within the meaning of Code Section 162(m).
(b) ELIGIBILITY. The Committee shall, in its sole discretion, designate within the first 90 days of a Performance Period (or, if shorter,
within the maximum period allowed under Section 162(m) of the Code) which Participants will be eligible to receive Performance Compensation Awards in respect of such Performance Period. However, designation of a Participant eligible to receive
an Award hereunder for a Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation Award for such Performance Period. The determination as to whether or not such Participant
becomes entitled to payment in respect of any Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 13. Moreover, designation of a Participant eligible to receive a Performance Compensation
Award hereunder for a particular Performance Period shall not require designation of such Participant eligible to receive a Performance Compensation Award hereunder in any subsequent Performance Period and designation of one person as a Participant
eligible to receive a Performance Compensation Award hereunder shall not require designation of any other person as a Participant eligible to receive a Performance Compensation Award hereunder in such period or in any other period.
(c) DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE COMPENSATION AWARDS. With regard to
a particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period, the type(s) of Performance Compensation Awards to be issued, the Performance Criteria that will be used to establish the
Performance Goal(s), the kind(s) and/or level(s) of the Performance Goals(s) that is (are) to apply, or any combination of the foregoing, and the Performance Formula. Within the first 90 days of a Performance Period (or, if 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.
(d) MODIFICATION OF PERFORMANCE GOALS. The Committee is
authorized at any time during the first ninety (90) days of a Performance Period (or, if shorter, within the maximum period allowed under Section 162(m) of the Code), or any time thereafter (but only to the extent the exercise of such
authority after such 90-day period (or such shorter period, if applicable) would not cause the Performance Compensation Awards granted to any participant for the Performance Period to fail to qualify as qualified performance-based
compensation under Section 162(m) of the Code), in its sole discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to the extent permitted under Section 162(m) of the Code (i) in the
event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development affecting the Company (to the extent applicable to such Performance Goal) or (ii) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company (to the extent applicable to such Performance Goal), or the financial statements of the Company (to the extent applicable to such Performance Goal), or of changes in applicable rules,
rulings, regulations or other requirements of any governmental body or securities exchange, accounting principles, law or business conditions.
(e) PAYMENT OF PERFORMANCE COMPENSATION AWARDS.
(i) A Participant must be
employed by the Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period. Notwithstanding the foregoing, in the discretion of the Committee, Performance
Compensation Awards may be paid to a Participant whose Active Status as an employee has terminated after the beginning of the Performance Period for which a Performance Compensation Award is made, or to the designee or estate of a Participant who
died prior to the last day of a Performance Period.
(ii) A Participant shall be eligible to receive payments in respect of a
Performance Compensation Award only to the extent that (1) the Performance Goal(s) for such period are achieved and certified by the Committee in accordance with Section 13(e)(iii) and (2) the Performance Formula as applied against
such Performance Goal(s) determines that all or some portion of such Participants Performance Compensation Award has been earned for the Performance Period.
(iii) Following the completion of a Performance Period, the Committee shall meet to review
and certify in writing whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, to calculate and certify in writing that amount of the Performance Compensation Awards earned for the period based
upon the Performance Formula. The Committee shall then determine the actual size of each Participants Performance Compensation Award for the Performance Period.
(iv) [Intentionally omitted]
(v) The Performance Compensation Awards granted for
a Performance Period shall be paid to Participants as soon as administratively possible following completion of the certifications required by Section 13(e)(iii), unless the Committee shall determine that any Performance Compensation Award
shall be deferred.
(vi) In no event shall any discretionary authority granted to the Committee by the Plan be used to
(1) grant or provide payment in respect of Performance Compensation Awards for a Performance Period if the Performance Goals for such Performance Period have not been attained, or (2) increase a Performance Compensation Award for any
Participant at any time after the first 90 days of the Performance Period (or, if shorter, the maximum period allowed under Section 162(m)).
TERM OF PLAN AND SHAREHOLDER APPROVAL
SECTION 14. TERM OF PLAN. The Plan shall become effective as of the Effective Date. The Plan shall continue in effect until the (i) 10th
yearly anniversary of the Effective Date; provided, however, that upon approval of the plan amendments proposed at the 2010 Annual Meeting of Shareholders, the Plan shall continue in effect until midnight on June 7, 2020, or (ii) until
terminated under Section 15 of the Plan or extended by an amendment approved by the shareholders of the Company pursuant to Section 15(a).
SECTION 15. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board or the Committee may amend or terminate the Plan from time to time in such respects as the Board
may deem advisable (including, but not limited to amendments which the Board deems appropriate to enhance the Companys ability to claim deductions related to stock option exercises); provided that to the extent required by the Code or the
rules of Nasdaq or the SEC, shareholder approval shall be required for any amendment of the Plan. Subject to the foregoing, it is specifically intended that the Board or Committee may amend the Plan without shareholder approval to comply with legal,
regulatory and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purpose of the Plan or any Award Agreement.
(b) PARTICIPANTS IN FOREIGN COUNTRIES. The Committee shall have the authority to adopt such modifications, procedures, and sub-plans as may be necessary or desirable to comply with provisions of the laws
of foreign countries in which the Company or its Subsidiaries may operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any amendment or termination of the Plan shall not affect Awards already granted and such Awards
shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.
SECTION 16. SHAREHOLDER APPROVAL. The effectiveness of the Plan, or any amendment thereof requiring approval of the
shareholders of the Company, is subject to approval by the shareholders of the Company in accordance with applicable Nasdaq rules.