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| 8-K - FORM 8-K - JONES GROUP INC | jun14_8k.htm |
THE JONES GROUP INC.
2009 LONG TERM INCENTIVE PLAN
2009 LONG TERM INCENTIVE PLAN
(Amended as of June 14, 2013)
1.
Purpose. The Jones Group Inc. (the "Company") desires to attract and
retain the best available talent and to encourage the highest level of
performance. The 2009 Long Term Incentive Plan (the "Plan" or the "2009
Plan") is intended to contribute significantly to the attainment of
these objectives by (i) providing long-term incentives and rewards to
all key employees of the Company (including officers and directors who
are key employees of the Company and also including key employees of any
subsidiary of the Company which may include officers or directors of any
subsidiary of the Company who are also key employees of said
subsidiary), and those directors and officers, consultants, advisers,
agents or independent representatives of the Company or of any
subsidiary (together, "Eligible Individuals"), who are contributing or
in a position to contribute to the long-term success and growth of the
Company or of any subsidiary, (ii) assisting the Company and any
subsidiary in attracting and retaining Eligible Individuals with
experience and ability, and (iii) associating more closely the interests
of such Eligible Individuals with those of the Company's stockholders.
2.
Types of Awards; Maximum Number of Shares that may be Issued.
(a)
Under
the Plan, stock options ("Options"), shares of restricted stock
("Restricted Stock"), restricted stock units ("Restricted Stock Units")
and Performance Cash Awards, either alone or in combination, may be
granted to Eligible Individuals. The grant of an Option, Restricted
Stock, Restricted Stock Unit or Performance Cash Award is sometimes
referred to herein as an "Award." Options are rights to acquire shares
of common stock, par value $.01 per share, of the Company ("Common
Stock") upon payment of the exercise price. Options granted to employees
(including officers and directors who are employees) of the Company or a
subsidiary corporation thereof, may, at the time of grant, be designated
by the Company's Board of Directors either as incentive stock options ("ISOs"),
with the attendant tax benefits as provided for under Sections 421 and
422 of the Internal Revenue Code of 1986, as amended (the "Code"), or as
nonqualified stock options. Restricted Stock is an award of shares of
Common Stock that may be subject to certain restrictions or a risk of
forfeiture, pursuant to Section 6. Restricted Stock Units are awards
denominated in shares of Common Stock that represent the right to
receive payment for the value of such shares subject to satisfaction of
vesting conditions, pursuant to Section 7. Performance Cash Awards are
Awards that provide the grantee with the opportunity to earn a cash
payment based on the achievement of Performance Goals, pursuant to
Section 12.
(b)
Subject to adjustment under Section 11, the maximum number of shares of
Common Stock available for issuance under Awards to be granted under the
Plan shall be equal to the sum of: (i) 5,100,000 shares plus (ii) except
as provided below, the number of shares subject to Awards outstanding
under the Company's 1999 Stock Incentive Plan, as amended (the "1999
Plan"), and the Company's 1996 Stock Option Plan (the "1996 Plan") that
are forfeited, terminated or cancelled or are subject to Options that
expire at the conclusion of their respective terms unexercised, in each
case, after May 19, 2009. Shares of Common Stock subject to Awards
issued under the 2009 Plan that are forfeited, terminated or cancelled
or are subject to Options that expire at the conclusion of their
respective terms unexercised shall become available for other Awards
under the Plan. Shares of Common Stock that are subject to Awards under
the 1996 Plan, the 1999 Plan or the 2009 Plan shall not (or shall no
longer) be available for Awards under the 2009 Plan if they were: (i)
subject to Awards denominated in shares of Common Stock that were
settled in cash or consideration other than shares of Common Stock; (ii)
surrendered or withheld as payment of the exercise price of an Award; or
(iii) surrendered or withheld to satisfy applicable tax withholding
obligations. Subject to the foregoing limitations of this Section 2(b),
shares of Common Stock issued pursuant to the Plan may be authorized but
unissued shares of Common Stock, treasury shares, or
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shares of Common Stock which shall have been or which may be reacquired
by the Company, or any combination thereof, as the Board of Directors of
the Company shall from time to time determine. Restricted Stock and
Restricted Stock Units issued pursuant to the Plan, even while subject
to restrictions, will be counted against the maximum number of shares
issuable hereunder.
3.
Administration.
(a)
This
Plan will be administered by the Board of Directors of the Company (the
"Board of Directors"). The Board of Directors, in its discretion, may
designate a Compensation Committee (the "Compensation Committee" or
"Committee") composed of at least two members of the Board of Directors
to administer this Plan. Members of the Compensation Committee shall
meet such qualifications as the Board of Directors may determine;
provided, however, that each member shall qualify as a
"Non-Employee Director" under Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and as an "Outside Director" as
defined in Code Section 162(m) and any regulations promulgated
thereunder. The Board, in its discretion, may also designate a CEO
Committee (the "CEO Committee"), composed of the director of the Company
who is serving as the Company's chief executive officer.
(b)
The
Board of Directors or the Committee (hereinafter, the terms
"Compensation Committee" or "Committee", shall mean the Board of
Directors whenever no such Compensation Committee has been designated),
shall have authority in its discretion, subject to and not inconsistent
with the express provisions of this Plan, to: direct the grant of
Awards; determine the purchase price of the Common Stock covered by each
stock-based Award; determine the Eligible Individuals to whom, and the
time or times at which, Awards shall be granted and subject to the
maximums set forth in Section 4, the number of shares of Common Stock to
be covered by each stock-based Award; designate Options as ISOs;
interpret the Plan; determine the time or times at which Options may be
exercised; determine the terms and conditions of the restrictions,
including performance conditions and Performance Goals, if any, relating
to any Award (which restrictions may vary among Awards as the Committee
shall deem appropriate); make adjustments in the terms and conditions
of, and the Performance Goals (as defined herein) (if any) included in,
Awards; determine whether, to what extent, and under what circumstances
an Award may be settled, cancelled, forfeited, exchanged, or
surrendered; prescribe, amend and rescind rules and regulations relating
to the Plan, including, without limitation, such rules and regulations
as it shall deem advisable, so that transactions involving Awards may
qualify for exemption under such rules and regulations as the Securities
and Exchange Commission may promulgate from time to time exempting
transactions from Section 16(b) of the Exchange Act; determine the terms
and provisions of and cause the Company to enter into written agreements
with Eligible Individuals in connection with Awards granted under the
Plan ("Agreements"), which Agreements may vary from one another as the
Committee shall deem appropriate; and make all other determinations it
may deem necessary or advisable for the administration of the Plan.
Notwithstanding the foregoing, except as provided in Section 11, the
Committee shall not have the authority, without first obtaining the
approval of the Company's stockholders, to: reduce the exercise price of
any outstanding Option; offer to grant any other Award or to pay the
grantee cash in exchange for the cancellation of an outstanding Option
with an exercise price per share in excess of the then fair market value
per share of the Company's Common Stock; offer to grant any new Option
in exchange for the cancellation of an outstanding Option with a higher
exercise price; increase the maximum number of shares of Common Stock
reserved for issuance under the Plan; or alter the classes of persons
constituting Eligible Individuals.
Members of the Committee shall serve at the pleasure of the Board of
Directors. The Committee shall have and may exercise all of the powers
of the Board of Directors under the Plan, other than the power to
appoint a director to Committee membership. A majority of the Committee
shall constitute a quorum, and acts of a majority of the members present
at any meeting at which a quorum is present shall be
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deemed the acts of the Committee. The Committee may also act by
instrument signed by a majority of the members of the Committee.
Every action, decision, interpretation or determination by the Committee
with respect to the application or administration of this Plan shall be
final and binding upon the Company and each person holding any Award
granted under this Plan.
(c)
Subject to the express provisions of this Plan, the Committee shall have
the authority, in its discretion, to delegate to the CEO Committee the
authority to direct the grant of Awards to Eligible Individuals, subject
to guidelines established by the Committee, and, in connection with such
Awards, to determine the purchase price of the Common Stock covered by
such Awards, the number of shares of Common Stock or number of
Restricted Stock Units to be covered by such Awards, to designate any
such Awards of Options as ISOs, to determine the time or times at which
such Options may be exercised, and to determine the terms and conditions
of any restrictions relating to such Awards; provided, however,
that the CEO Committee shall have no authority to (i) grant Awards to
the chief executive officer of the Company or to any other Eligible
Individual who at the time of the Award is, or is reasonably expected to
become, subject to the provisions of Section 16 of the Exchange Act,
pursuant to Rule 16a-2 under the Exchange Act or (ii) grant Awards that
are inconsistent with the express provisions of the Plan.
4.
Eligibility: Factors to be Considered in Granting Awards and Designating
ISOs.
(a)
Awards
may be granted only to (i) key employees (including officers and
directors who are employees) of the Company or any subsidiary
corporation thereof on the date of grant (Options so granted may be
designated as ISOs), and (ii) directors or officers of the Company or a
subsidiary corporation thereof on the date of grant, without regard to
whether they are employees, and (iii) consultants or advisers to or
agents or independent representatives of the Company or a subsidiary
thereof. In determining the persons to whom Awards shall be granted and
the number of shares of Common Stock to be covered by each Award, the
Committee, or, if applicable, the CEO Committee, shall take into account
the nature of the duties of the respective persons, their present and
potential contributions to the Company's (including subsidiaries')
successful operation and such other factors as the Board of Directors in
its discretion shall deem relevant. Subject to the provisions of Section
2 and subsection 4(c) below, an Eligible Individual may receive Awards
on more than one occasion under the Plan.
(b)
The
maximum number of shares that may be granted to Eligible Individuals as
ISOs under the Plan shall be 462,500 shares.
(c)
In no
event shall any Eligible Individual be granted Options to purchase more
than 500,000 shares of Common Stock or more than 500,000 shares of
Restricted Stock or more than 500,000 Restricted Stock Units as
Performance-Based Awards (as defined in Section 12) during any 12-month
period.
5.
Awards of Options.
(a)
Purchase Price of Options.
| (i) | The purchase price per share of the Common Stock covered by each Option shall be established by the Committee, or, if applicable, the CEO Committee, but in no event shall it be less than the fair market value of a share of the Common Stock on the date the Option is granted. If, at the time an Option is granted, the Common Stock is publicly traded, such fair market value shall be the closing price of a share of Common Stock on such date as reported in The Wall Street Journal (or a publication or reporting service deemed equivalent to The Wall Street Journal for such purpose by the Board of Directors) for any national securities |
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|
exchange or other securities market which at the time is
included in the stock price quotations of such publication. In
the event that the Committee shall determine such stock price
quotation is not representative of fair market value by reason
of the lack of a significant number of recent transactions or
otherwise, the Committee may determine fair market value in such
a manner as it shall deem appropriate under the circumstances.
If, at the time an Option is granted, the Common Stock is not
publicly traded, the Committee shall make a good faith attempt
to determine such fair market value. |
| (ii) | In the case of an employee who at the time an ISO is granted owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or of its parent, if any, or subsidiary corporation thereof (a "10% Holder"), the purchase price of the Common Stock covered by any ISO shall in no event be less than 110% of the fair market value of the Common Stock at the time the ISO is granted. |
(b)
Term of Options. The term of each Option shall be fixed by the
Committee, or, if applicable, the CEO Committee, but in no event shall
it be exercisable more than seven years from the date of grant, subject
to earlier termination as provided in Sections 9 and 10. An ISO granted
to a 10% Holder shall not be exercisable more than five years from the
date of grant.
(c)
Exercise of Options.
| (i) |
Subject to the provisions of the Plan, an Option granted to an
employee under the Plan shall become fully exercisable at such
time or times as the Committee or, if applicable, the CEO
Committee, in its sole discretion shall determine at the time of
the granting of the Option or thereafter, except that in no
event shall any such Option be exercisable later than seven
years from the date of grant. In the case of each ISO granted to
an employee, the aggregate fair market value (determined at the
time the ISO is granted) of the Common Stock with respect to
which the ISO is exercisable for the first time by such employee
during any calendar year (under all plans of the Company and any
subsidiary corporation thereof) may not exceed $100,000. The
Committee, or, if applicable, the CEO Committee, may condition
the grant of an Option or the right to exercise the Option upon
the attainment of specified Performance Goals pursuant to
Section 12 or such other factors as the Committee, or, if
applicable, the CEO Committee, may determine, in its sole
discretion. |
| (ii) |
An Option may be exercised as to any or all full shares of
Common Stock as to which the Option is then exercisable. |
| (iii) |
The purchase price of the shares of Common Stock as to which an
Option is exercised shall be paid in full in cash at the time of
exercise; provided, that the purchase price may be paid (i) in
whole or in part, by surrender or delivery to the Company of
previously-owned securities of the Company already beneficially
owned by the grantee for at least six months and having a fair
market value on the date of the exercise equal to the portion of
the purchase price being so paid, or (ii) in cash by a
broker-dealer acceptable to the Company to whom the grantee has
submitted an irrevocable notice of exercise. Fair market value
shall be determined as provided in Section 5 for the
determination of such value on the date of the grant. In
addition, the holder shall, upon notification of the amount due
and prior to or concurrently with delivery to the holder of a
certificate representing such shares of Common Stock, pay
promptly any amount necessary to satisfy applicable Federal,
state or local tax requirements. |
| (iv) | Except as provided in Sections 9 and 10, no Option may be exercised unless the original grantee thereof is then an Eligible Individual. |
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| (v) |
The Option holder shall have the rights of a stockholder with
respect to shares of Common Stock covered by an Option only upon
becoming the holder of record of such shares of Common Stock. |
| (vi) | Notwithstanding any other provision of this Plan, the Company shall not be required to issue or deliver any share of stock upon the exercise of an Option prior to the admission of such share to listing on any stock exchange or automated quotation system on which the Company's Common Stock may then be listed. |
6.
Awards of Restricted Stock. The Committee, or, if applicable, the
CEO Committee, may authorize the issuance or transfer of shares of
Restricted Stock to Eligible Individuals either alone or in addition to
other Awards under the Plan. The terms and conditions of the vesting of
an Award of Restricted Stock shall be set forth in the Agreement with
the recipient thereof, except that total Awards of Restricted Stock and
Awards of Restricted Stock Units that will fully vest in fewer than
three years from the date of grant may not exceed 10% of the total
number of shares of Common Stock reserved for issuance under the Plan.
The Committee, or, if applicable, the CEO Committee, may condition the
grant of Restricted Stock or the lapse of restrictions thereon upon the
attainment of specified performance-based goals pursuant to Section 12
or such other factors as the Committee, or, if applicable, the CEO
Committee, may determine, in its sole discretion. Awards of Restricted
Stock shall also be subject to the following provisions:
(a)
The
Restricted Stock may be issued at a purchase price less than the fair
market value thereof or for no consideration, as determined by the
Committee, or, if applicable, the CEO Committee.
(b)
Restricted Stock may be subject to: (i) restrictions on the sale or
other disposition thereof, (ii) rights of repurchase or first refusal,
(iii) a risk of forfeiture and (iv) such other restrictions, conditions
and terms as the Committee, or, if applicable, the CEO Committee, deems
appropriate.
(c)
Each
Award of Restricted Stock will constitute an immediate transfer of
ownership of such shares, entitling the recipient to dividend, voting
and other ownership rights; provided, however, that
dividends with respect to a Performance-Based Award (as defined in
Section 12) of Restricted Stock shall be accumulated but shall not be
paid out to the holder of such Award unless and until such Award vests
in accordance with Section 12 of the Plan. Subject to the preceding
sentence, a holder of Restricted Stock shall not be required to return
any dividends received thereon to the Company in the event of the
forfeiture of such shares.
(d)
Shares
of restricted stock granted under the Plan may be evidenced in such
manner as the Committee shall determine, including by means of
certificates or through the entry of an uncertificated book position on
the records of the Company's transfer agent. If certificates
representing Restricted Stock are registered in the name of the grantee,
such certificates shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Restricted Stock,
and the Company shall retain physical possession of the certificate
until all restrictions on such shares have lapsed without a prior
forfeiture of the shares.
(e)
The Committee shall have the authority to accelerate the vesting of any
outstanding Award of Restricted Stock at such time and under such
circumstances as it, in its sole discretion, deems appropriate.
7.
Awards of Restricted Stock Units. The Committee, or, if
applicable, the CEO Committee, may authorize the issuance or transfer of
Restricted Stock Units to Eligible Individuals either alone or in
addition to other Awards under the Plan. The terms and conditions of the
vesting of an Award of
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Restricted Stock Units shall be set forth in the Agreement with the
recipient thereof, except that total Awards of Restricted Stock Units
and Awards of Restricted Stock that will fully vest in fewer than three
years from the date of grant may not exceed 10% of the total number of
shares of Common Stock reserved for issuance under the Plan. The
Committee, or, if applicable, the CEO Committee, may condition the grant
of Restricted Stock Units or the vesting thereof upon the attainment of
specified performance-based goals pursuant to Section 12 or such other
factors as the Committee, or, if applicable, the CEO Committee, may
determine, in its sole discretion. Awards of Restricted Stock Units
shall also be subject to the following provisions:
(a)
Unless otherwise specified in the Agreement with the grantee thereof or
in writing by the Committee, upon the vesting of a Restricted Stock
Unit, there shall be delivered to the grantee, within 30 days of the
date on which such Award (or any portion thereof) vests, the number of
shares of Common Stock equal to the number of Restricted Stock Units
becoming so vested. In the event that payment for an Award of Restricted
Stock Units is made in a form other than in shares of Common Stock
pursuant to the applicable Agreement and the terms of this Section 7,
such payment shall be made in cash in an amount equal to the product of
(i) the fair market value of a share of Common Stock with respect to the
relevant vesting date, multiplied by (ii) the number of Restricted Stock
Units vesting on such date.
(b)
Restricted Stock Units may be subject to: (i) restrictions on the sale
or other disposition thereof, (ii) rights of repurchase or first
refusal, (iii) a risk of forfeiture and (iv) such other restrictions,
conditions and terms as the Committee, or, if applicable, the CEO
Committee, deems appropriate.
(c)
Holders of Restricted Stock Units shall have no rights as stockholders
of the Company with respect to such Award.
(d)
Subject to the requirements of Section 409A of the Code, an Award of
Restricted Stock Units may provide the grantee with the right to receive
dividend equivalent payments with respect to the Common Stock subject to
the Award, which payment may be either made currently or credited to an
account for the grantee, and may be settled in cash or Common Stock, as
determined by the Committee. Such right to receive dividend equivalent
payments may apply both before or after the Common Stock subject to the
Award is earned, vested or acquired,
provided,
however, that dividend equivalent payments with respect to a
Performance-Based Award (as defined in Section 12) of Restricted Stock
Units shall be accumulated but shall not be paid out to the holder of
such Award unless and until such Award vests in accordance with Section
12 of the Plan. Subject to the preceding sentence, a holder of
Restricted Stock Units shall not be required to return any dividend
equivalent payments received with respect thereto to the Company in the
event of the forfeiture of such Restricted Stock Units. The settlement
and crediting of dividend equivalents may be subject to such other
conditions, restrictions and contingencies as the Committee shall
establish.
(e)
The Committee shall have the authority to accelerate the vesting of any
outstanding Award of Restricted Stock Units at such time and under such
circumstances as it, in its sole discretion, deems appropriate.
8.
Nontransferability of Awards. No Award granted under the Plan shall
be transferable, other than by will or by the laws of descent and
distribution, except that all or any portion of an Option (other than
Options which are ISOs) may be transferred to or for the benefit of (by
trust) the spouse or lineal descendants of a holder of such Option,
subject to such restrictions on transfer which may be imposed by federal
and state securities laws, and if prior thereto the transferee agrees to
be bound by the terms of the Plan and the Options, as the case may be (a
"Permitted Transferee"). Options which are ISOs may be exercised, during
the lifetime of the holder, only by the holder, or by his guardian or
legal representative.
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9.
Termination of Relationship to the Company.
(a)
Subject to such exceptions as may be determined by the Committee or set
forth in the applicable Agreement:
| (i) |
In the event that any original grantee of an Option shall cease
to be an Eligible Individual of the Company (or any subsidiary
corporation thereof), except as set forth in Section 10, such
Option may (subject to the provisions of the Plan) be exercised
(to the extent that the original grantee was entitled to
exercise such Option at the termination of his employment or
service as a director, officer, consultant, adviser, agent or
independent representative, as the case may be) at any time
within three months after such termination but not more than
seven years (five years in the case of a 10% Holder) after the
date on which such Award was granted or the expiration of the
Award, if earlier. Notwithstanding the foregoing, except as
provided in Section 10, if the position of an original grantee
shall be terminated by the Company or any subsidiary thereof for
cause or if the original grantee terminates his employment or
position voluntarily and without the written consent of the
Company or any subsidiary corporation thereof, as the case may
be, the Options granted to such person, whether held by such
person or by a Permitted Transferee and whether vested or
unvested shall, to the extent not theretofore exercised,
terminate immediately upon such termination. |
| (ii) | In the event any original grantee of Restricted Stock or
Restricted Stock Units shall cease to be an Eligible Individual
of the Company (or any subsidiary corporation thereof), except
as set forth in Section 10, all shares of Restricted Stock and
all Restricted Stock Units awarded to such grantee remaining
subject to applicable restrictions shall be forfeited and be
immediately transferred to, and reacquired by, the Company at no
cost to the Company. |
| (iii) | In the event any original grantee of a Performance Cash Award shall cease to be an Eligible Individual of the Company (or any subsidiary corporation thereof), except as set forth in Section 10, all unvested Performance Cash Awards awarded to such grantee shall be forfeited. |
(b)
Other
than as provided in Section 10(a), Awards granted under the Plan shall
not be affected by any change of duties or position so long as the
holder remains an Eligible Individual.
(c)
Any
Agreement may contain such provisions as the Committee shall approve
with reference to the determination of the date employment terminates or
the date other positions or relationships terminate for purposes of the
Plan and the effect of leaves of absence, which provisions may vary from
one another.
(d)
Nothing in the Plan or in any Award pursuant to the Plan shall confer
upon any Eligible Individual or other person any right to continue in
the employ of the Company or any subsidiary corporation thereof (or the
right to be retained by, or have any continued relationship with, the
Company or any subsidiary corporation thereof), or affect the right of
the Company or any such subsidiary corporation thereof, as the case may
be, to terminate his employment, retention or relationship at any time.
The grant of any Award pursuant to the Plan shall be entirely in the
discretion of the Committee, or, if applicable, the CEO Committee, and
nothing in the Plan shall be construed to confer on any Eligible
Individual any right to receive any Award under the Plan.
10.
Death, Disability or Retirement.
(a)
If a
person to whom an Award has been granted under the Plan shall die (and
the conditions in sub-Section (b) below are met) or become permanently
and totally disabled or enter retirement (as such
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terms are defined below) while serving as an Eligible Individual, then,
except as otherwise provided in an employment agreement between the
Company and the grantee, the following provisions shall apply:
| (i) |
In the case of an Option, the Option shall become immediately
fully exercisable and the period for exercise provided in
Section 9 shall be extended to (A) one year after the date of
death of the original grantee, or (B) in the case of the
permanent and total disability of the original grantee, one year
after the date of permanent and total disability of the original
grantee, or (C) three years in the case of a retirement, but, in
any case, not more than seven years (five years in the case of a
10% Holder) after the date such Award was granted, or the
expiration of the Award, if earlier, as shall be prescribed in
the original grantee's Award Agreement. An Award may be
exercised as set forth herein in the event of the original
grantee's death, by a Permitted Transferee or the person or
persons to whom the holder's rights under the Award pass by will
or applicable law, or if no such person has the right, by his
executors or administrators, or in the event of the original
grantee's permanent and total disability, by the holder or his
guardian. |
| (ii) |
In the case of Restricted Stock or Restricted Stock Units that
are not Performance-Based Awards, the period of restrictions
applicable to all unvested shares of Restricted Stock and all
unvested Restricted Stock Units shall terminate on the date of
termination of service as an Eligible Individual by reason of
retirement, disability or death, and such shares of Restricted
Stock shall become fully vested and transferable, and such
Restricted Stock Units shall be considered to be earned and
payable in full. |
| (iii) | In the case of unvested Performance-Based Awards, the period of restrictions applicable to vesting, settlement or payment shall terminate (A) on the date of termination of service as an Eligible Individual by reason of disability or death or (B) in the case of retirement, only at such time as the Performance Goals are achieved in accordance with Section 12(e). |
(b)
In the
case of death of a person to whom an Award was originally granted, the
provisions of subsection (a) apply if such person dies (i) while in the
employ of the Company or a subsidiary corporation thereof or while
serving as an Eligible Individual of the Company or a subsidiary
corporation thereof or (ii) within three months after the termination of
such position other than termination for cause or voluntarily on the
original grantee's part and without the consent of the Company or a
subsidiary corporation thereof, or (iii) within three years following
his retirement.
(c)
The
term "permanent and total disability" as used above shall have the
meaning set forth in Section 22(e)(3) of the Code.
(d)
The
term "retirement" as used above shall mean voluntary termination of
service with the Company or a subsidiary corporation thereof by the
Eligible Individual, with the approval of the Company, with at least 10
years of service and after attaining age 60, or if the individual has
not attained age 60, and/or has fewer than 10 years of service, the
Company determines that circumstances exist that warrant the granting of
retirement status.
11.
Adjustments upon Changes in Capitalization or Change in Control.
(a)
Notwithstanding any other provision of the Plan, in the event of stock
dividends, stock splits, reverse stock splits, recapitalizations,
mergers, consolidations, combinations or exchanges of shares, spin-offs,
reorganizations, liquidations and similar events affecting the capital
structure of the Company, the Committee shall appropriately adjust the
aggregate number and class of shares of Common Stock as to which Awards
may be granted under the Plan, the various maximum limitations set forth
in the Plan upon certain types of Awards and upon the grants to
individual participants of certain types of Awards,
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the number and class of shares subject to outstanding Awards, and the
exercise price (if any) of outstanding Awards.
(b)
In the
event of the dissolution or liquidation of the Company or the
disposition by the Company of substantially all of the assets or stock
of a subsidiary of which the original grantee is then an employee,
officer or director, consultant, adviser, agent or independent
representative, then, if the Committee shall so determine: (i) with
respect to Options, each Option granted under the Plan, if such event
shall occur with respect to the Company, or each Option granted to an
employee, officer, director, consultant, adviser, agent or independent
representative of a subsidiary respecting which such event shall occur,
shall (A) become immediately fully exercisable and vested or (B)
terminate simultaneously with the happening of such event, and the
Company shall pay the grantee in lieu thereof an amount equal to (x) the
excess (if any) of the fair market value over the exercise price of one
share of Common Stock on the date on which such event occurs, multiplied
by (y) the number of shares of Common Stock subject to the Option,
without regard to whether the Option is then otherwise exercisable; (ii)
with respect to Restricted Stock, any restrictions applicable to the
Restricted Stock granted under the Plan shall lapse and such shares of
Restricted Stock shall become immediately free of all restrictions and
fully vested and transferable; and (iii) with respect to Restricted
Stock Units, any restrictions applicable to Restricted Stock Units
granted under the Plan shall lapse, such Restricted Stock Units shall
become immediately free of all restrictions and considered to be earned
and payable in full, and such Restricted Stock Units shall be settled in
the form specified in the applicable Agreement as promptly as is
practicable.
(c)
Except
as otherwise provided in an employment agreement between the Company and
the grantee and notwithstanding any other provision of the Plan to the
contrary, upon a participant's termination of employment or other
termination of service by the Company, other than (i) for cause or (ii)
for permanent and total disability, during the 24-month period following
a change in control (as hereinafter defined) in connection with which
the Awards are assumed, converted or replaced, then, unless the
Committee determines otherwise:
| (i) |
each Option granted under the Plan shall (A) become immediately
fully exercisable and vested or (B) terminate simultaneously
with the change in control, and the Company shall pay the
grantee in lieu thereof an amount equal to (x) the excess (if
any) of the fair market value over the exercise price of one
share of Common Stock on the date on which such event occurs,
multiplied by (y) the number of shares of Common Stock subject
to the Option, without regard to whether the Option is then
otherwise exercisable; |
| (ii) |
any restrictions applicable to Restricted Stock granted under
the Plan shall lapse, and such shares of Restricted Stock shall
become immediately free of all restrictions and fully vested and
transferable; |
| (iii) |
any restrictions applicable to Restricted Stock Units granted
under the Plan shall lapse, such Restricted Stock Units shall
become immediately free of all restrictions and considered to be
earned and payable in full, and such Restricted Stock Units
shall be settled in the form specified in the applicable
Agreement as promptly as is practicable; |
| (iv) |
each outstanding Performance-Based Award shall be deemed to
satisfy any applicable Performance Goals at the target level of
achievement; and |
| (v) | subject to Section 14, the Committee may also make additional adjustments or settlements of outstanding Awards as it deems appropriate and consistent with the Plan's purposes. |
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If the Awards are not assumed, converted or replaced in connection with
the change in control, the Awards shall vest upon occurrence of the
change in control.
12.
Performance-Based Awards.
(a)
The
vesting of certain Awards of Options, Restricted Stock or Restricted
Stock Units may, in the discretion of the Committee, be conditioned upon
the achievement of performance goals ("Performance Goals"). In addition,
Performance Cash Awards may be awarded by the Committee, the vesting and
settlement of which shall be conditioned upon the achievement of
Performance Goals. The terms and conditions of each Award granted under
the Plan subject to achievement of Performance Goals ("Performance-Based
Awards") shall be specified by the Committee, in its sole discretion,
and shall be set forth in an Agreement. When the Committee desires a
Performance-Based Award to qualify as "performance-based compensation"
under Section 162(m) of the Code, the Committee shall establish the
Performance Goals for the respective Performance Award prior to or
within 90 days of the beginning of the period of time specified by the
Committee over which performance is measured for the purpose of
determining a grantee's right to and the payment value of an Award (the
"Performance Period") relating to such Performance Goal, or at such
other date as may be permitted or required for the Performance Award to
qualify as "performance-based compensation" under Section 162(m) of the
Code, and not later than after 25 percent of such Performance Period has
elapsed, and such Performance Goals shall otherwise comply with the
requirements of Section 162(m) of the Code. For all other
Performance-Based Awards, the Performance Goals must be established
before the end of the respective Performance Period. The Committee may
make grants of Performance-Based Awards in such a manner that more than
one Performance Period is in progress concurrently. For each Performance
Period, the Committee shall establish the number of Performance Awards
and their contingent values, which may vary depending on the degree to
which Performance Criteria established by the Committee are met. The
Committee shall have the power to impose such other restrictions on
Performance Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code as it may deem necessary
or appropriate to ensure that such Performance Awards satisfy all such
requirements. The maximum aggregate payout of Performance Cash Awards to
any individual grantee with respect to any Performance Period shall not
exceed $3,000,000.
(b)
The
Committee may establish Performance Goals applicable to
Performance-Based Awards based upon the Performance Criteria and other
factors set forth below related to the performance of the Company as a
whole or upon the performance of a subsidiary, business unit, division
or department and either as an absolute measure or as a measure of
comparative performance relative to a peer group of companies, an index,
budget, prior period, or other standard selected by the Committee.
Performance Criteria for the Company shall relate to the achievement of
predetermined financial and operating objectives for the Company and its
subsidiaries on a consolidated basis. Performance Criteria for a
subsidiary, business unit, division or department shall relate to the
achievement of financial and operating objectives of such segment for
which the grantee is accountable. "Performance Criteria" means one or
more of the following factors: revenue; net sales; operating income;
earnings before all or any of interest, taxes, depreciation and/or
amortization ("EBIT", "EBITA" or "EBITDA"); cash flow; working capital
and components thereof; return on equity; return on assets; return on
investment; stock price; total shareholder return; market share;
earnings per share; earnings from continuing operations; levels of
expense, cost or liability by category, operating unit or any other
delineation; or any increase or decrease of one or more of the foregoing
over a specified period.
(c)
The
Performance Goals may differ among grantees, including among similarly
situated grantees. Performance Criteria shall be calculated in
accordance with the Company's financial statements or generally accepted
accounting principles, on an operating basis, or under a methodology
established by the Committee prior to the issuance of a
Performance-Based Award that is consistently applied and identified. In
establishing a Performance Goal applicable to a Performance-Based Award,
the Committee
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may provide that the attainment of the Performance Goal shall be
measured by appropriately adjusting the Performance Goal in recognition
of unusual or non-recurring events affecting the Company or the
financial statements of the Company, or in response to changes in
applicable laws, regulations or accounting principles.
(d)
If the
Committee determines, in its discretion exercised in good faith, that
the established Performance Goals are no longer suitable to the
Company's objectives because of a change in the Company's business,
operations, corporate structure, capital structure, or other conditions
the Committee deems to be appropriate, the Committee may modify the
Performance Goals to the extent it considers such modification to be
necessary; provided, however, no such modification shall
be made with respect to any Performance-Based Award that is intended to
qualify as "performance-based compensation" under Section 162(m) of the
Code unless and to the extent such modification is not inconsistent with
Section 162(m) of the Code.
(e)
The
basis for the grant, vesting or payment, as applicable, of
Performance-Based Awards for a given Performance Period shall be the
achievement of those Performance Goals determined by the Committee as
specified in the Performance-Based Award Agreement. With respect to
Performance Awards intended to qualify as "performance-based
compensation" under Section 162(m) of the Code, the Committee shall not
have the authority in its discretion to increase the amount payable with
respect to the Performance-Based Award. The Committee's determination
with respect to a Performance Period of whether and to what extent a
Performance Goal has been achieved, and, if so, of the amount of the
Performance-Based Award earned for the Performance Period shall be final
and binding on the Company and all grantees, and, with respect to
Performance-Based Awards that are intended to qualify as
"performance-based compensation" under Section 162(m) of the Code, these
determinations shall be certified in writing before such
Performance-Based Awards are paid. Except as otherwise provided in the
Performance-Based Award Agreement, all Performance Cash Awards shall be
paid to the grantee in cash within 75 days after the end of the
applicable Performance Period.
13.
Effectiveness of the Plan. Awards may be granted under the Plan,
subject to its authorization and adoption by a majority of the votes
properly cast thereon at a meeting of stockholders of the Company duly
called and held after the date of adoption of the Plan by the Board of
Directors. If so adopted, the Plan shall become effective as of the date
of its adoption by the Board of Directors. The exercise of Options shall
also be expressly subject to the condition that at the time of exercise
a registration statement under the Securities Act of 1933, as amended
(the "Act") shall be effective, or other provisions satisfactory to the
Committee shall have been made to ensure that such exercise will not
result in a violation of such Act, and such other qualification under
any state or Federal law, rule or regulation as the Company shall
determine to be necessary or advisable shall have been effected. If the
shares of Common Stock issuable upon exercise of an Option or settlement
of a Restricted Stock Unit or if shares of Restricted Stock are not
registered under such Act, and if the Committee shall deem it advisable,
the recipient may be required to represent and agree in writing (i) that
any shares of Common Stock acquired pursuant to the Plan will not be
sold except pursuant to an effective registration statement under such
Act or an exemption from the registration provisions of the Act and (ii)
that such recipient will be acquiring such shares of Common Stock for
his own account and not with a view to the distribution thereof and
(iii) that the holder accepts such restrictions on transfer of such
shares, including, without limitation, the affixing to any certificate
representing such shares of an appropriate legend restricting transfer
as the Company may reasonably impose.
14.
Termination and Amendment of the Plan.
(a)
The
Plan shall terminate upon the adoption of a resolution of the Board
terminating the Plan. Subject to Section 14(b) below, no Award shall be
granted under the Plan after the tenth anniversary of the date on which
the Plan is initially adopted by the Board of Directors.
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(b)
The
Board of Directors of the Company may suspend, amend or modify the Plan
at any time prior to the termination of the Plan, except that no
amendment may be made without stockholder approval (i) if the Board of
Directors determines that such approval is necessary to comply with any
tax or regulatory requirement, including any approval requirement which
is a prerequisite for exemptive relief from Section 16 of the Exchange
Act, for which or with which the Board of Directors determines that it
is desirable to qualify or comply, or (ii) if such amendment grants the
Committee the authority, except as provided for in Section 11, to: (A)
reduce the exercise price of any outstanding Option; (B) offer to grant
any new Option in exchange for the cancellation of an outstanding Option
with a higher exercise price; (C) offer to grant any other Award or to
pay the grantee cash in exchange for the cancellation of an outstanding
Option with an exercise price per share in excess of the then fair
market value per share of the Company's Common Stock; (D) increase the
maximum number of shares of Common Stock reserved for issuance under the
Plan; (E) alter the classes of persons constituting Eligible
Individuals; or (F) grant total Awards of Restricted Stock and
Restricted Stock Units that will fully vest in fewer than three years
from the date of grant in excess of 10% of the total number of shares of
Common Stock reserved for issuance under the Plan. No suspension,
termination, modification or amendment of the Plan may, without the
express written consent of the Eligible Individual (or his Permitted
Transferee) to whom an Award shall theretofore have been granted,
adversely affect the rights of such Eligible Individual (or his
Permitted Transferee) under such Award.
15.
Severability. In the event that any one or more provisions of the
Plan or any Agreement, or any action taken pursuant to the Plan or such
Agreement, should, for any reason, be unenforceable or invalid in any
respect under the laws of the United States, any state of the United
States or any other government, such unenforceability or invalidity
shall not affect any other provision of the Plan or of such or any other
Agreement, but in such particular jurisdiction and instance the Plan and
the affected Agreement shall be construed as if such unenforceable or
invalid provision had not been contained therein or if the action in
question had not been taken thereunder.
16.
Applicable Law. The Plan shall be governed and interpreted,
construed and applied in accordance with the laws of the Commonwealth of
Pennsylvania.
17.
Withholding. The Company has the right to withhold amounts from
Awards to satisfy tax obligations as it deems appropriate. Whenever the
Company issues Common Stock under the Plan, unless it decides to satisfy
the withholding obligations through additional withholding on salary or
other wages, it may require the grantee to remit to the Company an
amount sufficient to satisfy any Federal, state, local or foreign tax
withholding requirements prior to the delivery of such Common Stock, or
the Company may in its discretion withhold from the shares to be
delivered shares sufficient to satisfy all or a portion of such tax
withholding requirements; provided, however, except as
otherwise provided by the Committee, that the total tax withholding
where shares are used to satisfy such tax obligations shall not exceed
the Company's minimum statutory withholding obligations (based on
minimum statutory withholding rates for Federal, state and foreign tax
purposes, including payroll taxes, that are applicable to such
supplemental taxable income).
18.
Section 409A of the Internal Revenue Code. It is the intention of
the Company that no Award, unless otherwise specified, shall constitute
"nonqualified deferred compensation" or a "nonqualified deferred
compensation plan" subject to Section 409A of the Code, unless and to
the extent that the Committee specifically determines otherwise as
provided in the immediately following sentence, and the Plan and the
terms and conditions of all Awards shall be interpreted accordingly. The
terms and conditions governing any Awards that the Committee determines
will be subject to Section 409A of the Code, including any rules for
elective or mandatory deferral of the delivery of cash or shares of
Common Stock 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 Agreement, and shall comply in all respects with Section 409A
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of the Code. Notwithstanding any other provision of the Plan to the
contrary, with respect to any Award, or any amount payable pursuant to
an Agreement, that constitutes "nonqualified deferred compensation" or a
"nonqualified deferred compensation plan" subject to Section 409A of the
Code, the Committee retains the right unilaterally to amend the Award or
terms of payment to conform with the requirements of Section 409A of the
Code. If required under Section 409A of the Code, any payments (whether
in cash, shares of Common Stock or other property) to be made with
respect to the Award or Agreement upon the participant's "separation
from service" (within the meaning of Treasury Regulation Section
1.409A-1(h)) shall be delayed until the first day of the seventh month
following such separation from service, or, if earlier, the earliest
other date as is permitted under Section 409A, if the participant is a
"specified employee" (as defined in Section 409A of the Code).
19.
Additional Definitions.
(a)
The
terms "parent," "subsidiary" and "subsidiary corporation" shall have the
meanings set forth in Sections 424(e) and (f) of the Code, respectively.
(b)
The
term "terminated for cause" shall mean termination by the Company (or a
subsidiary thereof) of the employment of or other relationship with, the
original grantee by reason of the grantee's (i) willful refusal to
perform his obligations to the Company (or a subsidiary thereof), (ii)
willful misconduct, contrary to the interests of the Company (or a
subsidiary thereof), or (iii) commission of a serious criminal act,
whether denominated a felony, misdemeanor or otherwise. In the event of
any dispute regarding whether a termination for cause has occurred, the
Board of Directors may by resolution resolve such dispute, and such
resolution shall be final and conclusive on all parties.
(c)
The
term "change in control" shall mean an event or series of events that
results in (i) a person, partnership, joint venture, corporation or
other entity, or two or more of any of the foregoing acting as a
"person" within the meaning of Sections 13(d)(3) of the Exchange Act,
other than the Company, a majority-owned subsidiary of the Company or an
employee benefit plan of the Company or such subsidiary (or such plan's
related trust), become(s) the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act) of 20% or more of the then outstanding
voting stock of the Company; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Company's Board of Directors (together with any new director whose
election by the Company's Board or whose nomination for election by the
Company's shareholders, was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors then in office; or (iii) all or substantially
all of the business of the Company is disposed of pursuant to a merger,
consolidation or other transaction in which the Company is not the
surviving corporation or the Company combines with another company and
is the surviving corporation (unless the shareholders of the Company
immediately following such merger, consolidation, combination, or other
transaction beneficially own, directly or indirectly, more than 50% of
the aggregate voting stock or other ownership interests of (x) the
entity or entities, if any, that succeed to the business of the Company
or (y) the combined company).
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