Attached files
file | filename |
---|---|
8-K - CURRENT REPORT - Yuma Energy, Inc. | yuma_8k.htm |
Exhibit 10.2
YUMA ENERGY, INC.
2018 LONG-TERM INCENTIVE PLAN
ARTICLE I
PURPOSE
1.1 Purpose.
The purposes of this Plan are to create incentives which are
designed to motivate Participants to put forth maximum effort
toward the success and growth of the Company and to enable the
Company to attract and retain experienced individuals who by their
position, ability and diligence are able to make important
contributions to the Company’s success, and thereby to
enhance stockholder value. Toward these objectives, this Plan
provides for the grant of Options, Restricted Stock Awards,
Restricted Stock Units, SARs, Performance Units, Performance
Bonuses, Stock Awards and Other Incentive Awards to Eligible
Employees and the grant of Nonqualified Stock Options, Restricted
Stock Awards, Restricted Stock Units, SARs, Performance Units,
Stock Awards and Other Incentive Awards to Consultants and Eligible
Directors, subject to the conditions set forth in this
Plan.
ARTICLE II
DEFINITIONS
2.1 “Affiliated
Entity” means any corporation, partnership, limited
liability company or other form of legal entity in which a
substantial portion of the ownership interest thereof is owned or
controlled, directly or indirectly, by the Company or one or more
of its Subsidiaries or Affiliated Entities or a combination
thereof. For purposes hereof, the Company, a Subsidiary or an
Affiliated Entity shall be deemed to have a substantial ownership
interest in a partnership or limited liability company if the
Company, such Subsidiary or Affiliated Entity (a) shall be
allocated a majority of partnership or limited liability company
gains or losses or (b) shall be or control a managing member,
manager, managing director or a general partner of such partnership
or limited liability company.
2.2 “Award”
means, individually or collectively, any Option, Restricted Stock
Award, Restricted Stock Unit, SAR, Performance Unit, Performance
Bonus, Stock Award or Other Incentive Award granted under this Plan
to an Eligible Employee by the Board or any Nonqualified Stock
Option, Performance Unit, SAR, Restricted Stock Award, Restricted
Stock Unit, Stock Award or Other Incentive Award granted under this
Plan to a Consultant or an Eligible Director by the Board, in
either case pursuant to such terms, conditions, restrictions,
and/or limitations, if any, as the Board may establish by the Award
Agreement or otherwise.
2.3 “Award
Agreement” means any written or electronic instrument
that establishes the terms, conditions, restrictions, and/or
limitations applicable to an Award in addition to those established
by this Plan and by the Board’s exercise of its
administrative powers.
2.4 “Board”
means the Board of Directors of the Company and, if the Board has
appointed a Committee as provided in Section 3.2, the term
“Board” shall include such Committee.
2.5 “Cash
Dividend Right” means a contingent right, granted in
tandem with a specific Restricted Stock Unit Award, to receive an
amount in cash equal to the cash distributions made by the Company
with respect to a share of Common Stock during the period such
Award is outstanding.
2.6 “Change
of Control Event” means each of the
following:
(a) Any
transaction in which shares of voting securities of the Company
representing more than 50% of the total combined voting power of
all outstanding voting securities of the Company are issued by the
Company, or sold or transferred by the stockholders of the Company,
in either case resulting in those persons and entities who
beneficially owned voting securities of the Company representing
more than 50% of the total combined voting power of all outstanding
voting securities of the Company immediately prior to such
transaction ceasing to beneficially own voting securities of the
Company representing more than 50% of the total combined voting
power of all outstanding voting securities of the Company
immediately after such transaction;
1
(b) The
merger or consolidation of the Company with or into another entity
resulting in those persons and entities who beneficially owned
voting securities of the Company representing more than 50% of the
total combined voting power of all outstanding voting securities of
the Company immediately prior to such merger or consolidation
ceasing to beneficially own voting securities representing more
than 50% of the total combined voting power of all outstanding
voting securities of the surviving corporation or resulting entity
immediately after such merger of consolidation; or
(c) The
sale of all or substantially all of the Company’s assets
unless those persons and entities who beneficially owned voting
securities of the Company representing more than 50% of the total
combined voting power of all outstanding voting securities of the
Company immediately prior to such asset sale beneficially own
voting securities of the purchasing entity representing more than
50% of the total combined voting power of all outstanding voting
securities of the purchasing entity immediately after such asset
sale.
Notwithstanding
anything herein to the contrary, with respect to any amounts that
constitute deferred compensation under Section 409A of the Code, to
the extent required to avoid accelerated taxation or penalties, no
Change of Control Event will be deemed to have occurred unless such
Change of Control Event also constitutes a change in control in the
ownership or effective control of the Company or a change in the
ownership of a substantial portion of the Company’s assets
under Treasury Regulation Section 1.409A-3(i)(5).
2.7 “Code”
means the Internal Revenue Code of 1986, as amended. References in
this Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any
regulations under such section.
2.8 “Committee”
means the Committee appointed by the Board as provided in
Section 3.2.
2.9 “Common
Stock” means the common stock, $0.001 par value per
share, of the Company, and after substitution, such other stock as
shall be substituted therefore as provided in Article
XII.
2.10
“Company” means
Yuma Energy, Inc., a Delaware corporation.
2.11
“Consultant”
means any individual who is engaged by the Company, a Subsidiary or
an Affiliated Entity to render bona-fide consulting or advisory
services, which services are not in connection with the offer or
sale of securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the
Company’s securities.
2.12 “Date
of Grant” means the date on which the grant of an
Award is authorized by the Board or such later date as may be
specified by the Board as the Date of Grant in such
authorization.
2.13 “Disability”
means, except as otherwise provided in this Plan, the Participant
is unable to continue providing services by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months. For purposes of this Plan, the
determination of Disability shall be made in the sole and absolute
discretion of the Board.
2.14 “Dividend
Unit Right” means a contingent right, granted in
tandem with a specific Restricted Stock Unit Award, to have an
additional number of Restricted Stock Units credited to a
Participant in respect of the Award equal to the number of whole
shares of Common Stock that could be purchased at Fair Market Value
upon, and with the amount of, each cash distribution made by the
Company during the period such Award is outstanding with respect to
a number of shares of Common Stock equal to the number of
Restricted Stock Units subject to the Award at the time of each
such distribution.
2.15 “Effective
Date” means June 7, 2018.
2.16 “Eligible
Employee” means any employee of the Company, a
Subsidiary, or an Affiliated Entity as approved by the
Board.
2
2.17 “Eligible
Director” means any member of the Board who is not an
employee of the Company, a Subsidiary or an Affiliated Entity, or a
Consultant.
2.18 “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
2.19 “Fair
Market Value” means (a) during such time as the
Common Stock is registered under Section 12 of the Exchange
Act, the closing sales price of the Common Stock as quoted by an
established stock exchange or automated quotation system on the day
for which such value is to be determined, or, if there was no
quoted price for such day, then for the last preceding business day
on which there was a quoted price as reported in The Wall
Street Journal or such other sources as the Board deems
reliable, or (b) during any such time as the Common Stock is
not listed upon an established stock exchange or automated
quotation system, the mean between dealer “bid” and
“ask” prices of the Common Stock in the
over-the-counter market on the day for which such value is to be
determined, as reported in The Wall Street Journal or
such other source as the Board deems reliable, or (c) during
any such time as the Common Stock cannot be valued pursuant to
(a) or (b) above, the fair market value of the Common
Stock as determined in good faith by the Board using a
“reasonable application of a reasonable valuation
method” within the meaning of Treasury Regulation
Section 1.409A-1(b)(5)(iv)(B) or any successor
provision.
2.20 “Incentive
Stock Option” means an Option that is intended to be
an “incentive stock option” within the meaning of
Section 422 of the Code.
2.21 “Nonqualified
Stock Option” means an Option which is not an
Incentive Stock Option.
2.22 “Other
Incentive Award” means an incentive award granted to
an Eligible Employee, Consultant or Eligible Director under Article
XI of this Plan.
2.23 “Option”
means an Award granted under Article V of this Plan and includes
both Nonqualified Stock Options and Incentive Stock Options to
purchase shares of Common Stock.
2.24 “Participant”
means an Eligible Employee, a Consultant or an Eligible Director to
whom an Award has been granted by the Board under this
Plan.
2.25 “Performance
Bonus” means the bonus which may be granted to
Eligible Employees under Article X of this Plan.
2.26 “Performance
Units” means those monetary units and/or units
representing fictional shares of Common Stock that may be granted
to Eligible Employees, Consultants or Eligible Directors pursuant
to Article IX hereof.
2.27 “Plan”
means the Yuma Energy, Inc. 2018 Long-Term Incentive Plan, as
amended from time to time.
2.28 “Restricted
Stock Award” means an Award granted to an Eligible
Employee, Consultant or Eligible Director under Article VI of this
Plan.
2.29 “Restricted
Stock Unit” means an Award granted to an Eligible
Employee, Consultant or Eligible Director under Article VII of this
Plan.
2.30 “Restriction
Period” means the period during which an Award remains
subject to time- and/or performance-based
restrictions.
2.31 “SAR”
means a stock appreciation right granted to an Eligible Employee,
Consultant or Eligible Director under Article VIII of this
Plan.
2.32 “Stock
Award” means an Award granted to an Eligible Employee,
Consultant or Eligible Director under Article XI of this
Plan.
2.33 “Subsidiary”
means a “subsidiary corporation” of the Company, as
defined in Section 424(f) of the Code.
3
ARTICLE III
ADMINISTRATION
3.1 Shares
Subject to this Plan. Subject to the limitations set forth
herein, 4,000,000 shares of Common Stock are reserved for issuance
pursuant to Awards made under this Plan. The limitations of this
Section 3.1 shall be subject to the adjustment provisions of
Article XII.
3.2 Administration
of this Plan. The Board shall administer this Plan. The
Board may, by resolution, appoint a Committee of one or more
members of the Board to administer this Plan and delegate its
powers described under this Section 3.2 for purposes of Awards
granted to Eligible Employees and Consultants; provided, however,
that no such delegation shall be effective with respect to Awards
for individuals subject to Section 16 of the Exchange Act with
respect to the Company unless the Committee consists solely of two
or more “non-employee directors.” Neither the Company
nor any member of the Board shall be liable for any action or
determination made in good faith by the Board with respect to this
Plan or any Award hereunder. The Board’s determinations
under this Plan need not be uniform and may be made selectively
among Participants, whether or not such Participants are similarly
situated. Each member of the Board is entitled to, in good faith,
rely or act upon any report or other information furnished to that
member by any Eligible Employee of the Company, the Company’s
independent certified public accountants or any executive
compensation consultant or other professional retained by the
Company or the Board to assist in the administration of this Plan.
The Company shall effect the granting of Awards under this Plan, in
accordance with the determinations made by the Board, by execution
of written agreements and/or other instruments in such form as is
approved by the Board. Subject to the provisions of this Plan,
the Board shall have exclusive power to:
(a) Select
Eligible Employees and Consultants to participate in this
Plan.
(b) Determine
the time or times when Awards will be made to Eligible Employees or
Consultants.
(c)
Determine the form of an Award, whether an Incentive Stock Option,
Nonqualified Stock Option, Restricted Stock Award, Restricted Stock
Unit, SAR, Performance Unit, Performance Bonus, Stock Award or
Other Incentive Award, the number of shares of Common Stock,
Performance Units or Restricted Stock Units subject to the Award,
the amount and all the terms, conditions (including performance
requirements), restrictions and/or limitations, if any, of an
Award, including the time and conditions of exercise or vesting,
and the terms of any Award Agreement, which may include the waiver
or amendment of prior terms and conditions or acceleration or early
vesting or payment of an Award.
(d) Determine
whether Awards will be granted singly or in
combination.
(e) Accelerate
the vesting, exercise or payment of an Award or the performance
period of an Award.
(f) Adopt
rules for the administration, interpretation and application of
this Plan as are consistent herewith, and interpret, amend or
revoke any such rules.
(g)
Correct any defect(s) or omission(s) or reconcile any
ambiguity(ies) or inconsistency(ies) in this Plan or any Award
granted hereunder.
(h) Make
all other decisions and determinations it deems advisable for the
administration of this Plan.
(i) Decide
all disputes arising in connection with this Plan and otherwise
supervise the administration of this Plan.
(j) Take
any and all other action it deems necessary or advisable for the
proper operation or administration of this Plan.
4
3.3 Administration
of Grants to Eligible Directors. The Board shall have the
exclusive power to select Eligible Directors to participate in this
Plan and to determine the number of Nonqualified Stock Options,
Performance Units, Restricted Stock Units, SARs, Stock Awards,
Other Incentive Awards or the number of shares of Common Stock
subject to a Restricted Stock Award awarded to Eligible Directors
selected for participation. If the Board appoints a Committee to
administer this Plan, it may delegate to the Committee
administration of all aspects of the Awards made to Eligible
Directors.
3.4 The
Board to Make Rules and Interpret Plan. The Board in its
sole discretion shall have the authority, subject to the provisions
of this Plan, to establish, adopt, or revise such rules and
regulations and to make all such determinations relating to this
Plan, as it may deem necessary or advisable for the administration
of this Plan. The Board’s interpretation of this Plan or any
Awards and all decisions and determinations by the Board with
respect to this Plan shall be final, binding, and conclusive on all
parties.
3.5 Delegation
by the Committee. Except to the extent prohibited by
applicable law or the rules of any stock exchange on which the
Common Stock is listed, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of
its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by
it. Any such allocation or delegation may be revoked by the
Committee at any time.
3.6
Indemnification. In addition to
such other rights of indemnification as they may have as members of
the Board, and to the extent allowed by applicable laws, the Board
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 Board may be party by reason
of any action taken or failure to act under or in connection with
this Plan or any Award granted under this Plan, and against all
amounts paid by the Board in settlement thereof (provided, however,
that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by the Board
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 Board did not
act in good faith and in a manner which such person reasonably
believed to be in the best interests of the Company, or in the case
of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within 60 days
after institution of any such action, suit or proceeding, the Board
shall, in writing, offer the Company the opportunity at its own
expense to handle and defend such action, suit or
proceeding.
ARTICLE IV
GRANT OF AWARDS
4.1 Grant
of Awards. Awards granted under this Plan shall be subject
to the following conditions:
(a) Subject
to Article XII, the aggregate number of shares of Common Stock that
may be covered by Options that are designated as Incentive Stock
Options may not exceed 4,000,000.
(b)
Any shares of Common Stock related to Awards which terminate by
expiration, forfeiture, cancellation or otherwise without the
issuance of shares of Common Stock or are exchanged in the
Board’s discretion for Awards not involving the issuance of
shares of Common Stock, shall be available again for grant under
this Plan and shall not be counted against the shares authorized
under Section 3.1. Any shares of Common Stock issued as
Restricted Stock Awards that subsequently are forfeited without
vesting shall again be available for grant under this Plan and
shall not be counted against the shares authorized under
Section 3.1. Any Awards that, pursuant to the terms of the
applicable Award Agreement, are to be settled in cash, whether or
not denominated in or determined with reference to shares of Common
Stock (for example, SARs, Performance Units or Restricted Stock
Units to be settled in cash), shall not be counted against the
shares authorized under Section 3.1. Shares of Common Stock
withheld to satisfy applicable withholding taxes pursuant to
Section 13.3 shall be available for future issuance under this
Plan. Any shares of Common Stock tendered or withheld in payment of
any exercise price or purchase price of an Award will be available
for future issuance under this Plan.
(c) Common
Stock delivered by the Company in payment of an Award authorized
under Articles V and VI of this Plan may be authorized and unissued
Common Stock or Common Stock held in the treasury of the
Company.
5
(d) The
Board shall, in its sole discretion, determine the manner in which
fractional shares arising under this Plan shall be
treated.
(e) Shares
of Common Stock issued hereunder may be evidenced in any manner
determined by the Board, including, but not limited to, separate
certificates or book-entry registration.
(f) Except
for adjustments pursuant to Article XII or reductions of the
exercise price approved by the Company’s stockholders, the
exercise price for any outstanding Option or SAR may not be
decreased after the Date of Grant nor may an outstanding Option or
SAR granted under this Plan be surrendered to the Company as
consideration for the grant of a replacement Option or SAR with a
lower exercise price or any other award under this Plan. Except as
approved by the Company’s stockholders, in no event shall any
Option or SAR granted under this Plan be surrendered to the Company
in consideration for a cash payment if, at the time of such
surrender, the exercise price of the Option or SAR is greater than
the then current Fair Market Value of a share of Common
Stock.
(g) Eligible
Directors and Consultants may only be granted Nonqualified Stock
Options, Performance Units, Restricted Stock Awards, Restricted
Stock Units, SARs, Stock Awards or Other Incentive Awards under
this Plan.
(h) The
maximum term of any Award shall be ten years (or in the case of an
Incentive Stock Option such shorter term as may be required under
Section 422 of the Code).
ARTICLE V
STOCK OPTIONS
5.1 Grant
of Options. The Board may, from time to time, subject to the
provisions of this Plan and such other terms and conditions as it
may determine, grant Options to Eligible Employees. These Options
may be Incentive Stock Options or Nonqualified Stock Options, or a
combination of both. The Board may, subject to the provisions of
this Plan and such other terms and conditions as it may determine,
grant Nonqualified Stock Options to Eligible Directors and
Consultants. Notwithstanding the foregoing, Nonqualified Stock
Options may be granted only to Eligible Employees, Eligible
Directors and Consultants performing services for the Company or a
corporation or other type of entity in a chain of corporations or
other entities in which each corporation or other entity has a
“controlling interest” in another corporation or entity
in the chain, starting with the Company and ending with the
corporation or other entity for which the Eligible Employee,
Eligible Director or Consultant performs services. For purposes of
this Section 5.1, the term “controlling interest” means
(a) in the case of a corporation, ownership of stock
possessing at least 50% of total combined voting power of all
classes of stock entitled to vote of such corporation or at least
50% of the total value of shares of all classes of stock of such
corporation; (b) in the case of a partnership, ownership of at
least 50% of the profits interest or capital interest of such
partnership; (c) in the case of a sole proprietorship,
ownership of the sole proprietorship; or (d) in the case of a
trust or estate, ownership of an actuarial interest (as defined in
Treasury Regulation Section 1.414(c)-2(b)(2)(ii)) of at least 50%
of such trust or estate. Each grant of an Option shall be evidenced
by an Award Agreement executed by the Company and the Participant,
and shall contain such terms and conditions and be in such form as
the Board may from time to time approve, subject to the
requirements of Section 5.2.
5.2 Conditions
of Options. Each Option so granted shall be subject to the
following conditions:
(a) Exercise
Price. As limited by Section 5.2(e) below, each Option
shall state the exercise price which shall be set by the Board at
the Date of Grant; provided, however, no Option shall be granted at
an exercise price which is less than the Fair Market Value of the
Common Stock on the Date of Grant unless the Option is granted
through the assumption of, or in substitution for, outstanding
awards previously granted to individuals who became Eligible
Employees (or other service providers) as a result of a merger,
consolidation, acquisition or other corporate transaction involving
the Company which complies with Treasury Regulation Section
1.409A-1(b)(5)(v)(D).
6
(b) Form
of Payment. The exercise price of an Option may be paid
(i) in cash or by check, bank draft or money order payable to
the order of the Company; (ii) subject to prior approval by
the Board in its discretion, by delivering previously acquired
shares of Common Stock having an aggregate Fair Market Value on the
date of payment equal to the amount of the exercise price, but only
to the extent such exercise of an Option would not result in an
adverse accounting charge to the Company for financial accounting
purposes with respect to the shares used to pay the exercise price
unless otherwise determined by the Board; (iii) subject to
prior approval by the Board in its discretion, by withholding
shares of Common Stock which otherwise would be acquired on
exercise having an aggregate Fair Market Value on the date of
payment equal to the amount of the exercise price; or
(iv) subject to prior approval by the Board in its discretion,
by a combination of the foregoing. In addition to the foregoing,
the Board may permit an Option granted under this Plan to be
exercised by a broker-dealer acting on behalf of a Participant
through procedures approved by the Board. Such procedures may
include a broker either (x) selling all of the shares of
Common Stock received when an Option is exercised and paying the
Participant the proceeds of the sale (minus the exercise price,
withholding taxes and any fees due to the broker) or
(y) selling enough of the shares of Common Stock received upon
exercise of the Option to cover the exercise price, withholding
taxes and any fees due to the broker and delivering to the
Participant (either directly or through the Company) a stock
certificate for the remaining shares of Common Stock.
(c) Exercise
of Options.
(i) Options
granted under this Plan shall be exercisable, in whole or in such
installments and at such times, and shall expire at such time, as
shall be provided by the Board in the Award Agreement. Exercise of
an Option shall be by written notice to the Secretary of the
Company (or such other officer as may be designated by the Board)
at least two business days in advance of such exercise (or such
lesser period of time as the Board may require) stating the
election to exercise in the form and manner determined by the
Board. Every share of Common Stock acquired through the exercise of
an Option shall be deemed to be fully paid at the time of exercise
and payment of the exercise price.
(ii) Unless
otherwise provided in an Award Agreement or determined by the
Board, the following provisions will apply to the exercisability of
Options following the termination of a Participant’s
employment or service with the Company, a Subsidiary or an
Affiliated Entity:
(A) If
an Eligible Employee’s employment with the Company, a
Subsidiary or an Affiliated Entity terminates as a result of death
or Disability, the Eligible Employee (or personal representative in
the case of death) shall be entitled to purchase all or any part of
the shares subject to any (i) vested Incentive Stock Option
for a period of up to one year and (ii) vested Nonqualified
Stock Option during the remaining term of the Option. If an
Eligible Employee’s employment terminates for any other
reason, the Eligible Employee shall be entitled to purchase all or
any part of the shares subject to any vested Option for a period of
up to three months from such date of termination. In no event shall
any Option be exercisable past the term of the Option. The unvested
portion of any Option shall be forfeited immediately upon
termination; provided, however, that the Board may, in its sole
discretion, accelerate the vesting of unvested Options in the event
of termination of employment of any Participant.
(B) In
the event a Consultant ceases to provide services to the Company, a
Subsidiary or an Affiliated Entity, or an Eligible Director ceases
to serve as a director of the Company, the unvested portion of any
Option shall be forfeited unless otherwise accelerated pursuant to
the terms of the Consultant’s or Eligible Director’s
Award Agreement or by the Board. Unless otherwise provided in the
applicable Award Agreement, the Consultant or Eligible Director
shall have a period of three years following the date he or she
ceases to provide consulting services or ceases to be a director,
as applicable, to exercise any Nonqualified Stock Options which are
otherwise exercisable on his or her date of termination of service.
In no event shall any Option be exercisable past the term of the
Option.
7
(d) Other
Terms and Conditions. Among other conditions that may be
imposed by the Board, if deemed appropriate, are those relating to
(i) the period or periods and the conditions of exercisability
of any Option; (ii) the minimum periods during which
Participants must be employed by or in service to the Company, its
Subsidiaries, or an Affiliated Entity, or must hold Options before
they may be exercised; (iii) the minimum periods during which
shares acquired upon exercise must be held before sale or transfer
shall be permitted; (iv) conditions under which such Options
or shares may be subject to forfeiture; (v) the frequency of
exercise or the minimum or maximum number of shares that may be
acquired at any one time; (vi) the achievement by the Company
of specified performance criteria; and (vii) non-compete and
protection of business matters.
(e) Special
Restrictions Relating to Incentive Stock Options. The terms
of any Incentive Stock Options granted under this Plan shall comply
in all respects with the provisions of Section 422 of the Code.
Anything in this Plan to the contrary notwithstanding, no term of
this Plan relating to Incentive Stock Options (including any SARs
issued in tandem therewith) shall be interpreted, amended or
altered, nor shall any discretion or authority granted under this
Plan be exercised, so as to disqualify either this Plan or any
Incentive Stock Option under Section 422 of the Code, unless the
Participant has first requested, or consents to, the change that
will result in such disqualification. Thus, if and to the extent
required to comply with Section 422 of the Code, Options granted as
Incentive Stock Options shall be subject to the following special
terms and conditions:
(i) Options
issued in the form of Incentive Stock Options shall only be granted
to Eligible Employees of the Company or a Subsidiary, and not to
Eligible Employees of an Affiliated Entity unless such entity shall
be considered as a “disregarded entity” under the Code
and shall not be distinguished for federal tax purposes from the
Company or the applicable Subsidiary.
(ii) Options
issued in the form of Incentive Stock Options shall not be
exercisable for more than ten years after the Date of
Grant.
(iii)
No Incentive Stock Option shall be granted to an Eligible Employee
who owns or who would own immediately before the grant of such
Incentive Stock Option more than 10% of the combined voting power
of the Company or its Subsidiaries or a “parent
corporation”, unless (A) at the time such Incentive
Stock Option is granted the exercise price is at least 110% of the
Fair Market Value of a share of Common Stock on the Date of Grant
and (B) such Option by its terms is not exercisable after the
expiration of five years from the Date of Grant. For purposes of
this Section 5.2(e), “parent corporation” means a
“parent corporation” of the Company, as defined in
Section 424(e) of the Code.
(iv)
To the extent that the aggregate Fair Market Value (determined at
the time an Incentive Stock Option is granted) of shares of Common
Stock with respect to which Incentive Stock Options are exercisable
for the first time by an individual during any calendar year under
all incentive stock option plans of the Company and its
Subsidiaries and parent corporations exceeds $100,000, such excess
Incentive Stock Options shall be treated as Nonqualified Stock
Options. The Board shall determine, in accordance with applicable
provisions of the Code, Treasury Regulations and other
administrative pronouncements, which of a Participant’s
Options will not constitute Incentive Stock Options because of such
limitation and shall notify the Participant of such determination
as soon as practicable after such determination is
made.
(v)
Each Participant awarded an Incentive Stock Option shall notify the
Company in writing immediately after the date he or she makes a
disqualifying disposition of any shares of Common Stock acquired
pursuant to the exercise of such Incentive Stock Option. A
disqualifying disposition is any disposition (including any sale)
of such Common Stock before the later of (i) two years after
the Date of Grant of the Incentive Stock Option or (ii) one
year after the date of exercise of the Incentive Stock
Option.
8
(vi) Except
in the case of death, an Option will not be treated as an Incentive
Stock Option unless at all times beginning on the Date of Grant and
ending on the day three months (one year in the case of a
Participant who is “disabled” within the meaning of
Section 22(e)(3) of the Code) before the date of exercise of
the Option, the Participant is an employee of the Company or a
parent corporation of the Company or a Subsidiary (or a corporation
or a parent corporation or subsidiary corporation of such
corporation issuing or assuming an Option in a transaction to which
Section 424(a) of the Code applies).
(vii) In
the event that an Option designated as Incentive Stock Options
fails to meet or continue to meet the requirements of Section 422
of the Code, such Option shall be re-designated as a Nonqualified
Stock Option.
(f) Application
of Funds. The proceeds received by the Company from the sale
of Common Stock pursuant to Options will be used for general
corporate purposes.
(g) Stockholder
Rights. No Participant shall have a right as a stockholder
with respect to any share of Common Stock subject to an Option
prior to purchase of such shares of Common Stock by exercise of the
Option.
ARTICLE VI
RESTRICTED STOCK AWARDS
6.1 Grant
of Restricted Stock Awards. The Board may, from time to
time, subject to the provisions of this Plan and such other terms
and conditions as it may determine, grant a Restricted Stock Award
to Eligible Employees, Consultants or Eligible Directors.
Restricted Stock Awards shall be awarded in such number and at such
times during the term of this Plan as the Board shall determine.
Each Restricted Stock Award shall be subject to an Award Agreement
setting forth the terms of such Restricted Stock Award and may be
evidenced in such manner as the Board deems appropriate, including
without limitation, a book-entry registration or issuance of a
stock certificate or certificates.
6.2 Conditions
of Restricted Stock Awards. The grant of a Restricted Stock
Award shall be subject to the following:
(a) Restriction
Period. Restricted Stock Awards shall be subject to such
time- and/or performance-based restrictions as the Board shall
determine and set forth in the applicable Award
Agreement. Restricted Stock Awards granted to an Eligible
Employee may require the holder to remain in the employment of the
Company, a Subsidiary, or an Affiliated Entity for a prescribed
period. Restricted Stock Awards granted to Consultants or Eligible
Directors may require the holder to provide continued services to
the Company for a period of time. In addition to or in lieu of any
time vesting conditions determined by the Board vesting and/or the
grant of Restricted Stock Awards may be subject to the achievement
by the Company of specified performance criteria as may from time
to time be established by the Board. Upon the fulfillment of any
specified vesting conditions, the Restriction Period shall expire,
and the restrictions imposed by the Board shall lapse with respect
to the shares of Common Stock covered by the Restricted Stock Award
or portion thereof.
(b) Restrictions.
The holder of a Restricted Stock Award may not sell, transfer,
pledge, exchange, hypothecate, or otherwise dispose of the shares
of Common Stock represented by the Restricted Stock Award during
the applicable Restriction Period or prior to the fulfillment of
any other specified vesting conditions. The Board shall impose such
other restrictions and conditions on any shares of Common Stock
covered by a Restricted Stock Award as it may deem advisable
including, without limitation, restrictions under applicable
federal or state securities laws, and may legend the certificates
representing shares of Common Stock covered by a Restricted Stock
Award to give appropriate notice of such restrictions.
(c) Rights
as Stockholders. Unless otherwise provided in the Award
Agreement, during any Restriction Period (and prior to the
fulfillment of any other specified vesting conditions), the
Participant shall have all of the rights of a stockholder with
respect to the shares, including, but not by way of limitation, the
right to vote such shares and to receive dividends. If any
dividends or other distributions are paid in shares of Common
Stock, all such shares shall be subject to the same risk of
forfeiture and same restrictions on transferability as the shares
of Common Stock covered by the Restricted Stock Award with respect
to which they were paid.
9
ARTICLE VII
RESTRICTED STOCK UNITS
7.1 Grant
of Restricted Stock Units. The Board may, from time to
time, subject to the provisions of this Plan and such other terms
and conditions as it may determine, grant Restricted Stock Units to
Eligible Employees, Consultants or Eligible Directors. Restricted
Stock Units shall be awarded in such number and at such times
during the term of this Plan as the Board shall determine. Each
Award of Restricted Stock Units shall be subject to an Award
Agreement setting forth the terms of such Award of Restricted Stock
Units. A Participant shall not be required to make any payment for
Restricted Stock Units.
7.2 Conditions
of Restricted Stock Units. The grant of Restricted Stock
Units shall be subject to the following:
(a) Restriction
Period. Restricted Stock Units shall be subject to such
time- and/or performance-based restrictions as the Board shall
determine and set forth in the applicable Award
Agreement. Restricted Stock Units granted to an Eligible
Employee may require the holder to remain in the employment of the
Company, a Subsidiary, or an Affiliated Entity for a prescribed
period. Restricted Stock Units granted to Consultants or Eligible
Directors may require the holder to provide continued services to
the Company for a period of time. In addition to or in lieu of any
time vesting conditions determined by the Board vesting and/or the
grant of Restricted Stock Units may be subject to the achievement
by the Company of specified performance criteria as may from time
to time be established by the Board. Upon the fulfillment of any
specified vesting conditions, the Restriction Period shall expire,
and the restrictions imposed by the Board shall lapse with respect
to the Restricted Stock Units.
(b) Lapse
of Restrictions. The Participant shall be entitled to
receive one share of Common Stock or an amount of cash equal to the
Fair Market Value of one share of Common Stock, as provided in the
Award Agreement upon settlement of a Restricted Stock Unit for
which the restrictions have lapsed.
(c) Cash
Dividend Rights and Dividend Unit Rights. The Board may, in
its sole discretion, grant a tandem Cash Dividend Right or Dividend
Unit Right grant with respect to Restricted Stock Units. A grant of
Cash Dividend Rights may provide that such Cash Dividend Rights
shall be paid directly to the Participant at the time of payment of
the related dividend, be credited to a bookkeeping account subject
to the same vesting and payment provisions as the tandem Award
(with or without interest in the sole discretion of the Board), or
be subject to such other provisions or restrictions as determined
by the Board in its sole discretion. A grant of Dividend Unit
Rights may provide that such Dividend Unit Rights shall be subject
to the same vesting and payment provisions as the tandem Award or
be subject to such other provisions and restrictions as determined
by the Board in its sole discretion.
ARTICLE VIII
STOCK APPRECIATION RIGHTS
8.1 Grant
of SARs. The Board may from time to time, in its sole
discretion, subject to the provisions of this Plan and subject to
other terms and conditions as the Board may determine, grant a SAR
to any Eligible Employee, Consultant or Eligible Director. SARs may
be granted in tandem with an Option, in which event, the
Participant has the right to elect to exercise either the SAR or
the Option. Upon the Participant’s election to exercise one
of these Awards, the other tandem Award is automatically
terminated. SARs may also be granted as an independent Award
separate from an Option. Each grant of a SAR shall be evidenced by
an Award Agreement executed by the Company and the Participant and
shall contain such terms and conditions and be in such form as the
Board may from time to time approve, subject to the requirements of
this Plan. The exercise price of the SAR shall not be less than the
Fair Market Value of a share of Common Stock on the Date of Grant
of the SAR.
10
8.2 Exercise
and Payment. SARs granted under this Plan shall be
exercisable in whole or in installments and at such times as shall
be provided by the Board in the Award Agreement. Exercise of a SAR
shall be by written notice to the Secretary of the Company at least
two business days in advance of such exercise (or such lesser
period of time as the Board may require). The amount payable with
respect to each SAR shall be equal in value to the excess, if any,
of the Fair Market Value of a share of Common Stock on the exercise
date over the exercise price of the SAR. Payment of amounts
attributable to a SAR shall be made in cash or in shares of Common
Stock, as provided by the terms of the applicable Award
Agreement.
8.3 Restrictions.
In the event a SAR is granted in tandem with an Incentive Stock
Option, the Board shall use commercially reasonable efforts to
subject the SAR to restrictions necessary to ensure satisfaction of
the requirements under Section 422 of the Code. In the case of
a SAR granted in tandem with an Incentive Stock Option to an
Eligible Employee who owns more than 10% of the combined voting
power of the Company or its Subsidiaries or a “parent
corporation” (as defined in Section 424(e) of the Code)
on the date of such grant, the amount payable with respect to each
SAR shall be equal in value to the applicable percentage of the
excess, if any, of the Fair Market Value of a share of Common Stock
on the exercise date over the exercise price of the SAR, which
exercise price shall not be less than 110% of the Fair Market Value
of a share of Common Stock on the date the SAR is
granted.
ARTICLE IX
PERFORMANCE UNITS
9.1 Grant
of Awards. The Board may, from time to time, subject to the
provisions of this Plan and such other terms and conditions as it
may determine, grant Performance Units to Eligible Employees,
Consultants and Eligible Directors. Each Award of Performance Units
shall be evidenced by an Award Agreement executed by the Company
and the Participant, and shall contain such terms and conditions
and be in such form as the Board may from time to time approve,
subject to the requirements of Section 9.2.
9.2 Conditions
of Awards. Each Award of Performance Units shall be subject
to the following conditions:
(a) Establishment
of Award Terms. Each Award shall state the target, maximum
and minimum value of each Performance Unit payable upon the
achievement of performance goals.
(b) Achievement
of Performance Goals. The Board shall establish performance
targets for each Award based upon such operational, financial or
performance criteria determined by the Board. The Board shall also
establish such other terms and conditions as it deems appropriate
to such Award. The Award may be paid out in cash or Common Stock as
determined in the sole discretion of the Board.
ARTICLE X
PERFORMANCE BONUS
10.1 Grant
of Performance Bonus. The Board may from time to time,
subject to the provisions of this Plan and such other terms and
conditions as the Board may determine, grant a Performance Bonus to
certain Eligible Employees selected for participation. The Board
will determine the amount that may be earned as a Performance Bonus
upon the achievement of one or more performance targets established
by the Board. The Board shall select the applicable performance
target(s) for each period in which a Performance Bonus is awarded.
The performance target(s) shall be based upon such
operational, financial or performance criteria determined by the
Board.
10.2 Payment
of Performance Bonus. In order for any Participant to be
entitled to payment of a Performance Bonus, the applicable
performance target(s) established by the Board must first be
obtained or exceeded. Payment of a Performance Bonus may be made in
cash or shares of Common Stock, as provided by the terms of the
applicable Award Agreement.
11
ARTICLE XI
STOCK AWARDS AND OTHER INCENTIVE AWARDS
11.1 Grant
of Stock Awards. The Board may, from time to time, subject
to the provisions of this Plan and such other terms and conditions
as it may determine, grant Stock Awards of shares of Common Stock
not subject to vesting or forfeiture restrictions to Eligible
Employees, Consultants or Eligible Directors. Stock Awards shall be
awarded with respect to such number of shares of Common Stock and
at such times during the term of this Plan as the Board shall
determine. Each Stock Award shall be subject to an Award Agreement
setting forth the terms of such Stock Award. The Board may in its
sole discretion require a Participant to pay a stipulated purchase
price for each share of Common Stock covered by a Stock
Award.
11.2 Grant
of Other Incentive Awards. The Board may, from time to time,
subject to the provisions of this Plan and such other terms and
conditions as it may determine, grant Other Incentive Awards to
Eligible Employees, Consultants or Eligible Directors. Other
Incentive Awards may be granted based upon, payable in or otherwise
related to, in whole or in part, shares of Common Stock if the
Board, in its sole discretion, determines that such Other Incentive
Awards are consistent with the purposes of this Plan. Such Awards
may include, but are not limited to, Common Stock awarded as a
bonus, dividend equivalents, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Common
Stock, purchase rights for Common Stock, Awards with value and
payment contingent upon the Company’s performance or any
other factors designated by the Board, and awards valued by
reference to the book value of Common Stock or the value of
securities of or the performance of specified subsidiaries.
Long-term cash Awards also may be made under this Plan. Cash Awards
also may be granted as an element of or a supplement to any Awards
permitted under this Plan. Awards may also be granted in lieu of
obligations to pay cash or deliver other property under this Plan
or under other plans or compensation arrangements, subject to any
applicable provision under Section 16 of the Exchange Act.
Each grant of an Other Incentive Award shall be evidenced by an
Award Agreement that shall specify the amount of the Other
Incentive Award and the terms, conditions, restrictions and
limitations applicable to such Award. Payment of Other Incentive
Awards shall be made at such times and in such form, which may be
cash, shares of Common Stock or other property (or a combination
thereof), as established by the Board, subject to the terms of this
Plan.
ARTICLE XII
STOCK ADJUSTMENTS
12.1 Recapitalizations
and Reorganizations. In the event that the shares of Common
Stock, as constituted on the Effective Date, shall be changed into
or exchanged for a different number or kind of shares of stock or
other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization,
reclassification, stock split, spin-off, combination of shares or
otherwise), or if the number of such shares of Common Stock shall
be increased through the payment of a stock dividend, or a dividend
on the shares of Common Stock, or if rights or warrants to purchase
securities of the Company shall be issued to holders of all
outstanding Common Stock, then the maximum number and kind of
shares of Common Stock available for issuance under this Plan, the
maximum number and kind of shares of Common Stock for which any
individual may receive Awards in any calendar year under this Plan,
the number and kind of shares of Common Stock covered by
outstanding Awards, and the price per share or the applicable
market value or performance target of such Awards will be
appropriately adjusted by the Board to reflect any increase or
decrease in the number of, or change in the kind or value of,
issued shares of Common Stock to preclude, to the extent
practicable, the enlargement or dilution of rights under such
Awards. Notwithstanding the provisions of this Section 12.1,
(i) the number and kind of shares of Common Stock available
for issuance as Incentive Stock Options under this Plan shall be
adjusted only in accordance with the applicable provisions of
Sections 422 and 424 of the Code and the regulations thereunder,
and (ii) outstanding Awards and Award Agreements shall be
adjusted in accordance with (A) Sections 422 and 424 of the
Code and the regulations thereunder with respect to Incentive Stock
Options and (B) Section 409A of the Code with respect to
Nonqualified Stock Options, SARs and, to the extent applicable,
other Awards. In the event there shall be any other change in the
number or kind of the outstanding shares of Common Stock, or any
stock or other securities into which the Common Stock shall have
been changed or for which it shall have been exchanged, then if the
Board shall, in its sole discretion, determine that such change
equitably requires an adjustment in the shares available under and
subject to this Plan, or in any Award, theretofore granted, such
adjustments shall be made in accordance with such determination. No
fractional shares of Common Stock or units of other securities
shall be issued pursuant to any such adjustment, and any fractions
resulting from any such adjustment shall be eliminated in each case
by rounding downward to the nearest whole share.
12.2 Adjustments
Upon Change of Control Event. Upon the occurrence of a
Change of Control Event, the Board, in its sole discretion, without
the consent of any Participant or holder of the Award, and on such
terms and conditions as it deems appropriate, may take any one or
more of the following actions in connection with such Change of
Control Event:
12
(a) provide
for either (i) the termination of any Award in exchange for an
amount of cash, if any, equal to the amount that would have been
attained upon the realization of the Participant’s rights
(and, for the avoidance of doubt, if as of the date of the
occurrence of such transaction or event, the Board determines in
good faith that no amount would have been attained upon the
realization of the Participant’s rights, then such Award may
be terminated by the Board without payment) or (ii) the
replacement of such Award with other rights or property selected by
the Board in its sole discretion;
(b)
provide that such Award be assumed by a successor or
survivor entity, or a parent or subsidiary thereof, or be exchanged
for similar rights or awards covering the equity of the successor
or survivor, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of equity interests and
prices;
(c) make
adjustments in the number and type of Common Stock (or other
securities or property) subject to outstanding Awards, and in the
number and kind of outstanding Awards or in the terms and
conditions of, and the vesting criteria included in, outstanding
Awards, or both;
(d) accelerate
any vesting schedule to which an Award is subject;
(e) provide
that such Award shall be payable, notwithstanding anything to the
contrary in this Plan or the applicable Award Agreement;
and/or
(f) provide
that the Award cannot become payable after such event, i.e., shall
terminate upon such event.
Notwithstanding the
foregoing, any such action contemplated under this Section 12.2
shall be effective only to the extent that such action will not
cause any Award that is designed to satisfy Section 409A of
the Code to fail to satisfy such section.
ARTICLE XIII
GENERAL
13.1 Effective
Date; Amendment or Termination of this Plan. The Board, in
its sole discretion, may alter, suspend or terminate this Plan, or
any part thereof, at any time and for any reason; provided,
however, that if an amendment to this Plan (i) would
materially increase the aggregate number of shares of Common Stock
available under this Plan (except by operation of
Article XII), (ii) would materially modify the
requirements as to eligibility for participation in this Plan,
(iii) would materially increase the benefits to Participants
provided by this Plan, (iv) would modify the provisions of
Section 4.1(f), or (v) must otherwise be approved by the
stockholders of the Company in order to comply with applicable law
or the rules of the NYSE American or, if the Common Stock is
not traded on the NYSE American, the principal national securities
exchange upon which the Common Stock is traded or quoted, then such
amendment will be subject to stockholder approval and will not be
effective unless and until such approval has been obtained, subject
to any other requirement of stockholder approval required by
applicable law, rule or regulation, including, without
limitation, Section 422 of the Code and the rules of the
applicable securities exchange. Unless terminated earlier by the
Board pursuant to this Section 13.1, the authority to grant new
Awards under this Plan will terminate on the tenth anniversary of
the Effective Date, with this Plan otherwise to remain in effect
until such time as no shares of Common Stock remain available for
delivery under this Plan and the Company has no further rights or
obligations under this Plan with respect to outstanding
Awards.
13.2 Transferability.
(a) Except
as provided in Section 13.2(b) hereof or as otherwise
determined by the Board, Awards under this Plan shall not be
assignable or transferable by the Participant, and shall not be
subject in any manner to assignment, alienation, pledge,
encumbrance or charge. Notwithstanding the foregoing, in the event
of the death of a Participant, except as otherwise provided by the
Board in an Award Agreement, an outstanding Award may be exercised
by or shall become payable to the Participant’s legatee or
legatees of such Award designated under the Participant’s
last will or by such Participant’s executors, personal
representatives or distributees of such Award in accordance with
the Participant’s will or the laws of descent and
distribution. The Board may provide in the terms of an Award
Agreement or in any other manner prescribed by the Board that the
Participant shall have the right to designate a beneficiary or
beneficiaries who shall be entitled to any rights, payments or
other benefits specified under an Award following the
Participant’s death.
13
(b) The
Board may, in its discretion, authorize all or a portion of the
Nonqualified Stock Options granted under this Plan to be on terms
which permit transfer by the Participant to (i) the ex-spouse
of the Participant pursuant to the terms of a domestic relations
order, (ii) the spouse, children or grandchildren of the
Participant (“Immediate
Family Members”), (iii) a trust or trusts for the
exclusive benefit of such Immediate Family Members, or (iv) a
partnership or limited liability company in which such Immediate
Family Members are the only partners or members. In addition there
may be no consideration for any such transfer. The Award Agreement
pursuant to which such Nonqualified Stock Options are granted
expressly provides for transferability in a manner consistent with
this Section 13.2. Subsequent transfers of transferred
Nonqualified Stock Options shall be prohibited except as set forth
below in this Section 13.2(b). Following transfer, any such
Nonqualified Stock Options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of Section 5.2(c)(ii) or
similar provisions of an Award Agreement the term
“Participant” shall be deemed to refer to the
transferee. The events of termination of employment of
Section 5.2(c)(ii) or similar provisions of an Award Agreement
shall continue to be applied with respect to the original
Participant, following which the Nonqualified Stock Options shall
be exercisable by the transferee only to the extent, and for the
periods specified in Section 5.2(c)(ii). No transfer pursuant
to this Section 13.2(b) shall be effective to bind the Company
unless the Company shall have been furnished with written notice of
such transfer together with such other documents regarding the
transfer as the Board shall request. With the exception of a
transfer in compliance with the foregoing provisions of this
Section 13.2(b), all other types of Awards authorized under
this Plan shall be transferable only by will or the laws of descent
and distribution; however, no such transfer shall be effective to
bind the Company unless the Board has been furnished with written
notice of such transfer and an authenticated copy of the will
and/or such other evidence as the Board may deem necessary to
establish the validity of the transfer and the acceptance by the
transferee of the terms and conditions of such Award.
13.3 Withholding
Taxes. Unless otherwise paid by the Participant, the
Company, its Subsidiaries or any of its Affiliated Entities shall
be entitled to deduct from any payment under this Plan, regardless
of the form of such payment, the amount of all applicable income
and employment taxes required by law to be withheld with respect to
such payment, may require the Participant to pay to it such tax
prior to and as a condition of the making of such payment, and
shall be entitled to deduct from any other compensation payable to
the Participant any withholding obligations with respect to Awards.
In accordance with any applicable administrative guidelines it
establishes, the Board may allow a Participant to pay the amount of
taxes required by law to be withheld from an Award by
(i) directing the Company to withhold from any payment of the
Award a number of shares of Common Stock having a Fair Market Value
on the date of payment up to the maximum amount of the required
withholding taxes or (ii) delivering to the Company previously
owned shares of Common Stock having a Fair Market Value on the date
of payment up to the maximum amount of the required withholding
taxes. However, any payment made by the Participant pursuant to
either of the foregoing clauses (i) or (ii) shall not be
permitted if it would result in an adverse accounting charge with
respect to such shares used to pay such taxes unless otherwise
approved by the Board.
13.4 Change
of Control. Unless otherwise provided in the applicable
Award Agreement, Awards granted under this Plan to any Eligible
Employee, Consultant or Eligible Director shall be immediately
vested, fully earned and exercisable upon the occurrence of a
Change of Control Event.
13.5 Amendments
to Awards. Subject to the limitations of Article IV and the
other terms and conditions of this Plan, such as the prohibition on
repricing of Options, the Board may at any time unilaterally amend
the terms of any Award Agreement, whether or not currently
exercisable or vested, to the extent it deems appropriate. However,
amendments which are adverse to the Participant shall require the
Participant’s consent.
13.6 Regulatory
Approval and Listings. In the sole discretion of the
Board, the Company may file with the Securities and Exchange
Commission and keep continuously effective, a Registration
Statement on Form S-8 with respect to shares of Common Stock
subject to Awards hereunder. Notwithstanding anything contained in
this Plan to the contrary, the Company shall have no obligation to
issue shares of Common Stock under this Plan prior to the obtaining
of any approval from, or satisfaction of any waiting period or
other condition imposed by, any governmental agency which the Board
shall, in its sole discretion, determine to be necessary or
advisable. In addition, and notwithstanding anything contained in
this Plan to the contrary, at such time as the Company is subject
to the reporting requirements of Section 12 of the Exchange
Act, the Company shall have no obligation to issue shares of Common
Stock under this Plan prior to:
(a) the
admission of such shares to listing on the stock exchange on which
the Common Stock may be listed; and
(b) the
completion of any registration or other qualification of such
shares under any state or federal law or ruling of any governmental
body which the Board shall, in its sole discretion, determine to be
necessary or advisable.
14
13.7
Right to Continued
Employment or Other Service. Participation in this Plan
shall not give any Eligible Employee, Consultant or Eligible
Director any right to remain in the employ or other service of the
Company, any Subsidiary, or any Affiliated Entity. The Company or,
in the case of employment or other service with a Subsidiary or an
Affiliated Entity, the Subsidiary or Affiliated Entity reserves the
right to terminate any Eligible Employee, Consultant or Eligible
Director at any time. Further, the adoption of this Plan shall not
be deemed to give any Eligible Employee, Consultant, Eligible
Director or any other individual any right to be selected as a
Participant or to be granted an Award.
13.8 Reliance
on Reports. Each member of the Board shall be fully
justified in relying or acting in good faith upon any report made
by the independent public accountants of the Company and its
Subsidiaries and upon any other information furnished in connection
with this Plan by any person or persons other than himself or
herself. In no event shall any person who is or shall have been a
member of the Board be liable for any determination made or other
action taken or any omission to act in reliance upon any such
report or information or for any action taken, including the
furnishing of information, or failure to act, if in good
faith.
13.9 Construction.
Masculine pronouns and other words of masculine gender shall refer
to both men and women. The titles and headings of the sections in
this Plan are for the convenience of reference only, and in the
event of any conflict, the text of this Plan, rather than such
titles or headings, shall control.
13.10
Governing Law. This
Plan shall be governed by and construed in accordance with the laws
of the State of Delaware except as superseded by applicable federal
law.
13.11 Other
Laws. The Board may refuse to issue or transfer any shares
of Common Stock or other consideration under an Award if, acting in
its sole discretion, it determines that the issuance or transfer of
such shares or such other consideration might violate any
applicable law or regulation or entitle the Company to recover the
same under Section 16(b) of the Exchange Act, and any payment
tendered to the Company by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be
promptly refunded to the relevant Participant, holder or
beneficiary. In addition, by accepting or exercising any Award
granted under this Plan (or any predecessor plan), the Participant
agrees to abide and be bound by any policies adopted by the Company
pursuant to Section 954 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act and any rules or exchange listing
standards promulgated thereunder calling for the repayment and/or
forfeiture of any Award or payment resulting from an accounting
restatement. Such repayment and/or forfeiture provisions shall
apply whether or not the Participant is employed by or affiliated
with the Company.
13.12 No
Trust or Fund Created. Neither this Plan nor an Award shall
create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between the Company and a
Participant or any other person. To the extent that a Participant
acquires the right to receive payments from the Company pursuant to
an Award, such right shall be no greater than the right of any
general unsecured creditor of the Company.
13.13
Section 409A of the
Code.
(a)
To the extent applicable, it is intended that this Plan and all
Awards hereunder comply with, or be exempt from, the requirements
of Section 409A of the Code and the Treasury Regulations and other
guidance issued thereunder, and that this Plan and all Award
Agreements shall be interpreted and applied by the Board in a
manner consistent therewith. In the event that any (i) provision of
this Plan or an Award Agreement, (ii) Award, payment, transaction
or (iii) other action or arrangement contemplated by the provisions
of this Plan is determined by the Board to not comply with the
applicable requirements of Section 409A of the Code and the
Treasury Regulations and other guidance issued thereunder, the
Board shall have the authority to take such actions and to make
such changes to this Plan or an Award Agreement as the Board deems
necessary to comply with such requirements without the consent of
the Participant.
(b)
No payment that constitutes deferred compensation under Section
409A of the Code that would otherwise be made under this Plan or an
Award Agreement upon a termination of employment or other service
will be made or provided unless and until such termination is also
a “separation from service,” as determined in
accordance with Section 409A of the Code.
(c)
Notwithstanding the foregoing or anything elsewhere in this Plan or
an Award Agreement to the contrary, if a Participant is a
“specified employee” as defined in Section 409A of the
Code at the time of termination of service with respect to an
Award, then solely to the extent necessary to avoid the imposition
of any additional tax under Section 409A of the Code, the
commencement of any payments or benefits under the Award shall be
deferred until the date that is six months plus one day following
the date of the Participant’s termination or, if earlier, the
Participant’s death (or such other period as required to
comply with Section 409A).
(d)
Notwithstanding the foregoing, or any provision of this Plan or any
Award Agreement, the Company does not make any representation to
any Participant that any Awards made pursuant to this Plan are
exempt from, or satisfy, the requirements of Section 409A of the
Code, and in no event whatsoever shall the Company be liable for,
or indemnify or hold harmless the Participant for, any additional
tax, interest or penalties that may be imposed on a Participant by
Section 409A of the Code or any damages for failing to comply with
Section 409A of the Code.
15