Attached files
file | filename |
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10-K - IEC ELECTRONICS CORP | v165990_10k.htm |
EX-10.6 - IEC ELECTRONICS CORP | v165990_ex10-6.htm |
EX-21.1 - IEC ELECTRONICS CORP | v165990_ex21-1.htm |
EX-32.1 - IEC ELECTRONICS CORP | v165990_ex32-1.htm |
EX-10.7 - IEC ELECTRONICS CORP | v165990_ex10-7.htm |
EX-10.5 - IEC ELECTRONICS CORP | v165990_ex10-5.htm |
EX-31.1 - IEC ELECTRONICS CORP | v165990_ex31-1.htm |
EX-31.2 - IEC ELECTRONICS CORP | v165990_ex31-2.htm |
EX-23.1 - IEC ELECTRONICS CORP | v165990_ex23-1.htm |
EX-10.22 - IEC ELECTRONICS CORP | v165990_ex10-22.htm |
EX-10.21 - IEC ELECTRONICS CORP | v165990_ex10-21.htm |
EX-10.20 - IEC ELECTRONICS CORP | v165990_ex10-20.htm |
EX-10.19 - IEC ELECTRONICS CORP | v165990_ex10-19.htm |
Exhibit
10.4
IEC
ELECTRONICS CORP.
2001
STOCK OPTION AND INCENTIVE PLAN
(2009
Amendment)
Article
I. Establishment and Purpose
1.1 Establishment of the
Plan. IEC Electronics Corp., a Delaware corporation
(hereinafter referred to as the “Company”), hereby establishes an incentive
compensation plan, to be known as the IEC Electronics Corp. 2001 Stock Option
and Incentive Plan (hereinafter referred to as the “Plan”), as set forth in this
document.
1.2 Purpose of the
Plan. The Plan is intended to enhance the Company’s ability to
attract and retain highly qualified officers, key employees, outside directors,
and other persons to advance the interests of the Company by providing such
persons with stronger incentives to continue to serve the Company and its
subsidiaries (as defined herein) and to expend maximum effort to improve the
business results and earnings of the Company. The Plan is intended to
accomplish this objective by providing to eligible persons an opportunity to
acquire or increase a direct proprietary interest in the operations and future
success of the Company.
1.3 Effective
Date. This Plan shall become effective upon its adoption by
the Board of Directors; provided, however, that the validity of the Plan and any
Award provided hereunder is subject to approval of the Plan at the next
stockholders’ meeting following its adoption by the Board of
Directors. If the stockholders fail to timely approve the Plan, the
Plan and any Award that may be issued hereunder shall be null and
void.
Article
II. Definitions
Whenever used in the Plan and related
documents (including Award Agreements), the following terms shall have the
meanings set forth below and, when such meaning is intended, the initial letter
of the word is capitalized:
2.1 Award means, individually or
collectively, a grant under the Plan of any Option, Stock Appreciation Right,
Unrestricted Stock, Restricted Stock, Performance Stock, Director Stock or any
other type of stock-based award permitted under the Plan.
2.2 Award Agreement means a
written agreement or instrument delivered by or on behalf of the Company setting
forth the terms and provisions applicable to an Award granted to a Participant
under the Plan, which may (but need not) require the Participant’s
signature.
2.3 Base Value of an SAR means
the Fair Market Value of a share of Stock on the date the SAR is
granted.
2.4 Beneficial Owner means such
term as defined in Rule 13d-3 under the Exchange Act.
2.5 Board or Board of Directors means the
Board of Directors of the Company.
2.6 Change in Control
means:
(a) the
date of the acquisition by any “person” (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act, excluding the Company or any of its
Subsidiaries, of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of 15% or more of either the then outstanding shares of Stock
of the Company or the then outstanding voting securities entitled to vote
generally in the election of directors; or
(b) the
date the individuals who constitute the Board as of the date of the adoption of
the Plan by the Board (the “Incumbent Board”) cease for any reason to constitute
at least two-thirds of the members of the Board, provided that any person
becoming a director subsequent to the date of the adoption of the Plan by the
Board whose election, or nomination for election by the Company’s stockholders,
was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board (other than any individual whose nomination for election to
Board membership was not endorsed by the Company’s management prior to, or at
the time of, such individual’s initial nomination for election) shall be, for
the purposes of this Plan, considered as though such person were a member of the
Incumbent Board; or
1
(c) the
date of consummation of a merger, consolidation, recapitalization,
reorganization, sale or disposition of all or a substantial portion of the
Company’s assets or the issuance of shares of stock of the Company in connection
with the acquisition of the stock or assets of another entity; provided,
however, that a Change in Control shall not occur under this clause (c) if
consummation of the transaction would result in at least 51% of the total voting
power represented by the voting securities of the Company (or, if not the
Company, the entity that succeeds to all or substantially all of the Company’s
business) outstanding immediately after such transaction being beneficially
owned (within the meaning of Rule 13d-3 promulgated pursuant to the Exchange
Act) by at least 51% of the holders of outstanding voting securities of the
Company immediately prior to the transaction, with the voting power of each such
continuing holder relative to other such continuing holders not substantially
altered in the transaction; or
(d) the
date the Company files a report or proxy statement with the Securities and
Exchange Commission pursuant to the Exchange Act disclosing in response to Form
8-K or Schedule 14A (or any successor schedule, form or report of item therein)
that a change in control of the Company has or may have occurred, or will or may
occur in the future, pursuant to any then existing contract or
transaction.
2.7 Code means the Internal
Revenue Code of 1986, as amended from time to time, and any regulations
promulgated thereunder.
2.8 Committee means the
committee, as specified in Article III appointed by the Board to administer the
Plan.
2.9 Company means IEC Electronics
Corp., a Delaware corporation, or any successor thereto as provided in Article
XX herein.
2.10 Covered Employee means any
Participant who would be considered a “covered employee” for purposes of Section
162(m) of the Code.
2.11 Designated Beneficiary means
the beneficiary designated by a Participant, in a manner determined by the
Committee, to receive amounts or Stock due or exercise rights of the Participant
in the event of the Participant’s death. In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant’s Estate.
2.12 Detrimental Activity means
the type of activity described in Section 17.1 herein.
2.13 Director Stock means an Award
of Stock to an Outside Director described in Section 7.2 herein.
2.14 Disability means a mental or
physical condition which, in the opinion of the Committee, renders a Participant
unable or incompetent to carry out the job responsibilities which such
Participant held or the duties to which such Participant was assigned at the
time the disability was incurred, and which is expected to be permanent or for
an indefinite duration.
2.15 Eligible Person means any
employee, officer or director (including any Outside Director) of the Company
and its Subsidiaries and any consultant or independent contractor providing
services to the Company or any Subsidiary whom the Committee deems to be an
Eligible Person.
2.16 Employee means an individual
who is paid on the payroll of the Company or of one of the Company’s
Subsidiaries, and is classified on the Company’s human resource payroll system
as a regular full-time or regular part-time employee.
2.17 Exchange Act means the
Securities Exchange Act of 1934, as amended from time to time, or any successor
act thereto.
2
2.18 Exercise Period means the
period during which an Option or SAR is exercisable as set forth in the related
Award Agreement.
2.19 Fair Market Value means the
value of a share of Stock, determined as follows: if on the
determination date the Stock is listed on an established national or regional
stock exchange, is admitted to quotation on the Nasdaq National Market, or is
publicly traded on an established securities market, the Fair Market Value of a
share of Stock shall be the closing price of the Stock on such exchange or in
such market (the closing price on the principal such exchange or market if there
is more than one such exchange or market) on the determination date (or if there
is no such reported closing price, the Fair Market Value shall be the mean
between the highest bid and lowest asked prices or between the high and low sale
prices on such trading date), or, if no sale of Stock is reported for such
trading day, on the next preceding day on which any sale shall have been
reported. If the Stock is not listed on such an exchange, quoted on
such system or traded on such a market, Fair Market Value shall be the value of
the Stock as determined by the Committee in good faith.
2.20 Family Member means any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, or
sibling, including adoptive relationships, a trust in which these persons have
more than fifty (50) percent of the beneficial interest, a foundation in which
these persons (or the Employee) control the management of assets, and any other
entity in which these persons (or the Employee) own more than fifty (50) percent
of the voting interests.
2.21 Freestanding SAR means an SAR
that is not a Tandem SAR.
2.22 Incentive Stock Options or
ISO means an option to
purchase Stock, granted under Article VI of the Plan, which is designated as an
Incentive Stock Option and is intended to meet the requirements of Section 422
of the Code or any successor provision.
2.23 Nonstatutory Stock Option or
NSO means an option to
purchase Stock, granted under Article VI of the Plan, which is not intended to
be an incentive stock option under Section 422 of the Code.
2.24 Option means an option to
purchase one or more shares of Stock pursuant to the Plan and may be designated
as an Incentive Stock Option, a Nonstatutory Stock Option, a Reload Option or an
Outside Director Option.
2.25 Option Exercise Price means
the price at which the shares of Stock covered by a particular Option may be
purchased by a Participant, as determined by the Committee or Board and set
forth in the Option Award Agreement.
2.26 Other Stock-Based Award means
any Award granted under Article XI of the Plan.
2.27 Outside Director means a
member of the Board who is not an officer or employee of the
Company.
2.28 Outside Director Option means
an NSO granted under Section 7.1 of the Plan to an Outside
Director.
2.29 Participant means an Eligible
Person designated to be granted an Award under the Plan.
2.30 Performance Stock means an
Award described in Article X of the Plan.
2.31 Period of Restriction means
that period of time determined by the Committee during which the transfer of
shares of Restricted Stock is limited in some way and such shares are subject to
forfeiture.
2.32 Person means any individual,
corporation, partnership, association or trust.
2.33 Plan means the IEC
Electronics Corp. 2001 Stock Option and Incentive Plan.
3
2.34 Reload Option means an
additional Option described in Section 6.6 herein.
2.35 Reporting Person means a
person required to file reports under Section 16(a) of the Exchange Act or any
successor statute.
2.36 Restricted Stock means an
Award described in Article IX herein.
2.37 Retirement means termination
of employment with the Company if such termination of employment constitutes
normal retirement, early retirement, disability retirement or other retirement
as provided for at the time of such termination of employment under the
applicable retirement program then maintained by the Company, provided that the
Participant does not continue in the employment of the Company.
2.38 Securities Act means the
Securities Act of 1933, as amended.
2.39 Stock means the common stock,
$.01 par value, of the Company.
2.40 Stock Appreciation Right or
SAR means a right,
granted alone or in connection with a related Option, designated as an SAR, to
receive a payment on the day the right is exercised, pursuant to the terms of
Article VIII herein. Each SAR shall be denominated in terms of one
share of Stock.
2.41 Subsidiary means any
“subsidiary corporation” of the Company within the meaning of Section 424(f) of
the Code.
2.42 Tandem SAR means an SAR that
is granted in connection with a related Option, the exercise of which shall
require forfeiture of the right to purchase Stock under the related Option (and
when Stock is purchased under the Option, the Tandem SAR shall be similarly
canceled).
2.43 Ten-Percent Stockholder means
an Employee who owns stock of the Company possessing more than 10% percent of
the total combined voting power of all classes of stock of the Company at the
time an ISO is granted.
2.44 Termination of Employment
means the date on which an individual is for any reason no longer employed by
the Company or any of its Subsidiaries.
2.45 Termination of Service means
the date on which an Outside Director’s service as a director ceases for any
reason.
2.46 Unrestricted Stock means an
Award of Stock not subject to restrictions described in Article IX
herein.
Article
III. Administration of the Plan
3.1 The Committee. The
Plan shall be administered by the Compensation Committee or such other committee
(the “Committee”) as the Board shall select. The Committee shall
consist of no fewer than two members of the Board, none of whom shall be an
officer or other salaried employee of the Company, and each of whom shall
qualify in all respects as a “non-employee director” within the meaning of Rule
16b-3 under the Exchange Act or any successor rule or regulation and as an
“outside director” within the meaning of Section 162(m) of the
Code. The members of the Committee shall be appointed from time to
time by, and shall serve at the discretion of, the Board.
4
3.2 Authority of the
Committee. The Committee shall have full power and authority,
except as limited by law, the Articles of Incorporation or the Bylaws of the
Company, subject to such other restricting limitations or directions as may be
imposed by the Board and subject to the provisions herein, to: (i)
designate Participants; (ii) determine the type or types of Awards to be granted
to each Participant under the Plan; (iii) determine the number of shares of
Stock to be covered by (or with respect to which payments, rights or other
matters are to be calculated in connection with) each Award; (iv) determine the
terms and conditions of any Award or Award Agreement; (v) amend the terms and
conditions of any Award or Award Agreement and accelerate the exercisability of
Options or the lapse of restrictions relating to Restricted Stock; (vi)
determine whether, to what extent and under what circumstances Awards may be
exercised in cash, Stock, other securities, other Awards, other property, or
canceled, forfeited or suspended; (vii) determine whether, to what extent and
under what circumstances cash, stock, other securities, other Awards, other
property and other amounts payable with respect to an Award under the Plan shall
be deferred either automatically or at the election of the holder thereof or the
Committee; (viii) interpret and administer the Plan and any instrument or
agreement relating to, or Award made under, the Plan; or other property, or
canceled, forfeited or suspended; (ix) establish, amend, suspend or waive such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (x) make any other determination and
take any other action that the Committee deems necessary or desirable for the
administration of the Plan.
3.3 Awards to Outside
Directors. With respect to Awards to Outside Directors
pursuant to Article VII, the Committee’s responsibilities under the Plan shall
be limited to taking all legal actions necessary to document the Awards so
granted, to interpret the Award Agreements evidencing such Awards, to maintain
appropriate records and reports regarding such Awards, and to take all acts
authorized by this Plan or otherwise reasonably necessary to effect the purposes
hereof. Awards provided for in Article VII shall be made by the
Board.
3.4 Delegation. The
Committee may delegate to one or more officers of the Company, but only to the
extent such officer or officers are also members of the Board of Directors of
the Company, the authority, subject to such terms and limitations as the
Committee shall determine, to grant Awards to Eligible Persons who are not
officers or directors of the Company for purposes of Section 16 of the Exchange
Act. The Committee shall not delegate its powers and duties under the
Plan in any manner that would cause the Plan not to comply with the requirements
of Section 162(m) of the Code.
3.5 Delivery of Stock by Company;
Restrictions on Stock. Notwithstanding any other provision of
the Plan, the Company shall have no liability to deliver any Stock or benefits
under the Plan unless such delivery would comply with all applicable laws
(including, without limitation, the Securities Act) and applicable requirements
of any securities exchange or similar entity and unless the Participant’s tax
obligations have been satisfied as set forth in Article XV.
The
Committee may impose such restrictions on any Stock acquired pursuant to Awards
under the Plan as it may deem advisable, including, without limitation,
restrictions to comply with applicable federal securities laws, with the
requirements of any stock exchange or market upon which such Stock is then
listed and/or traded and with any blue sky or state securities laws applicable
to such Stock.
3.6 Decisions
Binding. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations and other decisions under or with
respect to the Plan shall be final, conclusive and binding upon any Participant,
any holder or beneficiary of any Award, any employee of the Company or any
Subsidiary, and all other persons having any interest therein.
3.7 No Liability;
Indemnification. No member of the Board or of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Award or Award Agreement, except for liability arising from
his or her own willful misfeasance, gross negligence or reckless disregard of
his or her duties. The Company hereby agrees to indemnify each member
of the Committee and the Board for all costs and expenses and, to the fullest
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.
3.8 Costs. The Company
shall pay all costs of administration of the Plan.
Article
IV. Stock Subject to the Plan
4.1 Number of
Shares. Subject to Section 4.2 herein, the total number of
shares of Stock available for Awards under the Plan shall be
3,100,000. Shares of Stock underlying lapsed or forfeited Awards, or
Awards that are not paid in Stock, may be reused for other Awards. If
the purchase price relating to an Award is satisfied by tendering Stock, only
the number of shares issued net of the shares tendered shall be deemed issued
under the Plan. Stock granted pursuant to the Plan may be (i)
authorized but unissued shares of common stock or (ii) treasury
stock.
5
4.2 Adjustments in Authorized Stock and
Awards. In the event that any dividend or other distribution
(whether in the form of cash, Stock, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase or exchange of Stock
or other securities of the Company or other similar corporate transaction or
event affecting the Stock would be reasonably likely to result in the diminution
or enlargement of any of the benefits or potential benefits intended to be made
available under the Plan or under an Award (including, without limitation, the
benefits or potential benefits of provisions relating to the term, vesting or
exercisability of any Option, the availability of any “reload” Option rights, if
any, contained in any Option Award, and any Change in Control or similar
provisions of any Award), the Committee, in its sole discretion, shall, in such
manner as it shall deem equitable or appropriate in order to prevent such
diminution or enlargement of any such benefits or potential benefits, adjust any
or all of (i) the number and type of shares of Stock (or other securities or
other property) which thereafter may be made the subject of Awards, (ii) the
number and type of shares of Stock (or other securities or other property)
subject to outstanding Awards and (iii) the purchase or exercise price with
respect to any Award; provided, however, that the number of shares of Stock
covered by any Award or to which such Award relates shall always be a whole
number. Notwithstanding the foregoing, (i) each such adjustment with
respect to an Incentive Stock Option shall comply with the rules of Section
424(a) of the Code and (ii) in no event shall any adjustment be made which would
render any Incentive Stock Option granted hereunder to be other than an
incentive stock option for purposes of Section 422 of the Code.
4.3 Award
Limitations. Subject to Section 4.2 above, (i) the total
number of shares of Stock with respect to which Options or SARs may be granted
in any calendar year to any Covered Employee shall not exceed 400,000 shares;
(ii) the total number of shares of Restricted Stock that may be granted in any
calendar year to any Covered Employee shall not exceed 400,000 shares; (iii) the
total number of shares of Performance Stock that may be granted in any calendar
year to any Covered Employee shall not exceed 400,000 shares; and (iv) the total
number of shares of Stock that are intended to qualify for deduction under
Section 162(m) of the Code granted pursuant to Article XI herein in any calendar
year to any Covered Employee shall not exceed 400,000 shares.
4.4 Incentive Stock
Options. Notwithstanding the foregoing, the number of shares
of Stock available for granting Incentive Stock Options under the Plan shall not
exceed 2,700,000, subject to adjustment as provided in Section 4.2 of the Plan
and Section 422 or 424 of the Code or any successor provision.
Article
V. Eligibility and Participation
5.1 Eligibility. Any
Eligible Person, including any Eligible Person who is an officer or director of
the Company or any Subsidiary, shall be eligible to be designated a Participant;
provided, however, that an Incentive Stock Option may be granted only to
full-time or part-time employees (which term as used herein included, without
limitation, officers and directors who are also employees).
5.2 Actual
Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all Eligible Persons those to whom
Awards shall be granted.
Article
VI. Stock Options
6.1 Grant of
Options. Subject to the terms and conditions of the Plan,
Options may be granted to an Eligible Person, except an Outside Director, at any
time and from time to time, as shall be determined by the
Committee.
The
Committee shall have complete discretion in determining the number of shares of
Stock subject to Options granted to each Eligible Person (subject to Article IV
herein) and, consistent with the provisions of the Plan, in determining the
terms and conditions pertaining to such Options. The Committee may
grant ISOs, NSOs or a combination thereof. Notwithstanding the
foregoing, no Eligible Person shall be granted an ISO which would result in such
person receiving a grant of ISOs for Stock that would have an aggregate fair
market value in excess of $100,000, or such other amount specified in Section
422(d) of the Code, determined as of the time that the ISO is granted, that
would be exercisable for the first time by such person during any calendar
year.
6
6.2 Option Award
Agreement. Each Option grant shall be evidenced by an Option
Award Agreement that shall specify the Option Exercise Price, the term of the
Option, the number of shares of Stock to which the Option pertains, the Exercise
Period and such other provisions as the Committee shall determine, including,
but not limited to, special provisions relating to a change in control and any
Reload Options. The Option Award Agreement shall also specify whether
the Option is intended to be an ISO or NSO.
6.3 Option Exercise
Price. The Option Exercise Price shall not be less than 100%
of the Fair Market Value of the Stock on the date of grant (110% in the case of
an ISO granted to a Ten-Percent Stockholder).
6.4 Option Term. The
term of each Option shall be fixed by the Committee at the time of grant, but,
in no event, shall any Option have a term of more than ten years (five years in
the case of an ISO granted to a Ten-Percent Stockholder). The
Committee may, subsequent to the grant of any Option, extend the term thereof,
but, in no event, shall the term as so extended exceed the maximum term provided
for in the preceding sentence.
6.5 Exercise of and Payment for
Options. Options granted under the Plan shall be exercisable
in such amounts and at such time and shall be subject to such restrictions and
conditions as the Committee shall in each instance approve. The
Committee may accelerate the exercisability of any Option or any portion thereof
at any time.
A
Participant may exercise an Option at any time during the Exercise
Period. Options shall be exercised by the delivery of a written
notice to the Company, setting forth the number of shares of Stock with respect
to which the Option is to be exercised, accompanied by provision for full
payment of the Stock.
The
Option Exercise Price shall be payable: (i) in cash or its
equivalent, (ii) by tendering (by actual delivery of shares or by attestation)
previously acquired Stock (owned for at least six months) having an aggregate
Fair Market Value at the time of exercise equal to the total Option Exercise
Price, (iii) by broker-assisted cashless exercise or (iv) by a combination of
(i), (ii) and/or (iii).
Stock
received upon exercise of an Option may be granted subject to any restrictions
deemed appropriate by the Committee.
6.6 Reload
Options. The Committee may provide in an Award Agreement that
a Participant who exercises all or any portion of an Option with Stock which has
a Fair Market Value equal to not less than 100% of the Option Exercise Price for
such Option shall be granted, subject to Article IV, an additional option
(“Reload Option”) for a number of shares of Stock equal to the sum (“Reload
Number”) of the number of shares of Stock tendered in payment of the Option
Exercise Price for the Options plus, if so provided by the Committee, the number
of shares of Stock, if any, retained by the Company in connection with the
exercise of the Options to satisfy any federal, state or local tax withholding
requirements.
Reload
Options shall be subject to the following terms and conditions:
(i) the
grant date for each Reload Option shall be the date of exercise of the Option to
which it relates;
(ii) subject
to (iii) below, the Reload Option, upon vesting, may be exercised at any time
during the unexpired term of the Option to which it relates (subject to earlier
termination thereof as provided in the Plan and in the applicable Award
Agreement); and
(iii) the
terms of the Reload Option shall be the same as the terms of the Option to which
it relates, except that (a) the Option Exercise Price shall be the Fair Market
Value of the Stock on the grant date of the Reload Option and (b) the Reload
Option shall be subject to new vesting provisions, commencing one (1) year after
the grant date of the Reload Option and vesting upon the same schedule as the
Option to which it relates.
Reload
Options may not be granted to Participants who exercise Options after a
Termination of Employment.
7
6.7 Termination. Each
Option Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the Option following termination of the Participant’s
employment with the Company and its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee (subject to
applicable law), shall be included in the Option Award Agreement entered into
with Participants, need not be uniform among all Options granted pursuant to the
Plan or among Participants and may reflect distinctions based on the reasons for
termination.
To the
extent the Option Agreement does not set forth termination provisions, the
provisions of Article XVI shall control
6.8 Transferability of
Options. Except as otherwise determined by the Committee, all
Options granted to a Participant under the Plan shall be exercisable during his
or her lifetime only by such Participant, and no Option granted under the Plan
may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. ISOs are not transferable other than by will or by the
laws of descent and distribution.
The
Committee shall have the authority, in its discretion, to grant (or to sanction
by way of amendment to an existing Award) Nonstatutory Stock Options which may
be transferred by the Participant during his lifetime to any Family
Member. A transfer of an Option pursuant hereto may only be effected
by the Company at the written request of a Participant and shall become
effective only when recorded in the Company’s record of outstanding
Options. In the event an Option is transferred as contemplated
herein, any Reload Options associated with such transferred Option shall
terminate, and such transferred Option may not be subsequently transferred by
the transferee except by will or the laws of descent and
distribution. Otherwise, a transferred Option shall continue to be
governed by and subject to the terms and limitations of the Plan and the
relevant Award Agreement, and the transferee shall be entitled to the same
rights as the Participant, as if no transfer had taken place.
Article
VII. Awards to Outside Directors
7.1 Outside Director
Options.
7.1.1 Grant of
Options. Subject to the terms and conditions of the Plan,
Nonstatutory Stock Options may be granted to an Outside Director at any time and
from time to time, as shall be determined by the Board.
The Board shall have complete
discretion in determining the number of shares of Stock subject to Outside
Director Options granted to each Outside Director (subject to Article IV herein)
and, consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such Outside Director Options.
7.1.2 Option Award
Agreement. Each Outside Director Option grant shall be
evidenced by an Option Award Agreement that shall specify the Option Exercise
Price, the term of the Option (which shall not be greater than ten (10 years),
the number of shares of Stock to which the Option pertains, the Exercise Period
and such other provisions as the Board shall determine, including, but not
limited to, special provisions relating to a change of control.
7.1.3 Option Exercise
Price. The Option Exercise Price shall not be shall not be
less than
100% of the Fair Market Value of the Stock on the date of grant.
7.1.4 Option Term. The
term of each Option shall be fixed by the Board at the time of grant, but, in no
event, shall an Option have a term of more than ten years. The Board
may, subsequent to the grant of any Option, extend the term thereof, but, in no
event, shall the term as so extended exceed the maximum term provided for in the
proceeding section.
7.1.5 Exercise of and Payment for
Options. Outside Director Options granted under the Plan shall
be exercisable at such times and shall be subject to such restrictions and
conditions, as the Board shall in each instance approve.
8
An Outside Director may exercise an
Option at any time during the Exercise Period. Options shall be
exercised by the delivery of a written notice of exercise to the Company,
setting forth the number of shares of Stock with respect to which the Option is
to be exercised, accompanied by provision for full payment of the
Stock.
The Option Exercise Price shall be
payable: (i) in cash or its equivalent, (ii) by tendering (by actual
delivery of shares or by attestation) previously acquired Stock (owned for at
least six months) having an aggregate Fair Market Value at the time of exercise
equal to the total Option Exercise Price, (iii) by broker-assisted cashless
exercise or (iv) by a combination of (i), (ii) and/or (iii).
Stock received upon exercise of an
Outside Director Option may be granted pursuant to any restrictions deemed
appropriate by the Board.
7.1.6 Termination. Each
Option Award Agreement shall set forth the extent to which the Outside Director
shall have the right to exercise the Option following termination of the Outside
Director’s service with the Company. Such provisions shall be
determined in the sole discretion of the Board (subject to applicable law),
shall be included in the Option Award Agreement entered into with the Outside
Director, need not be uniform among all Options granted to Outside Directors
pursuant to the Plan and may reflect distinctions based on the reasons for
termination.
To the extent the Option Award
Agreement does not set forth termination provisions, the provisions of Article
XVI shall control.
7.1.7 Transferability of
Options. Except as otherwise determined by the Board, all
Options granted to an Outside Director under the Plan shall be exercisable
during his or her lifetime only by such Outside Director, and no Option granted
under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will or by the laws of descent and
distribution.
The Board shall have the authority, in
its discretion, to grant (or to sanction by way of amendment to an existing
Award) Outside Director Options, which may be transferred by the Outside
Director during his or her lifetime to any Family Member. A transfer
of an Option pursuant hereto may only by effected by the Company at the written
request of an Outside Director and shall become effective only when recorded in
the Company’s record of outstanding Options. A transferred Option
shall continue to be governed by and subject to the terms and limitations of the
Plan and the relevant Award Agreement, and the transferee shall be entitled to
the same rights as the Outside Director, as if no transfer had taken
place.
7.2 Director
Stock.
7.2.1 Director
Compensation. The Company intends to pay each Outside Director
(a) an annual retainer, payable in quarterly installments or in any other manner
(determined without regard to the Plan) (the “Retainer”), (b) fees for
attendance at meetings of the Board of Directors and/or committees thereof
(determined without regard to the Plan) (“Meeting Fees”), and (c) such other
compensation for services as a director (“Other Compensation”) as may be
determined from time to time by the Board. The Retainer, the Meetings
Fees, and the Other Compensation (collectively, “Director Compensation”) shall
be in such amounts as may be set from time to time by the Board.
7.2.2 Director Compensation Payable in
Cash or Stock. Except as the Board may otherwise determine,
each Outside Director shall be entitled to receive any component of his or her
Director Compensation exclusively in cash, exclusively in stock (“Director
Stock”) or any portion in cash and any portion in Director Stock. The
Board may from time to time require that all or a portion of the Director
Compensation be paid in Director Stock. To the extent not otherwise
prescribed by the Board, each Director shall be given the opportunity, during
the month the Director first becomes a Director and during the last month of
each quarter thereafter, to elect among the three choices for the remainder of
the quarter (in the case of the election made when the Director first becomes a
Director) and for the following quarter (in the case of any subsequent
election). If the Director chooses to receive at least some of his or
her Director Compensation in Director Stock, the election shall also indicate
the percentage of each component of the Director Compensation to be paid in
Director Stock. If a Director makes no election during his or her
first opportunity to make an election, the Director shall be assumed to have
elected to receive his or her entire Director Compensation in
cash. If a Director makes no election during any succeeding election
month, the Director shall be assumed to have remade the election then currently
in effect for that Director. An election by a Director to receive a
portion of his or her Director Compensation in Director Stock shall either (i)
be approved by (a) the Committee or (b) the Board or (ii) provide that Director
Stock received by the Director pursuant to such election shall be held by the
Director for a period of at least six months.
9
7.2.3 Payment in Director
Stock. Except as may otherwise be determined by the Board,
issuances of Director Stock in payment of Director Compensation for a particular
fiscal quarter shall be made as of the first trading day after the end of such
fiscal quarter. The number of shares of Stock to be issued to a
Director as of the relevant trading date shall equal:
[%
multiplied by C] divided by P
WHERE:
%
=
|
the
percentage of the Director’s Compensation that the Director is required
and/or has elected to receive in the form of Director Stock, expressed as
a decimal;
|
|
C
=
|
the
cash amount that otherwise would have been paid as Director Compensation
to the Director for the fiscal quarter; and
|
|
P
=
|
the
Fair Market Value of one share of Stock on the trading
date
|
For Director Compensation not paid in
quarterly installments, the Board shall determine the relevant date of issuance
for the shares of Stock to be issued to a Director.
Director Stock shall not include any
fractional shares. Fractions shall be rounded to the nearest whole
share.
Article
VIII. Stock Appreciation Rights
8.1 Grant of
SARs. Subject to the terms and conditions of the Plan, an SAR
may be granted to an Eligible Person at any time and from time to time as shall
be determined by the Committee. The Committee may grant Freestanding
SARs, Tandem SARs or any combination of these forms of SARs. A stock
Appreciation Right granted under the Plan shall confer on the holder thereof a
right to receive upon exercise thereof the excess of (i) the Fair Market Value
of one share of Stock on the date of exercise (or, if the Committee shall so
determine, at any time during a specified period before or after the date of
exercise) over (ii) the grant price of the Stock Appreciation Right as specified
by the Committee, which price shall not be less than 100% of the Fair Market
Value of one share of Stock on the date of grant of the Stock Appreciation
Right.
The Committee shall have complete
discretion in determining the number of SARs granted to each Eligible Person
(subject to Article IV herein) and, consistent with the provisions of the Plan,
in determining the terms and conditions pertaining to such SARs.
8.2 SAR Award
Agreement. Each SAR grant shall be evidenced by an SAR Award
Agreement that shall specify the number of SARs granted, the Base Value, the
term of the SAR, the Exercise Period, the methods of exercise, and such other
conditions or restrictions as the Committee shall determine, including, but not
limited to, special provisions relating to a change in control.
8.3 Exercise and Payment of
SARs. Tandem SARs may be exercised for all or part of the
Stock subject to the related Option upon the surrender of the right to exercise
the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the shares of Stock for which its related Option
is then exercisable.
10
Notwithstanding
any other provision of the Plan to the contrary, with respect to a Tandem SAR
granted in connection with an ISO: (i) the Tandem SAR will expire no
later than the expiration of the underlying ISO; (ii) the value of the payout
with respect to the Tandem SAR may be for no more than one hundred percent
(100%) of the difference between the Option Exercise Price of the underlying ISO
and the Fair Market Value of the shares of Stock subject to the underlying ISO
at the time the Tandem SAR is exercised; (iii) the Tandem SAR may be exercised
only when the Fair Market Value of the shares of Stock subject to the ISO
exceeds the Option Exercise Price of the ISO; and (iv) the Tandem SAR may be
transferred only when the underlying ISO is transferable, and under the same
circumstances.
Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes
upon them.
A Participant may exercise an SAR at
any time during the Exercise Period. SARs shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of SARs being exercised. Upon exercise of an SAR, a
Participant shall be entitled to receive payment from the Company in an amount
equal to the product of: (a) the excess of (i) the Fair Market Value
of a share of Stock on the date of exercise of (ii) the Base Value multiplied
by: (b) the number of shares of Stock with respect to which the SAR is
exercised.
At the sole discretion of the
Committee, the payment to the Participant upon SAR exercise may be in cash, the
shares of Stock of equivalent value or in some combination thereof.
8.4 Termination. Each
SAR Award Agreement shall set forth the extent to which the Participant shall
have the right to exercise the SAR following termination of the Participant’s
employment with the Company and its Subsidiaries. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the SAR Award Agreement entered into with Participants and may reflect
distinctions based on the reasons for termination.
To the
extent the SAR Award Agreement does not set forth termination provisions, the
provisions of Article XVI shall control.
8.5 Transferability of
SARs. Except as otherwise determined by the Committee, all
SARs granted to a Participant under the Plan shall be exercisable during his or
her lifetime only by such Participant or his or her legal representative, and no
SAR granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution.
Article
IX. Unrestricted Stock and Restricted Stock
9.1 Grant of Unrestricted
Stock. Subject to the terms and conditions of the Plan,
Unrestricted Stock and/or Restricted Stock may be granted to an Eligible Person
at any time and from time to time, as shall be determined by the
Committee.
The Committee shall have complete
discretion in determining the number of shares of Unrestricted Stock and/or
Restricted Stock granted to each Eligible Person (subject to Article IV herein)
and, consistent with the provisions of the Plan, in determining the terms and
conditions pertaining to such Awards. Restricted Stock shall be
subject to such restrictions as may be determined by the Committee and set forth
in the Award Agreement.
9.2 Period of
Restriction. Restricted Stock shall be subject to a Period of
Restriction (after which restrictions will lapse), which shall mean a period
commencing on the date the Restricted Stock is granted and ending on such date
as the Committee shall determine. The Committee may provide for the
lapse of restrictions in installments where deemed appropriate.
9.3 Unrestricted Stock and Restricted
Stock Award Agreement. Each grant of Unrestricted Stock and/or
Restricted Stock shall be evidenced by an Award Agreement that shall specify the
number of shares of Unrestricted Stock and/or Restricted Stock granted, the
Period or Periods of Restriction (if applicable), and such other provisions as
the Committee shall determine, including, but not limited to, special provisions
relating to a change in control.
11
9.4 Transferability. Restricted
Stock granted hereunder may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of
Restriction established by the Committee and specified in the Award
Agreement. During the applicable Period of Restriction, all rights
with respect to the Restricted Stock granted to a Participant under the Plan
shall be available during his or her lifetime only to such Participant or his or
her legal representative.
9.5 Certificates. No
certificates representing Stock shall be delivered to a Participant until such
time as all restrictions applicable to such shares have been
satisfied.
9.6 Removal of
Restrictions. Restricted Stock shall become freely
transferable by the Participant after the last day of the Period of Restriction
applicable thereto. However, the Committee, in its sole discretion,
shall have the right to immediately vest the Stock and waive all or part of the
restrictions and conditions with regard to all or part of the Stock held by any
Participant at any time. Once Restricted Stock is released from the
restrictions, the Participant shall be entitled to receive a
certificate.
9.7 Voting
Rights. During the Period of Restriction, Participants may
exercise full voting rights with respect to the Restricted Stock.
9.8 Dividends and Other
Distributions. Subject to the Committee’s right to determine
otherwise at the time of grant, during the Period of Restriction, Participants
shall receive all regular cash dividends paid with respect to the Restricted
Stock while they are so held. All other distributions paid with
respect to such Restricted Stock shall be credited to Participants subject to
the same restrictions on transferability and forfeitability as the Restricted
Stock with respect to which they were paid and shall be paid to the Participant
promptly after the full vesting of the Restricted Stock with respect to which
such distributions were made.
9.9 Termination. Each
Restricted Stock Award Agreement shall set forth the extent to which the
Participant shall have the right to receive Restricted Stock payment following
termination of the Participant’s employment or service with the Company and its
Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with the Participants, need not be uniform among all grants of Restricted
Stock or among Participants and may reflect distinctions based on the reasons
for termination.
To the
extent the Restricted Stock Award Agreement does not set forth termination
provisions, the provisions of Article XVI shall control.
Article
X. Performance Stock
10.1 Grant of Performance
Stock. Subject to the terms and conditions of the Plan,
Performance Stock may be granted to an Eligible Person at any time and from time
to time, as shall be determined by the Committee.
The Committee shall have complete
discretion in determining the number of shares of Performance Stock granted to
each Eligible Person (subject to Article IV herein) and, consistent with the
provisions of the Plan, in determining the terms and conditions pertaining to
such Awards.
10.2 Performance Stock Award
Agreement. Each grant of shares of Performance Stock shall be
evidenced by a Performance Stock Award Agreement that shall specify the number
of shares of Performance Stock granted, the Performance Period, the Performance
Goals and such other provisions as the Committee shall determine, including, but
not limited to, special provisions relating to a change in control.
10.3 Value of Performance
Stock. The value of a share of Performance Stock shall be
equal to the Fair Market Value of the Stock. The Committee shall set
Performance Goals in its discretion which, depending on the extent to which they
are met, will determine the number and/or value of Performance Stock that will
be paid to the Participants.
12
10.4 Performance
Period. The Performance Period for Performance Stock is the
period over which the Performance Goals are measured. The Performance
Period is set by the Committee for each Award; however, in no event shall an
Award have a Performance Period of less than one year.
10.5 Performance
Goals. For each Award of Performance Stock, the Committee
shall establish performance objectives (“Performance Goals”) for the Company,
its Subsidiaries, and/or divisions of any of foregoing, based on the Performance
Criteria and other factors set forth in (a) and (b)
below. Performance Goals shall include payout tables, formulas or
other standards to be used in determining the extent to which the Performance
Goals are met, and, if met, the number of shares of Performance Stock and/or
cash (or the rate of such conversion) and distributed to Participants in
accordance with Section 10.7. All Performance Stock which may not be
converted under the Performance Goals or which are reduced by the Committee or
which may not be converted for any other reason after the end of the Performance
Period shall be cancelled at the time they would otherwise be
distributable. When the Committee desires an Award to qualify under
Section 162(m) of the Code, as amended, the Committee shall establish the
Performance Goals for the respective Performance Stock prior or within 90 days
of the beginning of the service relating to such Performance Goal, and not later
than after 25% of such period of service has elapsed. For all other
Awards, the Performance Goals must be established before the end of the
respective Performance Period.
|
(a)
|
The
Performance Criteria which the Committee is authorized to use, in its sole
discretion, are any of the following criteria or any combination
thereof:
|
|
(1)
|
Financial
performance of the Company (on a consolidated basis), of one or more of
its Subsidiaries, and/or a division of any of the
foregoing. Such financial performance may be based on net
income, EBITDA (earnings before income taxes, depreciation and
amortization), revenues, sales, expenses, costs, market share, return on
net assets, return on assets, return on capital, profit margin, operating
revenues, operating expenses, and/or operating
income.
|
|
(2)
|
Service
performance of the Company (on a consolidated basis), of one or more of
its Subsidiaries, and/or of a division of any of the
foregoing. Such service performance may be based upon measured
customer perceptions of service
quality.
|
|
(3)
|
The
Company’s Stock price, return on stockholders’ equity, total stockholder
return (Stock price appreciation plus dividends, assuming the reinvestment
of dividends), and/or earnings per
share.
|
(b) Except
to the extent otherwise provided by the Committee in full or in part, if any of
the following events occur during a Performance Period and would directly affect
the determination of whether or the extent to which Performance Goals are met,
the effects of such events shall be disregarded in any such
computation: changes in accounting principles; extraordinary items;
changes in tax laws affecting net income; and natural disasters, including
floods, hurricanes, and earthquakes. No such adjustment shall be made
to the extent such adjustment would cause the Performance Stock to fail to
satisfy the performance based exemption of Section 162(m) of the
Code.
10.6 Earning of Performance
Stock. After the applicable Performance Period has ended, the
Participant shall be entitled to receive a payout with respect to the
Performance Stock earned by the Participant over the Performance Period, to be
determined as a function of the extent to which the corresponding Performance
Goals have been achieved.
10.7 Form and Timing of Payment of
Performance Stock. Payment of earned Performance Stock shall
be made following the close of the applicable Performance Period. The
Committee, in its sole discretion, may pay earned Performance Stock in cash or
in Stock (or in a combination thereof), which has an aggregate Fair Market Value
equal to the value of the earned Performance Stock at the close of the
applicable Performance Period. Such Stock may be granted subject to
any restrictions deemed appropriate by the Committee.
13
10.8 Termination. Each
Performance Stock Award Agreement shall set forth the extent to which the
Participant shall have the right to receive a Performance Stock payment
following termination of the Participant’s employment or service with the
Company and its Subsidiaries during a Performance Period. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all grants of Performance Stock or among Participants and may
reflect distinctions based on reasons for termination.
To the
extent the Performance Stock Award Agreement does not set forth termination
provisions, the provisions of Article XVI shall control.
10.9 Transferability. Except
as otherwise determined by the Committee, a Participant’s rights with respect to
Performance Stock granted under the Plan shall be available during the
Participant’s lifetime only to such Participant or the Participant’s legal
representative and Performance Stock may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution.
Article
XI. Other Stock-Based Awards
The Committee shall have the right to
grant to Eligible Persons such other Stock-Based Awards which may include,
without limitation, the payment of Stock in lieu of cash and the payment of
Stock in lieu of cash under other Company incentive or bonus programs as are
deemed by the Committee to be consistent with the purpose of the Plan; provided,
however, that such grants must comply with applicable law. Subject to
the terms of the Plan, the Committee shall determine the terms and conditions of
such Awards.
Article
XII. Stock Purchase Program
12.1 Establishment of
Program.
Subject to the terms of the Plan and
compliance with applicable law, the Board or Committee may, from time to time,
establish one or more programs under which Eligible Persons will be permitted to
purchase shares of Stock under the Plan, and shall designate the Eligible
Persons to participate under Stock purchase programs. The purchase
price for shares of Stock available under such programs, and other terms and
conditions of such programs shall be established by the Board or
Committee. The purchase price may not be less than 100% of the Fair
Market Value of the Stock at the time of purchase (or in the Board’s or
Committee’s discretion, the average Stock value over a period determined by the
Board or Committee), and further provided that the purchase price may not be
less than par value.
12.2 Restrictions.
The Board
or Committee may impose such restrictions with respect to shares of Stock
purchased under this Article XII as the Board or Committee determines to be
appropriate. Such restrictions may include, without limitation,
restrictions of the type that may be imposed with respect to Restricted Stock
under Article IX.
Article
XIII. Deferrals
The Committee may, in its sole
discretion, permit a Participant to defer the Participant’s receipt of the
payment of cash or the delivery of Stock that would otherwise be due to such
Participant under the Plan. If any such deferral election is
permitted, the Committee shall, in its sole discretion, establish rules and
procedures for such payment deferrals.
Article
XIV. Rights of Participants
14.1 No Rights to
Awards. No Eligible Person, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Eligible Persons, Participants or
holders or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to different
Participants.
14
14.2 Award
Agreements. No Participant will have rights under an Award
granted to such Participant unless and until an Award Agreement shall have been
duly executed on behalf of the Company.
14.3 No Limit on Other Compensation
Arrangements. Nothing contained in the Plan shall prevent the
Company or any Subsidiary from adopting or continuing in effect other or
additional compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
14.4 No Right to Employment,
etc. The grant of an Award shall not be construed as giving a
Participant the right to be retained in the employ, or as a consultant, or as
giving an Outside Director the right to continue as a director, of the Company
or any Subsidiary. In addition, the Company or Subsidiary may at any
time dismiss a Participant from employment, or as a consultant, or terminate the
term of an Outside Director, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award
Agreement.
14.5 Limitation of Implied
Rights. Neither a Participant nor any other Person shall, by
reason of the Plan, acquire any right in or title to any assets, funds or
property of the Company or any Subsidiary whatsoever, including, without
limitation, any specific funds, assets or other property which the Company or
any Subsidiary, in their sole discretion, may set aside in anticipation of a
liability under the Plan. A Participant shall have only a contractual
right to the Stock or amounts, if any, payable under the Plan, unsecured by any
assets of the Company or any Subsidiary. Nothing contained in the
Plan shall constitute a guarantee that the assets of such companies shall be
sufficient to pay any benefits to any Person.
14.6 No Right as a
Stockholder. Except as otherwise provided in the Plan, no
Award under the Plan shall confer upon the holder thereof any right as a
stockholder of the Company prior to the date on which the individual fulfills
all conditions for receipt of such rights.
14.7 Waiver. Each
Participant, by acceptance of an Award, waives all rights to specific
performance or injunctive or other equitable relief and acknowledges that he or
she has an adequate remedy at law in the form of damages.
Article
XV. Payment for Awards and Withholding
15.1 Payment for
Awards. In the event a Participant elects to pay the Option
Exercise Price or make payment for any other Award through tender of previously
acquired Stock, (i) only a whole number of share(s) of Stock (and not fractional
shares of Stock) may be tendered in payment, (ii) such Participant must present
evidence acceptable to the Company that he or she has owned any such shares of
Stock tendered in payment (and that such shares of Stock tendered have not been
subject to any substantial risk of forfeiture) for at least six months prior to
the date of exercise and (iii) Stock must be tendered to the Company, either by
actual delivery of the shares or by attestation. When payment is made
by tender of Stock, the difference, if any, between the aggregate amount payable
and the Fair Market Value of the share(s) of Stock tendered in payment (plus any
applicable taxes) shall be paid by check. No Participant may tender
shares of Stock having a Fair Market Value exceeding the aggregate Option
Exercise Price or other payment due.
15.2 Loans and
Guarantees. Except as prohibited by Sec. 4.02 of the
Sarbanes-Oxley Act of 2002 and Sec. 13(k) of the Exchange Act, the Committee
may, in its discretion, cause the Company to guarantee a loan from a third party
to the Participant or to make a loan to the Participant in an amount equal to
all or any portion of the Option Exercise Price and/or any related income
taxes. Any such guarantee or loan by the Company pursuant to this
section shall be upon the following terms and conditions:
15.2.1 Term of Loan. Each
loan or guarantee will extend for a period of not more than five (5)
years.
15
15.2.2 Promissory
Note. Each loan will be evidenced by a promissory note given
by the Participant and for which the Participant shall have full personal
liability. Each such note shall bear interest at such rate per annum
as determined by the Committee, which interest shall be not less than the rate
in effect for the Company’s senior indebtedness to a financial institution and
shall be payable at such times as determined by the Committee but at least no
less frequently than annually. Payments of principal, or installments
thereof, need not be required by the terms of the notes, but may be required
thereby if so determined by the Committee. Principal and interest may
be prepaid in whole or in part, from time to time, without
penalty. Each such note shall in all events become due and payable
without demand on the fifth anniversary of the date of the note, or upon the
Participant's failure to pay any installment of principal and interest when due
or within 30 days thereafter, or immediately upon the insolvency or bankruptcy
of the Participant, or within 30 days from the date of termination of the
Participant’s employment or directorship or office for whatever cause, excepting
only death, Disability and Retirement. In the event of the death of a
Participant, such note shall become due and payable without demand 9 months from
the date of such death. In the event of the Disability or Retirement of a
Participant such note shall become due and payable without demand 3 months from
the date of such permanent disability or approved retirement.
15.2.3 Pledge of
Stock. Each note or guaranty will be secured by a pledge of
the shares of Stock purchased with the proceeds of the loan which shall be
deposited with the Company. Dividends paid on shares subject to the pledge shall
be first applied against interest charges due upon the bank loan, or the note
secured, with any balance applied to reduce the principal thereof. Regardless of
any other provision of this Plan, shares pledged to secure the guarantee or note
may not be withdrawn from the pledge unless the proportionate amount of the
guaranteed bank loan or the note secured thereby shall be immediately
repaid.
15.2.4 Other Terms and
Conditions. All such notes, guaranty and pledges may contain
such further terms and conditions consistent with this Plan, including
provisions for additional collateral security, as may be determined by the
Committee. from time to time.
15.2.5 Approval by
Stockholders. Approval and adoption of this Plan by the
stockholders of the Company shall constitute full and complete authorization for
any guaranty, loan, or interest reimbursement made to or on behalf of
Participant hereunder.
15.2.6 Loans to Outside Directors and
Consultants. Notwithstanding anything contained herein to the
contrary, each note or guaranty representing a loan or guaranty to a
Non-Employee Director or Consultant shall be secured by a pledge of shares equal
to twice their maximum loan value as defined in Federal Reserve Regulation U (12
CFR Part 221) or by such other or additional collateral security as the
Committee deems appropriate and in the best interests of the
Company.
15.2.7 Prohibition of Loans to Officers and
Directors. Pursuant to Sec. 402 of the Sarbanes-Oxley Act of
2002 and Sec. 13(k) of the Exchange Act, the Company is prohibited, directly or
indirectly, from extending or maintaining credit, arranging for the extension of
credit, or renewing an extension of credit, in the form of a personal loan to or
for any director or executive officer (or equivalent thereof) of the
Company.
15.3 Notification under Section
83(b). If a Participant shall, in connection with the exercise
of any Option, or the grant of any share of Restricted Stock, make the election
permitted under Section 83(b) of the code (i.e., an election to include in such
Participant’s gross income in the year of transfer the amounts specified in
Section 83(b) of the Code), such Participant shall notify the Company of such
election within 10 days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant to
regulations issued under the authority of Section 83(b) of the
Code.
15.4 Tax
Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
(including any Stock withheld as provided below) sufficient to satisfy federal,
state and local taxes (including the Participant’s FICA obligation) required by
law to be withheld with respect to an Award made under the Plan.
15.5 Stock
Withholding. With respect to tax withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock,
or upon any other taxable event arising out of or as a result of Awards granted
hereunder, Participants may elect to satisfy the withholding requirement, in
whole or in part, by tendering Stock held by the Participant (by actual delivery
of the shares or by attestation) or by having the Company withhold Stock having
a Fair Market Value equal to the minimum statutory total tax which could be
imposed on the transaction. All elections shall be irrevocable, made
in writing and signed by the Participant.
16
Article
XVI. Termination of Employment/Service
16.1 Options to Employees and
Officers. If a Participant who is an Employee or officer has a
Termination of Employment, then, unless otherwise provided by the Committee or
in the Award Agreement, the following provisions shall apply;
16.1.1 Death. If the
Participant’s Termination of Employment is on account of death, then unvested
options shall be forfeited, and Options, to the extent they are vested on the
date of Termination of Employment, may be exercised, in whole or in part, by the
Participant’s Designated Beneficiary at any time on or before the earlier to
occur of (x) the Expiration Date of the Option and (y) the first anniversary of
the date of such Termination of Employment.
16.1.2 Retirement. If the
Participant’s Termination of Employment is on account of Retirement, then
unvested options shall be forfeited, and Options, to the extent they are vested
on the date of Termination of Employment, may be exercised, in whole or in part,
by the Participant at any time on or before the earlier to occur of (x) the
Expiration Date of the Option and (y) three months after the date of such
Termination of Employment.
16.1.3 Disability. If the
Participant’s Termination of Employment is on account of Disability, unvested
Options shall be forfeited, and Options, to the extent they are vested on the
date of Termination of Employment, may be exercised, in whole or in part, by the
Participant at any time on or before the earlier to occur of (x) the Expiration
Date of the Option and (y) the first anniversary of the date of such Termination
of Employment.
16.1.4 Cause. If the
Participant’s Termination of Employment is on account of cause, all outstanding
Options, vested and unvested, shall terminate and be forfeited on the date of
such Termination of Employment.
16.1.5 Other Reasons. If
the Participant’s termination of Employment is for any reason other than those
enumerated in Sections 16.1.1 through 16.1.4, unvested Options shall be
forfeited, and Options, to the extent they are vested on the date of Termination
of Employment, may be exercised, in whole or in part, by the Participant at any
time on or before the earlier to occur of (x) the Expiration Date of the Option
and (y) three months after the date of such Termination of
Employment.
16.1.6 Death after Termination of
Employment. If (a) the Participant’s Termination of Employment
is for any reason other than death and (b) the Participant dies after such
Termination of Employment but before the date the Options must be exercised as
set forth in the preceding subsections, unvested Options shall be forfeited, and
any Options, to the extent they are vested on the date of the Participant’s
death, may be exercised, in whole or in part, by the Participant’s Designated
Beneficiary at any time on or before the earliest to occur of (x) the Expiration
Date of the Option and (y) the first anniversary of the date of
death.
Reload Options may not be granted after a Termination of
Employment.
16.2 Options to Outside
Directors. If a Participant who is an Outside Director has a
Termination of Service, then, unless otherwise provided by the Committee or in
the Award Agreement, the following provisions shall apply:
16.2.1 Death. If the
Participant’s Termination of Service is on account of death, then unvested
options shall be forfeited, and Options, to the extent they are vested on the
date of Termination of Service, may be exercised, in whole or in part, by the
Participant’s Designated Beneficiary at any time on or before the earlier to
occur of (x) the Expiration Date of the Option and (y) the first anniversary of
the date of such Termination of Service.
16.2.2 Disability. If the
Participant’s Termination of Service is on account of Disability, unvested
Options shall be forfeited, and Options, to the extent they are vested on the
date of Termination of Service, may be exercised, in whole or in part, by the
Participant at any time on or before the earlier to occur of (x) the Expiration
Date of the Option and (y) the first anniversary of the date of such Termination
of Service.
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16.2.3 Retirement After Five Years of
Service. If the Participant’s Termination of Service is on
account of retirement from the Board, after having served at least five (5)
years as a director, then all outstanding Options, to the extent not vested,
shall vest, and all outstanding Options may be exercised, in whole or in part,
by the Participant at any time on or before the Expiration Date of the
Option.
16.2.4 Cause. If the
Participant’s Termination of Service is on account of cause, all outstanding
Options, vested and unvested, shall terminate and be forfeited on the date of
such Termination of Service.
16.2.5 Other Reasons. If
the Participant’s Termination of Service is for any reason other than those
enumerated in Sections 16.2.1 through 16.2.4, unvested Options shall be
forfeited, and Options, to the extent they are vested on the date of Termination
of Service, may be exercised, in whole or in part, by the Participant at any
time on or before the earlier to occur of (x) the Expiration Date of the Option
and (y) three months after the date of such Termination of Service.
16.2.6 Death after Termination of
Service. If (a) the Participant’s Termination of Service is
for any reason other than death and (b) the Participant dies after such
Termination of Service but before the date the Options must be exercised as set
forth in the preceding subsections, unvested Options shall be forfeited, and any
Options, to the extent they are vested on the date of the Participant’s death,
may be exercised, in whole or in part, by the Participant’s Designated
Beneficiary at any time on or before the earliest to occur of (x) the Expiration
Date of the Option and (y) the first anniversary of the date of
death.
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16.3
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Performance
Stock.
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16.3.1 Termination of Employment Due to
Death or Disability. In the event of the Participant’s
Termination of Employment by reason of death or Disability, the Participant
shall receive a lump sum payout of all outstanding Performance Stock calculated
as if all unfinished Performance Periods had ended with 100% of the Performance
Goals achieved, payable in the year following the date of Termination of
Employment.
16.3.2 Termination of Employment for Other
Reasons. In the event of the Participant’s Termination of
Employment for other than a reason set forth in Section 16.3.1 (and other than
for Cause), the Participant may receive no more than a prorated payout of all
Performance Stock, based on the number of months the Participant worked during
the respective Performance Period divided by the number of months in the
Performance Period.
16.3.3 Termination of Employment for
Cause. In the event of a Participant’s Termination of
Employment for Cause, all Performance Stock shall be forfeited by the
Participant to the Company.
16.4 Other Awards. If a
Participant has a Termination of Employment or a Termination of Service, then,
unless otherwise provided by the Committee or in the Award Agreement, all
Awards, other than the Awards enumerated in Sections 16.1, 16.2 and 16.3, shall
terminate and be forfeited on the date of such Termination of Employment or
Termination of Service.
Article
XVII. Cancellation and Rescission of Awards
17.1 Cancellation and Rescission;
Detrimental Activity. Unless the Award Agreement specifies
otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise
limit or restrict any unexpired, unpaid, or deferred Awards at any time if the
Participant is not in compliance with all applicable provisions of the Award
Agreement and the Plan, or if the Participant engages in any “Detrimental
Activity”. For purposes of this Article XVII, “Detrimental Activity”
shall include: (i) the rendering of services for any organization or
engaging directly or indirectly in any business which is or becomes competitive
with the Company, or which organization or business, or the rendering of
services to such organization or business, is or becomes otherwise prejudicial
to or in conflict with the interests of the Company; (ii) the disclosure to
anyone outside the Company, or the use in other than the Company’s business,
without prior written authorization from the Company, of any confidential
information or material relating to the business of the Company, acquired by the
Participant either during or after employment with the Company; (iii) activity
that results in termination of the Participant’s employment or service for
cause; (iv) a violation of any rules, policies, procedures or guidelines of the
Company, including, but not limited to, the Company’s Code of Conduct; (v) any
attempt, directly or indirectly, to induce any employee of the Company to be
employed or perform services elsewhere or any attempt, directly or indirectly,
to solicit the trade or business of any current or prospective customer,
supplier or partner of the Company or (vi) any other conduct or act determined
by the Board to be injurious, detrimental or prejudicial to any interest of the
Company.
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17.2 Certification of
Compliance. Upon exercise, payment or delivery pursuant to an
Award, the Participant, if requested by the Company, shall certify in a manner
acceptable to the Company that he or she is in compliance with the terms and
conditions of the Plan.
17.3 Repayment of Gain;
Set-off. In the event a Participant fails to comply with the
provisions of (i)-(vi) of Section 17.1 prior to, or during the six months after,
any exercise, payment or delivery pursuant to an Award, such exercise, payment
or delivery may be rescinded within two years thereafter. In the
event of any such rescission, the Participant shall pay to the Company the
amount of any gain realized or payment received as a result of the rescinded
exercise, payment or delivery, in such manner and on such terms and conditions
as may be required, and the Company shall be entitled to set-off against the
amount of any such gain any amount owed to the Participant by the
Company.
Article
XVIII. Change in Control
Except as otherwise determined by the
Committee or Board or except as otherwise provided in the Award Agreement, upon
the occurrence of a Change in Control:
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(a)
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any
and all outstanding Options and SARs will immediately become vested and
exercisable;
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(b)
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all
restrictions applicable to outstanding Restricted Stock, Other Stock-Based
Awards and Stock purchased by Participants pursuant to Article XII will
immediately lapse and such Stock will immediately become fully
vested;
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(c)
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the
100% Performance Goal for all Performance Stock relating to incomplete
Performance Periods shall be deemed to have been fully achieved and shall
be converted and distributed in accordance with the other terms of the
Award Agreement and this Plan.
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Article
XIX. Amendment, Modification and Termination
The Board may, at any time and from
time to time, alter, amend, suspend or terminate the Plan in whole or in part,
without the approval of the stockholders of the Company, except as stockholder
approval may be required (i) to permit the Company to deduct, in computing its
income tax liability pursuant to the provisions of the Code, compensation
resulting from Awards, (ii) to retain incentive stock option treatment under
Section 422 of the Code or (iii) under the listing requirements of any
securities exchange on which are listed any of the Company’s equity
securities.
No termination, amendment or
modification of the Plan shall adversely affect in any material way any Award
previously granted under the Plan, without the written consent of the
Participant holding such Award, unless such termination, modification or
amendment is required by applicable law and except as otherwise provided
herein.
Article
XX. Successors
All obligations of the Company under
the Plan, with respect to Awards granted hereunder, shall be binding on any
successor to the Company, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation or otherwise of all or
substantially all of the business and/or assets of the Company.
Article
XXI. Legal Construction
21.1 Gender and
Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular and the singular shall include the plural.
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21.2 Severability. In
the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.
21.3 Requirements of
Law. The granting of Awards and the issuance of Stock under
the Plan shall be subject to all applicable laws, rules and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required.
21.4 Governing Law. To
the extent not preempted by federal law, the Plan, and all agreements hereunder,
shall be construed in accordance with, and governed by, the laws of the State of
Delaware, except with regard to conflicts of law provisions.
Article
XXII. Duration of the Plan
Subject to the Board’s right to earlier
terminate the Plan pursuant to Article XIX hereof, the Plan shall terminate ten
(10) years after the date of the adoption of the Plan by the
Board. However, unless otherwise expressly provided in the Plan or in
an applicable Award Agreement, any Award theretofore granted may extend beyond
the end of such 10-year period, and the authority of the Committee provided for
hereunder with respect to the Plan and any Awards, and the authority of the
Board of Directors of the Company to amend the Plan, shall extend beyond the end
of such period.
Date Plan
adopted by Board: December 12, 2001
Date Plan
approved by Stockholders: February 27, 2002
Date
Amended Plan (2004 Amendment) adopted by Board: November 17, 2004
Date
Amended Plan (2004 Amendment) approved by Stockholders: January 19,
2005
Date
Amended Plan (2007 Amendment) adopted by Board: August 22, 2007
Date
Amended Plan (2007 Amendment) approved by Stockholders: January 23,
2008
Date
Amended Plan (2009 Amendment) approved by Board: February 4,
2009
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