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8-K - FORM 8-K - Morgans Hotel Group Co. | c95206e8vk.htm |
TABLE OF
CONTENTS
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1. PURPOSE
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2. DEFINITIONS
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3. ADMINISTRATION OF THE PLAN
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3.1. Board
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3.2. Committee
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3.3. Terms of Awards
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3.4. Deferral Arrangement
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3.5. No Liability
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3.6. Share Issuance/Book-Entry
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4. STOCK SUBJECT TO THE PLAN
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6 | |||
5. EFFECTIVE DATE, DURATION AND AMENDMENTS
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5.1. Effective Date
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5.2. Term
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5.3. Amendment and Termination of the Plan
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6. AWARD ELIGIBILITY AND LIMITATIONS
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6.1. Service Providers and Other Persons
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6.2. Successive Awards and Substitute Awards
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6.3. Limitation on Shares of Stock Subject to Awards and Cash
Awards
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7. AWARD AGREEMENT
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8. TERMS AND CONDITIONS OF OPTIONS
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8.1. Option Price
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8.2. Vesting
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8.3. Term
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8.4. Termination of Service
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8.5. Limitations on Exercise of Option
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8.6. Method of Exercise
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8.7. Rights of Holders of Options
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8.8. Delivery of Stock Certificates
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8.9. Transferability of Options
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8.10. Family Transfers
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8.11. Limitations on Incentive Stock Options
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8.12. Notification of Disqualifying Disposition
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9. TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS
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9.1. Right to Payment and Grant Price
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9.2. Other Terms
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9.3. Term
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9.4. Transferability of SARS
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9.5. Family Transfers
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10. TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS
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10.1. Grant of Restricted Stock
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10.2. Restrictions
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10.3. Restricted Stock Certificates
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10.4. Rights of Holders of Restricted Stock
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10.5. Rights of Holders of Stock Units
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10.5.1. Voting and Dividend Rights
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10.5.2. Creditors Rights
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10.6. Termination of Service
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10.7. Purchase of Restricted Stock
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10.8. Delivery of Stock
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11. FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK
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11.1. General Rule
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11.2. Surrender of Stock
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11.3. Cashless Exercise
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11.4. Other Forms of Payment
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12. TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS
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12.1. Dividend Equivalent Rights
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12.2. Termination of Service
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13. OTHER STOCK-BASED AWARDS AND LLC UNITS
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14. TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE
AWARDS
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14.1. Performance Conditions
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14.2. Performance or Annual Incentive Awards Granted to
Designated Covered Employees
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14.2.1. Performance Goals Generally
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14.2.2. Business Criteria
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14.2.3. Timing For Establishing Performance Goals
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14.2.4. Settlement of Performance or Annual Incentive Awards;
Other Terms
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14.3. Written Determinations
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14.4. Status of Section 14.2 Awards Under Code Section
162(m)
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15. PARACHUTE LIMITATIONS
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16. REQUIREMENTS OF LAW
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16.1. General
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16.2.
Rule 16b-3
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17. EFFECT OF CHANGES IN CAPITALIZATION
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17.1. Changes in Stock
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17.2. Reorganization in Which the Company Is the Surviving
Entity Which does not Constitute a Corporate Transaction
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17.3. Corporate Transaction
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17.4. Adjustments
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17.5. No Limitations on Company
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18. GENERAL PROVISIONS
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18.1. Disclaimer of Rights
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18.2. Nonexclusivity of the Plan
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18.3. Withholding Taxes
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18.4. Captions
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18.5. Other Provisions
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18.6. Number and Gender
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18.7. Severability
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18.8. Governing Law
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18.9. Code Section 409A
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21 |
ii
MORGANS
HOTEL GROUP CO.
AMENDED
AND RESTATED 2007 OMNIBUS INCENTIVE PLAN
Morgans Hotel Group Co., a Delaware corporation (the
Company), sets forth herein the terms of the
amendment and restatement of its 2007 Omnibus Incentive Plan in
the form of this Amended and Restated 2007 Omnibus Incentive
Plan (the Plan), as follows:
1. | PURPOSE |
The Plan is intended to enhance the Companys and its
Affiliates (as defined herein) ability to attract and
retain highly qualified officers, outside directors, key
employees, and other persons, and to motivate such persons to
serve the Company and its Affiliates and to expend maximum
effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire
or increase a direct proprietary interest in the operations and
future success of the Company. To this end, the Plan provides
for the grant of stock options, stock appreciation rights,
restricted stock, stock units (including deferred stock units),
dividend equivalent rights, cash awards and any other
stock-based award under the Plan. Any of these awards may, but
need not, be made as performance incentives to reward attainment
of annual or long-term performance goals in accordance with the
terms hereof. Stock options granted under the Plan may be
non-qualified stock options or incentive stock options, as
provided herein, except that stock options granted to outside
directors and any consultants or advisers providing services to
the Company or an Affiliate shall in all cases be non-qualified
stock options.
2. | DEFINITIONS |
For purposes of interpreting the Plan and related documents
(including Award Agreements), the following definitions shall
apply:
2.1 Affiliate means, with respect to the
Company, any company or other trade or business that controls,
is controlled by or is under common control with the Company
within the meaning of Rule 405 of Regulation C under
the Securities Act, including, without limitation, any
Subsidiary. For purposes of granting stock options or stock
appreciation rights, an entity may not be considered an
Affiliate unless the Company holds a controlling
interest in such entity, where the term controlling
interest has the same meaning as provided in Treasury
Regulation 1.414(c)-2(b)(2)(i),
provided that the language at least 50 percent
is used instead of at least 80 percent and,
provided further, that where granting of stock options or stock
appreciation rights is based upon a legitimate business
criteria, the language at least 20 percent is
used instead of at least 80 percent each place
it appears in Treasury
Regulation 1.414(c)-2(b)(2)(i).
2.2 Annual Incentive Award means an
Award made subject to attainment of performance goals (as
described in Section 14) over a performance period
of up to one year (the Companys fiscal year, unless
otherwise specified by the Committee).
2.3 Award means a grant of an Option,
Stock Appreciation Right, Restricted Stock, Stock Unit, Dividend
Equivalent Rights, cash award, or any Other Stock-Based Award
under the Plan.
2.4 Award Agreement means the written
agreement between the Company and a Grantee that evidences and
sets out the terms and conditions of an Award. The Committee may
provide for the use of electronic, Internet, or other nonpaper
Award Agreements, and the use of electronic, Internet, or other
nonpaper means for the acceptance thereof and actions thereunder
by a Grantee.
2.5 Benefit Arrangement shall have the
meaning set forth in Section 15 hereof.
2.6 Board means the Board of Directors
of the Company.
2.7 Book Value means, as of any given
date, on a per share basis (i) the shareholders
equity in the Company as of the end of the immediately preceding
fiscal year as reflected in the Companys consolidated
balance sheet, subject to such adjustments as the Committee
shall specify at or after grant, divided by (ii) the number
of then outstanding shares of Stock as of such year-end date (as
adjusted by the Committee for subsequent events).
1
2.8 Cause means, with respect to any
Grantee, the meaning of such term as set forth in the employment
agreement between the Company (or any Affiliate) and the Grantee
or, in the event there is no such employment agreement (or if
any such employment agreement does not contain such a
definition), such term shall mean (i) willful or gross
misconduct or willful or gross negligence in the performance of
his or her duties for the Company or any Affiliate,
(ii) neglect of his or her duties for the Company or any
Affiliate after written notice and opportunity to cure,
(iii) dishonesty, fraud, theft, embezzlement or
misappropriation of funds, properties or assets of the Company
or of any Affiliate, (iv) conviction of a felony or
(v) a direct or indirect material breach of the terms of
any agreement with the Company or any Affiliate.
2.9 Code means the Internal Revenue Code
of 1986, as now in effect or as hereafter amended.
2.10 Committee means a committee of, and
designated from time to time by resolution of, the Board, which
shall be constituted as provided in Section 3.2.
2.11 Company means Morgans Hotel Group
Co.
2.12 Corporate Transaction shall be
deemed to have occurred if (i) any person or group of
persons (as defined in Section 13(d) and 14(d) of the
Exchange Act) together with its affiliates, excluding employee
benefit plans of the Company, is or becomes, directly or
indirectly, the beneficial owner (as defined in
Rule 13d-3
of the Exchange Act) of securities of the Company representing
40% or more of the combined voting power of the Companys
then outstanding securities; or (ii) individuals who at the
beginning of any two-year period constitute the Board, plus new
directors of the Company whose election or nomination for
election by the Companys shareholders is approved by a
vote of at least two-thirds of the directors of the Company
still in office who were directors of the Company at the
beginning of such two-year period, cease for any reason during
such two-year period to constitute at least two-thirds of the
members of the Board; or (iii) a merger or consolidation of
the Company with any other corporation or entity is consummated
regardless of which entity is the survivor, other than a merger
of consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted
into voting securities of the surviving entity) at least 60% of
the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation; or (iv) the Company is
completely liquidated or all or substantially all of the
Companys assets are sold.
2.13 Covered Employee means a Grantee
who is a covered employee within the meaning of
Section 162(m)(3) of the Code.
2.14 Disability means the Grantee is
unable to perform each of the essential duties of such
Grantees position by reason of a medically determinable
physical or mental impairment which is potentially permanent in
character or which can be expected to last for a continuous
period of not less than 12 months; provided, however, that,
with respect to rules regarding expiration of an Incentive Stock
Option following termination of the Grantees Service,
Disability shall mean the Grantee is unable to engage in any
substantial gainful activity by reason of a medically
determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months.
2.15 Dividend Equivalent Right means a
right, granted to a Grantee under Section 12 hereof,
to receive cash, Stock, other Awards or other property equal in
value to dividends paid with respect to a specified number of
shares of Stock, or other periodic payments.
2.16 Effective Date means April 10,
2008, the date this Amended and Restated 2007 Omnibus Incentive
Plan was approved by the Board.
2.17 Exchange Act means the Securities
Exchange Act of 1934, as now in effect or as hereafter amended.
2.18 Fair Market Value with respect to a
share of Stock means the value of a share of such Stock
determined as follows: if on the Grant Date or other
determination date the Stock is listed on an established
national or regional stock exchange, is admitted to quotation on
The NASDAQ Stock Market, Inc. 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 (if there is more than one such
exchange or
2
market the Committee shall determine the appropriate exchange or
market) on the Grant Date or such other 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
day) 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 of
the share of Stock shall be the value of the Stock as determined
by the Committee by the reasonable valuation method, in a manner
consistent with Internal Revenue Code Section 409A
(Code Section 409A). Fair Market
Value with respect to an Award means the value of the
Award as determined by the Committee in good faith, taking into
consideration applicable tax and accounting rules and
regulations.
2.19 Family Member means a person who is
a spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, niece, nephew,
mother-in-law,
father-in-law,
son-in-law,
daughter-in-law,
brother, sister,
brother-in-law,
or
sister-in-law,
including adoptive relationships, of the Grantee, any person
sharing the Grantees household (other than a tenant or
employee), a trust in which any one or more of these persons
have more than fifty percent of the beneficial interest, a
foundation in which any one or more of these persons (or the
Grantee) control the management of assets, and any other entity
in which one or more of these persons (or the Grantee) own more
than fifty percent of the voting interests.
2.20 Good Reason means (a) a
substantial adverse alteration in the Grantees title or
responsibilities from those in effect immediately prior to the
Corporate Transaction; (b) a reduction in the
Grantees annual base salary as of immediately prior to the
Corporate Transaction (or as the same may be increased from time
to time) or a material reduction in the Grantees annual
target bonus opportunity as of immediately prior to the
Corporate Transaction; or (c) the relocation of the Grantee
s principal place of employment to a location more than
35 miles from the Grantees principal place of
employment as of the Corporate Transaction or the Companys
requiring the Grantee to be based anywhere other than such
principal place of employment (or permitted relocation thereof)
except for required travel on the Companys business to an
extent substantially consistent with the Grantees business
travel obligations as of immediately prior to the Corporate
Transaction. The Grantees continued employment shall not
constitute consent to, or a waiver of rights with respect to,
any act or failure to act constituting Good Reason hereunder,
provided that the Grantee provides the Company with a written
notice of resignation within ninety (90) days following the
occurrence of the event constituting Good Reason.
2.21 Grant Date means, as determined by
the Committee, the latest to occur of (i) the date as of
which the Committee approves an Award, (ii) the date on
which the recipient of an Award first becomes eligible to
receive an Award under Section 6 hereof, or
(iii) such other date as may be specified by the Committee.
2.22 Grantee means a person who receives
or holds an Award under the Plan.
2.23 Incentive Stock Option means an
incentive stock option within the meaning of
Section 422 of the Code, or the corresponding provision of
any subsequently enacted tax statute, as amended from time to
time.
2.24 LLC Unit or LLC
Units means a membership interest or membership
interests in Morgans Group LLC, a Delaware limited liability
company and the entity through which the Company conducts a
significant portion of its business.
2.25 Non-qualified Stock Option means an
Option that is not an Incentive Stock Option.
2.26 Option means an option to purchase
one or more shares of Stock pursuant to the Plan.
2.27 Option Price means the exercise
price for each share of Stock subject to an Option.
2.28 Other Agreement shall have the
meaning set forth in Section 15 hereof.
2.29 Other Stock-Based Award shall mean
any right granted under Section 13 of the Plan.
2.30 Outside Director means a member of
the Board who is not an officer or employee of the Company.
3
2.31 Performance Award means an Award
made subject to the attainment of performance goals (as
described in Section 14) over a performance period
of up to ten (10) years.
2.32 Plan means this Morgans Hotel Group
Co. Amended and Restated 2007 Omnibus Incentive Plan, an
amendment and restatement of the Morgans Hotel group Co. 2007
Omnibus Incentive Plan.
2.33 Purchase Price means the purchase
price for each share of Stock pursuant to a grant of Restricted
Stock or Other Stock-Based Award.
2.34 Reporting Person means a person who
is required to file reports under Section 16(a) of the
Exchange Act.
2.35 Restricted Stock means shares of
Stock, awarded to a Grantee pursuant to Section 10
hereof.
2.36 SAR Exercise Price means the per
share exercise price of a SAR granted to a Grantee under
Section 9 hereof.
2.37 Securities Act means the Securities
Act of 1933, as now in effect or as hereafter amended.
2.38 Service means service as a Service
Provider to the Company or an Affiliate. Unless otherwise stated
in the applicable Award Agreement, a Grantees change in
position or duties shall not result in interrupted or terminated
Service, so long as such Grantee continues to be a Service
Provider to the Company or an Affiliate. Subject to the
preceding sentence, whether a termination of Service shall have
occurred for purposes of the Plan shall be determined by the
Committee, which determination shall be final, binding and
conclusive.
2.39 Service Provider means an employee,
officer or director of the Company or an Affiliate, or a
consultant or adviser currently providing services to the
Company or an Affiliate.
2.40 Stock means the common stock, par
value $.01 per share, of the Company.
2.41 Stock Appreciation Right or
SAR means a right granted to a Grantee under
Section 9 hereof.
2.42 Stock Unit means a bookkeeping
entry representing the equivalent of one share of Stock awarded
to a Grantee pursuant to Section 10 hereof.
2.43 Subsidiary means any
subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.
2.44 Substitute Awards means Awards
granted upon assumption of, or in substitution for, outstanding
awards previously granted by a company or other entity acquired
by the Company or any Affiliate or with which the Company or any
Affiliate combines.
2.45 Ten Percent Stockholder means
an individual who owns more than ten percent (10%) of the total
combined voting power of all classes of outstanding stock of the
Company, its parent or any of its Subsidiaries. In determining
stock ownership, the attribution rules of Section 424(d) of
the Code shall be applied.
3. | ADMINISTRATION OF THE PLAN |
3.1. Board
The Board shall have such powers and authorities related to the
administration of the Plan as are consistent with the
Companys certificate of incorporation and by-laws and
applicable law. The Board shall have full power and authority to
take all actions and to make all determinations required or
provided for under the Plan, any Award or any Award Agreement,
and shall have full power and authority to take all such other
actions and make all such other determinations not inconsistent
with the specific terms and provisions of the Plan that the
Board deems to be necessary or appropriate to the administration
of the Plan, any Award or any Award Agreement. All such actions
and determinations shall be by the affirmative vote of a
majority of the members of the Board present at a meeting or by
unanimous consent of the Board executed in writing in accordance
with the Companys certificate of incorporation and by-laws
and applicable law. The interpretation and construction by the
Board of any provision of the Plan, any Award or any Award
Agreement shall be final, binding and conclusive.
4
3.2. Committee.
The Board has delegated to the Committee the powers and
authorities related to the administration and implementation of
the Plan, as set forth in Section 3.1 above and
other applicable provisions, consistent with the certificate of
incorporation and by-laws of the Company and applicable law.
(i) Except as provided in Subsection (ii) and except
as the Board may otherwise determine, the Committee appointed by
the Board to administer the Plan shall consist of two or more
Outside Directors of the Company who: (a) qualify as
outside directors within the meaning of
Section 162(m) of the Code and who (b) meet such other
requirements as may be established from time to time by the
Securities and Exchange Commission for plans intended to qualify
for exemption under
Rule 16b-3
(or its successor) under the Exchange Act and (c) who
comply with the independence requirements of the stock exchange
on which the Common Stock is listed.
(ii) The Board may also appoint one or more separate
committees of the Board, each composed of one or more directors
of the Company who need not be Outside Directors, who may
administer the Plan with respect to employees or other Service
Providers who are not executive officers or directors of the
Company, may grant Awards under the Plan to such employees or
other Service Providers, and may determine all terms of such
Awards.
In the event that the Plan, any Award or any Award Agreement
entered into hereunder provides for any action to be taken by or
determination to be made by the Committee, such action may be
taken or such determination may be made by the Board. Unless
otherwise expressly determined by the Board, any action or
determination by the Committee shall be final, binding and
conclusive. To the extent permitted by law, the Committee may
delegate its authority under the Plan to a member of the Board.
3.3. Terms
of Awards.
Subject to the other terms and conditions of the Plan, the
Committee shall have full and final authority to:
(i) designate Grantees,
(ii) determine the type or types of Awards to be made to a
Grantee,
(iii) determine the number of shares of Stock to be subject
to an Award,
(iv) establish the terms and conditions of each Award
(including, but not limited to, the exercise price of any
Option, the nature and duration of any restriction or condition
(or provision for lapse thereof ) relating to the vesting,
exercise, transfer, or forfeiture of an Award or the shares of
Stock subject thereto, and any terms or conditions that may be
necessary to qualify Options as Incentive Stock Options),
(v) prescribe the form of each Award Agreement evidencing
an Award, and
(vi) amend, modify, or supplement the terms of any
outstanding Award. Such authority specifically includes the
authority, in order to effectuate the purposes of the Plan but
without amending the Plan, to modify Awards to eligible
individuals who are foreign nationals or are individuals who are
employed outside the United States to recognize differences in
local law, tax policy, or custom. Notwithstanding the foregoing,
no amendment, modification or supplement of any Award shall,
without the consent of the Grantee, impair the Grantees
rights under such Award other than amendments or modifications
necessary to comply with Code Section 409A and amendments
pursuant to Section 5.3.
The Company may retain the right in an Award Agreement to cause
a forfeiture of the gain realized by a Grantee on account of
actions taken by the Grantee in violation or breach of or in
conflict with any employment agreement, non-competition
agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any
confidentiality obligation with respect to the Company or any
Affiliate thereof or otherwise in competition with the Company
or any Affiliate thereof, to the extent specified in such Award
Agreement applicable to the Grantee. Furthermore, the Company
may annul an Award if the Grantee is an employee of the Company
or an Affiliate thereof and is terminated for Cause as defined
in the applicable Award Agreement or the Plan, as applicable.
5
Furthermore, if the Company is required to prepare an accounting
restatement due to the material noncompliance of the Company, as
a result of misconduct, with any financial reporting requirement
under the securities laws, the individuals subject to automatic
forfeiture under Section 304 of the Sarbanes-Oxley Act of
2002 and any Grantee who knowingly engaged in the misconduct,
was grossly negligent in engaging in the misconduct, knowingly
failed to prevent the misconduct or was grossly negligent in
failing to prevent the misconduct, shall reimburse the Company
the amount of any payment in settlement of an Award earned or
accrued during the twelve-(12) month period following the first
public issuance or filing with the United State Securities and
Exchange Commission (whichever first occurred) of the financial
document that contained such material noncompliance.
Notwithstanding the foregoing, no amendment or modification may
be made to an outstanding Option or SAR, including without
limitation by replacement of underwater Options or SARs with
cash or other award type, that would be treated as a repricing
under the rules of the stock exchange on which the Stock is
listed or result in replacement of underwater Options or SARs
with cash or other award with an exercise price below the Fair
Market Value as of the date of such replacement award, in each
case, without the approval of the stockholders of the Company,
provided, that, appropriate adjustments may be made to
outstanding Options and SARs pursuant to Section 17
or Section 5.3 and may be made to make changes
to achieve compliance with applicable law, including Code
Section 409A.
3.4. Deferral
Arrangement.
The Committee may permit or require the deferral of any award
payment into a deferred compensation arrangement, subject to
such rules and procedures as it may establish, which may include
provisions for the payment or crediting of interest or dividend
equivalents, including converting such credits into deferred
Stock equivalents, and restricting deferrals to comply with
hardship distribution rules affecting 401(k) plans. Any such
deferrals shall be made in a manner that complies with Code
Section 409A.
3.5. No
Liability.
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.
3.6. Share
Issuance/Book-Entry
Notwithstanding any provision of this Plan to the contrary, the
issuance of the Stock under the Plan may be evidenced in such a
manner as the Committee, in its discretion, deems appropriate,
including, without limitation, book-entry registration or
issuance of one or more Stock certificates.
4. | STOCK SUBJECT TO THE PLAN |
Subject to adjustment as provided in Section 17
hereof, the number of shares of Stock available for issuance
under the Plan shall be eleven million six hundred ten thousand
11,610,000 all of which may be granted as Incentive Stock
Options. Stock issued or to be issued under the Plan shall be
authorized but unissued shares; or, to the extent permitted by
applicable law, issued shares that have been reacquired by the
Company. If any shares covered by an Award are not purchased or
are forfeited, or if an Award otherwise terminates without
delivery of any Stock subject thereto, then the number of shares
of Stock counted against the aggregate number of shares
available under the Plan with respect to such Award shall, to
the extent of any such forfeiture or termination, again be
available for making Awards under the Plan. The number of shares
available for issuance under the Plan shall be reduced by the
number of shares subject to Options and SARs. Upon a grant of
Awards other than Awards of Options or SARs, the number of
shares available for issuance under the Plan shall be reduced by
1.7 times the number of shares of Stock subject to such Awards
and any shares underlying Options or SARs not purchased or
forfeited shall be added back to the limit set forth above by
1.7 times the number of shares of Stock subject to such Awards.
The number of shares of Stock available for issuance under the
Plan shall not be increased by (i) any shares of Stock
tendered or withheld or Award surrendered in connection with the
purchase of shares of Stock upon exercise of an Option, or
(ii) any shares of Stock deducted or delivered from an
Award payment in connection with the Companys tax
withholding obligations.
6
The Committee shall have the right to substitute or assume
Awards in connection with mergers, reorganizations, separations,
or other transactions to which Section 424(a) of the Code
applies. The number of shares of Stock reserved pursuant to
Section 4 may be increased by the corresponding
number of Awards assumed and, in the case of a substitution, by
the net increase in the number of shares of Stock subject to
Awards before and after the substitution. The Committee may
adopt reasonable counting procedures to ensure appropriate
counting, to avoid double counting (as, for example, in the case
of tandem or substitute awards).
5. | EFFECTIVE DATE, DURATION AND AMENDMENTS |
5.1. Effective
Date.
The amendment and restatement of the 2007 Omnibus Incentive Plan
shall be effective as of the Effective Date of the Plan, subject
to approval of the Plan by the Companys stockholders
within one year of the Effective Date. Upon approval of the Plan
by the stockholders of the Company as set forth above, all
Awards made under the Plan on or after the Effective Date shall
be fully effective as if the stockholders of the Company had
approved the Plan on the Effective Date. If the stockholders
fail to approve the Plan within one year of the Effective Date
of the Plan, any Awards made hereunder shall be null and void
and of no effect.
5.2. Term.
The Plan shall terminate automatically ten (10) years after
its adoption by the Board and may be terminated on any earlier
date as provided in Section 5.3.
5.3. Amendment
and Termination of the Plan
The Board may, at any time and from time to time, amend,
suspend, or terminate the Plan as to any shares of Stock as to
which Awards have not been made. No Awards shall be made after
termination of the Plan. No amendment, suspension, or
termination of the Plan shall, without the consent of the
Grantee, impair rights or obligations under any Award
theretofore awarded under the Plan.
5.4 Additional
Provisions
Any provision of the Plan or any Award Agreement
notwithstanding, the Committee may cause any Award granted
hereunder to be amended, modified or cancelled in consideration
of a cash payment, an alternative Award or both made to the
holder of such cancelled Award equal to or greater than the Fair
Market Value of such cancelled Award.
6. | AWARD ELIGIBILITY AND LIMITATIONS |
6.1. Service
Providers and Other Persons
Subject to this Section 6, Awards may be made under
the Plan to: (i) any Service Provider to the Company or of
any Affiliate, including any Service Provider who is an officer
or director of the Company, or of any Affiliate, as the
Committee shall determine and designate from time to time and
(ii) any other individual whose participation in the Plan
is determined to be in the best interests of the Company by the
Committee.
6.2. Successive
Awards and Substitute Awards.
An eligible person may receive more than one Award, subject to
such restrictions as are provided herein. Notwithstanding
Sections 8.1 and 9.1, the Option Price of an
Option or the grant price of a SAR that is a Substitute Award
may be less than 100% of the Fair Market Value of a share of
Common Stock on the original date of grant; provided, that, the
Option Price or grant price is determined in accordance with the
principles of Code Section 424 and the regulations
thereunder; as modified by Code Section 409A and the
regulations thereunder as Options that are non-qualified stock
options and SARs.
7
6.3. Limitation
on Shares of Stock Subject to Awards and Cash
Awards.
During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act:
(i) the maximum number of shares of Stock subject to
Options or SARs that can be awarded under the Plan to any person
eligible for an Award under Section 6 hereof is
2,000,000 (two million) shares per calendar year.
(ii) the maximum number of shares that can be awarded under
the Plan, other than pursuant to an Option or SAR, to any person
eligible for an Award under Section 6 hereof is
2,000,000 (two million) shares per calendar year.
(iii) the maximum amount that may be earned as an Annual
Incentive Award or other cash Award in any calendar year by any
one Grantee shall be $10,000,000 (ten million dollars) and the
maximum amount that may be earned as a Performance Award or
other cash Award in respect of a performance period of greater
than one year by any one Grantee shall be $25,000,000
(twenty-five million dollars).
The preceding limitations in this Section 6.3 are
subject to adjustment as provided in Section 17
hereof.
7. | AWARD AGREEMENT |
Each Award granted pursuant to the Plan shall be evidenced by an
Award Agreement, in such form or forms as the Committee shall
from time to time determine. Award Agreements granted from time
to time or at the same time need not contain similar provisions
but shall be consistent with the terms of the Plan. Each Award
Agreement evidencing an Award of Options shall specify whether
such Options are intended to be Non-qualified Stock Options or
Incentive Stock Options, and in the absence of such
specification such options shall be deemed Non-qualified Stock
Options.
8. | TERMS AND CONDITIONS OF OPTIONS |
8.1. Option
Price
The Option Price of each Option shall be fixed by the Committee
and stated in the Award Agreement evidencing such Option. Except
in the case of Substitute Awards, the Option Price of each
Option shall be at least the Fair Market Value on the Grant Date
of a share of Stock; provided, however, that in
the event that a Grantee is a Ten Percent Stockholder, the
Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than
110 percent of the Fair Market Value of a share of Stock on
the Grant Date. In no case shall the Option Price of any Option
be less than the par value of a share of Stock.
8.2. Vesting.
Subject to Sections 8.3 and 17.3 hereof, each Option
granted under the Plan shall become exercisable at such times
and under such conditions as shall be determined by the
Committee and stated in the Award Agreement. For purposes of
this Section 8.2, fractional numbers of shares of
Stock subject to an Option shall be rounded down to the next
nearest whole number.
8.3. Term.
Each Option granted under the Plan shall terminate, and all
rights to purchase shares of Stock thereunder shall cease, upon
the expiration of ten years from the date such Option is
granted, or under such circumstances and on such date prior
thereto as is set forth in the Plan or as may be fixed by the
Committee and stated in the Award Agreement relating to such
Option; provided, however, that in the event that
the Grantee is a Ten Percent Stockholder, an Option granted
to such Grantee that is intended to be an Incentive Stock Option
shall not be exercisable after the expiration of five years from
its Grant Date. If on the day preceding the date on which a
Grantees Options would otherwise terminate, the Fair
Market Value of shares of Stock underlying a Grantees
Options is greater than the Option Price of such Options, the
Company shall, prior to the termination of such Options and
without any action being taken on the part of the Grantee,
consider such Options to have been exercised by the Grantee. The
8
Company shall deduct from the shares of Stock deliverable to the
Grantee upon such exercise the number of shares of Stock
necessary to satisfy payment of the Option Price and all
withholding obligations.
8.4. Termination
of Service.
Each Award Agreement shall set forth the extent to which the
Grantee shall have the right to exercise the Option following
termination of the Grantees Service. Such provisions shall
be determined in the sole discretion of the Committee, need not
be uniform among all Options issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination of
Service.
8.5. Limitations
on Exercise of Option.
Notwithstanding any other provision of the Plan, in no event may
any Option be exercised, in whole or in part, prior to the date
the Plan is approved by the stockholders of the Company as
provided herein or after the occurrence of an event referred to
in Section 17 hereof which results in termination of
the Option.
8.6. Method
of Exercise.
An Option that is exercisable may be exercised by the
Grantees delivery to the Company of written notice of
exercise on any business day, at the Companys principal
office, on the form specified by the Company. Such notice shall
specify the number of shares of Stock with respect to which the
Option is being exercised and shall be accompanied by payment in
full of the Option Price of the shares for which the Option is
being exercised plus the amount (if any) of federal
and/or other
taxes which the Company may, in its judgment, be required to
withhold with respect to an Award. The minimum number of shares
of Stock with respect to which an Option may be exercised, in
whole or in part, at any time shall be the lesser of
(i) 100 shares or such lesser number set forth in the
applicable Award Agreement and (ii) the maximum number of
shares available for purchase under the Option at the time of
exercise.
8.7. Rights
of Holders of Options
Unless otherwise stated in the applicable Award Agreement, an
individual holding or exercising an Option shall have none of
the rights of a stockholder (for example, the right to receive
cash or dividend payments or distributions attributable to the
subject shares of Stock or to direct the voting of the subject
shares of Stock ) until the shares of Stock covered thereby are
fully paid and issued to him. Except as provided in
Section 17 hereof, no adjustment shall be made for
dividends, distributions or other rights for which the record
date is prior to the date of such issuance.
8.8. Delivery
of Stock Certificates.
Promptly after the exercise of an Option by a Grantee and the
payment in full of the Option Price, such Grantee shall be
entitled to the issuance of a stock certificate or certificates
evidencing his or her ownership of the shares of Stock subject
to the Option. Notwithstanding any other provision of this Plan
to the contrary, the Company may elect to satisfy any
requirement under this Plan for the delivery of stock
certificates through the use of book-entry.
8.9. Transferability
of Options
Except as provided in Section 8.10, during the
lifetime of a Grantee, only the Grantee (or, in the event of
legal incapacity or incompetency, the Grantees guardian or
legal representative) may exercise an Option. Except as provided
in Section 8.10, no Option shall be assignable or
transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.
8.10. Family
Transfers.
If authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of an Option which is not
an Incentive Stock Option to any Family Member. For the purpose
of this Section 8.10, a not for value
transfer is a transfer which is (i) a gift, (ii) a
transfer under a domestic relations order in settlement of
marital
9
property rights; or (iii) a transfer to an entity in which
more than fifty percent of the voting interests are owned by
Family Members (or the Grantee) in exchange for an interest in
that entity. Following a transfer under this
Section 8.10, any such Option shall continue to be
subject to the same terms and conditions as were applicable
immediately prior to transfer. Subsequent transfers of
transferred Options are prohibited except to Family Members of
the original Grantee in accordance with this
Section 8.10 or by will or the laws of descent and
distribution. The events of termination of Service of
Section 8.4 hereof shall continue to be applied with
respect to the original Grantee, following which the Option
shall be exercisable by the transferee only to the extent, and
for the periods specified, in Section 8.4.
8.11. Limitations
on Incentive Stock Options.
An Option shall constitute an Incentive Stock Option only
(i) if the Grantee of such Option is an employee of the
Company or any Subsidiary of the Company; (ii) to the
extent specifically provided in the related Award Agreement; and
(iii) to the extent that the aggregate Fair Market Value
(determined at the time the Option is granted) of the shares of
Stock with respect to which all Incentive Stock Options held by
such Grantee become exercisable for the first time during any
calendar year (under the Plan and all other plans of the
Grantees employer and its Affiliates) does not exceed
$100,000. This limitation shall be applied by taking Options
into account in the order in which they were granted.
8.12. Notification
of Disqualifying Disposition
If any Grantee shall make any disposition of Shares issued
pursuant to the exercise of an Incentive Stock Option under the
circumstances described in Code Section 421(b) (relating to
certain disqualifying dispositions), such Grantee shall notify
the Company of such disposition within ten (10) days
thereof.
9. | TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS |
9.1. Right
to Payment and Grant Price.
A SAR shall confer on the Grantee to whom it is granted a right
to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise
over (B) the grant price of the SAR as determined by the
Committee. The Award Agreement for a SAR shall specify the grant
price of the SAR, which shall be at least the Fair Market Value
of a share of Stock on the date of grant. SARs may be granted in
conjunction with all or part of an Option granted under the Plan
or at any subsequent time during the term of such Option, in
conjunction with all or part of any other Award or without
regard to any Option or other Award; provided that a SAR that is
granted subsequent to the Grant Date of a related Option must
have a SAR Exercise Price that is no less than the Fair Market
Value of one share of Stock on the SAR Grant Date.
9.2. Other
Terms.
The Committee shall determine at the date of grant or
thereafter, the time or times at which and the circumstances
under which a SAR may be exercised in whole or in part
(including based on achievement of performance goals
and/or
future service requirements), the time or times at which SARs
shall cease to be or become exercisable following termination of
Service or upon other conditions, the method of exercise, method
of settlement, form of consideration payable in settlement,
method by or forms in which Stock will be delivered or deemed to
be delivered to Grantees, whether or not a SAR shall be in
tandem or in combination with any other Award, and any other
terms and conditions of any SAR.
9.3. Term.
Each SAR granted under the Plan shall terminate, and all rights
to purchase shares of Stock thereunder shall cease, upon the
expiration of ten years from the date such SAR is granted, or
under such circumstances and on such date prior thereto as is
set forth in the Plan or as may be fixed by the Committee and
stated in the Award Agreement relating to such SAR. If on the
day preceding the date on which a Grantees SAR would
otherwise terminate, the Fair Market Value of shares of Stock
underlying a Grantees SAR is greater than the SAR Exercise
Price of such SAR, the Company shall, prior to the termination
of such SAR and without any action being taken on the part of
the
10
Grantee, consider such SAR to have been exercised by the
Grantee. The Company shall deduct from the shares of Stock
deliverable to the Grantee upon such exercise the number of
shares of Stock necessary to satisfy payment of the SAR Exercise
Price and all withholding obligations
9.4. Transferability
of SARS
Except as provided in Section 9.5, during the
lifetime of a Grantee, only the Grantee (or, in the event of
legal incapacity or incompetency, the Grantees guardian or
legal representative) may exercise a SAR. Except as provided in
Section 9.5, no SAR shall be assignable or
transferable by the Grantee to whom it is granted, other than by
will or the laws of descent and distribution.
9.5. Family
Transfers.
If authorized in the applicable Award Agreement, a Grantee may
transfer, not for value, all or part of a SAR to any Family
Member. For the purpose of this Section 9.5, a
not for value transfer is a transfer which is
(i) a gift, (ii) a transfer under a domestic relations
order in settlement of marital property rights; or (iii) a
transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in
exchange for an interest in that entity. Following a transfer
under this Section 9.5, any such SAR shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers
of transferred SARs are prohibited except to Family Members of
the original Grantee in accordance with this Section 9.5
or by will or the laws of descent and distribution.
10. | TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS |
10.1. Grant
of Restricted Stock.
Awards of Restricted Stock or Stock Units may be made for no
consideration (other than par value of the shares which is
deemed paid by Services already rendered).
10.2. Restrictions.
At the time a grant of Restricted Stock or Stock Units is made,
the Committee may, in its sole discretion, establish a period of
time (a restricted period) applicable to such
Restricted Stock or Stock Units. Each Award of Restricted Stock
or Stock Units may be subject to a different restricted period.
The Committee may, in its sole discretion, at the time a grant
of Restricted Stock or Stock Units is made, prescribe
restrictions in addition to or other than the expiration of the
restricted period, including the satisfaction of corporate or
individual performance objectives, which may be applicable to
all or any portion of the Restricted Stock or Stock Units in
accordance with Section 14.1 and 14.2.
Restricted Stock, Stock Units Awards or Other Stock-Based Awards
may be granted or sold as described in the preceding sentence in
respect of past or future services and other valid
consideration, or in lieu of, or in addition to, any cash
compensation due to such Grantee. Notwithstanding the foregoing,
Restricted Stock and Stock Units that vest solely by the passage
of time shall not vest in full in less than three (3) years
from the Grant Date; provided, however, up to ten percent of the
shares reserved for issuance under this Plan may be granted
pursuant to this Section 10 or the other provisions of this
Plan without being subject to the foregoing restrictions.
Restricted Stock and Stock Units for which vesting may be
accelerated by achieving performance targets shall not vest in
full in less than one (1) year from the Grant Date. Neither
Restricted Stock nor Stock Units may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of during
the restricted period or prior to the satisfaction of any other
restrictions prescribed by the Committee with respect to such
Restricted Stock or Stock Units. The limitations stated in this
Section 10.2 apply to Sections 13 and 14.
10.3. Restricted
Stock Certificates.
The Company shall issue, in the name of each Grantee to whom
Restricted Stock has been granted, stock certificates
representing the total number of shares of Restricted Stock
granted to the Grantee, as soon as reasonably practicable after
the Grant Date. The Committee may provide in an Award Agreement
that either (i) the Secretary of the Company shall hold
such certificates for the Grantees benefit until such time
as the Restricted Stock is forfeited to the Company or the
restrictions lapse, or (ii) such certificates shall be
delivered to the Grantee, provided,
11
however, that such certificates shall bear a legend or
legends that comply with the applicable securities laws and
regulations and makes appropriate reference to the restrictions
imposed under the Plan and the Award Agreement. Notwithstanding
any other provision of this Plan to the contrary, the Company
may elect to satisfy any requirement under this Plan for the
delivery of stock certificates through the use of book-entry.
10.4. Rights
of Holders of Restricted Stock.
Unless the Committee otherwise provides in an Award Agreement,
holders of Restricted Stock shall have the right to vote such
Stock and the right to receive any dividends declared or paid
with respect to such Stock. The Committee may provide that any
dividends paid on Restricted Stock must be reinvested in shares
of Stock, which may or may not be subject to the same vesting
conditions and restrictions applicable to such Restricted Stock.
All distributions, if any, received by a Grantee with respect to
Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction shall be
subject to the restrictions applicable to the original Grant.
10.5. Rights
of Holders of Stock Units.
10.5.1. Voting
and Dividend Rights.
Holders of Stock Units shall have no rights as stockholders of
the Company. The Committee may provide in an Award Agreement
evidencing a grant of Stock Units that the holder of such Stock
Units shall be entitled to receive, upon the Companys
payment of a cash dividend on its outstanding Stock, a cash
payment for each Stock Unit held equal to the per-share dividend
paid on the Stock. Such Award Agreement may also provide that
such cash payment will be deemed reinvested in additional Stock
Units at a price per unit equal to the Fair Market Value of a
share of Stock on the date that such dividend is paid.
10.5.2. Creditors
Rights.
A holder of Stock Units shall have no rights other than those of
a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the
terms and conditions of the applicable Award Agreement.
10.6. Termination
of Service.
Unless the Committee otherwise provides in an Award Agreement or
in writing after the Award Agreement is issued, upon the
termination of a Grantees Service, any Restricted Stock or
Stock Units held by such Grantee that have not vested, or with
respect to which all applicable restrictions and conditions have
not lapsed, shall immediately be deemed forfeited. Such
provisions shall be determined in the sole discretion of the
Committee, need not be uniform among all Restricted Stock and
Stock Unit Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination of Service.
Upon forfeiture of Restricted Stock or Stock Units, the Grantee
shall have no further rights with respect to such Award,
including but not limited to any right to vote Restricted Stock
or any right to receive dividends with respect to shares of
Restricted Stock or Stock Units.
10.7. Purchase
of Restricted Stock.
The Grantee shall be required, to the extent required by
applicable law, to purchase the Restricted Stock from the
Company at a Purchase Price equal to the greater of (i) the
aggregate par value of the shares of Stock represented by such
Restricted Stock or (ii) the Purchase Price, if any,
specified in the Award Agreement relating to such Restricted
Stock. The Purchase Price shall be payable in a form described
in Section 11 or, in the discretion of the
Committee, in consideration for past or future Services rendered
to the Company or an Affiliate.
10.8. Delivery
of Stock.
Upon the expiration or termination of any restricted period and
the satisfaction of any other conditions prescribed by the
Committee, the restrictions applicable to shares of Restricted
Stock or Stock Units settled in Stock shall lapse, and, unless
otherwise provided in the Award Agreement, a stock certificate
for such shares shall be
12
delivered, free of all such restrictions, to the Grantee or the
Grantees beneficiary or estate, as the case may be.
Neither the Grantee, nor the Grantees beneficiary or
estate, shall have any further rights with regard to a Stock
Unit once the share of Stock represented by the Stock Unit has
been delivered.
11. | FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK |
11.1. General
Rule.
Payment of the Option Price for the shares purchased pursuant to
the exercise of an Option or the Purchase Price for Restricted
Stock shall be made in cash or in cash equivalents acceptable to
the Company.
11.2. Surrender
of Stock.
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock, if any, may
be made all or in part through the tender to the Company of
shares of Stock, which shall be valued, for purposes of
determining the extent to which the Option Price or Purchase
Price has been paid thereby, at their Fair Market Value on the
date of exercise or surrender.
11.3. Cashless
Exercise.
With respect to an Option only (and not with respect to
Restricted Stock), to the extent permitted by law and to the
extent the Award Agreement so provides, payment of the Option
Price for shares purchased pursuant to the exercise of an Option
may be made all or in part by delivery (on a form acceptable to
the Committee) of an irrevocable direction to a licensed
securities broker acceptable to the Company to sell shares of
Stock and to deliver all or part of the sales proceeds to the
Company in payment of the Option Price and any withholding taxes
described in Section 18.3.
11.4. Other
Forms of Payment.
To the extent the Award Agreement so provides, payment of the
Option Price for shares purchased pursuant to exercise of an
Option or the Purchase Price for Restricted Stock may be made in
any other form that is consistent with applicable laws,
regulations and rules.
12. | TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS |
12.1. Dividend
Equivalent Rights.
A Dividend Equivalent Right is an Award entitling the recipient
to receive credits based on cash distributions that would have
been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such
shares had been issued to and held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any Grantee. The
terms and conditions of Dividend Equivalent Rights shall be
specified in the grant. Dividend equivalents credited to the
holder of a Dividend Equivalent Right may be paid currently or
may be deemed to be reinvested in additional shares of Stock,
which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of
reinvestment. Dividend Equivalent Rights may be settled in cash
or Stock or a combination thereof, in a single installment or
installments, all determined in the sole discretion of the
Committee. A Dividend Equivalent Right granted as a component of
another Award may provide that such Dividend Equivalent Right
shall be settled upon exercise, settlement, or payment of, or
lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other award. A
Dividend Equivalent Right granted as a component of another
Award may also contain terms and conditions different from such
other award.
12.2. Termination
of Service.
Except as may otherwise be provided by the Committee either in
the Award Agreement or in writing after the Award Agreement is
issued, a Grantees rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate
upon the Grantees termination of Service for any reason.
13
13. | OTHER STOCK-BASED AWARDS AND LLC UNITS |
Other forms of Awards (Other Stock-Based Awards) that may
be granted under the Plan include Awards that are valued in
whole or in part by reference to, or are otherwise calculated by
reference to or based on, shares of Stock, including without
limitation, (i) LLC Units, (ii) convertible preferred
stock, convertible debentures and other convertible,
exchangeable or redeemable securities or equity interests
(including LLC Units), (iii) membership interests in a
Subsidiary or operating partnership, (iv) Awards valued by
reference to Book Value, fair value or Subsidiary performance,
and (v) any class of profits interest or limited liability
company membership interest created or issued pursuant to the
terms of the partnership agreement, limited liability company
operating agreement or otherwise by an Affiliate that has
elected to be treated as a partnership for federal income tax
purposes and qualifies as a profits interest within
the meaning of Revenue Procedure
93-27 with
respect to a Grantee who is rendering services to the issuing
Affiliate.
For purposes of calculating the number of shares of Stock
underlying an Other Stock-Based Award relative to the total
number of shares of Stock reserved and available for issuance
under this Section, the Committee shall establish in good faith
the maximum number of shares of Stock to which a Grantee of such
Other Stock-Based Award may be entitled upon fulfillment of all
applicable conditions set forth in the relevant Award
documentation, including vesting, accretion factors, conversion
ratios, exchange ratios and the like. If and when any such
conditions are no longer capable of being met, in whole or in
part, the number of shares of Stock underlying such Other
Stock-Based Award shall be reduced accordingly by the Committee
and the related shares of Stock shall be added back to the
shares of Stock available for issuance under the Plan. Other
Stock-Based Awards may be issued either alone or in addition to
other Awards granted under the Plan and shall be evidenced by an
award agreement. The Committee shall determine the Grantees to
whom, and the time or times at which, Other Stock-Based Awards
shall be made; the number of shares of Stock or LLC Units to be
awarded; the price, if any, to be paid by the Grantee for the
acquisition of Other Stock-Based Awards; and the restriction and
conditions applicable to Other Stock-Based Awards. Conditions
may be based on continuing employment (or other service
relationship), computation of financial metrics
and/or
achievement of pre-established performance goals and objectives.
The Committee may require that Other Stock-Based Awards be held
through a limited partnership or similar
look-through entity, and the Committee may require
such limited partnership or similar entity to impose
restrictions on its partners or other beneficial owners that are
not inconsistent with the provisions of this Section. The
provision of the grant of Other Stock-Based Awards need not be
the same with respect to each Grantee.
Subject to the provisions of this Plan and the award agreement
or such other agreement and unless otherwise determined by the
Committee at grant, the Grantee of an award under this Section
shall be entitled to receive, currently or on a deferred basis,
interest or dividends or interest equivalents or Dividend
Equivalent Rights with respect to the number of shares of Stock
covered by the Award, as determined at the time of the Award by
the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been
reinvested in additional shares of Stock or otherwise reinvested.
Shares of Stock (including securities convertible into shares of
Stock) issued on a bonus basis under this Section may be issued
for no cash consideration.
14. | TERMS AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE AWARDS |
14.1. Performance
Conditions
The right of a Grantee to exercise or receive a grant or
settlement of any Award, and the timing thereof, may be subject
to such performance conditions as may be specified by the
Committee. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in
establishing any performance conditions, and may exercise its
discretion to reduce the amounts payable under any Award subject
to performance conditions, except as limited under
Sections 14.2 hereof in the case of a Performance
Award or Annual Incentive Award intended to qualify under Code
Section 162(m). The Committee also has the authority to
provide for accelerated vesting of any Award based on the
achievement of performance goals pursuant to the performance
conditions set forth in this Section 14. If and to
the extent required under Code Section 162(m), any power or
authority relating to a Performance Award or Annual Incentive
Award intended to qualify under Code Section 162(m), shall
be exercised by the Committee and not the Board.
14
In the event that applicable tax
and/or
securities laws change to permit Board discretion to alter the
governing performance measures without obtaining shareholder
approval of such changes, the Board shall have sole discretion
to make such changes without obtaining shareholder approval
provided the exercise of such discretion does not violate Code
Section 409A. In addition, in the event that the Committee
determines that it is advisable to grant Awards that shall not
qualify as performance-based compensation, the Committee may
make such grants without satisfying the requirements of Code
Section 162(m) and base vesting on performance measures
other than those set forth in this Section 14.
14.2. Performance
or Annual Incentive Awards Granted to Designated Covered
Employees
If and to the extent that the Committee determines that a
Performance or Annual Incentive Award to be granted to a Grantee
who is designated by the Committee as likely to be a Covered
Employee should qualify as performance-based
compensation for purposes of Code Section 162(m), the
grant, exercise
and/or
settlement of such Performance or Annual Incentive Award shall
be contingent upon achievement of pre-established performance
goals and other terms set forth in this Section 14.2.
14.2.1. Performance
Goals Generally.
The performance goals for such Performance or Annual Incentive
Awards shall consist of one or more business criteria and a
targeted level or levels of performance with respect to each of
such criteria, as specified by the Committee consistent with
this Section 14.2. Performance goals shall be
objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the
requirement that the level or levels of performance targeted by
the Committee result in the achievement of performance goals
being substantially uncertain. The Committee may
determine that such Performance or Annual Incentive Awards shall
be granted, exercised
and/or
settled upon achievement of any one performance goal or that two
or more of the performance goals must be achieved as a condition
to grant, exercise
and/or
settlement of such Performance or Annual Incentive Awards.
Performance goals may differ for Performance or Annual Incentive
Awards granted to any one Grantee or to different Grantees.
14.2.2. Business
Criteria.
One or more of the following business criteria for the Company,
on a consolidated basis,
and/or
specified subsidiaries or business units of the Company (except
with respect to the total stockholder return and earnings per
share criteria), shall be used by the Committee (and not by the
Board) in establishing performance goals for such Performance or
Annual Incentive Awards: (1) total stockholder return;
(2) such total stockholder return as compared to total
return (on a comparable basis) of a publicly available index
such as, but not limited to, the Standard &
Poors 500 Stock Index; (3) net income;
(4) pretax earnings; (5) earnings before interest
expense, taxes, depreciation and amortization, with or without
adjustments used from time to time by the Company in its
publicly filed financial statements; (6) pretax operating
earnings after interest expense and before bonuses, service
fees, and extraordinary or special items; (7) operating
margin; (8) earnings per share; (9) return on equity;
(10) return on capital; (11) return on investment;
(12) operating earnings; (13) working capital;
(14) ratio of debt to stockholders equity
(15) revenue; (16) brand awareness; (17) revenue
per available room; (18) number of rooms or units;
(19) debt reduction; (20) customer satisfaction; and
(21) any other business criteria used in the Companys
publicly announced guidance. Business criteria may be measured
on an absolute basis or on a relative basis (i.e., performance
relative to peer companies) and on a GAAP or non-GAAP basis. The
Committee may provide, in a manner that meets the requirements
of Code Section 162(m) that any evaluation of performance
may include or exclude any of the following events that occur
during the applicable performance period: (a) asset
write-downs; (b) litigation or claim judgments or
settlements; (c) the effect of changes in tax laws,
accounting principles or other laws or provisions affecting
reported results; (d) any reorganization or restructuring
programs; (e) extraordinary nonrecurring items as described
in Accounting Principles Board Opinion No. 30
and/or in
managements discussing and analysis of financial condition
and results of operations appearing in the Companys annual
report to shareholders for the applicable year;
(f) acquisitions or divestitures; and (g) foreign
exchange gains and losses. To the extent such inclusions or
exclusions affect Awards to Covered Employees, they shall be
prescribed in a form that meets the requirements of Code
Section 162(m) for deductibility.
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14.2.3. Timing
For Establishing Performance Goals.
Performance goals shall be established not later than the
earlier of (i) 90 days after the beginning of any
performance period applicable to such Performance or Annual
Incentive Awards and (ii) the day on which 25% of any
performance period applicable to such Awards has expired, or at
such other date as may be required or permitted for
performance-based compensation under Code
Section 162(m).
14.2.4. Settlement
of Performance or Annual Incentive Awards; Other
Terms.
Settlement of such Performance or Annual Incentive Awards shall
be in cash, Stock, other Awards or other property, in the
discretion of the Committee. The Committee may, in its
discretion, reduce the amount of a settlement otherwise to be
made in connection with such Performance or Annual Incentive
Awards. The Committee shall specify the circumstances in which
such Performance or Annual Incentive Awards shall be paid or
forfeited in the event of termination of Service by the Grantee
prior to the end of a performance period or settlement of
Performance Awards.
14.3. Written
Determinations.
All determinations by the Committee as to the establishment of
performance goals, the amount of any potential Performance
Awards and as to the achievement of performance goals relating
to Performance Awards, and the amount of any potential
individual Annual Incentive Awards and the amount of final
Annual Incentive Awards, shall be made in writing in the case of
any Award intended to qualify under Code Section 162(m). To
the extent permitted by Section 162(m), the Committee may
delegate any responsibility relating to such Performance Awards
or Annual Incentive Awards.
14.4. Status
of Section 14.2 Awards Under Code
Section 162(m)
It is the intent of the Company that Performance Awards and
Annual Incentive Awards under Section 14.2 hereof
granted to persons who are designated by the Committee as likely
to be Covered Employees within the meaning of Code
Section 162(m) and regulations thereunder shall, if so
designated by the Committee, constitute qualified
performance-based compensation within the meaning of Code
Section 162(m) and regulations thereunder. Accordingly, the
terms of Section 14.2, including the definitions of
Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m)
and regulations thereunder. The foregoing notwithstanding,
because the Committee cannot determine with certainty whether a
given Grantee will be a Covered Employee with respect to a
fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by
the Committee, at the time of grant of Performance Awards or an
Annual Incentive Award, as likely to be a Covered Employee with
respect to that fiscal year. If any provision of the Plan or any
agreement relating to such Performance Awards or Annual
Incentive Awards does not comply or is inconsistent with the
requirements of Code Section 162(m) or regulations
thereunder, such provision shall be construed or deemed amended
to the extent necessary to conform to such requirements.
15. | PARACHUTE LIMITATIONS |
Notwithstanding any other provision of this Plan or of any other
agreement, contract, or understanding heretofore or hereafter
entered into by a Grantee with the Company or any Affiliate,
except an agreement, contract, or understanding that expressly
addresses Section 280G or Section 4999 of the Code (an
Other Agreement), and notwithstanding any formal or
informal plan or other arrangement for the direct or indirect
provision of compensation to the Grantee (including groups or
classes of Grantees or beneficiaries of which the Grantee is a
member), whether or not such compensation is deferred, is in
cash, or is in the form of a benefit to or for the Grantee (a
Benefit Arrangement), if the Grantee is a
disqualified individual, as defined in
Section 280G(c) of the Code, any Option, Restricted Stock
or Stock Unit held by that Grantee and any right to receive any
payment or other benefit under this Plan shall not become
exercisable or vested (i) to the extent that such right to
exercise, vesting, payment, or benefit, taking into account all
other rights, payments, or benefits to or for the Grantee under
this Plan, all Other Agreements, and all Benefit Arrangements,
would cause any payment or benefit to the Grantee under this
Plan to be considered a parachute payment within the
meaning of Section 280G(b)(2) of the Code as then in effect
16
(a Parachute Payment) and (ii) if, as a
result of receiving a Parachute Payment, the aggregate after-tax
amounts received by the Grantee from the Company under this
Plan, all Other Agreements, and all Benefit Arrangements would
be less than the maximum after-tax amount that could be received
by the Grantee without causing any such payment or benefit to be
considered a Parachute Payment. In the event that the receipt of
any such right to exercise, vesting, payment, or benefit under
this Plan, in conjunction with all other rights, payments, or
benefits to or for the Grantee under any Other Agreement or any
Benefit Arrangement would cause the Grantee to be considered to
have received a Parachute Payment under this Plan that would
have the effect of decreasing the after-tax amount received by
the Grantee as described in clause (ii) of the preceding
sentence, then the Grantee shall have the right, in the
Grantees sole discretion, to designate those rights,
payments, or benefits under this Plan, any Other Agreements, and
any Benefit Arrangements that should be reduced or eliminated so
as to avoid having the payment or benefit to the Grantee under
this Plan be deemed to be a Parachute Payment; provided,
however, that in order to comply with Code Section 409A,
the reduction or elimination will be performed in the order in
which each dollar of value subject to an Award reduces the
Parachute Payment to the greatest extent.
16. | REQUIREMENTS OF LAW |
16.1. General.
The Company shall not be required to sell or issue any shares of
Stock under any Award if the sale or issuance of such shares
would constitute a violation by the Grantee, any other
individual exercising an Option, or the Company of any provision
of any law or regulation of any governmental authority,
including without limitation any federal or state securities
laws or regulations. If at any time the Company shall determine,
in its discretion, that the listing, registration or
qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is
necessary or desirable as a condition of, or in connection with,
the issuance or purchase of shares hereunder, no shares of Stock
may be issued or sold to the Grantee or any other individual
exercising an Option pursuant to such Award unless such listing,
registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to
the Company, and any delay caused thereby shall in no way affect
the date of termination of the Award. Without limiting the
generality of the foregoing, in connection with the Securities
Act, upon the exercise of any Option or any SAR that may be
settled in shares of Stock or the delivery of any shares of
Stock underlying an Award, unless a registration statement under
such Act is in effect with respect to the shares of Stock
covered by such Award, the Company shall not be required to sell
or issue such shares unless the Committee has received evidence
satisfactory to it that the Grantee or any other individual
exercising an Option may acquire such shares pursuant to an
exemption from registration under the Securities Act. Any
determination in this connection by the Committee shall be
final, binding, and conclusive. The Company may, but shall in no
event be obligated to, register any securities covered hereby
pursuant to the Securities Act. The Company shall not be
obligated to take any affirmative action in order to cause the
exercise of an Option or a SAR or the issuance of shares of
Stock pursuant to the Plan to comply with any law or regulation
of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option (or SAR that
may be settled in shares of Stock) shall not be exercisable
until the shares of Stock covered by such Option (or SAR) are
registered or are exempt from registration, the exercise of such
Option (or SAR) (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the
effectiveness of such registration or the availability of such
an exemption.
16.2. Rule 16b-3.
During any time when the Company has a class of equity security
registered under Section 12 of the Exchange Act, it is the
intent of the Company that Awards pursuant to the Plan and the
exercise of Options and SARs granted hereunder will qualify for
the exemption provided by
Rule 16b-3
under the Exchange Act. To the extent that any provision of the
Plan or action by the Committee does not comply with the
requirements of
Rule 16b-3,
it shall be deemed inoperative to the extent permitted by law
and deemed advisable by the Committee, and shall not affect the
validity of the Plan. In the event that
Rule 16b-3
is revised or replaced, the Committee may exercise its
discretion to modify this Plan in any respect necessary to
satisfy the requirements of, or to take advantage of any
features of, the revised exemption or its replacement.
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17. | EFFECT OF CHANGES IN CAPITALIZATION |
17.1. Changes
in Stock.
If the number of outstanding shares of Stock is increased or
decreased or the shares of Stock are changed into or exchanged
for a different number or kind of shares or other securities of
the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution
payable in capital stock, or other increase or decrease in such
shares effected without receipt of consideration by the Company
occurring after the Effective Date, the number and kinds of
shares for which grants of Options and other Awards may be made
under the Plan shall be adjusted proportionately and accordingly
by the Company. In addition, the number and kind of shares for
which Awards are outstanding shall be adjusted proportionately
and accordingly so that the proportionate interest of the
Grantee immediately following such event shall, to the extent
practicable, be the same as immediately before such event. Any
such adjustment in outstanding Options or SARs shall not change
the aggregate Option Price or SAR Exercise Price payable with
respect to shares that are subject to the unexercised portion of
an outstanding Option or SAR, as applicable, but shall include a
corresponding proportionate adjustment in the Option Price or
SAR Exercise Price per share. The conversion of any convertible
securities of the Company shall not be treated as an increase in
shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution
to the Companys stockholders of securities of any other
entity or other assets (including an extraordinary dividend but
excluding a non-extraordinary dividend of the Company) without
receipt of consideration by the Company, the Company shall, in
such manner as the Company deems appropriate, adjust
(i) the number and kind of shares subject to outstanding
Awards
and/or
(ii) the exercise price of outstanding Options and Stock
Appreciation Rights to reflect such distribution.
17.2. Reorganization
in Which the Company Is the Surviving Entity Which does not
Constitute a Corporate Transaction.
Subject to Section 17.3 hereof, if the Company shall
be the surviving entity in any reorganization, merger, or
consolidation of the Company with one or more other entities
which does not constitute a Corporate Transaction, any Option or
SAR theretofore granted pursuant to the Plan shall pertain to
and apply to the securities to which a holder of the number of
shares of Stock subject to such Option or SAR would have been
entitled immediately following such reorganization, merger, or
consolidation, with a corresponding proportionate adjustment of
the Option Price or SAR Exercise Price per share so that the
aggregate Option Price or SAR Exercise Price thereafter shall be
the same as the aggregate Option Price or SAR Exercise Price of
the shares remaining subject to the Option or SAR immediately
prior to such reorganization, merger, or consolidation. Subject
to any contrary language in an Award Agreement evidencing an
Award, any restrictions applicable to such Award shall apply as
well to any replacement shares received by the Grantee as a
result of the reorganization, merger or consolidation. In the
event of a transaction described in this
Section 17.2, Stock Units shall be adjusted so as to
apply to the securities that a holder of the number of shares of
Stock subject to the Stock Units would have been entitled to
receive immediately following such transaction.
17.3. Corporate
Transaction.
Subject to the exceptions set forth in the last sentence of this
Section 17.3 and the last sentence of
Section 17.4, upon the occurrence of a Corporate
Transaction:
(i) all outstanding shares of Restricted Stock shall be
deemed to have vested, and all Stock Units shall be deemed to
have vested and the shares of Stock subject thereto shall be
delivered, immediately prior to the occurrence of such Corporate
Transaction, and
(ii) either of the following two actions shall be taken:
(A) fifteen days prior to the scheduled consummation of a
Corporate Transaction, all Options and SARs outstanding
hereunder shall become immediately exercisable and shall remain
exercisable for a period of fifteen days, or
18
(B) the Committee may elect, in its sole discretion, to
cancel any outstanding Awards of Options, Restricted Stock,
Stock Units
and/or SARs
and pay or deliver, or cause to be paid or delivered, to the
holder thereof an amount in cash or securities having a value
(as determined by the Committee acting in good faith), in the
case of Restricted Stock or Stock Units, equal to the formula or
fixed price per share paid to holders of shares of Stock and, in
the case of Options or SARs, equal to the product of the number
of shares of Stock subject to the Option or SAR (the Award
Shares) multiplied by the amount, if any, by which
(I) the formula or fixed price per share paid to holders of
shares of Stock pursuant to such transaction exceeds
(II) the Option Price or SAR Exercise Price applicable to
such Award Shares.
With respect to the Companys establishment of an exercise
window, (i) any exercise of an Option or SAR during such
fifteen-day
period shall be conditioned upon the consummation of the event
and shall be effective only immediately before the consummation
of the event, and (ii) upon consummation of any Corporate
Transaction the Plan, and all outstanding but unexercised
Options and SARs shall terminate. The Committee shall send
written notice of an event that will result in such a
termination to all individuals who hold Options and SARs not
later than the time at which the Company gives notice thereof to
its stockholders. This Section 17.3 shall not apply
to any Corporate Transaction to the extent that provision is
made in writing in connection with such Corporate Transaction
for the assumption or continuation of the Options, SARs, Stock
Units and Restricted Stock theretofore granted, or for the
substitution for such Options, SARs, Stock Units and Restricted
Stock for new common stock options and stock appreciation rights
and new common stock units and restricted stock relating to the
stock of a successor entity, or a parent or subsidiary thereof,
with appropriate adjustments as to the number of shares
(disregarding any consideration that is not common stock) and
option and stock appreciation right exercise prices (an
Equivalent Award), in which event the Plan, Options,
SARs, Stock Units and Restricted Stock theretofore granted shall
continue in the manner and under the terms so provided. If the
Grantee receives an Equivalent Award in connection with a
Corporate Transaction and his employment is terminated by the
Company without Cause or by the employee with Good Reason within
one year following the Corporate Transaction involuntarily, the
Equivalent Award may be exercised in full beginning on the date
of such termination and for such period as the Committee shall
determine.
17.4. Adjustments.
Adjustments under this Section 17 related to shares
of Stock or securities of the Company shall be made by the
Committee, whose determination in that respect shall be final,
binding and conclusive. No fractional shares or 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.
The Committee shall determine the effect of a Corporate
Transaction upon Awards other than Options, SARs, Stock Units
and Restricted Stock, and such effect shall be set forth in the
appropriate Award Agreement. The Committee may provide in the
Award Agreements at the time of grant, or any time thereafter
with the consent of the Grantee, for different provisions to
apply to an Award in place of those described in
Sections 17.1, 17.2 and 17.3. This
Section 17 does not limit the Companys ability
to provide for alternative treatment of Awards outstanding under
the Plan in the event of change of control events that are not
Corporate Transactions.
17.5. No
Limitations on Company.
The making of Awards pursuant to the Plan shall not affect or
limit in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of
its capital or business structure or to merge, consolidate,
dissolve, or liquidate, or to sell or transfer all or any part
of its business or assets.
18. | GENERAL PROVISIONS |
18.1. Disclaimer
of Rights
No provision in the Plan or in any Award or Award Agreement
shall be construed to confer upon any individual the right to
remain in the employ or service of the Company or any Affiliate,
or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the
compensation or other payments to any individual at any time, or
to terminate any employment or other relationship between any
individual and the Company. In addition, notwithstanding
anything contained in the Plan to the contrary, unless
19
otherwise stated in the applicable Award Agreement, no Award
granted under the Plan shall be affected by any change of duties
or position of the Grantee, so long as such Grantee continues to
be a director, officer, consultant or employee of the Company or
an Affiliate. The obligation of the Company to pay any benefits
pursuant to this Plan shall be interpreted as a contractual
obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan
shall in no way be interpreted to require the Company to
transfer any amounts to a third party trustee or otherwise hold
any amounts in trust or escrow for payment to any Grantee or
beneficiary under the terms of the Plan.
18.2. Nonexclusivity
of the Plan
Neither the adoption of the Plan nor the submission of the Plan
to the stockholders of the Company for approval shall be
construed as creating any limitations upon the right and
authority of the Committee to adopt such other incentive
compensation arrangements (which arrangements may be applicable
either generally to a class or classes of individuals or
specifically to a particular individual or particular
individuals) as the Committee in its discretion determines
desirable, including, without limitation, the granting of equity
awards otherwise than under the Plan.
18.3. Withholding
Taxes
The Company or an Affiliate, as the case may be, shall have the
right to deduct from payments of any kind otherwise due to a
Grantee any federal, state, or local taxes of any kind required
by law to be withheld with respect to the vesting of or other
lapse of restrictions applicable to an Award or upon the
issuance of any shares of Stock upon the exercise of an Option
or pursuant to an Award. At the time of such vesting, lapse, or
exercise, the Grantee shall pay to the Company or the Affiliate,
as the case may be, any amount that the Company or the Affiliate
may reasonably determine to be necessary to satisfy such
withholding obligation. Subject to the prior approval of the
Company or the Affiliate, which may be withheld by the Company
or the Affiliate, as the case may be, in its sole discretion,
the Grantee may elect to satisfy such obligations, in whole or
in part, (i) by causing the Company or the Affiliate to
withhold shares of Stock otherwise issuable to the Grantee or
(ii) by delivering to the Company or the Affiliate shares
of Stock already owned by the Grantee. The shares of Stock so
delivered or withheld shall have an aggregate Fair Market Value
equal to such withholding obligations. The Fair Market Value of
the shares of Stock used to satisfy such withholding obligation
shall be determined by the Company or the Affiliate as of the
date that the amount of tax to be withheld is to be determined.
A Grantee who has made an election pursuant to this
Section 18.3 may satisfy his or her withholding
obligation only with shares of Stock that are not subject to any
repurchase, forfeiture, unfulfilled vesting, or other similar
requirements. The maximum number of shares of Stock that may be
withheld from any Award to satisfy any federal, state or local
tax withholding requirements upon the exercise, vesting, lapse
of restrictions applicable to such Award or payment of shares
pursuant to such Award, as applicable, cannot exceed such number
of shares having a Fair Market Value equal to the minimum
statutory amount required by the Company to be withheld and paid
to any such federal, state or local taxing authority with
respect to such exercise, vesting, lapse of restrictions or
payment of shares.
18.4. Captions
The use of captions in this Plan or any Award Agreement is for
the convenience of reference only and shall not affect the
meaning of any provision of the Plan or such Award Agreement.
18.5. Other
Provisions
Each Award granted under the Plan may contain such other terms
and conditions not inconsistent with the Plan as may be
determined by the Committee, in its sole discretion.
18.6. Number
and Gender
With respect to words used in this Plan, the singular form shall
include the plural form, the masculine gender shall include the
feminine gender, etc., as the context requires.
20
18.7. Severability
If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof
shall be severable and enforceable in accordance with their
terms, and all provisions shall remain enforceable in any other
jurisdiction.
18.8. Governing
Law
The validity and construction of this Plan and the instruments
evidencing the Awards hereunder shall be governed by the laws of
the State of Delaware, other than any conflicts or choice of law
rule or principle that might otherwise refer construction or
interpretation of this Plan and the instruments evidencing the
Awards granted hereunder to the substantive laws of any other
jurisdiction.
18.9. Code
Section 409A
The Committee intends to comply with Code Section 409A, or
an exemption to Code Section 409A, with regard to Awards
hereunder that constitute nonqualified deferred compensation
within the meaning of Code Section 409A. To the extent that
the Committee determines that a Grantee would be subject to the
additional 20% tax imposed on certain nonqualified deferred
compensation plans pursuant to Code Section 409A as a
result of any provision of any Award granted under this Plan,
such provision may be deemed amended to the minimum extent
necessary to avoid application of such additional tax. The
nature of any such amendment shall be determined by the
Committee.
* * *
To record adoption of the Plan by the Board as of November 30,
2009, and approval of the Plan by the stockholders on January 28, 2010, the Company has caused its authorized officer
to execute the Plan.
MORGANS HOTEL GROUP CO.
By: /s/ Richard Szymanski
Title: Chief Financial Officer
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